http://www.nwda.co.uk/pdf/DBERR_PWC_2 by Northwest Regional Development Agency

Government and Public Sector

Department for Business, Enterprise & Regulatory Reform Impact of RDA spending – National Report – Volume 2 – Regional Annexes

March 2009



Contents

Section

Page

Introduction and approach............................................................................................................................ 1 Advantage West Midlands............................................................................................................................ 8 East of England Development Agency....................................................................................................... 38 East Midlands Development Agency.......................................................................................................... 74 London Development Agency .................................................................................................................. 102 North West Development Agency ............................................................................................................ 145 One North East......................................................................................................................................... 203 South East England Development Agency .............................................................................................. 235 South West Regional Development Agency ............................................................................................ 282 Yorkshire Forward .................................................................................................................................... 322 Annex A: List of AWM evaluations ........................................................................................................... 359 Annex B: List of EEDA evaluations .......................................................................................................... 360 Annex C: List of LDA evaluations ............................................................................................................. 361 Annex D: List of NWDA evaluations ......................................................................................................... 363 Annex E: List of ONE evaluations ............................................................................................................ 366 Annex F: List of SEEDA evaluations ........................................................................................................ 367 Annex G: List of SWRDA evaluations ...................................................................................................... 369 Annex H: List of YF evaluations ............................................................................................................... 371

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Introduction and approach Terms of reference In December 2007, PricewaterhouseCoopers LLP (PwC) was appointed by the Department for Business, Enterprise and Regulatory Reform (BERR), in its sponsorship role for the RDAs, and the RDAs themselves to provide an independent assessment of the impact of the spending by each of the nine RDAs and the RDA network as a whole. The primary purpose of this report is to summarise the available evidence of the impact of spending by RDAs, drawing on those evaluations commissioned since the last review which comply with the standards 1 set out in the Impact Evaluation Framework (IEF) as well as any other earlier evidence which is consistent with the IEF principles. The secondary purpose is to assess RDAs’ achievements against the objectives of both the Regional Economic Strategies (RESs) (and Economic Development Strategies (EDSs) in the case of London) and their Corporate Plans (all of which have changed over time) and for each specific programme and project.

Report structure This is the second of two volumes which together form the report of our work. This volume provides a brief summary of the key elements of our approach, and its limitations, and then analyses and summarises the available evaluation evidence for each of the nine RDAs. In order to provide a consistent analysis across the RDAs, each of the following nine sections considers one of the RDAs within a common structure which includes: 

a summary of the key elements of the evidence;



a description of the regional context including an overview of the region, the purpose and strategy of the RDA and its profile of spending and evaluation evidence;



an analysis of key findings in relation to impact, value for money and performance against objectives;



a summary of the evidence of impact of each RDA’s spending on interventions linked to business development and competitiveness;



a summary of the evidence of impact of each RDA’s spending on interventions linked to regeneration through physical infrastructure;



a summary of the evidence of impact of each RDA’s spending on interventions linked to people and skills;



a summary of the evidence of impact of each RDA’s spending on the Single Regeneration Budget and other activities, including those which span more than one of the categories; and



a summary of the evidence of impact of each RDA’s spending on national programmes for which they have been responsible for delivery.

Appendix 1 provides a list of evaluations by RDA that have been used to inform this report.

The IEF was commissioned by the Department of Trade & Industry in partnership with the RDAs: “DTI Occasional Paper No 2 – Evaluating the impact of England’s Regional Development Agencies: Developing a Methodology and Evaluation Framework” (February 2006) – available at http://www.berr.gov.uk/files/file21900.pdf.

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A separate volume contains a national overview of the evidence of the impact of RDAs’ spending. In addition, two separate documents provide a summary of: 

the approach taken and methodology implemented by PwC (‘Technical Summary’); and



the lessons learned and examples of evaluation best practice identified as a result of the project (‘Lessons Learned’).

Approach The remainder of this section provides an overview of the key elements of our approach. It is divided into four parts: 

an explanation of the scope of our work;



a description of the evaluation evidence base which we have been able to draw upon;



an outline of the framework and methodology we have used to assess the impact of RDAs’ spending; and



a summary of the principal limitations of the evidence base and methodology.

Further details of our approach can be found in Volume 1 of our report. Scope Although this report draws on evaluations which cover RDAs’ spending over the whole period since their 2 establishment in 1999 , the focus is on that spending for which RDAs are formally accountable, over which they have had the greatest influence and where (at least) the early evidence of impact should be apparent. In practice, this means that we focus on understanding the impact of RDAs’ spending on those programmes and projects where: 

they were able to shape the programme or project;



their spending occurred in the ‘relevant period’ between 2002/03 to 2006/07: thus, the report focuses less on RDAs’ spending on those programmes and projects which were inherited from their predecessors and those where spending may be too recent for the full impact to be assessed (although, in several cases, the evaluations which have been used to underpin the report are interim in nature and consider both achieved and future potential impacts); and



the evaluation evidence is consistent with the requirements of the IEF.

We analyse the impact of RDAs’ spending, where possible, according to the three key categories of intervention defined within the IEF: 

business development and competitiveness (which we also refer to as ‘business’);



regeneration through physical infrastructure (which we also refer to as ‘place’); and



people and skills (which we also refer to as ‘people’).

We also analyse the impact of RDAs’ other (hybrid) activities that span more than one of the three IEF categories, for example the Single Regeneration Budget (SRB). In addition, we review the available

The London Development Agency was established in 2000.

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evidence as to the impact of ten national programmes which RDAs have been responsible for delivering 3 within parameters determined by central government departments . Evaluation evidence In the first part of our work in December 2007, we reviewed and assessed over 240 new evaluations which were either completed, in progress or planned and which had the potential to cover RDA spending 4 of £1.85bn in the period between 1999 and 2007 . Of these evaluations, we found that about 40% could potentially be used to assess the impact of RDA spending although very few were wholly compliant with the requirements of the IEF. It was agreed that such coverage (even if it could be achieved) would be some way short of being comprehensive and robust given that it would include many evaluations which were not wholly IEF compliant. In response, RDAs launched an intensive programme of further project and programme evaluations. As a result of this work, RDAs have increased their evaluation coverage significantly and all have achieved a coverage of at least 60% of their spend in the ‘relevant period’ excluding national programmes and administration costs. Overall, the RDAs have IEF compliant evaluations covering 66% of their relevant spend. Framework for impact assessment and methodology Our framework for assessing the impact of RDAs’ spending reflects the key requirements of the IEF. It involves five steps: 

understand the purpose of RDAs’ interventions by reviewing their context, rationale and objectives;



map RDAs’ spending on each intervention, identify the resulting gross outputs, for example the number of jobs created and the area of brownfield land remediated and/or redeveloped and assess the extent to which the outputs are additional (i.e. net outputs which would not otherwise have arisen);



determine the outcomes and impacts associated with the net outputs, for example the number of people in employment and the additional gross value added (GVA);



assess the value for money of the interventions; and



draw together the key conclusions.

We summarise the key issues arising in relation to each element of the framework below. Understand purpose A key element in assessing the impact of the RDAs’ activities is to understand the regional (and local) context, the rationale for each intervention and the underlying objectives. We have relied primarily on the evaluation reports we have drawn on to do this. This gives rise to a number of issues: 

the way in which the evaluations describe the regional and local context for each intervention varies in its depth and quality which means that it is sometimes difficult to get a consistent view across the interventions;



although many evaluations articulate a rationale for the intervention, it is evident that some of these rationales were developed as part of the evaluation process rather than being established when the intervention was originally developed; and

Ten national programmes have been defined: the Coalfields Programme; the Regional Innovation Fund; the Manufacturing Advisory Service; Regional Tourist Board Support; the Rural Development Programme for England and Sustainable Food and Farming, Market Town Initiative; Business Link; Regional Selective Assistance/Selective Finance for Investment; Grant for Research & Development; and Phoenix Fund. 4

This includes some double-counting as some expenditure was expected to be covered by more than one evaluation.

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

not all of the programmes and projects covered by the evaluations have a set of specific and measurable objectives which lend themselves to an assessment of performance against them.

Measure outputs As part of our work we have collated the evidence from the evaluations with respect to the inputs to, and outputs from, RDAs’ activities. A key element of this is the assessment of the extent of additionality (i.e. the extent to which the outputs attributed to the RDAs’ spending would not otherwise have arisen in the absence of their intervention). Several features of this work need to be recognised when interpreting the findings: 

we have not sought independently to verify the outputs recorded on RDAs’ project management systems;



reflecting the requirements of the IEF, many of the estimates of additionality are based on surveys of direct and indirect beneficiaries of the RDAs’ interventions: as with all surveys, the resulting estimates are subject to margins of uncertainty which reflect the responses received and the samples surveyed; and



although our focus has been on additionality at the regional level, it is also relevant to consider additionality at other spatial levels, especially locally and nationally: some evaluations have considered the local impacts as well as the regional impacts but very few have considered additionality at the national level.

