MEETING OF THE LIVERPOOL CITY REGION COMBINED AUTHORITY

To: The Members of the Liverpool City Region Combined Authority

Dear Member,

You are requested to attend a meeting of the Liverpool City Region Combined Authority to be held on Friday, 22nd January, 2021 at 1.00pm. This meeting is being held remotely.

The meeting will be live webcast. To access the webcast please go to the Combined Authority’s website at the time of the meeting and follow the instructions on the page.

If you have any queries regarding this meeting, please contact Trudy Bedford on telephone number (0151) 330 1330.

Yours faithfully

Chief Executive

WEBCASTING NOTICE

This meeting will be filmed by the Combined Authority for live and/or subsequent broadcast on the Combined Authority’s website. The whole of the meeting will be filmed, except where there are confidential or exempt items.

If you do not wish to have your image captured or if you have any queries regarding the webcasting of the meeting please contact the Democratic Services Officer on the above number or email [email protected].

A Fair Processing Notice is available on the Combined Authority’s website at https://www.liverpoolcityregion-ca.gov.uk/wp-content/uploads/Fair-Processing- Notice-CA-Meeting-Video-Recording.pdf.

(Established pursuant to section 103 of the Local Democracy, Economic Development and Construction Act 2009 as the Halton, Knowsley, Liverpool, St Helens, Sefton and Wirral Combined Authority)

LIVERPOOL CITY REGION COMBINED AUTHORITY

AGENDA

1. APOLOGIES FOR ABSENCE

2. DECLARATIONS OF INTEREST

3. MINUTES OF THE MEETING OF THE LCR COMBINED AUTHORITY HELD ON 18 DECEMBER 2020 (Pages 1 - 10)

4. LIVERPOOL CITY REGION METRO MAYOR ANNOUNCEMENTS AND UPDATES To receive updates from the Liverpool City Region Metro Mayor.

5. MAYORAL COMBINED AUTHORITY BUDGET SETTING REPORT 2021/22 To consider the report of the Director of Corporate Services. (Pages 11 - 62)

6. LIVERPOOL CITY REGION STRATEGIC INVESTMENT FUND: CONTINUATION OF THE INWARD INVESTMENT SERVICE BY LCR GROWTH PLATFORM To consider the report of the Portfolio Holder: Inclusive Economy and Third Sector and Director of Commercial Development and Investment. (Pages 63 - 130)

7. LIVERPOOL CITY REGION FAIR EMPLOYMENT CHARTER To consider the report of the Director of Policy and Strategic Commissioning and the Metro Mayor. (Pages 131 - 138)

8. FREEPORT BID DEVELOPMENT To consider the report of the Director of Policy and Strategic Commissioning. (Pages 139 - 148)

9. ACTIVE TRAVEL FUND TRANCHE 2 UPDATE To consider the report of the Interim Director of Integrated Transport and Portfolio Holder for Transport and Air Quality. (Pages 149 - 160) 10. EU TRANSITION READINESS FUNDING To consider the report of the Director of Corporate Services. (Pages 161 - 164) GOVERNANCE

11. PUBLIC QUESTION TIME Members of the public will be given the opportunity to ask questions which have been submitted in accordance with Meetings Standing Orders No. 11. A period of 30 minutes will be allocated for this item. Copies of valid questions will be circulated at the meeting.

Members of the public who wish to submit questions are asked to contact Democratic Services either by:

Email: [email protected] Telephone: 0151 330 1330 In writing: Democratic Services, LCR Combined Authority, PO Box 1976, No. 1 Mann Island, Liverpool, L3 1BP.

A proforma will be supplied for the submission of public questions which for this meeting must be returned by 5.00pm on Monday 25 January 2021.

12. PETITIONS AND STATEMENTS Members of the public who wish to submit a single position or statement in accordance with Meetings Standing Orders No. 11 are asked to contact Democratic Services either by:

Email: [email protected] Telephone: 0151 330 1330 In writing: Democratic Services, LCR Combined Authority, PO Box 1976, No. 1 Mann Island, Liverpool, L3 1BP.

The single petition or statement for this meeting must be returned by 5.00pm on Monday 25 January 2021.

MINUTES

13. OVERVIEW AND SCRUTINY COMMITTEE - 4 NOVEMBER 2020 (Pages 165 - 172)

14. TRANSPORT COMMITTEE - 5 NOVEMBER 2020 (Pages 173 - 182)

15. TRANSPORT COMMITTEE - 10 DECEMBER 2020 (Pages 183 - 190)

Agenda Item 3

LIVERPOOL CITY REGION COMBINED AUTHORITY

PUBLICATION: 18 DECEMBER 2020

DEADLINE FOR CALL-IN: 25 DECEMBER 2020

FOLLOWING THE CALL-IN PERIOD, DECISIONS INCLUDED IN THESE MINUTES MAY THEN BE IMPLEMENTED WHERE THEY HAVE NOT BEEN SUBJECT TO A CALL-IN.

* DENOTES KEY DECISION

At a meeting of the Liverpool City Region Combined Authority held remotely on Friday, 18th December, 2020 the following Members were

P r e s e n t:

Metro Mayor S Rotheram Chairperson of the Combined Authority (in the Chair)

Members of the LCR Combined Authority Councillor D Baines, Portfolio Holder: Digital Connectivity and Inclusion Mr A Hamid MBE Councillor I Maher, Portfolio Holder: Culture, Tourism and the Voluntary Sector Councillor W Simon, Portfolio Holder: Education, Employment and Skills Councillor R Polhill, Portfolio Holder: Low Carbon and Energy Renewables Councillor A Leech, (substitute for Councillor J Williamson), Deputy Leader, Wirral MBC

Co-opted Members Mr A Hamid MBE, Portfolio Holder: Business and Brexit Councillor L Robinson, Portfolio Holder: Transport and Air Quality

Associate Member Councillor C Mitchell, Warrington Borough Council (Substitute for Councillor R Bowden)

Deputy Portfolio Holders Councillor K Groucutt, Inclusive Economy and Third Sector Councillor P Sinnott, Education, Employment and Skills Councillor G Wood, Low Carbon and Energy Renewables Councillor C Tomas, Policy, Resources and Reform

75. APOLOGIES FOR ABSENCE

Apologies for absence were received on behalf of:

Members of the LCR Combined Authority Mayor J Anderson OBE, Liverpool City Council and Portfolio Holder: Education, Employment and Skills Rt Hon J Kennedy, Merseyside Police and Crime Commissioner and Portfolio Holder: Criminal Justice

Page 1

Associate Members Councillor R Bowden, Leader of Warrington Borough Council Councillor I Moran, Leader of West Lancashire Borough Council

Deputy Portfolio Holders Councillor T Hardy, Housing and Spatial Framework Councillor S Powell, Culture, Tourism and the Visitor Economy

Mayoral Advisors Gideon Ben-Tovim OBE, Natural Environment Reverend Canon Dr Ellen Loudon, Community and Voluntary Sector Professor Dame Janet Beer, Further Education

Due to technical difficulties the following Members were unable to be present at the meeting but observed the meeting via the live stream.

Members of the LCR Combined Authority Councillor G Morgan, Leader of Knowsley MBC and Portfolio Holder: Housing and Spatial Framework

Deputy Portfolio Holders Councillor L Robertson-Collins, Digital Connectivity and Inclusion Councillor N Nicholas, Transport and Air Quality

76. DECLARATIONS OF INTEREST

No declarations of interest were submitted.

77. MINUTES OF THE MEETING OF THE LCR COMBINED AUTHORITY HELD ON 6 NOVEMBER 2020

RESOLVED – That the minutes of the meeting held on 6 November 2020 be approved as a correct record.

78. LIVERPOOL CITY REGION METRO MAYOR ANNOUNCEMENTS AND UPDATES

Metro Mayor S Rotheram provide Members with an update on his activities and key developments since the last meeting of the LCR Combined Authority.

The Metro Mayor placed on record his thanks to the people of the City Region for their hard work and sacrifice which had led to a dramatic decrease in COVID-19 transmission rates locally. However, he stressed that it was important not to underestimate the scale of the problem which was faced two months ago. He explained that infection rates were around 700 per 100,000 and were rising rapidly, with the hospitalisation rates some of the highest in Europe and the NHS was under significant pressure. The Metro Mayor stated that by making tough decisions and sacrifices the City Region was able to come out of the second lockdown in Tier 2, which was great news for local people and the local economy.

Mayor Rotheram acknowledged that many people would be looking forward to Christmas, seeing it as a chance to return to normal after a challenging year, however, he urged everyone to remain cautious and stay within the rules. He highlighted that spikes in infection rates were beginning to be seen elsewhere in the

Page 2 Country, with places such as London going into higher tiers. He encouraged everyone to follow the rules to avoid undoing the good work and seeing infection rates increase and putting the NHS under even more pressure.

The Metro Mayor reported that over the past few months he had been working closely with campaigners from Excluded UK and Forgotten Ltd, who had called for the Government to provide support for the self-employed, freelancer and small business owners who had not received Government support during the pandemic. He expressed his concern that almost 3 million taxpayers had been left without support since March and the Government had failed to provide support despite knowing the extent of the problem at the recent spending review.

The Metro Mayor explained that locally, a lot was being done to protect as many jobs and businesses as possible, who were under threat from the impact of Coronavirus. Which was why, the City Region, had launched the UK’s first fund to support ‘excluded and forgotten’ businesses in the retail and hospitality sector. The £9.5m fund was open to small and micro businesses that had so far had to get by without any assistance from national government. The Metro Mayor noted that this was a further example of the city region continually supporting residents throughout the pandemic.

As this was the last meeting before Christmas, the Metro Mayor took the opportunity to pay tribute to the key workers who had served the city region with distinction, over a very challenging year. Most notably the doctors, nurses, carers, those keeping the transport network running, supermarket workers and delivery drivers. He also thanked staff at the local and combined authorities for all they had done to continue to deliver services and support those who most needed it.

The Metro Mayor congratulated St Helens Rugby League Club who became Super League Champions after beating rivals Wigan Warriors 8-4 in a tense Grand Final.

Before moving onto the formal agenda, the Metro Mayor sought nominations to appoint a Deputy Chair for the LCR Combined Authority. It was moved by Councillor Polhill, and seconded by Councillor Baines, and:

RESOLVED – That Councillor I Maher be appointed as Deputy Chair for the LCR Combined Authority.

The Metro Mayor also sought appointment to the Portfolio for Education, Employment and Skills.

RESOLVED – That Councillor W Simon be appointed as the Portfolio Holder for Education, Employment and Skills.

79. UPDATE ON THE COMBINED AUTHORITY RESPONSE TO BUSINESS SECTOR SUPPORT IN RESPONSE TO COVID-19

The LCR Combined Authority considered a report of the Metro Mayor and Chief Executive which provided an update on the Combined Authority’s response to Covid-19, which included business support and transport activities.

Frank Rogers, LCR Chief Executive, informed Members that the response to the pandemic had required a phenomenal effort from the constituent Local Authorities and other public sector partners and paid tribute to their hard work. He

Page 3 explained that following the emergency legislation which was enacted by the Government, the Combined Authority and its partners had already started preparing in response to the pandemic.

It was explained that in response to the economic impact to the City Region, the Metro Mayor established an Economic Recovery Panel, which comprised of local business leaders, constituent local authorities, representatives from central government and national bodies, with the objective look to maximise support for businesses and build back better. The Panel along with other key stakeholders supported the Combined Authority in the development and publication of an LCR Economic Recovery Plan. The Plan identified a series of evidence-based projects to support the City Region in its recovery and sought to secure £1.4bn in investment, to unlock £8.8bn worth of projects, which were ready to commence.

To support the Hospitality and Leisure sector, the Metro Mayor announced the establishment of an emergency package of support to directly support this sector. Within the City Region the hospitality and leisure sector directly supported 50,000 jobs and 4,000 businesses. Members were informed that Government funding was received in November 2020 and nearly 16,000 businesses had applied for funding. Round two of the funding package was launched in November 2020 and there was approximately £12.5million available.

In addition to providing the business support the Combined Authority had also supported the response and recovery to the pandemic through the Local Resilience Forum (LRF). Particularly by leading on the Transport cell along with active engagement in the Communications Cell, PPE Cell.

The Metro Mayor highlighted the work of the establishment of LCR Cares. LCR Cares had raised over £2million and was supporting individuals and organisations across the City Region. He paid tribute to the work of the community and voluntary sector in supporting the establishment and distribution of the fund.

RESOLVED – That the contents of the report, outlining the key actions and initiatives that the Combined Authority had been involved in, in response to the pandemic be noted.

80. FINALISING THE LIVERPOOL CITY REGION'S AIR QUALITY ACTION PLAN

The LCR Combined Authority considered the report of the Director of Policy and Strategic Commissioning and the Portfolio Holder: Transport and Air Quality which presented the final action plan to improve poor air quality across the City Region.

Councillor L Robinson, Portfolio Holder: Transport and Air Quality welcomed the opportunity to present the final Air Quality Action Plan to Members. He reported that a draft plan had previously been presented to the Combined Authority. However, since then, the pandemic had reaffirmed the importance of Air Quality to the City Region, citing that at the height of the lockdown in April 2020 the nitro dioxide levels had reduced by more than a third and this demonstrated what could be achieved in the long term.

Members were informed that the Plan had been refreshed considering the covid pandemic and green public transport would be pushed forward along with a

Page 4 focus on cycling and active travel and the retrofitting of homes to address fuel poverty.

In conclusion, Councillor Robinson explained that the recommendations within the Action Plan would be incorporated into the Climate Partnership. Furthermore, the Overview and Scrutiny Committee would be asked to monitor the implementation of the Plan and recognising the importance of mainstreaming the plan into the work and actions of each of the constituent Local Authorities, it would be recommended that they each report the Plan through their governance structures. Councillor Robinson wished to place on record his thanks to the Local Authority Cabinet Members and Officers who had helped support the development of the plan.

Metro Mayor Rotheram welcomed the Plan and noted that just this week was the first officially recorded death in the UK because of poor air quality and it was imperative this was addressed.

RESOLVED – That:

(i) the Air Quality Action Plan developed to aid the improvement of air quality across the Liverpool City Region as set out within the Appendix to this report be agreed;

(II) the importance of embedding the finalised Air Quality Plan within the work and plans of the Liverpool City Region Climate Partnership and associated Climate Action Plan, recognising that achieving the transition away from fossil fuels in transport, industry and buildings will have a transformative effect on the air quality of the Liverpool City Region, be agreed;

(ii) the constituent local authorities and partners endorse the plan and its relevant actions at a local level, to embed the plan its associated measures locally; and

(iv) the Overview and Scrutiny Committee maintain a role in overseeing and scrutinising the implementation of the measures set out in the plan, as part of the scrutiny of the wider Climate Action Plan.

81. SPENDING REVIEW 2020 - HEADLINE IMPLICATIONS FOR THE LIVERPOOL CITY REGION

The LCR Combined Authority considered a report of the Metro Mayor and the Director of Policy and Strategic Commissioning which provided a factual update on the announcements from the Spending Review and the initial headline implications of the announcements for the Liverpool City Region.

Kirsty McLean, Director of Policy and Strategic Commissioning, reported that the expected multi-year Financial Spending Review had been changed to a 12-month Spending Review due to the on-going economic uncertainty caused by the pandemic.

Members were informed that the report set out the key points from the Spending Review including the impact on Local Authority Finance, Council Tax and Business Rates and the £4billion ‘Levelling Up Fund’.

Page 5 Furthermore, it was reported that the Combined Authority had received a letter from the Chancellor which referenced working with the Combined Authority on the Business Case for the proposed Manufacturing Technology Centre. Members were informed they would be kept up to date with developments in the Business Case.

RESOLVED – That the briefing on the initial headline implications of the Spending Review announcements be noted.

82. LIVERPOOL CITY REGION COMBINED AUTHORITY MID YEAR TREASURY ACTIVITY REVIEW 2020-21

The LCR Combined Authority considered a report of the Director of Corporate Services which provided Members with an update on the Combined Authority’s treasury management activity for 2020/21.

John Fogarty, Director of Corporate Services, reported that despite the financial pressures caused by the pandemic, the Combined Authority had been able to manage the treasury management activities within the set limits and parameters. It was explained that the situation would be closely monitored, and any changes would be reflected in the 2021/22 budget which was due to considered by Members in January 2021.

RESOLVED – That the mid-year treasury management report be noted.

83. COMPANY REPORTING

The LCR Combined Authority considered a report of the Chief Legal Officer & Monitoring Officer which sought to establish a process of providing annual reports to Members on the subsidiary companies of the Liverpool City Region Combined Authority.

Jill Coule, Chief Legal Officer & Monitoring Officer, explained that the new annual report would give an insight into the companies the Combined Authority holds, the activities they undertake and their financial position to be transparent with Members and the wider public.

Officers hoped that the annual report would also be shared with Members of the LCR Audit and Governance Committee to secure their views on the management of the shareholding companies.

RESOLVED - That:

(i) the contents of the report and accompanying Appendix be noted; and

(ii) the establishment of annual reporting to the Combined Authority on its subsidiary companies be approved.

84. GREEN HOME GRANT LOCAL AUTHORITY DELIVERY PHASE 2 NORTH WEST DELIVERY VIA NORTH WEST LOCAL ENERGY HUB

The LCR Combined Authority considered a report of the Portfolio Holder: Low Carbon and Renewable Energy and the Interim Director of Strategic Delivery which set out the proposed approach to disperse the Green Home Grants to Local

Page 6 Authorities across the North West and sought approval for the Combined Authority to act as an accountable body.

Councillor Polhill, Portfolio Holder: Low Carbon and Renewable Energy’s, reported that in July 2020 the Government announced the Green Home Grant Scheme to improve home energy efficiency for low-income households. With a total of £50million being allocated to Local Authority delivery in the North West of England via the North West Local Energy Hub. It was reported that £10.5million had been allocated to Local Authorities within the Liverpool City Region.

Furthermore, it was explained that the funding would be dispersed through funding agreements with each Local Enterprise Partnership areas. This was highlighted as an important economic recovery measure which would help simulate local supply chains and create jobs while supporting the Combined Authority’s net zero Carbon target.

RESOLVED - That:

(i) Green Home Grant Phase 2 funding that has been allocated to the Local Energy North West Hub for delivery across the region consisting of two parts, namely the mobilisation fund and the capital fund be noted;

(ii) the Local Energy North West Hub has proposed a delivery route for Green Homes Grant which disburses the capital fund to each of the North West sub-regions within Local Enterprise Partnership areas, including the Liverpool City Region be noted;

(iii) The Combined Authority approved acting as an accountable body for the funding and noted that in its capacity as accountable body the Combined Authority will receive both:

i. a design and mobilisation fund of £1,250,000 to secure delivery of this programme, and will retain a portion to support design; and

ii. a capital fund anticipated to be £52.8 million of which 12% can support programme administration. Approximately £11.6 million is the Liverpool City Region notional share of the capital budget.

(iv) delegated authority be granted to the Director of Corporate Services, Interim Director of Strategic Delivery and the Monitoring Officer to retain a sufficient proportion of the programme design and capital budget to:

i. Administer both funds in its capacity as an accountable body and to note that decisions made in that capacity will not constitute key decisions as defined by the Combined Authority Constitution; and;

ii. Conclude necessary legal agreements for the accountable body arrangements.

85. STRATEGIC INVESTMENT FUND - QUARTERLY UPDATE

The LCR Combined Authority considered the report of the Portfolio Holder for Inclusive Economy and Third Sector and Director of Commercial Development which

Page 7 provided the quarterly update on the Strategic Investment Fund (SIF). Metro Mayor Rotheram that the External Investment Panel had recently recruited new Members to the Panel and welcomed Helen Heap, Helen Legg, Dr Amanda Lamb, Clare Dove OBE and Dr Michael R. Birkett to the Panel and thanked them for agreeing to participate in the valuable work that the Panel undertook in supporting the Strategic Investment Fund.

Councillor A Leech, Deputy Leader, Wirral MBC, explained that work was continuing to respond to the economic consequences of the pandemic, with Officers focusing on ensuring that all previously agreed SIF business cases were progressing towards delivery. Councillor Leech drew Members attention to section 5 of the report and acknowledged that the approach to disburse Gainshare Trance Two funds, once confirmed by Government had risks, however, these risks would be mitigated by the positive impact the quick release of the funding could have on the City Region’s economy. Approval was therefore sought to commit £2.8m to Kirkby Town Centre Phase 2 and £2.1m to Kindred.

The Metro Mayor spoke on behalf of Councillor G Morgan, Leader of Knowsley MBC, who was unable to join the meeting due to technical difficulties, reported that Councillor Morgan welcomed the additional investment to Kirkby Town Centre. Recognising that the investment to date had acted as catalyst for Kirkby and he wanted to recognise how pivotal this had been for Knowsley Council and the Liverpool City Region.

RESOLVED – That:

(i) the positive disbursement performance for the Local Growth Fund in Q2 2020 and the commitment to the trajectory be noted;

(ii) to commit, in-principle, £50m of the next tranche of ‘gainshare’ funding due in March 2021 through subject to government review and approval, to economic recovery projects as set out in paragraph 5.3- 5.4;

(iii) to commit, in principle and subject to further consideration, up to £4.9m immediately, before confirmation of funding, to the following previously agreed SIF projects:

 £2.8m to Kirkby Town Centre phase two; and  £2.1m to Kindred.

(iv) each of the approvals set out in section 5.5 remain subject to satisfactory negotiation of terms;

(v) the proposed new members of the SIF external investment panel as set out in section be endorsed;

(vi) the following changes to previously agreed SIF projects as set out in Section 7 of this report be agreed:

 the changes requested by Liverpool City Council (LCC) for the Ropewalks and Princess Avenue (STEP) projects as set out in paragraphs 7.1-7.25 of the report;

Page 8  the changes requested by Wirral Council for Duke Street (STEP) project as set out in paragraph 7.3-7.3.1 of the report;  the changes requested by the Growth Platform for the Growing Business Visits project as set out in paragraph 7.4-7.4.9.

(vii) the changes approved under delegated powers as set out in Section 8 with detail in Appendix 1 be noted; and

(viii) in accordance with Part 4, Section C, Paragraph 13, of the LCR Combined Authority Constitution, the Chairperson of the Overview and Scrutiny Committee has been notified that a General Exception in respect of a Notice of a Key Decision has been applied to recommendations (ii) and (iii).

86. STRATEGIC INVESTMENT FUND - HOUSEHOLDS INTO WORK

The LCR Combined Authority considered a report which sought approval of the Full Business Case to allocate up to £1.4m of Strategic Investment Fund finance to support the Households into Work (HiW) programme.

Councillor A Leech, Deputy Leader of Wirral MBC, reported that the Households into Work was an innovative employment support designed to support people who were far removed from the job market and required additional support. The programme was launched in 2018 and through its bespoke arrangements had made a successful impact on those who had participated in it.

Councillor Leech reported that as a consequence of the current pandemic, there was a greater need for the programme. As such approval was sought to allocate £1.4m to the Households into Work programme to support its continuation up until December 2022.

RESOLVED – That:

(i) the successful delivery of the pilot HiW programme, the significant impacts that this employment programme had had on residents of the City Region and the efforts of the delivery team during the ongoing COVID-19 situation be noted;

(ii) the full business case, with an allocation of £1.4m from SIF (revenue), for a continuation of the programme be approved; and

(iii) authority be granted to the Director of Commercial Development and Investment to finalise negotiations of detailed terms of the funding and associated agreements in consultation with the Combined Authority Monitoring Officer and Combined Authority Treasurer.

87. PUBLIC QUESTION TIME

Members of the public were given the opportunity to submit questions which had been submitted in accordance with Meeting Standing Order No.11.

Metro Mayor S Rotheram reported that one question had been submitted from Councillor W Shortall, Liverpool City Council. Councillor Shortall was invited to read out his question as follows:

Page 9 ‘As an elected ward Councillor in Old Swan Liverpool L13, I welcome the draft Air Quality Action Plan to the Combined Authority. One of the worst affected areas of air population in the City of Liverpool is St Oswald’s Street and Prescot Road in Old Swan, which measured a mean of 47µg/m3 and 51 µg/m3 respectively. I understand the Combined Authority has secured £7.9m from the Active Travel Fund, part of which is to help create low traffic neighbourhoods around schools. How will this funding improve the health and quality of life for children and residents in Old Swan?’

Metro Mayor Rotheram thanked Councillor Shortall for his question and replied that improving the health and quality of life for all our residents, particularly children, across the whole of the Liverpool City Region, was a priority for us all. The £7.9m Tranche 2 active travel funding, which the Combined Authority had secured from Government would continue the work to reprioritise streets for walking and cycling. There were 10 packages of work planned as part of this round of funding.

Furthermore, one of the packages was focussed on implementing a number of School Streets across the city region, which would prioritise the streets for pedestrians and cyclists to tackle the ‘school run’ problems. He explained that public consultation would be undertaken providing people with an opportunity to comment upon the schemes. Following the results of the consultation it was hoped that the Combined Authority would be able to define more accurately the schemes which would be progressed in the New Year.

In conclusion, the Metro Mayor reported that a written response would be sent to Councillor Shortall within 10 working days, following today’s meeting.

88. PETITIONS AND STATEMENTS

The Metro Mayor reported that no petitions or statements had been received.

89. OVERVIEW AND SCRUTINY COMMITTEE - 9 SEPTEMBER 2020

RESOLVED – That the minutes of the Overview and Scrutiny Committee held on 9 September 2020 were received as a correct record.

90. AUDIT AND GOVERNANCE COMMITTEE - 23 SEPTEMBER 2020

RESOLVED – That the minutes of the Audit and Governance Committee held on 23 September 2020 were received as a correct record.

91. TRANSPORT COMMITTEE - 24 SEPTEMBER 2020

RESOLVED – That the minutes of the Transport Committee held on 24 September 2020 were received as a correct record.

Minutes 75 to 91 to be received as a correct record on the 22nd day of January 2021.

Metro Mayor of the Combined Authority

Page 10 Agenda Item 5

LIVERPOOL CITY REGION COMBINED AUTHORITY

To: Metro Mayor and Members of the Combined Authority

Meeting: 22 January 2021

Authorities Affected: All

EXEMPT/CONFIDENTIAL ITEM: No

Key Decision

REPORT OF THE DIRECTOR OF CORPORATE SERVICES

MAYORAL COMBINED AUTHORITY BUDGET SETTING REPORT 2021/22

1. PURPOSE OF THE REPORT

1.1 This report seeks approval for the Liverpool City Region Mayoral Combined Authority budget for 2021/22. In establishing its budget, the LCRCA needs to make a series of key decisions regarding its income and how it uses this income.

1.2 The Combined Authorities (Finance) Order 2017 established new financial arrangements in respect of Mayoral Combined Authorities that need to be reflected in the 2021/22 budget. These include the requirement to specifically determine the costs of the Combined Authority Mayor.

1.3 The Order also requires the Combined Authority Mayor to notify the Combined Authority of the Mayor’s draft budget before 1st February 2021, which was complied with in the issuing of this report and provides a statutory timescale for the Combined Authority to consider and, where appropriate, to recommend amendments to the Mayor before 8th February 2021.

1.4 This provision only applies to the Mayoral Cost element of the Combined Authority’s budget for 2021/22, and specifically those areas where the Mayoral Combined Authority is funded through the Mayoral precept.

1.5 The Combined Authority must also set a budget for its other costs in 2021/22. This includes transport activity funded through the Transport Levy mechanism and the operation and maintenance of the Mersey Tunnels estate.

1.6 Members will be aware that the LCRCA has a statutory duty to agree a levy for 2021/22 before 14th February 2021.

1.7 The LCRCA must also set the schedule of tolls applicable to the Mersey Tunnel for 2021/22. This decision is subject to a separate report that was considered by the Transport Committee at its meeting of the 13th January 2021, and the revenue associated with their recommendation is incorporated into the LCRCA budget for 2021/22.

Page 11

1.8 In funding its transport activities, the Combined Authority also needs to establish a differential levy in respect of the LCRCA’s transport powers in Halton. It is important to note, however that there are no changes to the delivery of transport services in Halton implied within this report.

1.9 The purpose of this report is to bring together these key decisions and present detail of the budget requirement for the Authority for 2021/22, together with the operational grants that will be payable to Merseytravel and Halton for the delivery of the LCRCA’s transport activities throughout the City Region.

2. RECOMMENDATIONS

2.1 The Liverpool City Region Combined Authority is recommended to:-

(a) note this report; (b) agree the Mayoral Budget as presented at Table 1 of this report; (c) agree to freeze the Mayoral precept at its 2020/21 level equivalent to £19 per year for a Band D property and £12.67 per year for a Band A property; (d) approve the non-Mayoral elements of the Combined Authority budget for 2021/22; (e) approve a freeze in the Transport Levy at £97.4m for 2021/22; (f) approve the payment of an operational grant of £93.1m to Merseytravel; (g) note the level of ‘authorised tolls’ for the Mersey Tunnels as determined in the County of Merseyside Act 1980 (as amended by the Mersey Tunnels Act 2004) with details on calculation methods explained in section 5 of this report; (h) accept the recommendation of the Liverpool City Region Combined Authority’s Transport Committee and implement a schedule of Tunnel Tolls as contained in Table 7 of this report; (i) approve the discounts and concessions as detailed at 5.4.2 and 5.4.3; (j) approve the request for an operational grant of £23.08m in respect of the operation of Mersey Tunnels for 2021/22; (k) approve the capital programme as detailed in table 9; (l) approve a grant of £7.3m to Merseytravel to support the delivery of strategic capital investment and pre development works in respect of schemes in the Transforming Cities pipeline; (m)approve a grant of £2.93m to Merseytravel to support the project delivery costs associated with Rolling Stock; (n) approve a grant of £10m to Merseytravel to support capital schemes delivery and development; (o) recognise the differential levy payable by Halton as £3.2m; (p) agree a corresponding grant from the LCRCA to Halton of £3.2m in order that Halton can continue to provide transport services in Halton on behalf of the LCRCA in 2021/22; (q) approve the Treasury Management Strategy 2021/22 incorporating the Minimum Revenue Provision and associated Treasury Limits and Prudential Indicators as detailed at Appendix 1; and (r) approve the Capital Strategy as detailed at Appendix 2.

Page 12 3. BACKGROUND

3.1 The Mayoral budget reflects the priorities of the City Region Metro Mayor and is focussed on securing the City Region’s economic recovery by prioritising investment in our infrastructure, our skills and our environment.

3.2 The Combined Authority has been at the forefront of responding to the challenges of the Covid pandemic while at the same time building the foundations for the city regions future economic recovery and prosperity.

During the past 12 month we’ve submitted an Economic Recovery Plan to government that shows how £1.4bn investment would unlock £8.8bn worth of projects and create 94,000 permanent jobs, with a further 28,000 jobs in construction. And we have rolled out an emergency fund of up to £40million in a bid to protect Liverpool City Region’s vital hospitality and leisure businesses from the huge economic impact Covid-19 restrictions are having on the sector. The Mayor is determined that despite the huge challenges the effects of the pandemic will place on CA budgets in the medium term, that we continue to support the city region’s economy and protect jobs throughout the 2021/22 budget period.

3.3 The budget will make special provision for a number of key, strategic priorities in 2021/22. Of these, the most significant are:

 Mersey Tidal Power Project  Liverpool City Region Digital Connectivity Programme  Supporting recovery and reform of the bus market  Support for Halton’s Borough of Culture

3.4 The Mayoral Combined Authority also manages a significant portfolio of investments across the City Region that will improve economic growth and opportunities for our residents, businesses and visitors. Of these investments, the larger ones that will progress through different stages of delivery in 2021/22 are:

 New trains for the Merseyrail network  Shakespeare North Playhouse  Parkside Link Road  Glass Futures  Liverpool City Centre Connectivity Programme  The redevelopment of Runcorn Station Quarter  Headbolt Lane rail enhancements  Wirral Waters and the regeneration of Birkenhead  Bootle & Southport Strategic Investment Fund schemes

3.5 In addition to the Mayoral budget, the Combined Authority’s budget also reflects those powers and responsibilities already held by the Combined Authority prior to the establishment of the City Region Mayoral powers. These principally relate to transport powers. Page 13

3.6 In respect of transport powers, this budget considers the transport levy payable by each of the district councils within the city region and the schedule of tolls in respect of the Mersey Tunnels for 2021/22.

3.7 The Combined Authority has delegated detailed financial monitoring with respect to transport activities to the Transport Committee. The Transport Committee considered the detailed transport budget for Merseytravel at its meeting on 13th January and a verbal update on the outcome of these discussions will be provided.

4. MAYORAL COSTS AND BUDGET 2021/22

4.1 The Liverpool City Region Mayoral Combined Authority has been established in law as a major precepting authority in order that the costs associated with exercising its functions can be funded in an appropriate manner.

4.2 Having due regard to the principles of value for money the Mayor has sought to minimise the costs associated with these functions and has established a structure that includes only those functions directly associated with delivering the maximum benefit for the City Region.

4.3 The Mayor has sought to provide resources to further priorities in digital connectivity, tidal energy and other areas associated with the devolution agreement which will be of significant and long-term benefit to the City Region.

4.4 The Mayor recognises the financial challenges facing households across the City Region as a result of the Covid pandemic and does not want to add to this burden unnecessarily.

4.5 To help address these pressures it is proposed to freeze the precept for 2021/22 at the levels approved in 2020/21. This means that the precept for a Band D property in 2021/22 will remain at the level of £19.00 and £12.67 for Band A.

4.6 The table below confirms the precept that will be payable for each band of property across the City Region.

Table 1 Mayoral Precept by Council Tax Band 2021/22

Band Charge £ Band A 12.67 Band B 14.78 Band C 16.89 Band D 19.00 Band E 23.22 Band F 27.44 Band G 31.67 Band H 38.00

Page 14 4.7 Additional responsibilities and commitments arising from the devolution deal continue to increase and wherever possible, the Mayor is using other sources of funding to shield households from corresponding increases in taxation.

4.8 The Combined Authority (Finance) Order 2017 requires the Mayor to specifically identify the budget for costs directly related to the exercise of Mayoral function in 2021/22. These are presented in Table 2 below.

4.9 It should be noted that Table 2 includes only those costs associated with the Mayoral budget for 2021/22 and is provided for the purposes of transparency. In reality, these costs form only a proportion of overall Combined Authority expenditure which is shown in its general budget in Table 3.

Table 2 Liverpool City Region Combined Authority Mayoral Budget 2021/22

2021/22 Proposed Budget £’000 Mayoral Allowance 96 Corporate Management 728 Bus Alternative Service Delivery 2,000 Tidal Power 1,336 Digital 592 Culture 381 Mayoral Priority Project Support 824 Policy and Strategic Commissioning 1,374 Commercial Development and Investment 625 Communications, Marketing and Corporate Engagement 583 Corporate Services 591 Total Expenditure 9,130 Funded by: Mayoral Precept (7,630) Application of Reserves (1,500) Total Income (9,130)

5. LCR CA REVENUE BUDGET 2021/22

5.1 Overview

5.1.1 The Combined Authority’s revenue budget for 2021/22 includes all the functions of the Combined Authority and not just those associated with the exercise of Mayoral powers. In particular, this budget includes the costs associated with the Combined Authority’s substantial responsibilities for transport.

Page 15 Table 3 LCRCA Revenue Budget 2021/22

2021/22 Proposed Budget £’000 Bus Alternative Service Delivery 2,000 Tidal Power 1,336 Digital 592 Culture 381 Mayoral Programme Delivery 824 Corporate Management 973 Housing and Spatial Planning 626 Policy & Strategic Commissioning 4,292 Commercial Development & Investment 1,924 Communications, Marketing & Corporate Engagement 2,478 Corporate Services 3,016 Organisational Development 184 Mayoral Election Costs 2,000 Merseytravel Grant 93,114 Mersey Tunnels Grant 23,080 Other Payments to Merseytravel 2,926 Halton Differential Levy 3,200 Net Debt Servicing Costs 13,348 Total Expenditure 156,294 Funded by: Transport Levy (97,404) Tunnel Tolls (35,000) Halton Differential Levy (3,200) Mayoral Precept (7,630) Gain Share Revenue (4,020) Mayoral Capacity Grant (1,000) Use of Reserves (8,040) Total Income (156,294) Net Budget Requirement 0

Page 16 5. 2 Strategic Investment Fund Revenue Programme 2021/22

5.2.1 In addition to the main revenue budget, LCRCA is supporting an extensive programme of investment across the City Region through its Strategic Investment Fund.

5.2.2 This investment brings together funding from a number of sources to allow a more strategic and coherent approach to investment in economic growth. While the majority of funding is earmarked for capital schemes, a proportion is available to fund revenue priorities.

5.2.3 Most funding is subject to a five yearly gateway review which will take place during 2021/22. As such, it is critical that the Combined Authority and its delivery partners have the capacity and resources they need to accelerate delivery across all of its investment portfolio.

5.2.4 As a result, the Combined Authority is proposing a significant investment in capacity to maximise the benefit of existing funding streams and to ensure that the City Region is well-placed to benefit from future funding opportunities. This investment includes resources for the management of the current investment portfolio but also includes a provision for the development of a pipeline of schemes in anticipation of future funding opportunities.

5.2.5 Resources available for revenue projects are limited and applications for SIF revenue resources are over-subscribed. The first call on revenue in the current five- year tranche of Gainshare funding has been on existing commitments such as previous International Business Festivals, election costs and capacity building in support of managing the general SIF programme.

Table 4 SIF Revenue Schemes (Committed)

Spend to Spend Spend to Future Years 31/03/2021 2021/22 31/03/2022 Spend £’000 £’000 £’000 £’000 Town Centres 651 1,717 2,368 0 Skills & Apprenticeships 2,256 1,704 3,960 0 Liverpool Film Fund 220 0 220 0 Internationalisation 100 0 100 0 IFB 2018 5,000 0 5,000 0 IFB 2020 2,250 750 3,000 0 Growing Businesses 397 604 1,001 571 Future Proof M6 223 0 223 0 Pre Development Pot 3,640 0 3,640 0 Cultural Events 4,142 0 4,142 0 Createch Scale Up 1,974 760 2,734 728 Covid Recovery Fund 2,045 1,600 3,645 0 Convention Centre 0 1,000 1,000 0 Civic Data Trust 347 1,730 2,077 3,201 Agent Academy 225 168 393 192 Brownfield Fund 1,346 0 1,346 0 Total Projected 24,816 10,033 34,849 4,692 Expenditure Page 17

5.2.6 In addition to those committed schemes detailed in the table above, there are a number of other SIF revenue schemes which are currently either in development or awaiting approval. These are detailed in the table below.

Table 5 SIF Revenue Schemes (Pipeline)

Projected Total Spend £’000 Talent City 1,500 Port City Liverpool 863 Music Fund 1,915 Kindred 689 Households into Work 1,400 Brexit Fund 10,000 TOTAL 16.367

5.3 TRANSPORT

5.3.1 The Combined Authority is the transport authority for the Liverpool City Region. Its transport responsibilities are discharged by Merseytravel and by Halton Council within the boundaries of Halton.

5.3.2 Transport responsibilities are funded through the transport levy. The transport levy has reduced significantly in recent years and this has benefited those districts that fund the levy through Council Tax.

5.3.3 Higher inflation and demographic pressures mean that further levy reductions are not possible for 2021/22 however the Combined Authority can commit to maintaining a flat cash Levy for 2021/22. Should this proposal be agreed, the distribution of the Levy will be as detailed in the table below.

Table 6 Transport Levy by Authority

Transport Levy Transport Levy 2020/21 2021/22 £’000 £’000 Knowsley 10,240 10,279 Liverpool 33,869 33,924 Sefton 18,851 18,828 St Helens 12,321 12,302 Wirral 22,123 22,071

Total 97,404 97,404

Note: Halton Council equivalent transport differential levy is £3.2m for 2021/22

5.3.4 The Covid 19 pandemic has led to a crisis in transport patronage and funding. For services to remain sustainable there is a need for a return to broadly pre Covid levels of patronage across all modes of transport. Given the continued Covid Page 18 restrictions there are some significant uncertainties and financial risks here and therefore there may be a need to review cost models and funding to ensure transport provision remains affordable over the medium to long term.

