Actions from the meeting: (17.01.18)

Capital Growth Programme Projects

Identify whether other LEPS have received requests for investment in flood defence schemes.

Chief Executive’s Report

For CS to produce a paper on the impact of GCGP changes

Welcome from the Chairman

Doug Field (DF) welcomed everyone to the meeting and thanked Jonathan Reynolds and Orbis for

hosting the meeting. He welcomed Richard Smith who is deputising for Colin Noble.

Apologies

Apologies were received from:

Cllr Colin Noble

Declarations of Interest

Full declarations of interest can be found at 30TUhttp://www.newanglia.co.uk/about-us/the-board/ . U30T

The board were reminded that declarations of interest are required as part of LEP scrutiny and must be

submitted to the LEP office at the earliest convenience.

Declarations relevant to this meeting:

Item 7: Capital Growth Programme Projects

Projects for Approval

David Richardson and Steve Oliver

Projects for Deferral

Nikos Savvas, Richard Smith, Cliff Jordan, Sue Roper and Tracy Jessop

Projects for Rejection

David Richardson, Richard Smith, Cliff Jordan, Sue Roper and Tracy Jessop

Item 9: Integrated Health and Employment Service Proposal

Cliff Jordan & Tracy Jessop

Item 10:Growing Places Fund investment The Malthouse

David Ellesmere and Steve Oliver

Item 11: New Anglia Capital

Doug Field declared an interest in the investments in MBASO and Novofarina

Chris Starkie (CS) reminded Board members that the new Declaration of Interest form supplied by

Government needed to be completed and returned by the next Board meeting on 21^st February as it must

be published on the LEP web site by 28^th February in order for the LEP to remain compliant.

In the future any declarations made at the Board meetings will be transposed onto Board member’s forms

as well as recorded in the minutes. Any changes identified between Board meetings should be advised

to Charley Purves and forms will be updated accordingly.

Lindsey Rix (LR) asked about the process should a Board member participate in the investment approval

process and subsequently became involved in the contract. CS advised that the LEP should be notified

at the earliest opportunity either directly to the Office Manager or at the next Board Meeting and the

relevant Declaration of Interest form would be updated accordingly.

Welcome from Orbis Energy

Johnathan Reynolds welcomed Board members to Orbis Energy and provided an overview of

the organisation covering the range of work carried out, its achievements over the past 9 years

and provided examples of some of the programmes in which it has been involved. The

presentation included details of the importance of the UK and the East in the world renewable

energy market. Johnathan then left the meeting.

Minutes of the last meeting 22^nd November 2018

Actions from last meeting updated as follows:

LEP Governance Review

Page 2 of 6

To express preferences over committee roles to LiR by 1^st December - Complete - a table of

ALL

proposed committee members will be circulated prior to next Board.

Business Investment Proposal - Confidential

To receive more detail on the skills spending within the proposal - details are available at the

meeting or on request.

May Ney Review Including Standards of Conduct

To receive details of where the policies can be accessed - complete

Board Forward Plan

ALL

To provide feedback on the plan and propose any additional items - complete

Business Performance Reports

To receive a proposal on the Eastern Agi-Tech initiative by email - On hold due to the winding

up of GCGP and awaiting clarification about their financial position.

Aims and Objectives for the Year

Chris Starkie (CS) provided a presentation on the strategic aims and objectives for the LEP for

2018.

Board members discussed the importance of promoting the East as a brand and Dominic Keen

(DK) felt that more could be done to champion local business success stories.

David Ellesmere (DE) asked how New Anglia compared to other high performing LEPs and

whether it was proactively looking to identify best practise elsewhere. CS confirmed that New

Anglia was actively involved in the LEP network and was also increasing its involvement in

ADEPT.

Sandy Ruddock (SR) noted that the region had many micro and start-up businesses who would

benefit from support from the LEP which needed to be promoted as the go-to organisation for

small businesses.

DF asked CS what he viewed as the 3 key aims to be achieved in the next 12 months. CS

stated that he wanted the Board to have confidence in the LEP’s internal processes, to

continue to promote local business successes and to have secured a local industrial strategy.

Steve Oliver (SO) asked that the LEP’s aims include social mobility and social inclusion.

The Board agreed:

 To note the content of the presentation

Capital Growth Programme Projects

DF proposed breaking this item into the various bid groupings namely those which were

proposed to be approved, deferred or rejected. It was agreed that meeting attendees would

Chris Dashper (CD) took the majority of the paper as read and reviewed the key points of the

proposal.

He explained that the projects had also been considered by the Investment Appraisal

Committee.

Approved Projects

David Richardson (DR) and SO declared an interest in this item and left the room

CD proposed that the Board approve the award of Growth Deal grant funding to the Bacton to

Walcott Coastal Management Scheme and to the Cefas Research Centre.

This was approved by the Board

DR & SO returned to the room.

Deferred Projects

Nikos Savvas (NS), Richard Smith (RS), Cliff Jordan (CJ), Sue Roper (SuR), Tracy Jessop (TJ)

declared an interest in this item and left the room.

CD advised that further work would be carried out on these projects and some would be

included in a later round of funding as appropriate.

LR noted that the Board should have a holistic view of future projects in order to properly

assess which were the best projects in which to invest the limited funds available so that

investments were not solely made in those projects presented first.

Page 3 of 6

The meeting discussed the issue of whether flood defences should be funded locally or

nationally. SR asked if other LEPs had received requests to fund similar projects.

CD asked for approval to defer the projects as listed. This was agreed by the meeting.

Rejected Projects

DR declared an interest in this item and left the room. NS returned to the room.

RS, CJ, SuR and TJ also declared an interest in this item and therefore remained outside the

room.

CD reviewed the list of rejected projects detailing the rationale behind the decisions.

SO asked whether any could be referred to New Anglia Capital. CD advised that Liquid 11

could possibly apply for New Anglia Capital but would be more suitable for Growing Business

Fund.

CD asked for approval to reject the projects as listed. This was agreed by the meeting.

DR, RS, CJ, SuR and TJ returned to the meeting.

The Board agreed:

 To note the contents of the report

 To approve the award of Growth Deal grant funding to the following projects in table 1:

 Bacton to Walcott Coastal Management Scheme

 Cefas Research Centre

 To approve the recommended decision option for each of the projects in tables 1, 2 and

3. (Table 2: Recommended to defer and Table 3: Recommended to reject)

 CD to Identify whether other LEPS have received requests for investment in flood

defence schemes.

New Anglia Voluntary Community Sector Programme Extension

Iain Dunnett (ID) took the majority of the paper as read and reviewed the key points of the

paper including the history of the fund and its achievements to date.

DE expressed his support highlighting the importance of multi-year grants for organisations in

order to assure future funding. He noted that this should be based on performance over a 1

year deal rather than the size of the organisation.

DE also queried how performance was rated proposing using the length of unemployment prior

to entering employment as one criteria.

ID advised that the criteria would be reviewed as part of the re-scoping of the fund.

The meetings agreed to the proposal.

NS and SO offered to sit on the Funds Appraisal Panel.

The Board agreed:

 To note the content of the proposal

 To agree the re-scoping of the criteria for the fund as described in the paper.

 To agree that the LEP makes the further commitment of a £250,000 grant from the

Growing Places Fund for 2018/19 and to agree to review further commitments for two

years beyond 2018 at an appropriate stage.

 To agree that NS and SO would sit on the Funds Appraisal Panel.

Integrated Health and Employment Service Proposal

CJ & TJ declared an interest in this item and left the room.

Iain Dunnett (ID) took the majority of the paper as read and reviewed the key points of the

paper.

RS expressed support for the project noting that there was a similar scheme in Suffolk and CD

confirmed that the LEP were already in discussion with them.

CS proposed that the funding be agreed subject to the funding being matched as detailed in

the proposal.

The meeting discussed the benefits of the project.

Page 4 of 6

The Board agreed:

 To note the content of the proposal

 To support the overall purpose of the proposal against the key LEP objectives of

employability and skills.

 To provide matching finance at a rate of £120k per annum for three years to the project

to assist in leveraging over £2million of European Social Funds (ESF). This is

dependent on other matched funding being secured.

Growing Places Fund investment The Malthouse - Confidential

DE & SO declared an interest in this item and left the room.

ID took the majority of the paper as read and highlighted the key points of the proposal. He

explained that the LEPs Investment Appraisal Committee have reviewed an initial appraisal

and a full appraisal of the development, including an externally completed assessment of the

loan application. These reviews included an assessment of the development for strategic fit

from an economic perspective and the financial aspects.

LR noted that if the further £900k is raised from another party then the point of the LEP having

first charge would be renegotiated at the Investment Appraisal Committee.

DF noted that a discussion was required at a future date as to how the board balances fairness

& transparency in similar investments.

The Board agreed:

 To note the content of the proposal.

 To approve a recommendation made by the LEPs Investment Appraisal Committee that

an offer of a £600,000 loan is made to the current owner of the Ipswich Malthouse for its

redevelopment into bespoke business units.

New Anglia Capital

DF declared an interest in the investments MBASO and Novofarina and took no further part in

the discussion.

CD advised the meeting that this was the bi-annual report as requested by the Board and took

the majority of the paper as read and asked the Board for questions.

The Board reviewed the approach to risk with DE noting that some investments will naturally

fail but that the portfolio should be assessed as a whole.

CS noted that the jobs created by NAC were generally high value jobs with a lower cost per job

than that in the Growing Business Fund.

The Board agreed:

 To note the content of the report.

Chief Executive’s report including PwC and Mary Ney Review Implementation Plan

CS took the majority of the paper as read and provided an update on the following items:

Mary Ney Review - CS noted that the Board is compliant with the Mary Ney recommendations

on the issuing and publication of papers and minutes however this process is still being rolled

out to the relevant sub-committees. This will be achieved by 28^th February 2018.

Government Dashboard - The proposed dashboard was circulated to attendees. CS

requested approval for the dashboard and asked whether the Board wanted to see the report

on a regular basis. Board agreed to the Dashboard and confirmed that there was no

requirement to include it in Board papers. Improvements to Board reporting are being

progressed in line with the timeframes included in the PwC report.

Unilever - The meeting discussed the current situation. Jeanette Wheeler (JW) noted that the

recent press stories had provided a negative view of the state of investment in the region and

Page 5 of 6

that more positive promotion was required. CS agreed noting that the LEP had to balance

sensitivity to job losses and the promotion of other investments.

COO Recruitment - short listing has begun with first interviews scheduled to take place before

the end of January.

CGCP - CS reviewed the issues raised by the changes to GCGP including the impact of

possible changes to the boarders of the LEPS. CS offered to produce a paper on the subject

detailing known facts and potential impacts. JW requested details of the impact of changes on

LEP programmes and investments.

The Board agreed:

 To note the content of the report

 To endorse the Dashboard

 For CS to produce a paper on the impact of GCGP changes

Finance Report

CS took the majority of the papers as read and asked for questions from the Board.

The Board agreed:

 To note the content of the report.

Appointment of New Director

Andrew Proctor (AP) & LR met to interview two candidates and proposed Jonathan Reynolds

as the new board member.

The Board agreed:

 To approve the appointment

Any Other Business

It was agreed that Item 16 would be completed prior to Item 15 given the latter’s confidential

nature.

Tim Whitley (TW) advised that Adastral Park is hosting the Innovate UK Conference on 27^th

January to which Board Members were invited.

TJ updated the meeting on the position with Carillion advising that the Council had been in

discussion with Highways England and received confirmation that contingency plans were in

place and no projects in the East would be impacted by the collapse.

NS advised that on 16^th April East of England Education providers would be hosting a

promotional event and requested promotion from the LEP.

Remuneration Committee - Confidential

Non Board Members left the meeting.

The confidential minutes of the Remuneration committee were presented by DF. The minutes

contained a salary recommendation for the Chief Executive Officer (CEO) and a salary banding

for the Chief Operating Officer (COO). There was also details of the performance management

process for the CEO.

The Board agreed:

 To note the content of the minutes for the Remuneration Committee

 To agree the recommendations made by the Remuneration Committee

Next meeting:

Date and time of next meeting: 21^st February, 2018. 10am-12.30pm

Venue: The Marble Hall, Surry Street, Norwich, NR1 3NG

Page 6 of 6

Actions from New Anglia LEP Board Meetings

Date

Item

Action

Update

Actioned By

Status

17/01/2018

Capital Growth Programme

Identify whether other LEPS have received requests for investment in flood

On-Going

Projects

defence schemes.

17/01/2018

Chief Executive’s Report

For CS to produce a paper on the impact of GCGP changes

Completed

22/11/2017

Business Performance

To receive a proposal on the Eastern Agi-Tech initiative by email.

On hold pending clarification on the situation at

On Hold

Reports

GCGP

25/10/2017

Implementing the Economic

To be advised of the retention rate of jobs created through the VCS Challenge

NCF provided three case studies of projects

Completed

Strategy

Fund

supported by the VCSE Challenge Fund with figures

for job creation and retention. Across the Access to

Community Trust, Pro Corda and Museum of EA

Life a total of 21 people have found employment

and have been retained in those jobs.

25/10/2017

Implementing the Economic

Investigate whether any Co-Ops have applied for the VCS Challenge Fund

The number of Coops/ social enterprises supported

CD/ID

Completed

Strategy

by the Vcse fund was 6

20/09/2017

Business Performance

To receive a future report on the approach to NAC investments

Included in the January half-yearly update

Completed

Reports

New Anglia Local Enterprise Partnership Board

Wednesday 21^st February 2018

Agenda Item 6

Brexit Analysis for Norfolk and Suffolk

Author: Alexander Riley / Lisa Roberts

Summary

This paper provides a summary of the report that has been produced by Metro Dynamics on

the potential impacts of Brexit for Norfolk and Suffolk.

Patrick White from Metro Dynamics is attending the Board meeting and will present the

conclusions of the research and draw out some of the most important findings by sector.

The report also highlights measures the LEP and partners are taking to minimise the

challenges and maximize the opportunities of Brexit.

Recommendation

The board is asked to:

 Support the recommendations in the report

 Support the activities the LEP is undertaking to mitigate the challenges and take

advantage of the opportunities of Brexit and identify additional activities or areas of

focus

Background

The LEP, Norfolk County Council and Suffolk County Council commissioned consultants Metro

Dynamics to assess the potential impact of Brexit on the region’s economy, focusing on the

potential challenges and opportunities across different economic sectors and identifying

individual companies that might be significantly affected.

The attached report has been developed as a result of this work and this paper provides a high-

level summary of the key points.

Main Report

The report presents a detailed analysis of the potential impacts of Brexit on six sectors that are

particularly exposed to Brexit in Norfolk and Suffolk - Agriculture, Manufacturing, Construction,

Offshore wind energy, Digital and Life Sciences.

The report considers the impact of Brexit specifically on the workforce, trade, regulations and

funding for each of these sectors.

It also poses a set of challenges and opportunities for Norfolk and Suffolk in relation to Brexit,

identifying a key role for the LEP and partners in supporting local businesses and institutions to

secure the skills and funding needed to grow, internationalise and innovate - in line with the

Government’s Industrial Strategy.

The report also proposes that the LEP, as well as local authorities, should be more proactive in

engaging with businesses pre and post-Brexit to ensure that they are well-placed to address

any future challenges.

It concludes with a set of policy recommendations to help inform the LEP and local authorities

on the strategic approach that they might take in the period ahead.

Key recommendations of the report include:

 Develop a local industrial strategy to further reinforce the sectoral specialisms that

Norfolk and Suffolk have, and to ensure that central Government is fully aware of the

contribution that those specialisations make to the national economy.

 Review and focus the LEP’s Growth Hub, Innovation Hubs and skills deal activity to

more proactively reach out to those businesses which could have opportunities for

growth and/or be more challenged by Brexit.

 Focus and strengthen place marketing and inward investment in order to reach out to

the people that need to be attracted and retained as well as the investment needed to

drive productivity.

 Attract large scale private sector investment in infrastructure and development, requiring

places to further focus their investment marketing activity and develop a very strong

place based story and proposition.

 Collaborate with other regions and sectors elsewhere where there is a common interest

in reaching out to new markets or designing new products.

New Anglia LEP Activity

In order to respond to the recommendations, the LEP executive has developed an initial eight

point Brexit action plan outlining our approach to taking forward the recommendations in the

report, in line with the implementation of our Economic Strategy.

Local Industrial Strategy. The LEP will use the opportunity to develop a Local

Industrial Strategy to reinforce the sectoral specialisms of Norfolk and Suffolk, building

on the work of the Science and Innovation Audit and wider evidence base. We are

actively pursuing the opportunity with Government to be a pilot area.

Developing our sector and innovation strengths. As part of this process we are

working with the national Knowledge Transfer Network and Smart Specialisation Hub to

improve the way innovation and sectoral specialisms are mapped nationally. The

limitations of the data that is used means strengths within Norfolk and Suffolk sectors

are not recognised nationally. We are also working with them on developing a cluster

evidence pack which will support our cluster development. We will pilot this with the

view for it to be scaled up across the UK. This will place us is a good position to respond

to the Industrial Strategy Strengths in Places fund when it is launched later this year.

Driving Inward Investment and place marketing. The LEP is leading on the

development of a shared inward investment strategy which is due to be presented to the

LEP Board in May. This strategy will aim to enable integrated inward investment and

business location offer and will include activity around building a stronger place offer

and proposition to help attract new infrastructure investment and non-EU Foreign Direct

Investment.

Gathering intelligence. James Allen joins the LEP Executive team later this month

from the CBI. His role includes building business intelligence which includes working

with local partners on impacts of Brexit on businesses. This intelligence is regularly fed

into Government.

Championing local business. The LEP is developing a range of case studies which

championing local "trail-blazers" and actively promote them through national, regional

and local opportunities. These will be presented in a range of ways including videos,

blogs, leaflets and report interviews.

1. Introduction

Introduction

The councils of Norfolk and Suffolk, together with New Anglia LEP, have

▪ Trade - including future arrangements after the expected departure of the UK

commissioned Metro Dynamics to assess the potential impact of Brexit on the

from the European Single Market.

region’s economy, focusing on the potential challenges and opportunities across

▪ Regulations - in regards to the many EU directives incorporated into UK law.

different economic sectors and identifying individual companies that might be

significantly affected.

▪ Funding and Investment - including the role of European funds and subsidies

and the capacity to continue to attract foreign private investment.

This report presents the findings of a detailed analysis of the potential impacts of

Brexit on six economic sectors that are particularly exposed to Brexit in Norfolk and

Our approach has been to identify local economic strengths, based on an analysis of

Suffolk, as agreed with the Steering Group. It is part of a broader research process,

Norfolk and Suffolk’s employment patterns and companies, to sit alongside analysis

undertaken over several stages and in close consultation with our clients. This

of the sectoral impacts of Brexit, which are often reflective of national trends.

process is illustrated in the diagram on the next page.

Although considerable uncertainty remains on the specific outcomes of Brexit, this

Following a background analysis of the key economic and policy implications of

report identified a set of challenges and opportunities for Norfolk and Suffolk,

Brexit at the national level based on recent studies and the Government’s position,

including:

we produced a high-level assessment of potential impacts in Norfolk and Suffolk on

▪ Retaining the current EU workforce, both low and highly skilled, who are key to

19 different sectors. These were drawn from the strategic sectors identified in the

the future success of some of Norfolk and Suffolk most important sectors, such as

Norfolk and Suffolk Strategy and other prominent sectors in the Norfolk and Suffolk

agriculture, manufacturing, construction and life sciences.

economy. Building on the findings of this work, we agreed with the Steering Group a

set of six sectors for a more detailed analysis: Agriculture, Manufacturing,

▪ New opportunities to uplift the economy, using innovation and technology to

Construction, Offshore wind energy, Digital and Life sciences. The analysis was

upskill the workforce and create better paid jobs.

complemented by research into significant Norfolk and Suffolk companies operating

in these sectors.

▪ The need for companies to adjust to new trade arrangements and potential tariffs

and other barriers, while using the opportunity to increase the UK share of their

Naturally, the impact of Brexit is not limited to the chosen sectors. As such, the final

supply chains and open their products to new markets worldwide.

six sectors and the extent to which they were aggregated (for instance by choosing

to focus on Offshore wind rather than the wide energy sector more broadly), were

▪ The importance of ensuring continued funding for research and development and

selected on the basis of: (1) their particular significance to the Norfolk and Suffolk

innovation, as well as alternative sources of funding for agriculture and farming

economy (both in terms of employment and value added); (2) the likelihood of their

businesses that often rely on EU subsidies.

being highly impacted by Brexit; and (3) their strategic importance to Norfolk and

▪ The need to continue to be attractive to foreign investment.

Suffolk. This was determined in consultation with the Steering Group.

The LEP could have a key role in this process, supporting local businesses and

The analysis presented here focuses on these six sectors and considers potential

institutions in securing the necessary skills and funding to continue to grow,

challenges and opportunities brought about by the impact of Brexit on:

internationalise and innovate, in line with the National Industrial Strategy.

▪ Workforce - including the EU labour force and the potential impacts of Brexit on

immigration patterns.

2. Sectoral impacts of Brexit in Norfolk and Suffolk

Agriculture

Table 1: Crop hectarage in East of England as a percentage

Agriculture is a crucial sector in the economy of Norfolk and Suffolk. The region is not only strong in

of total hectarage in England (2016)

in crop farming and animal production, but also in the strong supply chains these agricultural

sectors provide to other local sectors of specialism, particularly manufacturing of food, beverages

East of England: percentage

and machinery.

Crop

of total national hectarage

The last official data shows that 16,160 Norfolk and Suffolk residents work in Agriculture, forestry

Wheat

28.0

and fishing, which amounts to 2.2% of the region’s workforce, a much higher share than the 0.8%

in England (ONS, 2011). Even when farm agriculture activities are excluded, Agriculture, forestry

Barley

21.4

and fishing composes 2.8% of the GVA produced in Norfolk and Suffolk, compared to a figure of

0.7% for the whole of England excluding London (ONS, 2015). Important sub-sectors for Norfolk

Oilseed rape

24.7

and Suffolk include the production of sugar, malt, poultry and pork, and potatoes.

For the broader East of England region, the Department for Environment, Food and Rural Affairs

Sugar beet

65.6

estimates a total of 40,698 jobs in agriculture, including short-term and seasonal workers. This

region accounts for 13.4% of farming jobs in England, and, as Table 1 shows, sugar beet and

Potatoes

32.3

potatoes are the of two most significant crops. In fact, the East of England grows 32.3% of

England’s total potato crop and 65.6% of England’s sugar beet crop (Defra, 2017).

Field grown vegetables

28.8

Sugar beet production is particularly important in Norfolk and Suffolk as the LEP area is home to

three of the largest sugar manufacturing facilities in the UK: Wissington, Bury St. Edmunds and

Cantley. According to British Sugar (2017), these facilities employ 335, 230 and 180 workers

respectively and together make use of over 1,900 suppliers growing sugar beet across the wider

Table 2: Large Agriculture companies in Norfolk and

region.

Suffolk (examples)

Company

Location

Growing cereals for the production of malt is also significant in Norfolk and Suffolk, due to the

area’s favourable growing conditions (NFU, 2016b) and links to the regional specialisation in

Cofco International UK

The Havens, Ipswich

beverage manufacturing. Furthermore, East Anglia has the second largest number of pigs in

Hutchinson Group

Hunstanton

England.

Banham Group

Attleborough

In Agriculture, forestry and fishing, 10% of workers in the UK are EU nationals (36,000) according

Heathpatch

Semer, Ipswich,

to data from the Annual Population Survey (ONS, 2017). It is important to note that the sample

used in this survey does not account for short-term or seasonal workers.

Traditional Norfolk Poultry

Shropham, Attleborough

Lawson Partners

Stadbroke

H.G. Gladwell & Sons

Copdock, Ipswich

2. Sectoral impacts of Brexit in Norfolk and Suffolk

Brexit impact on Agriculture

Trade

Regulations

The agricultural sector is likely to be significantly impacted by Brexit, as it is highly

EU rules regarding marketing standards and product safety apply for products sold

reliant on trade with EU countries. In 2016, 73.3% of UK exports of agricultural

on the EU market, even for non-EU imports, so continued adherence to these is

products were to the EU (ONS, 2017). According to the CBI (2016), this is likely to

essential (NFU, 2016a). Regulatory stability and certainty will be necessary to ease

continue due to the difficulty of transporting perishable goods, which would impede

trade in agricultural products (CBI, 2016).

trade further afield.