Assess outcomes Many of the evaluations we have reviewed provide estimates of the impact of RDAs’ spending on regional GVA. These estimates cover different aspects of the impact on GVA. On the one hand, some consider the impacts which have already been achieved and others consider future potential impacts over and above those already achieved. On the other hand, some express the impact on GVA on an annual basis and others express it on a cumulative basis which takes account of the expected persistence of the impacts. Although all the estimates are IEF compliant, their basis is often inconsistent across interventions and between RDAs. For example: 

the scope of the estimated impacts on GVA differs: the majority of evaluations focus only on the impacts associated with jobs created and safeguarded whereas a few also take account of other impacts, for example those linked to improvements in productivity (where firms have reduced their costs and improved their profits) and enhanced earnings (where individuals’ skills have been improved);



the time period covered by the estimates of impacts on GVA also varies: some evaluations only estimate the impacts which have resulted from employment in a single year, whereas others take account of the potential persistence of the benefits over a longer period;



the treatment of future potential benefits is inconsistent: not all evaluations provide estimates of (any) further benefits which might be expected to be realised in the future, and this is especially relevant where the evaluations are interim evaluations of long-term capital projects; and



not all evaluations take account of inflation (by adjusting both costs and benefits to a common price basis) and the timing of benefits (through the application of an appropriate discount rate).

These inconsistencies reflect the challenges inherent in quantifying the economic impact of interventions such as those of the RDAs and the absence of explicit guidance within the IEF. In the Regional Annexes we have taken the estimates of the outcomes of RDAs’ spending from the evaluations and summarised them within an internally consistent framework for each RDA. We have also made clear, where we can, the basis of the outcome estimates. These estimates of impact on GVA are drawn from the original evaluations and are summarised for each RDA in this Volume: as such, they are

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based on a range of different assumptions with respect to the parameters determining the benefits profile. This means that the estimates in this Volume differ from those in the National Report, where we have estimated the achieved and future potential impact of RDAs’ spending on GVA on a more consistent basis by estimating the impact on GVA arising from jobs created and safeguarded as this is the most frequently estimated (net) output measure across the RDAs’ interventions and using a common set of assumptions about the parameters determining the benefits profile. Care therefore needs to be taken when making comparisons between estimates for individual RDAs in this Volume and those in the National Report. Assess value for money In assessing the value for money of RDAs’ interventions, we have focused on the ratio of the estimated (net) additional GVA to the cost to the RDA of the intervention. Ideally, net additional GVA will comprise both achieved and future potential benefits. We concentrate mainly, however, on the estimated NPV of the stream of the stream of achieved benefits as the best available measure of the value for money of an RDA’s intervention given that many evaluations have not assessed the future potential impacts on jobs. We also use a number of other measures to assess cost-effectiveness. These are primarily expressed as the cost per (net) unit of output. They cover business assists, business creation, land remediation, skills assist and people helped into employment Where possible, we have compared the evidence from RDAs’ evaluations against the results of similar interventions by other organisations. We have also compared each RDA’s estimated returns with those derived from the evaluation evidence available across the RDA network as a whole. Derive conclusions Finally, in seeking to derive conclusions from the available evidence, we have addressed a series of issues which arise from the nature of RDAs’ roles and responsibilities and the scope and form of the impact evidence available. In considering the impact of RDAs’ interventions, we have recognised the need to take account of the quantitative and qualitative evidence of the impact of the RDAs’ programme and project spend as well as evidence of their ability to work with and influence their partners’ and stakeholders’ behaviour to generate Strategic Added Value. The Regional Annexes, therefore, include illustrations of how RDAs have delivered Strategic Added Value. We have not verified all the case studies provided by the RDAs included in this report: in some cases, they are based on evidence from evaluations but in other cases they reflect information made available to us by the RDAs during our preparation of this report. Many of the IEF compliant evaluations we have reviewed have assessed how well the RDAs’ interventions have performed against their original objectives although some have been constrained by the interim nature of the evaluation and the absence of specific, measurable objectives and targets. As with the measurements of outcomes, the evaluations have often used different categories. We have, therefore, sought to classify performance on the basis of a consistent set of definitions as follows: 

‘Exceeded’, where all the objectives have been significantly exceeded;



‘Wholly met’ where all objectives are at least fully met;



‘Largely met’ where most but not all objectives have been fully met;



‘Mixed’ where some not all objectives have been met;



‘Limited performance’ where most objectives/targets have not been met; and



‘Not assessed’ where no assessment of performance against objectives/targets has been made within IEF compliant evaluations, in some cases because it is considered in other evaluations.

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We have also considered how far the evidence suggests that RDAs have been able to deliver their Corporate Plan objectives and contribute to the delivery of the RESs. There are several significant difficulties in this respect: 

the evaluation evidence base generated by the RDAs does not cover all of their spending, either since their establishment or in the relevant period;



many of the evaluations, especially of capital projects, are interim in nature which means that the future potential impacts of the spending cannot be observed and are uncertain;



RDAs’ spending in their regions is only a small proportion of the total public expenditure in each of them; and



the Corporate Plans and RESs (EDSs) of all the RDAs have evolved over the period in question with consequential implications for priorities and indicators.

Methodological limitations The methodology which we have used to estimate the impact of RDA spending are IEF compliant, and largely involve the use of well established means of assessing the economic impact of public sector interventions. However, the nature, quality and consistency of the available information mean that it is subject to some inherent limitations. First, many of the estimates of the impact on GVA are derived (only) from the estimated impact on net job outputs. This means that they do not take account of: 

other direct and indirect economic impacts, for example in terms of enhanced productivity;



the wider economic impacts, for example any ‘halo’ effects from physical regeneration investment; and



those non-economic outputs from RDAs’ interventions, for example the provision of community facilities, where it is difficult to estimate an economic value.

In part, evaluations that have not estimated net jobs do this because other outputs were regarded as a more important focus for the evaluation of the intervention. For example, an evaluation may have assessed the net impact of an intervention on the number of people assisted into employment or the businesses created but may not have assessed how these outputs translate into additional jobs. Second, the approach distinguishes between jobs which have already been achieved and those expected to be delivered in the future. How quickly an intervention delivers an impact on jobs will vary between types of intervention: revenue projects such as business support will deliver relatively quick impacts whereas some capital projects will need time before the full impact of the interventions becomes evident. Third, most evaluations use some measure of the average regional GVA per job to estimate the impact on GVA. By doing so, they implicitly assume that the net jobs created and safeguarded within a region will generate the same economic impact although, in practice, the impact may vary depending on the quality of the job provided. These methodological limitations also affect the interpretation of the GVA estimates (and value for money measures derived from them such as the GVA to cost ratio) in several ways: 

comparisons of the impact estimates between RDAs are potentially affected by differences in the scale and mix of spend which has been evaluated by each RDA (and which has estimated jobs created/safeguarded);



differences in regional conditions and context need to be taken into account when assessing the significance of the impact on jobs and GVA: for example, additional jobs may be seen as less valuable in regions which already enjoy high employment rates; and

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comparisons of the GVA impact or GVA to cost ratio between themes and sub-themes are likely to be sensitive to the nature of the intervention, especially how quickly and over what period impacts are likely to be realised: for example, interventions designed to promote R&D may take time before they contribute to businessesâ&#x20AC;&#x2122; employment levels.

Taking into account these limitations, in the remainder of this Volume we summarise the available evidence with respect to the impact of RDAsâ&#x20AC;&#x2122; spending.

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Advantage West Midlands Summary Overview 

Advantage West Midlands (AWM) has spent approximately £1,841m since its establishment in 1999 on a range of interventions designed to stimulate business development and competitiveness, promote regeneration through physical infrastructure and enhance employability and skills.



Over the period from 2002/03 to 2006/07, AWM has spent £1,228m on programmes and projects which are the focus of this work. SRB accounts for £218m out of this spending.



We have reviewed nine evaluations covering AWM spend of £990m.

Impact 

The evaluations show that AWM has generated significant outputs already: –

nearly 78,000 jobs have been created and safeguarded of which 47% are additional at the regional level;

–

over 28,000 businesses have been assisted of which 30% are additional;

–

just over 3,000 businesses have been created of which 45% are additional;

–

over 670 hectares of land have been remediated of which 58% are additional; and

–

more that 183,000 skills assists have been delivered of which 44% are additional.



Significant future potential outputs, in particular over 16,000 jobs created/safeguarded and 112 hectares of brownfield land remediated, are also anticipated as schemes are completed although these estimates are inherently more uncertain.



In addition to the impact of its project and programme spend, SAV is a key element of AWM’s impact, for example its leadership in the response to the collapse of MG Rover and its work with partners across the region in a variety of sectors.

Value for money 

The highest achieved GVA returns are as a result of business and place interventions, with achieved average returns of 3.9 and 4 to 1. The lowest return is from people interventions with an achieved average return of 1.4 to 1. Place interventions offer significant future potential returns which could be as high as 14 to 1, depending on the extent to which forecast jobs materialise and how long they persist.