5.3.5 The most significant transport activity on 2021/22 will be the operation and implementation of the new fleet of rolling stock. Changes to the original operating model for the new fleet will require changes to be made to the original business case in 2021/22 and there is a financial risk associated with this.

5.3.6 While transitional funding arrangements will apply in 2021/22, managing the financial risk associated with changes to the operating model remains a priority to ensure that our rail funding model remains sustainable.

5.3.7 In addition, delays on the part of Network Rail mean that the full benefits of the new timetable could be delayed until later in 2021/22, even though the new fleet will be in service (see 6.6). This will have a temporary but negative impact on revenue. Should this be the case, this could be mitigated by retaining a small proportion of the existing fleet during the transitional phase.

5.3.8 This will increase the costs associated with the Rolling Stock programme for 2021/22 and require a further draw down of resources from the Rail Capital Financing reserve.

5.3.9 It will also require the Combined Authority to provide greater headroom in respect of borrowing cost than is currently the case and this is reflected in the Capital Programme and Treasury Management sections of this report.

5.3.10 Other transport priorities will include:

I supporting the recovery and long-term reform of the transport network from the impacts of the Covid pandemic; ii examine the potential benefits and risks associated with the Mayor’s powers in respect of bus services; iii. deliver an ambitious programme of investment in transport infrastructure through the Transforming Cities Programme; iv. invest in the Mersey Ferries service through the potential provision of new vessels and associated investment in landing stages; v. work with the Bus Alliance to increase patronage across the network by the promotion of affordable, sustainable and reliable bus services, backed by a modern, integrated ticketing scheme; vi continue to deliver the Long Term Rail Strategy including the progression of schemes at Headbolt Lane, St James and Liverpool Central; and vii continue to work with TfN to demonstrate the value of HS2 and NPR etc.

5.3.11 In order to deliver on these priorities, Merseytravel will receive grants from the Combined Authority in 2021/22, which are detailed in section 6.

5.3.12 Arrangements for Halton will continue to recognise the historical differences in transport funding and delivery, with Halton subject to a differential transport levy of £3.2m which will be paid back to Halton for transport delivery within its boundaries on behalf of the LCRCA.

Page 19

5.4 TUNNEL TOLLS

5.4.1 Setting the tunnels tolls is a key requirement of the LCRCA’s budget. The Transport Committee considered a detailed report on the proposed schedule of tolls at its meeting of the 13th January 2021 and is considering an unchanged schedule of tolls retaining all tolls at 2020/21 levels for 2021/22.

Table 7 Agreed Tunnel Tolls 2021/22

Vehicle Authorised 2021/22 2021/22 Fast 2021/22 Fast Class Toll Cash Toll Tag Toll – Tag Toll – (November LCR Non LCR RPI) Resident Resident 1 £2.10 £1.80 £1.00 £1.80 2 £4.20 £3.60 £2.40 £2.40 3 £6.30 £5.40 £3.60 £3.60 4 £8.40 £7.20 £4.80 £4.80

5.4.2 As part of the ongoing tunnels tolls review process, a number of discounts were offered as part of the tunnel tolls setting process for 2020/21. These are:

 all emergency service liveried vehicles to be allowed free travel through the Mersey Tunnels;  travel through the Mersey Tunnels between 10pm on 24 December and 6.00am on 26 December each year be allowed free in recognition that public transport services are not available during these times;  a reduced Fast Tag charged for Fast Tag account holders who are residents within the Liverpool City Region. This discount will be available for class 1 vehicles and applicable to just private Fast Tag accounts, not business account Fast Tag holders;  the existing Tunnels disabled concessionary travel scheme.

5.4.3. It is proposed that these discounts/ concessions remain in place for 2021/22.

5.5 ADULT EDUCATION

5.5.1 2021/22 is the third year in which the budget for Adult Education has been devolved to the CA. The expenditure and associated grant in respect of Adult Education is contained within the Policy line of the budget tables above. As the service is funded in entirety through the grant, the net impact on the net spend is nil. As funding in respect of AEB is received in relation to academic years, the funding for the financial year comprises funding in respect of the second years devolved funding and the start of the third year which commences August 2021. Contracts are in place with providers until July 2021 with funding allocation for the period from August 2021 yet to be confirmed.

Page 20 5.5.2 The annual funding allocation for AEB is announced in January for the academic year commencing August 2021 and therefore at the time of writing this report the actual settlement is unknown. The CA’s share of the national pot remains fixed at 3.99% and therefore for the purpose of setting a budget, the 2020/21 allocation is being used for planning purposes. Any variations will increase or decrease the amount available for dispersal and will not impact on the CA’s overall financial position.

5.5.3 Of this allocation, 2% of the grant value will be top sliced to cover management and administration costs with the remainder available for delivery. In line with previous years, around £2.5m will be retained as a contingency to respond to in year demands, the remainder will be disbursed as grant funded allocations and contracted services on an approximate 2:1 ratio.

5.5.4 The priority areas for AEB in 2021/22 will be:

 maintaining the allocation given to Adult and Community Learning;  funding the required statutory entitlements for learning;  supporting the local flexibilities introduced as a result of devolution including the extension of the low wage pilot;  continuing the test and learn provision, to explore new and innovative ways of delivering learning; and  continue to be responsive to learner and employer demand.

6. CAPITAL PROGRAMME

6.1 The Combined Authority receives capital grant in respect of the Local Growth Fund (LGF) programme, devolution monies received from central government (Gain Share funding) and direct transport related grants. The LCRCA’s operates a Single Pot for the capital funds for which it is a recipient. For 2021/22 the annual allocations into the single pot are as follows:

Table 8 Capital Funding Grant Allocations 2021/22

2021/22 £’000 Gain Share Capital 18,000 Transforming Cities 54,000 Brownfield Fund 23,000 Getting Building Fund* 13,000 Transport Funding 26,500 Total Annual Allocation 134,500

6.2 Funding allocations in respect of Gain Share and the Transport Single Capital Pot both remain subject to confirmation. The next tranche of Gain Share will be confirmed in the new year on completion of the Gateway review. Indications from BEIS are that this funding will be received however this is still to be confirmed. Transport capital funding allocations were not confirmed in the Spending Review and therefore figures are subject to confirmation. The current assumption is that Page 21 this funding will be received however there is a risk that the quantum could be different. Plans for this funding would be scaled in accordance with funding received. Due to the uncertainty here it is proposed that a separate report is submitted to the CA in the New Year with proposals for use once funding has been confirmed.

6.3 The table below summarises the Authority’s capital programme for 2021/22 including Merseytravel spend. A more detailed scheme based analysis is attached to this report at Appendix 3.

Table 9 Projected Capital Spend 2021/22

2021/22 £’000 Capital Expenditure

Gain Share Schemes 55,805 Transforming Cities 80,830 Brownfield Funding 15,330 Get Building Fund 22,352 Transport Single Pot 26,500 Transport Scheme Development 9,731 Rolling Stock 94,159 Other Merseytravel Capital Schemes 17,106 Infrastructure Fund 15,000 Pipeline Scheme Development 4,515 Total Expenditure 331,596

Funded by:

Grant Funding (182,903) Revenue Contributions to Capital (7,480) Use of Reserves (7,140) Borrowing (134,074) Total Funding (331,596)

6.4 2021/22 will see the first of the new fleet of rolling stock in service on the Merseyrail Network. This is the largest capital programme currently in delivery across the City Region and the largest ever undertaken by Merseytravel.

6.5 The elements of the programme that are directly controlled and contracted for by the CA are the rolling stock itself, new depot facilities on the site of the original Kirkdale depot and enhancements to wifi connectivity.

6.6 These elements of the programme remain broadly on target for both delivery and cost. Depot construction is complete and the first units of rolling stock are already complete and in test awaiting formal handover. Travel restrictions between UK and Switzerland, Poland and Spain (where elements of our trains are manufactured) as a result of COVID has had an impact on testing and formal handover.

Page 22 6.7 Where the project has encountered further difficulties however is in its various interfaces with Network Rail. In a number of significant areas, including changes to platform height and length and upgrades to power supplies Network Rail have passed on significant additional expenditure which the CA has been forced to incur.

6.8 These infrastructure works, required from Network Rail, were considered to be a financial and delivery risk at the onset of the project and as such, a risk provision was made in the initial capital allocation.

6.9 These additional costs and works will occur over the next 18 months to two years. Officers are currently working with Network Rail to identify options to mitigate costs and reduce the overall quantum of any additional costs. In addition, Officers will also endeavour to mitigate the need for additional borrowing, looking at options to apply external funding for specific activities.

6.10 The Treasury Management Strategy appended to this report reflects this overall borrowing requirement.

7.0 FINANCIAL RISKS AND RESERVES

7.1 The table below details the reserves position for Combined Authority taking account of the projected use of reserves in 2020/21 and 2021/22.

Table 10 Projected Reserves Position

Balance as at Utilisation in Balance at 31 1 April 2021 Year March 2022 £’000 £’000 £’000 Capital Receipts 5,721 0 5,721 Revenue/ Working Balances 4,043 0 4,043 Infrastructure Reserve 43,676 (7,140) 36,536 Tunnels Reserve 5,411 0 5,411 Rail Reserve 37,293 (4,484) 32,809 Chrysalis Reserve 34,972 0 34,972 Other Reserves 14,274 0 14,274 Total 145,390 (11,624) 133,766

7.2 Whilst the quantum of reserves remains healthy, a number of the reserves (including the Tunnels, Chrysalis and Rails reserves) are earmarked for specific purposes and therefore cannot be used to support general CA activity.

7.3 The budget for 2021/22 is being set against the backdrop of significant financial uncertainty. There is already a great deal of uncertainty around the timing of any upturn in the use of public transport and this impacts significantly on the Merseytravel budget and the support that is required from the Combined Authority. Revenues from the precept, tunnel tolls, ferries and TBS income could be negatively impacted by further restrictions that could be implemented in the New Year to address the Covid 19 impact. Whilst budget setting has taken a prudent approach to addressing these concerns there will be a need for careful monitoring and timely reporting during the year.

Page 23 7.4 Full recovery in the transport sector is highly dependent upon restrictions regarding social distancing being lifted. While social distancing remains necessary, capacity on trains and buses is significantly reduced. This will present a risk to our business both as direct operators of transport services but also potentially more significant risks from commercial operator failure on both rail and bus.

7.5 This is a national issue and we are working closely with DfT and the commercial operators to ensure network stability and there are costs associated with this.

7.6. Of all our operations the most significant and immediate risk is in the introduction of the new fleet of rolling stock. This project is highly dependent on increasing revenues to fund the additional cost of new trains and without this additional revenue there will be problems in financing the trains. We are working closely with MEL and DfT to find a resolution to this.

7.7 The delivery of the Rolling Stock project has also been negatively impacted by Covid 19 which has led to delays and cost pressures arising. As with all rail projects, there is a significant degree of risk associated with the programme where contracts for delivery are with Network Rail. Due to the emerging cost basis on which these contacts work, cost increases will flow back to Merseytravel as the contractor and any such increases that cannot be mitigated will put pressure on the overall capital cost of the scheme.

7.8 The CA has set an ambitious programme of capital delivery for 2021/22 which is predicated on an ability to deliver across most of the year without the restrictions that impacted on delivery in 2020/21. A number of the grants received by the Authority to support capital delivery are time limited and therefore there is a risk that any significant restrictions or impediments to delivery in 2021/22 arising as a result of Covid 19 or other economic factors could lead to the risk of grant clawback. The Authority will seek to mitigate this by taking a whole programme approach to its capital activity and using the flexibilities available to over programme and utilise funding across the programme to ensure resource maximisation.

8. RESOURCE IMPLICATIONS

8.1 Human Resources

None as a direct result of this report.

8.2 Physical Assets

This report will provide resources to Merseytravel to undertake its asset management function in respect of the Mersey Tunnels and other LCRCA assets.

8.3 Information Technology

None as a direct result of this report.

Page 24

9. RISKS AND MITIGATION

None as a direct result of this report.

10. EQUALITY AND DIVERSITY IMPLICATIONS

Members are reminded that under Public Sector Equality Duty, the Combined Authority has a duty to eliminate discrimination, advance equality of opportunity and foster good relations between people who share a protected characteristic and those who do not. Whilst the level of detail contained within this budget does not lend itself to a full appraisal of the operational implications with respect to equality and diversity, it is possible that there could be resultant implications for people who share a protected characteristic, for example older disabled people.

Therefore whilst there are no issues with the budget itself, any actions undertaken as part of the management of any savings, the equalities consequences will be fully appraised and considered as part of the process, and any negative implications for any of the protected characteristics will be mitigated, where possible, subject to available resources.

11. COMMUNICATION ISSUES

None as a direct result of this report.

12. CONCLUSION

12.1 The Liverpool City Region Mayoral Combined Authority is recommending a series of measures within its overall budget for 2021/22. These measures each recognise the need to deliver the functions of the Mayoral Combined Authority while seeking to protect households in the City Region from additional financial burdens wherever possible.

JOHN FOGARTY Director of Corporate Services

Contact Officers:- Sarah Johnston, Assistant Director of Finance (0151 330 1015) Ben O’Brien, Head of Communications, Engagement and Marketing (07966 674 053)

Appendices Appendix 1 LCRCA Treasury Management Strategy Appendix 2 LCRCA Capital Strategy Appendix 3 Capital Programme 2021/22

Page 25

APPENDIX ONE

COMBINED AUTHORITY TREASURY MANAGEMENT STRATEGY STATEMENT, MINIMUM REVENUE PROVISION POLICY STATEMENT AND ANNUAL INVESTMENT STRATEGY 2021/22

1. BACKGROUND

1.1 The Combined Authority is required to operate a balanced budget which broadly means that expenditure incurred during the year will be met through cash raised during the year. Part of the treasury management operation is to ensure that cash flow is adequately planned, with cash available when it is needed. Surplus monies are invested in counterparties or instruments commensurate with the Authority’s low risk appetite, providing adequate liquidity initially before considering investment return.

1.2 The second main function of the Combined Authority’s treasury management activities is the funding of its capital plans. The capital plans provide a guide to the borrowing need of the Combined Authority, essentially the longer term cash flow planning to ensure that the Combined Authority can meet its capital spend obligations. The management of longer term cash may involve arranging long or short term loans or using longer term cash flow surpluses. On occasions, when it is prudent and economic, any debt previously drawn may be restructured to meet cost or risk objectives.

1.3 The contribution the treasury management function makes to the Combined Authority is critical as the balance of debt and investment operations ensure liquidity or the ability to meet spending commitments as they fall due; either on day to day revenue or for larger capital projects. The treasury operations will see a balance of the interest cost of debt and the investment income arising from cash deposits affecting the available budget. Since cash balances generally result from reserves and balances, it is paramount to ensure adequate security of the sums invested as a loss of principal will in effect result in a loss to General Fund Balance.

1.4 Whilst any commercial initiatives or loans to third parties will impact on the treasury function, these activities are generally classed as non-treasury activity, arising usually from capital expenditure, and are separate from the day to day treasury management activities.

CIPFA defines treasury management as:

“The management of the Combined Authority’s borrowing, investments and cash flows, its banking, money market and capital market transactions; the effective control of the risks associated with those activities; and the pursuit of optimum performance consistent with those risks.”

Reporting Requirements

1.5 The CIPFA Prudential and Treasury Management Codes (revised 2017) detail the reporting requirements for the Combined Authority. From a treasury perspective, the Page 26 Combined Authority is required to receive and approve as a minimum, three main reports each year, which incorporate a variety of policies, estimates and actuals. These can be summarised as:

 An annual treasury management strategy and prudential and treasury indicators - the capital plans, (including prudential indicators); - a minimum revenue provision (MRP) policy, (how residual capital expenditure is charged to revenue over time) - the treasury management strategy, (how the investments and borrowings are to be organised), including treasury indicators; and - an investment strategy, (the parameters on how investments are to be managed).  A mid-year treasury management report providing an update on progress of the capital position and amending treasury and prudential indicators if required; and  An outturn treasury report detailing the outturn position and comparing performance against estimates included within the strategy.

1.6 In addition to the treasury reporting requirements, the CIPFA 2017 Prudential and Treasury Management Codes require all Authorities to prepare a capital strategy report which will cover the following:

 a high level, long terms overview of how capital expenditure, capital financing and treasury management activity contribute to the provision of services;  an overview of how the associated risk is managed; and  the implications for future financial sustainability.

The aim of the capital strategy is to ensure that all Members of the Combined Authority fully understand the overall long term policy objectives and resulting capital strategy requirements, governance procedures and risk appetite.

1.7 The capital strategy is reported separately from the Treasury Management Statement, with non-treasury investments being reported through the former. The rationale for the separate reporting is to ensure there is a separation of the core treasury function with the focus on security, liquidity and yield principles and the non-treasury investments which are driven by expenditure on an investment with the intended purpose of generating a return. The capital strategy will show:

 The corporate governance arrangements in place for non-treasury investments;  Any service objectives relating to these type of activities;  The expected income, costs and resulting contributions;  The debt related to the activity and the associated interest costs;  The pay back period (MRP Policy);  For non-loan type investments, the cost against the current market value; and  The risks associated with each activity.

Treasury Management Strategy for 2021/22

1.8 The Treasury Management Strategy for 2021/22 covers two main areas:

Page 27  Capital issues - the capital expenditure plans and the associated prudential indicators; - the minimum revenue provision (MRP) policy.

 Treasury management issues - the current treasury position; - treasury indicators which limit the treasury risk and activities of the Combined Authority; - prospects for interest rates; - the borrowing strategy; - policy on borrowing in advance of need; - debt rescheduling; - the investment strategy; - creditworthiness policy; and - the policy on use of external service providers.

These elements cover the requirements of the Local Government Act 2003, the CIPFA Prudential Code, MHCLG MRP Guidance, the CIPFA Treasury Management Code and MHCLG Investment Guidance.

1.9 The Combined Authority uses Link Group, Treasury solutions as its external treasury management advisors. The Combined Authority recognises that responsibility for treasury management decisions remains with the organisation and seeks to ensure that undue reliance is not placed upon external service providers. All decisions will be undertaken with regards to all available information, including, but not solely, our treasury advisors. The Combined Authority recognises that there is value in employing external providers of treasury management services in order to acquire access to specialist skills and resources. The Combined Authority will ensure that the terms of their appointment and the methods by which their value will be assessed are properly agreed and documented, and subjected to regular review.

2. THE CAPITAL PRUDENTIAL INDICATORS 2021/22-2022/23

2.1 Capital Expenditure

2.1.1 The Combined Authority’s capital expenditure plans are a key driver of its treasury management activity and the output of these plans are reflected in the Prudential Indicators. The prudential indicators are designed to assist members’ overview and confirm capital expenditure plans.

The table overleaf summarises the Combined Authority’s capital expenditure plans for the current financial year and the three subsequent years, together with the proposed sources of financing.

Page 28

2020/21 Estimated 2021/22 2022/23 2023/24 Outturn Estimate Estimate Estimate £m £m £m £m Combined Authority Group capital spend 327.00 316.60 58.50 7.50 Commercial activities/ non-financial investments 11.00 15.00 20.00 15.00 Total Capital Spend 338.00 331.60 78.50 22.50 Funded by: Capital Grants -232.22 -182.90 -51.00 0.00 Other Contributions -6.20 -14.62 -7.50 -7.50 Borrowing -100.06 -134.07 -20.00 -15.00 (1) A breakdown of the Merseytravel and Combined Authority capital spend is shown in the main body of the budget report

2.1.2 To the extent that the overall quantum of the programme detailed above increases and cannot be funded through other grants or reserves, this would result in an increase to the overall requirement to borrow.

2.1.3 In line with the Combined Authority’s SIF strategy, funding can be provided to sponsors in a variety of formats: be that grant, loan or equity. To date, the Combined Authority has approved 4 separate repayable instruments on a mixture of commercial and sub commercial rates. Each project has been subject to a detailed viability assessment and modelling. Current proposals for non financial investments are such that for the period through to 2023, all activity will be funded by the Combined Authority’s devolution funding and borrowing. There is therefore a risk that the Combined Authority will not recover the full value of its investment which would reduce the value of recyclable funds available for reinvestment. In accordance with accounting standards these loans will be subject to an expected credit loss assessment, and to the extent that there is an impairment, this will be reported and accounted for accordingly.

2.2 The Combined Authority’s Borrowing Need (Capital Financing Requirement)

2.2.1 The second prudential indicator is the Authority’s Capital Financing Requirement (CFR). The CFR represents the historic outstanding capital expenditure that has not yet been paid for either through revenue or capital resources and therefore a measure of the Authority’s indebtedness and underlying need to borrow.

2.2.2 To the extent that the Combined Authority undertakes capital expenditure for which there are immediately available capital or revenue resources, this will increase the CFR. The CFR does not, however, increase indefinitely as the MRP is a statutory annual charge which broadly reduces indebtedness in line with each assets life.

2.2.3 The Combined Authority is asked to approve the CFR projections below.

Page 29

2020/21 2021/22 2022/23 2023/24 Estimated Estimate Estimate Estimate Outturn £m £m £m £m Opening CFR 424.98 517.35 644.99 654.50 CFR Services 89.06 119.07 CFR Commercial Activity 11.00 15.00 20.00 15.00 Less: MRP -7.69 -6.43 -10.49 -10.66 Net Movement in CFR 92.37 127.64 9.51 4.34 Closing CFR 517.35 644.99 654.50 658.84

2.2.4 As detailed at 2.1.4, there are currently plans to utilise borrowing to support commercial or non financial investments, however these are subject to further due diligence and review. The position in respect of these will be kept under review and future treasury strategies updated accordingly.

2.3 Minimum Revenue Provision (MRP) Policy Statement

2.3.1 The Combined Authority is required to make provision for the repayment of an element of the accumulated capital spend each year through a charge to revenue (the Minimum Revenue Provision – MRP) however should the Combined Authority wish it is also allowed to undertaken additional voluntary payments if required (Voluntary Revenue Provision – VRP).

2.3.2 The Ministry for Housing, Communities and Local Government (MHCLG) regulations have been issued which require the full Combined Authority to approve an MRP statement in advance of the year. Under the guidance a number of options are available however the Combined Authority does have some discretion over the approach taken however the overriding requirement is that any approach must be prudent.

2.3.3 The regulations allow for an Authority to review and revise its MRP statement at any stage, providing that the overriding requirement that the resulting approach is prudent. To this end the Combined Authority seek to revise the MRP Policy for 2021/22. Based on the regulations, the Combined Authority is recommended to approve the following MRP statement for application in 2021/22:-

 For historic capital expenditure (i.e. that incurred before 2008), MRP has previously been calculated at 4% of the previous year end’s Capital Financing Requirement (option 2 under the MHCLG guidance). It is proposed that the Combined Authority move to applying option 3 the Asset Life Method (Annuity Method) as the basis on which to calculate MRP It is proposed to apply a period of 50 years as the period which is proxy for the underlying asset’s life. It is felt appropriate to use the maximum life period as consequence of the fact that 55% of the Authority’s asset base (excluding assets under construction) are infrastructure assets with a maximum asset life of 72 years and 20% of the asset base relates to lease and free hold property which has a maximum asset life of 52 years. Page 30

 For new (unsupported) borrowing, the Authority intends to take a more nuanced, principle-based approach to the calculation on MRP. The approach to the calculation will be guided by whether the borrowing related to the creation or enhancement of an asset or whether the borrowing is to support the provision of a loan or other form of investment within another organisation.

Where the borrowing underpins the acquisition and enhancement of assets funded through borrowing is that an Asset Life Method to calculating MRP (Option 3 under the MHCLG guidance). Under the guidance there are two approaches that can be applied for calculating MRP under the Asset Life Method: Equal Instalment or the Annuity Method. The Authority will make the decision as to the specific approach to be adopted on a case by case basis determining what is most appropriate and prudent based on the underlying asset.

For capital expenditure that is classified as such under Regulation 25(1) of the Local Government Act 2003, the rebuttable presumption will be that a revenue provision will be made and that MRP will be calculated in accordance with Option 3 (Asset Life Method) applying the maximum life value detailed in the statutory guidance.

This presumption will be challenged on a case by case basis and to the extent that the Authority is seeking to make a loan to a third party, the approach to making a prudent provision will be made giving due consideration to a variety of factors including the following:

 Whether the loan is being made on commercial or sub commercial rates;  The duration of the loan;  The financial standing of the borrower;  The degree of perceived risk to the underlying capital sums invested;  The strength or existence of covenants that underpin any loans; and  The structure of the loan and subsequent repayments.  Where loans are made to support policy objectives or there is a degree of risk that the capital will not be repaid either in full or in part, then a revenue provision will be made using Option 3 as detailed above.

Where loans are made where there is a higher degree of confidence in repayment and there regular repayments over the life of the agreement, then the Authority will seek to set aside capital receipts arising from the repayment of the loan to reduce the CFR as opposed to making an annual provision for MRP.

Where loans are made where there is a high degree of confidence in repayment but where repayment is irregular or is on expiration of the loan, then the Authority will make a revenue provision in accordance with Option 3 using an asset life as determined through this method. To the extent that the loan is repaid over a shorter timescale, capital receipts from repayment would be used to write down any remaining CFR liability relating to the loan

Page 31

2.4 Borrowing

2.4.1 The capital expenditure plans set out in Section 2.1 provide details of the service activity of the Combined Authority. The treasury management function ensures that the Combined Authority’s cash is organised in accordance with professional codes, so that sufficient cash is available to meet the service activity and its capital strategy. This will involve organising cash flows and appropriate borrowing facilities as necessary. The table below details the projected overall treasury management portfolio as at 31 March 2021.

As at As at As at As at 06/12/20 06/12/20 31/03/21 31/03/21 % £’000 % £’000 Treasury Investments Banks 320,400 90.15% 123,865 83.2% Local Authorities 35,000 9.85% 25,000 16.8% Total Treasury Investments 355,400 148,865 Loans PWLB 152,683 43.7% 148,480 43.6% European Investment Bank 183,770 52.6% 180,656 53.0% Transferred Debt 12,586 3.6% 11,442 3.4% Total External Borrowing 349,039 340,577 Net Treasury Investments/ 6,361 (191,712) (Borrowing)

2.4.2 The table below provide an analysis of the Combined Authority’s outstanding debt as at 31 March 2021.

Outstanding Debt as at 31 March Principal Average Rate 2021 £m % Public Works Loan Board (PWLB) EIP 50.190 6.15 Loans PWLB Annuity Loans 44.979 8.25 PWLB Maturity Loans 53.311 4.49 European Investment Bank 180.656 1.521 Transferred Debt 11.442 4.78 Total 340.578

2.4.3 The Combined Authority’s projections for borrowing are summarised below showing actual external debt against the underlying capital borrowing need (the CFR) highlighting any under or over borrowing.

Page 32

2020/21 2021/22 2022/23 2023/24 External Debt Estimate Estimate Estimate Estimate £m £m £m £m External and Transferred Debt 1 357.49 340.44 323.39 306.34 April Forecast Change in Debt -17.05 -17.05 -17.05 -17.05 Gross Debt 31 March 340.44 323.39 306.34 289.29 Capital Financing Requirement 517.35 644.99 654.50 658.84 (Under)/ Over Borrowing -176.91 -262.64 -369.40 -421.46

2.4.4 Within the range of prudential indicators there are a number of key indicators to ensure that the Combined Authority operates its activities within well defined limits. One of these is that the Combined Authority needs to ensure that its gross debt does not, except in the short term, exceed the total of the CFR in the preceding year plus the estimates of any additional CFR for 2021/22 and the following two financial years. This allows some flexibility for limited early borrowing for future years, but ensures that borrowing is not undertaken for revenue or speculative purposes.

2.4.5 The Director of Corporate Services reports that the Combined Authority complied with this prudential indicator in the current year and does not envisage difficulties for the future. This view takes into account current commitments, existing plans and the proposals contained within the budget report.

Treasury Indicators: Limits to Borrowing Activity

2.4.6 The Operational Boundary is the limit beyond which external debt is not normally expected to exceed. Ordinarily this would be a figure commensurate with the CFR however this may be lower or higher depending on the Combined Authority’s levels of actual debt and its ability to fund under borrowing by other cash resources. The table below summarises estimated operational boundary for the current and subsequent three years.

2020/21 2021/22 2022/23 2023/24 Forecast Estimate Estimate Estimate £m £m £m £m Debt 464.27 533.51 530.05 532.97 Other Long Term Liabilities 0.00 0.00 0.00 0.00 Commercial Activities 0.00 15.00 20.00 15.00 Total 464.27 548.51 550.05 547.97

2.4.7 The Authorised Limit for external debt represents the legal limit beyond which external debt is prohibited. The limit for this key prudential indicator is set by the Combined Authority and therefore any changes to this limit must be agreed by the Combined Authority also. The Authorised Limit reflects the level of external debt which, whilst not desirable or sustainable over the longer term, could be afforded in the short term.

Page 33 1. This is the statutory limit determined under section 3 (1) of the Local Government Act 2003. The Government retains an option to control either the total of all Authorities plans, or those of a specific Authority, although this power has not yet been exercised. 2. The Combined Authority is asked to approve the following authorised limit overleaf:

2020/21 2021/22 2022/23 2023/24 Forecast Estimate Estimate Estimate £m £m £m £m Debt 517.35 629.99 634.50 643.84 Other Long Term Liabilities 0.00 0.00 0.00 0.00 Commercial Activities 0.00 15.00 20.00 15.00 Total 517.35 644.99 654.50 658.84

Prospects for Interest Rates

2.4.8 The Combined Authority has appointed Link Asset Services as its treasury advisors and part of their service is to assist the Combined Authority to formulate a view on interest rates. The table below provides an overview of Link Group’s view of interest rates.

Link Group Interest Rate View 9.11.20 These Link forecasts have been amended for the reduction in PWLB margins by 1.0% from 26.11.20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Dec-23 Mar-24 BANK RATE 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 3 month ave earnings 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 6 month ave earnings 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 12 month ave earnings 0.20 0.20 0.20 0.20 0.20 0.20 0.20 0.20 0.20 0.20 0.20 0.20 0.20 0.20 5 yr PWLB 0.80 0.80 0.80 0.80 0.80 0.90 0.90 0.90 0.90 0.90 1.00 1.00 1.00 1.00 10 yr PWLB 1.10 1.10 1.10 1.10 1.10 1.20 1.20 1.20 1.20 1.20 1.30 1.30 1.30 1.30 25 yr PWLB 1.50 1.50 1.60 1.60 1.60 1.60 1.70 1.70 1.70 1.70 1.80 1.80 1.80 1.80 50 yr PWLB 1.30 1.30 1.40 1.40 1.40 1.40 1.50 1.50 1.50 1.50 1.60 1.60 1.60 1.60

2.4.9 The coronavirus outbreak has done huge economic damage to the UK and economies around the world. After the Bank of England took emergency action in March to cut Bank Rate to first 0.25%, and then to 0.10%, it left Bank Rate unchanged at its subsequent meetings to 5th November, although some forecasters had suggested that a cut into negative territory could happen. However, the Governor of the Bank of England has made it clear that he currently thinks that such a move would do more damage than good and that more quantitative easing is the favoured tool if further action becomes necessary. As shown in the forecast table above, no increase in Bank Rate is expected in the forecast table above as economic recovery is expected to be only gradual and, therefore, prolonged.

2.4.10 As the interest forecast table for PWLB certainty rates above shows, there is expected to be little upward movement in PWLB rates over the next two years as it will take economies, including the UK, a prolonged period to recover all the momentum they have lost in the sharp recession caused during the coronavirus shut down period. From time to time, gilt yields, and therefore PWLB rates, can be Page 34 subject to exceptional levels of volatility due to geo-political, sovereign debt crisis, emerging market developments and sharp changes in investor sentiment, (as shown on 9th November when the first results of a successful COVID-19 vaccine trial were announced). Such volatility could occur at any time during the forecast period.

2.4.11 Economic and interest rate forecasting remains difficult with so many influences weighing on UK gilt yields and PWLB rates. The above forecasts (and MPC decisions), will be liable to further amendments depending on how economic data and developments in financial markets transpire over the next year. Geopolitical developments, especially in the EU, will also have a major impact. Forecasts for average investment earnings beyond the three-year horizon will be heavily dependent on economic and political developments.

2.4.12 Based on the above, the impact on investment and borrowing rates is likely to be as follows:

 Investment returns are likely to remain low during 2021/22 with little increase in the following two years  Borrowing interest rates fell to historically very low rates as a result of the COVID crisis and the quantitative easing operations of the Bank of England: indeed, gilt yields up to 6 years were negative during most of the first half of 20/21. The policy of avoiding new borrowing by running down spare cash balances has served local authorities well over the last few years. However, the unexpected increase of 100bps in PWLB rates required an initial major rethink of local authority treasury management strategy and risk management. However, in March 2020, the Government started a consultation process for reviewing the margins over gilt rates for PWLB borrowing for different types of local authority capital expenditure and on it’s conclusion in November 2020 the PWLB standard and certainty margins were reduced by 1%  The Combined Authority will not be able to avoid borrowing to finance new capital expenditure (rolling stock fleet), there will be a cost of carry, to any new long term borrowing that causes an increase in cash balances as this position will most likely incur a revenue cost.

Borrowing Strategy

2.4.13 The Combined Authority currently has an under borrowed position, which means that the CFR, the underlying need to borrow, has not been fully funded by loan debt as cash supporting the Combined Authority’s balances and reserves have been used as a temporary measure. The Combined Authority borrowed £190 million from the European Investment Bank in December 2019 to support the rolling stock programme, given the quantum of the capital programme over the next three years, there is likely to be an absolute need to borrow additional funds at some point. Moreover the longer term forecast for interest rates is to increase and therefore consideration must be given to weighting the short term advantage of internal borrowing against potential long term costs. This is if the opportunity is missed for

Page 35 taking loans at longer term rates where the rates are expected to be higher in future years.

2.4.14 Whilst investment returns remain subdued and a relative dearth of high quality counterparties remains an issue, the strategy of utilising cash balances is considered prudent. Against this background, the Director of Corporate Services will monitor interest rates in financial markets and adopt a pragmatic approach to changing circumstances and satisfying the need to borrow, seeking to identify the options that are available and provide value for money for the Combined Authority.

 If it was felt that there was a significant risk of a sharp FALL in borrowing rates, (e.g. due to a markers increase of risks around relapse into recession or of risks of deflation), the borrowing will be postponed.  If it was felt that there was a significant risk of a much sharper RISE in borrowing rates than that currently forecast, perhaps arising from an acceleration on the rate of increase in central rates in the USA and UK, an increase in world economic activity, or a sudden increase in inflation risks, then the portfolio position will be re-appraised. Most likely, fixed rate funding will be drawn whilst interest rates are lower than they are projected to be in the next few years.

Any decisions will be reported to the appropriate decision making body at the next available opportunity.

Policy on borrowing in advance of need

2.4.15 The Combined Authority will not borrow more than or in advance of need purely to profit from the investment of the extra sums borrowed. Any decision to borrow in advance will be forward approved within the Capital Financing Requirement estimates, and will be considered carefully to ensure value for money can be demonstrated and security of funds evidenced. Risks associated with borrowing in advance of need will be subject to prior appraisal and subsequent reporting through the mid-year or annual reporting mechanism.

Debt Rescheduling

2.4.16 The Combined Authority will monitor opportunities to generate savings through debt rescheduling activity, however any savings that could be generated would need to be considered in light of the current treasury position and the size of any potential premiums payable on early redemption of debt. Reasons for debt rescheduling will include:

 The generation of cash savings or discounted cash flow savings;  Helping fulfil the treasury strategy; or  Enhancing the balance of the portfolio (maturity profile or balance of volatility).

Consideration will also be given to identify if there are residual potential for making short term savings by running down investment balances to repay debt prematurely as short term rates on investments are likely to be lower than rates paid on current debt. Page 36

Rescheduling of current borrowing in our debt portfolio is unlikely to occur. If rescheduling was done, it will be reported to the Combined Authority, at the earliest meeting following its action.

2.5 New financial institutions as a source of borrowing and types of borrowing

2.5.1 In March 2020, the Government started a consultation process for reviewing the margins over gilt rates for PWLB borrowing for different types of local authority capital expenditure, On 25 November 2020, the Chancellor announced the conclusion to the review of margins over gilt yields for PWLB rates; the standard and certainty margins were reduced by 1% but a prohibition was introduced to deny access to borrowing from the PWLB for any local authority which had purchase of assets for yield in its three year capital programme. Consideration will also need to be given to sourcing funding at cheaper rates from the following:

 Local authorities (primarily shorter dated maturities)  Financial institutions (primarily insurance companies and pension funds but also some banks)  Municipal Bonds Agency (no issuance at present but there is potential)

2.6 Approved Sources of Long and Short term Borrowing

2.6.1 Whilst in practice the Combined Authority will tend to draw its substantive borrowing requirement through the PWLB, it also has access to a number of other sources of fixed and variable funding as detailed below.

On Balance Sheet Fixed Variable PWLB   Municipal bond agency   Local authorities   Banks   Pension funds   Insurance companies  

Market (long-term)   Market (temporary)   Market (LOBOs)   Stock issues  

Local temporary   Local Bonds  Local authority bills   Overdraft  Negotiable Bonds  

Internal (capital receipts & revenue balances)   Commercial Paper  Medium Term Notes  Finance leases  

Page 37 2.7 Annual Investment Strategy

2.7.1 In conducting its investment activity, the Combined Authority will have regard to the MHCLG’s Guidance on Local Government Investments and the 2017 revised CIPFA Treasury Management in Public Services Code of Practice and Cross Sectoral Guidance Notes (the CIPFA TM Code). The Combined Authority’s overriding investment priorities are the security of capital and liquidity of investments.

2.7.2 Whilst MHCGL and CIFPA have extended the meaning of investments to include both financial and non-financial investments, the Annual Investment Strategy as detailed below deals solely with the financial (treasury) investments. Non-financial investments, essentially the purchase of income yielding assets, are covered within the Capital Strategy.

2.7.3 The Combined Authority will seek to obtain the optimum return on its investments commensurate with the desired level of security and liquidity. Risk appetite is low with investment decisions giving priority to security of investments. The Combined Authority does not borrow purely to invest or on-lend to make a return.

2.7.4 The Combined Authority has a clearly stipulated minimum acceptable level of credit quality of Counterparties which feeds into its Counterparty lending list. The creditworthiness methodology used to create the Combined Authority’s list takes account of the ratings provided by FITCH and/ or Moodys, two of the three main ratings agencies. All investments made during 2021/22 will be made in accordance with the Annual Investment Strategy detailed in Appendix Two.

Appendices:- Annex One – Outlook for Interest Rates Annex Two – Annual Investment Strategy 2021/22 Annex Three – Treasury Management Limits and Prudential Indicators Annex Four – Treasury Management Scheme of Delegation Annex Five – The Treasury Management Role of the Section 151/ 73 Officer

Page 38 ANNEX ONE

OUTLOOK FOR INTEREST RATES

Link Group Interest Rate View 9.11.20 (The Capital Economics forecasts were done 11.11.20) These Link forecasts have been amended for the reduction in PWLB margins by 1.0% from 26.11.20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Dec-23 Mar-24 BANK RATE 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 3 month ave earnings 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 6 month ave earnings 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 12 month ave earnings 0.20 0.20 0.20 0.20 0.20 0.20 0.20 0.20 0.20 0.20 0.20 0.20 0.20 0.20 5 yr PWLB 0.80 0.80 0.80 0.80 0.80 0.90 0.90 0.90 0.90 0.90 1.00 1.00 1.00 1.00 10 yr PWLB 1.10 1.10 1.10 1.10 1.10 1.20 1.20 1.20 1.20 1.20 1.30 1.30 1.30 1.30 25 yr PWLB 1.50 1.50 1.60 1.60 1.60 1.60 1.70 1.70 1.70 1.70 1.80 1.80 1.80 1.80 50 yr PWLB 1.30 1.30 1.40 1.40 1.40 1.40 1.50 1.50 1.50 1.50 1.60 1.60 1.60 1.60 Bank Rate Link 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 Capital Economics 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 - - - - - 5yr PWLB Rate Link 0.80 0.80 0.80 0.80 0.80 0.90 0.90 0.90 0.90 0.90 1.00 1.00 1.00 1.00 Capital Economics 0.90 0.90 0.90 0.90 0.90 0.90 0.90 0.90 0.90 - - - - - 10yr PWLB Rate Link 1.10 1.10 1.10 1.10 1.10 1.20 1.20 1.20 1.20 1.20 1.30 1.30 1.30 1.30 Capital Economics 1.30 1.30 1.30 1.30 1.30 1.30 1.30 1.30 1.30 - - - - - 25yr PWLB Rate Link 1.50 1.50 1.60 1.60 1.60 1.60 1.70 1.70 1.70 1.70 1.80 1.80 1.80 1.80 Capital Economics 1.80 1.80 1.80 1.80 1.80 1.80 1.80 1.80 1.80 - - - - - 50yr PWLB Rate Link 1.30 1.30 1.40 1.40 1.40 1.40 1.50 1.50 1.50 1.50 1.60 1.60 1.60 1.60 Capital Economics 1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70 - - - - -

The rates shown above take account of the 20 base point certainty rate reduction

Page 39

ANNEX TWO

ANNUAL INVESTMENT STRATEGY 2021/22

The purpose of this Strategy is to set out, for approval by the Combined Authority, is to outline:

 The Combined Authority’s overriding investment objectives;  The investments the Combined Authority will use for the prudent management of surplus funds during the financial year 2021/22 and the management of risk  The procedures for determining the use of each asset class;  The maximum periods for which funds may be prudently committed in each class;  The upper limits to be invested in each class;  The extent to which prior professional advice needs to be sought from the Combined Authority’s Treasury Advisors prior to use; and  The minimum amount to be held in short term investments.