However, changes to EU regulations may bring positives by allowing the UK to

Given this dependence, UK agricultural exports would be particularly vulnerable to

establish its own domestic regulatory policy (ibid.). For example, in an article by the

the introduction of trade barriers such as tariffs. On average, tariffs are 36% on

Managing Director of British Sugar, Paul Kenwood (2017) writes that Brexit provides

dairy products, 20% on animal products and 10% for fruit and vegetables. This

the chance to design a sugar policy which benefits the UK’s domestic industry. The

would reduce competitiveness vis-a-vis EU countries. As the agricultural sector in

EU-imposed quota system has previously controlled the quantity of sugar produced in

Norfolk and Suffolk is intrinsically linked to other sectors, most notably food and

and sold by the UK (British Sugar, 2017), so that, for instance, when there was a

drink manufacturing, trade barriers to agricultural products could have deleterious

surplus crop in 2015, it could not be sold on the UK, EU or world markets (Kenwood,

effects on interconnected sectors (CBI, 2016).

2017). In October 2017, this quota system will be revoked (British Sugar Beet

Review, 2017).

To mitigate this, Paul Kenwood (2017), the Managing Director of British Sugar, has

stated that he would wish for any tariffs which act as barriers to trade with Ireland,

In the case of regulatory changes to the wider agricultural sector, new policies will

France and Italy to be matched by reciprocal tariffs to protect the thriving British

need to ensure that favourable access between the UK and EU markets is

sugar beet industry.

maintained.

Despite the relative dependency of the UK agricultural system on the EU, the

sector could become more open looking. Brexit offers the UK the opportunity to

expand its exports globally. This optimism is shared by British Sugar (2017),

particularly given the removal of the quota system, as will be discussed in the

following section.

2. Sectoral impacts of Brexit in Norfolk and Suffolk

Brexit impact on Agriculture

Workforce

Funding and investment

A restriction on the free movement of people in the EU is highly likely to affect the

The main source of funding for the agricultural sector comes from the Common

agricultural sector in Norfolk and Suffolk.

Agricultural Policy (CAP), which has become central to the agricultural sector in the

UK. The aim of CAP is to address the failure of agricultural markets in delivering fair

Agriculture is a labour-intensive sector which is reliant upon both full-time and

incomes to farmers by helping farmers deal with market volatility and to buffer them

seasonal EU labour. Between April 2016 and March 2017, 10% of the workforce

against shocks.

(36,000 people) were non-UK EU nationals (ONS, 2017). This figure is unlikely to

In 2015 alone, farmers in the UK received €3.084 billion in direct payments (NFU,

account for temporary and seasonal workers, as it is from the Annual Population

2016a). On average, these payments contribute 55% of the total income from farming

Survey, which uses a sample of UK residents.

(CBI, 2016). CAP payments enable farmers to meet the higher cost associated with

higher welfare and environmental standards, without which many farms would be

UK agriculture’s reliance on seasonal EU labour derives from many farms’ inability

unable to survive (NFU, 2016a).

to recruit sufficient domestic workers (NFU, 2016a). According to the National

Farmer’s Union Deputy President Minette Batters, “…80,000 seasonal workers

Alongside CAP subsidies, the UK was allocated €5.2 billion for rural development

plant, pick, grade and pack over nine million tonnes and 300 types of fruit,

projects between 2014 and 2020 (NFU, 2016a). These funds are used to support

vegetable and flower crops in Britain every year” (NFU, 2017). This underlines the

increased farm productivity, micro/small enterprises and farm diversification, rural

extent to which the official estimate of 36,000 EU workers diverges from the

tourism, rural services, cultural and heritage activities, and forestry productivity, and

will no longer be available after the current funding round ends in 2020.

number of seasonal workers in reality.

This reliance on EU labour applies to Norfolk and Suffolk. Across the region,

thousands of Eastern European workers pick fruit, vegetables and salads. A

supply of both seasonal and permanent workers is similarly important to poultry

and pig farming (NFU, 2017).

Without access to a ready supply of relatively cheap EU labour and absent desire

among UK nationals for agricultural work, farms may find it difficult to locate

sufficient work for the season. Labour shortages may reduce the production and

growth of UK farms, necessitating increased imports and price rises (Smithson Hill,

2017).

2. Sectoral impacts of Brexit in Norfolk and Suffolk

Table 3: Top Manufacturing sub-sectors in employment

(Norfolk and Suffolk, 2015)

Manufacturing

Main SIC-2 sub-sectors

Number of jobs

Food products

13,681

Norfolk and Suffolk has a wide and diverse manufacturing sector employing over 61,000 workers.

Fabricated metal products

6,820

Manufacture of food products is by far the largest sub-sector, employing 13,681 people. Half of

these jobs are concentrated in production and processing of poultry meat (detailed analysis on

Machinery and equipment

6,452

page 9), an area of high employment growth and specialization in Norfolk and Suffolk. Firms

Rubber and plastic products

5,883

operating in the area include Bernard Matthews, Tulip and 2 Sisters Food Group. Manufacturing of

beverages is also an area of high local specialisation that employs over 2,000 people in Norfolk

Printing/reproduction of recorded media

3,122

and Suffolk. Most of these jobs are in beer manufacturing, with Adnams based in Southwold and

Motor vehicles

2,833

Greene King in St Edmundsbury. In addition, Aspalls, based in Mid Suffolk, drives local strength in

the production of cider, Muntons, a major malt exporter, is based in Stowmarket, and Britvic,

Chemicals and chemical products

2,707

located in Norwich, is an important soft drinks manufacturer. Other significant food products

produced in the region include prepared meals, cocoa and chocolate, condiments and animal

Furniture

2,584

feeds. Finally, the manufacture of sugar also has a large workforce in the area through the British

Wood products

2,456

Sugar manufacturing facilities in Wissington, Bury St. Edmunds and Cantley.

Beverages

2,272

Other important sub-sectors in terms of employment include the manufacture of fabricated metal

products, machinery and equipment, and rubber and plastic products - all with more than 5,000

Total Manufacturing

61,017

jobs in Norfolk and Suffolk. The manufacture of metal products primarily involves metal structures

for industrial use, structures and elements for the construction industry and machining. Machinery

and equipment includes non-domestic cooling and ventilation equipment and agricultural and

forestry machinery. Plastic and rubber manufacture encompasses a broad range of products,

Table 4: Large Manufacturing companies in Norfolk and

including packing goods and plastic elements for construction.

Suffolk (examples)

Other manufacturing sub-sectors with more than 2,000 jobs in Norfolk and Suffolk include the

Company

Location

printing and reproduction of recorded media, manufacture of motor vehicles (eg. Hethel

Engineering Centre), chemicals, and furniture and wood products. Finally, the manufacture of

Greene King

Bury St Edmunds

pharmaceuticals is also an important sector for Norfolk and Suffolk. Although not amongst the top

Forfarmers UK

Bury St Edmunds

manufacturing sub-sectors in terms of employment (with just below 1,000 jobs), the concentration

Baxter Healthcare

Thetford

of pharmaceutical jobs in Norfolk and Suffolk is 17% higher than in Great Britain. This sector is key

for innovation in manufacturing based on high-skilled and high-wage jobs. Pharmaceutical

Bosch Lawn And Garden

Stowmarket

companies in Norfolk and Suffolk include Baxter Healthcare, in Thetford, and Genzyme, in

Direct Table Foods

Little Saxham

Haverhill.

British Sugar

Wissington; Bury St. Ed.; Cantley

Palm Paper

King’s Lynn

Bernard Matthews

Norwich

Tulip

Stadbroke

2 Sister Group

Thetford

2. Sectoral impacts of Brexit in Norfolk and Suffolk

Manufacturing

Figure 1 maps the spatial distribution of manufacturing jobs in Norfolk and Suffolk.

Overall, it shows that jobs in the manufacturing sector are fairly dispersed across the

whole area of Norfolk and Suffolk. Nonetheless, the following areas have particularly

high concentrations of jobs in manufacturing:

No.

SIC-2 sub-

Figure 1: Spatial distribution of manufacturing jobs in Norfolk and Suffolk (2015)

Geographic area

jobs

sectors

Example companies

Paper and paper

Palm Paper, Cooper

King’s Lynn and

products;

Roller Bearings

surrounding

3,752

machinery and

Company, A T

area

equipment

Promotions

Pharmaceuticals;

Baxter Healthcare, Trox

Thetford

3,216

fabricated metal;

UK, Advanced Air (UK),

rubber and plastic

Camvac

A144 between

Bungay and

2,816

Food products

Cleveleys Foods

Halesworth

Silk Industries, 4 BG

Sudbury

2,135

Textiles

Group, Walters Holdings

Pharmaceuticals;

computer,

Genzyme, IFF, Herbert

Haverhill (East)

2,125

electronic and

Group

optical products

Chemicals and

Stowmarket

PPG Industries (UK),

1,417

chemical products;

(South East,)

Muntons

beverages

Between

Dereham and

1,324

Beverages

Broadland Wineries

Aylsham

Machinery and

equipment;

Fakenham

1,256

PMC Harvesters, P4

electrical

equipment

Hethel

Lotus, MSF

Engineering

1,185

Motor vehicles

Technologies, Multimac

Centre

2. Sectoral impacts of Brexit in Norfolk and Suffolk

Brexit impact on Manufacturing

Regulations

Trade

Manufactured products account for 89.8% of total goods exports and 91.0% of

The EU determines many manufacturing regulations and laws which are

total goods imports in the UK, and UK-EU trade is substantial. In 2016, the EU

standardised across EU member states. EU laws and regulations apply to many

share of exports in manufactured products was 47.7%, whilst the EU share of

different legislative areas, including product safety, employment, health and safety,

imports was 57.7% (ONS, 2017). Manufactured goods move along complex

and environmental and consumer protection (EEF, 2016b). Regulatory compliance is

central to trade and investment agreements, particularly as many EU laws (for

supply chains which operate across the EU. The UK is reliant on exports to the

EU, and the interdependency of companies along the supply chain in the single

example those concerning labour markets and health and safety) have been

market means that the any imposition of tariffs would increase costs for

integrated into domestic law (ibid.). For instance, exports of manufactured goods are

manufacturers (CBI, 2016).

subject to various regulations and standards, which facilitates their easy trade

between EU countries (CBI, 2016). In order to continue trading in the EU, UK

The fall of the value of the pound post-Brexit has impacted trade of manufactured

manufacturers would have to conform to EU product safety and product standards

goods in different ways, and sterling appears set to remain weak. Firstly, this has

(EEF, 2016b). Therefore, it is recommended that the UK continue to comply with

increased the cost of imported manufactured products (Tait Walker, 2016).

certain legislations, such as employment and health and safety regulations, in order

Auditors Creaseys believe that this may boost the UK domestic market, as

to maintain stability. However, the UK may opt for a more flexible legislative and

companies are forced to source nationally. Secondly, the weak pound cheapens

regulatory framework, which is independent of the EU (ibid.).

exports, making UK exports more competitive.

The pharmaceutical sub-sector is highly regulated by the EU, consisting of both

The UK pharmaceuticals sector trades a lot with the EU. A total of 44% of UK

regulations, guidelines to be followed by national governments, and directives, which

exports are to the EU. Supply chains in pharmaceuticals operate across borders,

are integrated into domestic law (Bird and Bird LLP, 2017). Prevalent at multiple

which has raised fears of trade barriers at various stages of production. In the EU,

stages of production, the EU has harmonised regulation in the following areas:

there are no import tariffs on pharmaceuticals; however, tariffs exist on raw

clinical trials, pharmacovigilance, joint procurement, marketing authorisations, data

materials and machinery, which, if imposed, would increase production costs

flows and intellectual property (ibid., Simmons and Simmons LLP, 2017). Continued

(CBI, 2016). It is unclear whether the UK will be able to negotiate favourable

regulatory alignment would enable UK medicines to be sold in the EU. It is

terms of trade for these items (Simmons and Simmons LLP, 2017).

particularly important that manufacturing standards and safety regulations are

consistent (PwC, 2016b), as non-compliance would affect UK pharmaceutical

Concerning poultry and meat processing, less than 25% of British meat is

companies’ competitiveness if their products were perceived to be of lower standard

exported (Global Meat News, 2016); however the EU is the UK’s most important

than those produced in the EU (Norton Rose Fulbright, 2016a). Outside of the EU,

export market. In 2016, exports of preserved meat and meat products to the EU

the freedom of pharmaceutical companies to assert intellectual property rights could

comprised 78.1% of total exports (ONS, 2017). For poultry, it is primarily ‘dark

prevent parallel importation into the UK (Bird and Bird LLP, 2017).

meat’ (thighs and legs) that is exported, while ‘white meat’ (breast and wings)

serves the domestic market (FWI, 2016). Estimates suggest that tariffs would fall

Similarly, EU regulations dictate the terms of trade in poultry and meat processing.

between €187-1,283 per tonne of poultry meat or €1,024-2,765 per tonne of

The majority of export health certificates and trade agreements have an EU

processed poultry meat. Given the disparity in domestic demand for ‘dark’ and

dimension (Jean-Pierre Garnier, Head of Exports at AHDB Beef and Lamb, Global

‘white’ meat, a fall in exports of dark meat precipitated by the imposition of tariffs

Meat News, 2016). The UK has health certification agreements with over 100

would result in its overproduction, severely damaging poultry manufacturers’

countries (FWI, 2016), demonstrating the importance of EU regulation for trade

profitability (ADBH, 2016). A failure to impose tariffs or quotas on imports or form

globally, not only with other EU member states. As with manufacturing, it is deemed

free trade agreements with other countries may flood the domestic market with

preferential for regulatory compliance to be maintained in order to ease trade.

cheaper global imports (ibid.), further damaging the domestic industry.

2. Sectoral impacts of Brexit in Norfolk and Suffolk

Brexit impact on Manufacturing

Funding and Investment

Workforce

As with agriculture, manufacturing is reliant on EU labour. Sector-wide in the UK,

EU funding is integral to maintaining a dynamic and innovative manufacturing sector

between April 2016 and March 2017, 10.9% of the workforce (318,000 people)

in the UK. In 2015, the majority (68%) of Research and Development expenditure in

were non-UK EU nationals (ONS, 2017). A survey conducted by CBI in 2016

the UK was channelled to manufacturing (CBI, 2016). A number of specific schemes

found that nearly two-thirds of manufacturing companies surveyed anticipated

have benefitted the sector and driven innovation. Between 2007 and 2013, €7 billion

recruitment problems in the immediate future.

was granted to the UK as part of the EU Framework Programme 7 (FP7), €1.2 billion

of which was used to support around 10,000 companies (with the majority used for

Underlying the need for EU workers in manufacturing in the UK is a long-standing

skills gap, rooted in disparities between the skills provided by education/training

education/training) (EEF, 2016b). Under Horizon 2020, the UK was the second

and those required by employers (EEF, 2016a). A report presented at the

largest recipient of funding of all EU countries, totalling €1.8 billion, with 22% directed

National Manufacturing Debate, an annual conference for the manufacturing

to businesses (ibid.). Locally, EU funding has been important, as the Hethel

industry, listed shortages in technical skills, such as robotics, artificial intelligence,

Engineering Centre is funded by the EU Regional Development Fund. Losing

software, data analysis, and electrical/electronic engineering (Cranfield

eligibility for these funds may damage UK manufacturing’s long-term vibrancy and

University, 2017). Responding to these shortages is the common practice of

competitiveness.

moving highly-skilled engineers at short notice across the EU, which may be

threatened by the end to freedom of movement (CBI, 2016).

Foreign investment also maintains the health of the sector. Manufacturing receives a

relatively low share of foreign direct investment (FDI); however, it is vital to boosting

Furthermore, Brexit may result in the movement of manufacturing away from the

UK. The increased reliance upon UK workers could lead to higher wages,

productivity through efficiency improvements and the development of new products.

however as UK workers generally expect to be paid more than their EU

Therefore, lower levels of investment would diminish potential future productivity

counterparts, companies may choose to move their operations abroad where

gains (Beck, 2016). In a letter from the Japanese government to the UK and EU, the

labour costs are lower.

sustainability of inward investment and continued presence of European

headquarters of Japanese companies was called into question (Andy Neely, Head of

The EU workforce is also important in pharmaceuticals. Multinational

the Institute for Manufacturing at Cambridge University, 2016). The impacts of this

pharmaceutical companies in the UK often draw on an international talent base

(PwC, 2016b). Skilled workers, mainly from the EU, are seen to have been key to

have already been felt in the auto industry, which experienced a 30% decrease in

the strength of UK pharmaceutical research and development (Bruegel, 2017b).

investment in 2016 compared to the previous year (Campbell, 2017).

Restricted freedom of movement may encourage companies to relocate to an

alternative EU country with easier access to EU labour, and the UK may become

EU funding has been central to the development of the UK as a centre of

a less attractive destination for highly-educated EU workers (ibid.).

pharmaceutical research and development, particularly given as the UK is the largest

beneficiary of EU funding (Bruegel, 2017b). Key funds for this sector include the

Typically referring to a lower skills set, industries relating to the manufacturing of

Innovative Medicines Initiative and Horizon 2020 (Bird and Bird LLP, 2017). In the

food products rely heavily on EU migrant labour. EU workers represent 30% of

face of funding uncertainty, UK multinationals may move their research projects

the labour force in the food production sector and 60% in the poultry meat

outside the UK to ensure continued access to funding streams or change their lead

industry, according to the British Poultry Council Chief Executive, Richard

Griffiths (Open Britain, 2017). Sourcing these jobs domestically is considered

team (PwC, 2016b). Furthermore, international firms may be reluctant to invest in

problematic due to their perceived undesirability (AHDB Pork, 2016).

research and development projects in the UK (UNESCO, 2016).

The impact of EU funding post-Brexit in poultry and meat processing are likely derive

from the agricultural sector. If CAP payments were removed from farms without a

replacement scheme designed and implemented by the UK government, this could

result in farm closures or lower levels of output, impacting the supply of meat to

process.

2. Sectoral impacts of Brexit in Norfolk and Suffolk

Construction

The construction sector is strong and diverse in Norfolk and Suffolk, employing just under

Table 6: Top construction sub-sectors in employment

50,000 people across a wide set of specialisms. Construction activities in Norfolk and Suffolk

(Norfolk and Suffolk, 2015)

are mainly related to the general construction of buildings and infrastructure and to the more

specialized construction and engineering activities of the energy sector, comprising offshore

Main SIC-2 sub-sectors

Number of jobs

wind, oil and gas.

Specialised construction activities

22,183

As shown in Table 6, there are 22,183 jobs in specialized construction activities in Norfolk and

Suffolk. Most of these jobs are related to building construction, including electrical installation

Construction of buildings

12,629

(4,800 jobs), plumbing, heating and AC (3,800 jobs), and joinery and building finishing (both

Architectural and engineering activities;

with roughly 2,600 jobs). Together with construction of buildings (12,629 jobs), these activities

8,781

technical testing and analysis

form the core of the construction industry related to building construction. However, there are

2,300 more specialized construction activities based in the area, focusing on different types of

Civil engineering

6,176

structures and requiring specialized skills or equipment. These include activities related to the

offshore wind, oil and gas energy sector. Derrick Services (specialized in drilling), East Coast

Total Construction

49,769

Pipe and Fittings (piping services and equipment), and CLS Global Solutions (engineering,

project management, fabrication and personnel services), all based in Great Yarmouth, are

examples of companies working in this sector.

Architectural and engineering activities, technical testing and analysis employs 8,781 people in

Table 7: Large construction companies in Norfolk and

Norfolk and Suffolk and also includes activities related both to building construction (e.g.

Suffolk (examples)

architectural and engineering design and consulting activities) and to the offshore energy

Company

Location

sectors (e.g. technical testing and specialised engineering design and consulting). Gardline, a

marine surveying business providing geotechnical services to the offshore wind, oil and gas

R.G. Carter Construction

Drayton, Norwich

sectors, and 3Sun Group, which provides skilled technicians for installation, inspections,

Anglian Windows

Norwich

operation and maintenance of wind turbines, and other services to the oil and gas industry, are

examples of companies in this sector, both based in Great Yarmouth.

One Group Construction

Ipswich

Hopkins and Moore (Developments)

Melton, Woodbridge

Finally, civil engineering activities employ 6,176 people in Norfolk and Suffolk. The principal

activities are construction of roads and motorways and other civil engineering projects such as

Derrick Services (UK)

Great Yarmouth

industrial facilities (except buildings) and outdoor sports and leisure facilities.

East Coast Pipe and Fittings

Great Yarmouth

CLS Global Solutions

Great Yarmouth

Gardline Shipping

Great Yarmouth

3Sun Group

Great Yarmouth

2. Sectoral impacts of Brexit in Norfolk and Suffolk

Brexit impact on Construction

Trade

Regulations

Trade is not the most significant aspect of Brexit impact in the construction sector.

Regulatory change following Brexit may be of less concern. According to Burges

According to Sarah McMonagle, director of external affairs at the Federation of

Salmon (2016), EU law has minimal presence in the construction sector. Instead, its

Master Builders, only 25% of construction materials are imported (Allen, 2017).

regulatory framework is a combination of UK and EU-directed legislation.

Nevertheless, the EU is an important trading partner. According to a 2010 study

Areas of regulation where the EU is influential include working conditions, climate and

conducted by the Department of Business Skills and Innovation (Designing

the environment, health and safety, and import standards (CBI, 2016). In many

Buildings, 2017), the EU is the origin of 64% of imports and destination for 63% of

cases, the UK chooses to conform to EU standards. For legislation relating to

exports in building materials. Furthermore, of the top four countries from which

construction materials, continued compliance will be necessary to maintain ease of

the UK imports (Germany, China, Italy and Sweden), three are in the EU

trade (CBI, 2016; Designing Buildings, 2017). It is unlikely that altering construction

(Shepherd and Wedderburn, 2016).

legislation and standards will be a priority (Burges Salmon, 2016).

Loss of access to the single market will have a significant impact on the industry.

In some instances, EU directives have been fully integrated into UK law. The most

If duties or complex restrictions were placed on materials, this may cause

significant of which, according to Burges Salmon (2016), are Construction Design

shortages (Designing Buildings, 2017) or delays in importing and exporting

and Management (CDM) Regulations (CMS, 2016) and Energy Performance of

essential resources (Gateley PLC, 2016). Consequently, materials will become

Buildings (Eversheds-Sutherland, 2016). The repeal or dilution of EU directives is

more expensive, increasing the cost of construction, affecting both construction

possible in the long term (ibid.). Fisher Scoggins Waters (2016) state that if the UK

companies and those who use their services (Paul Manchester, Manchester

were to establish its own domestic policy, this could reduce the costs associated with

Safety Services, Builder and Engineer, year unknown). The weakness of the

complying with EU directives. Deregulation of this type could make the UK seem

pound has already contributed to increased material costs (Scape Group, 2017).

more attractive to investors (Ashfords, 2016).

2. Sectoral impacts of Brexit in Norfolk and Suffolk

Brexit impact on Construction

Funding and Investment

Workforce

Construction is considered to be one of the largest beneficiaries of EU funding

The construction sector is highly dependent upon the free movement of workers

from the EU. Both unskilled and skilled positions are filled by EU migrants

(Fisher Scoggins Waters, 2016). It is funded both by the European Investment Bank

(Builder and Engineer, year unknown). There are high numbers of non-UK EU

(EIB) and European Investment Fund (EIF) and has access to the European

nationals working in the sector, accounting for 8.8% of the workforce between

Structural Investment Fund (ESIF), European Regional Development Fund (ERDF)

April 2016 and March 2017 (ONS, 2017). RICS (2017) have shown that the

and Joint European Support for Sustainable Investment in City Areas (Jessica). In

sector could lose 176,500 workers should restrictions be placed on freedom of

2015, the EIB and EIF together invested €7.8 billion in UK infrastructure projects

movement.

(CBI, 2016). This is important for construction, as much of the sector is involved in

the engineering, construction and design of infrastructure projects. These institutions

The main reason for the reliance on skilled EU workers, who are typically from

Eastern European countries (Fisher Coggins Waters, 2016), is the failure to

also lent €665.8 to SMEs in 2015 (Designing Buildings, 2017).

recruit from the domestic market due to a skills shortage within the sector

The future sustainability of funding is of vital importance to the sector’s continued

(Eversheds Sutherland, 2016).

success, particularly for infrastructure projects (CBI, 2016) and regeneration projects

Restrictions on migration are likely to have broad implications for the construction

(Ashfords, 2016), and may also impinge on the ability of start-ups to emerge and

sector. Firstly, it may impact wages and costs. The increased demand for skilled

thrive in the market (Designing Buildings, 2017). Existing UK contributions to these

workers may drive up wages, resulting in higher project costs (Eversheds

funds could be directed to infrastructure projects (Ashfords, 2016), however, Fisher

Sutherland, 2016). Monika Slowikowsa, Founder of Golden House

Scoggins Waters (2016) suggest that projects may consequently receive funding for

Developments, predicts that labour costs may rise by 15-20. If labour demand

political reasons rather than based on merit.

supersedes supply, project costs may increase, eventually impacting the

fulfilment of housing targets (Designing Buildings, 2017). Higher material import

In the short-term, the weak pound has attracted international investment (Savills,

costs and labour costs are forecast to cost the sector £570 million (Scape Group,

2017).