Performance against objectives 

The interim nature of many evaluations means that nearly half (44%) have not assessed performance against objectives. Of those which have made such an assessment, 40% of interventions have at least largely met their objectives.

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Context Overview of the West Midlands The West Midlands region includes the counties of Shropshire, Staffordshire, Warwickshire, and Worcestershire, the unitary authorities of Herefordshire, Stoke-on-Trent, and Telford & Wrekin, and the seven metropolitan districts of Birmingham, Coventry, Dudley, Sandwell, Solihull, Walsall and Wolverhampton. The West Midlands is a diverse region, with natural assets such as parts of the Peak District National Park and the Shropshire hills, cultural assets like Warwick Castle and Stratford-upon-Avon, and major urban centres such as Birmingham, Coventry, North Staffordshire, and the Black Country. The region 5 has a population of 5.36 million people (9% of the UK total) and the main city is Birmingham, with approximately 1 million people. 6

The gross value added (GVA) of the West Midlands economy in 2006 was £89bn . The regional economic strategy ‘Connecting to Success’ compares the average GVA per capita in the region of 7 £15,812 to the average across the UK of £17,677 and finds that current output is about £10bn below the 8 potential output of the West Midlands economy . Of this gap, it has been estimated that 80% is attributable to the structure and the level of productivity of the region’s economy, while the remaining 20% 9 can be accounted for by economic exclusion. The service sector has expanded in recent years, increasing by over 250,000 jobs, and now represents nearly 70% of the region’s employment, with the key sectors being property & business services, health & social work, education and financial services. Despite a recent decline, manufacturing remains an important element in the regional economy, accounting for 20% of all employment. The region is also a significant employer in the automotive sector, accounting for 28% of UK automotive employment. 10

The West Midlands is a major exporter, accounting for approximately 8% of national exports . It has also attracted significant foreign direct investment: nearly 2,000 overseas companies have set up facilities in the region, with the main centres being Birmingham, Solihull, Coventry and Telford. The largest single investor is the Tata Group of India, which acquired Corus (ex-British Steel), Land Rover and Jaguar. The 11 United States is the largest investor, followed by Germany, Sweden, India, France and Japan. AWM’s purpose and strategy AWM’s purpose is to lead the economic development of the West Midlands, working alongside a wide range of public, private and voluntary sector partners to help the West Midlands to prosper - building upon its strengths and addressing the unique challenges. AWM’s Board and Corporate Management Team aim to develop and deliver AWM’s own programmes and projects, shape and influence the strategies and activities of public and private sector partners, secure external funding and develop coordinated regional agreement to deliver improved economic, social and environmental outcomes for the West Midlands. One of AWM’s key tasks is to lead the development and delivery of the West Midlands Economic Strategy, which provides the policy framework for the West Midlands economy. Since its inception AWM has developed three Regional Economic Strategies (RESs): 

‘Creating Advantage’ (1999);



‘Delivering Advantage’ (2004); and

Sub-regional population, National Statistics, 2006. Regional Gross Value Added, National Statistics, 2006. 7 West Midlands Economic Strategy - Connecting to Success, Advantage West Midlands, 2007. 8 Evaluation of West Midlands Regional Economic Strategy, July 2006. 9 Economic exclusion covers economic inactivity and unemployment in the West Midlands. 10 Regional Profile, Government Office for the West Midlands. 11 Regional Statistics, Advantage West Midlands. 6

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

‘Connecting to Success’ (2007).

The first two RESs were based around four strategic pillars: 

developing a diverse and dynamic business base;



promoting a learning and skilful region;



creating the conditions for growth; and



regenerating communities in the West Midlands.

The latest RES, which was launched in December 2007, was developed by AWM using a more extensive consultation process and utilising a deeper evidence base. It concentrates on three key components of the economy: business, people and place. In addition, the RES emphasises the importance of providing a ‘powerful voice for the region’ to communicate its strengths, opportunities and needs to the business community and to other public sector partners. To deliver the objectives of the successive RESs, AWM has created five Corporate Plans since its inception: 

‘Business Plan’ (2001-2002);



‘Committed to Succeed’ (2002-2004);



‘Delivering the Advantage’ (2003-2006);



‘Corporate Plan’ (2005-2008); and



‘Corporate Plan’ (2008-2011).

AWM’s Corporate Plans identify the specific programmes and projects that AWM will contribute towards meeting the RES objectives. AWM’s core outputs, as stated in these Corporate Plans, cover: jobs created or safeguarded; people assisted to get a job; new businesses created and surviving 12 months; businesses assisted to improve their performance; businesses assisted through collaboration with the UK knowledge base; public and private regeneration investment levered; hectares of brownfield land reclaimed and redeveloped; and people assisted in their skills development. The Corporate Plan (20052008), which is consistent with the 2004 RES ‘Delivering Advantage’, details the high-level targets that AWM is expected to deliver over the period 2005/06 to 2007/08. These core outputs are the ones which AWM reports to BERR and which provide the starting point for evaluating AWM’s activity and impact. AWM’s profile In 2006/07, AWM had an annual budget of £313.8m and has spent £1,841.4m up to and including 2006/07. Although this report draws on evaluations which cover AWM’s spending over the whole period since its establishment in 1999, its focus is on that spending for which AWM is formally accountable, over which it has had the greatest influence and where at least the early evidence of impact should be apparent. In practice, this means that it focuses on understanding the impact of AWM’s spending on interventions in the ‘relevant period’ between 2002/03 to 2006/07: thus, it focuses less on those 12 programmes and projects which AWM inherited from its predecessors and ten national programmes where AWM has been responsible for delivery within parameters determined by central government 13 departments .

The exception here is the SRB programme, a legacy programme, which has recently been evaluated to asses the impact of RDA spending. 13 Ten national programmes have been defined: the Coalfields Programme, the Regional Innovation Fund, the Manufacturing Advisory Service, Regional Tourist Board Support, the Rural Development Programme for England and Sustainable Food and

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Table 1 shows AWM’s spend by year and by the three categories of intervention identified in the IEF . The nature and design of AWM’s programmes means that for Regeneration Zones and the Single Regeneration Budget it is not possible to categorise the programme expenditure uniquely by business, place or people. Where this is the case, we have categorised the intervention as other/hybrid expenditure. In the ‘relevant period’ between 2002/03 and 2006/07, AWM spent £1,375.6m on interventions (rather 15 than administration), of which £1,228.5m was spent directly on AWM’s own interventions and £147.1m on national programmes which AWM delivered on behalf of central government departments. These AWM-directed interventions are the primary focus of this report (see shaded area in Table 1). Over the period from 2002/03 to 2006/07 AWM has spent broadly consistent amounts on business and place interventions. AWM has spent a lower proportion on its skills programme and the level of expenditure has reduced from its peak in 2003/04, reflecting AWM’s prioritisation of higher level skills programmes. AWM’s expenditure on other other/hybrid programmes, which cut across business, place and people, has remained consistent over the period 2002/03-2006/07. Table 1: Analysis of AWM spend by year and by intervention category (1999/2000-2006/07) Admin (£m)

Business (£m)

Place (£m)

People (£m)

Other/hybrid (£m)

National programmes (£m)

Total (£m)

1999/2000

104.5

2000/2001

109.9

2001/2002

123.4

2002/2003

38.6

44.7

9.1

107.0

19.8

22.0

240.0

2003/2004

62.5

69.2

15.6

123.2

15.3

24.0

311.0

2004/2005

54.5

78.3

12.9

109.9

39.9

28.0

321.0

2005/2006

73.4

68.3

14.0

92.8

36.7

28.0

313.0

2006/2007

76.7

60.7

9.4

107.8

35.4

26.0

313.8

Total

305.7

321.1

61.0

540.7

147.1

128.0

1,841.4

Source: AWM programme expenditure data; PwC analysis

Table 2 summarises AWM’s spend covered by the usable evaluation evidence. The evidence for the impact of AWM’s spending draws on nine evaluations covering 81% (£990.3m) of AWM’s programme spend over the ‘relevant period’ which are consistent with the requirements of the IEF. For the requirements of our analysis, this provides a robust evidence base upon which AWM’s impact can be assessed. Annex A provides a list of the evaluations used. The level of coverage varies across the intervention categories, with very high coverage in relation to people, place and other/hybrid spending.

Farming, Market Town Initiative, Business Link, Regional Selective Assistance/Selective Finance for Investment, Grant for Research & Development and Phoenix Fund. 14 For expenditure over the period 1999/2000 to 2001/2002, given the available data, it has not been possible to classify by intervention categories. 15 Excludes national programme spend. 16 This also includes budget items covering the cost of capital, bank interest, grants credited to reserves and policy development.