Investment Objectives

The Combined Authority’s investment decisions are governed by the need to ensure that all decisions are prudent and ensure the security of capital and liquidity of investments are paramount.

The Combined Authority will seek to ensure an optimum return on the investment of all surplus funds commensurate with the required levels of liquidity and security, having properly assessed the inherent risk associated with different investment options.

The Combined Authority will not engage in treasury borrowing activity solely for the purpose of investment or on-lending to make a return.

Investment policy – management of risk

The guidance from the MHCLG and CIPFA place a high priority on the management of risk. This authority has adopted a prudent approach to managing risk and defines its risk appetite by the following means:

1. Credit Criteria A minimum acceptable credit criteria is applied in order to generate a list of highly creditworthy counterparties. This enables diversification and this avoidance of concentration of risk. The key ratings used to monitor counterparties are the short term and long term ratings

2. Other information Ratings will not be the sole determinant of the quality of an institution, it is important to continually assess and monitor the financial sector on both a micro and macro basis and in relation to the economic and political Page 40 environments in which institutions operate. The assessment will also take account of information that reflects the opinion of the markets. To achieve this consideration the Combined Authority will engage with its advisors to maintain a monitor on market pricing such as ‘credit default swaps’ and overlay that information on top of the ratings.

3. Other information sources The Combined Authority will pay consideration to other information sources such as the financial press, share price and other such information pertaining to the financial sector in order to establish the most robust scrutiny process on the suitability of potential investment counterparties.

4. Types of investment instruments The Combined Authority has defined the list of types of investment instruments that the treasury management team are authorised to use. There are two lists in Annex 2.1 under the categories of ‘specified’ and ‘non- specified’ investments. - Specified investments are those with a high level of credit quality and subject to a maturity limit of one year - Non-specified investments are those with less high credit quality, may be for periods in excess of one year and/or are more complex instruments which require greater consideration by members and officers before being authorised for use. Once an investments is classed as non-specified, it remains non-specified all the way through to maturity i.e. an 18 month deposit would still be non-specified even if it has only 11 months left until maturity.

The table attached as Annex 2.1 provides further guidance on Specified and Non Specified investments.

5. Non-specified investments limits. The Combined Authority has determined that it will limit the maximum total exposure to non-specified investments as being 40% of the total investment portfolio

6. Lending limits, amounts and maturity, for each counterparty will be set through applying the matrix table in Annex 2.2.

7. Transaction limits are set for each type of investment in Annex 2.2

8. Sovereign ratings Investments will only be placed with counterparties from countries with a specified minimum sovereign rating

9. The Combined Authority will set a limit for the amount of investments which are invested for longer than 365 days

10. External Consultants The Combined Authority has engaged external consultants to provide expert advice on how to optimise an appropriate balance of security, liquidity and yield, given the risk appetite of the

Page 41 authority in the context of the expected level of cash balances and need for liquidity throughout the year.

11. All investments will be denominated in sterling.

12. As a result of the change in accounting standards for 2019/20 under IFRS 9, the Combined Authority will consider the implications of investment instruments which could result in an adverse movement in the value of the amount invested and resultant charges at the end of the year.

The Combined Authority will pursue value for money in treasury management and will monitor the yield from investment income against appropriate benchmarks for investment performance. Regular monitoring of investment performance will be carried out during the year.

Creditworthiness Policy and Liquidity

The Combined Authority relies on credit ratings published by FITCH or Moody’s two independent rating agencies to establish the credit quality of Counterparties. Credit ratings are reviewed on an ongoing basis to ensure that prompt action can be taken to remove institutions whose ratings fall below the minimum threshold applied by the Combined Authority. The proposed Counterparty criteria is appended to this report at Annex 2

Within the framework detailed in Annex 2, it is proposed that at any one time up to 20% of investments will be retained in liquid instant access/ call accounts to ensure that there is adequate liquidity maintained to deal with unforeseen eventualities.

Investment Strategy – Internally and Externally Managed Funds

All investments managed internally will be undertaken in compliance with the framework outlined in this document. Due regard will be had to the wider cash flow movements and requirements of the Combined Authority and forecast movement in interest rates. As detailed above the Combined Authority will ensure that adequate funds are held as cash equivalents thereby allowing the Combined Authority to address any unforeseen cash requirements or to take advantage of investment opportunities as they arise.

The Combined Authority will seek to lock into fixed term deals (within the limits outlined in the counterparty criteria) at advantageous rates subject to the outlook for interest rates and the availability of such opportunities with high quality counterparties.

Currently the Combined Authority does not engage any external Fund Managers to invest monies on its behalf, however this position will be periodically reviewed to establish whether this option provides any opportunities for diversification. Any such consideration will be made in conjunction with the Combined Authority’s treasury advisors and subject approval by the Director of Corporate Services.

Investment returns expectations.

Page 42 The Bank Rate is unlikely to rise from 0.10% for a considerable period. It is very difficult to say when it may start rising so it may be best to assume that investment earnings from money market-related instruments will be sub 0.10% for the foreseeable future.

The suggested budgeted investment earnings rates for returns on investments placed for periods up to about three months during each financial year are as follows (the long term forecast is for periods over 10 years in the future):

Average earnings in each year 2020/21 0.10% 2021/22 0.10% 2022/23 0.10% 2023/24 0.10% 2024/25 0.25% Long term 2.00% later years

The overall balance of risks to economic growth in the UK is probably now skewed to the upside, but is subject to major uncertainty due to the virus and how quickly successful vaccines may become available and widely administered to the population.

There is relatively little UK domestic risk of increases or decreases in Bank Rate and significant changes in shorter term PWLB rates. The Bank of England has effectively ruled out the use of negative interest rates in the near term and increases in Bank Rate are likely to be some years away given the underlying economic expectations. However, it is always possible that safe haven flows, due to unexpected domestic developments and those in other major economies, or a return of investor confidence in equities, could impact gilt yields, (and so PWLB rates), in the UK.

Negative investment rates

While the Bank of England said in August / September 2020 that it is unlikely to introduce a negative Bank Rate, at least in the next 6 -12 months, and in November omitted any mention of negative rates in the minutes of the meeting of the Monetary Policy Committee, some deposit accounts are already offering negative rates for shorter periods. As part of the response to the pandemic and lockdown, the Bank and the Government have provided financial markets and businesses with plentiful access to credit, either directly or through commercial banks. In addition, the Government has provided large sums of grants to local authorities to help deal with the COVID crisis; this has caused some local authorities to have sudden large increases in cash balances searching for an investment home, some of which was only very short term until those sums were able to be passed on.

Inter-local authority lending and borrowing rates have also declined due to the surge in the levels of cash seeking a short-term home at a time when many local Page 43 authorities are probably having difficulties over accurately forecasting when disbursements of funds received will occur or when further large receipts will be received from the Government.

Policy on the use of External Service Providers

The Combined Authority uses Link Group, treasury services as its external treasury management advisors. Whilst the responsibility for treasury management decisions remains with the Combined Authority, the value in employing an external treasury provider is recognised as means by which it can acquire access to specialist skills and resources. Notwithstanding this the Combined Authority will ensure that there is no undue reliance on an external service provider.

Reporting Arrangements

The Combined Authority will receive reports on Treasury Management activity as a minimum at three points during the year: a forward looking strategy will be submitted for approval, a mid- year Strategy review and a year- end report which will consider outturn performance in light of the strategy set at the start of the year.

Page 44 ANNEX 2.1

SPECIFIED AND NON SPECIFIED INVESTMENTS

Table 1 Specified Investments

Investments Minimum Credit Use Rating Term deposits- UK banks and See Annex 2.2 In house building societies Term deposits – UK Government High security although In house or Local Authorities few local authorities are credit rated Call Account Facilities See Annex 2.2 In house Notice Account Facilities See Annex 2.2 In house Term Deposits – non UK banks See Annex 2.2 In house and building societies Debt Management Agency UK Government In house Deposit Facility backed Certificates of Deposit See Annex 2.2 In house Treasury Bills UK Government In house backed Money Market Funds AAA In house

All Specified Investments must be sterling denominated and have maturities of up to 1 year.

Page 45 Table 2 Non Specified Investments

Investments Minimum Credit Use Maximum Rating Duration Term deposits- UK banks and See Annex 2.2 In house 2 years building societies (exceeding 365 days) Term deposits – UK Government High security In house 2 years or Local Authorities (exceeding although few 365 days) local authorities are credit rated Term Deposits – non UK banks See Annex 2.2 In house 2 years and building societies (exceeding 365 days) Certificates of Deposits See Annex 2.2 In house – after 2 years consultation with Treasury Advisors Callable Deposits See Annex 2.2 In house – after 2 years consultation with Treasury Advisors Structured Deposits See Annex 2.2 In house – after 2 years consultation with Treasury Advisors Forward Deposits See Annex 2.2 In house – after 2 years in consultation total with Treasury Advisors

Page 46

ANNEX 2.2 COUNTERPARTY CRITERIA

Counterparty Category Credit Rating Maximum Maximum Investment (£m) Duration Government Backed Long Short Viability Sovereign Term Term Rating Treasury Bills AA Rated £10m per investment 2 years (£80m in total) Local Authorities, other N/A £10m per LA, £50m 2 years Public Sector Bodies incl per LA within the DMO LCRCA (£150m total)

Part Nationalised Banks See Below * £70m 2 years Money Market Funds AAA Rated £10m per fund On call (£40m in total) Combined Authority A F1/P1 and AA and Up to a maximum of On call Main Banker above above £200m Authorised institutions A+ and F1/P1 and AA and £20m per investment 2 years under the Banking Act above above above (£80m total per 1987 which hold suitable institution or up to credit ratings £100m for CA Main Banker) A F1/P1 and AA and £10m per investment 12 months above above (£40m total per institution) Building Societies A and F1/P1 and AA and £10m per investment 12 months above above above (£40m in total) A- and F1/P1 and AA and £5m per investment 12 months above above above (£20m in total)

* Although the individual rating for the part nationalised banks fall below the criteria outlined above, due to the fact that they are part nationalised, as such these institutions take on the credit rating of the UK Government itself (UK Sovereign Rating AA-) as deposits are essentially being made with the UK Government itself.

Page 47 ANNEX THREE

THE CAPITAL PRUDENTIAL AND TREASURY INDICATORS 2020/21 – 2023/24

21/22 Forward 22/23 Forward 23/24 Forward Indicator Description 20/21 Outturn Estimate Estimate Estimate

Proposed capital spend to Capital Spend which the Authority plans to (£m) commit 338.07 331.60 78.66 22.50 Additional borrowing In year requirement for capital Requirement expenditure 100.06 134.07 20.00 15.00

This is the aggregation of historic and cumulative capital expenditure which has yet to be paid for Capital Financing through either capital or Requirement (£m) revenue resources 517.35 644.99 654.50 658.84 Identified the impact and Ratio Financing trend of revenue costs of Cost to Income capital financing decisions Stream on the revenue budget 20.98% 19.20% 21.40% 21.07% Represents the net investments or borrowing Net Borrowing requirement based on the Requirement (£m) debt and investments held 240.44 223.39 206.34 189.29

Represents the absolute limit of borrowing that could be raised and afforded in the short term however this Authorised Limit is likely to be unsustainable for Borrowing (£m) in the long term 517.35 644.99 654.50 658.84 Represents the level beyond which debt is not Operational Limit normally expected to for Borrowing (£m) exceed 464.27 548.51 550.05 547.97 Upper Limit for These limits seek to ensure Fixed Interest that the Authority does not Rate Exposure 100.00% 100.00% 100.00% 100.00% expose itself to an Upper Limit for inappropriate level of Variable Interest interest rate risk Rate Exposure 30.00% 30.00% 30.00% 30.00% This indicator can highlight where an authority may be Gross Debt and borrowing in advance of the CFR (£m) need 176.91 321.60 348.17 369.55

Page 48 ANNEX FOUR

TREASURY MANAGEMENT SCHEME OF DELEGATION

The Combined Authority

 Approves the annual Treasury Management Strategy Statement;  Receives a mid year report and an outturn report on Treasury Management activity;

The Director of Corporate Services

 Draft and submit to the Combined Authority the Treasury Management Strategy Statement prior to the start of the financial year;  Implement and monitor these documents,  Draft and submit mid year and outturn reports to the Combined Authority for approval;  Maintain suitable Treasury Management Practices (TMP’s) setting out the manner in which the Authority will seek to achieve its objectives. The TMP’s will prescribe how the treasury activities will be managed and controlled;  Be responsible for the execution and administration of treasury management decisions; and  Act in accordance with the Council’s Policy Statement and Treasury Management Practices, and also in accordance with CIPFA’s Standard of Professional Practice on Treasury Management

Page 49 ANNEX FIVE

THE TREASURY MANAGEMENT ROLE OF THE SECTION 151/ 73 OFFICER

The S151 (responsible) officer  recommending clauses, treasury management policy/practices for approval, reviewing the same regularly, and monitoring compliance;  submitting regular treasury management policy reports;  submitting budgets and budget variations;  receiving and reviewing management information reports;  reviewing the performance of the treasury management function;  ensuring the adequacy of treasury management resources and skills, and the effective division of responsibilities within the treasury management function;  ensuring the adequacy of internal audit, and liaising with external audit;  recommending the appointment of external service providers;  preparation of a capital strategy to include capital expenditure, capital financing, non-financial investments and treasury management, with a long term timeframe;  ensuring that the capital strategy is prudent, sustainable, affordable and prudent in the long term and provides value for money;  ensuring that due diligence has been carried out on all treasury and non-financial investments and is in accordance with the risk appetite of the authority;  ensure that the authority has appropriate legal powers to undertake expenditure on non-financial assets and their financing;  ensuring the proportionality of all investments so that the authority does not undertake a level of investing which exposes the authority to an excessive level of risk compared to its financial resources;  ensuring that an adequate governance process is in place for the approval, monitoring and ongoing risk management of all non-financial investments and long term liabilities;  provision to members of a schedule of all non-treasury investments including material investments in subsidiaries, joint ventures, loans and financial guarantees;  ensuring that members are adequately informed and understand the risk exposures taken on by an authority;  ensuring that the authority has adequate expertise, either in house or externally provided, to carry out the above;  creation of Treasury Management Practices which specifically deal with how non treasury investments will be carried out and managed, to include the following: - o Risk management, including investment and risk management criteria for any material non-treasury investment portfolios; o Performance measurement and management, including methodology and criteria for assessing the performance and success of non-treasury investments o Decision making, governance and organisation, including a statement of the governance requirements for decision making in relation to non-treasury Page 50 investments; and arrangements to ensure that appropriate professional due diligence is carried out to support decision making. o Reporting and management information including where and how often monitoring reports are taken o Training and qualifications, including how the relevant knowledge and skills in relation to non-treasury investments will be arranged.

Page 51 APPENDIX TWO

CAPITAL STRATEGY 2021/22

1.0 Purpose

1.0.1 The Chartered Institute of Public Finance and Accountancy (CIPFA) requires all organisations operating under the Prudential Code for Capital Finance (the Prudential Code) to produce a capital strategy to demonstrate that capital expenditure and investment decisions are taken in line with organisational objectives, are affordable, take proper account of stewardship, sustainability, value for money and prudence. As an organisation that operates under the aegis of the Prudential Code, the Liverpool City Region Combined Authority (the Authority) is required to produce a capital strategy.

1.0.2 The capital strategy provides a high level overview of how capital expenditure, capital financing and treasury management activity contribute to the achievement of the Authority’s priorities and service provision. It also provides an overview of how the associated risks are managed and the implications for future financial stability. The document provides an overview of the governance processes for approving and monitoring capital activity.

1.1 Scope

1.1.1 This capital strategy covers all capital expenditure and capital investment decisions for not only the Authority but also those entered into under group arrangements. As such this capital strategy applies to Merseytravel and its subsidiary companies.

1.1.2 For expenditure to qualify as capital expenditure and therefore be under the scope of this document it must be:

 Expenditure that is incurred on the acquisition or creation of a new asset or expenditure that enhances the life or value of an existing asset in accordance with relevant account standards;  Expenditure that meets one of the definitions specified in regulation made under the 2003 Local Government Act; or  Expenditure for which a direction has been made by the Secretary of State that allows the expenditure to be treated as capital.

1.2 Liverpool City Region Context

1.2.1 The Combined Authority approved a corporate plan for the period 2020-2021 in July 2020. The plan is structured around four priorities:

Priority One: Economic Recovery: Moving in partnership beyond Covid 19;

Priority Two: Restoring the transport network: Restoring the Liverpool City Region transport network to connect people, goods and services;

Page 52 Priority Three: Planning and delivering for the Future: A competitive, clean and inclusive city region;

Priority Four: Developing our Organisation: Making the best use of our resources.

1.2.2 Key priorities are underpinned by a vision statement and a series of key deliverables central to the achievement of the overarching priorities. To help the Combined Authority deliver it is vital that there is a clear and coherent framework through which to make capital investment. At the CA level strategic investments will be driven by the Single Investment Strategy and associated assurance framework and the Key Route Network asset management plans. At the Merseytravel, key strategies including the Tunnels, Bus Infrastructure, Ferries and Long Term Rail Strategies will help inform and shape capital requirements.

1.3 Capital Expenditure

1.3.1 Whilst at the Authority level, most investment interventions are focussed on supporting its growth strategy and devolution aims, below this level, Merseytravel which is the strategic transport advisory body and delivery arm, is responsible for the operation and maintenance of its and the Authority’s major transport assets. Whilst Merseytravel has recourse to some of its own resources to support investment, this ability is limited and most requests for funding are channelled up through the Authority.

1.3.2 The size of the capital programme is influenced by the availability of funding sources and capital financing costs, including the availability of revenue resources to support the full implications of capital expenditure; both borrowing costs and running costs after any grant funding is applied.

1.4 Funding Streams

1.4.1 The Authority’s capital investment decisions can be funded from a number of sources, the key components of which are detailed below;

 Government grants – this is the single largest source of capital funding received by the Authority. The key government grants received directly by the Authority include Transforming Cities Funding, transport funding from the Department for Transport and the Gain Share/ Investment Fund monies received in support of the Authority’s devolution agreement. The Authority has agreed with government to have a single pot approach to capital and the funds that form part of the Single Pot are governed by the Authority’s Single Investment framework. In addition the Authority acts as the Accountable Body for the Local Growth Funds for which local agreement has been reached with the LEP whereby these funds for part of the Single Investment Fund. Merseytravel is not a significant grant recipient in its own right and therefore grants to Merseytravel will flow via the CA, either as a result of work commissioned by the CA or as a result of a bid made by Merseytravel against the SIF.  Prudential borrowing – under the Prudential Code the Authority is permitted to determine its own borrowing requirement (which includes the need for borrowing that may exist within Merseytravel), provided the borrowing proposed is affordable, prudent and cost effective. Whilst the Authority is governed by the Prudential Framework, in common with all other Mayoral Combined Authorities, the Authority Page 53 has agreed a debt cap with HM Treasury which limits the absolute level of borrowing that can be incurred. Where this type of funding is applied there are revenue implications in the form of financing cost.  Reserves – both the Combined Authority and Merseytravel have recourse to specific reserves to support capital investment. Whilst the Authority has significant reserves that are earmarked for inclusion within the SIF, the current level of resources is not forecast to increase, rather they are on a downward trajectory as there has been a significant reliance on reserves to support the Merseytravel capital programme over the last couple of years and therefore these should be applied judiciously.  Revenue funding – the Authority is permitted to utilise revenue resources to fund capital schemes however given the limited availability of revenue funding more generally for the Authority it is not a significant source of capital funding and would normally be used to support specific smaller scale initiatives. The only area in which a significant and sustained use is made of revenue to support capital investment is in respect of the Mersey Tunnels whereby use of tolls is directed by statute.  Capital receipts – the Authority and Merseytravel are able to generate capital receipts through the sale of surplus assets, such as land and buildings. The use of such receipts is governed by statute and therefore must be used for capital investment, unless capitalisation directives are permitted. Both organisations hold limited levels of capital receipts and by virtue of the fact that both organisations hold significant infrastructure asset bases, their capacity to generate new receipts is constrained. To this end the first call on any capital receipts to support capital investment are for invest to save initiatives.

1.5 Governance Arrangements

1.5.1 The Strategic Investment Fund (SIF) manages the public funding that the Combined Authority receives following the devolution agreement agreed with government in 2015 and the Growth Deal Funds for which agreement has been reached with the Liverpool City Region Growth Platform for the Authority to manage these funds.

1.5.2 The Combined Authority’s Strategic Investment Fund Strategy defines and outlines the Authority’s investment strategy for the SIF, including its principles and priorities, approval process and fund-recycling model.

1.5.3 The core objective of the Investment Strategy is to ensure that investment made by the Combined Authority is most effectively targeted at interventions and opportunities that help deliver its strategic aims and help drive inclusive growth, social value, tackle market failure maximise value for money and make a financial return into the SIF.

1.5.4 The Investment Strategy clearly details the principles against which the SIF will operate and the economic sectors in which the region has a competitive advantage and which will drive future regional success.

1.5.5 Overlaying the Investment Strategy is the SIF Assurance Framework, which has been designed to meet the requirements of the Single Pot Assurance Guidance published by MHCLG and managed by HM Government’s Cities & Local Growth Unit. This documents covers;

 The context, scope and purpose of the assurance framework; Page 54  the governance structures of the Combined Authority, investment approach and transparency mechanisms that will apply to decision making;  the decision making procedures for funding; and  the approach to monitoring and evaluation.

1.5.6 The process for making investment decisions through the SIF is as follows:

 All projects are developed in conjunction with the Investment Team to ensure they have a mesh with the Authority’s Investment Strategy;  Projects are subject to development of business case in accordance with HM Treasury Green Book principles;  An internal panel of senior officers considers projects at outline stage. This group has a right of veto and may use this to refuse a project should they believe it would breach SIF governance and/ or run counter to good economic development policy;  Detail diligence will be undertaken on all projects and an external appraisal report will be completed;  The Investment Panel will conduct interim and final reviews of projects and provide advice and commentary on the merits of a project to the Combined Authority and if necessary make recommendations for modifications;  Based on the recommendations of the Investment Panel, projects will be submitted to the Combined Authority for approval.

1.5.7 Monitoring of delivery and outcomes is managed by the Corporate Programme Management Office who reports performance through to the Programme Delivery Board, which is comprised of senior officers within the Combined Authority and the Growth Platform. Dedicated Finance resource exists to monitor SIF programme on an ongoing basis and feeds into the reporting rhythm.

1.5.8 Monthly capital monitoring of spend is undertaken and reported through to Merseytravel and the CA respectively.

1.5.9 Whilst all significant and major capital expenditure plans for the Authority are channelled through the SIF, Merseytravel separately has a requirement to invest in and maintain its asset base and the Mersey Tunnels, which it manages and operates on behalf of the Combined Authority. Maintenance programmes and investment requirements for Merseytravel assets are determined in parallel with the service and revenue budget planning process within the framework of the Medium Term Financial Plan.

1.6 Long Term Capital Plans

1.6.1 The table overleaf shows the capital plans for both the Combined Authority and Merseytravel for the period through to 2023/24.

Page 55

Combined Authority Investment Plans

2020/21 2021/22 2022/23 2023/24 Forecast Estimate Estimate Estimate £m £m £m £m Combined Authority Capital Plans 327.00 316.60 58.50 7.50 Commercial Activities 11.00 15.00 20.00 15.00 Total Capital Expenditure 338.00 331.60 78.50 22.50 Financed by: Borrowing -100.06 -134.07 -20.00 -15.00 Capital Grants -232.22 -182.90 -51.00 0.00 Revenue/Reserves -6.20 -14.62 -7.50 -7.50 Total Funding -338.48 -331.60 -78.50 -22.50

1.6.2 The table above reflects the Combined Authority’s investment decisions that have been ratified to December 2020 however there are a number of schemes within the pipeline at various stages of development. As these pipeline projects progress through to approval and funding agreement, the programme will be updated.

1.6.3 The main schemes are detailed in the Combined Authority and Merseytravel budget reports.

1.7 Investments

1.7.1 The Authority may undertake two distinct types of investment; treasury management investments and service/ commercial investments.

1.7.2 Treasury management investment activity arises as a consequence of managing the organisation’s cashflows. For these investments, security and liquidity of investments are the primary considerations when making such decisions, ahead of any consideration of investment yield generated. Treasury management investments are governed by the Authority’s Treasury Management Policy and its Annual Investment Strategy. The Authority’s counterparty criteria provides a framework against which treasury investments are made. The approach is informed by the creditworthiness work undertaken by the Authority’s treasury advisors, Link Asset Services.

1.7.3 Service or commercial investments by contrast are those investments made by an organisation outside of the day to day treasury management activity which could be either made in support of service provision, for example economic regeneration or commercial whereby the investments have been undertaken purely for the purpose of generating financial returns.

1.7.4 There is a regulatory and statutory recognition that organisations may make investments for policy reasons outside their treasury management activity. To Page 56 ensure that all investment decisions are made in a structured an informed manner with due consideration to both the risks and rewards stemming from that decision, the CIPFA Treasury Management Code covers both types of investment.

1.7.5 The Authority’s non-treasury investments are primarily aimed at supporting the organisation’s service objectives and the achievement of its devolution aims and such investments will naturally flow out of the SIF generated schemes. As stated above, the core objective of the Investment Strategy is to ensure that investment made by the Combined Authority is most effectively targeted at interventions and opportunities that help deliver its strategic aims and help drive inclusive growth, social value, tackle market failure maximise value for money and make a financial return into the SIF.

1.7.6 Whilst investments through the SIF will aim to ensure that there is a positive reflow, the key driver in these investments is not to generate a financial return to support the ongoing revenue budget for the Combined Authority but to ensure the continued viability of the investment fund. As the SIF is funded primarily through grant, it is pertinent to seek to maximise the benefits arising from investments flowing back to the Combined Authority thus allowing the fund to be more sustainable over the longer term.

1.7.7 The Authority’s non-treasury investments will vary in shape, size and structure and will be tailored for each individual deal. In accordance with the governance framework outlined above, a significant level of work will be undertaken by the Investment Team to develop and shape deals and undertake necessary due diligence which will inform the commercial negotiation and inform the final deal.

1.7.8 As all non-treasury investments will flow through the SIF process, the review, and scrutiny and ultimately approval process will be in accordance with the SIF Investment Strategy and SIF Assurance Framework. The governance arrangements around interventions funded through the SIF are detailed above.

1.8 Treasury Management

Governance

1.8.1 The Combined Authority has adopted the CIPFA Treasury Management in Public Sector Code of Practice and formally adopted a treasury management policy statement as part of its annual Treasury Management Strategy Statement, which was approved by the Combined Authority at its meeting on 2 February 2018.

1.8.2 Under the Local Government Act 2003 local authorities are permitted to determine their own programmes for capital investment and associated borrowing requirements, provided they have regard to CIPFA’s Prudential Code for Capital Financing in Local Authorities.

1.8.3 The objectives of the Prudential Code are to ensure that there is a clear framework for ensuring capital plans are affordable, prudent and sustainable and that treasury management decisions are taken in accordance with good professional practice. In support of the decision making process the Prudential Code sets out a number of prudential indicators that should support local decision making with regards to the Authority’s capital expenditure plans and it is the duty of the Director of Corporate Page 57 Services (the Section 73 Officer) to ensure that this information is made available to support decision making by the Combined Authority. Key issues that should be considered are:

 Affordability;  Prudence;  Value for money;  Stewardship of assets;  Alignment with service objectives; and  Practicality.

1.8.4 The requirements of the Local Government Act 2003 and the Prudential Code apply equally to the Combined Authority however; there is an additional requirement for Mayoral Combined Authorities to agree overall debt caps with HM Treasury. As such there is an additional dynamic for the Authority in considering prudence as any increases in the absolute need to borrow above the agreed cap, even if still affordable within the confines of the Prudential Code would, require approval of HM Treasury.

1.8.5 The Combined Authority retains overall responsibility for review and approval of the annual Treasury Management Strategy, the midyear report and the outturn report. Day to day management of the Treasury Management function is delegated to the Director of Corporate Services. Details of the scheme of delegation are contained within the Authority’s Treasury Management Practices.

Affordability

1.8.6 Fundamental to any assessment of the affordability of the Combined Authority’s capital plans is the extent to which the revenue costs associated with servicing new and existing debt can be sustained within the available budget. A significant proportion of the Authority’s capital plans relate to strategic investments through the Strategic Investment Fund which is essentially funded by grant. Whilst the Authority’s Investment Strategy does not preclude borrowing in support of this activity, this has not been factored into medium term plans and as such the requirement to borrow, within the debt cap agreed with HM Treasury focuses on the servicing of historic transport debt and other strategic investments in support of transport arising from its role as the Strategic Transport Authority.

Prudence

1.8.7 The Authority is required to make reasonable estimates of total capital expenditure that it plans to incur for the next and at least the following two years. The Prudential Code requires the Authority to ensure that all capital expenditure, investment and borrowing decisions are prudent and affordable and take account of the resources available to fund such schemes or the implications of borrowing to fund them. The aim is to ensure that requirement to repay borrowing is factored into the overall consideration of the organisation’s fiscal sustainability.

1.8.8 In respect of the Authority’s external debt, there are two key indicators, which the Authority is required to complete for the forthcoming and two successive years; the Authorised Limit and Operational Boundary. The Authorised Boundary represents the absolute maximum the Authority could borrow and therefore should not be Page 58 varied during the year whereas the Operational Boundary should encompass all anticipated borrowing and in year use and should incorporate sufficient headroom for the Authority to satisfy in year requirements.

1.8.9 The Authority’s Authorised and Operational Boundaries are detailed below.

2021/22 2022/23 2023/24

£’m £’m £’m Authorised Limit 644.99 654.50 658.84 Operational Boundary 548.51 550.05 547.97

1.8.10 The Authority’s Treasury Management Strategy Statement, which is also forms part of the overall budget report, details the Authority’s borrowing and financing plans for its capital programme over the period through to 2023/24, its borrowing limits and debt repayment strategy. To avoid duplication of content the reader is referred to Appendix 1 for more detail.

Value for Money

1.8.11 As detailed above a significant proportion of the Authority’s capital programme relates to the delivery of the strategic investment priorities detailed in the Authority’s Investment Strategy. All such capital expenditure is incurred on the back of a rigorous application, assessment and evaluation process as detailed in the Single Investment Framework. Funding provided through the SIF is essentially gap funding aimed at supporting strategic interventions. As the assessment and evaluation of all schemes through the SIF follow the principles of the HM Treasury Green Book, value for money is integral to the decision making process.

1.9 Skills and Knowledge

1.9.1 The Director of Corporate Services (Section 73 Officer) who is a Qualified Accountant has overall responsibility for the Authority’s Treasury Management activity and overall capital programme. The capital programme and treasury management strategy are managed by Qualified Accountants with specific day to day delegations to individual members within the Finance Team with extensive experience within these designated areas. Emphasis is placed on continuing professional development and staff are encouraged to attend events which help maintain current knowledge and understanding of sectoral developments.

1.9.2 Commercial investment decisions are led by the Authority’s Investment Team. This is a multi-disciplinary team with significant experience in financial services and the structuring of corporate finance. This team also has access to a range of specialist advisory support from a specifically procured framework contract to access specialist advice as necessary. The team will work closely with the Finance and Legal teams to ensure that specific regulatory or legislative requirements are understood and adhere to prior to deals being closed.

1.9.3 The Combined Authority has access to a range of advisors to assist in the operation of its treasury and investment activity. The Authority uses Link Asset Services as its Page 59 external treasury management advisors. The Authority recognises that responsibility for treasury management decisions remain with the organisation and seeks to ensure that undue reliance is not placed upon external service providers. Notwithstanding this, the Authority recognises that there is value in employing external providers of treasury management services in order to acquire access to specialist skills and resources. The Investment Team has access to a range of specialist advisors through its framework, including Legal, Financial, sectoral specific advisors and economic appraisers who will be utilised as necessary for the purpose of supporting investment opportunities brought forward.

Page 60 APPENDIX THREE

Detailed Capital Programme 2021/22

£'000 Gainshare Capital Town Centres 1,498 Tower Road 1,750 MTC Project in a Box 9,100 Inward Investment Fund 3,000 Festival Gardens 22,720 Eureka 1,343 Digital Connect 2,735 Crosby Lake Adventure Centre 1,000 Agent Academy 16 Shakespeare Playhouse 4,000 LCR Backhaul Network / Digital infastructure project 4,712 Kindred 3,930 TOTAL GAINSHARE CAPITAL 55,805

Transforming Cities Fund Runcorn Station Quarter 1,785 Cycling & Walking 1,516 Ferries 13,900 St Helens Southern Gateway 4,271 NPR HS2 1,050 Headbolt Lane Gateway 10,000 Central Station Growth Hub 1,390 Birkenhead Central Gateway 6,241 Public Transport Connectivity 2,500 Hydro Buses 7,400 Access For All 2,791 Access City Centre 5,150 Smart Ticketing 1,137 LCR Cycle Network (ph 2) 15,000 Connecting Wirral Waters 6,699 TOTAL TRANSFORMING CITIES FUND 80,830

Brownfield Fund Moss Nook 1,050 Denford Road 230 Golden Lane 1,000 Buckley Hill 1,050 TT Electronics 2,000 N Huyton 3,000 Cherryfield Drive 7,000 TOTAL BROWNFIELD FUND 15,330 Page 61 APPENDIX THREE

Detailed Capital Programme 2021/22

£'000

Getting Building Fund LSTM (Capacity Development Lab) 1,754 Littlewoods 9,800 Halsnead Garden Village 2,518 Glass Futures 8,280 TOTAL GETTING BUILDING FUND 22,352

Single Capital Allocation 26,500

Pre Development Runcorn Busway active travel corridor 100 East Runcorn Connectivity (A558 Daresbury) 500 Southport Eastern Access 250 Maritime Corridor 60 Birkenhead Central Gateway 500 St Georges Gateway 250 Ropewalks phase 2 100 M57 J4 multimodal access 175 Huyton active travel corridor (Wilson Road) 200 St Helens Town Centre Multimodal Interchange 500 St Helens North Housing Access 500 Rail Freight connectivity 30 Station Assessment Programme 200 LCR Active Travel corridors 500 KRN Strategic Maintenance 50 Tunnels Modernisation 100 St Georges Tunnel approach 500 TOTAL PRE DEVELOPMENT 4,515

Infrastructure Fund 15,000

Merseytravel Capital Schemes Rolling Stock 94,159 Mersey Tunnels 7,480 Other Merseytravel capital schemes 9,625 TOTAL MERSEYTRAVEL CAPITAL 111,264

TOTAL PROGRAMME 331,597

Page 62 Agenda Item 6

LIVERPOOL CITY REGION COMBINED AUTHORITY

To: The Metro Mayor and Members of the Combined Authority

Meeting: 22nd January 2022

Authority/Authorities Affected: All

EXEMPT/CONFIDENTIAL ITEM: No

KEY DECISION Yes

REPORT OF THE PORTFOLIO HOLDER: INCLUSIVE ECONOMY AND THIRD SECTOR AND DIRECTOR OF COMMERICAL DEVELOPMENT AND INVESTMENT

LIVERPOOL CITY REGION STRATEGIC INVESTMENT FUND: CONTINUATION OF THE INWARD INVESTMENT SERVICE BY LCR GROWTH PLATFORM

1. PURPOSE OF REPORT

1.1. This report seeks Combined Authority (“CA”) approval to fund the LCR Growth Platform to continue its inward investment service and deliver against a new post Covid-19 marketing plan which is in line with the existing Service Level Agreement with the CA.

1.2 The service is a Mayoral priority project (it was previously referred to as One Front Door) and the request is an extension of the existing service. The original funding approval of 1 year expired in March 2020 but during Covid-19 lockdowns the service was scaled back by the Growth Platform. A new marketing plan has now been developed to take account of Covid-19 and Brexit changes.

2. RECOMMENDATIONS

2.1. It is recommended that the Liverpool City Region Combined Authority :

(a) Approve the provision of an extension in funding to March 2023 of £1,107,568; and

(b) Grant authority to the Director of Commercial Development & Investment in consultation with the Combined Authority Monitoring Officer and Combined Authority Treasurer to review progress against targets during that period; and

(c) Require that further appropriate scrutiny on delivery is provided with the CEO of the Growth Platform providing reports to LCR Growth Directors on a monthly basis and to LCR Chief Executives Group on a bi-monthly basis. Page 63

3. BACKGROUND

3.1. The LCR LEP commissioned an Internationalisation Strategy in 2018 to establish a direction for the investment promotion of the City Region in international markets.

3.2. The Metro Mayor, in parallel with the Internationalisation Strategy preparation, established a „One Front Door‟ mechanism to better coordinate inward investment enquiries into the LCR.

3.3. The CA then developed a Service Level Agreement with the LCR Growth Platform for the delivery of inward investment services.

3.4. Funding was provided for an initial 12-month period (FY19/20) to enable the service to be established, plans to be developed with the Local Authorities and enquiries to be supported. This work had been broadly completed in February 2020 when the Covid-19 outbreak had a major impact on international investment and the ability to undertake work in this area. At this point the service was essentially mothballed.

3.5. In September 2020 Mark Basnett, CEO of the Growth Platform appointed Pete Sandman, Head of Visitor Economy to additionally lead on inward investment work and ensure that the marketing plan was re-assessed in light of Covid.

3.6. The proposed plan focuses mainly on direct company targeting of businesses in those business sectors where the LCR has a clearly defined proposition (advanced manufacturing, low carbon, health and life sciences, port & logistics, finance and professional services and creative & digital) and mainly in those markets which generate the largest number of inward investment enquiries (US and Germany) – although the sector targeting is the dominant focus.

3.7. The CA‟s intention is that Pete Sandman is retained as the lead officer on this work and that separately Local Authorities are provided with more visibility on progress in the work through the CEO of the Growth Platform providing reports to the LCR Growth Directors meetings on a monthly basis and to LCR Chief Executives meetings on a bi-monthly basis.

4. RESOURCE IMPLICATIONS

4.1. Financial The total SIF commitment for the extension to the programme is £1,107,568 funded through Gainshare revenue.

4.2. The provision of the funding will also enable the drawdown of £356,851 of ERDF award that is already approved for use in inward investment marketing by the Growth Platform. The Growth Platform has also allocated £45,471 of its own retained funding.

4.3. Human Resources Page 64 No additional resources will be required within the Combined Authority. The Growth Platform intends to add an additional Business Analyst to its team to increase resource for delivery.

4.4. Physical Assets Not applicable

4.5. Information Technology The work of the Growth Platform will involve populating a CRM system and using this to maintain contact with those businesses that have expressed an interest in the LCR investment proposition.