2016a), but in the long term, the construction sector will likely suffer from the subdued

private investment climate post-Brexit. Of particular concern is a reduction in foreign

Secondly, it may have implications for the productivity and dynamism of the

investment in commercial and residential development (Norton Rose Fulbright,

sector. A weaker workforce may reduce the capacity of house builders, further

2017a). There is predicted to be a 30-40% decline across the country in commercial

contributing to an increase in costs (Gateley PLC, 2016). Another impact may be

that a lack of skilled labour results in project delays (Eversheds Sutherland,

developments over the next five years (Savills, 2016b). Infrastructure projects will

2016). Uncertainties over workforce numbers have already begun to impact

also be impacted. A study conducted by EY showed that Brexit has reduced the UK’s

companies’ willingness to bid for future projects (CBI, 2016).

long-term attractiveness to foreign investors (Construction News, 2017). Overall, this

will likely cause an economic slump in the industry.

More optimistically, UK workers may benefit from reduced competition for jobs

and access to larger selection of roles within the industry (Builder and Engineer,

year unknown). Without migrant workers to fill vacancies, a skills shortage may

fuel investment in training and upskilling (Ashfords, 2016).

2. Sectoral impacts of Brexit in Norfolk and Suffolk

Offshore wind energy

Norfolk and Suffolk have a strong and diverse offshore wind sector, and the region is key to

upholding the UK’s status as the world leader in offshore wind in hosting almost 70% of the

UK’s offshore wind capacity.

Table 8: Large offshore wind energy companies in

There are several offshore wind farms located off the coast of the two counties, including

Norfolk and Suffolk (examples)

Sheringham Shoal (17-23 km north of Sheringham), Scroby Sands (2.5km off coast of Great

Company

Location

Yarmouth) and Greater Gabbard (23km off the coast of Suffolk). The farms create jobs while

under construction and also thereafter in their long-term operation and maintenance.

Scira Offshore Energy

Walshingham

Sheringham Shoal created 50 permanent jobs, whilst Greater Gabbard created 100 permanent

Scroby Sands Operations and

Great Yarmouth

jobs with 95% employed from the local area.

Maintenance Facility

Greater Gabbard Operations Base

Lowestoft

Other projects are currently in the planning and construction phase. Vattenfall are planning to

Gardline Shipping

Great Yarmouth

develop Norfolk Vanguard, which will be one of the largest offshore wind farms in the UK. Its

sister project, Norfolk Boreas, will be of a similar size. It is likely that the two projects combined

(more examples on next page)

will require 160 technicians and managers by the mid-2020s. The Galloper wind farm is

currently under construction, creating up to 700 jobs in the process and leaving 90 permanent

jobs in operations thereafter. Furthermore, Dudgeon wind farm is also currently under

construction and will be fully operational at the end of 2017, employing a further 70 people.

A wider economy surrounds the windfarms. Local companies are present at all stages of the

supply chain, offering a range of support services integral to the functioning of the farms. They

focus mainly on supply, installation, commissioning, operations and maintenance. Typically,

these companies are located in coastal areas so as to be in close proximity to other marine

services, ports and the wind farms themselves. Particular clusters exist in Great Yarmouth and

Lowestoft.

Figure 3 on the following page illustrates the presence of companies across the supply chain.

2. Sectoral impacts of Brexit in Norfolk and Suffolk

Offshore wind energy

Figure 3: Location of significant wind energy companies and supply chains in Norfolk and Suffolk

Construction/

Engineering/

Operations

Installation

maintenance

Manufacture/

Construction

Logistics/

Engineering/

Operations

Consultancy

Statoil (Scira Offshore

Supply

/ Installation

Marine

maintenance

Rotos 360

Rotos

360

Energy) Walsingham

Green Spur

Delpro Wind

Engie

James Fisher

Manor

renewables

CHPV

Fabricom

& Sons

Renewable

Offshore

Statoil

Rhenus

Energy

Energy Media

Offshore UK

Engie

Services

Osbit

Fabricom

Global Wind

World Cargo

Railstons

Service

Logistics

Global Wind

Fred Olsen

Service

Windcarrier

GWS

Statoil (Scoby

Seajacks

Statoil (Scoby

4C Offshore

Amec Foster

Sands)

Amec Foster

Wheeler

Amec Foster

Wheeler

CLS Global

Solutions

Manufacture/

Construction

Logistics/

Engineering/

Operations

Consultancy

Supply

/ Installation

Marine

maintenance

CTR Secure

DAP UK

GEV Offshore

Nautilus

Services

Associates

3Sun Group

Gardline

3Sun Group

Subsea

Greater

Marine

Moughton

Protection

Gabbard

Sciences

Engineering

Systems

Operations

ODE

Pharos

Base

Greater

Marine Sims

Gabbard

Systems

Operations

Base

2. Sectoral impacts of Brexit in Norfolk and Suffolk

Brexit impact on Offshore wind energy

Trade

Regulations

The UK is a net importer of energy (CBI, 2016) but leads the world in offshore

Much energy policy has been shaped by the EU, encompassing member states’

wind, therefore the country exports related services. These include cable

competitiveness, and security and environment policies (Chatham House, 2016).

Post-Brexit, the UK will no longer be represented by EU energy bodies (Allen and

installation, equipment repair and construction (Renewable UK, 2016). These

Overy LLP, 2016). The most likely outcome of this for the UK offshore wind sector will

services are exported worldwide to Europe, the USA and Asia - in recent years,

be the necessity for continued adherence to EU regulations absent UK influence over

UK offshore wind sector companies have won 115 contracts to build and service

their formation (RCG, 2016). In the long-term, the UK may choose to determine its

50 offshore wind projects abroad (ibid.). In a report by Renewable UK surveying

own regulations, but this may make the UK less competitive than other EU countries

36 companies (2017), the UK offshore wind sector had won contracts in 18

(ibid.). Regulatory changes are likely to impact business, funding and investment.

countries in 2016.

For instance, some contracts may have particular clauses which necessitate

This sector is considered to have great potential for growth in exports. It presents

continued compliance with EU law. For projects which have secured EU funding, it

an opportunity to form new markets abroad, which will be crucial after Brexit

may be necessary to align regulations, whilst future projects may have problems

(Renewable UK, 2017). The Government has recognised the sector’s promise

acquiring funding due to regulatory mismatches. Changes to rules surrounding

mergers, acquisitions and joint ventures, which are important given overseas

and even invited a delegation of senior Chinese figures to the UK to learn about

investors’ interest in the UK offshore wind sector, would also be significant. It is

offshore wind (Renewable UK, 2016). Post-Brexit, it is anticipated that exports will

possible that the UK will need to adopt rules corresponding to the EU Merger

become more competitive due to the weak pound and the falling cost of offshore

Regulation, otherwise EU-based investors would need to consider the application of

wind technology (Ambrose, 2017).

UK merger control rules as well as those of the EU (Norton Rose Fulbright, 2016b).

However, the UK’s status as an ideal location to access the European offshore

market, as claimed in a UK Trade and Investment (2015) publication, may be

called into question by the removal of the UK from the single market. As with

manufacturing and construction, the increased cost of importing materials and

parts could impact domestic capacity.

2. Sectoral impacts of Brexit in Norfolk and Suffolk

Brexit impact on Offshore wind energy

Workforce

Funding and Investment

One of the major existing challenges for the offshore wind sector relates to its

The development of the offshore wind sector in the UK has greatly benefitted from EU

workforce, as there is a shortage of offshore wind farm engineers in the UK

funding. EU funding and European Investment Bank (EIB) loans contribute approximately

(CBI, 2016). The Government’s Offshore Wind Industrial Strategy, published in

£2.5 billion per year to energy-related infrastructure, climate change mitigation, and

2013, identified a lack of skills as a major issue, particularly in engineering,

research and development (Chatham House, 2017). Specifically, EIB funding has made

offshore skills, technician roles and roles specific to the sector, such as

up a significant portion of wind farm construction costs, including the Galloper,

environmental analysis, lifting and helicopter/boat pilots. The general shortage

Sheringham Shoal and Greater Gabbard farms off the coast of Norfolk and Suffolk

of skilled engineers was identified as the driving factor. Other factors include

(Norton Rose Fulbright, 2016b).

competition from other sectors and the low profile of the industry; however, this

Another important source of funding is the European Fund for Strategic Investment

is likely to change as the sector grows.

(EFSI), which invests in energy infrastructure (Watson Farley and Williams, 2016). The

The offshore wind sector encompasses particular sub-sectors of construction

UK has received over €8 billion of EFSI funding, of which around a quarter has been used

and manufacturing, particularly given the importance of engineers, and is

to fund energy projects, including offshore wind projects (Chatham House, 2016).

therefore likely to face similar problems post-Brexit. Furthermore, it is

Furthermore, the European Research Council and Horizon 2020 has funded innovation

reasonable to assume that the skills shortage is likely to persist after the UK

and research and development in the energy sector (Watson Farley and Williams, 2016).

leaves Europe and may be worsened by companies finding it more difficult to

The UK is likely to lose eligibility for these funding streams upon leaving the EU, which

access EU labour.

may hold up the expansion of the sector. Watson Farley and Williams (2016) note that the

UK may be able to access the 12% of EIB funds for renewable energy projects allocated

to non-EU countries, however this does not compensate for lost access to larger funds.

The impact of Brexit on private investment in the sector is uncertain. The investment

climate has remained strong with a number of new developments (Maritime Journal,

2017), such as the £300 million invested by Swedish company Vattenfall in Aberdeen Bay

(Vaughan, 2016). However, Siemens, a major investor in and manufacturer of

components for UK wind farms, has put investment plans on hold (Neslen, 2016),

indicating a loss of confidence in the face of uncertainty. Deterred investment is likely to

be short-term, which can be managed if the government provides the right incentives

(Utilitywise, 2016). In the long-term, issues surrounding policy clarity may impede

investment (Durham Energy Institute, year unknown), indeed Jennifer Webber, Director of

External Affairs at RenewablesUK, considers this the most important factor in

guaranteeing long-term foreign investment (Maritime Journal, 2017).

2. Sectoral impacts of Brexit in Norfolk and Suffolk

Digital

Table 9: Top digital sub-sectors in employment (Norfolk

The digital sector employs 18,695 people in Norfolk and Suffolk in a wide set of activities

and Suffolk, 2015)

ranging from electronics manufacturing to publishing and media production. Two sub-sectors

Main SIC-2 sub-sectors

Number of jobs

clearly dominate the digital economy in Norfolk and Suffolk in terms of employment: computer

programming and consulting (6,891 jobs), and telecommunications (4,324 jobs).

Computer programming and consultancy

6,891

Computer programming, consultancy and related activities cover mostly business services

Telecommunications

4,324

activities, such as software development, data storage and management, computer system

design, and other IT support services. Jobs in these activities can be found all across Norfolk

Publishing

2,935

and Suffolk, but there are particular concentrations in Norwich, Ipswich, and the areas

surrounding the two cities, as well as around Bury St. Edmunds.

Manufacture of computer and electronic

2,140

products

Telecommunications, the second largest digital sub-sector, is clearly concentrated around

Adastral Park, 7 miles east of Ipswich, where the main BT research facilities are based. This

Computer repair

1,953

cluster houses roughly 70% of jobs in the telecommunications sector in Norfolk and Suffolk and,

besides BT, is home to major companies such as Cisco, Fujitsu, O2, Huawei and a cluster of

Film, television and music production

1,905

small, high-tech ICT companies. Besides Adastral Park, there are significant concentrations of

telecommunication jobs in Norwich city centre, including Comm-Tech Voice and Data and

Total Digital

18,695

Matrix Telecoms, and along the Brundall Gardens-Cantley Corridor, where companies such as

Aspect International Telecoms are located.

Table 10: Large digital companies in Norfolk and Suffolk

(examples)

Other high employment digital sectors include publishing, the manufacture of electronic

Company

Location

products, computer repair and media production. Most publishing activities relate to the

publishing of business and professional journals, a fast growing sub-sector in Norfolk and

Arrow ECS

Newmarket

Suffolk employing roughly 1,000 people. Other activities include the publishing of newspapers,

Archant Ltd

Norwich

books and software. Publishing activities are mainly concentrated in and around Norwich,

where companies such as Archant are based. The manufacture of computer and electronic

Anovo

Norwich

products and computer repair each employ roughly 2,000 people. Although most of these jobs

Access UK Ltd

Holton St Mary

are relatively evely distributed across Norfolk and Suffolk, there is a significant concentration in

Getech Ltd

Ipswich

Norwich, where companies like Anovo, a French-owned large computer repair business, is

located. Norfolk and Suffolk also have roughly 2,000 jobs in cinemas, film and TV production,

Optimise Media Group

Norwich

and music recording and publishing.

AST Connections Ltd

Great Yarmouth

Ipswich

Trimble UK Ltd

Ipswich

2. Sectoral impacts of Brexit in Norfolk and Suffolk

Digital

Figure 5 maps the spatial distribution of digital jobs in Norfolk and Suffolk, with an

emphasis on computer programming, consulting and related activities, and

telecommunications. There are digital jobs across the region, but there are clear

concentrations in the following locations:

Figure 4: Spatial distribution of digital jobs in Norfolk and Suffolk (2015)

Geographic area

Sub-sector

No. jobs

Example companies

Computer

Optimise Media, Systems

609

programming

Powering Healthcare Ltd

Central and

outer North

Comm-Tech Voice and

Telecommunications

388

Data, Matrix Telecoms

East Norwich

Other digital

2321

Archant Ltd, Anovo

Computer

Blue Novation Ltd,

143

programming

Coderus,

Adastral Park

BT Research &

Telecommunications

2741

Development HQ, Huawei

Other digital

188

Arqiva Ltd

Trimble UK Ltd,

Computer

810

Manhattan Software

programming

Group Ltd

Central

Ipswich

Citytalk Comms Ltd, Zen

Telecommunications

264

Systems Ltd

Other digital

396

Double S Design

Computer

Hoveton &

234

Breakwater IT, Geologix

programming

Wroxham -

Cantley

Aspect International

Corridor

Telecommunications

269

Telecoms

Access UK Ltd, Safe

Computer

SW Ipswich

299

Computing Ltd, Sch 2014

programming

Ltd

2. Sectoral impacts of Brexit in Norfolk and Suffolk

Brexit impact on Digital sectors

Trade

Regulations

The digital sector is by nature borderless (CBI, 2016). However, according to

Regulatory change is a major concern for the digital sector, as it is primarily services-

Julian David, CEO of TechUK, tech businesses are still highly reliant upon the

based (Diginomica, 2017). Some areas of EU regulations and law will remain

important, for instance data protection. It is essential that UK data protection laws

single market (2017). There are few concerns over potential barriers to trading

align with EU and international laws so that UK companies can continue trading and

digital goods. More pertinent is the trade in services, which makes up 81% of

processing EU data and transfer data globally (CBI, 2016). Despite Brexit, it has been

digital sector exports, of which over one third are exported to EU partners

confirmed that, as of early 2018, UK companies will have to abide by the new

(Frontier Economics, 2017). However, WTO tariffs on digital services (and goods)

General Data Protection Regulation, which aims to unify data protection regulation

are relatively low (Diginomica, 2017).

EU-wide (Pinson-Roxburgh, 2017). Failure to comply with data protection laws can

result in compliance costs (Diginomica, 2017).

Arguably more concerning is the sector’s ability to capitalise on the potential of

the Digital Single Market (DSM). This aims to ensure the free movement of

As a distinct sub-sector, the regulatory challenges faced by the telecommunications

people, services and capital, enable access to online activities under fair

industry are quite different to those of the digital sector as a whole. The majority of

competition, and maintain data protection (European Commission, 2017).

telecoms regulations are based on EU law (DXP, 2016). The framework is comprised

Industry professionals hope to maintain access to the Digital Single Market

of directives (which have already been incorporated into UK law), regulations and

recommendations set by the European Commission (EC) (Clifford Chance, 2017).

following Brexit (CBI, 2016), and Brent Hoberman, Co-founder of

Lastminute.com, sees it as fundamental to the success of the sector (McGoogan,

Brexit will have divergent implications for different areas of telecommunications

2016).

regulation and legislation. For instance, Ofcom may choose to deregulate net

neutrality, boosting competition and investment (Taylor Wessing, 2016). Alternatively,

The impact of trade on telecommunications is likely to be relatively low, as

some regulations may be incorporated into UK law. If the UK were to pursue its own

telecoms services are rarely traded (Clifford Chance, 2017) and most providers

data protection legislation, companies with data in the UK and EU will need to comply

serve a domestic customer base (Taylor Wessing, 2016).

with both sets of regulations (DXP, 2017).

2. Sectoral impacts of Brexit in Norfolk and Suffolk

Brexit impact on Digital sectors

Workforce

Funding and Investment

According to Frontier Economics (2017), 18% of the workforce are from outside

Investment is integral to the growth of the digital sector. A major challenge for new

the UK, a third of which (6% of the total) are non-UK EU nationals. However, the

digital start-ups is their ability to access capital (Patel, 2016). The European

proportion of foreign workers in digital companies can be high, indeed, up to 70%

Investment Fund (EIF) provides capital for start-ups (Clarks Legal, 2017) by funding

of the workforce of some digital businesses are non-UK nationals (CBI, 2016). As

venture capital firms and private equity funds. Between 2011 and 2015, the EIF gave

with other sectors, the UK digital sector has a shortage of technical skills,

€2.3 billion to UK based funds, which have supported over 27,000 UK companies

resulting in the need to seek talent from abroad (ibid.). Julian David, CEO of

(Patel, 2016). If the EIF ceased investment in the UK, the sector’s dynamism would

TechUK, concludes that access to a global workforce is vital to the sector

suffer.

(TechUK, 2017).

However, private sector investment may remain buoyant. In 2016, UK tech

A relatively low number (4.5% in 2015) of telecommunications workers are non-

companies raised more capital than any other European country (Turner, 2017).

UK EU nationals (ONS, Frontier Economics, 2017). Although small in number,

Investors are positive that there remains significant venture capital in the UK

they are often a valuable group of highly skilled workers, as demonstrated by BT

(McGoogan, 2016). For instance, Index Ventures, Octopus Ventures, Balderton

Chief Executive Gavin Patterson’s concerns about attracting talent (The Register,

Capital and Hoxton Ventures have expressed their continued support for the sector

2017), which is a particular challenge for senior executive positions (TechUK,

despite Brexit (Information Age, 2016).

2017).

Ceasing to be a member of the DSM could impact funding and investment. The

In a list of the ten best countries for computer programming, compiled by UK

European Commission website states that funding will be made available for projects

Business Insider UK (2016), half of the countries were in the EU, not including the

relating to the DSM, however companies in the digital sector may lose their eligibility

UK. This illustrates the shortage of these skills in the UK. Programmers are

for these funds (Clifford Chance, 2017). Moreover, remaining outside of the DSM and

particularly mobile within the digital sector, as computer languages are

deregulating the sector could affect the investment decisions of mobile and

international (Barslund and Busse, 2017), and may choose not to move to the UK

broadband operators (Norton Rose Fulbright, 2017b).

if it became difficult to get a visa.

The telecommunications sector is reliant on EU funding streams. Examples include

EU Research and Innovation funding through Horizon 2020, which supports emerging

technologies such as 5G and the ‘Internet of Things’, the Investment Plan for Europe,

which boosts investment in digital infrastructure, and the European Regional

Development Fund, which facilitates broadband roll-out schemes (Broadband UK,

2017). Absent these funding streams, it is unclear how telecommunications

companies will finance their investments, as higher costs would hinder research and

development (TechUK, 2016). BT Executive Gavin Patterson has voiced his fears

about the threat of reduced funding to research and development (The Register,

2017).

2. Sectoral impacts of Brexit in Norfolk and Suffolk

Life Sciences

Life Sciences is a strategic sector for Norfolk and Suffolk. Its main local strengths are in the

Table 11: Top life science sub-sectors in employment

fields of food and health research, plant science, microbiology, animal health, ornithology

(Norfolk and Suffolk, 2015)

and pharmaceutical research. According to the ONS Business Register and Employment

Survey (2015), Norfolk and Suffolk have 2,128 jobs in natural sciences and engineering

Main SIC-5 detailed sectors

Number of jobs

(most related to natural sciences), as well as 143 jobs in biotechnology (Table 9). These

numbers do not include all of Norfolk and Suffolk’s manufacturing companies’ scientific and

Natural sciences and engineering

2,128

R&D activities, for instance the life sciences research carried out by pharmaceutical

companies.

Biotechnology

143

The highest concentration of natural sciences and engineering jobs (604) in Norfolk and

Suffolk is in West Norwich, where the University of East Anglia and the Norwich Research

Total Life sciences

2,271

Park (NRP) are located. The NRP is a campus for world-leading research in food and

health, plant science and microbiology. It is home to research groups such as Earth and Life

Systems Alliance, Food and Health Alliance and Industrial Biotechnology Alliance, and to

institutes such as the Earlham Institute and the John Innes Centre (plant science,

microbiology, and biotechnology applied to agriculture and nutrition), the Sainsbury

Table 12: Large life sciences companies and institutes in

Laboratory (plant diseases), and the recently formed Quadram Institute (food and health

Norfolk and Suffolk (examples)

research and endoscopy), due to open fully in 2018.

Company

Location

There are 410 life sciences jobs located just south of Lowestoft, as the Centre for

John Innes Centre

Norwich Research Park

Environment, Fisheries and Aquaculture (Cefas) is located there. This is the UK’s most

diverse centre for applied marine and freshwater science and research, providing innovative

Quadram Institute

Norwich Research Park

solutions for the aquatic environment, biodiversity and food security.

Earlham Institute

Norwich Research Park

Lower numbers of life science jobs are found in West Thetford (107 jobs) where The British

The Sainsbury Laboratory

Norwich Research Park

Trust for Ornithology is located. There is also a cluster of animal health firms at Newmarket,

Cefas

Lowestoft

and large pharmaceutical companies at Haverhill and Thetford, which benefit from links to

The British Trust for Orinthology

Thetford

the Cambridge life sciences cluster.

2. Sectoral impacts of Brexit in Norfolk and Suffolk

Brexit impact on Life sciences

Workforce

Funding

Global expertise is essential to the vibrancy of the life sciences sector. Scientific

A generous and flexible funding environment is essential for the exploratory,

research and development is intrinsically international in scope and researcher

innovative and research-based life sciences sector. Annually, life sciences

mobility is seen as critical to the global success of UK science (House of Lords,

companies in the UK spend £4.1 billion on research and development (CBI, 2016). As

2016).

a net recipient of EU funding for research and development (Simmons and Simmons

LLP, 2017), British science will struggle to replicate the automatic access to EU

Within UK research institutions, 17% of STEM academics are non-UK EU

Research and Innovation programmes it has enjoyed until now (PwC, 2016b).

nationals (CBI, 2016). As discussed in previous sections, the UK has a shortage

of STEM skills, therefore, EU migration enables the sector to access the skills it

Scientific research and development has benefited greatly from EU funding. Natural

requires from a wider pool of talent (CBI, 2016). Brexit may result in life science

and physical sciences (as well as engineering) receive the highest share of EU

academics moving away from the UK (Simmons and Simmons LLP, 2017), as it

funding of all academic disciplines (The Royal Society, 2017). In 2015, under Horizon

becomes a less attractive destination.

2020, the largest EU Research and Innovation programme, UK university

researchers received the largest share of total projects funded (over 2,000 per year)

Collaboration is also important. Internationally co-authored UK publications are

and the largest share of grants (€1.2 billion, or 16% of the total) (Bruegel, 2017a).

cited more frequently than papers with solely UK-based authors, and 60% of UK

scientific publications are co-authored with EU researchers (Bruegel, 2017a). In

Furthermore, since 2007, the UK has won around 1,400 of 5,000 European Research

absolute terms, the top collaborative partners are Germany, France, Italy and the

Council Grants (Lucas, 2016). It is estimated that the UK will lose €1.5 billion per year

Netherlands (The Royal Society, 2017). A report by the House of Commons

in direct EU funds following Brexit (Bruegel, 2017a). Furthermore, the UK may lose

Science and Technology Committee published in 2016 warned that any

access to collaborative projects with EU partners, as certain funding streams are

restrictions placed on EU immigration would limit collaborative research.

directed solely to cross-border projects, indeed Horizon 2020 grants have done much

to connect scientific researchers across the EU (Prospect, 2017).