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Table 2: Analysis of AWM relevant spend covered by IEF compliant evaluations Total Expenditure covered by evaluations (£m)

% of spend (2002/032006/07)

Number of evaluations

Business

183.6

Place

261.4

People

47.1

Hybrid

498.2

Total

990.3

Source: PwC analysis based on AWM evaluation evidence

Key findings Before setting out details of the impact of AWM’s spending on each type of intervention, this section draws together the key findings from the aggregate evaluation evidence base for AWM in relation to the two key objectives of our work, namely to summarise the available evidence of the impact of spending by AWM, at both regional and national level, and to assess AWM’s achievements against the objectives of both the RES and its Corporate Plan (which have changed over time) and each specific programme and project. It considers three key questions in turn: 

What has been the impact of AWM’s spending both at the project and programme level and overall?



What does the available evidence suggest has been the value for money of AWM’s interventions’?



How has AWM performed against its relevant objectives both at the project and programme level and overall in relation to its Corporate Plan and the RES?

Impact AWM’s expenditure and the key gross and net outputs associated with its interventions are summarised in Table 3. A distinction is drawn between outputs that have already been achieved and (where they have been estimated) those future potential outputs. Table 3: Gross and net attributable AWM outputs (2002/03-2006/07) Jobs created/ safeguarded

Businesses created

Businesses assisted

Brownfield land (ha)

People assisted in skills development

Business development and competitiveness Gross outputs achieved

33,626

463

12,738

8,991

Net outputs achieved

17,078

213

2,778

0.6

1,937

Additionality (%)

Regeneration through physical infrastructure Gross outputs achieved

5,937

185

219

440

Net outputs achieved

3,050

160

226

15,221

2,122

7,818

1,090

Additionality (%) Future potential gross outputs Future potential net outputs Additionality (%)

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Jobs created/ safeguarded

Businesses created

Businesses assisted

Brownfield land (ha)

People assisted in skills development

People and skills Gross outputs achieved

2,351

4,454

33,600

517

979

8,744

Gross outputs achieved

35,917

2,621

10,983

451

140,431

Net outputs achieved

16,294

1,178

4,683

230

69,979

1,200

560

640

332

Gross outputs achieved

77,831

3,104

28,360

671

183,462

Net outputs achieved

36,938

1,402

8,535

391

80,886

16,421

112

2,682

8,458

1,421

Net outputs achieved Additionality (%) Other/hybrid

Additionality (%) Future potential gross outputs Future potential net outputs Additionality (%) Total

Additionality (%) Future potential gross outputs Future potential net outputs Additionality (%)

Source: PwC analysis based on AWM evaluation evidence

Over the period 2002/03 to 2006/07, AWM has created/safeguarded a significant number of jobs, assisted and created businesses across the region, remediated brownfield land and assisted people in skills development. In terms of employment, AWM has created/safeguarded nearly 37,000 net jobs. This 17 can be compared to the increase in employment in the West Midlands, over the same period, of 68,876 . From the available data, it is not possible to consistently distinguish between jobs created and safeguarded, although we note that much of AWM’s work has been related to the safeguarding of employment, rather than the creation of new jobs. For example, 95% of the jobs created/safeguarded for the Premium Automotive Research & Development and Rover and MG Rover Task Force programmes were safeguarded jobs. Looking across all of the evaluation evidence, the additionality of achieved outputs varies between 30% and 58% although there are some key differences within the themes. For jobs created/safeguarded additionality is relatively consistent, with the exception of people and skills interventions (22%), which is notably lower. For businesses created additionality is between 45% and 51% across the themes. There is wider variation in relation to the number of businesses assisted which varies from 22% to 51%. Additionality for brownfield land is highest across the themes ranging from 51% to 73%. For skills assists there is a larger variation in the level of additionality. The levels of additionality can also be compared with the evidence emerging from the evaluation of other RDAs’ activities. Looking across the intervention themes and by measure of output: 

For business development and competitiveness, the national level of additionality for jobs

Annual Business Inquiry, National Statistics.

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created/safeguarded is 48% compared to 51% across AWM’s business development and competitiveness interventions. Additionality is slightly higher for businesses created at 46% compared with 40% nationally. 

For regeneration through physical infrastructure, the level of additionality is 51% across outputs with the exception of brownfield land, where additionality is higher at 73%. These findings are broadly consistent with the national picture, where additionality for brownfield land remediated is 64% for physical infrastructure interventions. Levels of additionality for jobs created/safeguarded are slightly higher for AWM’s physical infrastructure interventions (51% compared to 45% across the RDAs).



For AWM’s people and skills programme, the level of additionality is lower compared to national benchmarks. Additionality for AWM’s people and skills programme is low, ranging from 22% for jobs created/safeguarded to 26% for skills assists, whereas, across the RDAs the respective figures are 48% and 62%.



For other/hybrid interventions, consisting of Regeneration Zones and SRB, additionality is broadly consistent across the different outputs. The use of the same additionality factors for the SRB programmes means that the gross-to-net ratios are in line with those estimated for the other RDAs.

The core outputs generated by AWM’s interventions can be expected to drive changes in economic activity both directly and indirectly. These economic outcomes are captured in net regional GVA which measures the additional contribution that West Midland’s workers and businesses make to the economy. Table 4 summarises the estimated GVA impact of AWM’s expenditure based on the available evaluation evidence. It presents three separate measures: 

the achieved annual GVA which is estimated as an annual flow of benefits recorded by the evaluation;



the cumulative achieved GVA which is the estimated value of the flow of benefits over the lifetime of 18 the intervention based on the persistence assumptions recorded in the evaluation ; and



the total achieved and future potential GVA which differs from the cumulative achieved GVA in that it also includes the benefits expected to accrue from the future potential net jobs attributable to AWM’s interventions.

Based on the available evaluation evidence, GVA has been calculated for the majority of AWM’s projects and programmes. The exception is Mercia Spinner, where the evaluation did not calculate GVA (although it did estimate that the net turnover impact was £7.2m over the lifetime of the programme). Table 4: GVA outcomes of AWM’s interventions (2002/03-2006/07) Evaluation

Expenditure covered by evaluations (£m)

Achieved GVA (annual, £m)

Persistence assumption (years)

Achieved GVA (cumulative, £m)

Achieved & future potential GVA (cumulative, £m)

Business development and competitiveness High Technology Corridors

38.7

32.4

5.5

80.9

178.2

Rover and MG Rover Task Force programme

36.2

217.5

Clusters

72.8

108.5

271.3

542.6

Premium Automotive Research and Development (PARD)

32.7

133.0

Future benefits have not been discounted.

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Evaluation

Expenditure covered by evaluations (£m)

Achieved GVA (annual, £m)

Persistence assumption (years)

Achieved GVA (cumulative, £m)

Achieved & future potential GVA (cumulative, £m)

180.4

491.4

N/R

703.6

1,071.3

261.4

103.7

1,036.9

3,695.1

47.1

22.0

67.4

220.1

Regeneration Zones

280.2

253.0

3 -10

1,441.0

SRB

218.0

370.0

2.5

925.0

Business total

Regeneration through physical infrastructure Land & Property People and skills Skills Hybrid 19

Source: PwC analysis based on AWM evaluation evidence

Some care should be taken when considering the estimates of the impact on GVA as they include both achieved and future potential impacts: the latter have yet to be realised and there is also significant uncertainty around the length of the persistence. The stream of impacts on GVA has not been discounted nor have constant prices been applied. It must also be stated that these impacts capture largely economic outcomes, not the full range of social and environmental impacts which some AWM projects have targeted. In addition, the evaluation methodologies used do not seek to capture the full range of economic impacts relating to regeneration schemes, for example the ‘halo effects’ around land and property interventions in deprived areas. Strategic Added Value Complementing and enhancing the impact of AWM’s project and programme spend, Strategic Added Value is a key element of AWM’s impact. AWM’s Strategic Added Value Across the nine evaluations that we have reviewed, a wide range of SAV impacts have been reported, ranging from AWM’s strategic leadership on a particular subject to the general approach to policy development the agency has advocated. The key themes of AWM’s SAV are summarised below: 

Leadership – All of the evaluations we have reviewed have highlighted to some extent the leadership role of AWM. The clearest example of this role is the response of AWM to the collapse of MG Rover 20 in 2005 . Building on the work of the Rover Task Force 2000 (established to mitigate the impact of BMW’s decision to dispose of MG Rover and help modernise and diversify the economy of the West Midlands), in April 2005 following the announcement of the closure of the MG Rover plant in Birmingham with the loss of over 5,000 direct jobs the MG Rover Task Force (chaired by the Chairman of Advantage West Midlands) was established in order to advise the Secretary of State on the implementation of the emergency package of support for those effected by the closure.



Partnership working – Several evaluations have highlighted the work AWM undertakes to get partners working together. The Regional Skills Partnership, established through AWM’s leadership is 21 an example of getting partners from both the public and private sectors to work together .