5. LEGAL IMPLICATIONS

5.1 None identified

6. RISKS AND MITIGATION

6.1. The key risk in respect of the project is that there are fewer inward investment enquiries than expected in the current economic environment. Current evidence suggests that this is not the case with enquiries to the Growth Platform increasing markedly since Sept 2020. Nevertheless, expenditure and actions taken by the Growth Platform as part of this contract will be subject to greater scrutiny with the reporting requirements placed on the Growth Platform CEO.

6.2. A further risk is that team appointed to undertake the work does not have the experience or skills to deliver quickly and effectively. A previous appointee of the Growth Platform in this area departed within their probationary period. This risk will be mitigated by ensuring that Pete Sandman continues to lead the management of the programme beyond funding approval and the approval of the marketing plan. This will be a requirement of the funding agreement.

7. EQUALITY AND DIVERSITY IMPLICATIONS

7.1. The Growth Platform is required to comply with the LCR Equality and Diversity policies in its work and recruitment. The work will have no negative impact on equality or diversity.

8. PRIVACY IMPLICATIONS

8.1 The service proposed will not involve the use of personal information. Where business emails are retained the Growth Platform will ensure consent is gained to maintain contact with the organisation. A Data Protection Impact Assessment (DPIA) is not required.

9. COMMUNICATION ISSUES

Page 65

9.1. The Growth Platform will be required to comply with the CA‟s branding guidelines and publicity requirements within the funding agreement.

10. CONCLUSION

10.1. This report presents the proposed approach to inward investment to March 2023 and seeks approval for the Director of Commercial Development & Investment to proceed with the finalisation of the funding agreement.

MARK BOUSFIELD Director of Commercial Development and Investment

COUNCILLOR JANETTE WILLIAMSON Portfolio Holder: Inclusive Economy and Third Sector

Contact Officer(s): Lorna Rogers, Head of Mayoral Programme Delivery [email protected]

Appendices: Appendix One – Summary impact report

Background Documents: Draft inward investment marketing report

Page 66 APPENDIX 1

11. SUMMARY APPRAISAL

11.1. The CA previously engaged SQW to conduct an external, economic appraisal of the inward investment grant fund. This report therefore considered the economic impact of securing inward investment projects into the LCR and concluded that work in this area represents very good value for money on a standalone basis and relative to comparators.

11.2. The summary appraisal below takes account of the SQW work and also draws on the large-scale independent appraisal of inward investment services of multiple Regional Development Agencies conducted by PWC1.

11.3. The below table provides an economic appraisal summary adjusted for the inward investment service:

Item Value Explanation

Public Sector Costs £1.5m Based on the costs in the (Discounted). application plus ERDF and Growth Platform.

Economic Benefits £18m Net GVA of the benefits achieved (Discounted) over 5-year persistence less optimism bias and sensitivity

Net Present Value of Benefits £16.5m Economic benefits (after deadweight) less costs

Benefit Cost Ratio 12 The value for money appears very high – and this is in line with PWC‟s findings of inward investment activity (they estimated a BCR of 12-13.5).

Jobs Gross 842 This represents the same ratio of gross jobs to inward investment expenditure identified by PWC in their study of multiple inward investment programmes.

Jobs Net (minus deadweight) 362 Net direct jobs calculated as 362 after displacement leakage and deadweight (43% gross : net estimated by PWC review)

11.4. The result is that the proposed inward investment service represents good value for money in terms of economic impact.

1 PWC appraisal of RDAs for BEIS 2009 Page 67

Page 68 DRAFT LCR INWARD INVESTMENT MARKETING STRATEGY GROWTH PLATFORM – 6th December 2020

Liverpool City Region Inward Investment Board Inward Investment Marketing Strategy – First Draft 8th December 2020

Page 69

Contents

Executive Summary

Section 1 Introduction & Marketing Objectives

Section 2 Strategic Context

Section 3 Competitive Value Propositions

Section 4 Customer & Investor Focus

Section 5 Key Markets

Section 6 Marketing Strategy

Section 7 Research & Intelligence Gathering

Section 8 Budget & Timescales

Section 9 Delivery & Governance

Section 10 Monitoring & Evaluation

Appendix One Short Form Competitive Value Propositions

Page 70

Exec Summary

To be included following partner feedback

Page 71

1. Introduction

Attracting inward investment is a key component of any economy as it generates wealth, creates jobs and supports infrastructure. Its impacts can be transformational to local economies both in terms of broadening the business base and creating demand for skilled labour, as well as stimulating innovation in supply chains, retaining (and attracting) talent and driving competition.

This is no different for the Liverpool City Region and in achieving its ambition to become one of the most globally competitive economies in the UK, considerable emphasis will need to be placed on encouraging overseas and UK based businesses to set up and locate. Despite the challenging investment climate, the City Region has the attributes to deliver this, not least due to the global pulling power of Liverpool, but also its expertise in world leading R&D, direct access to global markets and the presence of multinational industries. Perhaps most importantly, the region has established itself as a place where people now choose to live, work, learn, visit and do business.

Capitalising on this opportunity is as much about the region’s capabilities and strengths, as it is about making it easy for investment to happen The latter element will be reliant on attracting the attention of investors and intermediaries, helping them understand what the region has to offer and the benefits it brings, as well as providing business assistance and aftercare to support their long-term growth.

1.1 Purpose of the Strategy

The basic principle of marketing is to put customers at the centre of decision making supported by processes and communications that will influence behaviour. Applying this premise to inward investment, the strategy will help deliver the region’s ambitions by combining market analysis, customer relationship processes and proposition development to form an effective marketing programme.

The resulting outcomes will be greater awareness of the City Region, and an extended pipeline of qualified opportunities for the investment services teams in the Growth Platform and Local Authorities to convert.

To achieve this, the strategy has been developed around 5 priorities:-

Priority 1: Delivering Sector Specific Campaigns – Capitalising on the City Region’s sector strengths by delivering inbound and outbound marketing activity that are effective in building leads and nurturing investment enquiries through to conversion.

Priority 2: Always On – Developing content marketing, PR and the quality of our sales materials to ensure the City Region is front of mind with its target markets.

Priority 3: Being brand led – Aligning investment marketing with the City Region’s brand narrative and building the profile of Invest Liverpool with ‘far’ domestic and international markets.

Priority 4: Developing Strategic Marketing Partnerships – Building relationships with partners and intermediaries at local, regional and national level to amplify the City Region’s investment proposition, extend the reach of investment marketing and increase content.

Priority 5: Competitive Value Propositions – Working with industry expertise to identify the core strengths of the region’s business sectors and where it has competitive advantage.

Cutting across each of the priority areas will be the development of the Region’s Customer Relationship Management (CRM) by creating ‘one view’ of the customer through enhanced profiling, personalisation and

Page 72

account-based marketing. The approach will be supplemented by a programme of research and intelligence designed to build insight into key investment markets, performance analytics and targeted lead generation.

Importantly, the approach is intended to enhance the relationships with the Investment Services Teams (Growth Platform and Local Authority partners) to continue with a co -ordinated and centralised approach to account management and enquiry handling.

1.2 The Front Door

The Growth Platform has been commissioned by the City Region’s Combined Authority (CA) to lead the co- ordination of inward investment over the next two years. The approach will work at several levels, ranging from the way the region projects itself in the marketplace to the protocols for lead and enquiry management. The overall aim being to deliver a high-quality investment and account management service.

As per the priorities outlined above, the marketing strategy will play a significant role in achieving that end. First and foremost, it will provide the basis for delivery in terms of the Growth Platform’s key partnerships with Marketing Liverpool and City Region’s Local Authorities. Secondly, it will allow the City Region to speak with one voice and integrate ‘place’ with investment marketing to reflect the wider lifestyle attributes that count in investment decision making. And thirdly, it will take a market led approach to shape its investor propositions that will be fulfilled by a co ordinated approach for nurturing leads along the sales journey, supported by the appropriate levels of business assistance and aftercare.

As a result, the strategy will provide the delivery framework for phase 2 of the region’s ERDF Place Marketing for Investment programme. It will combine this opportunity with strategic investment funds from the CA to deliver One Front Door up to March 2023 (pending final approvals).

1.3 Current Position

The City Region has attracted c.£1.4bn inward investment over the last 5 years, this incudes XXXX across the key sectors of manufacturing, health & life sciences and digital. The City Region also has recognised strengths in logistics, port access, professional services and low carbon/renewable energy.

As identified by the City Region’s Internationalisation Strategy, attracting inward investment has been due in no small part to the strength of the City Region’s major prime industries in creating supply chain opportunities, as well as its proximity to customers and export markets through the Port of Liverpool/Free Port.

The region’s strong network of scientific research and knowledge-based assets also attracted businesses who see innovation and specialisation as key to driving their competitive advantage. The ongoing collaborations between the City Region’s Higher Education Institutions (HEI’s) and industry are evidence of how such partnerships are creating commercial opportunities through knowledge transfer and the infrastructure to enable growth – Sci – Tech Daresbury and The Knowledge Quarter are cases in point.

The strength of Liverpool as an international city, as well as the diversity and affordability of the City Region as a place to live and spend leisure time, also makes a considerable contribution to the area’s overall investment proposition. This is further enhanced by the pull of the region’s universities and access to graduates, its proximity to the Northern Powerhouse and connectivity to other national/international cities and regions. The skills base is highly specialised in areas such as health and life Sciences, digital innovation and advanced manufacturing where the combined value of foreign direct investment into the City Region of the last 5 years has exceeded £200m

Against this backdrop however, the City Region only secures 1.5% of all UK FDI projects and has a 1.7% share of UK GVA (source ONS) which continues to be below the average of its comparators.

Page 73

1.4 Opportunities for Growth

The uncertainties resulting from the COVID-19 global pandemic and Brexit will have significant impact on the global investment climate. This can however bring opportunity, and through greater emphasis being placed on trade, medical research, materials innovation and digitisation in decision making, the region can capitalise on its recognised sector strengths. Most notably around health and life sciences, advanced manufacturing, its digital and tech clusters and ambitions for Free Port.

Working on the premise that these areas are the most likely to drive overseas and domestic investment, the region’s supporting sector eco system (finance/professional services, logistics/storage and energy etc) provides the critical mass of advantages and opportunity, which can capture the interest of influencers and multipliers . Similarly, many of the region’s global primes operate within the identified growth sectors (HHS, Astra Zenica, Pilkington’s etc) and will continue to offer existing or new supply chain opportunities as they adapt to these new conditions.

The implications are that greater investment from national/international SMEs may be the most realistic short to medium term target. They are likely to be seeking alignment with local primes as well as improved access to local markets/customers as the international trading environment becomes more complicated (and uncertain). Similarly, the ability to cluster with likeminded businesses, develop business efficiencies through access to R&D capabilities, along with access to finance, recruitment and premises are likely to be among their primary motivations.

1.4 Strategic Marketing Objectives

The Inward Investment Marketing Strategy has four key strategic objectives:-

1. Contribute to increasing the Liverpool City Region’s share of UK FDI projects from 1.5% to 2% within 3 years. 2. Deliver targeted inward investment marketing activity capable of generating 400 leads per annum (across all partners) of which 15%/60 leads will turn into bona fide enquiries and realistic targets for investment. 3. Through the deployment of effective sales enabling tools, support the City Region’s investment services teams to secure 15 investment projects per annum. 4. Increase the level of university spin outs setting up in the region to XX from XX by March 2023.

In delivering the above the overarching aims of the strategy will be to:-

- Advance the competitiveness of the City Region through regular engagement with industry regarding its competitive value proposition(s). - Develop an account management approach to ensure the region can respond swiftly to potential movements of investors overseas and across the UK. - Build the international profile and reputation of Invest Liverpool through alignment with the City Region’s brand narrative and content development programme. - Maximising returns on inward investment through collaborative marketing where markets and channels are common

Page 74

2. Strategic Context

There are a range of local, regional and national strategic drivers that have been considered in framing the investment marketing strategy. Alignment in each of these areas has been established to bring synergy with current funding programmes and to ensure the strategy contributes to, and is informed by existing priorities and initiatives for attracting inward investment.

A brief overview of the key policies and strategies that have relevance to inward investment marketing across the City Region is set out below:

Page 75

Strategy Local/Regional/ Overview Implications for II Marketing National Modern National Establishes ‘grand challenges’ affecting modern industrialised The composition of the City Region’s growth sectors are Industrial Government economies over the medium term – Big Data/AI, Aging society, closely aligned with the MIS. The assets and capabilities that Strategy Future Mobility and Clean Growth. These areas are central to already exist within the region’s digital health & life sciences, future productivity/output and will be delivered through the Local advanced manufacturing, low carbon energy and digital/smart Industrial strategies of the UK regions. tech base, means it is well placed to investigate and enable solutions for the grand challenges. The MIS identifies a range of sectors that will be important for solving the challenges and there will be economic benefits for Having these enablers in place, means there are compelling the economies of those region’s that manage to create solutions reasons why businesses should invest in the LCR, both terms and commercialise the approach. of research and commercialising through developing products.

Page 76 Page These capabilities are beneficial in terms of positioning and strengthening our sector specific value propositions. NP11/DIT? Regional TBC TBC

LCR Local Establishes how the City Region can leverage its current assets In terms of FDI, the City Region is consistently in the top 5 Internationali and points of differentiation to stimulate further economic regions for pharmaceuticals, logistics, chemical manufacture sation activity. In achieving this, the core areas of focus are inward and automatic. Research & Development investment is also a Strategy investment/FDI, research and exports as well as the attraction of principal driver for FDI projects. students and international visitors. The City Region’s sectoral strengths are identified as Health The outworking of the strategy is based on the development of and Life Sciences, Advanced Manufacturing, Port & Logistics, three sector groups: the LCR’s globally competitive prime Low Carbon and Digital and Creative. As such, they should industries, its strong network of scientific and knowledge assets, provide the focus for sector specific marketing for FDI. and innovative start up’s and high growth firms/SMEs. The Key overseas markets for FDI are EU (Ireland & Enabling this development, the strategy prioritises 5 growth Germany) and US. The Chinese market is underdeveloped enablers – network and collaboration, skills and capabilities, and there will be barriers and opportunities for investment physical infrastructure, digital & smart technology, and brand & based on the outcome of Brexit. distinctiveness. Innovative start-ups/SMEs are a key growth opportunity – particularly through ‘spin outs’ and university graduates.

A coherent brand positioning and message, based on the LCR’s distinctive strengths, back by a co-ordinated approach to manage investment enquiries could significantly increase profile and opportunities for conversion. LCR Local Local Sets out the City Region’s priorities for Covid-19 recovery with The recently completed City Region brand narrative will Industrial the aim of establishing the region as a globally competitive, provide the focus for clear, shareable messaging about the Strategy environmentally responsible, socially inclusive economy. It is region’s place and investment offer. As such, the importance /Build Back delivered through six key principles that include using the of the Marketing Strategy in activating the brand strategy will Better regions strength of brand and ability to shape places to create a provide a supplementary pillar for the recovery plan. compelling narrative for investment - post COVID-19, post Brexit UK. Given the prominence and dependencies on the City Region’s growth sectors, the ongoing development of specific value Of the 4 priority areas, the interventions for Business Eco propositions will be needed. There are specific opportunities System and Place have the most significance for the region’s for R&D across things like health, life sciences, manufacturing inwards investment proposition. Critically, this centres on the and clean growth/low carbon that can be commercialised.

Page 77 Page City Region’s knowledge and research capabilities and assets to Similarly, the region’s digital capability (knowledge, assets & commercialise and drive innovation across health, digital, infrastructure) means it has further capability to drive logistics and manufacturing sectors to build resilience and efficiencies and enhance productivity across those sectors exploit emerging opportunities. where it already has recognised strengths – Port/Maritime, Logistics, manufacturing and health. In terms of place, the diversity of the region’s cultural and tourism offer is acknowledged as key strengths in differentiating The CVP’s provide the basis for rationalising the complexity of the region from others. In combination with interventions for these propositions and the interrelationships. They will form improving housing, local amenities, town centres and the basis of sector specific marketing will be delivered to help connectivity the ambition is to further enhance the attractiveness the City Region Build Back Better. of the City Region to those who live and aspire to live it. Liverpool Local Establishes a unifying narrative for the Liverpool City Region’s The activation of the brand strategy will be a priority for inward City Region place and investment proposition through the ‘Here for Good’ investment marketing in terms of the creative development, Brand positioning. A brand framework has been developed for generating content and application across the LCR’s main Narrative business and investment which is aligned with the LCR Covid - digital/online channels, PR and collateral. 19 Recovery Plan and is based on 8 themes. The themes are based on the City Region’s identified strengths (Globally Establishing the positioning will be dependent of establishing Connected, Knowledge and Expertise, Green Powered, Talent champions and building advocacy for the brand. The etc) backed by individual proof points/case studies. marketing strategy will also provide the basis for application of the brand through PR, the integration of the brand framework

The outworking of the brand strategy is being delivered through and CVPs to strengthen sector specific marketing activity and an open access repository hosted on the Invest Liverpool influencing key opinion formers etc. allowing stakeholders to access and provide content for investment marketing. The strategy and framework has been The positioning of Invest Liverpool as the primary brand for the delivered through a private sector led steering group. It is LCR in attracting domestic and international markets also anticipated that the creative development of the brand and allows positioning/messaging to be simplified. application will be progressed over the next 6 months. LCR Brexit Local In light of COVID-19, there is no current policy for the City Dependent on outcomes of Brexit negotiations and UK Policy/ Region combined with uncertainty as to whether a trade deal freeports policy outcomes. Strategy with the EU will be agreed.

Irrespective of the position, the Government’s intention to establish designated freeports/free trade zones within the UK is galvanising new policy initiatives based on the Port of Liverpool

Page 78 Page and its enhanced handling capability (L2) as well as the wider opportunities for freight handling/distribution, processing and storage space.

Depending on these outcomes, the opportunities for inward investment in the Port/Maritime/Logistics sector could result from enhanced import/export capability. Similarly access to export markets (consumer and supply chain) for sectors such as manufacturing (primes, tier 1 and tier 2 companies) could also be significantly enhanced.

These benefits will be scalable based on the nature of the trade agreement the UK is able to put in place with the EU and its other main trading partners – US, North America/Canada and Asia/Australia etc

CA/One Regional Developed as a Mayoral priority to simplify and facilitate the Current proposals are that this marketing plan will also act as Front Door investor journey, as well as developing a ‘one stop shop’ the delivery plan for the CA/GP SLA and ERDF/SIF funding approach to enquiry handling across the City Region’s local programmes. It will also provide the basis of an extension to authorities and other stakeholders. the SLA and ERDF programmes to March 2023, to allow new structures in the Growth Platform to bed in and a sufficient

Recognising the profile of Invest Liverpool in domestic and time to implement the revised strategy (and deliver the international markets, the CA has commissioned the Growth outputs). Platform to co-ordinate Inward Investment marketing, lead generation and enquiry handling. The main areas of activity At an operational level, a new commissioning arrangement will being a single investment and place brand narrative, delivering a be set in place with Marketing Liverpool to support the delivery best practice inward investment service, gathering of the strategic marketing priorities (see section 6) including research/insight on key markets/sectors, developing strategic content management/creation, brand development and sector partnerships/collaborations and activating the LCR brand specific marketing. The Growth Platform will focus on through strategic and operational marketing. strategy, account managements, intelligence, CRM/pipeline and nurturing qualified enquiries/leads through a blend of sales Working in conjunction with LA partners, the SLA runs to March and outbound marketing. 2022 (now 2023) and combines funds from SIF and the ERDF Place Marketing for Investment programme.

Governance is provided through the CA’s Investment Panel and

Page 79 Page the LCR Investment Board (and subgroups)/LA Growth Directors.

3. Competitor Value Propositions (CVP)

The Liverpool City Region is competing for investment with many other regions across the UK and overseas. From an investment perspective, it is those areas that understand and can satisfy the wants/needs of the companies it is seeking to attract that enable competitive advantage.

The Liverpool City Region Internationalisation Strategy and the Local Industrial Strategy establish where the City Region has these strengths. They are split between those sectors that have the potential for high growth and will drive productivity, innovation and competitiveness, and those that are essential for enabling growth, and are therefore provide opportunities for investment in their own right.

Examples can be found between the region’s health and life sciences sector and digital innovation in terms of the expertise and physical assets that will be key to unlocking investment in health tech. Similarly, the reliance of the City Region’s manufacturing base to reach global exports through integrated port/logistics assets is another dependency and competitive strength.

The chart below summarises these relationships and processes.

3.1 Building the Proposition

The articulation of these strengths and interdependencies into a compelling narrative provides the basis for the investment marketing activity. The approach to developing the competitive value proposition (CVP) structures this process by establishing the competitive strengths of each sector, the underlying messages that articulate these strengths and the associated proof points that evidence the promise.

While competitive value will also be found in the quality of client facing investment services, in this context the CVPs will provide the creative inspiration for campaign/comms activity, content generation (owned and partner channels) and sales enabling materials. The process will also work in parallel with the City Region’s

Page 80

wider brand narrative both in terms of positioning and aligning the associated place/lifestyle benefits with sector-based marketing.

Importantly, the CVP process will be under constant review to reflect the dynamic nature of our priority sectors as well as global market changes and the City Region’s future investment and infrastructure plans.

3.2 Short form CVPs

Following engagement with the LEP boards and sector specialists, short form CVPs have been developed can be found in Appendix 1. They profile the sectors that are important to Liverpool City Region and its comparative strengths based on the needs of businesses that could be targeted for investment.

As part of the outworking of this strategy, the short form versions will be used as the basis for the detailed CVPs that will be developed and tested over the next 3 months (see section 6). This will be followed by market testing with commercial stakeholders and alignment with the City Region’s wider brand positioning.

The assumption is that the scoping work competed to date is correct. Along with the market assessments developed in section 5, the mapping provides the basis for the suggested marketing initiatives set out in section 6.

Page 81

4. Customer/ & Investor Focus

The intention of the strategy is to develop an ‘investor led’ approach to building intelligence and tailoring communications to the individual needs of the market. Critically, the process will form a critical part of developing a high-quality investment and account management service that are aligned with the principles of One Front Door. The broad elements involve generating investment leads (through dedicated lead generation, marketing activity or requests for information), qualifying leads as sales or marketing enquiries and managing the subsequent interactions through a centralised database. The process involves different interactions from the marketing and sales teams depending on the stage and nature of the enquiry. It will typically include nurturing leads once they have been qualified and developing detailed investment proposals with the intention of landing the project. The process is summarised in the flow chart below:

Lead generation Inbound (Lead Gen) Marketing Inbound Marketing Lead

Lead quality check Business analyst check & update CRM status

Enter Lead Nurture Programme

Marketing Lead Scored and qualified by Growth Qualification Platform marketing team

Yes Over to No investment team

to SQ.

Sales Are they ready Enter back into lead Qualified to invest? nurture programme Lead

Assign as an opportunity

Convert

Page 82

4.1 Current Approach to CRM Over the last 3 years, the City Region has invested in its Customer Relationship Management (CRM) capability through Evolutive and the creation of a dedicated database to manage and monitor qualified investment leads. As a result of COVID and the wider restructuring of the investment service, the full end to end processes for managing enquires through to conversion/landing has been delayed. As a result, full potential of the investment in CRM has not yet been realised. From a marketing perspective, the main issues that require development are set out below:

Stage Issue Impact Lead & Enquiry Tracking Leads generated are being • Information not be captured to tracked using a spreadsheet lead the desired standard tracker, which is manually updated specification. by a member of the Growth • Data records are not up to date Platform investment services – recent contact, nature of team. Leads are then manually enquiry, follow up, changes in uploaded into the CRM circs etc. There is no way of tracking leads • Multiple LCR contact points that are coming into local • Mixed messaging authorities without the adoption of • Loss of prospective enquiries CRM as a central place for all to other regions. enquiries into the City Region. Qualifying Leads & Enquiries The primary source of new leads • Sub optimum follow up and comes through the DIT, the Invest opportunity to Liverpool website, stakeholder target/personalise messaging. engagement and limited marketing • Missed opportunity to qualify campaign activity. These are leads as sales or marketing being managed by the investment enquiries. services team with no marketing • Limits ability to maintain support to nurture the leads relationship with prospective through the sales journey. investor and generation of sales enquiry. Leads that are generated through • Missed opportunity to qualify the website and marketing leads generated as sales or campaigns are lacking a dedicated marketing enquiries. resource to qualify leads. • Enquiry process is not streamlined. • Limits opportunities for the investment services team to build/personalise the relationship. Nurturing Leads & Enquiries There is no day to day • Capability of CRM is restricted management of the quality and • Data is weak and not able to accuracy of data being imported support planning and into the CRM. performance management. • Nurture campaign activity is limited and compromises the reputation of the LCR investment service.

Page 83

4.2 Maximising Capability

The Evolutive CRM system also has the capability and functionality to streamline the process for enquiry handling and the lead nurture programme. This includes segmenting data (by size, sector, company profile, enquiry stage etc) and using standardised templates (for newsletters, emails etc) to target communications at these predefined groups. In terms of data capture, there is also functionality to introduce enquiry forms that plug into third part systems. Hosting this application on the Invest Liverpool website (as the primary call to action for inbound marketing), would obviously bring significant benefit in allowing website leads to be entered straight into CRM and triggering automated email responses. 4.3 Further Development is Needed…..

Areas for further development include the full automation of email marketing campaigns to predefined segments – specifically around scheduling regular communications based on the stage of enquiry or targeted messaging that forms part of the nurture programme. Similarly, the ability to extend the breath of data held in CRM (up to date sites/premises, support packages, local labour market information, sectoral economic performance etc) will increase the efficiency of these processes, as well as improving the overall response times to direct enquiries.

In terms of building insight and intelligence, there are a range of data sources that can support the interrogation of data records in CRM. This specifically relates to supplementing lead/company profile information (size, location, ownership, turnover, growth/high growth potential etc), investment potential and the corresponding opportunities within the City Region. While a solution would be required in terms of the interface between these systems and CRM, the Growth Platform is already accessing intelligence that would support these processes. These include its existing licences with Beauhurst (high growth UK businesses), DIT’s Investment Tracker and Red Flag for example. 4.4 Next Steps

• Recruit a business analyst within the Growth Platform to control and mine data, making sure it is accurate and is appropriate to enter into the CRM as a lead. • Work with Evolutive and Marketing Liverpool to create an enquiry form that can plug into the Invest Liverpool website and CRM • To include a new call to action that links to the new enquiry form in the Invest Liverpool newsletter to encourage enquiries and sign-up to the email nurture programme. • Data sharing protocols between Marketing Liverpool and Local Authorities with Growth Platform for nurturing leads. • Set up CRM functionality with the right fields and functionality to segment and analyse data – increasing the number of fields (i.e. sector, size, location, enquiry stage etc.) • Investment into analysis and marketing automation tools i.e. mailchimp or campaign monitor • Encourage local authorities to supply data to benefit from the nurture programme. 4.5 The Marketing and Sales Process.

The integration of CRM into the marketing and sales process is an effective way of building capacity and value into the data the region owns and has direct access to. It also provides a ‘single view’ of the customer to direct marketing and sales interactions. The end game being to build the cost effectiveness of marketing by targeting inbound activity at the markets that offer the greatest return, combined with outbound marketing to nurture individual leads through to conversion via the sales process. As part of that journey, all interactions will come under the Invest Liverpool brand and will require collective effort of stakeholders to influence, share intelligence and build a competitive investment proposals.

Page 84

Aligned to this, the specific priorities for inward investment marketing are set in section 6 and are a culmination of the sector specific value propositions (short form versions) and market analysis contained in sections 3 and 5. In conjunction with the enhanced CRM capability outline above, the process of building awareness, generating/qualifying leads and nurturing leads through to sales enquires is set out in the marketing and sales funnel – see below. 4.6 Applying the Model

Using this approach, inbound marketing and investor profiling work drive leads into CRM by building brand awareness of the City Region’s investment proposition. Dedicated resource within the Growth Platform Inward Investment Service, will marketing qualify (MQL) the leads by checking data accuracy, segment and enter into an appropriate lead nurture email campaign if they qualify (see section 7). During the MQL process, leads will be tagged and sourced so that they can be tracked and monitored for reporting purposes. Once the leads have become a MQL, they are to be passed onto the investment team to make contact and ‘sales’ qualify the lead (SQL) and manage the enquiry along with the support of an email nurture programme. This will include ‘sales’ enabling tools and marketing campaigns using high value content (created in the form of guides and case studies – video, PDF’s and podcasts etc) to take the prospect from consideration through to closing stages. Due to the nature of businesses landing into the City Region, the sales journey can take anything from months to years, which is where regular contact through sales conversations and marketing helps nurture the leads along the journey. Once the prospect is ready to decide, the lead moves on to being bona fide opportunity which will require a set of sales enabling tools and bespoke proposals with available space to let. Once the project has been landed, the business is passed to the business growth hub support team to provide aftercare in terms of access to networks, grant assistance and recruitment.

Page 85

4.7 Marketing & Sales Funnel

Brand Awareness: Inbound marketing campaigns; events, advertising, blogs, news, social media, PPC, Awareness activity - Marketing Liverpool SEO, media mentions (PR), digital advertising, activity & Investor Profiling - guides Get traffic Commissioned Consideration stage: Outbound marketing campaigns; Targeted Lead Generation activity – Growth automated email, sector specific assets Get leads Platform Inward Investment Marketing

Lead Generation activity – Shared Inward Investment Decision stage: Outbound marketing campaigns; automated

Page 86 Page Qualify leads Marketing & Sales responsibility emails focusing on sector specific case studies & key facilities Lead Generation activity – Shared Inward Investment

CRM Get sales Marketing & Sales responsibility Closing stage: Sales emails and calls to provide available space and Prospect Nurturing –Inward Investment Sales funding support. Convert responsibility Business support through Growth Hub and brand advocates Keep Client Nurturing – Growth Hub & Brand Advocacy

5. Key Markets

The uncertainty facing the world’s economy of COVID 19 and the impact this will have on foreign direct investment and investment from domestic markets outside the City Region is impossible to predict. Similarly, the additional challenges and uncertainty of trading with the EU and the rest of the world post Brexit, present an additional layer of complexity that will almost certainly influence/impact where inward investment projects will originate from.

The likely result of these combined factors is that investment will be driven by the need of companies to localise their operations according to the markets they serve, and where international trading restrictions/barriers do not hinder access to export markets. Developing the marketing strategy within this uncertainty is therefore challenging and we have used the most up to date intelligence provided through the Growth Platform/CA intelligence, Department for International Trade (DIT) and market analysis conducted through the City Region’s Internationalisation Strategy to help establish where the opportunities for attracting overseas/FDI and domestic investment lie.

It is fair to say, that the dearth of detailed information currently available for targeting countries/regions, establishing the location, profile and motivations of target companies etc, requires considerable development. In light of this, section 7 sets out recommendations to improve the management and gathering of intelligence as well as the interventions that will be needed to fill gaps in market intelligence.

5.1 Markets – National

The UK regions secure investment from a large range of countries but the largest origins of UK investment tend to remain relatively steady year-on-year. Chart A shows new projects (ignoring expansions) secured by the UK regions (excluding London) over the last five years. The six countries listed are the only countries which were in the ‘top ten’ origins in each of the five years.

The analysis also reveals the complete consistency of the US and Germany as the leading origins for new UK regional FDI. Chat B, however, demonstrates the domination of the US in generating FDI. The US has always been the UK’s most important source of FDI by a significant margin and in 2019 accounted for 35% of all new inbound investment into the regions of the UK.

Chart A: Origins of new investment into UK regions by rank of scale (2015-2019)

2015 2016 2017 2018 2019

1 1 1 1 1 2 2 2 2 2 3 3 3 4 4 4 5 5 5 5 6 6 6 6 7

8 8

10 10 10

United States Germany France Netherlands China India

Page 87

Chart B: Percentage of new investment into UK regions from US and Germany (2015-2019)

40

35

30

25

20

Percentage 15

10

5

0 2015 2016 2017 2018 2019

US Germany

5.2 Liverpool City Region

In terms of FDI into the Liverpool City Region, the region’s Internationalisation strategy benchmarks performance of FDI projects landed against the top performing UK cities (2007 – 2016). As per table C, most of the region’s recognised growth sectors are within the top five destinations for investment with the exception of the Digital and Creative sector where cites including Manchester, Glasgow and Belfast were ranked in the top five.

Similarly, the Business and Financial Sector performs less well than other UK cities, however at a City Region level it is among the top three performing sectors for investment project landings, along with the Digital and Creative Sector (as per the analysis below).

Table C

LEP Sector/Sub Sector Benchmark Number of FDI Ranking Projects - LCR

Business & Financial Services 16 14

Digital & Creative - Software 12 19

Health & Life Sciences - 3 9 Pharmaceuticals

Port & Logistics - Logistics 3 15

Manufacturing - Chemicals 2 10

Page 88

Manufacturing – Automotive 4 10

5.3 Analysis of LCR Investment Projects – 2015 – 2019

The baseline work conducted in the internationalisation strategy is important for substantiating those sectors where the region has competitive strength. Additional investment in the likes of the Knowledge Quarter, Sci-Tech Daresbury, materials innovation, renewable energy and digital infrastructure over the last 5 years has further strengthened the investment proposition (both foreign and domestic).

Analysis of the region’s foreign direct investment projects over the last 5 years (2015 – 2019) has also been completed to enhance our evidence base and trends for marketing activity. Table D shows that the investment projects landed in the City Region are predominantly linked to manufacturing, digital/tech and health and life sciences. While energy/clean growth projects are also strong, many of them relate to the region’s capabilities in manufacturing, storage and logistics for example. As such, these dependencies should be considered when establishing the primary motivators for investment (see section 3 – CVPs).

The majority of Digital and Creative investment projects fell within the creative media and software development sub sectors. FPBS investment projects were mainly related to the expansion of consumer services (high street) and professional services (predominantly legal and financial). In terms of FinTech investments, there were no investment from FPBS businesses into FinTech, but rather from Software companies providing services to FPBS businesses (see further analysis below).

While not a recognised DIT sector cluster, the Visitor Economy is used to include elements of retail, food and drink (excluding manufacture). Within this mix, several hotel and leisure facility attraction projects feature, however, the added value of jobs created in these sub sectors are relatively low in comparison to the others. They do however play a significant role, both in terms of the volume of job opportunities and the region’s wider place/lifestyle attributes and should not be overlooked.

Table D

LCR FDI Projects by Sector - 2015-2019

Other

Visitor Economy

Ports & Logistics

Health & Life Sciences

FPBS

Energy/Renew Energy

Digital & Creative

Advanced Manufacturing

0 5 10 15 20 25 30 35 40 45

Page 89

5.4 LCR Investment Projects – Origin

Table E shows the top ten countries that have invested in the City Region over this period (based on investment with a total value of > £30m). As per the national analysis, investment is dominated by the US and Germany in terms of both the value and number of investment projects secured. Most of the other investment projects originated from other EU countries. It is also important to note that while the US is a significant trading partner, Ireland, France and Germany made almost 60% of the regions export markets between 2007 and 2016 (source: Internationalisation Strategy).

Table E

Country New Jobs Total Investment Investment Created - all Value** Projects investments USA 9 1802 £480.1m Germany 3 911 £324.7m Netherlands 3 2065 £131.5m Singapore 1 53 £113.7m India 0 499 £55.3m France 0 1229 £51.5m Israel 0 0 £33m Ireland 1 991 £32.9m ** Investment for 2018 not recorded

The presence of Singapore and Israel is mainly due to investment projects across multiple UK regions of which the City Region was one. India, however, was a constant source of investment across multiple sectors (manufacturing, chemicals, food & drink and creative), and were made directly into the City Region.

Investment from China ranked 15th (£15m), while more established investment partners like Japan and Denmark ranked 11th and 13th respectively. Both countries invested approximately £25m each and this included the £25m investment secured from Dong Energy (Denmark) into Birkenhead.

A total of 79 investment projects originated from these countries (see table F) with 24% being new projects and 61% being due to expansion of those businesses already located in the City Region. The remaining investments comprised acquisition (9%) and retention (6%).

Table F

Acquisition Expansion New Retention Totals Investment 1 6 1 2 10 1 9 7 3 20 0 15 5 0 20 0 9 2 0 11 5 9 4 0 18 7 48 19 5 79 9% 61% 24% 6% 100%

Page 90

5.5 LCR Sector Performance

Looking at the performance of the region’s sectors against the lead investment countries (see table G), the health, digital and manufacturing sectors show significant yield within the US market and to a lesser extent the Indian and German markets. In terms of manufacturing, US investments where largely associated with new equipment or new production techniques, with one investment aiming to bring work back to the UK from low cost supply chains abroad.

For health and life sciences, two thirds of US projects were new investments, being primarily into health IT and health logistics companies. All the investments in Health and Life Sciences from Germany have been from existing investors who have expanded their Liverpool sites. These include multiple investments by Fresenius Kabi into their biotechnology and pharmaceutical manufacturing facility in Runcorn, and Atlanta AG have invested into chemical manufacturing capacity at their existing Widnes site.

The £24m investment by the French company DPD (Stonebridge Industrial Estate) generated an additional 500 jobs across 2015 and 2016 made up approximately 61% of foreign investment into the regions logistics sector.

The performance of energy and professional services have already been referenced and are skewed as a result of the investment being spread across the UK and not just the LCR. This is also true of the Heineken Holdings (Netherlands) refurbishment of circa £150m of portfolio of 2700 pubs within the food and drink sector.

Despite this, it is important to note that there have been 5 investments into FinTech from 2015-2019, all have been investments in the Software and Computer Services Business to Business sector. These investments have originated from the USA, Germany, France, Canada, and Bulgaria, including three investments into sites at Sci-Tech Daresbury: • £3.7m investment from the US company Flexera Software creating 30 new jobs • ATOS, a French digital company ranked as one of the top 25 FinTech companies, to set up a sales office at Sci-Tech Daresbury. • Canadian company CGI to open a new office in Liverpool, creating 70 new jobs to provided IT services to ensure the smooth running of the Disclosure and Barring Service (DBS).

The green highlighted cells indicate those countries sectors where significant levels have been made directly into the City Region. As such, it affirms the regions strengths in manufacturing and health and life sciences when compared to the national benchmarks, the emerging capability of digital and creative and the latent potential of the port and logistics sector.

Table G

Page 91

5.5 Research & Development Projects (R&D)

Research and Development investment projects in FDI made up approximately 8% of all investment into the City Region over this period. The dominant sectors were the Advanced Manufacturing and Health & Life Sciences sectors, with the majority of investment being placed into the expansion of existing sites to increase R&D capability as opposed new starts or relocations. This includes the expansion of R&D facilities by Unilever at its Wirral site and investments in the Health and Life Sciences sector involving the expansion of R&D capabilities in pharmaceutical and biochemicals manufacturing.

Some investments into R&D have also been made in the Energy sector, including the acquisition of a Knowsley based energy company and investment from Incetrans UK into a R&D site at Sci-Tech Daresbury. One investment in R&D has also been made into the Digital and Creative sector, involving the expansion of a site in Sefton to include an R&D facility for Domino Printing Science.

Number of Research & Development Projects

1 2 5

4

Ad Man H&LS Energy Digital/Creative

5.6 Company Profiles

Taking all these factors into consideration, the analysis shows there has been no significant new investment from multinational/prime industries over this period. The profile of those companies investing in the Advanced Manufacturing and Health sectors is dominated by the expansion of existing foreign owned businesses with an average of 30.1 new jobs being created per project for Advanced Manufacturing and 13.5 for Health & Life Sciences.

Conversely, the Digital and Creative sector has seen much higher levels of new investment into the region (especially from the USA) particularly in software development and creative media. The average number of jobs created per project was 37.2 for this sector.

Page 92

5.7 Identifying FDI Markets & Qualifying our Marketing Leads

The analysis of performance over the last 5 years provides a good indication of the sectors and countries where the Liverpool City Region is likely to have the greatest success when building the pipeline of prospective leads. Whilst large scale investment is the priority, competition and the challenges facing the global economy mean opportunities are likely to be limited. In that sense, investment marketing in foreign markets is likely to yield greater return by focussing on small to medium sized enterprises in those sectors where the analysis indicates the region has a competitive advantage. This includes the primary sectors mentioned, but also the use of the region’s knowledge and digital assets to attract R&D investment in emerging sectors such as renewables, clean energy, health and digital manufacturing for example.