3. Concluding remarks

Concluding remarks

Although considerable uncertainty remains on the specific outcomes of Brexit while the UK Government negotiates the terms of its departure from the EU, this research

identified a set of challenges and opportunities for six key sectors of Norfolk and Suffolk’s economy. These challenges and opportunities will have different impacts across

different economic sectors and geographical areas. The following points summarize our main conclusions, focusing on Brexit’s impact on workforce, regulations, trade,

funding and investment.

Workforce

▪ Arguably the most significant impact of Brexit in Norfolk and Suffolk will be on the local labour force. There is consensus that non-UK EU nationals currently residing in the

UK should be allowed to stay. But recent evidence suggests that many may wish to relocate, as the UK is perceived to be less desirable. In the long-term, it is highly likely

that migration from the EU will drop. Moreover, Brexit will impact low and high skilled workers in different ways.

▪ Lower skilled EU workers often fill vacancies in agriculture, manufacturing and construction, many of which are seasonal or temporary, and therefore are difficult to fill

domestically. It will be important to retain the current workforce as far as possible.

▪ In the future, there is an opportunity for these sectors to uplift the economy, as innovation could lower labour intensity by transforming a high number of low skilled, low

paid jobs into higher skilled, better paid jobs. For instance, agri-tech is seen to help overcome labour shortages by reducing labour intensity through further mechanisation

and automation (Robert Smith, Russell Smith Farms, Smithson Hill, 2017). The LEP could have a key role in this process, supporting local business in securing the

necessary skills and funding to innovate, in line with the National Industrial Strategy.

▪ Many higher skilled professionals from the EU work in offshore wind, advanced manufacturing, digital (especially computer programming) and life sciences, due to a

shortage of STEM skills in the UK. As with the lower skilled jobs, it is crucial to retain these workers. This may be challenging because, on the one hand, these are highly

mobile workers who can easily find good jobs in other European countries, and, on the other hand, there might be increased costs for businesses to employ overseas

workers (as is currently the case for non-EU workers).

▪ The LEP should support local businesses in retaining their skilled workers, while working with companies and education and training providers to ensure that STEM skills

provision aligns with local skills demand.

Regulations

▪ Leaving the EU provides the UK the opportunity to formulate its own regulatory regime, which in many industries has been EU-directed over the past several decades.

This can be made more in accordance with UK-specific concerns and objectives, and may unlock increased investment. For example, in the digital industry, rules on net

neutrality could be overturned, reducing red tape and consequently boosting competition and investment.

▪ However, the standardisation of regulations across the EU with many EU directives incorporated into UK law means that regulatory alignment and stability will be

important across the sectors to maintain ‘business as usual’, easing trade and ensuring continued access to international funding. Consequently, in order to remain

competitive, the UK is likely to have to continue conforming to many EU laws, policies and regulations.

▪ The relationship between regulation and trade is particularly pertinent in agriculture and manufacturing, including pharmaceuticals and poultry and meat processing, due to

the importance of product safety standards. It is no surprise that companies in these sectors may be anxious about regulatory changes following Brexit. Companies in

Norfolk and Suffolk will need to remain aware of any regulatory changes and how they may impact them.

3. Concluding remarks

Concluding remarks (cont.)

Trade

▪

The future environment and conditions for trade after the UK leave the European Single Market are still very uncertain. Negotiations on trade are not expected to start

before December 2017 at best.

▪

Outside of the single market, the introduction of trade barriers, such as tariffs, is likely to impact UK exports, particularly in the agricultural and food production sectors,

where tariffs are typically very high and Norfolk and Suffolk export a good deal of goods to the EU. Given the importance of farming and food production in Norfolk and

Suffolk, this is a key area of concern for the region.

▪

Although most goods produced in Norfolk and Suffolk are sold on the UK market, tariffs will impact entire supply chains, affecting most manufacturing activities as well as

construction, as various components and materials across the supply chain are traded with EU partners. For example, duties or restrictions placed on imports may cause

shortages of materials, increasing costs in construction, which in turn will impact the entire region’s economy. In this context, in is vital for the region that the UK

Government achieves a favourable trade deal with the EU post-2019.

▪

The region will inevitably have to adjust economically. This is both a challenge and an opportunity. There is a clear opportunity to increase the UK share of companies’

supply chains, and open products to new markets worldwide. The lower value of sterling may make UK exports more competitive, but it is important that local companies

innovate and actively enter new markets. As companies often rely on imported inputs in their global supply chains, and because some high-value-added products (such as

pharmaceuticals) are less sensitive to price changes, the recent depreciation in sterling has not generated a significant boost in UK exports (The Economist, 2017). Firms

appear to be using sterling’s weakness to bank increased profits in a time of uncertainty, rather than to move into new markets (ibid.). Exploiting new markets and

cultivating a competitive advantage requires time, innovation and financing. The LEP can play a central role in supporting Norfolk and Suffolk companies in this

endeavour.

▪

The trade of services is important for the digital sector, and whilst any potential tariffs would be low, the inability of the UK digital sector to take advantage of the free

movement of services and capital as part of the Digital Single Market would inhibit the sector.

Funding and investment

▪ EU funding plays a supporting role in all of the important sectors in Norfolk and Suffolk. Across manufacturing, digital and life sciences, EU funding has been integral to

driving the evolution of the sector through research and development, and innovation. EU funding has also been important for investing in large scale infrastructure

projects, indirectly supporting businesses and job growth in the construction and offshore wind sectors.

▪ In agriculture, the Common Agriculture Policy (CAP) heavily subsidises farming, without which many farms would close, severely damaging the rural economy. It is

important that local businesses find alternative sources of funding - from Central Government or elsewhere - once they are no longer eligible for EU funding. The LEP

may play a key role in working with local businesses and supporting them in securing the funding they need to continue to grow and innovate.

▪ Foreign Direct Investment (FDI) is key to raising national productivity, and, by extension, output and wages across all sectors (most significantly in manufacturing). There

is evidence that EU membership has significantly increased FDI - the extent to which FDI will be affected by Brexit depends highly on future trading arrangements with

the EU (CEP, 2016). The impacts also vary across sectors. For instance, investment has already declined in manufacturing, whilst investment is likely to slow in

commercial and residential development, impacting construction. In the offshore wind sector, there has been a mixed post-Brexit reaction by foreign companies with some

continuing to invest whilst others have put investment on hold. The digital sector, on the contrary, has continued to enjoy robust foreign private investment.

4. Policy recommendations

Policy Recommendations

This report was commissioned to provide analysis of potential opportunities and challenges and information on companies within specific sectors where those

impacts were assessed to be greatest. But the analysis also leads to potential conclusions about the strategic approach that Norfolk and Suffolk might take to

supporting businesses in the period ahead. This slide summarises our conclusions about potential policy, very much in the context of the new Norfolk and Suffolk

Economic Strategy.

▪

Local partners should take the opportunity of developing a local industrial strategy to further reinforce the sectoral specialisms that Norfolk and Suffolk

have and to ensure that central Government is fully aware of the contribution that those specialisations make to the national economy. Many of these

sectors have similar requirements (e.g. for technical skills, leadership skills, new technologies and easier to access funding and partnerships for

smaller scale commercial research and innovation). And many face global opportunities for new markets and new products (e.g. clean energy, high

tech food and drink production and digital / ICT)

▪

There is an opportunity to consider reviewing and focussing Growth Hubs, Innovation Hubs and skills deal activity to more proactively reach out to

those businesses which could have opportunities for growth and/or be more challenged by Brexit (encouraging innovation and automation in food

production is one example).

▪

As the labour market continues to tighten and if migration continues to slow, then there is a strong case for focussing and strengthening place

marketing and inward investment in order to reach out to the people you need to attract and retain as well as the investment needed to drive

productivity.

▪

Attracting large scale private sector investment in infrastructure and development will require places to further focus their investment marketing activity

and develop a very strong place based story and proposition.

▪

Collaborating with other regions and sectors elsewhere to where there is a common interest in reaching out to new markets or designing new

products.

▪

In the context of local industrial strategy consider a more in-depth piece of work in order to understand your business base in more detail and in a way

that updates regularly, including the specific needs of individual businesses and how you can work with them. Both for central Government and

locally it will be vital to have a more accurate understanding of your leading indicators and of business health and where the challenges and

opportunities lie.

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New Anglia Local Enterprise Partnership Board

Wednesday 21^st February 2018

Agenda Item 7

Economic Strategy Indicator Trajectories and Target Methodologies

Author: Alexander Frost / Lisa Roberts

Purpose: This paper outlines the robust methodology that has been developed to set

targets for each of the eight Economic Strategy indicators up to 2021 along with forecast

trajectories up to 2036.

Recommendation: The Board is asked to:

 Agree the methodologies that have been developed to set the targets for each of the

indicators up to 2021.

 Agree the approach to monitoring and reporting on the indicators to the Board.

Background

The Economic Strategy for Norfolk and Suffolk 2017-36 sets ambitious targets for the two

counties against eight indicators (see figure 1 below). These targets were agreed by the

board as part of the development of the strategy and will help measure success and drive

delivery.

The new indicators build on those that were set in the Strategic Economic Plan - GVA, new

homes, new businesses, job creation and productivity. They also include new indicators on

inclusive growth - employment rates, wages and skills - important measures to monitor the

impact of growth on every section of society.

In order for the LEP and its partners to evaluate the impacts and learn from its investments

and interventions it is important to have a robust foundation to start from.

Previous targets were set through discussion rather than formulated on a sound mythology.

This made monitoring and reporting challenging. Through the evidence-focused nature of

the new strategy we are keen to take a different approach to enhance our ability to learn and

ensure greatest impact on growth.

The common evidence base which underpins the strategy, the indicator methodology and

targets places the LEP and partners in a much better position to monitor and report on the

indicators with greater clarity, consistency and accountability. It also enables the LEP and

partners to flexibly react to prevailing economic conditions and shape and direct

interventions and investments to ensure alignment with, and realisation of, the ambitions in

the Economic Strategy.

Having targets that are set on sound methodology also builds confidence and robustness

with our reporting to government. Positive feedback on our robust approach to setting

targets was received following the LEPs Growth Deal three bid.

Figure 1 - Economic Strategy indicators targeted delivery to 2036

A user guide has been developed which provides an introductory overview and guidance for

non-data users to the respective indicators. This is available at the following link

https://newanglia.co.uk/wp-content/uploads/2018/02/1802-Final-ES-indicators-user-guide.pdf

The guidance provides answers to the following questions for each indicator:

 What do we mean/how do we define the indicator?

 Where is the data sourced from?

 How is it measured and calculated?

 How often is it updated?

 When was it last updated, and what is the baseline for the strategy?

 How is it forecast? And how were the annual targets set?

 What is the potential trajectory over the strategy period?

These methodologies and ‘user guides’ have been independently peer reviewed by a

number of internal and external partners, including the Economic Strategy Steering Group,

the Norfolk and Suffolk Data Practitioners Group, and Strategy consultants Metro Dynamics.

What happens next?

With the formal adoption of the methodologies and associated targets to 2021, the LEP

executive will begin to shape the monitoring and reporting processes for the indicators. The

ambitions dashboard will be redesigned to include the new indicators. The indicators will be

monitored on a rolling annual basis, with an official update at the annual LEP board,

Leaders’ and sector leads session which is part of the agreed Economic Strategy annual

progress review process.

The methodologies also will be used to help align LEP Programmes outputs to the indicators

and set targets at LEP programme level. The user guide will be expanded to include a

section for LEP Programmes which will answer the following question for each of the LEP

Programmes:

 What outputs does the programme deliver?

 How do the outputs align with the Economic Indicators?

 How are these outputs defined?

 How often are the outputs monitored and updated?

 How have the targets been set for each output?

This will feed into the work underway looking at how the LEP reports and presents its

programmes performance to the LEP board.

Part of this will include addressing how and when the supporting metrics (offering much

greater detail underneath the indicators) will be monitored and reported. The work on LEP

Programme Performance will be presented to the LEP board in April or May.

Methodology Summary

Table 1 below summarises the recommended target-setting methodology sitting underneath

the eight Economic Strategy indicators. These methodologies utilise established and

recognised metrics, formulas and forecasts, which enables the setting of consistent and

economically-aligned short term targets moving forward.

The short term targets - to 2021 - are also outlined, and highlighted as a share of the overall

2036 target. These targets all follow slightly different trajectories across the respective

indicators given the contrasting economic context differing levels of certainty in the forecasts.

Nevertheless, all of the indicators share a high level of ambition, particularly in light of

historic delivery. Targeted housing delivery to 2021 is almost double that achieved over the

previous five years. For wages, targets are initially gradual but then place an onus on strong

and recently unprecedented wage growth (in-line with the 1980 to mid-2000’s average).

Even jobs, despite aiming for lower growth compared to the past 5 years (due to a tightening

labour market), targeted rates of job creation remain ambitious when compared to the long-

run historic trend and potential labour supply pressures (e.g. migration, aging population).

Alongside these targets and the associated methodology, the table also provides a brief

overview of baselines, data sources, previous SEP delivery, timeframes and so forth.

Please refer to the associated appendices, as indicated in the table, for greater detail and

narrative around the targets, methodologies and potential trajectory.

For even more in-depth detail please refer to the use guide which is available at the following

link https://newanglia.co.uk/wp-content/uploads/2018/02/1802-Final-ES-indicators-user-

guide.pdf.

These targets will help measure success and drive delivery of the Economic Strategy

ambitions for Norfolk and Suffolk to be:

 The place where high growth businesses with aspirations choose to be.

 An international facing economy with high value exports.

 A high performing productive economy.

 A well-connected place.

 An inclusive economy with a highly skilled workforce.

 A centre for the UK’s low carbon energy sector.

 A place with a clear, ambitious offer to the world.

Appendix B - Summary of target methodology and trajectory for Jobs

Strategy baseline-

as a % of total

Strategy indicator

2021-2036 target

2021 target

target

Jobs

27,800

31.6%

60,200

68.4%

Target methodology:

• Like GVA, annualized targets have been drawn from the baseline forecasts from the EEFM.

Similarly, these baseline forecasts have been adjusted (upwards) slightly (by only 10-20 jobs p.a.) to

reflect the rounding of the forecast originally to develop the strategy ambition.

Trajectory and context:

• Short-term forecasts show a continuation of the strong job creation that has been commonplace

over the past 5 years. Short term targets for jobs growth therefore continue to be ambitious, with

emphasis on front-end delivery for this ambition.

• However, given slowing population growth, decreasing spare capacity in the labour market and

wider macroeconomic headwinds, longer term jobs growth is expected to ease, and this has been

factored into the longer-term targets.

2012-15

2015

2016

2017

2018

2019

2020

2021

2021-26

2026-31

2031-36

2015-36

Previous SEP delivery

Strategy baseline

Short term targeted delivery

Targeted delivery over review points

Overall Strategy delivery

Targeted delivery

43,919 (14,640 p.a.)

786,592

6,224

4,652

3,939

3,574

4,477

4,934

22,364

20,345

17,491

+88,000

Y-o-y percentage change

0.8%

0.6%

0.5%

0.4%

0.6%

2.7%

2.4%

2.0%

Forecasted delivery

43,919 (14,640 p.a.)

786,592

6,213

4,640

3,928

3,562

4,466

4,923

22,306

20,288

17,433

+87,759

Y-o-y percentage change

0.8%

0.6%

0.5%

0.4%

0.6%

2.7%

2.4%

2.0%

Appendix C - Summary of target methodology and trajectory for Businesses

Strategy baseline-

as a % of total

Strategy indicator

2021-2036 target

2021 target

target

Businesses

9,494

31.6%

20,506

68.4%

Target methodology:

• Targets have been based on forecasts drawn from OBR projections (up to 2022) followed by a

time-series trend from 2022 onwards. Year-on-year values from the forecasts have been adjusted in

line with the stretch of the ambition, with the ambition demanding +300 uplift p.a. above central

forecasts.

Trajectory and context:

• Short term, targets anticipate that the current ‘boom’ in enterprise formation will continue at a

rapid pace (i.e. the 'gig-economy'), as predicted by mainstream forecasts. Similar to jobs, this

places front-end emphasis on the delivery of the overall ambition.

• Longer term there is expected to be some normalization in enterprise rates, as reflected in the

more gradual trend of the longer term targets. However, given the stretching-nature of this

ambition, even ‘normalized’ targets remain above-average and ahead of central forecasts.

2012-16

2016

2017

2018

2019

2021

2021-26

2026-31

2031-36

2015-36

Previous SEP delivery

Strategy baseline

Short term targeted delivery

Targeted delivery over review points

Overall Strategy delivery

Targeted delivery

5,705 (1,426 p.a.)

61,015

1,705

1,429

2,045

2,188

2,127

7,691

6,259

6,556

+30,000

Y-o-y percentage change

2.8%

2.3%

3.2%

3.3%

3.1%

10.9%

8.0%

7.8%

Forecasted delivery

5,705 (1,426 p.a.)

61,015

1,705

1,125

1,741

1,884

1,823

6,171

4,739

5,036

+24,225

Y-o-y percentage change

2.8%

1.8%

2.7%

2.9%

2.7%

8.9%

6.3%

Appendix D - Summary of target methodology and trajectory for Housing

Strategy baseline-

as a % of total

Strategy indicator

2021-2036 target

2021 target

target

Housing

45,060

32.2%

94,940

67.8%

Target methodology:

• Short term targets up to 2021 have been drawn from respective local authority’s permissions data

and local plans. Longer term, targets move in line with the required - though typically ambitious -

Objectively Assessed Need (OAN) delivery, which have been allocated from 2021 onwards.

Trajectory and context:

• Short term targets show the potential for a continued upturn in housing delivery, with Local Plan

allocations and permissions data indicating 2016-2021 delivery could be almost double that of the

previous five years (2011-2016). This reflects to continued recovery and robustness of local housing

• Longer term, targets move in line with the required (though still ambitious) OAN delivery, with the

option of further review (and inclusion of revised local plan estimates and up to date permissions

data) in 2021. These targets fall slightly under the central forecast (around 200 p.a.), reflecting input

2012-16

2016

2017

2018

2019

2021

2021-26

2026-31

2031-36

2015-36

Previous SEP delivery

Strategy baseline

Short term targeted delivery

Targeted delivery over review points

Overall Strategy delivery

Targeted delivery

19,730 (4,933 p.a.)

753,840

5,970

8,490

9,690

10,980

9,930

31,650

31,640

+140,000

Y-o-y percentage change

0.8%

1.1%

1.3%

1.4%

1.3%

4.0%

3.8%

3.7%

Forecasted delivery

19,730 (4,933 p.a.)

753,840

6,200

8,720

9,920

11,210

10,160

32,800

32,790

+144,600

Y-o-y percentage change

0.8%

1.1%

1.3%

1.4%

1.3%

4.1%

3.9%

3.8%

Appendix E - Summary of target methodology and trajectory for Productivity (GVA per hour)

Strategy baseline-

as a % of total

Strategy indicator

2021-2036 target

2021 target

target

Productivity (£)

£2.40

27.7%

£6.40

72.3%

Target methodology:

• Targets have been drawn from a proxy forecast compiled by decomposing GVA and hours

worked data from ONS into individual components, and forecasting these components with proxy

outputs from the EEFM. These forecasts do not take account of OBRs downgrades to their

productivity projections in 2017.

Trajectory and context:

• Given that recent productivity forecasts have consistently been overoptimistic, this is another

indicator that has greater uncertainty in its targets. Short term, targets expect only a slow and

steady improvement on the sluggish rates of productivity growth seen over the past decade.

• Longer term, there is a potential for stronger rates of productivity growth, not least as the labour

market becomes ever-tighter and automation/digitisation becomes more widespread. However,

wider macroeconomic headwinds have the potential to stunt such uplift.

• Though annual targets remain below central forecasts, this is to accommodate the large margins

of error in previous productivity forecasts (which since 2008 have been consistently overoptimistic)

as suggested during the development of the strategy's ambitions.

2012-15

2015

2016

2017

2018

2019

2020

2021

2021-26

2026-31

2031-36

2015-36

Previous SEP delivery

Strategy baseline

Short term targeted delivery

Targeted delivery over review points

Overall Strategy delivery

Targeted delivery

£1.0 (£0.3 p.a.)

£30.2

£0.5

£0.4

£1.9

£2.1

£2.4

+£8.8

Y-o-y percentage change

1.6%

1.2%

1.3%

1.4%

1.2%

5.9%

6.0%

6.5%

Forecasted delivery

£1.0 (£0.3 p.a.)

£30.2

£0.5

£0.4

£0.5

£2.3

£2.5

£2.7

+£10.4

Y-o-y percentage change

1.8%

1.5%

1.6%

1.4%

6.9%

7.2%

*Figures are in 2015 prices

Appendix F - Summary of target methodology and trajectory for Median Wages

Strategy baseline-

as a % of total

Strategy indicator

2021-2036 target

2021 target

target

Wages (£)

£25.80

12.9%

£174.20

87.1%

Target methodology:

• Targets have been drawn from a bespoke forecast, which draws on OBR projections up to 2022

followed by a productivity/wage based regression model for 2022 onwards. Year-on-year values

from this bespoke forecast have then been adjusted in line with the stretch of the ambition, with the

ambition demanding £2-4 uplift p.a. above central forecasts.

Trajectory and context:

• Similar to productivity, recent forecasts for median wages have been increasingly uncertain and

often overoptimistic, and though the two indicators (productivity and wages) often move together,

this relationship has become less apparent in recent years i.e. improvements to productivity have

been slow to pass on benefits to employees.

• Short term, sluggish (possibly negative) wage growth is forecast, though some pickup is expected

towards 2021. To reach this ambitious target however, the onus is on strong and relatively

unprecedented wage growth (in-line with the 1980 to early 2000’s average) later on in the strategy

period, and this is reflected in the longer term targets. This would align the local area to wage levels

matching their pre-crisis trend.

2012-16

2016

2017

2018

2019

2021

2021-26

2026-31

2031-36

2015-36

Previous SEP delivery

Strategy baseline

Short term targeted delivery

Targeted delivery over review points

Overall Strategy delivery

Targeted delivery

£15.3 (£3.8 p.a.)

£503.8

£0.0

£7.1

£8.1

£10.6

£54.8

£57.4

£62.0

+£200.0

Y-o-y percentage change

0.0%

1.4%

1.6%

2.0%

10.4%

9.8%

9.7%

Forecasted delivery

£15.3 (£3.8 p.a.)

£503.8

-£4.6

-£0.2

£4.4

£6.9

£36.2

£38.7

£43.3

+£129.0

Y-o-y percentage change

-0.9%

0.0%

0.9%

1.4%

7.0%

7.3%

*Figures are in 2016 prices

Appendix G - Summary of target methodology and trajectory for Employment Rate

Strategy baseline-

as a % of total

Strategy indicator

2021-2036 target

2021 target

target

Employment rate (%)

1.4 p.p.

27.0%

3.8 p.p.

73.0%

Target methodology:

• Similar to jobs, the EEFM is utilised to forecast employment rates and thus set annualized targets.

Strictly speaking, since this ambition is qualitative rather than quantitative there are no numerical

targets. However, annual tracker targets have been produced for the indicator, drawn directly from

the baseline forecasts.

Trajectory and context:

• Trajectories for this indicator are almost identical to that of jobs. Short-term prospects remain

largely positive - with the potential for local employment rates to eclipse 78% by 2021 for the first

time on record - and this is reflected in the targets.

• However, given slowing population growth, decreasing spare capacity in the labour market and

wider macroeconomic headwinds, longer term performance is expected to ease, and this has been

factored into the longer-term targets.

2012-16

2016

2017

2018

2019

2021

2021-26

2026-31

2031-36

2015-36

Previous SEP delivery

Strategy baseline

Short term targeted delivery

Targeted delivery over review points

Overall Strategy delivery

Targeted delivery

2.6 p.p. (0.7 p.a.)

76.9 p.c.

0.3 p.p.

0.2 p.p.

0.3 p.p.

1.3 p.p.

1.7 p.p.

0.8 p.p.