For the Regeneration Zones programme, three different assumptions regarding persistence have been applied to cover the range of different outputs from the programme. 20 Evaluation of the Rover Task Force 2000 and MG Rover Task Force 2005 Programmes, August 2008. 21 An Evaluation of AWM’s Skills Interventions, August 2008. 22 Advantage West Midlands: Independent Performance Assessment, NAO, 2007.

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

Strategic co-ordination/influence – Evaluations have also noted the strategic role AWM plays to coordinate activity and influence partners in the region to pursue particular types of activities that are aligned with the RES. AWM has also helped to shape national policy priorities in its role as the lead RDA for transport, where it helped to agree within the RDA network and with the Department for Transport a suite of national priorities for funding that have been taken forward for further 22 development.

Source: AWM

Value for money Having identified the estimated impact of AWM’s programmes on the regional economy in terms of employment and GVA, we now consider the value for money of the spending. Our analysis considers the value for money of AWM’s interventions from two perspectives: 

the GVA to cost ratio (as an indicator of the benefit:cost ratio) (Table 5); and, especially where this is not available,



measures of cost per unit of net output using a range of measures where these are available.

Table 5 summarises the GVA to cost ratio of AWM’s interventions. In assessing the value for money of AWM’s interventions, we have sought to compare them with the evidence emerging from the evaluation of other RDAs’ activities and benchmarks arising from the evaluation of other similar programmes. Table 5: Summary of AWM’s achieved and future potential GVA to cost ratios (2002/03-2006/07) Evaluation

Expenditure covered by evaluations (£m)

Achieved GVA (annual):cost

Persistence assumption (years)

Achieved cumulative GVA:cost

Achieved & future potential cumulative GVA:cost

High Technology Corridors

38.7

0.8

5.5

2.1

4.6

Rover and MG Rover Task Force programme

36.2

6.0

Clusters

72.8

1.5

3.7

7.5

PARD

32.7

4.1

Total

180.4

2.7

N/R

3.9

5.9

261.4

0.4

4.0

14.1

47.1

0.5

1.4

4.7

Regeneration Zones

280.2

0.9

3-10

5.1

SRB

218.0

1.7

2.5

4.2

Business development and competitiveness

Regeneration through physical infrastructure Land & Property People and skills Skills Other/hybrid

Source: PwC analysis based on AWM evaluation evidence

Over the period 2002/03 to 2006/07, AWM’s interventions have achieved positive cumulative returns against cost with cumulative GVA to cost ratios in excess of one, although three evaluations have achieved annual returns that are less than costs. In terms of annual achieved returns, these are highest for business development and competitiveness, which is likely to achieve more immediate returns compared to capital interventions, such as land and property investments, which are estimated to offer the highest overall returns.

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The estimated GVA to cost ratios for AWM’s interventions can be compared to the average across the RDAs: 

For business development and competitiveness interventions, AWM’s annual returns (2.7:1) are consistent with those estimated at national level (2.8:1). However, the cumulative returns are higher at a national level (for both achieved and including future potential) with total return at a national level being 11.6 compared to 5.9 for AWM. This reflects the fact that there are only limited future potential impacts anticipated for AWM’s business development and competitiveness interventions and the different levels of persistence assumed.



For regeneration through physical infrastructure interventions, annual returns are the lowest across AWM activities, due to the limited number of jobs created/safeguarded. This is consistent with the national picture, where the achieved annual GVA to cost ratio is 0.7. This reflects the long-run nature of capital based physical regeneration interventions where considerable benefits remain to be achieved in the future even though expenditure has already been undertaken. The significant number of future potential jobs (7,818) associated with AWM’s physical infrastructure interventions and the persistence effects of these over ten years will increase the total GVA to cost ratio to over 14:1, which is above the national average of 8:1. There are, however, significant uncertainties around this estimate arising from the number of future potential jobs created and the persistence of these jobs (which is approximately double that assumed in the national analysis.



People and skills interventions have only had a limited impact to date, with a cumulative achieved GVA to cost ratio of 1.4:1, which is lower than the national average of 2.5:1. The total returns estimated are approximately double the national average which partially reflects the higher level of persistence applied in AWM’s skills evaluation which was derived from a survey of West Midlands 23 businesses .



AWM’s other/hybrid activities in the form of Regeneration Zones (RZs) and SRB have generated lower returns, linked to the equity based rationale of the activities. The RZs programme has an annual achieved GVA to cost ratio of 0.9:1 and a cumulative achieved GVA to cost ratio of 5.1:1. Given the specific nature of this intervention it is difficult to compare with national benchmarks. The most appropriate national sub-theme to compare with is the hybrid area interventions sub-theme. The estimated annual GVA to cost ratio of these interventions is 0.9:1 and the cumulative achieved GVA to cost ratio is 2.3:1, which is approximately half of the returns achieved by AWM’s RZs. For SRB, the average annual GVA to cost ratio across the RDAs is 3.4 compared to 4.2 for AWM’s SRB programme.

In addition to the GVA to cost ratios, we have compared several measures of cost per unit of net output where these are available (see Table 6). Cost per unit of net output measures have only been captured consistently across AWM interventions for cost per net job, although a range of other indicators have been estimated. The cost per net job varies from £5,000 to £85,700; it is lowest within business development and competitiveness (with the exception of Mercia Spinner where limited employment impacts were expected) and highest for regeneration for physical infrastructure interventions, although there is uncertainty regarding the estimate. It is important to recognise when interpreting these unit cost estimates that the programmes delivered by AWM have delivered multiple outputs, for example AWM’s land and property programme has also delivered the remediation of brownfield land, which has required investment and could influence the measures presented below.

AWM’s skills evaluation applies a persistence of ten years compared to three years in the national analysis of skills programmes across RDAs.

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Table 6: Achieved and future potential cost per net output for AWM’s interventions (2002/032006/07) Achieved cost per net job (£)

Future potential cost per net job (£)

Cost per net business created (£)

Achieved cost per net business assist (£)

Achieved cost per net skills assist (£)

9,244

58,292

27,513

5,000-8,000

Clusters

18,184

PARD

9,000

Mercia Spinner

81,500

270,000

59,900-85,700

16,800-24,000

46,943

22,953

1,017

14,500-19,400

Business development and competitiveness High Technology Corridors Rover and MG Rover Task Force programme

Regeneration through physical infrastructure 24

Land and Property People and skills Skills Other/hybrid

Regeneration Zones

Source: PwC analysis based on AWM evaluation evidence

The cost per unit of output for AWM interventions are broadly consistent with the national benchmarks across business, people and place. This suggests that the programmes have been effectively delivered. The cost per job estimates for business development and competitiveness interventions are in line with those estimated at a national level, which range from £8,301 for individual enterprise support to £37,938 for science, R&D and innovation infrastructure. The cost per net job at a national level for physical regeneration interventions is £63,271, which is towards the bottom of the range of the estimate for AWM’s land and property programme. For people and skills interventions, the average national estimate of cost per net job is £43,302, which is consistent with the estimate for AWM’s people and skills interventions. The cost per net skills assist for AWM’s people and skills programme is nearly half of the national benchmark of £1,960. It is difficult to draw conclusions on the cost per business created/assisted, as there are only four estimates for very different programmes, although these estimates are broadly 25 consistent with the overall pattern at a national level. It should also be noted that the estimates of cost per business assisted/created take no account of the nature of the businesses created (for example high technology businesses in the case of Mercia Spinner) or the intensity of the business support. Performance against objectives AWM, along with the other eight RDAs, has a series of gross output targets set for it by central government. Table 7 presents AWM’s performance against these targets in the period from 2002/03 to 2006/07 based upon evidence provided by BERR. For all of the measures, taking the period as a whole, AWM has exceeded the targets set by DTI/BERR, particularly for businesses created and people assisted in skills development. Looking at performance by year, AWM has achieved all its targets with the exception of two years when it missed its targets for jobs created/safeguarded and brownfield land remediated.

Cost per job estimates are presented for achieved and future potential jobs. We have also presented the figures as a range both including and excluding write-downs on property assets to reflect the uncertainty around future property values. 25 The cost per business created for individual enterprise support at a national level is £74,196 and for Science, R&D and innovation infrastructure £1,564,603, which are higher than the AWM business programmes within these sub-themes. The cost per business assist for individual enterprise support is £8,502, approximately a third of the estimates for AWM.