Using this evidence base to identify achievable markets/investment opportunities within these sectors, the process will involve establishing the scale of the business (e.g. digital/creative businesses >20 jobs, manufacturing businesses >50 jobs) and whether it has demonstrated growth (longer term businesses demonstrating 3-year growth in revenues; newer businesses growth in funds raised etc). In meeting these criteria, the strategic intent of the business to invest overseas can be established through its business strategy or effective media monitoring across the identified markets/territories, and by assessing if there is no UK presence (or at least none beyond a representative office).

There will of course be other motivations for investment including:

• Supply chain interest • Key customers in UK • UK Execs in management team • UK university alumni • Management team had significant prior UK experience • News indicates a change in strategy

All of which will need to be considered in relation to the primary indicators and will provide the basis for qualifying marketing leads.

Having defined the markets, the process of building the prospective pipeline of leads using this qualification criteria can be developed through access to international corporate databases that hold this level of information and allow the appropriate level of filtering (sector match, scale, growth, exports, UK presence etc). The Dun & Bradstreet and potentially Beauhurst data systems are good examples of this, however it is likely that manual work will be required for targeted campaigns including company strategy, supply/customer links and indication of Directors interest.

As example of how this process could work in practice, we ran a report in conjunction with Mickledore (Regional Development specialists) focussing on US based and owned software businesses with more than 50 employees (Dun & Bradstreet data). This yielded 1,544 businesses. Further refining the search according to those companies considering opening new facilities narrowed the field down to 20!

This signifies the importance of how these qualified sales and marketing leads are engaged with by the City Region (messaging and proposition) and nurtured (often over several years) through to a landed project. As per the detail in section 4, the importance of a strategic approach to CRM and personalised communications will be the fundamental link in establishing a fully integrated sales and marketing process.

Page 93

5.8 Other Investment Opportunities

5.8.1 R&D - Spin Outs and Start Ups

The City Region has significant academic and research strengths through its higher education institutions (and those that are within its wider catchment including Manchester) and they are aligned to the sectors where the region has competitive advantage (see section 3). Coupled with the accelerator programmes, knowledge assets and sites/premises that are available through the likes of Sci-Tech Daresbury and the Knowledge Quarter (a key is their soft landing packages), there is a means of cultivating ideas and IP emanating from university graduates into commercial ventures (spin outs).

Based on these factors, the internationalisation strategy indicates the spin out markets has the potential for increasing investment into the LCR by retaining talent and providing the incentives (and support) for business to be formed – particularly in the high-tech sectors. The fact that within the region alone, fewer than two of these company types are formed per annum against a national average of 17, indicates the size of the opportunity – both in terms of retaining talent and innovation, but also in developing the pipeline of businesses that have the potential to grow, as well as enhancing the region’s competitiveness in attracting new FDI opportunities.

5.8.2 Investment from Domestic Markets/Trends

The domestic market is also an important consideration. This can relate to the expansion of UK firms, or the expansion of foreign owned firms that have located in the commercial centres such as London. As part of their second phase development, these companies will often look to expand or relocate as a result of factors like changing market conditions, gaining better access to markets and skilled labour or through the need to generate efficiencies.

At a local level, there is limited intelligence on the profile of these companies, however through the incentives offered through North-Shoring, Port Access, clean energy and the access to world leading knowledge, it makes sense to establish the precise nature of where these opportunities may lie.

Looking at the overall pattern of inward investment across the North West in general (as there is no data available for the Liverpool City Region), it shows that from 2011 to date, the region attracted investment from all over the UK ranging from up and coming tech start-ups to ambitious scales ups. London and Scotland are the primary sources of investment, with the South West, West Midlands, Yorkshire and The Humber being secondary sources. What is this telling us?

5.9 Markets & Targets

• The perceptions of the UK as a stable FDI location appear to have changed. In part because of uncertainties about how the UK will exit the EU and in part because of changing appetites by Multi Nationals consolidating operations in their home territories.

• The primary motivations for investment relate to market proximity (access to consumer markets and/or supply chain (tier 1of tier 2)), infrastructure and labour. Over the short to medium term, the likelihood of largescale investment is small due to market uncertainty, disruptions to global supply chain and the availability of infrastructure - although freeport status may have a significant impact.

Page 94

• As a result, SMEs are therefore a more realistic target on the basis that relocation (or start up) will help them access LCR primes/supply chain, their own consumer markets, or to be located near to centres of expertise, knowledge, or research.

• The primary overseas markets for FDI are European markets (especially France, Germany and Ireland) and North America. Secondary markets include India based on the consistent levels of investment that have been made directly into the LCR over the last 5 years. North America is by far the biggest market in terms of the volume and value of investment.

• Opportunities in domestic markets need to be researched and mapped, especially in light of Brexit/freeport and the UK’s emerging priorities and ambitious target for carbon reduction (renewable energy, automotive & R&D etc)

• University (local and regional) spinouts have not been targeted as a source of domestic investment, the capacity building of the LCR economy over the long term and the retention of talent. 5.10 Liverpool City Region Investment Proposition

• The City Region sectors of Manufacturing/Advanced Manufacturing, Health & Life Sciences and Digital and Creative are the most attractive in terms of securing direct investment. Along with renewable energy, they also provide the focus for investment in R&D.

• Secondary sectors (those that strengthen the region’s proposition and have investment potential in their own right) are Port and Logistics, Professional Business Services and Low Carbon/Energy/Renewable Energy. There are emerging opportunities for the LCR associated with Free Port and the UK’s ambitious carbon reduction targets to 2030 and 2050 which will need to be considered as part of the future proposition.

• The focus on FDI SME markets (including start-ups and spin outs) will mean greater alignment/integration of local business growth packages with the overall investment proposition. This includes soft landing packages and aftercare support in the form of access to networks, access to knowledge and assets and the city region’s existing business growth programmes. 5.11 Implications for Investment Marketing

• Competition for any form of investment is fierce, as such, the articulation of the region’s competitive strengths (primary sectors, secondary sectors, knowledge and digital assets etc) must be delivered through a compelling narrative and overall proposition to have ‘cut though’ across the identified markets. The integration of the recently agreed Liverpool City Region brand framework and the sector specific CVPs along with sector specific intelligence (size, labour market, sites, recruitment and premises availability etc) are fundamental to fulfilling the marketing and sales process.

• A targeted approach to lead generation will be an effective tool in building a pipeline of qualified marketing and sales leads. This is best achieved using third-party data sources working to set criteria/indicators (sector, company size, potential for growth, UK presence etc) to identify the leading growth companies. The approach must be supplemented by a strategic approach to CRM and targeted nurture campaigns, which in turn will strengthen account management, sales and the value of the LCR’s intelligence base.

• The above should be supported by a broader programme of investment marketing targeting all those active in the industry/sector (businesses and intermediaries alike). This should be supplemented by PR / thought leadership / and social media/digital marketing, with the aim of ensuring that potential investors associate Liverpool City Region with the sector.

Page 95

• Trade and investment exhibitions (such as MIPIM, TGBF and Digital Manufacturing Week) are likely to be an important anchor for sector specific investment marketing in terms of positioning the region, building awareness of the sector value proposition(s) and generating qualified leads through pre- arranged meetings and opportunities to speak on relevant sector developments.

Page 96

6. Marketing Strategy

6.1 Introduction

The marketing strategy has been developed to reflect the preliminary work completed for mapping the sector propositions and our understanding of where opportunities for securing business investment from international and domestic markets lie. The approach has been split into five priority areas that reflect the need for sector specific campaign activity giving prominence to those areas where the region has strengths and some form of competitive advantage. It also sets out the approach for marketing the region’s wider sector eco system through content marketing, and the generation of high-quality content that will help maintain market visibility on a year-round basis – ‘always on’. Aligned with this, we have set out the approach for activating the City Region’s place brand, in terms of incorporating it into planned activity and creative development, as well as building advocacy, encouraging stakeholder adoption and generating dynamic content. There is also recognition that investment marketing is a collective effort and requires commercial partnerships to be formed to achieve the economies of scale and increased reach joint marketing can bring. This also includes the use of shared channels to amplify messaging. Recognising that greater emphasis must be placed on developing and understanding the region’s competitive strengths, the strategy establishes the approach for building out the preliminary mapping of the sector competitor value propositions (section 3). This includes establishing the opportunities for investment based on the way the region’s sectors interact with one another, as well as testing the resulting propositions with industry to validate our positioning and the associated proof points. Ultimately, the strategy will support targeted lead generation into CRM and the subsequent process for enquiry development and fulfillment set out in section 4. The five priority areas are as follows:- 6.2 PRIORITY ONE: Sector specific campaigns Health & life science, advanced manufacturing, maritime & logistics and digital & creative are the sectors where the City Region has competitive strengths. Individually and collectively they provide a critical mass of advantages and opportunities that, when combined with the region’s wider sector ecosystem, create a compelling investment proposition that justifies dedicated marketing activity.

As we have seen through previous campaigns such as Digital Manufacturing Week, using sector related events, media or other high-profile initiatives to raise visibility can be an effective way of building awareness and generating leads. Supplemented by tactical marketing (PR, paid social media), the process will help amplify key messages and increase the duration of the campaign.

The table below highlights the events, media and milestone opportunities (in the form of infrastructure development, key announcements etc.) that have the potential to form the pillars on which to anchor sector specific campaign activity. It is impossible to gauge the value and reach of these opportunities at this time, however input from commercial partners and sector experts will be instrumental for decision making as plans are developed. The table also sets out the likely opportunities for PR in the form of thought leadership, editorials in trade publications and working with partners to increase in reach and media spend.

Event selection will rely on the right profile of target companies, the right markets and the opportunity to gain a return on investment in the form of leads generated, especially through account-based marketing/pre event engagement. For media, it will be the reach of the publication, anchored by either sector specific

Page 97

messaging or the milestone activity (or both). It will rely on content syndication and the ability to guarantee leads, along with the opportunity to engage with sector target audiences via co-hosting, webinar sponsorship or roundtables etc.

Supplementary activity will be delivered through inbound marketing in the form of high value content - blog posts, social media (organic and paid), SEO, PR, case studies, guides and partnerships etc. The dedicated campaign landing pages on Invest Liverpool will be the primary call to action. Once leads have been qualified in CRM (see section 4), they will be the focus of the Growth Platform’s ongoing programme of outbound nurture campaigns, including podcasts, webinars, sector specific newsletters and downloadable assets.

The key actions under these priorities are: P1 Gathering intel on target audiences to build out persona profiles to create a personalised email nurture programme, which can be captured from the activity outlined in the research intelligence section. P2 Building out sector specific content for each sector campaign in the form of guides, brochures, podcasts, images, case studies and video content. P3 Working with key partners to map key events and initiatives for each sector and devise campaign plans around those key milestones in the year-round planner P4 Invest in an automated email software and create an email workflow for each sector based on campaign activity, and then build out the emails that will go into the nurture programme.

Page 98

Campaign Indicative Pillar activity Indicative Markets Indicative Indicative PR Activity Themes Proposition

Health & Life Event options: UK: - Thriving ecosystem Fuel your growth and Trade Press to engage with: Science - Arab Health- July 2021 - Business - World-class innovation by joining a Life science Industry News - Infectious Diseases – demonstrating growth expertise and R&D thriving ecosystem of Pharma Times Conference (London) – - Scale facilities expertise, collaboration, Drug Discovery Today Oct 2021 - Fits the target sector - Exceptional Talent and state of the art Med-technews.com - Medica (Germany) – Nov pool facilities, where global 2021 US / France / Germany / - Comprehensive brands, world class Event PR: India: infrastructure for academic institutions, Pick out a key speaker at event to profile and the Media campaign options: - Business clinical trials and public funders are organisation they represent - Pharma Times – March demonstrating growth - Gateway to the investing in the future of 2021 - Scale world Health and Life Milestone opportunities: - Lifescience Industry - Fits target sector - Quality of life and Sciences. The Hill Page 99 Page News – April 2021 - Strategic intent competitive edge The Spine opening – RCP - No UK Presence Milestone opportunities: - Business specific Partners: - The Hill - TBC rational Working with key partners to align PR - The Spine opening – opportunities RCP – April 2021 Thought leadership: Profiling key influencers like Janet Hemmingway

Advanced Event Options: UK: - Supply chain and Be a part of shaping the Trade Press to engage with: Manufacturing - MACH Exhibition – April - Business demonstrating ecosystem future of tomorrow with The Manufacturer (UK) 2021 growth - Talent our industries at the Manufacturer Global - Digital Manufacturing - Scale - Technology forefront of developing Week (North America – - Fits the target sector Innovation business-changing Event PR: Virtual) – June 2021 - Globally connected technology that radically Pick out a key speaker at event to profile and the - Digital Manufacturing US / Germany / India: location improves both industry organisation they represent Week – Nov 2021 - Business demonstrating - Proximity to and society. growth customers Milestone opportunities: Media campaign options: - Scale Free Port

- The Manufacturer - Fits target sector We’re bringing tomorrow - Manufacturing (Global) – - Strategic intent closer Partners: April/Nov 2021 - No UK Presence Working with key partners to align PR - Business specific opportunities Milestone opportunities: rational - Free Port – Oct – Dec Thought leadership: 2021 Profiling key projects like the national packaging centre Digital & Event options: UK: - Cluster community Establish your business Trade Press to engage with: Creative - London Tech Week – - Business demonstrating and ecosystem in a place of world Tech Nation Sept 2021 growth - Acceleration & leading digital innovation Forbes - Tech Summit - TBC - Scale Support for SME’s fueled by a wider eco TechCrunch - Fits the target sector - Infrastructure system of opportunity Business Insider Media campaign options: and growing Bloomberg News Page 100 Page - Tech Nation – May 2021 reputation/expertise in - Forbes development of Event PR: - TechCrunch immersive tech and Pick out a key speaker at event to profile and the - Business Insider gaming. organisation they represent - Bloomberg News Milestone opportunities: Milestone opportunities: Tech Climbers Report 21 - Tech Climbers Report – Jan 2021 Partners: Working with key partners to align PR opportunities

Thought leadership: Profiling case studies of ecosystem in action (see results of Tech Climbers Report)

Adhoc PR opportunities that arise over the year.

Start-ups & Spin Event Options: Liverpool City Region - Cluster community Liverpool City Region is Trade Press to engage with: Outs - University spin outs and ecosystem the place to start and - Local start-up firms grow your business with Business Insider

Co-sponsored event with key - Health & Life Science & - Acceleration & business space, support LBN university stakeholders - Digital Support for SME’s and funding to get you webinar (aimed at Students) - Infrastructure up and running. Partners: – April 2021 – alignment with North West: - Soft-landing Working with key partners to align PR University entrepreneur - University spin outs packages & funding opportunities with universities etc. programmes - Local start-up firms support – KQ & - Health & Life Science & STFC Thought leadership: Digital Guides tailored on how to start a business and the package and support available in LCR.

Page 101 Page

6.3 PRIORITY TWO: Content Marketing and being ‘Always On’ Maintaining the broader awareness of the City Region’s investment proposition is important for building reputation, maintaining impetus and supporting the sales process. While priority one sets out the targeted marketing interventions for those sectors where the City Region has competitive advantage, they are dependent on the wider sector ecosystem which in themselves will be targets for inward investment. Within the budgets we are working to, the generic marketing of the City Region’s investment opportunities will be based on the translation of the CVPs into inbound content marketing activity across our digital channels (owned and earned). This will be supplemented by PR, improving access to usable content for our partner and developing new marketing assets, such as, off-the-shelf sales enabling tools. Importantly, content will be generated and refreshed so that it is aligned with the City Region’s new brand positioning (see 6.4) and is able to influence the decision making of potential investors. The content framework (below) describes the journey leads take from discovery to choosing the region for investment and will be used to determine how best Invest Liverpool channels and media are deployed.

Discovery Educating with content to loosen (disrupt) the status quo and connect with the business issue (i.e. growing business with need to access new markets) with thought leadership pieces.

Aim: Encouraging the target to commit to change with an idea or concept that will persuades them to take action.

Consider

Explore possible locations by providing content that explains the benefit and how the City Region meets the target’s needs with stories.

Aim: Committing the target to a location and what makes the City Region different & unique.

Decide Justifying their decision to choose the City Region with an investment rational for the target’s decision criteria. Aim: Encouraging the target to make a selection by confirming

and reinforcing the location choice with peer testimonials and case studies.

Within this framework, the approach is intended to bring an ‘always on’ mentality to the planning of our marketing given the constant noise that exists in the market place and the need the to generate the level of ‘cut through’ marketing at set intervals across the year. This will relate to the way we tactically plan and time our PR activity, to the way we communicate our generic strengths and opportunities through key City Region events, like The Good Business Festival. It will also include providing content to our strategic

Page 102

partners such as DIT through webinars and newsletters, to ensure we have the correct level of visibility across their channels and the use of our ambassadors to influence and provide thought leadership (see 6.4). The key actions under this priority are as follows: P1 Upgrading content across all Invest Liverpool channels (web & social media) so that content is aligned with the sector specific value propositions and LCR brand strategy. To include updated online sector guide/business prospectus, refreshed introductory/landing page content (to align with overarching brand messaging and tone of voice), facts and figures and upgrading open access to content within the brand repository (case studies, video and imagery etc). P2 Increasing access to the region’s inward investment content across influential third-party platforms including DIT, Sci-Tech Daresbury, The Knowledge Quarter and Local Authority investment platforms. P3 Develop standard/Off the shelf sales aid materials and presentations to support planned/unplanned opportunities, including DIT High Potential Opportunities via the Invest Liverpool brand repository. P4 Commission a planned programme of LCR inward investment PR to coincide with key events – Good Business Festival, MIPIM etc and help capitalise on unplanned opportunities – good news stories, performance, sector performance, research and innovation etc. P5 Conduct a content gap analysis by reviewing the customer journey from awareness to landing a business and the associated requirements to help inform the content strategy and improve SEO rankings etc. 6.4 PRIORITY THREE: Activating the Liverpool City Region brand – Good is Good Enough ‘Here for Good’ has been accepted as the unifying idea for the Liverpool City Region’s brand narrative and uses eight themes to reflect the region’s individual strengths/characteristics. It is underpinned by the City Region’s ambition of creating one of the most globally competitive, environmentally responsible, socially inclusive economies in the UK and beyond, for the benefit of all. As with all place brands, it is the behaviour of its people, businesses and the governing organisations supporting them that make them strong and effective.

For business and inward investment, the positioning provides the focus for marketing activity, in terms of strengthening sector specific propositions and establishing a common underlying narrative for investment that is aligned with the principles of One Front Door. This point is not an end in itself and establishing the brand to ensure it resonates with external audiences, as well as being widely adopted and advocated by stakeholders is an important next step in its development. Similarly, establishing the visual identity of the brand will also form part of this process, ensuring its personality is in kilter with positioning and has the versatility to work across different themes and audiences. To this point, the LCR brand strategy has been developed from the perspective of business, however it is the integration of the wider components of place (live, learn, work, visit etc) that will strengthen the overall competitiveness of region’s investment proposition. To that end, the adoption of the brand and its values by stakeholders within our cultural, visitor economy, sport, and education sectors for example, will do much to build these associations. This will range from creating cross sector collaborations, to building awareness through consistent messaging across partner channels and leveraging their individual routes to market. Based on these assumptions, the marketing strategy for inward investment will be at the centre of brand activation such is the relationship between the perception of places and those businesses we are targeting

Page 103

to invest. This will involve four main areas of activity aimed at engaging stakeholders and building advocacy. They are:- • Brand building and application through adoption within planned inward investment marketing activity and Invest Liverpool channels. • Generating brand led content. • Increasing stakeholder access to brand messaging and content • The creative development of the brand’s visual identity. Based on its global reach, Liverpool will be used as the main attract brand for the City Region when considering ‘far’ domestic and international investment markets. Major events like The Good Business Festival also offer the opportunity to present the Liverpool City Region brand to a global audience and play to the strengths, messages and themes that are aligned with the festival’s ethos. The key actions under this priority are as follows: P1 Begin an activation programme for the positioning ‘Here for Good’ throughout sector specific campaign messaging, upgrading copy across owned channels and literature and alignment of brand messaging/themes with high profile events especially TGBF, where appropriate. P2 Launch the brand toolkit to increase brand awareness and encourage content from third party stakeholders (case studies, video, images etc) to build the quality and diversity of material available through the brand repository. This will include: o Awareness raising through high profile City Region events, including The Good Business Festival. o Engagement programme targeting local business partnerships, trade organisations and partnerships e.g. Professional Liverpool, the City Region’s Cultural Partnership and the Liverpool Hospitality Association etc. o Developing strategic partnerships with external facing delivery partners (Marketing Liverpool, Invest Sefton, Universities, Knowledge Quarter, Sci-Tech etc) to adopt and incorporate the brand toolkit (where appropriate) across their digital channels and marketing activity to target aligned markets/countries P3 Implement brand advocacy and engagement programme to enlist key influencers to become brand advocates, to help amplify the Liverpool City Region brand themes and messages: o Initial engagement to be conducted through LEP sector boards as a means of aligning CVP and brand developing programmes – including opportunities for integration with planned engagement from The Good Business Festival. o Secondary programme to include local Chambers of Commerce, Universities, Professional Networks, regional and national stakeholders and LCR alumni. o Others P4 Based on the brand positioning and delivered in conjunction with the engagement and advocacy programmes referenced above, secure creative expertise to develop a visual identity for the brand. The key requirements will include a visual solution that can be used in conjunction with existing brand/creative of a diverse range of stakeholders/advocates, one that embodies the personality of Here for Good and can be used across a wide range of audiences to illustrate the City Region’s investment proposition and strength of place. P5 In conjunction with Marketing Liverpool and the CA, develop process for the control and guardianship of the brand ensuring consistency of messages to external and internal audience and minimising mis use of the brand that could result in reputational damage. P6 Establish a brand partnership comprising advocates from across the City Region to oversee the ongoing development, implementation and adoption of the brand.

Page 104

6.5 PRIORITY FOUR: Developing strategic marketing partnerships Establishing a collaborative approach to inward investment marketing will be key to its success and will involve the commercial partners that operate within the City Region’s priority sectors, our Local Authorities and DIT. Ultimately, the approach relates to building on common objectives for inward investment marketing in terms of generating good returns on the investment made in promotional activity, building our evidence base and maximising visibility in our target markets.

The strategy has been designed to achieve these things, and the delivery of sector specific campaign activity, proactive lead generation, intelligence and brand activation to provide a range of opportunities for these relationships to come into play. In that sense, our planned campaigns will be developed to attract commercial partners by demonstrating economies of scale through shared resource, planning and the ‘buying power’/extended reach a joint marketing campaign can bring. It will also align partner content with the thematic approach and amplify our messages across their own digital and PR channels.

At regional and national level, the structured approach to proposition development, brand building and content generation will strengthen our partnerships with DIT and the Northern Powerhouse/NP11. This will include joint working with DIT account managers across the priority sectors to align plans to coincide with DIT’s national/international campaigns as well as feeding content regularly (good news stories, case studies, campaign creative etc) into national promotional channels. From a regional perspective, making the north a stronger proposition to FDI companies is key to building brand awareness of the City Region. Partnering with other northern cities through the Northern Powerhouse is an opportunity to unite messages across key sectors such as Health & Life Science and Manufacturing etc. The strategy sets out a very clear approach to content marketing and the involvement of our partners/networks in providing dynamic content (though blogs, podcasts, thought leadership pieces etc) will be vital for keeping the City Region brand front of mind. To ensure this approach is effective however, greater coordination among partners in terms of scheduling, curating (production, messaging, advocacy of the City Region) will have a significant role in building awareness and lead generation. These networks will also be important for recruiting key influencers, experts and opinion formers that allows the City Region to speak with authority in the areas where it has sectoral, knowledge and research strengths.

There are similarly opportunities for developing these partnerships including joint market research, intelligence gathering, sharing information and lead generation. The opportunity to develop a marketing led approach to export and trade missions is also an important consideration in raising profile in key FDI markets based on the market access and supply chain opportunities that may result.

The key actions under this priority are as follows:

P1 Based on plans for sector specific campaign activity (see section 6.1), engage with key commercial partners within the priority sectors (Knowledge Quarter, Sci-Tech Daresbury etc) to establish opportunities for joint marketing and messaging where objectives are common.

P2 Develop marketing partnership with key stakeholders as a means of building content marketing activity around themes/events through owned and earned digital channels.

P3 Establish collaborative approach to building online content that recognises agreed standards (production, messaging, curation etc) and is aligned with the regions’ overall positioning. Based on this, use these networks to engage key influences/opinion formers to support content generation.

P4 Further establish relations with DIT re the integration of the City Region’s themes and content into National campaigns and opportunities such as DSK events.

Page 105

P5 Develop opportunities for regional marketing activities through Northern partnerships/NHP including Manchester, Cheshire, Leeds, Sheffield and Newcastle.

P6 Establish the City Region’s key export markets and align with development initiatives (including trade missions/engagement programmes) where markets are common.

P7 Engage the regions key institutions and stakeholders to establish joint marketing opportunities in overseas territories – LFC, UoL etc.

Page 106

6.6 PRIORITY FIVE: Sector Competitive Value Propositions

Section 3 already describes the importance of our sector value propositions (CVPs) and we short form versions have been developed to establish the indicative strengths of the City Region and the key themes that will underpin our campaign and content marketing activity. As a result, there is an immediate priority to develop this work to reflect the intelligence we have gathered around key investment markets, as well as the opportunities and potential threats the yet unknow implications of Brexit and COVID 19 will bring. These dynamics will have a significant impact on the way we design our sector specific campaigns, such as the impact of things like changes in supply chain behaviour and market access will have on FDI and domestic investment opportunities. In reaching this point, the knowledge of the City Region’s sector boards will be used and combined with the sector expertise within the Growth Platform and the Inward Investment Board. In building out the region’s competitive sector strengths, the process will engage industry to test our assertions, be informed by the investor profiling analysis (see section 7) and establish the dependencies between priority sectors and ecosystems. The City Region’s investment service is also an important part of this mix, and CVP development will reflect and map the business support, aftercare and soft-landing packages etc so they are aligned with market need. Similarly, engagement with The Good Business Festival is undertaking with the sector boards to create ideas and secure content regarding responsible business practice across the region will also be included. Aligning the process in this way, provides a collective opportunity to demonstrate leadership and coordination that meets our brand positioning and values. It also enables us to add further dimensions to our CVPs on the basis that places with principled and strong business ethics will become an increasingly important motivation in the decision making of investment markets. Added to this the relationships The Good Business Festival is developing with large multinational companies, there is also opportunity to create closer associations between the growth sectors and globally recognised brands. Developing the region’s CVPs will be an ongoing process of refining against changes in market conditions, market preferences and the continued investment (through the Local Industrial Strategy) planned for the City Region’s economy. As part of our increased monitoring of investment markets and intelligence led approach, the propositions will be reviewing every 6 months. The key actions under this priority are as follows: P1 Begin process of developing long form CVPs as follows: o Specification to be based on industry benchmarking/competitor analysis and market analysis to inform sector specific proposition, messaging and proof points. o Completion of Health and Life Science, Advanced Manufacturing and Port & Logics by February 2021. o Digital and Creative to be completed by March 2021 to reflect the co dependencies with other sectors and the aim of rationalising its individual proposition.

P2 Work across sector leads, sector boards and the investment board to assess the implications of Brexit and Covid 19 on proposition development. The bidding for Liverpool’s Free Port status is an important consideration. P3 In conjunction with sector leads, develop industry networks with sector specific and inward investment experience to ‘stress test’ value proposition and assumptions. P4 Mapping of pre and post investment support packages (Local Authorities, Growth Platform, DIT, commercial stakeholders) including access to networks, recruitment and business grants to supplement sector specific propositions.

Page 107

P5 Build on current engagement with the Good Business Festival to coordinate the development of sector specific CVPs through the LEP sector boards with the intention of establishing good/ethical business practice as a tool for delivering competitive advantage. P6 Agree process for review and update of CVPs to ensure content and sector specific marketing themes are relevant and up to date.

Page 108

6.7 Marketing Strategy - Approach

The following tables set out the key activities that will be undertaken by the Growth Platform and Marketing Liverpool to support delivery of the strategy. The primary aims will be to use the routes to market that are within our direct control to increase the impact of planned campaign activity, as well as ensuring we optimise the use of our digital channels and CRM to capture data and monitor performance. We will engage the City Region’s creative sector to deliver these activities in a dynamic and inspiring way.

Channel Strategy Key Activity KPI’s Digital Content The underlying success of the marketing strategy - Commission new content to populate the brand - Increased web traffic by 5% will be delivered through our content strategy and repository to align with CVP and brand messages that - Enhanced the user journey ensuring it is applied consistently across all our sits on InvestLiverpool.com such as Video, photography online communications channels. As such, we will make and case studies. This is key for brand awareness - Increased engagement sure our content is balanced and aligned with our activity and to recruit brand advocacy across key - Generate downloads

Page 109 Page campaign themes taken from the customer value stakeholders. - Populated brand toolkit to propositions (CVP) for each sector, as well as the - Introduce protocols with new businesses entering to the cover all themes and sectors overarching themes from the brand guidelines for City Region to be captured with a case study for the - Increase leads by 5% Liverpool City Region. repository on InvestLiverpool.com and for nurturing - Partners adopting the brand enquiries. and sector (CVP) themes and Content will contribute to demand generation - Use buyer personas to personalise email content messages activity, sales enabling tools and to help build brand - Creating and updating CVP themes and messages awareness in order to deliver high quality and across all marketing assets - including genuinely qualified leads. investliverpool.com, brochures, video and imagery. - Develop sales enabling tools, with off the shelf We will also work across our partners to encourage marketing assets, such as presentations, case studies, them to develop content so that it reflects our brand podcasts, infographics, video’s, and guides to support and campaign themes, as well as making it enquiries, including DIT High Potential Opportunities accessible through their own communication hosted on InvestLiverpool.com. channels (on and offline). - Develop brand new marketing guides, such as ‘how to set up a business in LCR’ to help nurture leads through Campaign activity will be focused on developing a the customer journey from awareness to business win content strategy that will adopt an inbound marketing and to support SEO for the Invest Liverpool website. approach, ensuring content and messages are focused on target audience requirements using

Liverpool City Region owned channels. Content - Adoption of CVP and brand messages across partner should be educational, insightful and delight channels, such as, Knowledge Quarter, Sci-tech businesses who are looking for investment Daresbury, Local Authorities, DIT etc. opportunities. - Create a quarterly webinar aimed at DIT foreign account managers to showcase one of our key sectors and update on opportunities and highlight a number of companies in that sector. - Update sector specific brochures and collateral and printed material to support events and exhibitions. - Review content, themes and messages, such as CVPs every 6 months or annually. - Build out CVPs for secondary growth sectors, such as PBS and Low Carbon. Website InvestLiverpool.com will continue to be the main call - Develop an SEO strategy - Enhanced user experience - Page 110 Page to action for inward investment marketing campaigns - Enhance user experience through the development of a resulting in downloads and and communications activity. The website will be the search strategy including improvements in terms of enquiries main engine to generate leads as part of the inbound navigation - Generating leads marketing strategy, this includes ensuring we are - Map out the user journey of the website to explore areas - Improved ranking for keywords ranking for key words and pages are fully optimised. for improvement and implement the use of an online - Increased traffic by 5% chat facility to increase lead conversion. The website should also be creating brand - Introduce one way of making an enquiry through an awareness. The new brand repository will be a key enquiry form alongside the chat function and a area for building out content to help articulate the telephone number. Liverpool City Region narrative with stories, image’s - Update the look and feel of the website and its content and videos. to reflect the new brand guidelines for LCR. - Ensure webpages are fully optimised to improve The user journey on the website should enable rankings for keyword searches and increase web traffic visitors to access information they are looking for on both desktop and mobile. and is relevant to their needs. The user experience - Commission new content for the brand repository as on the website should result in making an enquiry or part of the next phase of the brand development and downloading an asset. subsequent launch of the repository.

Social Media Social media is an important tool for marketing - As part of sector campaign activity, a key part should be - Increase followers by 10% activity to help amplify key messages. There needs social be that organic or paid where appropriate. - Increased share of voice

to be a clear social media strategy to increase FDI - Utilise high value assets and messages created from and national business followers. This can be CVP and brand work achieved through organic and paid social campaigns.

A cross sector approach should be used to increase followers of key target audiences.

Digital A key focus for the marketing plan is to generate - Define which campaigns will use PPC - Generate xxx leads Advertising & leads. Sector specific marketing campaigns should - How can we make the most of media/event packages to Content incorporate a digital advertising strategy, using deliver a mixed channel approach to activity? syndication sector online media advertising as part of other - Explore which media outlets for each sector offer activity taking place with that media outlet, for content syndication to amplify high value assets created example, Digital Manufacturing Week event as part of the content strategy incorporates advertising as part of the package.

Page 111 Page Other ways to support a particular campaign is the use of PPC to promote a sector campaign or message using thought leadership to generate leads.

Where appropriate, look to include a content syndication programmes as part of media opportunities in order to generate leads. CRM & CMS Out of the sector specific and brand campaigns, a - Integrate the investliverpool.com website with Evolutive - Improved lead nurture process key objective is to generate leads for the investment - Create an enquiry form for the investliverpool.com - Increased number of leads services team to develop via the CRM, with the website generated from IL website support of marketing activity to nurture leads along - Explore how can we integrate some of the details from enquiry to wining the investment into the City captured in a chat facility with the CRM? Region. - Remove contact details from the InvestLiverpool.com website for investment managers across the city region Currently, we have no way of tracking leads so the CRM is more widely adopted and used as the generated from the investliverpool.com website due single source to manage and nurture enquiries. to the absence of an enquiry form. Implementing an enquiry form will enable the integration of leads

entering the CRM system Evolutive. This will enable the CRM system as the single source for enquiries which can then be distributed across the wider investment team once qualified by the Growth Platform Investment Services team. Lead Nurture Programme Email nurture Once leads have been capture and entered into the - Create a workflow for each sector and activity - Convert leads to SQL to programme CRM, they are taken care of by the investment - Map out the sales journey and the required information Opportunity services team. To support the IS activity, an email needed at each stage to progress the enquiry as part of - Content that satisfies the sales Email automation nurture programme will be created to nurture those the content strategy and for the email nurture journey tool leads through the sales journey using high value programme. content created in the form of guides and case - As part of the email programme, include a sector studies – video, PDF’s and podcasts. specific quarterly newsletter aimed at key stakeholders and target audiences. Page 112 Page Press & PR PR Contract In line with our digital plans, case studies will be - Confirm scope and length of existing and new contracts - 5% increase in PR central to our marketing activities. We will work - Align marketing plan with a PR plan to support sector opportunities and mentions across Liverpool City Region businesses to source specific activity including events, building LCR at key - 5% increase in social followers the most compelling and engaging case studies that industry events, bylines & major news opportunities. and engagement evidences the strengths and distinctiveness of the - Engage with influencer channels; blog, thought - Asks for speakers from the City Regions offer. leadership etc. region - Work in partnership with key partners to generate - X2 PR pieces for each sector We will use this to support our campaign activity and newsworthy stories and case studies build visibility across key media titles to extend the - Utilise high value assets and messages created from reach and impact of paid marketing, as well as CVP and brand work generating press/fam visits with key influencers.

Events Sector specific Events both virtual and physical are key to the - Audit and define a list of key events for priority sectors - Generate xxx leads per event exhibitions and marketing activity for sector specific campaigns. and prepare a plan for each event across the sectors events Events will be selected based on a clear ROI and for - Add into plans MIPIM and TGBF which will be an overall - Raise brand awareness prioritised sectors. opportunity to promote LCR to an international audience

Sector specific events will have an outlined plan that - Work with key partners to select key events to support will include key activity in around those events for each key sector including, PR, Paid Social, Printed Collateral and Video content where appropriate.

These events will play a key role in creating brand awareness of the assets within each sector and look to deliver leads. Print & Collateral Printing of marketing collateral will be important to - Once plans have been developed around events, review - Generate leads support events and exhibitions. Depending on the what printed marketing assets will be required. event, we may require bespoke printed marketing assets to match the theme and key messages of each event on a case by case basis.

Page 113 Page

7. Research & Intelligence Gathering

The market led approach set out in the strategy coupled with greater use of CRM to improve the value of our intelligence base and tailor communications to the needs of our respective audiences, will mean a planned programme of research will be a fundamental part of building the evidence base. This will take the form of a range of interventions to address the current gaps in market intelligence across domestic and FDI markets, as well as the more standard processes for assessing our competition and enhancing our capability to measure (and monitor) the impact of investment marketing.

With these factors in mind, the research programme uses six priority areas that align with the strategic priorities of the marketing strategy and delivery plan (see section 6). They are focused on expanding the knowledge base of those companies/markets identified in section 5 so the process of searching for and qualifying marketing/sales leads relate to our sectoral strengths (as well as the design of our nurture programmes). Resource to support the implementation of our CRM strategy has also been prioritised given the necessity to take a pragmatic and structured approach to accessing, managing and organising the range of investor intelligence that flows through the City Region’s Stakeholders and DIT.

In terms of delivery, the region’s investment proposition is fronted by Invest Liverpool, with the Invest Liverpool web platform and the social media channels providing the main interface and call to action for priority markets. Given the significance of these channels, we have also prioritised investment in tools that will enable us greater insight into the users of our ‘owned’ digital media as well as those that will help up us establish where our own content is being published by third parties. This in turn will help drive and inform our content strategy/SEO, conversion analysis (for paid and PR activity see section 6) and tracking the impact of the City Region’s emerging brand positioning.

Finally, the City Region does not have an automatic right to secure investment based on its unique strengths alone. As such, priority must be given to keeping pace with our main competitors for investment and staying one step ahead, both in terms of where future opportunities lie and learning from those that have been won/lost. Benchmarking performance against national and international comparator sets will support our positioning, but will also inform how incentives like soft-landing packages, business assistance/support post landing and infrastructure development should evolve.

The priorities for research and intelligence that will be actioned over the lifetime of this strategy are as follows:

P1 Introduce new processes for inward investment marketing using profiles of target investment markets (FDI & Domestic) and through increased investment in market analysis:

o Introducing a structured approach for gathering, formatting and analysing Inward Investment data regarding landings, enquiries, lost opportunities etc. This will include dedicated business analysis resource along with a common data sharing agreement between stakeholder partners (GP, DTI, LCR LAs etc). o Additional access to third party data sources to support greater understanding of domestic and foreign market investment opportunities using the agreed target company profiles – e.g. Beauhurst (UK) and Dun and Bradstreet (FDI), and tools like Uplead to verify data and source new potential leads. o Developing sector specific market intelligence through investment in Brandwatch

P2 Through the agreed approach to CRM, commission lead generation research to establish an up to date repository of qualified sales and marketing leads:

o Commission monthly reporting through data bases such as the Dun & Bradstreet investment monitor using the target sector and company profile descriptors outlined in section 5 o Establish processes for monitoring regarding company plans for expansion investment within target sectors using google alerts and media monitoring through tools like Brandwatch.

Page 114

o Establish conventions for gathering data at key trade exhibitions and events using data collection apps so that the investment team can follow-up those leads and they can enter into an email nurture programme.

P3 Develop the approach to building profiles of key target markets and segmenting markets as a means of refining tactical marketing, routes to market and messaging:

o Establishing tools for monitoring content syndication and enquiries generated. o Commissioning a regular programmes of sentiment analysis among existing and potential/target investors into the LCR

P4 Establishing internal processes and capabilities for assessing the performance of owned media channels and extracting intelligence/data:

o Content monitoring (digital channels), search terms and SEO using tools such as Google analytics and Moz to analyse our own performance and to benchmark against competitors. o Improved website and social media analytics using Google analytics and Moz also.

P5 Develop a regular programme of benchmarking using comparator set of cities/regions to measure performance and emerging trends/opportunities:

o Establishing domestic and international comparator sets based on priority sectors – UK Northern, Midlands and Scottish cities/city regions. o Develop a programme of monitoring reports based on UKTI data hub re global/UK trends in inward investment. o Subscription and review of sector specific trade press including XXXX o Formatting of internal data sets to establish baseline/comparators – leads generated, projects lost, projects won, value, origin, sector etc.