+5.2 p.p.

Forecasted delivery

2.6 p.p. (0.7 p.a.)

76.9 p.c.

0.3 p.p.

0.2 p.p.

0.3 p.p.

1.3 p.p.

1.7 p.p.

0.8 p.p.

+5.2 p.p.

Appendix H - Summary of target methodology and trajectory for Skills (% of residents qualified to NVQ3+)

Strategy baseline-

as a % of total

Strategy indicator

2021-2036 target

2021 target

target

Skills (%)

4.0 p.p.

25.0%

12.1 p.p.

75.0%

Target methodology:

• Targets (5-yearly) were based on the prior research undertaken by Metro Dynamics when

formulating the ambition. Nevertheless, annual tracker targets have been set here (utilising forecasts

from UKCES' Working Futures econometric model as a baseline) to enable short term tracking of

the ambition.

Trajectory and context:

• Despite the recommendation to only monitor the ambition on a 5-yearly basis, annual tracker

targets have still been produced, though formal monitoring is expected to be maintained on the 5-

yearly timeframe (due to data quality issues and the longer term impact/realisation of skills related

initiatives).

• As a demographic based indicator, trends show relatively steady and consistent progress towards

to 2036 ambition, with a near perfectly even split between delivery rates - and thus targeted

delivery rates - over 2016-21 and 2021-36 respectively.

2012-16

2016

2017

2018

2019

2021

2021-26

2026-31

2031-36

2015-36

Previous SEP delivery

Strategy baseline

Short term targeted delivery

Targeted delivery over review points

Overall Strategy delivery

Targeted delivery

0.9 p.p. (0.2 p.a.)

50.2 p.c.

0.8 p.p.

4.0 p.p.

+16.1 p.p.

Forecasted delivery

0.9 p.p. (0.2 p.a.)

50.2 p.c.

1.1 p.p.

1.0 p.p.

1.1 p.p.

4.0 p.p.

4.3 p.p.

4.6 p.p.

+18.3 p.p.

New Anglia Local Enterprise Partnership Board

Wednesday 21^st February 2018

Agenda Item 8

LEP Governance Review

Author: Lisa Roberts / Chris Starkie

Summary

This paper updates the board on the progress of implementing the review of LEP governance

intigated by the board following the PwC report and the Mary Nery review.

It recommends terms of refrence for the new and revised boards and committees which report

to the main LEP board as well as proposed membership.

Recommendation: The Board is invited to:

 Agree the Terms of Reference (ToRs) for each of the LEP tier one Committees and

Board

 Agree the approach to appointing members to the new committees within the new

structure

 Agree the Scheme of Delegation and Decisions Log

Update on Governance Review and Delivery Plan

Consultation on the governance structure is underway and a number of one to one discussions

have been carried out. These have helped shape the Terms of Reference for the top tier of the

structure as well as providing insight and views on the wider structure.

LEP Board members have provided their preference of which committees they would like to be

involved with. The tables in the next section take account of these preferences and form part of

the recommendations.

Agreement of the Terms of Reference for the top tier of the Governance structure is an

important step to progress to the next step of the review.

Once agreed work can commence on setting up the Economic Strategy Delivery Coordinating

Board. This Board will drive the development of the Economic Strategy high-level delivery plan

and inform the second phase of the Governance review.

The consultation will continue to gather views and information which will enable the Economic

Strategy Delivery Coordinating Board to shape the rest of the structure and make a

recommendation to the LEP Board in the summer.

The mapping of current activity that is delivering the Economic Strategy is underway. There has

been excellent engagement from businesses in our stakeholder sessions with nearly 300

businesses attending and a number of partners including Local Authorities completing the

online form.

The next step is to identify good practice and gaps to help inform and shape the high level

delivery plan which the Economic Strategy Delivery Board will be responsible for developing.

Top Tier of LEP Governance Structure

The diagram below illustrates the new top tier structure, which has previously been approved

by the board.

The new structure, the individual Terms of Reference, the Scheme of Delegations and

Decisions Log take on board the recommendations from the PwC report, Mary Ney Review and

feedback received from the governance consultation.

This approach will improve the transparency of decision making and will enable to LEP to carry

out its business in a transparent and accountable way.

This new structure consolidates some of the existing committees and creates a single

Investment Appraisal Committee which has oversight of assessments of all LEP investment

proposals.

Alignment with the Economic Strategy has also driven the review. One of the biggest

challenges with delivering the new Economic Strategy is to continue to build the momentum

and recognition that the Strategy is Norfolk and Suffolk’s not the LEP’s.

Business, Local Authorities, Education providers, Voluntary Community Sector and LEP all

have a role to play in delivery and aching the ambitions we have collectively set.

The Economic Strategy Delivery Coordinating Board will bring together partners

representatives to drive delivery. The new structure will also ensure the LEP is making

investment decisions which will have a direct impact on delivery of the strategy through the

development of a LEP Investment Framework.

Pages three and four provide a summary of the purpose of each board and proposed

membership. Terms of reference are appended.

Economic Strategy Delivery Coordinating Board (ToR 1)

New board to be set up.

Purpose

To continue the collaboration between businesses, local authorities, education

providers, voluntary and community sector and the LEP, drive and coordinate the

delivery of the economic strategy. Ensuring all partners play a part in delivering the

ambitions and targets in the Economic Strategy for Norfolk and Suffolk. It will be

responsible for developing and driving implementation of the high-level delivery

plan, reporting regularly on progress to the LEP Board and to Local Authority

Leaders and Sector Leads through the annual performance process. This Board is

an officer level Board.

Members

Total of 15 members - The Chair, five private sector Theme Champions and 8

Place representatives, LEP Head of Strategy.

The Board will be chaired by the LEP Chair providing the link back to the LEP

Board and as an ambassador for the Economic Strategy. The five Theme

Champions will be appointed through a nominations process seeking private

sector nominations and recommendations presented to the LEP Board for

approval. For the place representatives each priority place will be asked to

nominate a representative to sit on the Board, we would look to secure

representative that provides a geographical spread across Norfolk and Suffolk and

district and county level.

Board members to be appointed to Board - Doug Field to be Chair of Board

LEP Audit and Risk Committee (ToR 2)

New committee replaces part of the P&R and finance committee

Purpose

To ensure the development and implementation of the LEP’s polices on strategic

risk management, financial reporting, audit process, system of internal controls,

providing oversight and monitoring the integrity of these systems and ensuring

compliance with the assurance framework.

Members

The committee will consist of four members. An independent Chair will be

appointed by the LEP Board, the Accountable Body s151 Officer and two LEP

Board members who are appointed by the LEP Board. The LEP Chairman,

members of the Investment Appraisal Committee and members of the

Leadership Team shall not be members of the Committee.

Board members to be appointed to Committee - Nikos Savas and Andrew

Proctor

LEP Investment Appraisal Committee (ToR 3)

Existing committee with an expanded remit and membership.

Purpose

To ensure allocation of funding is delivered appropriately and in accordance with

the Assurance Framework through the mechanism of LEP Programmes -

Growing Places Fund, Growing Business Fund, Capital Growth Programme, EZ

Accelerator Fund, and other funds as appropriate, and that the funding

allocations supports the development of schemes that deliver the Economic

Strategy.

Members

The committee will comprise a total of eight members. Seven committee

members will be members of the LEP Board- four private sector members, three

public sector. The Chair of the Committee will be appointed by the LEP Board,

and a Deputy Chair shall be appointed to chair the Committee in the Chairman’s

absence or if he/she elects to delegate the chair. The remaining member will be

the Accountable Body Section 151 officer or their representative.

Board members to be appointed to Committee - Lindsey Rix (to remain as

Chair), David Ellesmere, Alan Waters, John Griffiths, Dominic Keen (GBF

Champion), Sandy Ruddock (GBF Champion) and Tim Whitley.

Jeanette Wheeler to continue as a GBF panel member but is not required to sit

on the IAC. Sandy Ruddock and Dominic Keen will also be GBP panel members

and provide the link to the IAC.

LEP Remuneration Committee - Existing committee (ToR 4)

Purpose

To provide a formal and transparent procedure for developing and implementing

policy on LEP senior executive remuneration.

Members

Independent Committee Chair to remain as Mark Jeffries and two LEP Board

members to remain as Jeanette Wheeler and Andrew Proctor.

LEP Management Committee (ToR 5)

Purpose

To act as the executive management committee of the LEP and provide

oversight to the Accountable Body

(section

151 officer) of LEP operations

providing assurance the LEP carriers out its business in a transparent and

accountable way.

Members

Chaired by the LEP Chief Executive and manged by the LEP COO. Other

members include Accountable Body s151 Officer, BEIS Relationship Manager for

New Anglia, Head of Strategy, Head of Programmes, Head of EZs, Inward

Investment and Innovation, Head of Finance and Head of Communications and

Engagement and Economic development representatives from Norfolk County

Council and Suffolk County Council.

This report is followed by draft Terms of Reference 1-5. In addition ToR for the Growing

Business Fund (ToR 6) and the Small Grants Scheme (ToR 7) which sit under the Investment

Appraisal Committee have also been included.

Recommendation:

 Agree the Terms of Reference (ToRs) for each of the Committees and Board.

 Confirm the appointment of members to the new committees within the new structure.

 Agree the Scheme of Delegation and Decisions Log

ToR 1

Economic Strategy Delivery Coordinating Board

Terms of Reference

Purpose

To continue the collaboration between businesses, local authorities, education providers, voluntary

and community sector and the LEP, drive and coordinate the delivery of the economic strategy.

Ensuring all partners play a part in delivering the ambitions and targets in the Economic Strategy

for Norfolk and Suffolk. It will be responsible for developing and driving implementation of the high-

level delivery plan, reporting regularly on progress to the LEP Board and to Local Authority

Leaders and Sector Leads through the annual performance process. This Board is an officer level

Board.

Responsibilities

•

Develop the Economic Strategy high-level delivery plan which identifies actions and

interventions which fill the delivery gaps identified and best practice that could be scaled up

to achieve bigger impact.

•

Manages implementation and monitoring of the Economic Strategy high-level delivery plan.

•

Review the second tier the LEP governance structure that underpins the delivery of the

Economic Strategy providing recommendations to the LEP Board.

•

Has oversight of sub-boards and committees that play a role in delivering the economic

strategy to continue to identify gaps and opportunities.

•

Influences stakeholders and government - to coordinate resources and investment to the

deliver economic strategy.

•

Commissions task and finish groups where appropriate and no other sub-board or

committee can fulfil the task.

•

Has oversight of the evidence base and provides direction on areas of development.

•

Provides the Investment and Appraisal Committee strategic guidance and input to help

inform the LEPs annual Investment Framework.

•

Manage the Economic Strategy annual review process reporting to the LEP Board, Leaders

and Sector Chairs session every autumn.

Membership and Appointment

The committee will comprise a total of 15 members - The Chair, five private sector Theme

Champions and 8 Place representatives and the LEP Head of Strategy.

The Board will be chaired by the LEP Chair providing the link back to the LEP Board and as an

ambassador for the Economic Strategy. The five Theme Champions will be appointed through a

nominations process seeking private sector nominations and recommendations presented to the

LEP Board for approval. For the place representatives each priority place will be asked to nominate

a representative to sit on the Board, we would look to secure representative that provides a

geographical spread across Norfolk and Suffolk and district and county level.

Attendance of non-members at meetings

The Board will be supported by LEP Head of Strategy. Members of the LEP executive team, sub-

boards and committees may also be invited to attend meetings where appropriate.

Meeting Frequency

Monthly meetings that will be scheduled to co-inside with the dates of the LEP Board meetings.

The frequency of meetings could change to bi-monthly or quarterly if the Board decide it is more

appropriate once it is established.

ToR 2

LEP Audit and Risk Committee

Terms of Reference

Purpose

To ensure the development and implementation of the LEP’s polices on strategic risk

management, financial reporting, audit process, system of internal controls, providing oversight

and monitoring the integrity of these systems and ensuring compliance with the assurance

framework.

Responsibilities

•

Ensure that appropriate procedures are in place to identify, assess and manage risk from a

strategic and operational perspective, to monitor implementation of Risk Management

procedures and to report to the LEP Board as necessary.

•

Manage strategic risk and have oversight of the operational risk which is managed by the

Management Committee.

•

Oversee the company’s relations with the external auditor and has primary responsibility for

making a recommendation on the appointment, reappointment and removal of the external

auditors.

•

Assess the independence and objectivity of the external auditor annually, taking into

consideration relevant UK law, regulation and professional requirements.

•

Review the effectiveness of the company’s internal financial controls (that is, the systems

established to identify, assess, manage and monitor financial risks.

•

To review, and challenge where necessary, the actions and judgements of management in

relation to the annual financial statement.

•

to review and to provide advice on whether the Annual Report and financial statements,

taken as a whole, are fair, balanced and understandable and provide the information

necessary to assess the company’s performance, business model and strategy.

•

Oversees the development, implementation annual review of the LEP’s Assurance

Framework.

Membership and Appointment

The committee will consist of four members. An independent Chair will be appointed by…….., the

Accountable Body s151 Officer and two LEP Board members who are appointed by the LEP

Board. The LEP Chairman, members of the Investment Appraisal Committee and members of the

Leadership Team shall not be members of the Committee.

Quorum

The quorum necessary for the transaction of business shall be three of which include the

independent Chair and the Accountable Body s151 Officer.

Attendance of non-members at meetings

The LEP COO will provide management support. Other attendees include the Financial Controller,

other individuals with oversight of risk, and a representative of the external auditor shall attend

meetings at the invitation of the Committee. Other members of LEP Leadership Team may also be

invited to attend meetings when required.

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ToR 2

Meeting Frequency

Meetings shall be held twice a year and, where appropriate, will coincide with key dates in the

LEPS’s financial reporting cycle. The Chair of the Audit & Risk Committee, LEP COO or external

auditor may request a meeting if they consider that one is necessary.

Delegated Authority including limits

The Committee is authorised by the LEP Board to investigate any activity within the Committee’s

terms of reference and, within its scope of responsibilities, to seek any information it requires and

to ensure the attendance of management representatives at meetings as appropriate. The

Committee has the authority to obtain outside legal or independent professional advice. The

advisers may attend meetings as necessary and the cost of the advisers shall be within budgetary

constraints.

Reporting procedures

Relevant key points will be reported through the LEP Board and recorded in the Board minutes

which are published on the LEP website.

Review

The Committee shall, review its own performance once a year and terms of reference to ensure it

is operating at maximum effectiveness and recommend any changes it considers necessary to the

LEP Board for approval.

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ToR 3

Investment Appraisal Committee

Terms of Reference

Purpose

To ensure allocation of funding is delivered appropriately and in accordance with the Assurance

Framework through the mechanism of LEP Programmes - Growing Places Fund, Growing

Business Fund, Capital Growth Programme, EZ Accelerator Fund - or other funds as appropriate,

and that the funding allocations support the development of schemes that deliver the Economic

Strategy.

Functions

•

Making an assessment as to the long term financial and legal viability of offering Growing

Places Fund loan finance to clients and other.

•

Making assessments on projects received through Capital Growth Programme, ensuring

value for money, additionality and alignment with the Economic Strategy ambitions and

Economic Indicators.

•

Consider proposals for co-investment of the Enterprise Accelerator Fund for projects to be

developed on Enterprise Zones, generating a rental return through co-ownership of a

suitable built asset.

•

Provide scrutiny to the Growth Deal spend profile and agree any reallocation of funds.

•

Providing a strategic assessment of proposed LEP Programme bidding calls.

•

Providing a final strategic assessment of projects and to make a decision on which projects

should be approved for funding where the value of the LEP intervention is £500k or less.

•

Make a recommendation to the LEP Board to approve or reject each request for funding

received exceeding £500K.

•

Approve contract variation to funding agreements after initial approval by the committee

within £500k of the original agreed funding or delivery profile.

•

Lead on the development of the LEP Investment Plan making recommendations to the LEP

Board in the summer of each year which sets out the framework for LEP Programmes for

the proceeding financial year.

Membership and Appointment

The committee will comprise a total of eight members. Seven committee members will be

members of the LEP Board- four private sector members, three public sector. The Chair of the

Committee will be appointed by the LEP Board, and a Deputy Chair shall be appointed to chair the

Committee in the Chair’s absence or if he/she elects to delegate the chair. The remaining member

will be the Accountable Body Section 151 officer or their representative.

Quorum

Four members, of which at least two shall be private sector directors and includes relevant LEP

Board Champion for the programme, one public sector Board member and the chair.

Attendance of non-members at meetings

Officers from the LEP Executive will attend meetings and present reports and recommendations,

but will not be entitled to vote. Project applicants will not be entitled to attend meetings unless it is

deemed necessary. Meetings of the Investment Appraisal Committee will not be open to observers

or other attendees.

ToR 3

Meeting Frequency

A meeting will be scheduled to be held before each LEP Board meeting. If no decisions are

forthcoming, the meeting can be cancelled. Ad hoc meetings can be scheduled if necessary,

particularly to review changes to outstanding projects.

Delegated Authority including limits

The committee will have a delegated responsibility from the LEP Board for financial decisions up to

£500k.

Authority will be delegated for Growing Business Fund (GBF) decisions to the GBF panel, which

the LEP Board Champion for GBF and member of the IAC attends. The maximum award size

under GBF will be £500k. A report will be provided on awards made by the GBF panel for each IAC

meeting.

Authority is also delegated, through the GBF panel, to the ERDF funded Small Grant Scheme. The

SGS, an on-line panel, will report decisions made to the GBF panel and in turn to the IAC. The

maximum award size under SGS will be £25k.

Reporting procedures

The minutes of meetings will be circulated to all members of the LEP Board and will be published

on the LEP website. The IAC will receive minutes from GBF, incorporating Small Grants Panel

decisions to ensure alignment with investment decisions. IAC minutes will be published 10 days

after meetings in accordance with LEP governance arrangements.

Decisions made by the IAC, GBF panel and Small Grants panel will be recorded in the LEP’s

Communications

Meeting agendas will be circulated 5 working days before each meeting in accordance with LEP

governance arrangements. Agendas will include all appropriate papers required to support any

decisions to be made. Additional papers may be circulated by email between meetings as

necessary.

Key stakeholders such as the Skills Board and the Local Transport Body will be consulted and

informed on projects and decisions made.

Decisions will be communicated to applicants in advance of minutes being published.

Review:

The membership of the Investment Appraisal Committee will be reviewed annually. The

Committee shall, review its own performance once a year and terms of reference to ensure it is

operating at maximum effectiveness and recommend any changes it considers necessary to the

LEP Board for approval.

ToR 4

LEP Remuneration Committee

Terms of Reference

Purpose

To provide a formal and transparent procedure for developing policy on executive remuneration.

Responsibilities



To determine and agree with the Board the framework or broad policy for the remuneration

of the executive team, as it is designated to consider.



In determining such policy, take into account all factors which it deems necessary. The

objective of such policy shall be to ensure that members of the executive team are provided

with appropriate incentives to encourage enhanced performance and are, in a fair and

responsible manner, rewarded for their individual contributions to the success of the LEP.



To approve the design of, and determine targets for, any performance related pay schemes

operated by the LEP and approve the total annual payments made under such schemes.



To ensure that contractual terms on termination, and any payments made, are fair to the

individual, and the LEP.



To review the outcomes of the performance review process in respect of the Chief

Executive Officer and any other executives appointed from time to time.



Within the terms of the agreed policy make recommendations to take to the Board

regarding the total individual remuneration package of the Chief Executive Officer and any

other senior executive officers or employees who may be appointed from time to time,

including bonuses and incentive payments.



In determining such packages and arrangements, to give due regard to any relevant legal

requirements;



To review and note annually the remuneration trends across the public and private sectors.



The Committee is authorised by the Board to seek any information it requires from any

employee of the LEP, in order to perform its duties.



In connection with its duties the Committee is authorised by the Board to obtain, at the

LEP’s expense, any outside legal or other professional advice, within budgetary constraints.

Membership and Frequency

The committee shall appoint an Independent Chair, who shall serve for maximum five-year term.

The Committee shall be made up of at least three members, including the Independent Committee

Chair. No Board Member who is an employee of the LEP or who has left the LEP’s employment

within three years to the LEP, or a spouse or partner of such employee, shall serve on the

Committee. Two members of the Committee shall be appointed by and from the members of the

New Anglia LEP Board.

The Committee is authorised to co-opt the Chair of the LEP as a Committee Member (if not already

appointed) for the purposes of facilitating the annual performance review process in respect of the

Chief Executive Officer.

ToR 4

Only members of the Remuneration Committee have the right to attend Remuneration Committee

meetings. However, other individuals and external advisers may be invited to attend for all or part

of any meeting as and when appropriate. Appointments to the Committee shall be reviewed

annually by the Board.

Quorum

The quorum necessary for the transaction of business shall be 3. A duly convened meeting of the

Committee at which a quorum is present shall be competent to exercise all or any of the

authorities, powers and discretions vested in or exercisable by the committee.

Monitoring and Reporting

Minutes of Committee meetings shall be circulated promptly to the Chair and, once agreed, to all

members of the Board.

The Committee Chair shall report formally to the Board on its proceedings after each meeting on

all matters within its duties and responsibilities.

The Committee shall make whatever recommendations to the Board it deems appropriate on any

area within its remit where action or improvement is needed.

The Board shall, at least once a year, review the performance of the Remuneration Committee,

constitution and terms of reference to ensure it is operating at maximum effectiveness.

Review

The Committee shall, review its own performance once a year and terms of reference to ensure it

is operating at maximum effectiveness and recommend any changes it considers necessary to the

LEP Board for approval.

ToR 5

New Anglia LEP Management Committee

Terms of Reference

Purpose

To act as the executive management committee of the LEP and provide oversight to the

Accountable Body (section 151 officer) of LEP operations providing assurance the LEP

carriers out its business in a transparent and accountable way.

Responsibilities

• Provide executive management oversight of the LEP Operations to the Accountable

Body (section 151 officer)

• Look at key projects, initiatives and programme performance that are LEP funded,

ensuring the Accountable Body is satisfied.

• Identify, categorise and assess operational risks, escalating risk to the Audit and

Risk committee when tolerances have been breached.

• Review and scrutinise Board papers and Business Performance Reports prior to

Board meetings, ensuring regular reports to the LEP Board and Government on

LEP performance.

• Ensuring actions from the LEP Board meetings are carried out and progress

reported back to the LEP Board.

• Escalate performance related issues to the LEP board when required and

tolerances have been breached.

• Review the development of LEP operational plans.

Membership

Chaired by the LEP Chief Executive and manged by the LEP COO. Other members

include Accountable Body s151 Officer, BEIS Relationship Manager for New Anglia, Head

of Strategy, Head of Programmes, Head of EZs, Inward Investment and Innovation, Head

of Finance and Head of Communications and Engagement. Norfolk County Council

Assistant Director Communities and Environmental Services and Suffolk County Council

Assistant Director for Strategic Development.

Attendance of non-members at meetings

Other members of the LEP executive team may also be invited to attend meetings when

required. Committee member deputies are prohibited.

Meeting Frequency

Meetings will be held monthly, at least two weeks before the LEP Board meeting. Meeting

location will alternate between Norfolk and Suffolk and will be conducted in two hours.

Monitoring and Reporting

The Committee shall, review its own performance once a year, constitution and terms of

reference to ensure it is operating at maximum effectiveness and recommend any

changes it considers necessary to the LEP Board for approval.

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ToR.docx

ToR 6

Growing Business Fund

Terms of Reference

Purpose

To ensure the allocation of funding to the Growing Business Fund programme is delivered

appropriately and in accordance with the Assurance Framework through the mechanism of the

Growing Business Fund and that the funding allocation supports the delivery of the Economic

Strategy through individual projects.

Functions

•

Consider applications requesting financial support from the Growing Business Fund and

reach an agreed decision to support or reject each application.

•

Provide support to applicants and partners to ensure that a quality standard of application

and subsequently project is achieved.

•

Support New Anglia LEP and the New Anglia Growth Hub and in the promotion and

publicity of the Growing Business Fund to improve and sustain the flow of quality

applications for funding.

•

Approve grants to individual applicants with values between £25k and £500k in accordance

with delegated decision making powers from the New Anglia LEP Investment Appraisal

Committee (IAC).

•

Approve financial interventions in accordance with guidance on State Aid for SMEs.

•

Consider applications in line with Growing Business Fund criteria and in accordance with

the New Anglia LEP Economic Strategy.

•

Approve contract variation to funding agreements after initial approval by the committee

only where necessary.