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Table 7: Comparison of AWM performance against DTI/BERR targets (2002/03-2006/07)

Jobs created/ safeguarded

Businesses created

Brownfield land (ha)

People assisted in skills development

Funding levered (£m)

Targets set by DTI/BERR

56,439

2,971

498

67,909

259

Achieved AWM gross outputs reported to DTI/BERR

65,701

4,934

570

101,580

479

Number of years when targets met

4 out of 5

5 out of 5

4 out of 5

5 out of 5

4 out of 4

Source: DTI/BERR and PwC analysis

Like all the RDAs (except the London Development Agency), in 2007 AWM was subject to the National Audit Office’s Independent Performance Assessment (IPA) which assessed how well AWM has responded to the common challenges facing RDAs, namely balancing the interests of the region with national policy requirements, managing the conflicting demands of different regional stakeholders, looking outwards to promote the region while staying focused on what is happening inside and responding to new duties imposed by central government. This assessment sheds further light on how well the Agency has been able to fulfil its role. Overall, AWM was seen as ‘performing strongly’, particularly in terms of: 

leadership and partnership working: AWM was seen as working well in partnership across a wide range of sectors, taking a strong and inclusive approach to develop the latest RES. Positive feedback was also received regarding AWM’s leadership role on transport.



achievements: AWM was seen as having achieved considerable success with core programmes such as The Market Towns Initiative, the Manufacturing Advisory Service West Midlands and the Building Essential Skills for Construction Trade. The Agency has also performed well in terms of Inward Investment, where it has focussed on strategically significant projects and has exceeded its targets for the past two years on both jobs created and safeguarded. The work of the Agency in managing the response to the collapse of MG Rover (as discussed above) was also seen as a major success.

AWM was noted as having an excellent track record in financial control and a good record of achieving targets. It was, however, noted that there were areas for improvement around communications with partners, in particular around the approvals process and the communication of AWM’s achievements. Table 8 sets out AWM’s performance against the objectives set for each of the individual interventions covered by the evaluations though the available data only give a partial picture: 

four evaluations did not assess performance against objectives: these evaluations are ‘programme’ evaluations, where several projects and programmes have been evaluated together with no overarching programme level objectives to assess performance against;



three interim evaluations reported that limited performance should be interpreted with caution as the objectives set were for 2010; and



two smaller programmes have ‘largely met’ their objectives .

26 27

Based on information from AWM’s Annual Reports. Mercia Spinner and the Premium Automotive Research and Development programme.

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Table 8: Comparison of performance against target across AWM’s evaluations Performance against objectives

Evaluations

Spend covered by evaluations

Number

(£m)

Exceeded

Met

Largely met

35.9

Mixed

Limited performance

391.5

Not assessed

562.9

Total

100

990.3

100

Source: PwC analysis based on AWM evaluation evidence

Impact by intervention We have structured our analysis of the impact of AWM’s spending, where possible, according to the three categories of intervention defined within the IEF (i.e. business, place and people). We have also analysed the impact of AWM’s other activities that span more than one of these categories as well as the available evidence of the impact of the ten national programmes where AWM has been responsible for delivery within parameters determined by central government departments. We have reported the impact of AWM’s interventions using a common structure which: 

summarises AWM’s activities and expenditure on each programme;



highlights the estimated net outputs arising from this expenditure (i.e. the additional outputs that are as a result of the intervention);



distinguishes between those outcomes which have already been achieved and those future potential impacts which are anticipated in the future as interventions are completed and/or their impacts persist; and



we summarise performance against objectives and the outcomes, where available, for each programme.

AWM’s business development and competitiveness interventions The West Midlands has a strong tradition in manufacturing, particularly the automotive sector where it accounts for 28% of UK automotive employment. ‘Delivering Advantage’ set the strategic context for AWM’s business interventions by identifying the need to modernise and diversify the business base of the West Midlands economy away from automotive manufacturing, in the light of the potential loss of the Rover car plant in 2000. The Rover closure also highlighted the impact of the large-scale nature of the automotive industry in the West Midlands, where large units predominate, with an average of 90 employees per automotive business compared to 53 per automotive business in the UK. This dependence on larger business units created risks of potentially significant economic impacts in the event of a failure of a large business. To address this dependence, AWM has focused on increasing the number of SMEs through developing an ‘enterprise culture’ and encouraging innovation, for example with support for start-up businesses, in an effort to modernise and diversify the business base in the West Midlands. This section covers five evaluations under the theme of business development and competitiveness. The interventions cover three main sub-themes and are summarised in Table 9.

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Table 9: Summary of AWM’s business development and competitiveness interventions Intervention theme/sub-theme

Evaluation

Expenditure covered by evaluations (£m)



Rover and MG Rover Task Force



High Technology Corridors (HTCs)

Sector/cluster support



Clusters

72.8

Science, R&D & innovation infrastructure



Premium Automotive Research and 31 Development (PARD) programme

32.7



Mercia Spinner

Individual enterprise level support

36.2 29

38.7

3.2

Total

183.6

Source: PwC analysis based on AWM evaluation evidence

It is important to recognise that the programmes span these sub-themes and the links are highlighted where relevant below. The programmes are: 

The Rover and MG Rover Task Force Programme which covers AWM’s work to support businesses and employees in the period before and after the collapse of MG Rover in 2005;



High Technology Corridors (HTCs) which has delivered support to high technology businesses in three geographical areas identified as at risk due to their dependence on MG Rover and its wider supply chain; the two key objectives were: –

to carry out the modernisation and diversification essential in the manufacturing industry; and

–

to build on the innovative potential of companies by exploiting and increasing research and development, promoting creative talent and developing all aspects of an innovative and marketled culture;



Clusters which has sought to develop ten business clusters, which seek to: modernise and diversify existing clusters/industries, provide support to those clusters/industries with growth potential and nurture the development of embryonic clusters with potential for growth;



Premium Automotive Research and Development programme (PARD) which has focused on improving the competitiveness of the premium automotive sector in the West Midlands through increased R&D expenditure; and



Mercia Spinner which was aimed at encouraging spin-out businesses from universities and research institutions.

Rationale AWM’s Business development and competitiveness interventions address a number of market failures and wider policy objectives: increasing economic performance (externalities), business advice (imperfect information), targeting economic disadvantaged groups and areas (equality) and tackling economic emergencies. In particular, the key rationale for the MG Rover programme, HTCs and (to a lesser extent) PARD was the objective of diversifying and modernising the business base within the West Midlands, with a focus on the automotive sector. The HTCs and Mercia Spinner programmes both sought to

Evaluation of the Rover Task Force 2000 and MG Rover Task Force 2005 Programmes, August 2008. Evaluation of the High/Higher Technology Corridors, August 2008. 30 Evaluation of AWM’s clusters programme 2002/03 to 2007/08, August 2008. 31 PARD: Third Interim Programme Report, August 2008. 32 An independent evaluation of the Mercia Spinner Programme, January 2007. 29

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address co-ordination and information failures between the between the private and higher education sectors. The rationale for the clusters programme was to ensure greater connections between interrelated companies to share technology, skills and finance and to increase the level of economic activity. The key gross and net outputs associated with each of these programmes are summarised in Table 10. The primary outputs arising from the business interventions have been: jobs created/safeguarded, businesses assisted, new businesses created and people assisted in skills development. None of the evaluations reported future potential outputs relating to business competitiveness and development interventions. Table 10: Outputs of AWMâ&#x20AC;&#x2122;s business development and competitiveness interventions (2002/032006/07)

Brownfield land (ha)

People assisted in skills development

People assisted into a job

1,318

1,481

140

840

0.6

612

12,543

118

2,664

2,997

1,087

6,396

1,898

1,325

470

11,477

106

8,180

4,513

1,047

4,154

Gross outputs achieved

Net outputs achieved

Gross outputs achieved

5,217

518

Net outputs achieved

3,729

Jobs created/ safeguarded

Businesses created

Businesses assisted

Gross outputs achieved

4,383

220

Net outputs achieved

2,795

HTCs

Additionality (%) Rover Gross outputs achieved Net outputs achieved Additionality (%) Clusters Gross outputs achieved Net outputs achieved Additionality (%) Mercia Spinner

Additionality (%) PARD

Additionality (%)

Business development and competitiveness total Gross outputs achieved

33,626

463

12,738

8,991

2,134

Net outputs achieved

17,078

213

2,778

0.6

1,937

470

Additionality (%)

Source: PwC analysis based on AWM evaluation evidence

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Several of AWM’s business development and competitiveness interventions have achieved similar levels of additionality in relation to jobs created/safeguarded for RDAs as a whole (51% compared to 48% across the RDAs). Additionality is slightly higher for businesses created (46% compared to 40% nationally). At a sub-theme level, the additionality of AWM’s individual enterprise support interventions (MG Rover and HTCs) and Science, R&D and innovation infrastructure interventions (PARD and Mercia Spinner) are well above the levels recorded nationally. The additionality of AWM’s clusters programme is below the level estimated for sector/cluster support interventions across the RDAs (36% compared to 67% nationally). Impact Table 11 summarises the impact on GVA (both achieved and future potential) of AWM’s interventions to promote business development and competitiveness, with the exception of Mercia Spinner where no estimate was calculated. In the majority of cases the evaluations estimated either cumulative or annual GVA. Where annual GVA was estimated for HTCs and Clusters an estimate of the persistence of the 33 GVA impacts was included to allow estimation of the cumulative impacts of the intervention, split between achieved and future potential. For Rover and PARD, no estimate of persistence was made, with the impacts assumed to last a single year. Moreover, future potential impacts on GVA have not been discounted nor have constant prices been applied. Table 11: Outcomes of AWM’s business development and competitiveness interventions (2002/032006/07) Evaluation

Expenditure covered by evaluations (£m)

Achieved GVA (annual, £m)

Persistence assumption

Achieved GVA (cumulative, £m)

Achieved & future potential (cumulative, £m)

High Technology Corridors

38.7

32.4

5.5

80.9

178.2

Rover and MG Rover Task Force programme

36.2

217.5

Clusters

72.8

108.5

271.3

542.6

PARD

32.7

133.0

Business total

180.4

491.4

N/R

703.6

1071.3

Source: PwC analysis based on AWM evaluation evidence

The evaluations have also captured a range of additional benefits to the West Midlands: 

the HTC and MG Rover programmes have “largely addressed” the objectives of diversification and 34 modernisation of manufacturing and related industries in the West Midlands ;



the PARD and Clusters programmes have both helped to develop networks and improve linkages in supply chains; and



the Mercia Spinner programme has brought about synergies through knowledge sharing networks, the introduction of commercialisation policies which have raised the issue on HEI agendas, a marked change in culture and attitudes towards commercialisation, and internal capacity building of business support providers.