P6 Developing our evidence base of key facts and figures about the LCR and the priority sectors to support inquiry handling and the broader sales process.

o In conjunction with the LCR CA, maintain access to key economic information including labour market, GVA/productivity, import/export, sectoral performance, infrastructure investments etc. o Access to land and site availability within the City Region via enhanced functionality in Evolutive. o Take up of the City Region’s business growth and support programmes by companies investing in the City Region (domestic and FDI).

Page 115

8. Budgets & Time Scales – SECTION TO BE ADDED

Page 116

9. Delivery & Governance

9.1 Delivery

The marketing strategy has been developed in good faith with the intention of establishing a structure approach for the delivery of inward investment marketing and sales activity within the resources available. As the commissioned organisation for co ordinating the City Region’s investment service, the Growth Platform will lead delivery using the funding and resource secured through the Strategic Investment Fund (SIF) to March 2023. Its focus will be on establishing an intelligence led approach to market development and improving the capability of its marketing and sales (as described) processes to increase the conversion of qualified leads/enquiries.

Marketing Liverpool will be commissioned by the Growth Platform to work at a City Region level supporting inbound inward investment marketing activity, brand development and the management of Invest Liverpool digital platforms. The Growth Platform will also lead the co-ordination of the second phase of the ERDF Place Marketing for Investment Project. This will ensure there is full aligned with the City Region’s investment service (and the priorities of OFD) and the associated SIF funds will be combined to achieve the intended outcomes, outputs and targets.

The relationship between the Growth Platform and Marketing Liverpool will be managed through separate commissioning framework which is currently being agreed.

9.2 Governance

The governance of these arrangements will work at a number of levels to ensure that contractual commitments/obligations are being met and a collaborative approach is taken to delivering inward investment marketing, intelligence sharing, lead generation and enquiry management etc. The intention is to work within current governance structures but recognising the changes in delivery arrangements as outlined above, as well as the resource constraints of partners. 9.3 Liverpool City Region Inward Investment Board

The Inward Investment Board will have the strategic oversight of the marketing strategy/delivery plan and the responsibility for agreeing it. As such, the board will oversee the activity of the Growth Platform in delivering against the five priority areas of this strategy, as well as having accountability for the milestones, outputs and expenditure targets for the ERDF Place Marketing for Investment project (this will include managing project risks).

The board will also ensure the various inward investment sector working groups are included in the role out of marketing activity. This will involve contributing to the campaign planning process, formulation of the sector specific CVPs and intelligence gathering in the form of leads/enquiries and assessing trends/market opportunities etc. In terms of lead generation, enquiry handling and investor development/aftercare, the investment board agreed protocols for these activities in 2016. To reflect the processes the Growth Platform will implement for lead generation via CRM, these arrangements will be reviewed in light of a centralised approach for data gathering and reporting (where appropriate) being a more practical use of resources. Similarly, the management of enquiries form part of the sales/CRM process as set out in section 4. In line with OFD principles, the Growth Platform will act as the primary interface for enquiries being generated through DIT and the marketing/lead generation activity of this partnership. These interactions will be delivered under the Invest Liverpool brand with the Growth Platform Investment Services team acting as an honest broker between the partners and the prospective investor. This arrangement will remain in place until such time a detailed proposal/involvement from the local authority/authorities is required.

Page 117

The Inward Investment Board will comprise the City Region’s local authorities, Growth Platform, Combined Authority, DIT and MHCLG. It is recommended that current membership is reviewed against the existing terms of reference to ensure it is representative and able to focus on the core areas of strategy, leaderships and decision making. 9.4 Growth Platform The Growth Platform will report progress to the Inward Investment Board and develop a collaborative approach for implementing the priorities of the II marketing strategy/delivery plan. This will form the part of the LCR Inward Investment Board reports/updates to the City Region’s Growth Directors. It will also help alignment with wider initiatives such as key account management and business growth programmes. As the lead for the City Region’s Inward Investment Service, separate corporate governance arrangements will also be used to oversee performance based on the service level agreement with the CA. It is anticipated that this will include formal reporting to the LEP Board, as well as involvement and use of commercial input from the business community via the sector boards - development/testing of value propositions, marketing campaign, influence and brand advocacy etc The flow chart below illustrates the interfaces between these relationships and how they should work.

Page 118

10. Monitoring & Evaluation

Our approach to monitoring and evaluation will be robust and used to inform future marketing activity as well as demonstrating the return on marketing investment being made. We will measure performance at three levels using a selection of the KPI’s referenced in the performance framework below. The indicators/measures are:-

- Campaign performance and effectiveness. - Conversion Impact - leads, enquiries and project landings. - Overall economic impact generated.

KPIs will be reported quarterly and used as the basis for the overall evaluation of dedicated campaign activity and year round content marketing and PR.

Supplementing this activity, we will also commission primary research as outlined in section 7.

Page 119

Appendix 1 – Short Form CVPs

Advanced Manufacturing Sector Characteristics Needs/Wants/Requirements LCR Strengths Include Summary Proposition (examples) Manufacturing. Sub-sectors – Overall, businesses operating in this • Proximity to local consumer markets – • A centre of excellence for medical Automotive, Aerospace, Pharmaceutical, industry are looking for a globally especially FMCG, Food & Drink & research and pharmaceutical Fast Moving Consumer Goods (FMCG), connected location with proximity to Pharmaceutical, Automotive manufacture. Food and Drink, Chemical, Energy (incl customers, talent, technology innovation • Distribution/supply network - • UK centre of digital manufacturing Clean Growth). and industrial supply chain. Road/rail/port/air connectivity to wider with existing ecosystem (LCR 4.0 – domestic and export markets, DIF, MIF, DMA, STFC Hartree, VEC, Engineering – machining, robotics, For the primes/OEMs this means potentially via free trade areas/free Sensor City, FET) physical systems (eg conveyors, pumps, establishing the most effective route to port. • Digitisation in the Circular Economy,

Page 120 Page compressors), electrical engineering, consumer markets and access to • Proximity to established prime vaccines and Med Tech welding. reliable, price competitive and quality manufacturing industries - Unilever, • National Packaging Innovation Centre driven supply chains. However, the JLR, AstraZeneca, Pilkingtons, (NPIC) and associated supply chain Within these sub sectors companies are impact of COVID-19 and no trade deal, Vauxhall, Aerospace etc. • Unrestricted access to markets – local the primes/OEM that manufacture the mean reliance on local supply chains, • Research & Innovation – Access to (UK & EU) and wider international finished goods. Tier 1 companies that proximity to local consumer markets and universities, Sci Tech - Daresbury, consumer markets. manufacture key/essential component unrestricted reach into export markets Materials Innovation Factory, Sensor • Accelerating & driving parts for the prime, or Tier 2/3 and will be of increasing importance. City, MTC etc. competitiveness into manufacturing supply chain companies that provide the • Digitisation – LCR 4.0, Digital processes through local collaboration components used in tier 1. For Tier 1/2/3 their proximity Manufacturing Accelerator (DMA) and digital & materials innovation/co OEMs/Primes and shorter supply chains • Clean Growth/Energy – Glass Futures, innovation. will be a key motivation as will having sustainable energy (tidal, wind, • Opportunities through emerging access to technical innovation to remain hydrogen etc), National Packaging ecosystems/markets and the strength agile and competitive. Reducing Innovation Centre. of our global primes. exposure to large scale supply chain • Sites/premises – Knowsley, St Helens, • Protecting the margin – proximity to disruption is a key factor in building long Halton, Wirral in particular primes, renewable/affordable energy, term credibility. Carbon reduction/clean • Soft landing packages, I2F2, key competitive skilled labour markets. growth are essential for minimising costs account management/support, access • Freeport status (emissions, packaging, waste etc), to local knowledge expertise/networks. legislative compliance and meeting • Talent/Skilled labour including FE consumer preference etc. Colleges, HEIs and specialist training

Common to these specific needs are the provision (The Engineering College availability of sites/premises, the and North West Training Council)0020 availability of talent/skilled labour and access to R&D/institutions/catapult networks – especially digital infrastructure and technological innovation aimed at improving manufacturing processes and distribution for example.

Page 121 Page

Health & Life Sciences Sector Characteristics Needs/Wants/Requirements LCR Strengths include Summary Proposition (examples) Health Tech – Companies developing Although the requirements will vary • Access to talent and expertise - • Thriving Ecosystem of support and technologies to improve the delivery of across the sub sectors. Access to talent University of Liverpool is in the top collaboration health care and commercialise medicinal (especially with niche skills in 1% globally and provides one of the • World class expertise and R&D products. engineering, lab and data etc) and largest concentrations of Health & facilities research is a key component in driving Life Science expertise in the UK. • Exceptional talent pool Life Science – Companies developing the innovation and technical ‘know how’ LSTM attracts more than 600 • Comprehensive infrastructure for new approaches to health care solutions that gives these businesses competitive students from PHD research & clinical trials including an aging population and the advantage. Similarly, the talent pool masters programmes. • Quality of life and a competitive treatment of infectious diseases etc., relating the senior leadership capability • Access to research, intelligence & edge This sub sector is dominated by (MD, CEO etc) is also a major data - The Centre for Global Vaccine • Globally Connected and companies operating across the new consideration for business relations. Research – The University of Unrestricted access to markets –

Page 122 Page technology/digital, research, engineering Liverpool’s, big data/Hartree Centre local (UK & EU) and wider and physical sciences. The commercial opportunity is often & Sci Tech Daresbury. international consumer markets. dependent on pier support and networks • World Class Facility/testing capability • An innovation eco-system with end- The majority of these companies tend to that provide access to buyers and – Knowledge Quarter (Paddington to-end capability be SMEs or spin outs with the exception manufacturers (for scale up). This Village, The Hill) as largest academic of the large-scale manufacture of includes enablers & routes into NHS campus in the UK. The Accelerator vaccines and medical equipment etc. hospital clusters and private hospitals and laboratory facilities for new and They are focussed on research and (into market) growing SMEs plus facilities at Sci innovation that responds to consumer Tech Daresbury. and health provider’s needs. The ability Companies in this sector are also • Access to pharma primes – to test, access markets and manufacture attracted by access to ‘world-class’ AstraZeneca, Seqirus,Bristol Myers- these products/solutions is central to facilities with testing and technical Squibb, Allergan Biologics, driving the commercial return. capabilities. Similarly, access to patients Elanco,and Teva makes the (well and those with health issues) for Liverpool City Region oneof the clinical trials and testing is of obvious largest biomanufacturing locations in importance for product validation. Europe. • Access to markets/customers – Nine As with advanced manufacturing, NHS Trusts in the City Region and businesses will also want to capitalise on the highest number of specialist supply chain opportunities from the hospitals outside of London. prime pharmaceutical industries by

being in close proximity to them and developing collaborations.

For the manufacturers themselves effective distribution networks and easy access to markets world-wide are key influences on their decision making.

Page 123 Page

Digital & Creative Sector Characteristics Needs/Wants/Requirements LCR Strengths include Summary Proposition (examples) The digital and creative sector includes Although the requirements will vary • Access to R&D - IBM – primary UK • Access to world leading digital (but is not limited to) key activities such across the sub sectors in general the Research Centre innovation and infrastructure. as: computer programming, needs include: • Primes - Very Group, Telefonica/O2, • Capitalising on the region’s growing telecommunications, advertising, film Unilever (global data centres & reputation/expertise in development and TV production, media broadcasting, 1. Access to talent (especially in cybersecurity hub) immersive tech and gaming. web development, design, publishing programming software development and • SMEs - Evoke Creative, Lime • Wider eco system of primary sectors and video game development. commercial/IP but also in softer skills – Pictures, Milky Tea, Ph.Creative, The actively embracing the communications and project Lead Agency, vTime, digital/creative/tech sector – Health, management) The sector is dominated by a large • Business Clusters - Baltic Creative, Manufacturing, Logistics, number of small businesses. It is 2. Access to research and development e-health cluster, & SciTech leisure/hospitality. characterised by companies operating in Daresbury data centric cluster • Access to finance/scale the creative and media industries direct to support product innovation (especially Page 124 Page between academia and business). • Competitive Strengths – Immersive up/accelerators to support business (see above), and those that develop and Tech & Gaming growth and start-ups. commercialise their own IP based on 3. Access to investment for early stage • Facilities – Sci – Tech Darebury, • Access to new markets – multi- digital technologies (immersive tech companies in terms of protecting IP Sensor City, UoL (UK’s leading national organisation & collaborations, technology, AI, data/information and commercialising/scaling the Computer Sciences Dept), World’s LCR digital strategy/investment and platforms etc) opportunity. 1st Microsoft Associate College; + national digital pilot initiatives etc. the Studio School. Access to, and the application of 4. Access to flexible workspace and • Creative/Tech Industries – Significant tech/digital within all forms of industry is dedicated incubator space/catapult. clusters in film, music, a primary motivator for inward visual/performance acts, digital 5. Market access ranges from ‘test bed’ investment. Digital innovation in health media etc, £1.3bn GVA, 11,000 opportunities resulting from local sector financial services, education, transport, jobs (2016) marketing, entertainment and eco systems, to domestic and export • Infrastructure - Transatlantic manufacturing have experienced markets. fibreoptic cable connections, 1 of significant growth. Covid-19 is also only 6 UK 5G testbeds creating opportunities for tech 6. Good linkages between • UK Digital Exemplars - 4 Global diversification in other service led knowledge/innovation tech and large Digital Exemplar Hospitals, LCR 4.0, sectors including hospitality and leisure, corporates/ public sector bodies UK-leading 4IR business support and social care. 7. Better regional engagement with project

national bodies (such as DCMS, Tech The sector is broadly clustered around a Nation, Digital Catapult) to develop creative area in Liverpool (Baltic accelerators pulling together the local

Triangle) and a data centric area (STFC talent pipeline, product development Daresbury campus) that drives support, infrastructure and attracting innovation,and has developed the digital investment etc. infrastructure required.

Page 125 Page

Financial & Professional Business Services Sector Characteristics Needs/Wants/Requirements LCR Strengths include Summary Proposition (examples) Broad spectrum of services delivered by Businesses operating in this sector are • National reputation as a place to do Growing markets: skilled professionals very often in an dependent on a combination of: business (Liverpool ranked within • A growing sector in one of the fastest advisory capacity. Top 20/The Sunday Times - Best growing City Regions • A thriving client base Place for Business 2020. • Thriving clusters/ growth sectors The sector includes banking, financial • Emerging talent - especially IT skills • Local Economic Growth - Above the which need support – HLS, Ad Man, services, insurance, accounting, legal • Proactive collaboration between national average of 3.5%; at 5%. Clean Growth, Tech/ Digital services, architecture, marketing, universities and private sector for • Sector Specific Characteristics - • Clear investment priorities from strong advertising, back office support and skills, research and innovation 12,000 businesses employing 93,000 local leadership which provides employment/ recruitment agencies. • A highly skilled labour force people contributing14.4% of all jobs opportunities for the PBS sector • Cost competitive work force in LCR & £4.3m GVA, full • Localised sector support programmes There is a lot of growth in fintech, • Grade A office accommodation complement of PBS services. and funding – comprehensive proptech, lawtech, insurtech etc as Growing E-commerce sector Page 126 Page • The appropriate support (funding and business ecosystem innovators look to increase efficiency programmes) they need to drive • Access to customers – Large SME • Growing opportunities to capitalise on and disrupt traditional, often dated forward. base (without in-house PBS emerging markets resulting from models. • Established peer to peer networks capability); thriving business eco Brexit, Northshoring etc. and sectoral clusters system – HLS, Ad Man, Clean • Internationalisation strategy and one They provide an essential enabling role • World class digital connectivity Growth, Tech/ Digital; LCR voice branding in any region’s business ecosystem by • Excellent regional, national and population 1.5 m. LCR operates in a facilitating transactions, access to international connectivity is essential wider economic geography stretching Connectivity: professional/expert advice, managing to maintain a flexible model to Lancs, IOM and North Wales. • Excellent digital connectivity risk, investment and the provision of • Stable and open leadership with clear • Local Growth Drivers – Interventions • Collaborative and connected PBS capital funds to support business priorities (CA) to strengthen the business sector with established University links growth/scale up etc. • Access to local policy making ecosystem through access to PBS - • Central UK location for hub and spoke

processes to influence and drive investment, peer networks and model The sector is dependent on back office change. specialised guidance and support to • High performing local rail connectivity and technology operations to facilitate enable recovery/growth. the smooth running of its services. Front and fast access to national and The sector is reactive to emerging • Local PBS advisor networks & and regional commercial centres – office services are client facing and markets and will locate in regions where business services. made up of traders, brokers, asset Manchester and other northern cities. the wider business base is • A mix of head quartered firms, • International airports and port managers, sales and structuring strong/developing and will underpin the regional offices of global firms and professionals. Middle office operations long term demands for PBS products SMEs – Armour, Rathbones, comprise risk management, research and services. Investec etc. and compliance. Talent pipeline:

• Strong Cluster of PBS Companies • Competitive labour markets with Roles are often highly specialised, - Santander; Barclays; Lloyds, Nat upskilling support available alongside a more generic transferable West; Deutsche Bank, BNY Mellon, • Rich supply of talent through skillset required for client facing roles. Royal Sun Alliance, Griffiths & universities and access to research Armour, Rathbones; Tilney; and innovation collaboration The sector is diversifying in how they Pershing, Quilter Cheviot, Investec, opportunities access talent with more firms recruiting TATA Consultancy Services, Capita, • Large travel to work area straight from school. Bosch, TCC, EY, Grant Thornton, • Wide ranging capability and expertise KMPG, DSG, Arup, Brabners, DLA in back, middle and front office The sector is facilitated through Piper, Hill Dickinson, Weightmans. solutions through strong collaboration networking and referrals; and trades • Legacy markets – Established wealth with industry and HEIs. heavily on reputation and personal management markets resulting from • Access to commuter workforce – 1.5m relationships. global port connectivity. in the city region and over 7m(?) • Reputational - UK Govt Financial within a 1-hour travel time. Centre of Excellence & Global

Page 127 Page reputation for wealth management Quality of life: • Connectivity - Port and two • Rich in culture and leisure, quality of international airports within 1-hour, life, education system, health care etc hourly direct train service to London • Grade A office space in the historic in 2hrs 10 mins commercial centre of Liverpool. • Facilities - Expansion of City region wide business facilities for PBS and Global reputation: co-working spaces, Central Business • Reputation as UK and Global Centre District etc. for finance and commerce. • Access to talent - Strongest Town & • 5th most visited UK city Gown Partnership in UK between • Iconic UNESCO waterfront sector and Universities, 20,000 students on PBS related courses. • Emerging Markets - Northshoring Centre for Business and Professional Services through expansion, relocation & outsourcing, enhanced support and finance for scale up business

Port & Logistics Sector Characteristics Needs/Wants/Requirements LCR Strengths include Summary Proposition (examples) Businesses associated with the storage Connections in to multi modal freight • Integrated Facilities/Clusters – Port • Growing reputation as a substantial and distribution of parts and finished facilities that can reach global markets in of Liverpool, Manchester Ship Canal, and effective logistics cluster with a goods to domestic and international a cost effective and cost-efficient way. Liverpool 2 Deep Water Container wealth of assets and capabilities markets. These include the logistical This includes direct access to the Facilities, LJLA, Mersey Gateway focused around the Port of services that facilitate the end to end national motorway and rail networks to Bridge, Stobart Rail Terminal, Liverpool, northern UK’s largest transportation of goods/services and the service/reach markets and distribution motorway network, Knowsley port. industries that provide the links in that hubs across the UK with same day Industrial Park, Parkside • The City Region’s central position process - road haulage companies, delivery. • Sector eco system - Peel Ports, allows ready access to large centres shipping companies, air freight, rail, Bibby Group, Cammell Laird, ACL, of population – 35 million people live port/terminal operators and storage Access to supply chain of retail and Maersk; MSC, CMA CGM, Stena within 150 miles. Excellent Page 128 Page companies etc. manufacturing Prime industries. Line, Unipart, ABP, NS Shipping, connections to the national Transglobal Express, Stobart Group, motorway and rail network enable The sector also includes commercial Clustering and integration of logistical Abbey Group, Potter Logistics logistics operators to service both passenger transport (particularly air and assets/facilities – road/rail freight /port • Location - The City Region’s central Scotland and the south of England sea) and comprises global companies handling/maritime/ air freight etc. position allows ready access to large with same day delivery such as ACL, Bibby Line, Seatruck and Supported by high quality storage/land & centres of population – 35 million • £1 billion investment opening up SMEs operating in areas such as premises, backed by a people live within 150 miles. opportunities in highly lucrative Denholm Logistics and Mersey regulatory/permitting environment and • Supply Chain Opportunities - QVC, markets for Atlantic facing ports Forwarding. business/support services and TJ Morris, Matalan, Amazon, B&M, creating the most effective and cost- amenities. Jaguar Land Rover and the closest efficient environment for freight The sector is driven by the supply chains port to over 50% of UK cargo logistics and passenger transit of those industries it serves and is The availability of a large, skilled and manufacturing sector. in the UK. mainly focussed in the distribution of highly competitive workforce supported • Sites & Premises - Assembly & • Access to a good supply of high manufactured, retail and food goods as by employer led training and specialist Development of Large Logistics quality and readily accessible sites, well as biomass and oil products. As a academies to ensure future employment Parks sufficient to meet occupiers’ result, the sector clusters in and has growth can be met. • Opportunities - Global Logistics Hub demands arising from planned more predominance in those regions for Northern UK and Ireland, UK investment over the next 5 years. where logistics assets are integrated and Innovation in terms of reducing energy Centre for Late Configuration • Free Port benefits post Brexit to key have critical mass. This includes having intensive transportation and the Manufacturing, Global Cruise Liner markets including the US. good connectivity to consumer markets digitisation of processes as well as the Destination, US Trade Deal • Enabling access to talent and (road, rail, air and sea etc) and the decarbonisation of entire supply chains. innovation that will drive cost

associated facilities for processing and • Innovation - Centre for Port Related efficiencies through digitisation and storage. Food/Processing Business, Maritime reducing energy costs.. Knowledge Hub. With the onset of Brexit, regions that can • Proximity to key markets - 35m facilitate the free movement of goods people closer to Liverpool than (export/import) will be at a significant Southern Ports and the largest advantage. Atlantic facing port in the UK, the most Central Port in the UK • Sector value - £1bn GVA contribution per annum and 20,000 employees. • Talent - Liverpool John Moores University, Northern Logistics Academy, Port Academy

Page 129 Page

Low Carbon/Clean Growth Sector Characteristics Needs/Wants/Requirements LCR Strengths include Summary Proposition (examples) To Be Added To Be Added Opportunities World Class Companies • UK’s Renewable Energy Coast • Orsted, ABB, Cadent • Mersey Tidal Commission: Tidal • Iberdrola, Clarke Energy Energy • Cammell Laird, Peel Ports • Carbon Capture & Utilisation • Inovyn • UK Hydrogen Production & • Office for Nuclear Regulation Development Hub • Global Centre for Modular World Class Facilities Manufacture • Burbo Bank: world first use of large turbines

Page 130 Page Key Facts • Port of Liverpool Biomass Facility • 1,500 businesses: 35,000 employees • Europe’s largest Chlor Alkali • £2bn GVA contribution per annum Hydrogen facility • £4.3bn investment in offshore wind • National Oceanography Centre turbines • Stephenson Institute for Renewable • Globally significant location for Energy offshore wind • Growing Low Carbon supply chain

Agenda Item 7

LIVERPOOL CITY REGION COMBINED AUTHORITY

To: The Metro Mayor and Members of the Combined Authority

Meeting: 22 January 2021

Authority/Authorities Affected: All

EXEMPT/CONFIDENTIAL ITEM: No

KEY DECISION Yes

REPORT OF THE DIRECTOR OF POLICY AND STRATEGIC COMMISSIONING AND METRO MAYOR

LIVERPOOL CITY REGION FAIR EMPLOYMENT CHARTER

1. PURPOSE OF REPORT

1.1 The purpose of this report is to present the Liverpool City Region Fair Employment Charter for approval by the Combined Authority.

2. RECOMMENDATIONS

2.1 It is recommended that the Liverpool City Region Combined Authority:

(a) Approve the Fair Employment Charter Framework as set out in Appendix One; and (b) Request regular monitoring reports on employer accreditations to be submitted.

3. BACKGROUND

3.1 There is general support that workers should be paid a fair day’s wage for a fair day’s pay: this has been a principle that is enshrined within the social contract between employers and employees for a long time. Recent years have seen the erosion of that social contract with the introduction of employment approaches (such as exclusive and exploitative zero hours contracts) that have seen the balance tilt more in favour of employers than employees. At the heart of all this is the understanding that we work best when we are in organisations that value us and treat us fairly, and this has seen the emergence of Fair or Good Work campaigns.

3.2 Fairness in employment is taken as read and celebrated in the vast majority of the 49,000 employers in the City Region, and there is a long history dating back to Lord Leverhulme of treating staff fairly and seeking wider benefits to help them in work. This notion is hard wired into these organisations, who see their employees as assets, who need to be supported and nurtured. The challenge is with those Page 131 employers who do not see their employees in this way, and for whom fairness in employment practices seems some way off.

3.3 In recognition of this, the Metro Mayor’s election manifesto contained a commitment to consult upon and establish a Fair Employment Charter for Liverpool City Region, which would celebrate fair employment practices where they were in place and highlight by their absence employers who did not have those practices. The intention was to recognise good quality and effective practice in fair employment and build the broader case amongst other employers for them to consider changing their practices.

3.4 An initial consultation on this took place in 2018, and this was followed up by further consultations in Spring and Autumn 2020: in total, over 300 respondents have provided feedback on what they consider fair employment to be and what should be included within a Charter. The timing of this final consultation in Autumn 2020 was helpful in terms of being able to include feedback and learning captured from the current COVID related situation, including the important of employer health and safety and considerations required for safe and effective homeworking.

3.5 The final stage of this development has been guided by a Reference Group, made up of Trades Unions, Unions, CIPD, ACAS, community and voluntary sector and both public and private employers. This has helped to ensure that the final Charter will have been considered broadly and is therefore more likely to be able to be effectively implemented.

4. FAIR EMPLOYMENT CHARTER

4.1 There was clear support for a Charter which celebrated fairness, inclusion and justice, and latterly a strong focus on healthy workplaces. There was also good support for employers being able to progress through levels, enabling them to show that they were working towards being a fair employer, being a fair employer and then having exemplary practice in fair employment. The intention is to identify fair employment practices where they exist and celebrate them accordingly, and to build the broader movement of employers so that fair employment practices become even more of a norm within the City Region.

4.2 The proposed Charter is attached at Appendix One and shows the four themes of Healthy, Fairness, Inclusion and Justice, and shows how these will be assessed at the Aspiring and Accredited levels. There is a full intention of have a higher level of Ambassador but given the current economic circumstances, it was considered that this would not be the right time to introduce this Ambassador level: the intention is that this would instead be introduced in late 2022 and subject to a consultation before that time.

4.3 Applications will be made via an online process, with employers required to provide evidence to underpin their applications. This will be reviewed for accuracy and completeness before any awards are made, with the higher Accredited level requiring further evidence and greatest scrutiny.

4.4 A multi-stakeholder oversight group with a membership similar to the current Reference Group will be established with a view to offering advice on Page 132 implementation. It is envisaged that this group may also be able to take a view on any questions of compliance or assessment, suggest improvements, or in rare cases, withdrawal of accreditation. This Group may also be able to advise on delivery moving forward in terms of increasing take up by employers, or as required amending the framework to reflect changes in context, emerging good practice, or new regulatory or legislative issues that may need to be considered.

5. RESOURCE IMPLICATIONS

5.1 Financial

The assessment of applications to the Fair Employment Charter will require dedicated resources, which will be funded through the redirection of existing resources: as such there will be no net increase in costs associated with the implementation of the recommendations in this report.

5.2 Human Resources

Recruitment for the dedicated capacity to manage the assessment process of the Fair Employment Charter will be undertaken in line with the Human Resources policies of the Combined Authority.

5.3 Physical Assets

The requirements for physical accommodation will be considered as part of the broader accommodation requirements for the Combined Authority.

5.4 Information Technology

The Information Technology required to implement the recommendaitons in this report are within the core service offer from the Information Technology Service.

6. LEGAL IMPLICATIONS

6.1 There are no legal implications associated with the implementation of the recommendations in this report.

7. RISKS AND MITIGATION

7.1 There is a risk that the proposed Charter will not be effective in having an impact in rasing fair employment levels in the City Reigon. This has been mitigated by having a broad based stakeholder group with Trades Unions, employers and community and voluntary sectors organisations.

8. EQUALITY AND DIVERSITY IMPLICATIONS

8.1 Equality and diversity implications are included within the Fair Employment Charter.

Page 133

9. PRIVACY IMPLICATIONS

9.1 There are no privacy implications associated with the implementation of the recommendations in this report. A Data Protection Impact Assessment will be completed as part of the design process for employers to apply for accreditation has been.

10. COMMUNICATION ISSUES

10.1 The launch of the Fair Employment Charter will take place following approval by the Combined Authority, and this will set out the process for employers to apply for accreditation.

11. CONCLUSION

11.1 This report has tabled the Fair Employment Charter for approval by the Combined Authority.

KIRSTY MCLEAN STEVE ROTHERAM Director of Policy and Strategic Metro Mayor Commissioning

Contact Officers: Rob Tabb, Policy Lead: Employment and Skills (07795 497441) Tim Moore, Principal Employment and Skills Officer (07818 537475)

Appendix: Appendix One – Fair Employment Charter Framework

Page 134 APPENDIX ONE

Fair Employment Charter Framework

Healthy

Healthy workplaces are productive workplaces that are safe for those working in them, whilst recognising the importance of mental and physical health inside and outside of the workplace. We commit to safe workplaces supporting a healthy workforce:

We will do this A commitment to ensuring a safe and healthy working environment whether in the by; workplace, on the road or in the home

Aspiring Demonstrate compliance with baseline H&S requirements. Audit homeworking and other policies and engage workforce in developing approach Accredited Meet ACAS guidance on safe working.

A dedicated Homeworking and/or travel policy. Demonstrate commitment to specific H&S work for example measures to keep staff and customers COVID safe.

We will do this Understanding the importance of Mental and Physical health to wellbeing and by; productivity. Flexible working available to support work-life balance and community or caring commitments Aspiring Demonstrate an understanding of the importance of mental health in the workplace.

Audit practices to comply with fair hours approach Accredited Dedicated workplace Mental Health Policy with employees supported to identify and access available and appropriate services

Compliance with Fair pay and fair hours requirements

Fair

Fairly paid, secure work is the foundation of good work and good workplaces. We commit to Fair pay and fair hours

We will do this A defined set of hours available to each worker, with minimal use of unstable and by; temporary contracts and flexible working to support productivity and wellbeing inside and outside of work

Aspiring Audit practices to identify any atypical contracts and consider how and whether they are needed.

Accredited Meet ACAS code of practice on handling Flexible Working Requests

Take measures to minimise unnecessary use of unstable and temporary contracts outside of defined and specific circumstances, including regular Page 135 reviews of these contract types, defined notice periods for working hours and referencing flexible working in job adverts

We will do this Fair pay, offering Real Living Wage or above and a commitment to supporting by; local partnership and co-operation in Liverpool City Region

Aspiring Identify those paid below Real Living Wage and put plans in place to work towards achieving the level of Real Living Wage Accredited Pay Real Living Wage or above to employees, and work with defined contractors in identifying and planning achievable actions to develop a plan to pay Real Living Wage for this defined group.

Inclusive

Good businesses and a successful economy can only be built if the talents of all are recognised and supported, barriers understood and removed, and talent maximised. We commit to Inclusive workplaces that support staff to grow and develop:

We will do this A recognised Diversity Equality and Inclusion Policy representing all Protected by; characteristics and proactive commitment to inclusivity and diversity in recruitment and retention

Aspiring Undertake an Equality Audit of staff and work towards improvements Accredited Meet ACAS guidance on E&D

Give evidenced examples of action taken to improve equality, diversity and inclusion which may include targeted recruitment, creating career pathways, and promoting staff voice through support networks

We will do this The chance to access training so that staff can perform, develop and manage by positively and effectively with procedures to recognise and support performance that involve and are supported by staff

Aspiring Plan to meet ACAS guidance on appropriate performance management and training policies Accredited Meet ACAS Guidance. A Training plan which includes organisational induction and ensures all staff and managers receive appropriate training during paid time to enable them to do their job effectively, with development opportunities to support aspirations for progression.

Page 136 Just

Workplaces that offer opportunities for all, a collective voice for all staff, and support the next generation to prosper underpin a more just present and an even better future for Liverpool City Region. We commit to a voice for staff to help deliver justice in the workplace with opportunities available for young people:

We will do this An independent voice for staff in the workplace with Trade Union recognition and by; membership encouraged and valued

Aspiring Inform staff of their right to join a Trade Union and be willing to offer fair access to Trade Unions Accredited Engage with Trade Unions representing their staff and respond to requests for recognition where this does not exist

We will do this Building a fair future through opportunities, apprenticeships and work experience by; for young people

Aspiring Offer work experience where possible and actively consider the benefits of apprenticeships or similar opportunities for young people Accredited Have a policy on work experience with a record of delivering opportunities for young people, and delivering apprenticeships where this is appropriate

Page 137 This page is intentionally left blank Agenda Item 8

LIVERPOOL CITY REGION COMBINED AUTHORITY

To: The Metro Mayor and Members of the Combined Authority

Meeting: 22nd January 2021

Authority/Authorities Affected: All

EXEMPT/CONFIDENTIAL ITEM: No

Key Decision: Yes

REPORT OF THE DIRECTOR OF POLICY AND STRATEGIC COMMISSIONING

FREEPORT BID DEVELOPMENT

1. PURPOSE OF REPORT

1.1 To update members on the Freeport bidding process and request for delegated authority to progress a bid to be considered for submission.

2. RECOMMENDATIONS

2.1 It is recommended that the Liverpool City Region Combined Authority:-

a) Endorse the submission of a Liverpool City Region Freeport bid; and

b) Delegate authority to the Director of Policy and Strategic Commissioning, in conjunction with the Metro Mayor, to progress with the proposal in line with the principles, aims and scope set out in this paper.

3. BACKGROUND

3.1 Freeports are specific geographic areas which have different customs rules than the rest of the country. Their aim is to help boost global trade, attract inward investment and increase productivity and innovation. They will have:  Streamlined planning processes to aid brownfield redevelopment;  A package of tax reliefs to help drive jobs, growth and innovation;  Simplified customs procedures and duty suspensions on goods.

3.2 Government has been developing the UK Freeport model over the last year. In February, it opened a consultation, in which LCRCA submitted a response on behalf of the City Region’s local authorities – with the exception of Sefton, which produced its own submission. In October a response to the consultation was published by Government; this was followed, on the 16th November, by publication

Page 139 of a bidding prospectus. The prospectus provides granular detail of what bids need to include to be considered to be successful as part of a competitive process.

3.3 There are three objectives that form the Government’s Freeport policy:  Establish Freeports as national hubs for global trade and investment across the UK: increased trade and investment within the Freeport, the surrounding area and nationally.  Promote regeneration and job creation: increased employment and wages in areas near Freeports and increased economic activity.  Create a ‘hotbed’ of innovation: increased innovation investment and therefore enhanced productivity.

3.4 UK Freeports will be comprised of a primary customs site (usually the port itself) and a number of additional customs sites (or sub-zones) where existing industries can benefit from relaxed customs rules, which in turn, can support their competitiveness. Some manufacturing businesses facing high customs charges on components may generate ‘tax inversion’ benefits when completed goods are taxed at lower duty levels. The customs sites should be of a ‘reasonable size’ although there is no specification, and there is no set limit on the number of these.

3.5 Bids must also include tax sites, which will be the focal point for where all envisaged Freeport tax reliefs will apply. These sites are primarily designed to attract new/relocating business operations and incentivise inward investment and new developments. Therefore, this should be a sizeable area of underdeveloped land. Whilst Government would prefer one tax site per Freeport, it will allow up to three should there be an economic rationale. LCRCA has been working with Growth Directors and AMION Consulting - appointed by LCRCA to support the Freeport bid process - in identifying potential tax and customs sites which meet the Government’s criteria and could benefit from being put forward. See 4.10 below for more detail.

3.6 The opportunity to bid for Freeport status is open until 5th February. Government’s intention is for 10 Freeports (3 of these being in Scotland, Northern Ireland and Wales), but it is open to award more should the quality of bids be high. The aim is for the first Freeports to be operational by the end of 2021.

3.7 Freeports are a flagship of UK Government policy. The Chancellor in particular, perceives Freeports as key to boosting global trade, showcasing advanced manufacturing and achieving levelling up, particularly in the North. Notably, Government’s response to the consultation stated that: “The decision to build a Freeport in an area will send an important signal on the Government’s assessment of the investment potential of that area” 3.8 There has been a high level of interest across the country from areas in bidding for Freeport status, and the process is likely to be very competitive.

3.9 The Metro Mayor, Leaders and Mayors have agreed that LCRCA – working with AMION and partners – will progress the development of a bid that they will consider for submission.

Page 140 3.10 LCRCA set up a Freeport Working Group, comprising of private, public and academic representation to take forward this agenda, and it supported the development of the proposition outlined in Section 4 below. This group met in November and December and continues to meet in the run-up to the submission deadline. Alongside this, there has been continued consultation with industry and others including academia and the education sector, to test the thinking.

3.11 A series of options have been worked up and analysed over recent months, and this paper sets out what a good bid for LCR looks like, together with the risks associated with bidding and equally not bidding (set out below).

3.12 There are a number of risks in terms of proceeding with the Freeport. Although not exhaustive, some of these include:

 Increased road traffic with impacts on congestion and air quality, both near the port and across key trunk roads within the City Region. This is a long-term issue which has impacted Sefton in particular.

 Marginal gains if the impacts of the Freeport do not meet anticipated returns in terms of both economic growth and skilled employment for our residents. The success of a Freeport, like any large regeneration infrastructure venture, cannot be guaranteed.

 Planning developments which do not necessarily meet the needs of the surrounding area of the port, given the Government’s permitted planning rights as part of its Freeport model.

 Potential displacement impacts on other local economic activity, due to the presence of tax sites. Bidders for Freeport status must set out how the likelihood of such impacts will be fully minimised. In LCR’s case, this is expected to link directly to strong Freeport governance and management arrangements, which will seek to ensure control and discretion when it comes to associated funds and support for relocating businesses, with additional, added value activity being part of the core criteria. This links to a key broader point, in that an LCR Freeport will be carefully designed to ensure benefits flow across the City Region and will not negatively impact existing opportunities. It will target activities that are complementary to, rather than duplicating what already exists.

There are also significant risks of not proceeding with a bid. These include:

 Competitive disadvantage compared to other areas that are awarded Freeport status. This could result in the City Region losing out in terms of future investment and quality jobs.

 Loss of credibility from local businesses. There has been engagement with a number of key figures from industry who are anticipating an LCR bid. If this does not materialise, then it may impact on key relationships.

 Loss of standing with Government, which has made clear the importance of Freeports to its levelling up and post-Brexit trade agenda. In essence it would appear that this is wider than just the Freeport agenda, and relates to follow on Government investments. Page 141

 Linked to above, it could result in more constrained ability to work with Government to address long standing infrastructure constraints related to the port. Conversely, being part of the Freeport process could aid planning and progression of innovative solutions to address such issues over the long term.

3.13 As highlighted in the risks above, part of the work undertaken so far has been to understand the concerns about possible community and environmental impacts of any potential expansion of activity around the port. These concerns need to be taken seriously because of the impact on City Region residents and because of the importance of the green agenda (as highlighted in key strategies such as the Local Industrial Strategy and Economic Recovery Plan). Indeed, much of the Freeport bid will be focused around developing future low carbon solutions.

3.14 Arup have produced an initial report exploring potential new options for moving freight out of the port to mitigate these community and environmental impacts. The aim of the report is to better understand the technical and economic feasibility of a number of solutions, that deliver significant environmental benefits compared to road traffic. There is a need to consider these proposals in more detail to understand whether they might offer a way of lessening the impacts. This will be taken forward through the Port Access Steering Group and will report back to the Combined Authority.