Membership and Appointment

The committee will comprise a total of five voting members. All voting members will be from the

private sector including the independent Chair. 1 private sector member will be a member of the

LEP Board and will also sit on the Investment Appraisal Committee. This individual will act as the

LEP board champion for the GBF programme. Each Panel Member will be expected to sign a

Declaration, in confirmation of their appointment to the Panel and acceptance of these Terms of

Reference.

Two Private Sector representatives will take the roles of Chair and Deputy Chair of the Panel. The

full Panel will elect them on an annual basis, at its April meeting.

Membership of the Panel is undertaken on a voluntary basis and is for a period of twelve months,

renewable at the discretion of New Anglia LEP and confirmed at the September Panel meeting,

unless a Member’s appointment is terminated.

A Panel Member may terminate membership of the panel by giving at least three months’ notice in

writing to New Anglia. New Anglia may terminate the Panel Membership of any Member if they do

not act at all times in accordance with these Terms of Reference. Panel Membership will be

terminated if the GBF programme comes to an end.

Quorum

Three members of the panel should be in attendance and in agreement for a decision to be made.

ToR 6

Attendance of non-members at meetings

Officers from the LEP Executive will attend meetings and present reports but will not be entitled to

vote. Project applicants will not normally be entitled to attend meetings. Other attendees at the

meeting will include at least 1 representative of SCC (the accountable and delivery body) and at

least 1 representative of Finance East (the independent appraisers). In addition, 1 representative

from each of NCC and SCC’s Economic Development teams may attend to provide local

knowledge and context to the discussion. On occasion, a single representative from the Growth

Hub may attend. No-one other than the private sector voting members will have a vote on any of

the applications. Meetings of the Investment Appraisal Committee will not be open to observers or

other attendees.

Meeting Frequency

Panel meetings will be held monthly, with dates, times and locations determined at least three

months in advance. Meetings will be located evenly between venues in Norfolk and Suffolk, usually

Ipswich and Norwich and arranged and coordinated by New Anglia LEP.

Panel Members will be expected to attend at least eight meetings a year. Any apologies should be

advised at least one week before meetings are held. Panel Members unable to attend a meeting

should ensure that they submit their vote by email in advance, with any further relevant comments

on each grant application to be considered at that meeting. In some instances it may be deemed

more efficient to ask the whole panel to provide their vote by email, particularly if there is only one

application to consider.

Declarations of Interest

If a Panel Member has a personal or professional pecuniary or non-pecuniary interest in any

organisation or project to be considered by the Panel, they should declare that interest at the

beginning of the meeting and leave the meeting before any discussion on that item commences.

The Panel Member will have no right to vote on that particular application.

Panel Members should not enter into any discussion on applications prior to a meeting, other than

to clarify matters of detail in relation to those applications. Opinions on the eligibility or quality of

applications should be reserved for Panel meetings. Questions on matters of detail should be

submitted to Finance East, who will respond to all interested parties to ensure consistency of

information.

In addition all panel members must complete the standard LEP register of interests form and is

responsible for ensuring this form is kept up to date.

Delegated Authority including limits

The committee will have a delegated responsibility from the Investment Appraisal Committee for

financial decisions up to £500k.

Authority is also delegated, through the GBF panel, to the ERDF funded Small Grant Scheme. The

SGS, an on-line panel will report decisions made to the GBF panel. The maximum award size

under SGS will be £25k.

Reporting procedures

The minutes of GBF meetings will be taken by SCC and circulated to all members of the LEP

Board and will be published on the LEP website.

The minutes will not contain commercially sensitive information but will include the applicant name

and the amount awarded.

The GBF panel will also provide information on decisions taken for the IAC.

ToR 6

The minutes will include a record of decisions made by the Small Grant Scheme, which has

delegated financial approval from the Investment Appraisal Committee through the Growing

Business Fund panel. Minutes will be published five days after meetings in accordance with LEP

governance arrangements. In accordance with new General Data Protection Regulations, panel

members will delete all emails relating to projects after meetings and destroy all papers.

Decisions taken by the GBF Panel and Small Grants Panel will also be included in the LEP’s

Communications

Meeting agendas will be circulated 5 working days before each meeting in accordance with LEP

governance arrangements. Agendas will include all appropriate papers required to support any

decisions to be made. Additional papers may be circulated by email between meetings as

necessary.

Decisions will be communicated to applicants in advance of minutes being published.

Review:

The membership of Growing Business Fund panel will be reviewed annually. The Committee shall

review its own performance and terms of reference annually to ensure it is operating at maximum

effectiveness and recommend any changes it considers necessary to the LEP Board for approval.

ToR 7

NEW ANGLIA BUSINESS GROWTH PROGRAMME

SMALL GRANT SCHEME PANEL TERMS OF REFERENCE

The role of the Small Grant Scheme (SGS) Panel (the Panel) is:

1.1.

To provide a forum to consider SGS grant applications

(via Assessment

Forms/Reports and other information prepared by Growth Hub and/or Nwes for

approving (including setting conditions if necessary) or rejecting and providing other

advice or recommendation on submitted applications according to a set of published

guidelines issued by New Anglia Local Enterprise Partnership (New Anglia LEP).

1.2.

To provide support to New Anglia LEP and its partner organisations (Nwes, Menta,

Suffolk Chamber of Commerce, and Suffolk County Council) to promote and deliver

the SGS programme.

1.3.

To provide advice or recommendations on SGS grant applications (of grant value

between £10,001 and £25,000) and delivery processes as required by New Anglia

LEP or its partner organisations.

Membership of the Panel

2.1.

The Panel comprises of one representative from each of the following three

organisations:

2.1.1. New Anglia LEP

2.1.2. Norfolk County Council

2.1.3. Suffolk County Council

Individual Panel Members, who will be of suitable seniority and experience, will be

invited by New Anglia LEP to join the Panel.

2.2.

Current Panel Members and their nominated replacements are listed by name in the

attached Annexe 1, which will be reviewed if necessary. Each Panel Member and

their nominated replacement will be expected to sign a Declaration, in the form

attached at Annexe 2, in confirmation of their appointment to the Panel and

acceptance of these Terms of Reference.

2.3.

Membership of the Panel is undertaken on a voluntary basis.

2.4.

Membership of the Panel is for the period of 22^nd May 2017 - 31^st August 2018,

unless a Member’s appointment is terminated under paragraphs 2.5, 2.6 below.

2.5.

A Panel Member may terminate his or her Membership by giving at least one

month’s notice in writing to New Anglia LEP.

2.6.

New Anglia LEP may terminate the Panel Membership of any Member if he or she

does not act at all times in accordance with these Terms of Reference.

ToR 7

New Anglia Business Growth Programme Small Grant Scheme Panel Terms of Reference

Operating Procedures

3.1.

SGS Progress meetings will be held quarterly. Additional meetings will be held as

and when required to facilitate effective decision making.

3.2.

Decision making on grant applications will be done electronically and Panel

members will be expected to submit their vote within five working days. Panel

Members may ask any relevant questions/queries they have on the application

before they submit their vote to Nwes.

3.3.

A complete set of all three Panel Members’ votes are required before a final

decision on the application is taken. A decision will be decided by a majority vote.

3.4.

New Anglia LEP has the right to veto any taken decision if the application is

ineligible or it is outside SGS scope.

3.5.

A Panel Member will have no right to vote on the application if he or she has either

a personal or professional interest in the Applicant’s organisation or project to be

considered by the Panel and must declare his or her interest before any discussion

on the grant application commences.

3.6.

A Panel Member must find a nominated replacement, a suitable individual within

their organisation, if he or she is unable to act according to this document, for

example, according to Para 3.5 or being away from the office.

3.7.

New Anglia LEP, Norfolk County and Suffolk County Councils are subject to the

provisions of the Freedom of Information Act 2000 (FOI). All enquiries received by

any partner organisation under FOI in the first instance must be directed to New

Anglia LEP as the accountable body for the programme.

3.8.

Copies of all correspondence relevant to the application between New Anglia LEP,

its partner organisations and the Panel will be saved by Nwes/Growth Hub and

passed to New Anglia LEP for accountability.

3.9.

A Panel Member and their nominated replacement must properly delete all

information related to the SGS application they receive after a final decision on the

requested grant has been taken.

4. This Terms of Reference document

4.1.

This Terms of Reference document is approved and signed by New Anglia LEP and

the Panel jointly.

4.2.

This Terms of Reference document will be reviewed by New Anglia LEP and the

Panel if necessary.

Page 2 of 3

New Anglia Local Enterprise Partnership Board

Wednesday, 21^st February 2018

Agenda Item 9

Update on the LEP’s 24 Month Operational Plan

Author: Marie Finbow

Summary

This report provides a high-level summary of progress against the LEP’s two-year operational plan

which runs from April 1st 2016 to March 31^st 2018.

The plan was structured under six strategic headings, with 54 work streams beneath these headings.

The plan shows good progress against the targets, with 43 work streams either completed or green

and just 11 amber. None are red, as the LEP executive has succeeded in focusing resources to move

all work streams forward.

The plan was developed to map and report against the LEP’s key priorities, and has proved effective

as an internal management tool, but less effective as information for the board.

Looking ahead, the quantity and quality of management information is being reviewed as part of the

review of the business performance reports.

Recommendation

The Board is asked to note the progress made against the LEP’s 24-month operational plan.

Background

In April 2016 the LEP Board agreed the strategic delivery priorities for the following 24 months which

were built around the six main headings (cogs):

Taken together, the two large cogs represent the key delivery priorities that have a direct impact on

achieving the ambitions which were set out in our Strategic Economic Plan.

The four smaller cogs represent the underpinning work streams that support and enable the

successful delivery of the two larger cogs. We recognised that there was an inevitable degree of

overlap between the different work streams, and all six cogs needed to function effectively for the LEP

to successfully move forward.

A total of 54 different work streams sit underneath the six cogs - highlighting the wide reach of the

LEP’s work.

To monitor progress against delivery effectively, the executive team developed the following RAG

rating for each of the work streams:

 Red - targets not being met; Risk of missing final deadline or risk of negative impact on the LEP’s

reputation. May be caused by unavoidable external factors or lack of resources (i.e. people

and/or funding)

 Amber - Making slower progress than anticipated/forecasted - external factors can be managed

- need to allocate resources to other priorities. Arrows are used to determine if the workstream is

moving towards Red or Green

 Green - On target; on time; on budget; will be complete by the end of March 2018 or continue

beyond the life of this operational plan.

 Complete - Work stream has been completed or is no longer being progressed.

Progress against the 24-month operational plan has been closely monitored by the LEP executive.

The LEP Board received a six-month progress report in November 2016 and the Board has continued

to receive monthly updates on progress against the six main cogs through the Managing

Director/Chief Executive Reports.

Of the 54 work streams in total, 19 have been completed, 24 are rated as Green and 11 are rated as

Amber. No workstreams have a Red rating.

This is because throughout the lifetime of the operational plan as and when workstreams have moved

to Red, the LEP Executive’s leadership team has targeted resources to unblock these from delivery.

Cog - Strategic Priority

Workstream RAG status

Complete

Green

Amber

Red

Visible Leadership in Driving Growth & Economic Development

Unleashing the potential & maximising impact from programme

delivery

Building Solid Economic Evidence and Analysis

Good Governance

Clear strategic communications and engagement

Robust Finance

Totals

Areas of Improvement

Whilst the majority of projects and programmes have delivered, where resources and priorities have

been refocused to accelerate delivery and where we continue to focus resources:

 Up until June 2017 the LEP’s Small Grant Scheme struggled to generate significant interest. To

alleviate this, an extensive marketing campaign was launched, and the programme’s criteria was

adjusted to allow grants of up to £25K. As a result, we have seen a dramatic increase in the

number of grants awarded. However, we are continuing to monitor this scheme closely and the

programme remains Amber until it has generated the required levels of match funding.

 The downturn in the Oil and Gas Industry continues to have an impact on uptake on our Enterprise

Zone sites. To address the impact of the dramatic fall in the price of oil within our region, the LEP

created the Oil and Gas Taskforce and launched a pack of measures worth more than £300,000.

Appendix 1

Progress against the LEP’s operational plan

The following section provides a narrative summary of the key work streams beneath each cog

beginning with work streams rated amber.

Cog One - Visible Leadership in Driving Growth and Economic Development

Complete

Green

Amber

Red

The following workstreams are rated as Amber:

 Support Housing and Business Growth - the LEP continues to work closely with the Housing

and Finance Institute and four Norfolk Local Authorities on the Housing Readiness Programme

- which is due to be delivered in Spring 2018. An infrastructure manager has recently been

appointed to develop the LEP’s position around housing. This will include liaising with local

authorities and working to enhance the building growth group over the next six months.

 Publish and implement the Integrated Transport Strategy - The timetable for development

of this strategy has been revised to allow further work to be done in aligning it with the new

Economic Strategy and the development of a delivery plan. The Integrated Transport Strategy

and its delivery plan will be presented to the LEP Board for sign-off in May 2018.

 Enhancing support for young people through the Youth Pledge - The New Anglia Youth

Pledge Marque was launched in July 2016 to award businesses who are committed to support

the future workforce, better align skills with enterprise and in turn grow the local economy. This

is currently being reviewed to ensure that it remains fit for purpose and really represents and

supports businesses who want to support this agenda. The Enterprise Advisor Network is in

place and developing well. Regular meetings are taking place with the team to support the

continued uptake of roles in schools and they achieve beneficial outcomes. MyGO in Ipswich is

progressing well and the model is now being replicated in Stowmarket and Lowestoft. This

service has supported over 9,000 individuals. 'Norwich for Jobs' initiative is also progressing

well having achieved its targets by getting over 1,770 young people into a paid position and

over 160 employers pledging to create 480 work experience opportunities. It will continue to add

to these totals and is likely to extend to other areas of the county. The on-line careers service

'ICANBEA' continues to thrive.

Seven workstreams are rated as Green and these will all roll forward.

 Growth Deal Three implementation - the LEP conducted a review of all LEP programmes to

ensure alignment with the ambitions in the new Economic Strategy and a series of project calls

will be launched over the coming months.

 Focus on Innovation - the development of an innovation framework and operational plan is

progressing well, with the LEP working in collaboration with a range of partners, including

TechEast, Hethel Innovation, Innovation Martlesham, the Norwich Research Park and

OrbisEnergy.

 Building our profile to support inward investment - we are in the process of developing an

inward investment strategy following the appointment of an Inward Investment Manager and a

Cambridge Norwich Tech Corridor Business Development Manager to co-ordinate and drive

delivery of inward investment work.

 Working beyond our borders - Regular engagement has continued with GCGP on the

development of economic strategies to ensure alignment in overlapping areas. We have also

continued to work closely with them on delivery of the Eastern Agri-tech programme and in

running the successful VentureFest East event. Discussions are continuing with the South East

LEP over potential joint working and supporting work around a sub national transport body.

 Developing the Project Pipeline - the LEP is now developing a new project pipeline which

aligns with the Economic Strategy. The first Growth Deal Three project call was announced in

October 2017 in parallel with the launch of the new Economic Strategy. This resulted in 29

project Expressions of Interest. Two projects were approved by the LEP Board in January 2018,

with decisions on a further 20 projects deferred pending further information and seven projects

rejected. Deferred projects, depending on when they are ready, will be brought back to a Spring

LEP board meeting or referred to a further Growth Deal funding round, currently scheduled for

the summer or autumn of 2018.

 Impact on Brexit - the LEP continues to work closely with Norfolk and Suffolk County Councils

in developing supporting data on the potential impacts of Brexit. A report is coming toi the

February LEP board. This work will be taken forward by the new Growth Manager, who joins the

LEP at the end of February 2018.

 Local Energy East - good progress is being made on development of a Local Energy East

Strategy, which is due to be completed by March 2018.

Seven workstreams have been completed:

 Devolution - the LEP played a leading role in developing devolution proposals for Norfolk and

Suffolk - but the proposal was withdrawn by Government when not all the local councils ratified

the proposals.

 Growth Deal Three - our bid was submitted in July 2016 and we were delighted to be awarded

£69.06m - the seventh highest allocation out of 38 LEPs.

 Improve business productivity - this long-term ambition is embedded in the new economic

strategy and the LEP’s role in this will become clearer over the coming months as we work with

partners to develop delivery and investment plans for the Economic Strategy.

 New Strategic Economic Plan (SEP) - the new Economic Strategy for Norfolk and Suffolk has

been published following approval by the LEP Board at its meeting in October 2017.

 Measure our Impact - the SEP Impact Report was published and launched at the LEP Board’s

AGM in September 2016 - highlighting the LEP’s achievements since the launch of the SEP

and reporting good progress being made against many our original ambitions.

 Look Further Ahead - this workstream was about the LEP looking at what a Strategic

Economic Plan post 2026 should look like - and culminated in the development and publication

of the new Economic Strategy.

 Industrial Strategy - The LEP submitted a collaborative response to the Government’s

Industrial Strategy Green Paper in April 2017 articulating the views of our local authorities,

business and academic partners and we are committed to working with Government to develop

and pilot a local industrial strategy for our area.

Cog Two - Unleashing the Potential and Maximising Impact from Programme Delivery

Complete

Green

Amber

Red

Six workstreams are rated as Amber:

 Growth Programme - to raise the profile of the Small Grant Scheme, which until June 2017

had struggled to generate significant interest, an extensive marketing campaign was launched,

and the programme was adjusted to allow grants of up to £25k. As a result, there has been a

dramatic increase in the number of grants awarded - but the programme remains Amber whilst

risk remains over the match funding that needs to be generated through the scheme.

 Enterprise Zone - Space to Innovate Legal Agreements - Work is underway to complete the

nine local tri-party legal agreements with complexities around some sites delaying progress.

Three legal agreements have been signed and are in place, with three further agreements

expected to be finalised by the end of March 2018.

 Growing Places Fund - The GPF programme was relaunched with a project call in 2016/17 to

stimulate further interest and applications. The project call has produced a working list of

applications for the current financial year, including the recently approved Winerack project in

Ipswich which has now commenced drawdown of the £5m GPF loan. Following the review of

LEP programmes in October 2017, GPF has been adapted to align with the objectives of the

Economic Strategy and support further growth by unlocking stalled sites.

 Agri-Tech - 68 grants have been awarded through the AgriTech Growth Initiative with a total

value of £5m (ahead of the target of £4.6m awards by April 2018). However, this programme

was effectively paused from November 2017 following full allocation of the New Anglia LEP

initial investment and issues with GCGP. Mechanisms will be put into place to manage payment

commitments in the New Anglia LEP area.

 Ipswich Vision Board - The Vision Board continues to progress all Vision ambitions. A revised

delivery framework which aligns with the new Economic Strategy was approved by the Ipswich

Vision Board in January 2018 and a new governance structure is being implemented to drive

delivery of the Ipswich Vision. Consultants have been appointed to develop the Public Realm

Strategy and the Ipswich Vision Board will consider a first draft in March 2018.

 European Funding - This work is ongoing despite the uncertainties of Brexit. The Treasury has

committed to guarantee all EU funds contracted to projects prior to the date of Brexit. Whilst

some projects continue to come forward for ESIF funding, there is evidence of a clear downturn

in interest in the funding streams given the current uncertainty about the security of future

investment through ESIF and doubts over whether the programmes will be able to run to their

intended conclusion in 2020. In the meantime, facilitators are continuing to support project

applicants and undertake promotional activity to publicise funding availability.

Five projects have a Green RAG rating, and these will all carry forward into the new operational plan:



Successful delivery of programmes - strong delivery continues to be shown by the LEP

programmes; Growing Business Fund has now awarded 361 grants and created 2255 new jobs.

Growth Deal has now completed two years of delivery with a spend of £51.5m. The Growth

programme is now fully operational, with an extensive marketing campaign to raise the profile of

the Small Grant Scheme. This workstream will carry forward into the new Operational Plan.



Growing Business Fund - as reported above, this programme is showing strong delivery and

it will carry forward into the new Operational Plan. Highlights of the GBF programme delivery

include 368 grants awarded to date through the programme, creating 2,370 new jobs as

shown in the table below:

Target to

Awarded

Delivered

Growing Business Fund

April 2018

to date

to date %

Number of grants awarded

368

336

Value of grants awarded

£21m

£18.64m

£17.4m

83%

Private sector match funding

£84m

£104.5m

£95.7m

114%

New Full-time jobs created

1422

2370

1517

107%



Growth Deal - Work is progressing, with 24 live projects/programmes and 11 projects

complete. Currently, one project has ‘red’ status and nine have ‘amber’ status. In most cases

‘amber’ status flags up minor points to be resolved before a grant agreement can be issued or

there is delayed delivery and expenditure.



New Anglia Capital - Funding was increased to £2m in April 2016 to accommodate further

demand. To date, twelve investments have been made, with one pending and a total of £1.87m

has been awarded/committed.



Oil and Gas Taskforce - The LEP continues to encourage potential applicants to come

forward for support. To date, 34 enquiries have been received, resulting in 27 visits to

companies, 17 business diagnostics undertaken, 10 applications for the consultancy scheme,

resulting in 6 approvals and 11 applications for support through the Growing Business Fund -

again resulting in 6 approvals.

Completed workstreams:



Inward Investment - marketing campaigns - A range of marketing material has been

developed; this includes brochures for both Enterprise Zones as promotional material and for

our website. Fact sheets have also been developed for individual sites. The EZ sites were

promoted at MIPIM UK in 2016 and in 2017 and we have run a series of events targeted at

attracting interest from specific sectors.



Enhance Existing Programmes - A review of LEP programmes has been completed in line

with development of the new Economic Strategy. A number of system improvements have been

made to our existing suite of programmes, including the introduction of a new CRM system to

support the Growth Programme and criteria revised to reflect our new ambitions.

Two new programmes have been introduced following the LEP review of its existing and

proposed new funding programmes in October 2017 - the Capital Growth Programme to

support delivery of the Economic Strategy and a new sustainable programme, the Enterprise

Accelerator Fund to both encourage development on the Enterprise Zones and to generate an

income stream through shared ownership of a flagship commercial building on a number of the

EZ sites.

 Capital Growth Programme: A call for projects for the new Capital Growth Programme

was launched in October 2017 in parallel with launch of the new Economic Strategy. A total

of 29 bids were received with a total value of £54m. Bids have been independently

appraised with recommendations considered by the LEP Board in January 2018.

 EZ Accelerator Fund: Specifically designed to support development and delivery of the

LEP’s Enterprise Zone sites to help resolve site development issues. The programme will

also help to support the sustainability of the LEP through an income stream generated from

a share of any rental income, alongside a percentage of the rate income as usually

generated from new developments on EZ’s. The first project of this type to be completed

will be the new headquarters of Proserv in Great Yarmouth.



Programme Innovation - Investment principles are now in place as agreed at the October LEP

Board to support the implementation of initiatives such as the EZ Accelerator Fund. Further

refinement of new and enhanced programmes has been completed as part of the programme

review.

Cog Three - Building Solid Economic Evidence and Analysis

Complete

Green

Amber

Red

All workstreams are complete.

 Enhance base data and evidence - a solid evidence base has been developed which was

used as the basis for the new Economic Strategy with mechanisms in place to ensure that this

evidence base is regularly reviewed and updated.

 Put in place clear KPIs - a data dashboard is in place and is presented to the LEP Board on a

quarterly basis. every quarter to inform them of progress against our ambitions. Work is

continuing on the development of supporting metrics and relevant targets with a 5 year

trajectory report expected to be published

 Develop annual business survey - following consideration of cost and identification of other

methods, the decision has been taken not to proceed with an annual business survey at this

time.

 Secure Science and Innovation Audit - The LEP was delighted to secure a Science and

Innovation Audit in Wave 2 which was published in September 2017 - highlighting to

Government our region’s strength for potential future funding streams, and a huge vote of

confidence in our world class sectors - including life sciences, Agri-Tech, advanced engineering

and ICT - which are a key part of our economy

 Update and publish the New Anglia Economic Profile - this was developed and forms part

of the evidence base for the Economic Strategy.

Cog Four - Good Governance

Complete

Green

Amber

Red

One workstream is currently rated as Amber:

 Local Authority Joint Working - the LEP continues to focus on strengthening working

relationships with Local Authorities through the work with the Norfolk and Suffolk Growth

Groups as well as participation in Greater Norwich activities, Ipswich Vision and other specific

area based work such as the Opportunity Areas. This work stream will roll forward.

Six workstreams are rated as Green:



Strengthen Internal Communications - Internal comms have been strengthened with the

introduction of key messages provided to staff on a monthly basis and a new investment map

created, highlighting investments made across our region and an interactive version being

developed for our website.