In addition to these benefits, AWM’s interventions have helped businesses and the wider economy to achieve a higher level of performance not only through their direct impacts but also through the benefits achieved through AWM’s Strategic Added Value contributions.

The HTCs evaluation estimated persistence from a survey of over 300 beneficiaries. The clusters evaluation assumes that the level of persistence is five years, applying an assumption from the Evaluation of Regional Selective Assistance in Scotland. 34 Evaluation of the High/Higher Technology Corridors, August 2008.

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AWM’s Strategic Added Value Across AWM’s business development and competitiveness interventions, a range of different forms of SAV have been noted. 

Leadership and strategy: AWM’s leadership role is a frequently noted element of SAV for business 35 development and competitiveness interventions. The Clusters evaluation notes it is “perhaps the strongest area of SAV… the cluster programme has been able to join up and successfully bring together key partners”. The PARD evaluation comments on the: “strategic role AWM has played in progressing the widely agreed regional development need to upgrade the technological base of the regions automotive cluster”.



Partnership working: AWM’s work with partners is noted in the evaluation of the Rover and MG Rover 36 Task Force programmes , which found evidence that linkages between various partners during the course of the Task Force programme activity were strong and that AWM exhibited particularly strong leadership and influence at this time by fully encouraging joint working between partners and providing a focus. The HTC evaluation notes the important role the A38/CTB corridor has played “in 37 cementing and increasing the role of QinetiQ in the region.”



Strategic co-ordination/influence: The clusters evaluation notes that the programme delivered improved co-ordination of activity and business engagement.

Source: AWM

Value for money We have compared the impact of AWM’s business development and competitiveness interventions on GVA with the expenditure associated with the projects and programmes. Where the GVA to cost ratio is greater than one, the economic benefits of the interventions attributable to AWM’s funding exceed their costs. This is the case for all of AWM business development and competitiveness interventions where GVA has been measured. Table 12 sets out the achieved and future potential GVA to cost ratios of AWM’s business development and competitiveness interventions. Overall, AWM’s achieved returns from its business development and competitiveness interventions are consistent with the average returns across the RDAs (2.7 compared to 2.8). However, the cumulative returns are higher across the RDAs with an achieved and future potential return at a national level of 11.6 compared to 5.9 for AWM’s business development and competitiveness interventions. This reflects the fact that there are only limited future potential impacts anticipated for AWM’s business development and competitiveness interventions and the different levels of persistence assumed. Table 12: Achieved and future potential GVA to cost ratios from AWM’s business development and competitiveness interventions (2002/03-2006/07) Programme

Expenditure covered by evaluations (£m)

Achieved GVA (annual):cost

Persistence assumption (years)

Achieved cumulative GVA:cost

Achieved & future potential GVA (cumulative):cost

Individual enterprise support

HTCs

38.7

0.8

5.5

2.1

4.6

Rover

36.2

6.0

72.8

1.5

3.7

7.5

Sector/cluster support

Clusters

Evaluation of AWM’s clusters programme 2002/03 to 2007/08, August 2008. Evaluation of the Rover Task Force 2000 and MG Rover Task Force 2005 Programmes, August 2008. 37 Evaluation of the High/Higher Technology Corridors, August 2008. 38 Evaluation of AWM’s clusters programme 2002/03 to 2007/08, August 2008. 36

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Programme

Expenditure covered by evaluations (£m)

Achieved GVA (annual):cost

Persistence assumption (years)

Achieved cumulative GVA:cost

Achieved & future potential GVA (cumulative):cost

4.1

N/R

3.9

5.9

Science, R&D and innovation infrastructure

PARD

32.7

4.1

Business Development and competitiveness

Total

180.4

2.7

Source: PwC analysis based on AWM evaluation evidence

The GVA to cost ratios can also be compared to the national evidence at the sub-theme level. For individual enterprise support interventions, the overall returns of AWM interventions are below the national average, where the average achieved cumulative GVA to cost ratio is 12.0 rising to 14.1 when future potential impacts are included. The GVA to cost ratios for AWM’s Clusters programme is lower than the levels for sector/cluster support at a national level, where achieved returns are approximately double AWM’s returns. The overall returns of AWM’s cluster programme are slightly lower that the national average (7.5 compared to 8.7 across the RDAs). The achieved returns for the PARD programme are above then national estimates for Science, R&D and innovation infrastructure. Table 13 sets out the achieved and future potential cost per net output of AWM’s business development and competitiveness interventions. No evaluations have estimated the cost per net future potential job or the cost per net skills assists. Table 13: Achieved and future potential cost per net output from AWM’s business development and competitiveness interventions (2002/03-2006/07) Achieved cost per net job (£)

Cost per net business created (£)

Achieved cost per net business assist (£)

HTCs

9,244

58,292

27,513

Rover

5,000-8,000

Clusters

18,184

PARD

9,000

Mercia Spinner

81,500

270,000

Source: PwC analysis based on AWM evaluation evidence

Comparing these estimates to the evidence across the RDAs shows that AWM’s business competitiveness and development interventions are broadly consistent with national benchmarks of cost effectiveness per unit of output. For individual enterprise support and sector/cluster support interventions, the national benchmarks are £8,301 and £12,135 per net job created/safeguarded, which are both slightly lower than values estimated measure for AWM. For science, R&D and innovation infrastructure interventions the cost per job at a national level is £37,938, which is more than four times greater than the estimate for the PARD programme. The cost per job for Mercia Spinner is approximately double the national average, although the Mercia Spinner programme’s focus was on creating spin-out companies rather than creating employment. The estimates of cost per net business created for both the HTCs programme (national benchmark of £74,196) and Mercia Spinner (national benchmark of £1,564,603) are both well below the national benchmarks. The cost per net business assist for HTCs is more than three times higher than the national benchmark (£8,502). It should also be noted that the estimates of cost per business assisted/created take no account of the nature of the businesses created (for example high technology businesses in the case of Mercia Spinner) or the intensity of the business support.

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Performance against objectives Performance against objectives has been assessed for the majority of business development and competitiveness intervention and is summarised in Table 14. It shows mixed performance against objectives, with two programmes recording only limited performance against objectives and two programmes largely meeting their objectives. It should be noted, however, that the assessment of performance against objectives of both Clusters and HTCs is partial and interim in nature, as the objectives for the programmes were set for 2010 and the evaluation does not take into account all of the expenditure and outputs associated with the programmes. Table 14: Summary of AWM’s performance against objectives and outcomes of business development and competitiveness interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Performance against objectives

Rover and MG Rover Task Force Programme

36.2

Not assessed

HTCs

38.7

Limited performance against objectives

Clusters

72.8

Limited performance against objectives

PARD

32.7

Largely met

Mercia Spinner

3.2

Largely met

Source: PwC analysis based on AWM evaluation evidence

AWM’s regeneration through physical infrastructure interventions This section focuses on the impact of AWM’s wide ranging activities in land and property. It draws on a 39 single, programme level evaluation of 49 of the largest land and property projects by expenditure over the period 2002/03 to 2006/07. AWM spent a total of £182.9m on physical infrastructure interventions between 2002/03 and 2006/07. In addition, AWM incurred further costs of £78.5m in write-downs on its 40 assets reflecting changes in the value of the sites owned by AWM , giving a total programme spend of £261.4m. Write-downs can occur for several reasons including: 

the restriction of the future use of the site in order to maximise economic benefit for the region rather than commercial profits;



remediation costs due to land contamination in excess of the overall uplift in site value; and



the timing of the evaluation and fluctuation in the property market will influence the overall write-down position recorded in the evaluation.