4. LIVERPOOL CITY REGION FREEPORT PROPOSITION

4.1 The LCR Freeport will provide a national hub for global trade and investment, promote regeneration, economic growth and job creation, and facilitate sustained innovation - especially within the area of low carbon technology. A proposed Logic Model for the Freeport is provided in Appendix 1.

4.2 It will be a multi-gateway/multi-modal Freeport, taking advantage of the City Region’s key strategic transport infrastructure. This includes the main port, links to the ship canal, rail enabled sites, and airport, all reflecting different markets and customers, whilst supporting cleaner, efficient freight and logistics solutions.

4.3 It will strengthen the post-EU global trading environment for businesses to import and export goods by creating areas of focus for measures intended to improve competitiveness, efficiency and the movement of goods. Liverpool, as the major strategic port in the Northwest of England, is the natural location for a Freeport given the existing manufacturing business sectors, opportunity sites, universities and proximity of large population centres.

4.4 The LCR Freeport will support business, employment, training, business investment, foreign direct investment, innovation and economic growth. As such it will contribute to the City Region’s Local Industrial Strategy, Economic Recovery Strategy, Internationalisation Strategy, emerging Digital Strategy and build on work undertaken with the Strategic Housing and Employment Land Market Assessment.

4.5 The Freeport will respond to the opportunity to rebalance UK freight and logistics, supporting infrastructure and trade close to major economic centres, reducing freight by road, in particular from the import and export of goods via southern and

Page 142 eastern UK ports. Trade via the Port of Liverpool creates and sustains employment opportunities within the port estate and within both the maritime supply chain and port customers. Efficient port infrastructure and the effective processing of goods reduces costs, improving business productivity, investment and growth potential.

4.6 The LCR Freeport will respond to the City Region’s priority sites and sectors to have the maximum impact. Although not exhaustive, some of the core sectors that could benefit include:

Automotive: there is a strong cluster within the City Region and functional economic geography. Strategically, a focus on automotive could also correlate directly to LCR’s contribution in the drive to electrification by 2030 as set out in the government’s 10 Point Green Industrial Revolution Plan.

Biomanufacturing: LCR has a strong proposition, with a cluster that includes a concentration on vaccine production. The strategic context here could focus on current and future pandemic resilience and connections to our leading (and growing) life sciences activity.

Chemicals: strengths around chemicals are focused on key anchor businesses and their regional supply chains. Within this is a key strategic development area – sustainable packaging - where LCR has a particularly strong proposition.

Combined, these clusters could form a value added and distinctive LCR trade proposition with a large international and domestic reach. This is given further prominence as Liverpool is the UK’s busiest Atlantic facing port, and strategically important for trade with Ireland and the United States – which will become increasingly key in a post-Brexit environment and in the event of a US Trade Deal.

4.7 The LCR Freeport Governance and Management teams could be co-located in a new ‘Freeport Management Centre’, with the capability and resources to both administer the Freeport operation and develop projects and partnerships to drive innovation, investment and collaboration.

4.8 The Primary Customs Site will be located within the Port of Liverpool and benefit from the experience of the former Freeport as the foundation for the creation of a modern Freeport hub location.

4.9 The Customs Sub Zones (Customs Sites) will be located to directly support key sectors and on sites for which there is clear strategic benefit in terms of business growth, employment and investment. Customs Sites have the capability to help safeguard key sites and support the acceleration of inward investment to new development sites. There is no technical limit to the designation of Customs Sites, but a clear rationale is required. It may also be possible and desirable to identify future Customs Sites, subject to further development work, which if designated would strengthen the LCR Freeport. The feasibility of a number of sites was being determined at the time of writing, but they are envisaged to be focused in and around the tax sites, multi-modal gateways, and key businesses and clusters (dependent on ongoing discussions with businesses and landowners who would have operational responsibility of the sites).

Page 143 4.10 The three Freeport Tax Sites are focused on investment, economic growth, innovation and employment growth. The locations have been selected through a robust appraisal process and are those which will have the greatest opportunity to support increased economic activity, attract investment and create inclusive and sustainable jobs. The anticipated sites are set out below (these were subject to final technical review at the time of writing).

1. Wirral Waters: a nationally significant regeneration site that will support the manufacturing base and be a focus for dedicated maritime and decarbonisation innovation activity.

2. Parkside, St Helens: the largest strategic site within LCR, it will be rail enabled and have extensive capacity to support efficient logistics and manufacturing activity.

3. 3MG, Widnes: major gateway site with established multimodal infrastructure, including a rail head.

Importantly, each of these sites have significant developmental capacity.

4.11 An LCR proposition needs to be strong in ensuring a Freeport becomes an enabler for decarbonisation and centre for innovation (Freeports will provide regulatory and funding incentives for innovators). In particular this includes opportunities to reduce carbon from trade and support lower carbon development as well as advance the digitisation of trade and the administration of tax arrangements for goods.

4.12 LCR has considerable assets to utilise in the decarbonisation and innovation space. There is particular value in a focus on clean freight, offshore wind supply chains, future fuels for shipping, and developing emerging hydrogen and tidal activities which are future growth opportunities for the City Region. The Freeport can be an important driver and enabler in supporting LCR being a centre for excellence for a low carbon future.

4.13 Linked to supporting decarbonisation efforts is our innovation ecosystem, comprised of world leading assets, a strong project pipeline and a compelling proposition for maritime innovation. We have a particularly strong basis for testing new technologies and data solutions that will support development in areas such as clean growth, port centred logistics, and supply chain management.

5. NEXT STEPS

5.1 LCRCA, AMION, Growth Platform and partners will continue with bid development work, connecting with a range of stakeholders in doing so. Given that this is highly time sensitive, the recommendation for members is to endorse the submission of a Liverpool City Region Freeport bid; and delegate authority to progress with the proposal, in line with the principles, aims and scope set out in this paper.

6. RESOURCE IMPLICATIONS

Page 144 6.1 Should the bid be submitted, and the City Region be successful, a full business case will be developed with Government as the next stage. This is where resource requirements will be reviewed in more detail across all successful areas.

6.2 The overall package of support is to be determined, although we know that approximately £17m of grant will support the establishment of each Freeport. Government will expect matching resources by the partners to support the governance and management aspects of the Freeport. Individual site owners are expected to resource, in partnership, the delivery of their site and participation in the Freeport. As part of the bid, tax sites will require local authority and landowner partnerships to develop investment proposals based on the ability to retain and invest future business rates. Furthermore, customers of the Freeport may be charged a Freeport levy on each container which supports the operating cost of the Freeport.

6.3 We are working with partners to set out the overarching details of the above within the bid, which would then be developed in detail within the subsequent business plan.

7 EQUALITY AND DIVERSITY IMPLICATIONS

7.1 At this stage there are no direct implications. A Freeport submission would go through Equality and Diversity assessments and be centred on the ambition of achieving an inclusive economy for Liverpool City Region. One of the questions in the bid also directly relates to maximising opportunities for protected characteristics groups.

8. COMMUNICATION ISSUES

8.1 There are no specific communication issues. LCRCA has developed a comprehensive stakeholder plan for this project and is working to ensure joined up external communications. Should the bid be submitted and is successful, a full communications strategy will be formulated.

9. PRIVACY IMPLICATIONS

9.1 There are no personal data implications as part of this project.

10. CONCLUSION

10.1 This report seeks members’ agreement for LCRCA and partners to progress the development of a competitive Freeport bid. The final decision whether or not to submit will lie with the Metro Mayor, Leaders and Mayors.

10.2 There are clear benefits that the Government is determined to draw from their flagship post-Brexit policy. A Freeport status would allow us to compete with other regions who will also be utilising their innovation and port assets to capitalise on this. The LCR is particularly well suited due to our excellent port and industry facilities, and transatlantic advantage. Page 145

10.3 LCRCA has been, and will continue to work in a consultative way with partners and stakeholders to develop, shape and hone a Freeport model that is right for LCR, speaking directly to the inclusive economy and green credentials that are set out in our Local Industrial Strategy and Economic Recovery Plan.

KIRSTY PEARCE Director of Policy and Strategic Commissioning

Contact Officer(s): Claire Blott, Head of Policy Coordination Adrian Nolan, Lead Officer, Industrial Strategy

Appendix One: Proposed LCR Freeport Logic Model

Page 146 APPENDIX 1: PROPOSED LCR FREEPORT LOGIC MODEL

Page 147 Page

This page is intentionally left blank Agenda Item 9

LIVERPOOL CITY REGION COMBINED AUTHORITY

To: The Metro Mayor and Members of the Combined Authority

Meeting: 22 January 2021

Authority/Authorities Affected: All

EXEMPT/CONFIDENTIAL ITEM: No

KEY DECISION Yes

REPORT OF THE INERIM DIRECTOR OF INTEGRATED TRANSPORT AND THE PORTFOLIO HOLDER: TRANSPORT AND AIR QUALITY

ACTIVE TRAVEL FUND TRANCHE 2 UPDATE

1. PURPOSE OF REPORT

This report sets out to update the Combined Authority on funding recently allocated and received by the Liverpool City Region from the Department for Transport (DfT) in relation to Active Travel Fund Tranche 2 and following the approval of the Combined Authority at it’s meeting on 31st July 2020 where delegated powers were granted to allow the Head of Paid Service to take emergency action to draw down and disburse funding across the six constituent authorities following acceptance of the funding.

https://moderngov.merseytravel.gov.uk/documents/s47440/Governance%20 update.pdf

2. RECOMMENDATIONS

It is recommended that the Liverpool City Region Combined Authority:

(a) Notes receipt of the Active Travel Fund Tranche 2 from central government as identified in paragraph 3.5, and;

(b) Agrees to the disbursement of these funds to the constituent local authorities and Merseytravel as indicated in paragraph 4.1, Table 1.

Page 149 3. BACKGROUND

3.1 Members will recall that in May 2020 the government announced that £250 million will be ring fenced to support cycling and walking measures, specifically in relation to providing alternative Active Travel opportunities. The fund was split in to two tranches;

 Tranche 1 supports the installation of temporary projects for the COVID-19 pandemic;

 Tranche 2 supports the creation of longer-term projects .

3.2 As reported to the CA in June 2020 the LCR was successful in receiving £1.874million of Tranche 1 Active Travel Fund.

3.3 Also in June 2020 DfT invited applications for Tranche 2 Active Travel Fund to be submitted to DfT on August 7th 2020. In anticipation of the Tranche 2 Funds coming into the LCR, shortly after submission of the application, a request was made to the CA to seek delegation for the Head of Paid Service to handle the receipt of funding accordingly.

3.4 The LTP Development Team working with colleagues from across the 6 constituent authorities of the CA developed a bid for Active Travel Fund Tranche 2 and submitted the application to DfT.

3.5 The LCR was successful in receiving £7.896m from the Active Travel Fund Tranche 2, this was 100% of the indicative allocation identified for the LCR by DfT. Authorities across the country received either 125%, 100%, 95%, 75% or 60% of their indicative allocations based on the strength of their bids. Where authorities received significantly less than their indicative allocations, the DfT indicated this was due to their proposals being less aligned with the objectives of the fund than those of other authorities. On this basis a receipt of grant was approved by Head of Paid Service on 11 December 2020.

3.6 Tranche 2 of the Active Travel Fund as mentioned above was identified by DfT for more permanent schemes than the Tranche 1, Therefore DfT expect local authorities to consult more thoroughly for the Tranche 2 more permanent schemes than was expected for the temporary Tranche 1 schemes. DfT have indicated therefore that Councils, whilst developing schemes that work for their communities, must also demonstrate appropriate consultation will be undertaken, (see Appendix A, Letter from Rt Hon Grant Shapps MP, Secretary of State for Transport

Page 150 4. PROPOSALS FOR ACTIVE TRAVEL FUND TRANCHE 2

As indicated above the LCR was successful in receiving £7.896million. Listed below are the levels of investment and therefore disbursement which has been agreed across the LCR.

Table 1: Funding Allocations by Scheme

Funding Local Authority Scheme allocation (£m)

1 Halton Cycle Lane 2.04

Cycle Lane 2 Knowsley Cycle Signal 0.66 improvements 3 Liverpool Ctle Lanes 1.81 Modal filters - 4 Sefton connecting 0.7 communities 5 St Helens Cyle Lane 1.03 Cycle improvements 6 Wirral and connecting 0.75 communities 7 All 6 Local Authority Areas School Streets 0.54

8 Merseytravel Inclusivity 0.03

9 Merseytravel Revenue Support 0.25 Monitoring and 10 Merseytravel 0.09 Evaluation Total (approx..) 7.9

Table 2 Funding Allocation by Local Authority and Merseytravel

Funding Allocation (£m) 1 Halton 2.13 2 Liverpool 0.75 3 Knowsley 1.9 4 Sefton 0.79 5 St Helens 1.12 6 Wirral 0.83 7 Merseytravel 0.376 Total 7.896

Page 151

5. RESOURCE IMPLICATIONS

5.1 Financial

The Head of Paid Service has approved the receipt of the Active Travel Fund and disbursement across the constituent local authorities as per Table 2 above.

5.2 Human Resources

There are no direct implications arising from this report. Work will be commissioned by Local Authorities to consultancy services.

5.3 Physical Assets

Active Travel Fund Tranche 2 schemes will impact on the physical assets of the constituent local authorities as a result of the introduction of permanent cycle measures which should if they are to be eligible for funding result in meaningful reallocation of road space as stated in the governments recent policy document Gear Change: A Bold Vision for Cylcing and Walking.

5.4 Information Technology

As part of the Monitoring of the Active Travel measures proposed for implementation it is proposed to install sensors along the routes. The sensors will be the same as those currently utilised on the ERDF Sustainable Urban Transport (SUD) scheme and Tranche 1 which feed into a dashboard operated by Liverpool John Moores University, as part of the SUD project.

6. LEGAL IMPLICATIONS

A funding agreement will be made with each of the constituent local authorities as a result of the Active Travel Fund Tranche 2, to meet the requirement of the DfT grant funding.

7. RISKS AND MITIGATION

Risks will include those associated with project delivery, Individual risk registers will be formulated by each of the project sponsors and will be monitored as part of the CA monitoring process.

8. EQUALITY AND DIVERSITY IMPLICATIONS

8.1 Following the recent publication of the governments guidance note Local Transport Note 1/20 Cycle Infrastructure Design, (LTN1/20), all newly implemented infrastructure for cycling and walking will need to meet minimum standards which includes provision for adapted bikes, provides a safe separated environment for cyclist suitable for use by children and adults.

Page 152 8.2 The provision of safer cycle and walking routes also provides opportunity for individuals who may find themselves in transport poverty as a result of lower incomes to utilise active travel, potentially supported by the revenue activities which are also part of this fund.

9. PRIVACY IMPLICATIONS

There are no direct privacy implications in respect to the Active Travel Fund Tranche 2.

10. COMMUNICATION ISSUES

10.1 As indicated in paragraph 3.4 it is a government requirement for all ATF Tranche 2 schemes to be subject to local consultation and for the consultation plans to be published prior to the release of funds from central government please see below the link to the CA website were the LCR consultation plans have been published.

https://www.liverpoolcityregion-ca.gov.uk/lcr-consultation-strategy-for-active-travel-fund- tranche-2/

10.2 In addition, the CA Communications Team are currently developing a Communications Strategy to support the activities of Active Travel across the LCR.

11. CONCLUSION

11.1 Active Travel Fund Tranche 2 schemes will be implemented across the LCR following consultations at the local level in the new year. The schemes are designed to be more permanent than Tranche 1 schemes which is reflected in the need to undertake appropriate consultation and the longer implementation timescales for delivery.

Page 153

11.2 As approved in July 2020 the Head of Paid Service has agreed to receive the Active Travel Fund Tranche 2 grant and disbursed them across the LCR in accordance with the values shown in Table 1.

COUNCILLOR LIAM ROBINSON Portfolio Holder: Transport and Air Quality

SHANE FITZPATRICK Interim Director of Integrated Transport

Contact Officer(s): Barbara Wade, LTP Development Manager Huw Jenkins, Lead Officer – Transport Policy

Appendices: Active Travel Funding T2 Letter from Secretary of State for Transport.

Background Documents: None

Page 154 From the Secretary of State The Rt. Hon. Grant Shapps

Great Minster House 33 Horseferry Road London SW1P 4DR

Tel: 0300 330 3000 E-Mail: [email protected]

Web site: www.gov.uk/dft Mayor Steve Rotheram Mayor of Liverpool City Region

13 November 2020

Dear Mayor Steve Rotheram,

Active Travel Funding Tranche 2 Allocations

Further to my letter of 16 October, I am now writing with details of your authority’s final allocation for tranche two of the Active Travel Fund. I am pleased to award Liverpool City Region Combined Authority £7,896,000 for delivery of tranche 2 schemes. This will be split 80% CDEL and 20% RDEL. A formal Section 31 grant offer letter will follow shortly. I am grateful to your staff for putting together and submitting proposals over the busy summer period which I know was a testing time for all local authorities.

A list of final allocations awarded to local authorities is attached at annex A, and these will also be published on gov.uk. Authorities will receive either 125%, 100%, 95%, 75% or 60% of their indicative allocations based on the strength of their bids. Where authorities have received significantly less than their indicative allocations, this is due to their proposals being less aligned with the objectives of the fund than those of other authorities. Feedback will be provided where this is the case.

I look forward to seeing this investment in active travel delivering an attractive alternative to the travelling public for shorter journeys, and supporting the Government’s drive to tackle obesity given its association with COVID-19. As in our original letter and in the guidance we issued in May, to receive any money under this tranche, you needed to show us meaningful plans to reallocate roadspace to active travel. Anything that did not meaningfully alter the status quo on the road would not be funded.

All this still applies, but experience in the five months since the funding was announced shows that some forms of roadspace reallocation have been more

Page 155 effective than others. Reducing traffic around schools and giving cyclists protection with segregated lanes have made it easier and safer to choose to cycle or walk to work or school.

In contrast, as I wrote recently, the temporary pavement extensions installed by many authorities in town centres using barriers up to four feet high have often been less effective. They may prevent pedestrians from crossing the road, cause congestion for buses and motor traffic, narrow streets to the detriment of cyclists, and impede access and parking for the kerbside businesses which cluster in these areas. Yet they also appear to be relatively little used by the pedestrians for whom they were intended. I don’t want this sort of scheme to undermine the fact that this Government is committed to ensuring all journeys are safe, reliable and efficient for drivers and businesses, including by investing over £27 billion over the next five years through Highways England’s roads plan to ensure the road network is fit for the future.

The Department is also therefore publishing today revised statutory Network Management Duty guidance which emphasises, among other things, the importance of consultation on permanent schemes. This second tranche of funding will be much more for permanent schemes than the first, so we expect local authorities to consult more thoroughly than on the temporary schemes you did in the first wave. Councils must develop schemes that work for their communities. I have set out my requirements in full at annex B. Consultation should include objective tests of public opinion, such as scientific polling, to cut through the noise and passion schemes can generate and gather a truly representative picture of local views. It should engage stakeholders, including local MPs, but it should not be confused with listening only to the loudest voices or giving any one group a veto. Before starting work, we will ask you to confirm in writing how you have consulted. Within twelve months of completing work, we will ask you to report on the impacts that schemes have had.

Very few changes to anything will command unanimous support, and we do not ask it for these schemes. But there is clear evidence that for all the controversy they can sometimes cause, ambitious cycling and walking schemes have significant, if quieter, majority support. In recent surveys by my Department, 65 per cent of people across England supported reallocating road space to walking and cycling in their local area and nearly eight out of ten people support measures to reduce road traffic in their neighbourhood.

In individual neighbourhoods from which through traffic has been removed, surveys again find that clear majorities of residents welcome the schemes and want them to stay. Evidence also shows that these schemes are

Page 156 effective. Evaluation of early School Streets projects has shown traffic outside schools has reduced on average by 68%, children cycling to school has increased by 51%, and harmful vehicle pollution outside schools is down by almost three-quarters.

Funding should, as far as possible, be committed by the end of the current financial year, and schemes delivered as soon as reasonably possible thereafter. In contrast to tranche 1 funding, it is more important that the schemes are delivered robustly and that community support for them is established than it is that they are delivered rapidly.

We also remind you that all new schemes should comply with the newly- updated Cycle Infrastructure Design Guidance, published in July, available at https://www.gov.uk/government/publications/cycle-infrastructure-design- ltn-120 . Active Travel England, once established, will review the quality of schemes delivered by local authorities with this funding, and will take this into account in its reports of local authorities' performance on active travel. The Department reserves the right to reduce future funding, for active travel or other purposes, where consultation and design quality conditions are not met.

Thank you once again for your support for active travel.

Yours ever,

Rt Hon Grant Shapps MP SECRETARY OF STATE FOR TRANSPORT

Page 157

Annex A

Active Travel Fund: final funding allocations

Combined authorities

Authority name Final allocation Final allocation Total (£) tranche 1 (£) tranche 2 (£) Cambridgeshire and Peterborough CA 642,429 1,724,250 2,366,679 Greater Manchester CA 3,174,000 15,871,250 19,045,250 Liverpool City Region CA 1,974,000 7,896,000 9,870,000 Transport for London 5,000,000 20,000,000 25,000,000 North East JTC 2,262,000 9,049,000 11,311,000 Sheffield City Region CA 1,437,000 5,461,550 6,898,550 Tees Valley CA 481,542 1,722,000 2,203,542 West Midlands ITA 3,850,997 13,097,650 16,948,647 West of England CA 827,895 2,964,000 3,791,895 West Yorkshire CA 2,513,000 10,053,000 12,566,000

Local authorities

Authority name Final allocation Final allocation Total (£) tranche 1 (£) tranche 2 (£) Bedford UA 30,250 363,750 394,000 Blackburn with Darwen UA 77,000 292,600 369,600 Blackpool UA 26,000 312,000 338,000 Bournemouth, Christchurch and Poole UA 312,835 1,062,100 1,374,935 Bracknell Forest UA 57,000 181,800 238,800 Brighton and Hove UA 663,657 2,376,000 3,039,657 Buckinghamshire 513,943 1,748,000 2,261,943 Central Bedfordshire UA 223,454 600,000 823,454 Cheshire East UA 155,000 588,050 743,050 Cheshire West and Chester UA 161,000 611,800 772,800 Cornwall UA1 152,000 607,000 759,000 Cumbria 260,323 886,350 1,146,673 Derby UA 227,923 776,150 1,004,073 Derbyshire 443,000 1,684,350 2,127,350 Devon 338,000 1,283,450 1,621,450 Dorset 128,486 438,900 567,386 East Riding of Yorkshire UA 123,000 467,400 590,400 East Sussex 535,171 1,820,200 2,355,371 Essex 968,500 7,358,700 8,327,200 Gloucestershire 321,773 864,750 1,186,523 Hampshire 863,000 3,280,350 4,143,350 Herefordshire, County of UA 20,000 120,000 140,000 Hertfordshire 1,247,329 6,451,450 7,698,779 Isle of Wight UA 62,000 235,600 297,600

Page 158 Kent 1,600,000 6,098,050 7,698,050 Kingston upon Hull, City of UA 272,000 1,035,500 1,307,500 Lancashire 782,087 2,801,000 3,583,087 Leicester UA 405,568 1,378,450 1,784,018 Leicestershire 335,180 900,000 1,235,180 Lincolnshire 105,500 799,900 905,400 Luton UA 216,000 822,700 1,038,700 Medway UA 242,500 927,000 1,169,500 Milton Keynes UA 228,000 684,750 912,750 Norfolk 295,500 1,498,150 1,793,650 North East Lincolnshire UA 42,000 319,200 361,200 North Lincolnshire UA 41,000 154,850 195,850 North Somerset UA 106,140 473,750 579,890 North Yorkshire 133,000 1,011,750 1,144,750 Northamptonshire 351,000 1,332,850 1,683,850 Nottingham UA 569,806 2,039,000 2,608,806 Nottinghamshire 263,250 2,178,350 2,441,600 Oxfordshire 298,500 2,985,000 3,283,500 Plymouth UA 249,000 945,250 1,194,250 Portsmouth UA 214,515 461,400 675,915 Reading UA 221,250 1,179,000 1,400,250 Rutland UA 2,500 36,100 38,600 Shropshire UA 86,000 259,500 345,500 Slough UA 205,577 552,000 757,577 Somerset 120,000 457,900 577,900 Southampton UA 245,000 1,225,000 1,470,000 Southend-on-Sea UA 309,000 927,000 1,236,000 Staffordshire 183,000 1,832,500 2,015,500 Stoke-on-Trent UA 126,000 504,750 630,750 Suffolk 376,519 1,685,000 2,061,519 Surrey 848,000 6,445,750 7,293,750 Swindon UA 214,515 731,500 946,015 Telford and Wrekin UA 76,000 229,500 305,500 Thurrock UA 288,000 690,000 978,000 Torbay UA 41,250 132,600 173,850 Warrington UA 130,000 650,000 780,000 Warwickshire 129,000 979,450 1,108,450 West Berkshire UA 124,000 495,000 619,000 West Sussex 781,000 2,351,250 3,132,250 Wiltshire UA 227,000 681,000 908,000 Windsor and Maidenhead UA 140,000 335,400 475,400 Wokingham UA 76,000 576,650 652,650 Worcestershire 135,500 649,200 784,700 York UA 193,287 658,350 851,637

Page 159 Annex B

Active Travel Fund: Strengthening consultation on tranche 2 schemes

Local authorities are required to:

1. Publish detailed consultation plans to show how they will consult their communities before funding is released;

2. Show ‘reasonable evidence’ of consultation before schemes can be introduced;

3. Undertake appropriate public opinion surveys before and after implementation;

4. Submit monitoring reports on the implementation of schemes 6- 12 months after their opening;

5. Liaise closely with the Department on these requirements and attend briefing sessions where the Department will communicate the strengthened requirements in more detail;

If these conditions are not met, the Department will reduce future funding allocations for local transport measures.

As part of the new body’s quality assurance remit, Active Travel England will both support and review local authority plans for stakeholder consultation on future schemes and investment plans.

Page 160 Agenda Item 10

LIVERPOOL CITY REGION COMBINED AUTHORITY

To: The Metro Mayor and Members of the Combined Authority

Meeting: 22 January 2021

Authority/Authorities Affected: All

EXEMPT/CONFIDENTIAL ITEM: NO

KEY DECISION Yes

REPORT OF THE DIRECTOR OF CORPORATE SERVICES

EU TRANSITION BREXIT READINESS GROWTH HUB FUNDING

1. PURPOSE OF REPORT

1.1 This report updates the Combined Authority on a funding bid and expected subsequent grant award of £181,050 for the 2020/21 financial year. This funding stems from the Department for Business, Energy & Industrial Strategy (BEIS) to support the Liverpool City Region Growth Company (the Growth Company) deliver the “EU Transition Brext Readiness Growth Hub” programme.

1.2 As the Combined Authority acts as the accountable body for the Growth Company in respect of Growth Deal funding, the funding will be paid to the Combined Authority. If successful, approval is sought to formally transfer this funding to the Growth Company, to enable it to deliver the measures specified within the offer letter, being the most appropriate delivery body in this instance.

2. RECOMMENDATIONS

2.1 It is recommended that the Liverpool City Region Combined Authority:

(a) note the bid and expected subsequent grant award of £181,050 to the Liverpool City Region Growth Company, via the Liverpool City Region Combined Authority as its accountable body, to support the “EU Transition Business Readiness Growth Hub” programme across the Liverpool City Region; and

(b) if successful, agree to transfer this funding to the Liverpool City Region Growth Company to enable it to deliver the measures set out within the offer letter.

3. BACKGROUND

3.1 On 16 December 2020, the Liverpool City Region Combined Authority, in its capacity as the Liverpool City Region Growth Company (Growth Company) and the Page 161 Accountable Body for Growth Deal funding, received a request from the Department for Business, Energy & Industrial Strategy (BEIS) to submit a bid for “EU Transition Business Readiness Growth Hub” funding. The amount available to the region of £181,050 for the period November 2020 to March 2021.

3.2 The funding is intended to support activities to provide outreach and engagement with businesses on EU Transition issues, and to further improve business resilience in the period leading up to the ending of the EU Transition Period on 31st December 2020 and the period afterwards up to and including 31st March 2021.

3.3 Operationally, the initiative will be led by the Growth Company, who will deliver this activity by working with local businesses and key partners.

4. RESOURCE IMPLICATIONS

4.1 Financial Whilst the project will be managed and delivered by the Growth Company, the Combined Authority is ultimately accountable to government for the £181,050 funding award, as accountable body. These risks will be managed by setting up a Funding Agreement between the Combined Authority and the Growth Company, to ensure that the funding is committed appropriately and for its intended purposes.

4.2 Human Resources The project will be managed by the Growth Company. There will be audit and financial management responsibilities as accountable body for these funds. Provision has been made in the Combined Authority’s Internal Audit Plan to accommodate internal audit assurance work in respect of Combined Authority funding streams.

4.3 Physical Assets No physical assets will be affected as a result of this funding.

4.4 Information Technology There are no direct implications. The project will utilise existing ICT systems at the Growth Company.

5. LEGAL IMPLICATIONS

5.1 If the grant is awarded, a grant funding agreement would be set up between the Liverpool City Region Combined Authotrity and the Liverpool City Region Growth Company to enable it to deliver the measures set out within the offer letter.

6. RISKS AND MITIGATION

6.1 There are risks associated with any funding stream, in the event that funds are misused or not fully committed, which can lead to a risk of funding being clawed back, legal proceedings and/or reputational damage. The specific nature of this funding, supported by an Assurance Framework, robust internal audit arrangements and the offer letter between the Combined Authority and the Growth Company, will Page 162 reduce the risk to the Authority that these funds are not used in an appropriate and effective manner.

7. EQUALITY AND DIVERSITY IMPLICATIONS

7.1 No direct implications at this strategic level, though the use of the funding could have equality impactions in terms of the diversity of businesses and entrepreneurs that are beneficiaries from the project (e.g. young people, BME groups, disabled people, LGBT groups). This will need to be addressed by the Growth Company in its delivery of the project.

8. PRIVACY IMPLICATIONS

8.1 There are no privacy implications associated with this report.

9. COMMUNICATION ISSUES

9.1 No significant implications.

10. CONCLUSION

10.1 This report updates the Combined Authority on a funding bid of £181,050 for the 2020/21 financial year, to support the Growth Company in the delivery of the “EU Transition Business Readiness Growth Hub” programme. As the Combined Authroity acts as the accountable body for the Growth Company in respect of Growth Deal funding, the Combined Authority’s approval to formally transfer this funding to the Growth Company is sought, to enable it to deliver the measures specified within the offer letter.

John Fogarty Director of Corporate Services

Contact Officer(s): Sarah Johnston, Assistant Director of Finance (0151 330 1015)

Appendices: none

Page 163 This page is intentionally left blank Agenda Item 13

OVERVIEW AND SCRUTINY COMMITTEE

At a meeting of the Overview and Scrutiny Committee held in the Remotely on Wednesday, 4th November, 2020 the following Members were

P r e s e n t:

Councillor Louise Whitley Labour Halton BC Councillor Kevan Wainwright Labour Halton BC Councillor Bill Woolfall Labour Halton BC

Councillor Edna Finneran Labour Knowsley MBC Councillor John Morgan Labour Knowsley MBC

Councillor Tom Crone (Chair) Green Liverpool CC

Councillor Christine Howard Labour Sefton MBC Councillor Carran Waterfield Labour Sefton MBC

Councillor Jimmy Jackson Labour St Helens MBC Councillor Michelle Sweeney Labour St Helens MBC Councillor John Wiseman Labour St Helens MBC

Councillor Jean Stapleton Labour Wirral MBC Councillor Helen Cameron Conservative Wirral MBC Councillor Adrian Jones Labour Wirral MBC

19. APOLOGIES FOR ABSENCE

Apologies for absence were received from Councillors Joanne Anderson, Liz Dowd, Tricia O’Brien and Sir Ron Watson OBE.

The Chair welcomed Councillors Sweeney, Jackson and Wiseman to the Committee as newly appointed members and thanked retiring members Councillors Clark, Gorst and Hattersley for their contributions to the Overview and Scrutiny Committee.

20. DECLARATIONS OF INTEREST

There were no declarations of interest.

21. MINUTES OF THE LAST MEETING HELD ON 9TH SEPTEMBER 2020

The minutes of the meeting of the LCR Overview and Scrutiny Committee held on 9 September 2020 were agreed as a correct record and signed by the Chairman.

22. METRO MAYOR S ROTHERAM'S UPDATE

The Metro Mayor, Steve Rotheram provided an update which focused on the effect of Covid-19 on the city region, particularly noting the new national restrictions and mass testing pilot.

Page 165 With regards to new national restrictions being introduced, the Metro Mayor advised that the LCRCA had supported calls from SAGE for a national ‘circuit breaker’ as an emergency measure to halt the increasing infection rates.

The Metro Mayor explained that Government had agreed to extend the 80% furlough scheme beyond October after originally announcing a reduction to 67% of an individual’s wages. However, it was noted that there were a significant amount of people in the city region who were not eligible for any support and this needed to be addressed alongside preventing evictions during the pandemic.

The Committee were informed that infection rates were still high across the city region with 5190 cases confirmed as of the end of October and 334.5 positive cases per 100,000 residents (although this figure was dropping).

The Metro Mayor informed the Committee of a national pilot for mass testing that would be taking place in the Liverpool City area.

Members of the Committee were given the opportunity to ask questions of the Metro Mayor.

Councillor Finneran enquired as to whether the mass testing pilot would be rolled out across Merseyside or if it was specifically for Liverpool City. It was explained that the pilot was to be carried out in Liverpool City due to capacity issues with testing new technology and ensuring that there was sufficient logistic support. The Metro Mayor reported that he was in discussion with the Secretary of State about rolling out the mass testing pilot across the rest of the city region soon.

With regards to the furlough scheme, the Metro Mayor explained that due to the impact of Covid on the hospitality and retail sector in the city region it was imperative that the scheme did not drop to 67%. It was confirmed that the 80% furlough scheme would continue and therefore was currently in place.

Councillor Stapleton asked the Metro Mayor if he was reassured through his discussions with Government that there was an organised way forward out of the pandemic as the current staggered approach had been confusing for the public. In the last four weeks residents had experienced four different restrictive tiers and the Metro Mayor had reiterated the need for a stable and clear tier system. The LCRCA had asked Government for an economic impact assessment and for a clear exit strategy for the city region with indicative markers on how to get out of tier three.

The Committee discussed education and asked the Metro Mayor for assurances that schools were safe for both pupils and staff to return to. Although the Combined Authority had no powers relating to education, they had requested that Government suspend Ofsted inspections during the pandemic. The Metro Mayor agreed it was important that vulnerable staff, those with underlying health conditions and people shielding needed to be considered.

Councillor Corkhill raised concerns over the art sector and asked what the LCRCA were doing to ensure it came out of the pandemic in the same condition it went in. The Metro Mayor agreed that the sector was one of the worst hit by the pandemic due to restrictions that prohibited events and he informed the Committee that he had been working closely with Local Authorities and industry bodies to advocate for government support for the sector. This included letters of support for applications to the Cultural Recovery Fund and the launch of the LCR Music Support Fund which provided financial assistance to organisations in that sector.

Page 166 Traineeships and apprenticeships were also being explored alongside repurposing £250,000 of the LCR Film and TV Development Fund to support projects into production. The Growth Platform were offering business support through the Gather Programme for digital and creative technology. It was emphasized that as well as this local support, the LCRCA continued to lobby for Government funding for the sector.

With regards to using remaining funding to provide free school meals for children in the city region it was explained that the LCRCA had to abide by the government’s assurance framework for funding which specified its intended purpose. Where it was able to, the LCRCA had repurposed funding to respond to the pandemic and would continue to do so to encourage economic growth.

Councillor Sweeney raised the issue of Commonwealth building in light of the disparity between the North and South when it came to funding, a gap which had widened during the pandemic. It was queried if the Metro Mayor was in support of social partnerships wherein Local Authorities were able to provide guidance and support with a focus on small and medium local businesses. The Metro Mayor explained that the city region were leading on community wealth building in the country and it was hoped that Build Back Better would have value for ordinary people. The Fairness and Social Justice Advisory Board also played a role in ensuring that the voluntary/community sector and faith organisations were included when considering inclusive growth.

The Committee discussed Universal Basic Income (UBI) with the Chair, Councillor Crone asking if the Metro Mayor would lend his support to a campaign to trial UBI in the city region. It was explained that the LCRCA had been supportive of UBI since March and the pandemic had heightened the need to support low paid often overlooked minimum wage heroes.

The Metro Mayor was asked to clarify the arrangements for the mass testing pilot, and it was confirmed that the pilot would be voluntary. It had not been possible to insource the staffing of the pilot due to capacity issues it was hoped the more people who were tested during lockdown, the better the situation would be for the city region emerging from the restrictions as rates would initially rise and then dramatically decrease. It was confirmed that personal data was not being stored and DNA would not be stored as part of the trial.

RESOLVED – That the update be noted.

23. YOUTH UNEMPLOYMENT

The Committee considered the report of the Director of Policy and Strategic Commissioning which provided a brief overview of youth unemployment together with key initiative examples being delivered and managed locally to support young people to be successful in the labour market.

Rob Tabb, Policy Lead – Employment and Skills, presented the report which outlined that young people were being particularly affected by the economic crisis and being made unemployed as they were 2.5 times more likely to work in retail and hospitality. The LCRCA were working to signpost young people to the most appropriate services being provided.

The Government had announced a range of schemes, most notably Kickstart, which was a temporary jobs scheme designed to create jobs for young people at risk of long-term unemployment. The scheme funded 6 months of work for national

Page 167 minimum wage with wrap around support and it was noted 30 organisations were engaged with the scheme across the city region.

Full-time support for 18-19 year olds to stay at college to do further qualifications was also in place as well as traineeships to help young people prepare for the future given that they may be unable to secure work at the moment.

It was explained that there were sectors seeing job growth such as Health and Social Care, Logistics and Warehousing and IT. The Committee’s previous work on apprenticeships was acknowledged and it was suggested a task and finish review be undertaken on how apprenticeships had been affected by the pandemic.

Councillor Howard queried whether there was any flexibility in government guidelines that would enable the LCRCA to offer more than the national minimum wage for Kickstart or if the hours for applicants could be increased to make the wages more liveable. It was clarified that the LCRCA was co-ordinating the provision and was limited in its powers, but it had raised the issue of pay and hours with the DWP originally asking for 30 hours at national living wage. Some employers were choosing to top up wages from the support funding but the LCRCA could not mandate that.

The Chair drew the Committee’s attention to the recommendations in the report noting that (d) asked members to indicate if they wished to participate in the task and finish group. Councillors Corkhill, Howard, Finneran, Sweeney, Wainwright, Whitley and Wiseman expressed interest in the task and finish group.

RESOLVED – That:

(i) the challenges faced by young people in the current economic climate and Covid-19 pandemic be noted;

(ii) the additional resources being secured and made available be supported;

(iii) the scoping document for the Apprenticeship Task and Finish Group attached at Appendix A be agreed;

(iv) Councillors Corkhill, Howard, Finneran, Sweeney, Wainwright, Whitley and Wiseman to participate in the Task and Finish Group; and

(v) the additional measures being put in place and the work of the Liverpool City Region Combined Authority and its partners to ensure that these are introduced, managed and delivered successfully for those young people most in need of additional support be welcomed.

24. THE LIVERPOOL CITY REGION SPATIAL DEVELOPMENT STRATEGY - PHASE 2 ENGAGEMENT PROPOSALS

The Committee considered the report of the Director of Policy and Strategic Commissioning and Portfolio Holder for Housing and Spatial Planning which outlined the overarching methodology by which the Combined Authority proposes to engage for the second time with the residents, businesses and organisations about the Liverpool City Region’s Spatial Development Strategy (SDS).