Transparency of decision-making - our Assurance Framework was updated in May 2016 and

revised in February 2017. The next review will be undertaken in February 2018. In addition, the

LEP commissioned PwC to look at the LEP’s operations and governance and an

implementation plan was approved by the LEP Board in September 2017. We have also

developed an implementation plan following the Government’s Mary Ney review to help improve

governance and transparency. Progress against both implementation plans is reported at each

LEP Board meeting. The Annual Conversation with Government took place in December

focusing on the LEP’s contribution on driving local economic growth, reviewing the LEP’s

governance and assurance processes, evaluating progress of delivery on key local growth

programmes and discussing the LEP’s priorities and challenges for the year ahead. The LEP

continues to be in the top two LEPs in the London and south east patch, proactive, with a good

culture and continued to put forward a compelling case.



Strengthen Sector Groups - We are also continuing to build effective working relationships

with our sector groups and the LEP held a number of events over the summer to engage them

in development of the new economic strategy and further events are planned to engage them

on implementation of the economic strategy.



Support for Board members - a formal induction process for new Board members is now

embedded to introduce them to the wide variety of work undertaken by the LEP, and the LEP

executive team.



Executive Team development - a full review of all our HR policies has been completed and

following consultation with the LEP executive team, all these policies are now embedded. The

new performance review system which was part of this review was introduced for the financial

year 2016/17. Following the PwC review the LEP Board agreed to the creation of two new

senior LEP Exec posts - CEO and COO. The CEO appointment has been made and

recruitment is underway for the new COO.

One workstream is complete:



Succession Planning - a forward plan is in place to fill LEP Board vacancies. A new Chairman

is in place and following the appointment of three new private sector board members the LEP

Board is now at full complement.

Cog Five - Clear Strategic Communications and Engagement

Complete

Green

Amber

Red

Four workstreams are rated as Green:

 New Anglia LEP brand and reputation - communications strategy and brand guidelines are in

place. Positive media coverage has continued to increase over the past year online, in print and

on radio/television. The LEP continues to be seen increasingly as an independent expert

commentator for business issues, which is a positive step and reinforces our reputation as

thought leaders. Work continues on strengthening our digital presence, ensuring clear and

consistent messaging across all platforms. Our new website - launched in October 2017 - has

been positively received and our online presence is also growing; we now have over 6,500

Twitter followers, 2,800 members of our LinkedIn group and 5,500 subscribers to our monthly

e-newsletter.

 Support, promote and market key LEP programmes - promotion of the business growth

programme is ongoing. Social media coverage has increased and the new Growth Hub comms

manager works closely with the LEP comms team - ensuring consistency of messaging.

 Strategic leadership on campaigns for better rail and road links - The LEP continues to

lead on transport campaigns, including the very successful GEML Rail Campaign, which led to

the award of the new franchise and the promise of an entire fleet of new trains.

 Strategic comms and marketing support for events - the LEP continues to provide strategic

and marketing support for events - including Venture Fest East 2017 and had a key role in

helping to identify opportunities for Norfolk and Suffolk businesses to be involved. The LEP also

led the steering group for MIPIM UK.

One workstream is complete:

 Lead business engagement for devolution - the LEP played a leading role in developing

devolution proposals for Norfolk and Suffolk - but the proposal was withdrawn by Government

when not all the local councils ratified the proposals.

Cog Six - Robust Finance

Complete

Green

Amber

Red

One workstream is rated as Amber:

 Sustainable budget/finances - The LEP is currently reviewing other income streams to sustain

its core budget for the longer term. The board has, in principle, approved the LEP to explore

and invest with certain partners to establish a new and sustainable income stream. The LEP is

currently working with a local authority partner to add a new operational income stream for

2018/19.

Three workstreams are rated as Green:

 Overall financial management - Regular budgeting and reporting continues ensuring the LEP

operates at its optimum whilst endeavouring to strengthen the LEP’s balance sheet. Over the

past year the LEP’s finances have been consistently managed within budget and work is taking

place to improve internal reporting with the leadership team to enable greater flexibility of the

budget across each department.

 Relationship with the accountable body - the LEP continues to maintain a strong working

relationship with its Accountable Body through regular communications and meetings ensuring

transparency and early identification of any issues.

 Maximising return on LEP funds - Continuous discussions take place between the

Accountable Body and the LEP to maximise returns on deposits.

New Anglia Local Enterprise Partnership Board

Wednesday, 21 February 2018

Agenda Item 10

New Anglia Business Growth Programme

Author: Jason Middleton

Summary

This paper updates board members on the progress being made by the LEP’s flagship

business support programme - the Business Growth Programme.

This programme includes the LEP’s Growth Hub, the LEP’s small grants programme and

two business start-up programmes which are delivered by partners.

It recommends approving a bid for further funding from the ERDF programme (European

funding) which will fund the programme until the end of August 2021.

The new programme has been re-designed to maximise alignment with the new Economic

Strategy and will form a key part of our plan to deliver the strategy.

Recommendation

The Board are asked to:

1. Support the submission of a bid for £7.4m of ERDF funding to the Ministry for

Housing, Communities and Local Government (MHCLG) to fund the New Anglia

Business Growth Programme for the three years from August 31^st 2018 until August

31st 2021.

2. Agree to the allocation of £150,000 of BEIS funding and £200,000 of the Growing

Business Fund to continue activity, should European Regional Development Fund

(ERDF) approval be delayed beyond August 2018.

Background

The New Anglia Growth Programme is the LEP’s flagship business support programme and

comprises three main elements:

 New Anglia Growth Hub, offering free and impartial advice to individuals and

businesses and is able to signpost individuals onto a range of additional support

 New Anglia Small Grant Scheme, providing grants between £1,000 and £25,000 to

SMEs to enable growth, increased productive and job creation

 Start-up and Early Stage Support Programme, providing specialist support to help

people set up a successful new business - delivered by partners NWES and Menta

The existing Growth programme was devised following a review of business support in 2013,

overseen by the LEP Board, and all elements of the Programme were built into the LEP’s

Strategic Economic Plan (2014). Funding for the current programme runs until the end of

August this year.

The new Growth Programme forms a key delivery element of the new Economic Strategy for

Norfolk and Suffolk, with Growth Hubs also identified as a key element of the Government’s

Industrial Strategy to deliver long term economic growth.

Existing Growth Programme

The existing Growth Programme has the following targets from April 2014 until August 2018

Output

Target

Achieved to Date

Businesses provided support and advice

7,530

6,993

Businesses provided ‘in-depth’ support

1,667

1,529

Hours of support provided to businesses

N/A

32,776

New business start-ups created/new enterprises supported

1,005

756

New Full-time jobs created

1,530

848*

*There can be a long delay between support provided (e.g. a grant) and jobs being created

Existing Funding

The existing Growth Programme was initially awarded £3.9m as part of the Norwich and

Ipswich City Deals from April 2014 until summer 2015.

This was extended until the end of August 2018 through a successful bid for £6.3m of ERDF

funding to the Ministry of Housing, Communities and Local Government (MHCLG).

Alignment of new Programme with economic strategy and industrial strategy

Since the Growth Programme started, Government has placed Growth Hubs at the centre of

future business support and encouraged LEPs to bid for further ERDF funding to be utilised

to support future activity.

At the same time we are focusing the work of the Growth Hub to drive forward the ambitions

in our new Economic Strategy.

The ambitions in the strategy are:

 The place where high growth businesses with aspirations choose to be.

 An international facing economy with high value exports

 A high performing productive economy

 A well-connected place

 An inclusive economy with a highly skilled workforce

 A centre for the UK’s clean energy sector

 A place with a clear ambitious offer to the world

The new Programme will place a greater emphasis on supporting businesses with high

growth potential, with 10,000 businesses across Norfolk and Suffolk proactively contacted

over the three year period.

This approach will enable more focused delivery in terms of economic benefits.

For this reason, some of the Output values have been reduced, to reflect the greater time

spent providing businesses and entrepreneurs with ‘in-depth’ support.

Bid for ERDF funding

We are working with delivery partners to develop a second ERDF application, which will

provide funding for all three strands of activity and enable the Programme to continue to

operate until the end of August 2021.

An outline application for £7.4m of ERDF funding was submitted to MHCLG in November

2017, with feedback expected from MHCLG shortly, which will enable us to move to full

application stage.

The LEP executive team have been working with delivery partners to develop the full

application prior to MHCLG’s feedback, as it is crucial that we obtain the final approval

before the current funding expires at the end of August 2018.

The application will use the same model of match funding as current delivery, whereby

ERDF contributes 50% of the costs, with the other 50% coming from recipients of the Small

Grant Scheme.

This model of delivery means that the LEP and its delivery partners do not need to make a

financial contribution towards delivery costs.

The table below shows the Outputs that the existing ERDF funded Programme and new

ERDF application will generate:

Outputs

Existing

New

Businesses awarded grants

200

175

Businesses receiving ‘in-depth’ support ( >12 hours)

430

1036

Businesses start-ups supported

630

606

Private investment provided by businesses

£6.1M

£7.49M

Employment increase in supported businesses

755

171*

Businesses introducing new products

Number of entrepreneurs assisted to start a new businesses

761

901

Businesses receiving information, diagnostic & brokerage

2,640

2,352

*Note, we will no longer be able to count a sole trader as new employment.

If sole traders are included, this figure is 727.

The following table shows the contribution that the Business Growth Programme is expected

to make in terms of LEP Programme delivery between April 2017 and March 2021:

LEP Programme

Outputs/Targets

2017/18 to

Percentage of LEP

2020/21

Programme

Delivery

Business Growth Programme

New Employment

1,414

2.7%

(direct and indirect)

New Businesses

799

64.5%

Private Sector Match

£13.05 million

1.5%

As can be seen in the table, the Business Growth Programme is a critical part of our overall

programme to create new businesses. It is less focused on new jobs because there is a

broader suite of programmes that support the creation of new jobs, such as Growing

Business Fund.

Approval Process

Delays have become a significant issue for the approval of ERDF applications during the

current ERDF programme period.

Our previous ERDF application took twelve months to approve, which resulted in a shorter

delivery period as a result. However, we have been informed that approval delays are now

significantly less.

With this in mind, we are acutely aware of the need to ensure that we obtain approval from

MHCLG as soon as possible, to ensure the continuation of delivery of the Programme and

business support.

We are not expecting final funding confirmation until July 2018, which is close to the 31^st

August 2018 date, when our existing delivery ends.

With this in mind, the Chief Executive Officer and Executive Team have assessed a number

of options available to the LEP, in order to ensure continuation of delivery of activity.

Operational Options

There are two options, with the LEP Chief Executive Officer and recommending Option Two:

Option One - Begin to wind down activity

This would see a reduction in existing, beginning in June, including a halt in any new

applications to the Small Grant Scheme, the winding down of promotion of start-up activity

and asking the Growth Hub to reduce the number of businesses they support.

Whilst this would allow for a reduction in spend, therefore reducing financial risk, it would

also mean that there would be reduction in the number of businesses supported, resulting in

a slowing of business investment and output generation.

This would also mean that the Programme would lose momentum, making it more difficult to

increase activity again, following confirmation of any new funding, and the risk of redundancy

of Growth Hub staff.

Costs for redundancy and to wind down the Growth Hub have been allocated within the

existing EDRF Programme allocation.

Option Two - Continue to the end of October 2018 for the Board to consider a full

options review at the September Board meeting

We are recommending that the Growth Hub and Small Grant Scheme continue in their

current form until the end of October 2018, an additional two month period, to give additional

time for ERDF approval and reduce the risk of the Programme being disrupted.

This equates to £150,000 and can be taken from our annual £287,000 allocation of funding

from the Department of Business, Energy and Industrial Strategy (BEIS) for Growth Hub

activity.

We also recommend that £200,000 of funding for the Small Grant Scheme be taken from the

Growing Business Fund, as the scheme forms a crucial element of the LEPs grant support

for SMEs. This would leave GBF with an operational budget of £2.8m for 2018/19 which

would be sufficient to run an effective programme.

In the event that a decision on funding from MHCLG is still pending by September, the LEP

Executive would present a paper on future options to September’s board meeting.

New Anglia Local Enterprise Partnership Board

21 February, 2018

Agenda Item 11

Sub-National Transport Bodies and The East of England Transport Forum

Author: Ellen Goodwin, Infrastructure Manager

Summary

This paper provides a background to the formation of Sub-National Transport Bodies, the

development of the East of England Transport Forum and seeks a nomination from this Board

to join the Forum to champion the East’s opportunities for growth and priorities for investment.

Recommendation

The Board is asked to:

 Agree to be a full member of Transport East; and

 Nominate a private sector representative to sit on Transport East.

Background

The Cities and Local Government Devolution Act (2016) provides for local partners to put

forward to Government a proposal to establish a statutory Sub-national Transport Body (STB).

Government sees STBs as delivering improved collective transport planning and decision

making over areas larger than current transport authorities. It is proposed that local partners

forming a statutory STB would have direct influence over decisions that are currently within the

control of Government and its agencies.

In introducing the STB concept, Government Ministers emphasised that they would be able to:

 develop transport plans for their areas;

 tackle issues that are currently decided in Whitehall rather than by local councils;

 consider longer distance road or rail networks and corridors; and

 consider transport systems that cross geographical areas.

To date four areas of England have begun the journey towards the creation of STBs. Each is at

a different stage. These are:

1. Transport for the North - the most advanced and with significant Government funding to

support its work;

2. Midlands Connect - the next most advanced and with some Government funding;

3. England’s Economic Heartland - the Oxford, Milton Keynes, Cambridge corridor is

making good progress. It is currently evaluating whether to progress to an STB -

currently a non-statutory forum.

4. Transport South East - linking the South Coast and the newest body.

The East of England Sub-National Transport Forum

Interest in an East of England sub-national transport forum has been growing following an

informal preliminary meeting on 13 September 2017 where elected members discussed the

possibility of setting up an East of England sub-national transport board/forum.

In order to broaden these discussions, the East of England Local Government Association

organised an East of England Transport Summit on 21 December 2017 which all councils,

Local Enterprise Partnerships and strategic partners were invited.

At the summit leaders, elected members, senior officers and wider partners discussed the

rationale and drivers for establishing a sub-national transport body/forum. Delegates at the

Transport Summit agreed to establish a non-statutory sub-national transport forum, covering

the East of England area, to be known as Transport East.

The key points highlighted that:

 A joint narrative and vision is very important for influencing national transport strategy,

funding and influencing decisions;

 There are joint strategic needs, demands and functions that flow from local needs and

aspirations which would be better served through Transport East;

 There is a surplus of growth plans and strategies, which would be more effective if

better linked;

 Partnership working with the transport industry, Network Rail, airports and ports can be

effectively coordinated by Transport East so that government receives agreed

messages;

 Transport East can progress quickly by working with partners and taskforces in the

region that already have a lot of the evidence base ready to use on strategic schemes;

and

 The work of Transport East would be strengthened by the number of very influential

MPs in the region.

The outline roles and remit of the non-statutory forum as agreed at the summit has been taken

forward into the draft terms of reference, included at Appendix A. Section 4 of the terms of

reference includes details regarding membership.

The meeting agreed that LEPs should be members of the forum alongside local authorities, as

is the case with the other four transport bodies.

In its initial form as a non-statutory body, it is envisaged that the forum will operate on

consensus. However, as it establishes its role, geographic scope, resource allocation and more

formal membership, consideration will need to be given to voting arrangements.

While the forum offers an observer membership, being a full member will offer the opportunity

to be more influential in the decisions the Forum takes and in exploring the challenges,

opportunities and options for moving towards statutory status, either in its own right or

alongside an already established STB.

Support by executive team will be provided by the LEP Executive Team.

Future meetings

An East of England Parliamentary Reception will take place on 28 February 2018, which would

provide a platform for launching an East of England Sub-National Transport Forum and

promoting collaboration across the region with Ministers, MPs and wider partners.

The next meeting of Transport East itself will take place on the morning of 13 March 2018.

Recommendation

The Board is asked to:

 Agree to be a full member of Transport East; and

 Nominate a private sector representative to sit on Transport East.

100

APPENDIX A.

East of England Sub-National Transport Forum

DRAFT Terms of Reference

First presented on 21 December 2017 to East of England Transport Summit

(Updated 18 January 2018)

Purpose

1.1.

The East of England Sub-National Transport Forum is the local response to the proposals contained

with The Cities and Local Government Devolution Act (2016) and reflects the need for a Forum in

which strategic issues and proposals can be addressed in a timely and efficient way.

1.2.

The East of England Sub-National Transport Forum brings together representatives of Local Transport

Authorities, District Planning Authorities, Local Enterprise Partnerships, and transport providers with

representatives from Government, infrastructure agencies and transport service providers in a

collaborative partnership that enables a single co-ordinated conversation.

1.3.

As such the East of England Sub-National Transport Forum provides a single point of contact for

Government, its agencies, infrastructure and service providers on strategic transport issues.

Strategic Aims

2.1.

The East of England Sub-National Transport Forum will support the development of a transport

network that:

•

is innovative and prepared for future developments.

•

enables housing growth.

•

enables the efficient and effective movement of people and goods to boost economic growth.

•

ensures that growth in the East is sustainable, encompassing all forms of transport including,

public transport, walking and cycling.

•

ensures that the East of England is a place where people want to live, work, learn and visit.

•

enables people to live independently and to make the most of opportunities as they arise.

Role

3.1.

The East of England Sub-National Transport Forum will:

3.1.1.

Provide the focus for a single conversation on strategic transport and infrastructure related

activities.

3.1.2.

Represent the East of England's interests with respect to national strategy and policy

ensuring effective alignment between national investment and local growth plans.

3.1.3.

Enable a more effective and meaningful engagement with the Department for Transport,

infrastructure agencies (such as Highways England and Network Rail) and service providers

(such as bus and train operating companies), and the East of England’s major ports and

airports.

3.1.4.

Provide the opportunity to share technical expertise and resources across the partners to

assist with the development of a coherent and integrated transport network better able to

respond to the demands of growth and changing technology.

3.1.5.

Oversee the development of a high level transport strategy which;

• covers the relevant geography of the membership of the Forum,

101

• is linked to the delivery of economic growth and prosperity, and

• has a functional link with spatial planning.

3.2.

The Forum will enable the partners to realise:

3.2.1.

More effective engagement with, and influence over decision making at the national level

3.2.2.

Greater added value through the sharing of knowledge, skills and resources

3.2.3.

More efficient operation of strategic, local and major road networks

3.2.4.

Improved resilience of the transport system, particularly during periods of disruption (both

planned and unplanned)

3.2.5.

More efficient and effective delivery of infrastructure, with schemes delivered faster and

at less cost

3.3.

The role of the East of England Sub-National Transport Forum will be periodically reviewed to ensure

that the Forum is best placed to meet the ambitions of its members.

Membership of the Forum

4.1.

The membership of an East of England Sub-national Transport Forum will include “relevant

authorities” that together would define the agreed geographic extent of the East of England Sub-

national Transport Forum.

4.2.

The Cities and Local Government Devolution Act (2016) Act outlines that it is for “relevant

authorities” to put forward a proposition including considerations of geography, governance and

the powers to be exercised by the STB; “relevant authorities” include:

• a Combined Authority;

• an Integrated Transport Authority;

• a county council;

• a unitary council.

4.3.

One representative per “relevant authority” will be included as a member of the Forum.

4.4.

One district council representative from each two tier “relevant authority” member geography will

be included as a member of the Forum. District representation will be determined locally.

4.5.

One representative from each Local Enterprise Partnership within the geographical scope of the

Forum will be included as members of the Forum.

4.6.

The members of the Forum are set out in Annex A to these Terms of Reference (to be appended once

agreed)

4.7.

The Department for Transport will be invited to attend in an observer capacity.

4.8.

Additional organisations may be invited by the Forum to join as members or observers at any time

where their membership and participation is seen as adding value.

4.9.

Membership of the Forum will be reviewed on a regular basis.

Chairman and Deputy Chairman of the Forum

5.1.

The Chairman of the Forum will be a representative from a “relevant authority” as defined in The

Cities and Local Government Devolution Act (2016), who will serve in the role for at least one year

but no more than two years. The Chairmanship will be reviewed annually by the Forum.

102

5.2.

The Deputy Chairman will be a representative from the wider membership (and does not need to be

from a “relevant authority”), who will serve in the role for at least one year but no more than two

years.

Voting

6.1.

The non-statutory Forum is a collaborative organisation and with decision making within the Forum

delivered by consensus.

6.2.

Formal arrangements for voting (where required) will be developed as the Forum becomes

established, with consideration given to the appropriate allocation of votes necessary to ensure

democratic accountability.

Forum attendance

7.1.

It is for each Partner to nominate their representative on the Forum. The expectation is that Local

Transport Authorities will be represented by their Leader or the relevant Cabinet member, Local

Enterprise Partnerships will be represented by a business focussed member of their governing Board,

and district councils by their Leader.

7.2.

Substitutes will represent members of the Forum if their lead representative is not available.

7.3.

Individual members of the Forum will be responsible for ensuring their organisation is kept briefed

on the work of the Forum.

7.4.

It is desirable for the Department for Transport and the majority of the Local Transport Authorities

be represented at Forum meetings.

7.5.

Members of the Forum retain their existing accountabilities and responsibilities for transport.

7.6.

Membership of the Forum:

• Does not oblige partners to be involved in all activities, projects or proposals

• Does not preclude any member from working cross-boundary with other Local Transport

Authorities or strategic transport organisations.

7.7.

Local authorities that are not members of the Forum may be invited to participate or request to

attend meetings of the Forum.

Ways Of Working

8.1.

Meetings of the Forum will be held quarterly.

8.2.

Third parties may be invited to participate in meetings of the Forum and invited to be members of

project teams established by the Forum

8.3.

Third parties may request to address the Forum on a specific issue or proposal. The Chairman of the

Forum will determine whether to grant the request.

8.4.

The Forum may decide to establish sub-groups where this is appropriate in order to address specific

issues: sub-groups may be either time-limited in their duration or standing sub-groups where the

issue is on-going.

103

8.5.

The secretariat for meetings of the Forum will be provided by the Local Transport Authority that

provides the Chairman for the Forum.

8.6.

The work of Forum will be support by a transport officer working group. It will be chaired by an

appropriate senior officer from the same authority as the Chairman of the Forum.

8.7.

The meetings of the Forum will be meetings of public record (papers published online) but will not

be open public meetings.

Wider partnership panel

9.1.

A wider partnership panel will be established that includes all potential partners and will meet once

a year. Membership of the Wider Partnership Panel is appended (Appendix B).

9.2.

Members of this wider panel can be co-opted onto the Forum based upon requirements identified

by the Forum members. Members of the wider panel also be co-opted onto specific sub-groups

established by the Forum.

9.3.

Membership of the Wider Partnership Panel will be subject to revision as required by the Forum

membership, or on an annual basis.

10.

Senior Officer Group

10.1.

The work of the Forum will be supported by the Transport East Senior Officer Group. This Group will

provide technical and professional advice drawn from the Local Transport Authorities, Local

Enterprise Partnerships and district authorities. Infrastructure agencies and transport service

providers will be invited to support the work of the Transport East Senior Officer Group as necessary.

10.2.

Transport East Senior Officer Group officers will be invited to attend Forum meetings in an advisory

capacity.

10.3.

The Transport East Senior Officer Group will maintain an overview of the activities taken forward by

the Forum and ensure that the work programme adopted by the Forum is delivered.

10.4.

Papers will be circulated at least five working days prior to each Forum meeting, and minutes

circulated in a timely manner following the Forum meeting.

11.

Revision of Terms of Reference

11.1.

These Terms of Reference will be subject to revision as required by the Forum membership, or on an

annual basis.

***

104

New Anglia Local Enterprise Partnership Board

Wednesday 21^st February 2018

Agenda Item 12 - Chief Executive’s Report

Author: Chris Starkie

Overview

This section provides a snapshot of main LEP team activity since the January board meeting

Governance review and implementation of the economic strategy

Good progress has been made over the past month in continuing the review of the LEP’s

governance and setting the structures in place to implement the new economic strategy.

 Agenda item 8 provides a fuller update and recommendations on the terms of

reference and membership of the tier one boards which sit beneath the LEP

board.

 We continue to make good progress against the implementation of both the PwC

review and Mary Ney review. Details of progress against these can be found

appended to this report.

 Annual conversation with Government. As previously reported, Government has

found us to be a high performing LEP. Following the national moderation process,

we have been classed in the top bracket of LEPs.