Page 168 Mark Dickens, Lead Officer – Spatial Planning, presented the proposals noting that the SDS was a statutory requirement for the LCRCA as stipulated in the Devolution Deal but the engagement was voluntary. Engagement had been planned before the pandemic and the LCRCA were keen to continue with the original timeline and consult on 10 November 2020 to support the LCR Recovery Plan and development sector in the city region. The proposal covered the SDS vision for the next 15 years, five objectives and policy areas.

It was proposed that a 13-week engagement take place with accessible questions and an aim to include individuals and communities that don’t traditionally respond.

The objectives were complimentary to the six Local Authorities and included:

(vi) Climate Change and the Environment; (vii) Health and Wellbeing; (viii) Inclusive Economy; (ix) Placemaking; and (x) Social Value.

It was highlighted that social value was unique to the SDS and focused on how development could benefit the local community. The city region had also undertaken work on Natural Capital with a baseline assessment commissioned with LJMU that applied a value against greenspace denoting its worth to health services, climate change etc.

It was explained that if the city region were to become net carbon neutral by 2040 then the SDS would have to consider energy and resources, particularly how to deal with waste and water and generate low carbon energy. Active travel and air quality would also form part of these considerations with a suggestion that a Health Impact Assessment be included as mandatory for developments. Policy around construction apprenticeships were also being considered alongside digital connectivity for residential and non-residential properties.

The importance of social economy to the city region was highlighted with potential measures to protect social economy facilities being considered as well as measures around the rural economy and accessibility as a housing standard.

Using the LCR Listens engagement tool, the LCRCA was able to engage with a variety of different people, though it was noted that disability groups had been underrepresented. As a result, an inclusive accessibility workshop was held to gather more perspectives. During the engagement, the environment and climate change had been identified as key topics for respondents.

It was explained that due to the pandemic the approach to engagement had to change especially when engaging with the Health Sector.

Councillor Cameron queried the engagement consultants that were used and suggested an ‘N-number’ be attributed to the table in the report to identify the number of respondents. It was explained that Places and SYA had undertaken previous engagements for the LCRCA and there was also an in-house engagement team working on the piece.

Page 169 The geographical spread of engagement was discussed, and the Committee heard that when consulting, SYA had engaged across the six local authorities and Placed had been able to situate in shop fronts in 5 of the local authorities.

Councillor Sweeney supported the use of Health Impact Assessments as it was felt they would be well received by residents and show that the local authorities were interested in health outcomes.

The Chair thanked Mark Dickens for his presentation and commended the approach to consultation. It was suggested that an update be brought to future meetings presenting the progress made on each aspect of the SDS including competing priorities and how well received the document was.

RESOLVED – That:

(i) the proposed SDS engagement including the proposed dates (10 November 2020 – 1 February 2021) and the methods of engagement for the Liverpool City Region Spatial Development Strategy non- statutory engagement be noted; and

(ii) update reports be presented to future meetings, setting out the progress made on each aspect of the SDS, including competing priorities.

25. FINALISING THE LIVERPOOL CITY REGION'S AIR QUALITY ACTION PLAN

The Committee considered the report of the Director of Policy and Strategic Commissioning and Portfolio Holder for Transport and Air Quality which provided the Committee with the Combined Authority’s revised action plan to improve poor air quality across the Liverpool City Region.

Councillor Liam Robison, Portfolio Holder for Transport and Air Quality, presented the final report from the Air Quality Task Force which had been established in March 2019 at the behest of the Overview and Scrutiny Committee.

It was acknowledged that Air Quality was a long-standing challenge for the city region with poor air quality contributing to 700 deaths every year. The medical impact was even more significant as a result of the pandemic and people with poorer health were disproportionately impacted by Covid.

Each local authority had shared good policies and practices such as anti- idling campaigns, cycling initiatives and clean air day proposals but these efforts needed to be unified across the city region. The main challenge was transport pollution caused by petrol and diesel and the need for walkable neighbourhoods was emphasized.

An Interim Air Quality Plan had been presented to the Committee and Huw Jenkins, Lead Officer- Transport Policy, highlighted the changes that had been incorporated as a result of the members feedback and as a result of the pandemic. The plan was structured around actions for the LCRCA, Local Authorities, Government and residents. The Members had originally requested that targets be assigned to the plan but it was explained that this was complex as air quality varied across the city region. As an alternative, in order to frame the action plan, three objectives had been included.

Page 170

It was noted that during national lockdown there had been a reduction in traffic movement and subsequently air quality had improved. As more people walked and cycled as part of their daily exercise roads also became safer. The Government had released funding in the summer to improve walking and cycling infrastructure and it was hoped these changes could be embedded moving forward. It was noted that public transport patronage had also decreased during this time due to social distancing guidelines.

The Chair thanked officers for their hard work and raised concerns about the lack of measures that directly addressed personal car use in the plan. Councillor Robinson agreed that personal car usage needed to reduce but that this was only possible with a stronger public transport offer which the LCRCA was working towards.

Councillor Cameron enquired about the available funding for cycling and walking and it was advised that it had been announced as part of the Changing Gear scheme, but little further information was available at this juncture as to how it would be allocated.

It was explained that a detailed consultation was planned to allow the public to comment on the action plan and provide their views on the final detailed proposition.

Councillor Stapleton reiterated Councillor Robinson’s remarks and stated that alternatives needed to be provided for personal car usage to engender the public to change modes of transport.

The Chair referred to the Action Plan and suggested that further action should be taken to reduce traffic on the roads. For example, by providing more cycling routes as a safe and alternative transport method to the car. He explained to the Committee, that as the Action Plan did not go far enough on this matter he would not be able to support recommendation (1).

RESOLVED – That

(i) the draft Air Quality Action Plan developed to aid the improvement of air quality across the Liverpool City Region be welcomed;

(ii) any further input in to the draft final Air Quality Action plan as set out within the Appendix to this report be provided; and

(iii) the Committee be provided with timely updates on the Action Plan to oversee the implementation of the measures set out in the draft plan.

26. OVERVIEW AND SCRUTINY COMMITTEE ANNUAL REPORT 2019-20

The Committee considered a report of the Statutory Scrutiny Officer which provided Members with an opportunity to consider the Overview and Scrutiny Committee Annual Report 2019-20, which set out the key achievements and activities of the Committee during the course of the municipal year.

RESOLVED – That the Scrutiny Committee Annual Report 2019-2020 as set out at Appendix A be approved and that any amendments/insertions be made in consultation with the Chair and Vice Chair and the Statutory Scrutiny Officer.

Page 171

27. PUBLIC ENGAGEMENT AT THE OVERVIEW & SCRUTINY COMMITTEE

The Committee considered a report of the Statutory Scrutiny Officer which sought members views on options for public engagement at the Overview and Scrutiny Committee.

At the March meeting of the LCRCA a public question had been received from Unlock Democracy regarding public involvement in Overview and Scrutiny meetings and as a result the Statutory Scrutiny Officer had explored some options for the Committee to consider.

RESOLVED- That the item be deferred to the next meeting of the Overview and Scrutiny Committee.

28. LCR LEP TASK AND FINISH REVIEW - OUTCOME OF CONSIDERATION BY THE LCR LEP BOARD & THE LCR COMBINED AUTHORITY

The Committee considered a report of the Statutory Scrutiny Officer regarding the outcome of the consideration by the LCR LEP Board and LCR Combined Authority on the LEP Task and Finish review.

The Committee heard that at its meeting on 17 September 2020 the LCR LEP Board considered the final report of the LCR LEP Task and Finish Group. Subsequently, on 25 September 2020, the LCR Combined Authority also considered the final report of the LCR LEP Task and Finish Group. Both the LCR LEP Board and the LCR Combined Authority agreed the recommendations contained in the report.

To support the implementation of the recommendations the LCR LEP Board and the LCR Combined Authority agreed an action plan which is detailed for Members information. An update on the implementation of the recommendations contained in the action plan would be presented to the Committee at its meeting on 10 March 2020.

RESOLVED -That the action plan be noted.

Minutes 19 to 28 be received as a correct record on the 14th day of January 2021.

Chairperson of the Overview and Scrutiny Committee

(The meeting closed at 12.26 pm)

Page 172 Agenda Item 14

TRANSPORT COMMITTEE

At a meeting of the Transport Committee held remotely on Thursday, 5th November, 2020 the following Members were

P r e s e n t:

Councillors

L Robinson Chairperson of the Transport Committee (in the Chair)

P Cleary, S Foulkes, G Friel, P Hayes, H Howard, N Killen, A Lavelle, K McGlashan, P McKinley, L Mooney, S Murphy, N Nicholas, J Pearson, G Stockton, J Stockton, M Uddin and F Wynn.

18. CHAIRPERSON'S ANNOUNCEMENTS

The Chairperson of the Committee, Councillor Liam Robinson welcomed everyone to the second virtual meeting of the Transport Committee. He referred that the Country was now subject to another National lockdown and hoped that all Members and Officers were safe and well.

Councillor Robinson briefly explained meeting procedure and etiquette.

Councillor Robinson reported that Councillor John Wiseman was no longer a member of the Transport Committee. He paid tribute to Councillor Wiseman’s dedication and hard work as a member of the Committee and undertook to write to him on behalf of the Committee, expressing their thanks and best wishes.

Councillor Robinson then extended a warm welcome to Councillor Susan Murphy who had been appointed to serve on the Committee. He added that Councillor Murphy had previously been a Member of the Transport Committee and that he looked forward to working with her once again.

On behalf of the Committee, Councillor Robinson extended best wishes for a speedy recovery to Councillor Jones’ Wife.

Councillor Robinson also asked the Committee to note that Councillor M O’Mara may be unable to join the meeting due to electrical work being carried out.

The meeting was informed that Councillors Lavelle, J Stockton, Thompson and Willliams were trying to access the meeting, but were experiencing technical difficulties. Democratic Services were providing assistance in order that Members could access the meeting as soon as possible.

19. APOLOGIES FOR ABSENCE

Apologies for absence were submitted on behalf of Councillors J Dodd, A Jones, M O’Mara and H Thompson.

The Committee noted that Councillors M O’Mara and H Thompson were unable to join the meeting due to technical difficulties.

Page 173

20. DECLARATIONS OF INTEREST

The Senior Democratic Services Officer reported that no declarations interest had been received.

21. MINUTES OF THE LAST MEETING

The minutes of the last meeting of the Transport Committee held on 24 September 2020 were received as an accurate record and signed by the Chairperson.

22. TRANSFORMING CITIES FUND UPDATE

The Committee considered the report of the Interim Director of Integrated Transport which provided an update on the Transforming Cities Fund (TCF) Programme.

In this respect, Shane Fitzpatrick, the Interim Director of Integrated Transport gave a presentation which highlighted the following:-

 Background and TCF themes;  Delivery to date;  Progress over the past 12 months;  Planned work;  Investing for the future.

Shane Fitzpatrick informed the Committee that he was also the Lead Officer for the Transforming Cities Fund which was £172.5 million of capital funding for projects over a 5-year period for completion by March 2023.

The presentation detailed progress to date on the following projects:

 Phase 1 Smart Ticketing Programme;  120km of full fibre network along the Merseyrail system;  Merseyrail battery technology trial;  Runcorn Station Quarter; and  Phase 1 of the Liverpool City Region Cycle (LCR) Network.

The presentation also detailed planned work over the next 12 months including:

 Investment in Ferries;  The purchase of a fleet of hydrogen cell buses;  Access improvements to 5 stations;  Delivery of the LCR Cycle Network in Halton and Wirral;  Upgrade of traffic signal installations;  Commencement of works at the new Headbolt Lane Merseyrail Station in Kirkby;  Bus corridor improvements on the 10A route; and  Active travel and infrastructure improvements at Lea Green and Birkenhead Central Stations.

Page 174 Shane Fitzpatrick concluded the presentation and indicated that the TCF programme was supporting the development of a pipeline of major transport schemes to ensure that the LCR was well placed to take full advantage of future Government capital funding during the recovery from the pandemic.

The Chairperson, Councillor Liam Robinson thanked Shane Fitzpatrick for his presentation and invited Members of the Committee to ask questions or make comments on the report.

Councillor Robinson highlighted that the LCR was fortunate to have access to funding through the TCF Programme through devolved powers and this was a great example of what devolution could achieve.

Councillor Robinson also paid tribute to the hard work of Shane Fitzpatrick and the Team supporting the programme, whose expertise had enabled continued project delivery during these difficult times.

RESOLVED –

(i) That the report be noted; and

(ii) That Shane Fitzpatrick, Interim Director of Integrated Transport be thanked for his informative presentation.

23. PRIORITISING HYDROGEN BUSES IN THE LIVERPOOL CITY REGION

The Committee considered the report of Merseytravel which provided an update on the current status of both the Merseytravel Hydrogen Bus Project (HyBus Trial) and Green Bus Routes, a package of bus prioritisation measures and improvements which aimed to transform bus travel in the Liverpool City Region.

Matt Goggins, the Assistant Director for Bus informed the Committee that these two projects were included within the TCF Programme and were closely aligned and co-dependent in order to maximise the benefits of each project at the same time.

Matt Goggins explained that the Liverpool City Region’s ‘Climate Emergency’ declaration and the ‘Vision for Bus’ had focussed the need to invest in bus priority infrastructure to provide a punctual and reliable bus network, serviced by a high-spec zero emission bus fleet. The key components of this vision and their delivery were seen as key priorities, namely to grow bus patronage and reduce dependence on the private car.

The Chairperson, Councillor Liam Robinson invited questions and/or comments from Members of the Committee.

Councillor Gordon Friel referred to the ‘Green Routes’ and asked if information could be included in future reports for the benefit of members of the public relating to:

 The number of minutes to be saved on journeys;  delivery times for the 53 route;  Reference to Sefton within the TCF programme; and  The key things relating to equalities within this project.

Page 175

Matt Goggins responded and explained that this report was purely an overview of the project and provided assurance that more detail would be included as the project developed. He added that there would be a significant amount of community engagement, particularly at the design phase in advance of considered by the Combined Authority.

In relation to target minutes, Matt Goggins indicated that it would depend on the interventions, but the target was to halve journey times.

Matt Goggins stated that the trial was focussed on 10A route with a view to developing a further 4 corridors, based on the same model. He stressed the importance of getting the model right to provide the best opportunity to access additional funding from Central Government.

On the matter of equality, Matt Goggins expected that a number of significant equality issues would be improved, and this would be included in future reports as appropriate.

Councillor Steve Foulkes commented that he could see the synergy with the previous report and referred to the Wirral Waters and Birkenhead Central Station projects. He asked why Wirral wasn’t included in the 5 corridors and were there any barriers preventing this? Councillor Foulkes added that he was keen to act as an advocate and remove any barriers precluding Wirral from the project.

Matt Goggins responded to Councillor Foulkes and stated that there were no barriers to including Wirral in any future schemes. The prioritisation of the first 5 routes focussed on a combination of factors including, how the route was used, the availability of other modes of transport, congestion, air quality and patronage. He added that he would also like to see this model used on a route in Wirral, but the focus was to ensure that the first route is done properly.

The Chairperson, Councillor Liam Robinson indicated that this project was exciting and hoped that it would be an exemplar for best practice. The project would provide high quality infrastructure and a ‘head turning’ vehicle and agreed with Matt Goggins, that it would hopefully set the standard for the whole of bus network.

Councillor Robinson added that this was the start of the interventions to address the ‘Climate Emergency’ and the target for a ‘zero emissions’ fleet by 2030.

Councillor Robinson commended the Team involved for pulling together this exciting proposition and he looked forward to seeing the project come to fruition in the weeks and months ahead.

Councillor Frances Wynn referred to the 10A and the problems currently being experienced by buses trying to find a place in St Helens Bus Station. She indicated that buses had to drive around 3 times and wondered if the Station needed to be extended. She also referred to the use of the Station for routes outside of the City Region.

Councillor Wynn added that she was in favour of hydrogen buses and asked if there were any plans to include the 89 route from St Helens to John Lennon Airport due to the length of the journey.

Page 176 Matt Goggins responded and explained that there were another 3 potential phases beyond this one and the vision would include new interchanges St Helens bus station. He added that if delivery on this current project could be demonstrated to Government then other routes would be considered and world class bus interchanges would be included as part of future schemes.

Councillor Wynn also asked where the location of the depot in St Helens would be.

Matt Goggins indicated that the location was the BOC site and explained that it was planned to be the City Region’s first hydrogen refuelling station.

RESOLVED –

(i) That the report be noted; and

(i) that Committee Members support the two projects highlighted in the report within in their communities.

24. MERSEY FERRIES UPDATE REPORT NOVEMBER 2020

The Committee considered the report of Merseytravel which provided a summary of key activities within Mersey Ferries, including an update on progress of the long-term Mersey Ferries Strategy.

Gary Evans, Assistant Director for Customer Delivery explained that the report was an operational update over past 6 months, He added that the impact of covid-19 had been challenging with the decline in income through leisure activities, but since mid-May, the ferries had focussed on providing a vital commuter service.

Gary Evans indicated that major refurbishment work at Seacombe Ferry Terminal was due to commence in 2021. He also reported that work with Eureka Mersey which had been delayed due to the pandemic, would also be commencing in early 2021.

The Chairperson, Councillor Liam Robinson invited Members of the Committee to raise questions, and/or comments.

Councillor Gordon Friel commented on the equality and diversity implications within the report. He added that although the report was for noting, he was pleased that there was work going on in the background in relation to accessibility for the ferries and this would be of interest to the public. Councillor Friel felt that Customer Delivery should be proud of the work being on accessibility to ferries, trains and stations and thanked Gary Evans for including it within the report.

Councillor Robinson, echoed Councillor Friel’s thanks. He commented that it had been a challenging time for the Ferry Service, but they had continued to play a vital part and link across the river. He asked if the Committees thanks could be passed onto the all the Ferries Team for their hard work in challenging circumstances.

RESOLVED – That the report be noted.

Page 177 25. MULTI OPERATOR TICKETING SCHEME - PRODUCT AND PRICING UPDATE AND PROPOSALS

The Committee considered the report of Merseytravel which sought approval for the ticketing recommendations relating to specific scheme arrangements, product and price changes for all Merseytravel multi operator and multi modal pre-paid tickets for 2021.

Gary Evans, Assistant Director for Customer Delivery explained that prices were set annually but this year had been significantly impacted by the pandemic. He highlighted that as a result of the Covid-19 Bus Services Support Grant (CBSSG), it unlikely that Trio and Saveaway products would be increased until that grant came to an end. The only price increases that would be implemented related to Railpass products. The increase usually came into effect on 2 January each year, but it was likely to be some point in quarter 1 of 2021, therefore the customer would benefit from 2020 prices for a longer period.

The Chairperson, Councillor Liam Robinson commented that it was the sensible and right thing to do, to freeze prices.

RESOLVED – That the annual price recommendations for the Merseytravel Multi-Operator Ticketing Scheme products, to be fully implemented in the first quarter of 2021 (or August 2021 for School Term products) for Trio, Railpass and Saveaway tickets as outlined in Appendix 1 of the report, be approved.

26. MERSEYTRAVEL Q2 FINANCIAL PERFORMANCE REPORT

The Committee considered the report of Merseytravel which detailed:-

(1) the organisation’s financial performance for the period through to 30 September 2020; and

(2) the proposed revisions to the 2020/21 budget aimed at ensuring that the organisation can continue to operate a balanced budget.

Sarah Johnston, Assistant Director for Finance explained that financial performance to the end of quarter two had been impacted by the Covid-19 pandemic.

Sarah Johnston highlighted that in balancing the budget for this year, there had been an increased use of reserves. However, an application had been made to the Government’s Sale, Fees and Charges reimbursement scheme to recover certain income in respect of eligible spend. As there had been no indication of the outcome of this application, this income had not been factored in at this point. If the claim was successful, the use of reserves would be reduced accordingly.

The Chairperson, Councillor Liam Robinson, invited questions and/or comments from Members of the Committee.

Councillor Steve Foulkes commented that Assistant Director for Finance had given a full account of the current financial position and since the report was written the City Region had moved into Tier 3 restrictions followed by a national lockdown. Councillor Foulkes added that even under the current circumstances, a balanced budget had been achieved and setting the budget for next year would be a challenge.

Page 178 He took the opportunity to thank Sarah Johnston and her Team for their hard work in collating the information in a readable form and commended the report and its recommendations.

Councillor Robinson, echoed Councillor Foulkes’ comments and understood how hard the Team were working to ensure the best outcome under extremely difficult circumstances with a keen eye on the years ahead. He added that he hoped that the Government would make good on their offer of funding to ‘Build Back Better’ and that the transport system was vital to the recovery.

Councillor Robinson also stated that the Government was requesting and guiding the Authority to maintain payments to bus companies at pre-pandemic levels, both supported payments for subsidised routes and concessionary travel. Whilst it was accepted that the Bus industry required financial assistance to ensure that the network was maintained to allow essential journeys to be made. He added that those additional funds should be made available to the City Region Combined Authority to allow more devolved decision making, providing better value for the taxpayer and flexibility for the delivery of a better transport network.

RESOLVED –

(i) That the report be noted; and

(ii) That it be noted that, to the extent that the organisation is successful in securing reimbursement for forgone income from the government’s sales fees and charges scheme, the actual additional application of reserves required to balance the budget will be reduced accordingly.

27. RESPONDING TO THE DEPARTMENT FOR TRANSPORT'S CONSULTATION ON PAVEMENT PARKING

The Committee considered the report of the Director of Policy and Strategic Commissioning and the Interim Director of Integrated Transport which set out a draft response to the consultation launched on 31 August 2020 by the Department for Transport (DfT) on means to control the problems associated with inconsiderate pavement parking.

Huw Jenkins, Lead Policy Officer for Transport explained that the principles and broad thrust of the draft response was attached at the Appendix to the report.

Huw Jenkins commented that this consultation formed part of a suite of measures to support a green, post-COVID recovery by encouraging more people to choose active travel. He added that that the new policy and funding frameworks that supported a very significant shift to walking and cycling was presented to the last meeting of the Transport Committee in September 2020

Huw Jenkins highlighted that this consultation was following a review by the DfT regarding inconsiderate pavement parking. He indicated that a third of people with a visual impairment and almost half of wheelchair users did not want to go out as a result of anti-social pavement parking.

Huw Jenkins stated that options available were detailed at section 3.5 of the report. Following consultation with the City Region Highway Authorities, the recommended approach was ‘option 2’. This was considered to be the most practical

Page 179 solution and consistent with devolution principles, in allowing local authorities to tailor their solutions in response to local need and circumstances.

The Chairperson, Councillor Liam Robinson was in support of ‘option 2’, particularly given that large parts of the City Region comprised of terraced streets with no off-street parking.

The Chairperson invited questions and/or comments from Members of the Committee.

Councillor Gordon Friel suggested that the recommendations should include reference to ‘option 2’ as the preferred approach.

Councillor Patrick McKinley also supported the approach. He added that the Government should take parking provision into consideration when assessing the density of housing development, rather than making the issue worse.

Huw Jenkins responded and agreed with Councillor McKinley’s comments, stating the design of new development was fundamental. The challenge was to balance provision with incentives to move away from car use as part of a wider mix of measures.

The Chairperson, Councillor Liam Robinson indicated that the final draft of the response would be circulated to Members of the Committee for comments prior to formal submission by the deadline.

RESOLVED –

(i) That the issues raised in this report in respect of the Government’s proposals to manage the problems of pavement parking in the context of its wider priorities to greatly increase levels of walking and cycling, and to create an accessible environment for all road users, be noted;

(ii) that the direction of the consultation response in support of ‘option 2’, as set out within the Appendix to this report, be agreed; and

(iii) that delegated authority be granted to the Director of Policy & Strategic Commissioning, in conjunction with the Director of Integrated Transport and the Chairperson of the Transport Committee to finalise the response, ahead of its submission to the Department for Transport by the deadline of 22 November 2020.

28. RESPONDING TO GREATER MANCHESTER'S CLEAN AIR PLAN

The Committee considered the report of the Interim Director of Integrated Transport which provided information on a consultation by the ten Greater Manchester Local Authorities in respect of plans to declare a Clean Air Zone (CAZ) for the Greater Manchester Combined Authority area.

Huw Jenkins, Lead Policy Officer for Transport explained that the report proposed the development of a response to the consultation, given the

Page 180 cross-boundary and wider strategic implications for the Liverpool City Region. He added that response would also include consideration of the risk of non-compliant traffic diverting through bordering areas of Liverpool City Region, especially into St Helens. In addition, there would also be implications if commercial vehicle fleets or depots were redistributed across the region, and older, non-compliant vehicle fleets were cascaded to adjoining Local Authority areas, in effect, moving problems elsewhere.

Huw Jenkins also indicated that in view of the timing of the consultation process, delegated authority was sought to allow the development and submission of a response. The response would be drafted in full consultation with the Chairperson and Members of the Transport Committee, to provide the opportunity for members to be engaged in the development of the response.

The Chairperson, Councillor Liam Robinson indicated that the final version of the draft response would be circulated to Members of the Transport Committee for comment prior to submission by the deadline.

The Chairperson invited questions and/or comments from Members of the Committee.

Councillor John Stockton commented that given that air had no geographical boundaries, asked how closely we were working with other Authorities, like Cheshire and North Wales, even across the Country to co-ordinate a response to our own clean air priorities.

Huw Jenkins indicated that the Liverpool City Region Combined Authority (LCRCA) was already working with a range of Local Authorities and other organisations looking at clean air proposals. He added that colleagues at Greater Manchester had been proactive in engaging with the LCRCA over the past 18 months.

Councillor Gordon Friel mentioned the allowance for vehicles to convert to LPG fuel. He also referred to charging for hackney carriage and private hire vehicles and asked how the distinction would be made when a private hire vehicle was not operating as such.

Huw Jenkins commented that he was not an expert of the different types of fuels but was aware that certain types of engine that fell below the standard, would incur a charge to enter the zone. In response to the issue of private hire vehicles, he indicated that the charging and enforcement process would be via automatic number plate recognition (ANPR) but he did not know how or if the Greater Manchester Combined Authority would be able to the make the distinction between a private hire vehicle in operation or when it was being used as a private vehicle.

The Chairperson, Councillor Liam Robinson strongly supported the principle of clean air zones, but in responding, point out the potential negative impact/un- intended consequences on the Liverpool City Region and its constituent Authorities.

RESOLVED-

(i) That the issues raised by Greater Manchester’s plans to declare a Clean Air Zone across the Greater Manchester conurbation, be noted; and

Page 181

(ii) that delegated authority be granted to the Director of Policy & Strategic Commissioning, in full consultation with the Chairperson of the Transport Committee, to develop and submit this response ahead of the 3 December 2020 deadline.

29. PUBLIC QUESTION TIME

There were no public questions received.

30. PETITIONS AND STATEMENTS

There were no petitions or statements received.

31. ANY OTHER URGENT BUSINESS APPROVED BY THE CHAIR

There were no urgent items of business.

32. CHAIRPERSON'S CLOSING REMARKS

The Chairperson, Councillor Liam Robinson referred to the second national lockdown and the difficulties ahead for the City Region and its communities. He paid tribute to all staff and frontline transport workers who would be maintaining the essential network for key workers.

Councillor Robinson concluded the meeting and hoped that Officers, Members and all watching remained safe and well over the weeks and months ahead.

Minutes 18 to 32 received as a correct record on the 10 day of December 2020.

Chairperson of the Transport Committee

(The meeting closed at 3.34 pm)

Page 182 Agenda Item 15

TRANSPORT COMMITTEE

At a meeting of the Transport Committee held remotely on Thursday, 10th December, 2020 the following Members were

P r e s e n t:

Councillor L Robinson Chairperson of the Transport Committee (in the Chair)

Councillor

P Cleary, J Dodd, G Friel, S Foulkes, P Hayes, H Howard, N Killen, A Lavelle, M O'Mara MBE, K McGlashan, L Mooney, N Nicholas, J Pearson, G Philbin, G Stockton, J Stockton, H Thompson, M Uddin, J Williams and F Wynn.

33. CHAIRPERSON'S REMARKS

The Chairperson of the Committee, Councillor Liam Robinson welcomed everyone to the third virtual meeting of the Transport Committee and hoped that Members, Officers and the viewing public were all safe and well.

34. APOLOGIES FOR ABSENCE

Apologies for absence were submitted on behalf of Councillors A Jones and S Murphy.

The Committee noted that Councillor P McKinley was unable to join the meeting due to technical difficulties.

35. DECLARATIONS OF INTEREST

There were no declarations of interest.

36. MINUTES OF THE LAST MEETING

RESOLVED - That the minutes of the last meeting of the Transport Committee held on 5 November 2020, be approved as a correct record.

Councillor Helen Thompson wished to note that due to technical difficulties she was unable to participate in the last meeting however she explained that she was able to follow the proceedings via the Live Stream and asked for this to be reflected in the minutes.

37. SMART TICKETING PROGRAMME UPDATE

The Committee considered the report of the Assistant Director for Customer Delivery, Gary Evans, which provided an update on the Smart Ticketing programme.

Gary Evans explained this was the latest in a series of reports detailing the progress that had been made on the development of Smart Ticketing across the

Page 183 Transport Network within the City Region and the report outlined the proposed next steps.

Gary Evans informed the Committee that since the introduction of Term Time Solo Products to the Smart Portal in August 2020 the number of registered users on the portal had increased. It was explained that there was over 7,000 registered users and half of these registrations had taken place since August 2020. The Committee were also informed that there had been over 4000 sales since the Smart Portal was first launched in January 2020.

Following investment to fit all of the City Region’s buses with model 2 Electronic Ticket Machines (ETM’s) which allowed passengers to purchase tickets using card payments it was explained that a new bus company, Warrington Buses had been introduced. Gary Evans also informed the Committee that the Combined Authority had purchased a number of handheld ETM’s to allow additional capacity to be added to the Bus network should it be required.

The Committee heard that work was underway to introduce platform validators across all of the rail stations in the City Region and an example was given that 187 platform validators were going into operation in the Merseyrail estate over the coming month.

Gary Evans reported that detailed work was also being carried out on the Legal Scheme Agreement alongside a zonal review with the aim of simplifying the ticketing zones. The Committee were informed that an update would be provided on this issue in due course.

Councillor Gordon Friel questioned how secure the Smart Portal was against cyber-attacks. It was explained that as Metro Cards are anonymous, privacy did not currently pose any major issues to the Combined Authority. However, as the Smart Portal was being developed over time more individual information would be stored and it was explained that this was being considered in detail. The Committee heard that the Combined Authority would seek assurances that any data that was being transferred was encrypted and that GDPR guidelines were being followed.

Councillor John Stockton questioned whether there had been lower demand for Solo products over the course of the pandemic. It was explained that demand for all products had been down during the pandemic due to patronage levels being lower than usual. However, it was also explained that the demand for contactless transactions had increased with transport networks encouraging contactless options and it was noted that this was a real positive for the Combined Authority and presented a great opportunity.

The Chairperson, Councillor Liam Robinson thanked Gary Evans for the comprehensive report and highlighted that great progress had been made. Councillor Robinson added that the roll out of platform validators and having a bus fleet with smart ticketing and contactless payments options meant that the City Region was in a great position compared to other parts of the Country.

RESOLVED - That the contents of the report be noted.

Page 184 38. RESPONDING TO HIGH SPEED 2 PHASE 2B WESTERN LEG DESIGN REFINEMENT CONSULTATION

The Committee considered the report of the Interim Director of Integrated Transport which set out a draft response to the consultation launched on 7 October 2020 by the Department for Transport on 4 proposed refinements to the design of the Western Leg of High Speed 2 Phase 2B.

Tom Carbery, Rail Development Advisor, explained that the consultation was seeking views on the four proposed refinements in Crewe, Manchester Piccadilly, Scotland and Manchester Airport’s High Speed Rail Station. It was highlighted that the Combined Authorities response focused on the three refinements in the North West of England.

Tom Carbery informed the Committee that the three proposed refinements in the North West were based on design development, ongoing engagement and future integration with the Northern Powerhouse Rail. It was added that these proposals showed that High Speed 2 was starting to formally recognise Northern Powerhouse Rail as a viable entity.

It was explained that a recent announcement from Central Government had confirmed two previously consulted changes including proceeding with the Northern Powerhouse Rail (NPR) touchpoints on the High Speed 2 route in the High Legh area in Cheshire. Tom Carbery informed the Committee that this was very significant for the City Region as a future NPR line could link into High Speed 2 and subsequently be connected to Liverpool to ensure that the City Region have full Northern Powerhouse Rail and High Speed 2 connectivity.

Tom Carbery explained each of the three proposed refinements in the North West to the Committee:

 A new junction to the North of Crewe which would allow trains to re-join the HS2 route;  Provisional platforms to be added to Manchester Airport which would allow Northern Powerhouse Rail services to stop at the Manchester Airport Station; and  Two additional platforms at Manchester Piccadilly to also allow Northern Powerhouse Rail services to stop. Tom Carbery informed the Committee that the Combined Authority had raised concerns in the consultation response that there were missed opportunities at Manchester Piccadilly. It was explained that Officers in Manchester had designed an underground station for Northern Powerhouse Rail as well as the two surface platforms proposed by HS2.

Tom Carbery concluded his presentation by stating that the proposed changes in the consultation exercise represented a necessary step towards the wider transformation that the Liverpool City Region were seeking from the Rail Network through HS2 and Northern Powerhouse Rail.

Councillor Ken McGlashan referred to the new port facilities in the City Region and added that this would reduce road traffic which in turn would lead to lower carbon emissions. Councillor McGlashan also highlighted that the existing link lines from the port need to be upgraded in order to cope with the expected higher capacity and therefore asked Tom Carvery to highlight these issues in the consultation

Page 185 response. It was explained that the issues raised by Councillor McGlashan would be added to the consultation response accordingly. It was also reported that Officers at the Combined Authority were continuing to work with Transport for the North on the phasing of new routes and were promoting building the Liverpool to Manchester corridor first as this would bring the biggest benefit to the City Region.

Councillor Gordon Friel noted that rail freight was a very important element to the High Speed 2 development and thanked officers for including this in the consultation response.

The Chairperson, Councillor Liam Robinson, thanked Tom Carbery for the excellent report. Councillor Robinson also commented that he very pleased that the response recognised the importance of a classic compatible High Speed service through Runcorn given that this was a vital part of the South East Corner that would benefit the whole City Region.

RESOLVED - That the consultation response to the refinement of the High Speed 2 Western Leg design consultation as set out within the Appendix of the report be agreed.

39. UNION CONNECTIVITY REVIEW

The Committee considered the report of the Director of Policy and Strategic Commissioning which set out a draft response to the consultation launched on 16 November 2020 into how connectivity across the UK can support economic growth and quality of life post covid-19.

Suzanne Cain, Transport Policy Co-ordinator, informed the Committee that the consultation was being led by Sir Peter Hendy and covered road, rail, air and sea links between England, Scotland, Wales and Northern Ireland.

The Committee heard that due to the tight timeframe the response presented in the report was a working progress which set out the key areas the Combined Authority wished to cover in their response. It was explained that as a City Region with a travel to work area that extended across the border, the main focus of the response was improvements to the borderlands and access to North Wales.

Suzanne Cain explained that the response also provided an opportunity to set out the need to improve port access as well as the Liverpool to Belfast links and the longstanding need for improved rail links into Scotland. It was reported that more detail would be added to the response covering the need to improve links out of the Liverpool Port to Northern Ireland and the importance of Liverpool John Lennon Airport. The Committee heard that The Combined Authority had requested data and evidence from Liverpool John Lennon Airport to be included in the response.

Suzanne Cain informed the Committee that the final response would also include more detail on the opportunity to strengthen links to North Wales and Cardiff via Halton Curve and Transpennie Express Services into Glasgow and Edinburgh. The response also set out the role of rail freight across the Nation’s corridors, highlighting the importance of removing as much traffic from the roads as possible.

Councillor Steve Foulkes requested that the 12 Quays roll on roll off facility in Birkenhead was mentioned by name in the consultation response as he explained it was a vital facility that served both Dublin and Belfast.

Page 186 Councillor Gordon Friel thanked Suzanne for the excellent report and commented that the consultation response showed a fantastic example of how each of the Nations were able to be united.

The Chairperson, Councillor Liam Robinson echoed Councillor Friel’s comments and stated that he believed the Union Connectivity Review was going to be a very influential piece of work that was going to be vital for the Liverpool City Region. Councillor Robinson added that he would like all Committee Members to see the final version of the response before it was submitted however highlighted that due to the Christmas Period there may be a tight deadline for Member’s feedback.

RESOLVED - That:-

(i) the comments raised by the Committee be incorporated into the draft response appended to the report; and

(ii) delegated Authority be granted to the Director of Policy & Strategic Commissioning, in conjunction with the Chair of the Transport Committee to finalise the response, ahead of its submission to the Department for Transport by the deadline of 30 December 2020.

40. QUARTERLY BUS UPDATE

The Committee considered the report of the Assistant Director for Bus which provided an update to Members on key bus issues relating to the third quarter of 2020/21.

Laura Needham, Bus Strategy Programme Manager, explained that the report detailed milestones of the Bus Alliance, progress on developing the commitment of the LCR Devolution Deal in respect of improving bus services and an overview of how the Bus Team had maintained a safe and reliable Bus Network during the Covid-19 Pandemic.

Laura Needham informed the Committee that work was currently being undertaken on forecasting and modelling the impact of the Covid-19 Pandemic on the Transport Network in the City Region. It was explained that Members would receive more information in due course however it was highlighted that transport users’ behaviour had changed over the course of the pandemic and was likely to change over the next couple of years.

It was explained that the Bus Alliance had deferred some milestones until 2021-2022, particularly those centred around the ‘Better by Bus’ campaign as well as driver training. The Committee heard that a customer confidence campaign had recently been launched to increase bus users’ confidence in returning and using the Bus.

Laura Needham explained to the Committee that an overview of the Bus Reform Assessment was presented in the report and informed the Committee that the Combined Authority had received four out of the five Outline Business Cases. The report also detailed how the Combined Authority had been working closely with Bus Operators in order to keep services operating during the pandemic.

Councillor Gordon Friel questioned whether there was a date for the installation of Intelligent Transport Systems (ITS) on route 53 and the installation of

Page 187 RTI screens at Bootle and Huyton Bus Station. It was explained that dates would be provided to Councillor Friel in writing. Councillor Friel also questioned whether matters were being progressed in line with the Traffic Signalling Systems at Local Authorities. It was explained that The Combined Authority Asset Management Team were working closely with other Authorities in order to identify signals that needed upgrading and integrating them with the wider ITS.

Councillor John Stockton commented that he was very impressed with the work on the Green Bus Routes and Hydrogen Buses and noted how it complimented the Green agenda. Councillor Stockton wished to place on record his thanks to all of the officers involved with these projects.

The Chairperson, Councillor Liam Robinson thanked Laura Needham for the excellent report and referred to the confidence building campaign, noting that during the course of the pandemic there had been negative perceptions around Public Transport. Councillor Robinson expressed the need to reassure passengers that the Transport Network is safe to use.

Councillor Robinson also recommended that a wider piece of work should be carried out into how the effects of the pandemic would affect individuals travel patterns and requested that the findings were presented at a future Committee meeting.

RESOLVED - That the contents of the report be noted.

41. PUBLIC QUESTION TIME

The committee received a question from Mr Peter Jackson as follows:

‘Given the current strain on public funds due to Covid, does the committee find it acceptable that Merseytravel is spending thousands on free Christmas Day buses, as many of these Christmas Day buses run more frequently/provide links which aren't available on any day of the year except Christmas Day?’

The Chairperson, Councillor Liam Robinson, responded by stating that Christmas Day Buses were a vital link to Hospitals across the City Region for individuals who needed to make essential journeys including front-line NHS Staff, who without this service may struggle to get to work. Councillor Robinson also explained that many additional festive period resources such as late-night services had not been utilised this year.

Councillor Robinson stated that the Combined Authority were very conscious about budgeting responsibly however on balance it was decided the free Christmas Day service would still go ahead as morally it was the right thing to do.

The Chair thanked Mr Peter Jackson for submitting his question and explained a detailed, formal written response would be provided within 10 working days.

Page 188 42. PETITIONS AND STATEMENTS

There were no petitions or statements received.

Minutes 33 to 42 received as a correct record on the 13th day of January 2021.

Chairperson of the Transport Committee

(The meeting closed at 2.49 pm)

Page 189 This page is intentionally left blank