 Economic indicators. Agenda item 7 seeks board approval for the methodology

we are proposing to use for our economic strategy trajectories and targets.

Brexit impact

Metro Dynamics has completed a study into the impact of Brexit on our key sectors. The

report is included in the board papers under agenda item 6 which also includes a Brexit

action plan.

Growth Deal

Focus for the programmes team this month has been accelerating spend against our

Growth Deal allocation for this financial year.

Spend has been slower than hoped because of delays to projects, and delays in claims

being submitted by project owners. The report below provides more details, including

actions being taken.

Business Growth Programme

Close attention is being given to the delivery of the Business Growth Programme, as well

as the submission of a bid to enable the programme to be extended. Details of this can

be found in agenda item 10.

Communications

Media coverage in January included coverage of Growth Deal investments in CEFAS

and Bacton, additional funding for the Community Challenge Fund and the start of work

on the Ipswich Cornhill.

Work has been on-going to ensure our website complies fully with the standards set out

in the Mary Ney review. This has included uploading additional policies and procedures

and ensuring they are easy to find.

Alongside this, we are working to ensure our data management meets upcoming

107

General Data Protection Regulations.

This includes a process of ‘repermissioning’ the contacts for our email newsletters,

asking subscribers to reconfirm their consent to receive emails from us and to tell us

more about what they would like to read. While it is envisaged that this will significantly

reduce the number of subscribers receiving the emails, it is hoped that the audience will

be more engaged.

Finances

Management accounts for 10 months to 31 January 2018 - year to date income £1,118k

with an operating surplus of just under £157k which is ahead of budget by just under

£132k.

Operating cash balance is £451k which is in line with management expectations

The LEP 2018/19 budget is progressing well and a draft budget will be included in the

finance paper for the March 2018 board meeting.

LEP actions and activity

This section provides a detailed update on other activities and key issues since the January

board meeting

LEP Programme delivery

1) Growth Deal

The LEP Growth Deal programme has 25 live projects/programmes and 11 projects now

complete.

We continue to develop legal agreements for new projects, including those allocated

funding under the third round of Growth Deal.

Currently, ten projects have an ‘amber’ status. These are predominately due to delays in

delivery. As the financial year end approaches the LEP team has been focused on

working with project promoters to keep projects on track.

Many of the amber projects are Norfolk County Council schemes and we have made

good progress in the last month ensuring spend remains on track.

The main issue has not been the delivery of the projects, but the time lag the authority

takes in submitting claims for payment.

However delays do mean there will be an under spend, which will be accommodated

through capital swaps with the two county councils, the mechanism for which has been

agreed.

The table below provides details of programme expenditure. We are anticipating

significant spend in the next month as the financial year draws to a close.

108

Change From

Last month

Government allocation for 2017/18

£41.334m

N/A

Spend paid to projects

£11.398m

+£4.397m

A project can only be paid once a legal agreement is

in place and evidence of eligible expenditure

provided

Projects with legal agreements in place

£17.321m

-£1.710m

Projects with legal agreements in place which allows

them to claim spend when ready

Projects with legal agreements pending

£2.656m

-£4.986m

Projects with legal agreements not yet in place, they

therefore cannot be paid any funds

Under allocation

£9.960m

+£2.3m

The amount of funding that has not allocated in the

current financial year. This is due to slippage on a

number of projects. To address this we have brought

forward spend on other projects where possible, and

capital swaps with our county councils

Details of amber projects:

Amber: Attleborough Sustainable Transport Package major slippage occurred due to

public consultation, with £1.2m of funds moved backward into the 2018/19 financial year.

Amber: Great Yarmouth Transport Package delivery of cycle and pedestrian schemes

has improved following delays due to extensive consultation. There will likely still be a

small underspend this financial year.

Amber: A47/A1074 Longwater Junction, Norwich the project has been further delayed

by land acquisition, but it is scheduled for delivery by 2019 with the remainder of the LEP

funding being claimed early next financial year.

Amber: Norwich Area Transportation Strategy - City Centre Package Although we

anticipate an overall overspend, the project is ‘amber’ as delivery of Phase 3, the Prince

of Wales Road and Rose Lane gyratory, is delayed pending public consultation, and

requires further extension to the funding timeline.

Amber: Norwich Area Transportation Strategy - A11 Corridor work in progress. The

project is ‘amber’ as there has been slippage in delivery due to an unexpected

requirement for land acquisition (for cycle way) & changes to parking restrictions.

Amber: Beccles Southern Relief Road Work started in August 2017 and is expected to

take one year to complete. Spend for this year is going well, with a forecast overall

overspend, but given the substantial amount to be claimed this FY, it remains on the list

of projects at risk.

109

2) LEP Capital Growth Programme

All projects, either approved, deferred or rejected at the January LEP board meeting have

now been informed of the decision made on their individual applications.

Deferred projects have been provided with details of further information required before a

final decision can be made on their applications.

The two approved projects, CEFAS and Bacton have been advised of the decision and

funding agreements will be started early in the new 2018/19 financial year- neither project

can spend their CGP award during 17/18.

The majority of deferred projects will be brought back to the LEP board in the Spring,

once outstanding information has been provided by projects.

3) Enterprise Zones

Space to Innovate Enterprise Zone

Sproughton Enterprise Park, Ipswich - Babergh District Council have received a major

planning application from a multi-national food company LDH Ladoria to develop a third of

the Enterprise Zone site for a new major distribution facility and create 120 jobs initially

(potentially rising to 200+). The silos have now been demolished on the former sugar

beet factory site.

Nar Ouse Business Park, King’s Lynn - The King’s Lynn Innovation Centre (KLIC)

received a visit from Prince Andrew who toured the facility and met some of the

businesses. KLIC has fifteen tenants, four co-workers and ten virtual tenants with two

new businesses have located there in the last quarter. A masterplan for the rest of the

development on the Enterprise Zone site is progressing.

Upper Orwell Crossings - Island Site, Ipswich - Important ground investigation works

began on site in mid-January and could take up to three months to complete. The

outcomes of the site investigations will inform the detailed design of the three bridges

planned for the Ipswich Waterfront. These will be a catalyst for the further regeneration of

the area and recognised as a key priority by the Ipswich Vision Partnership.

Great Yarmouth and Lowestoft Enterprise Zone

Work is progressing at a fast pace and nearing completion on several new units at

Phoenix Enterprise Park (South Lowestoft), Beacon Park (Proserv), Mobbs Way

(Longfields Court) and South Denes (BH Bus HQ). Several businesses are due to take

occupation before the end of March in order to access the main EZ rate relief benefits

which are due to expire.

4) New Anglia Capital

Spark EV, who have received a £50k investment from New Anglia Capital, have

completed arrangements to move to Lanwades Business Park near Newmarket, from

their current location in Cambridge. Spark, who are developing an artificial intelligence

based journey prediction system for electric vehicles, will build a new sales and

development team at Lanwades.

The team will be targeting sales and development in the well-developed Scandinavian EV

market and the emerging US market. The global market for EV prediction systems is

expected to be worth over £500m within 5 years.

110

Unilever update

Chris Starkie participated in a meeting with senior figures from the city and councils with

Unilever to discuss their proposed closure of the Carrow Works site.

At the meeting Unilever outlined their proposals, which followed a thorough review of all

options, including remaining on the site and transferring production to a new local facility.

Unilever’s proposal is to close the Carrow Works, transferring most production to their

factory at Burton on Trent. Packing of some packet sauces will be carried out in

Germany.

On a more positive note, Unilever is proposing to retain the processing and milling of

mustard in the Norwich area, together with the processing of mint, at a new facility.

This would be developed in conjunction with a local consortium of growers. Since the

meeting with Unilever the LEP team has had an initial meeting with the growers

consortium to understand their plans.

These plans will only be taken forward following the end of the formal consultation period,

anticipated in the next few weeks.

In addition the LEP will be joining Alan Waters, leader of Norwich City Council and LEP

board member and Norwich South MP Clive Lewis in meeting with the unions at Unilever

to gain their perspective on the proposals.

We will continue to keep the board informed of developments, particularly if LEP support

is sought.

CITB Round Table

Chris Starkie and Saul Humphrey, chair of the LEP’s Building Growth sector group,

represented the LEP at a roundtable in King’s Lynn held to discuss the changes being

proposed by the CITB.

The CITB - Construction Industry Training Board - is a national organisation, but its

headquarters is at Bircham Newton in West Norfolk where almost 600 people are

employed.

As part of a wide ranging reform of the organisation, the CITB is planning to sell its non-

core operations such as its training and card businesses and down size its head office by

outsourcing non-core functions.

The round table in King’s Lynn was hosted by the Borough Council and attended by MPs

Sir Henry Bellingham and Liz Truss as well as the College of West Anglia, the LEP and

Norfolk County Council.

The meeting agreed to establish two taskforces - one looking at the Bircham Newton site

and the second opportunities for the card business. The LEP will be represented on both

task forces.

Sector Development

Engineering and Manufacturing

The New Anglia Advanced Manufacturing & Engineering (NAAME) group held a major

event at West Suffolk College on 15^th February entitled ‘Evolution: Journey into Industry

4.0’.

A range of inspiring speakers by leading businesses in the region presented to a capacity

audience on the journey into Industry 4.0 and the evolution of the engineering and

111

Mary Ney Review - Implementation Plan

February 2018

Key

No.

Recommendation

New

Action

Deadlines

Culture and Accountability

New

The new assurance statement has been completed as

Complete by

The National Assurance Framework to require a brief formal

part of the Annual Conversation which took place in

end of Feb

assurance statement on an annual basis from the leadership of

December 2017.

2018

the LEP - i.e. the chair and CEO on the status of governance and

To be published on the website following the conclusion

transparency within their organisation and which can be explored

of the Annual Conversation Process as per

in greater detail during the Annual Conversation with Government.

Government guidelines.

To be published on the website.

Culture and Accountability

New

New Anglia LEP standards of conduct policy has been

Complete

The current Assurance Framework requirement for LEPs to have

updated to include reference to Nolan principles and

a standards of conduct policy that all board members and staff

has been published on the website.

life to be adopted as the basis for this policy.

Structure and decision making

Existing LEP policy and processes already comply with

Complete by

The National Assurance Framework should draw explicit attention

this recommendation. PwC review will, however, ensure

end of Feb

to the importance of LEP decision making structures

this area is further strengthened beyond the minimum

2018.

accommodating these separate components of good governance

required by the Ney review.

and that they form an essential part of assurance and ensuring

In addition we will cross check with Government

probity.

guidance when published to ensure compliance.

Structure and decision making

Existing LEP policies and processes already comply

Complete by

Local Assurance Frameworks should set out that all decisions

with this recommendation. PwC review will ensure that

end of Feb

must be subject to the normal business case, evaluation and

this area is further strengthened beyond the minimum

2018.

scrutiny arrangements. There must be a written report with the

required by Ney review.

opportunity for the Section 151 officer to provide comments, that

In addition we will cross check with Government

the conflict of interests policy will apply to decision makers

guidance when published to ensure compliance.

regardless of whether there is a formal meeting, and that

decisions should be recorded and published in the normal way.

113

Conflicts of Interest

The standard Register of Interest form has been

Complete by

All board members taking personal responsibility for declaring

received and will be issued to Board Members for

28^th Feb

their interests and avoiding perceptions of bias.

completion.

2018.

This should be evidenced by producing and signing of their

Use of a bespoke proforma for collection and publication of the

information which ensures that all categories of interest are

systematically considered.

Categories of interest to included employment, directorships,

significant shareholdings, membership of organisations, gifts and

hospitality, sponsorship. Interests of Household members also to

be considered.

Action in relation to any declared interests applies to any

involvement with the work of the LEP and is to be recorded.

Conflicts of interest

Existing LEP conflicts of interest policy already covers

Complete

LEPs to include in their local statements how scenarios of

this. This was reviewed at the Annual Conversation in

potential conflicts of interest will be managed whilst ensuring input

December and no further amendments were required.

from their areas of expertise in developing strategies and decision

making without impacting on good governance.

Complaints

New

The complaints and whistleblowing policies have been

Complete

LEPs to publish a whistleblowing policy and arrangements for

reviewed upon receipt of the Best Practise Guidelines.

confidential reporting of allegations of untoward concerns by third

Minor amendments have been identified and the

parties/ the public.

policies have been updated.

Section 151 Officers

New

Completed as part of the Annual Conversation in

Complete

The National Assurance Framework to set a requirement for the

December 2017.

Section 151 officer to provide a report on their work for the LEP

and a requirement to identify any issues of concern on

governance and transparency.

10.

Transparency

The LEP Board is already compliant, but new

Complete by

National Assurance Framework to provide additional guidance of

requirements are being rolled out to the relevant sub-

end of Feb

publication of agendas, meeting papers and decisions.

boards as per Government guidelines.

2018.

11.

Transparency

New

Our accounts are already published. Rolling schedule

Complete by

LEP to publish its accounts and to keep on its website a rolling

of funded projects has been developed as part of our

end of Feb

schedule of funded projects.

website relaunch.

2018.

114

Agenda Item 12

Review of our Governance and Operations - Recommendations and Implementation Plan

Recommendation

Rating

Owner

Way Forward

Status

Next Steps

Board

Review the options available to the board to ensure transitional

 Chair to have discussion with

Pure

Interviews completed.

High

Board

arrangements are made for the handover of activities currently

individual board members.

Executive

Offer made.

undertaken by the existing chair. Options may include one or a

 Organisation to be reviewed -

appointed for

combination of the following:

CEO / COO roles to be agreed

COO



Re-allocation of strategic and representative duties to other Board

recruitment

members.



Creation of the position of a Deputy Chair(s)



Or creation of a new executive position focused on delivery of some of

the activities currently undertaken by the Chair.

Undertake a review of the current committees and groups,

Once economic strategy published

November

Membership and T of

Medium

Exec

including their roles and responsibilities, in order to simplify the

in October:

Board

R of tier one groups to

governance structure of the organisation and to improve the

 Review committees, sub-board

agreed

be agreed at Feb

transparency of the decision making process. In particular,

and groups to ensure they align

changes to

board

consideration should be made with respect to:

with priorities

IAC and



Creation of a single Investment Committee, responsible for

 Design reporting structure for

P&R, created

assessment of all investment proposals (perhaps with the exception of

committees, sub-board and

Economic

the Micro Grant bids);

groups

Strategy



Review the purpose of the Performance and Risk Committee within

Board and

NALEP governance structure and clarify the rationale for the Board

Audit & Risk

Members attendance at the Committee. This should include

Committee

consideration if the committee should continue to operate as a Board

Committee or a management group.



Review the quality of the Committee outputs for the Board to ensure

the Board has clarity over the Committee’s activities.

Review the focus of the Board, including the Board papers, to

Medium

Board

Chair to work with Exec team to

Complete

ensure balance between providing strategic focus and vision to

align Board meetings with

NALEP and reviewing operational matters and decisions. Review the

ambitions detailed in economic

format and content of the Board papers and management information

strategy

reported to the Board in order to increase quality of the Board

reporting.

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115

Agenda Item 12

Review of our Governance and Operations - Recommendations and Implementation Plan

Recommendation

Rating

Owner

Way Forward

Status

Next Steps

Develop a register of decisions, with particular focus on funding

Medium

Exec

 Determine scope and

On track

To be considered at

decisions. Develop a scheme of delegation for the Board, sub-boards

timeframe of decisions to

Feb board

and committees and the executive team. Review the annual Board

include on register

planning calendar to establish key decision points for the Board, while

 Prepare register of decisions

ensuring flexibility for decision making is maintained.

(Recommendation repeated in Governance section)

Ensure that there is a process in place to escalate and address

Medium

Board

Chair to prepare paper for Board

Complete

issues of persistent non-attendance and lack of engagement, that

discussion on deputisation.

may result in skills shortages at the Board. Deputisation should

continue to be considered unacceptable.

Develop a Board Member handbook that would provide new Board

Medium

Exec

 Discuss current process with

On track

HR manager to

members with guidance on the operations of the Board and NALEP,

new Board members and

discuss process with

the governance structures and decision making. This should include

incorporate lessons learnt into

new Directors in early

the explanation of NALEP duties for meeting the requirements for

process going forward

2018.

appropriate spending of public funds and ensuring value for money,

and the list of the Nolan principles.

You may also wish to consider a rehearsal or implementation of

Medium

Exec

 Review need for Board

standard Board effectiveness training as well as a practical training

effectiveness training once new

session for those in a scrutiny role. This could ensure greater

organisation, committee and

consistency of understanding between members from differing

reporting structure is in place

backgrounds (private / public / education).

Governance

Undertake a comprehensive review of the Assurance Framework

High

Board/

Once economic strategy published

On track

Updated Assurance

to ensure that it reflects the organisational structure and provides a

Exec

in October

framework required by

clear and transparent view of the decision making process at NALEP.

 Review committees, sub-board

Government by end of

and groups to ensure they align

February 2018

with priorities and update

Assurance Framework

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116

Agenda Item 12

Review of our Governance and Operations - Recommendations and Implementation Plan

Recommendation

Rating

Owner

Way Forward

Status

Next Steps

9. Formalise the reporting process from the sub-committees,

High

Board/

Once economic strategy published

On track

As per

boards and groups to the Board on the activities undertaken by

Exec

in October

recommendation 2

those bodies. Such updates can range from a regular formal update

 Review committees, sub-board

papers with request to scrutinise and approve decisions, to an annual

and groups to ensure they align

or bi-annual presentation on activities undertaken by the sector

with priorities

groups.

 Design reporting structure for

committees, sub-board and

groups

10.The formal risk management process, as outlined in the

High

Board

 Review risk register in light of

On track

Audit and Risk

Assurance Framework, should be validated by the Board. This will

new economic strategy

committee

include clarity over the aggregation and escalation of risk. A routine

 Create a task / finish group to

membership and T o R

and dynamic assessment of risk should be implemented (quarterly

include members of the

paper to Feb board

reviews by the Board are considered good practice). Part of this

Executive and Board to agree

exercise should include horizon scanning and the identification of

format of risk reporting

current and future mitigation activities as well as assurances obtained.

The annual development of a risk derived assurance map will allow

the Board focus resources as required. A succinct format of reporting

risks should be developed and agreed with the Board to ensure

strategic focus is maintained.

11. Clearly define a NALEP scheme of delegation. Articulate the

Medium

Component part of reviewing

On track

Under development as

change management process, including the need for re-submission to

committees, sub-board and groups

part of

the Board in case of significant changes to the approved Growth Deal

to ensure they align with priorities

Recommendation 2.

schemes.

12. Review the governance arrangements for NALEP representation

Low

Component part of reviewing

Complete

on the New Anglia Capital board, and the feedback mechanism to

committees, sub-board and groups

update NALEP Board on the New Anglia Capital activities on regular

to ensure they align with priorities

basis (currently monthly).

13. In future, NALEP may wish to consider opening the Board

Low

Chair to prepare paper for Board

On Track

Board discussion on

meetings to public, or operating a public forum system enabling

discussion on transparency

transparency

public to ask questions relevant to the Board agenda. However, any

scheduled Q3 2018

such changes need to be assessed, and may require a restructure of

the Board agenda and papers in order to protect confidential

information.

3. Organisation

3 of 5

117

Agenda Item 12

Review of our Governance and Operations - Recommendations and Implementation Plan

Recommendation

Rating

Owner

Way Forward

Status

Next Steps

14. While we appreciate there are differences between the different types

High

Exec

New appraisal mechanism being

On track

Investment Approval

of funding provided by NALEP, the existing appraisal processes

developed as part of Economic

Committee approved

should be reviewed in order to seek synergies and improve

Strategy implementation

at November Board.

efficiency. The existing funding appraisal documentation should be

Under development as

reviewed and further developed to identify clear criteria for the bids

part of

assessment, including clear requirements for assessment of value for

Recommendation 2.

money.

15. The creation of a new structure should be considered in order to

High

Organisation to be reviewed - CEO

Complete

provide total focus on the design and implementation of the strategic

/ COO roles to be agreed

vision. In turn this will enable the Board to move away from input into

LEP operations and re-focus on strategic leadership of the

organisation. (also recommended in team section)

16. Develop a more detailed (and where feasible, standardised)

Medium

Exec

New appraisal mechanism being

To be

Under development as

methodology for the project identification, commissioning,

developed as part of Economic

completed in

part of

appraisal and prioritisation, including clear criteria for ensuring

Strategy implementation

line with the

Recommendation 2.

value for money is robustly scrutinised during the project assessment.

Mary Ney

Review the existing project pipeline to ensure the proposed projects

Review

clearly identify how they meet value for money criteria. Develop

methodology for benefits realisation assessment for projects that have

been completed for Growth Deal but also for projects funded from

other LEP funds.

17. We recommend NALEP executive team:

Medium

Exec

Chair to work with exec team on

See Forward

New board papers

 Reviews the format of the Business Performance reporting in order to

format of new board papers and

Programme

begin being introduced

summarise and simplify the programme reporting, with a succinct

integrated dashboards

during remainder of

report for the Board supported by further detail in the report appendix.

2017 and 2018

 Develops an integrated business dashboard which will provide

overview of the project positions and outline key matters for the Board

to focus on. It which would include information on the Growth Deal and

other funding programmes, but also on the status of the project

pipeline and the outputs measured for the funded projects. The

dashboard should be linked to the strategic objectives, and could

provide further analysis for the high profile programmes (such as the

Growth Deal transport or skills projects).

 Develops a financial dashboard could show the financial position of

NALEP and performance against the budget, but also show available

funding and future spending profiles.

4 of 5

118

Agenda Item 12

Review of our Governance and Operations - Recommendations and Implementation Plan

Recommendation

Rating

Owner

Way Forward

Status

Next Steps

18. Develop a more detailed methodology for RAG rating and escalation

Medium

New appraisal mechanism being

See Forward

Under development as

of issues with individual projects. The methodology should include

developed as part of Economic

Programme

part of

robust quantitative assessment of changes such as delays to key

Strategy implementation

Recommendation 2.

milestones and impact on completion, changes to spend profile and

re-profiling of funding across financial years, changes to outputs and

predicted benefits, and cumulative impact.

Linkage to the risk management system is encouraged for good

practice.

19. Confirm with the Board the methodology for escalation of slippages to

Medium

Component part of reviewing

On Track

Under development as

the Board’s attention.

committees, sub-board and groups

part of Item 2.

to ensure they align with priorities

20. The Board and Exec team should consider both the skills mix and

Medium

Exec

Approach to recruitment already in

Complete

backgrounds of individuals as part of any new recruitment exercises to

place with a policy recruitment

ensure a mix of private and public sector experience is achieved.

policy designed to attract recruits

Whilst there are wider issues with recruitment from the private sector

from a mix of backgrounds

(e.g. pay rates), this should help to ensure that there continues to be a

rich mix of experience within the Executive team as the LEP grows

further.

21. The Board and Executive team should continue to explore

Medium

Exec

Work already underway. Executive

Complete

opportunities to share skills and collaborate on strategy delivery with

already regularly meets with

other LEPs.

neighbouring LEPs and LEP MD

and senior team playing a key role

in the LEP Network - sharing best

practice with fellow LEPs.

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119

New Anglia Local Enterprise Partnership Board

Wednesday 21^st February 2018

Agenda Item 13

Finance Report

Author: Keith Spanton

Summary

This report provides board members with an update from the finance department on the LEP’s

finances to the period ending 31 January 2018. The report includes confidential appendices:

Appendix A - core management accounts period ended 31 January 2018

Appendix B - core monthly and year to date graphs

Management accounts

The LEP’s core income and expenditure account and graphs for the month ended

31 January 2018 are shown in confidential appendices A and B.

31 January 2018

Headline figures 10 months are: Total income £1,118,487 of which £623,333 represents core

contribution with recharges and other income of £495,154 making up the balance. Costs to 31

January total £961,623 leaving a surplus of £156,864, ahead of budget by £131,887.

This is ahead of management expectations. This has been due to some delays in the

recruitment of new staff, however these posts are almost filled with the final role being occupied

at the end of February 2018. Some of the planned project costs have also been delayed. Some

will materialise over the remaining two months however some of these costs are now likely to

occur in the 2018/19 year.

Further detail of the accounts and some of the larger variances will be explained at the board

meeting.

Budget - financial year 2018/19

A significant amount of work has already been done on the LEP 2018/19 budget covering both

core and all of the LEP’s programmes, however there is still some further work to do. A draft

budget will be published in the March finance paper for board approval. This will include

operating budget as well as the LEP’s capital and revenue programmes budget.

Recommendation

The board is invited to note the contents of the report.

121