The projects covered by the evaluation include some of AWM’s largest strategic site investments, such as Ansty Park, i54, the Fort and Stoneleigh Park. In addition, AWM’s other activities include the provision of land for business parks, office buildings, entertainment and leisure facilities, the creation of public space and visitor attraction schemes. We note that the land and property activities of AWM are also enabling interventions that deliver against AWM’s wider objectives including enterprise, innovation and economic inclusion: these impacts will largely be captured in the evidence presented below. Rationale The strategic rationale for land and property interventions was first outlined in ‘Creating Advantage’, where the importance of sites and premises as a facilitator of economic development was highlighted. The baseline conditions for land and property interventions were further outlined in ‘Delivering

Evaluation of major land and property investments, August 2008. Write downs result from changes in the value of sites purchased by AWM (when the open market value of the site on revaluation is less than the aggregate expenditure, including land purchase and improvements). They are included in AWM’s spend because HM Treasury resource accounting rules mean that AWM is required to write down site development activities to its current account. 40

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Advantage’, which highlighted two key issues. Firstly, only 39% of the region’s land stock for future employment use was currently available to companies and there was limited availability of large sites in the region. Secondly, half of the region’s employment land had remained undeveloped for more than five years. Against these baseline conditions, the common rationale for AWM’s physical infrastructure interventions was market failure and, in particular, externalities, which include: 

purchasing and developing important employment sites to prevent them being developed for less strategically important purposes;



undertaking projects where the works would have been too expensive for private sector developers to undertake, for example the remediation of contaminated land;



undertaking landmark developments to build confidence in particular locations (‘halo effects’); and



public realm improvements where not all the benefits can be captured by the developer, which makes them less attractive to the private sector in terms of commercial return.

Impact The net outputs generated by the intervention are shown in Table 15. A distinction is drawn between those outputs which have already been achieved and those future potential outputs which are anticipated in the future. The key outputs arising from AWM’s physical infrastructure are the jobs created and safeguarded and the brownfield land remediated, with a significant proportion of these outputs still to be achieved. Table 15: Gross and net attributable outputs of AWM’s physical infrastructure interventions (2002/03-2006/07) Jobs created/ safeguarded

Businesses created

Businesses assisted

Brownfield land (ha)

People assisted in skills development

Gross outputs achieved

5,937

185

219

440

Net outputs achieved

3,050

160

226

Future potential gross outputs

15,221

2,122

Future potential net outputs

7,818

1,090

Additionality (%)

Source: PwC analysis based on AWM evaluation evidence

Additionality for regeneration through physical infrastructure is 51% across outputs types with the exception of brownfield land, where additionality is higher at 73%. These findings are broadly consistent with the national evidence, where additionality for brownfield land remediated is 64% for physical infrastructure interventions. Levels of additionality for jobs created/safeguarded are higher for AWM’s physical infrastructure interventions (51% compared to 45% across the RDAs). In addition to the outputs considered above, the Agency has also levered in other regeneration funding (see Table 16). This additional funding largely relates to developer contributions to AWM’s projects. As the evaluation was not able to assess the commitment to future potential leverage, these figures should be interpreted with caution.

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Table 16: Gross leverage of AWM’s regeneration through physical infrastructure interventions (2002/03-2006/07) Gross public sector leverage (£m)

Gross private sector leverage (£m)

Achieved

36.7

23.4

Future potential

10.4

165.1

Source: PwC analysis based on AWM evaluation evidence

The GVA for AWM’s regeneration through physical infrastructure interventions are outlined in Table 17 and are estimated on the basis of the net (achieved and future potential) jobs safeguarded/created. Table 17: Outcomes of AWM’s regeneration through physical infrastructure interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Annual GVA achieved

Persistence assumption (years)

Achieved cumulative GVA

Achieved & future potential GVA (cumulative)

261.4

103.7

1,036.9

3,695.1

Source: PwC analysis based on AWM evaluation evidence

AWM’s regeneration through physical infrastructure interventions have achieved an annual return of £103.7m and the impacts of this assumed to persist over ten years. In addition, future potential jobs estimated to arise, with further GVA impacts. The level of persistence for AWM’s physical infrastructure 41 interventions is based on the fact that AWM commonly takes a charge of 10 years over its developments to ensure that they continue to be used for the intended purpose. The evaluation notes that there is uncertainty around this assumption and that “These long term impact figures could be viewed as the upper end of an estimate.” In addition to the outcomes highlighted above, which relate to AWM’s investment in regeneration through 42 physical infrastructure, the evaluation also highlights the wider impacts of AWM interventions. AWM’s Strategic Added Value AWM’s SAV includes: AWM’s contribution to the Regional Spatial Strategy, its work on sustainability to ensure the sites that it is involved with meet high standards of sustainability and contributing to issues such as housing and transport. The evaluation also describes four areas of AWM’s SAV: 

Influencing planning policies and decisions: AWM has played an active role in development of strategic planning policies, in addition to its role as a statutory consultee on planning applications for major employment related developments.



Supporting other public agencies in the region in their land and property activities: AWM’s land and property team has provided advice to other public agencies in the region, including local authorities and delivery vehicles in the West Midlands.



Developing innovative mechanisms relating to the supply of land and property: AWM has promoted two innovative initiatives (the Regional Investment Fund and PXP) to address constraints to the delivery of property projects.



Providing a leadership role: AWM has set high standards for sustainability, providing leadership for the region.

In addition to the SAV themes highlighted in the evaluation of AWM’s land and property activities, AWM also plays a wider role in the significant regeneration schemes. For example, AWM has played a role in the development of proposals to redevelop Birmingham New Street Station. AWM, working with partners, has developed a £600m regeneration scheme called the Birmingham Gateway project centred on the 41 42

The evaluation also considers a scenario of 15 years persistence. Evaluation of major land and property investments, August 2008.

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station. The appraisal of the scheme estimates that on the basis of the public sector investment of £398m public funding, the Birmingham Gateway project could result in wider impacts of 12,800 net jobs and a contribution of £35m GVA per annum by 2018. Source: AWM

Value for money Table 18 summarises the GVA to cost ratios of AWM’s regeneration through physical infrastructure interventions. There is a large difference between the achieved impacts and those where future potential impacts are included. Annual returns are the lower, as the persistence effects have been omitted. This reflects that national picture, where the achieved annual GVA to cost ratio is 0.7, which reflects the longrun nature of capital based physical regeneration interventions. The significant number of future potential jobs (7,818) associated with AWM’s physical infrastructure interventions and the persistence effects of these over ten years will increase the total GVA to cost ratio to over 14:1, which is greater than the average across the RDAs (8:1). Table 18: Achieved and future potential GVA to cost ratios from AWM’s regeneration through physical infrastructure interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved GVA (annual):cost

Persistence assumption (years)

Achieved cumulative GVA:cost

Achieved and future potential cumulative GVA:cost

261.4

0.4

4.0

14.1

Source: PwC analysis based on AWM evaluation evidence

The evaluation of AWM’s physical infrastructure interventions estimates the cost per job of AWM’s physical infrastructure interventions considering both the achieved and future potential jobs created/safeguarded. Given the significant levels of economic uncertainty, it is not possible to robustly assess the future position of write-downs to give a view on the final programme cost. This is noted in the evaluation: “Obviously what occurs to the UK economy during the next two to five years could significantly alter both cost and capital receipt projections”. The evaluation, therefore, considers the impact of different levels of write-down, presenting estimates of cost per job with and without write-downs. Table 19: Achieved and future potential cost per net output from AWM’s regeneration through physical infrastructure interventions (2002/03-2006/07) Spend covered by evaluation (£m)

Achieved cost per net job (£)

Achieved and future potential cost per net job (£)

Including write-downs

261.4

85,700

24,000

Excluding write-downs

182.9

59,900

16,800

Source: PwC analysis based on AWM evaluation evidence

The cost per net achieved job is in the range £59,900 to £85,700 depending on the extent to which writedowns will be recovered. Including future potential jobs decreases the cost per net job to £24,000£16,800. These estimates can also be compared to the cost per net job across the RDAs for physical regeneration interventions of £63,271. This suggests that the AWM programme has been effectively delivered. Performance against objectives It has not been possible to assess the performance of the land and property interventions against the various sets of objectives. This reflects the fact that the evaluation of AWM’s activities is a ‘programme’ evaluations, where several projects and programmes have been evaluated together and there are no

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overarching programme level objectives to assess performance against. The evaluation did not consider the performance against objectives for individual projects and programmes.

AWM’s people and skills interventions 43

AWM spent £47.2m on its core skills programme in the period between 2002/03 and 2006/07 providing basic skills training, expanding higher level skills and developing programmes to deliver leadership and management skills. Rationale The importance of developing skills within the West Midlands economy was highlighted in the first RES ‘Creating Advantage’ in 1999, which set out the need to promote a ‘learning and skilful region’ and highlighted the history of low education achievement and skills levels in the West Midlands. In addition, AWM’s interventions have also been strongly influenced by the region’s dependence on manufacturing industry and, in particular, the need to respond to the closure of MG Rover in 2005 which resulted in 22,500 workers having their jobs put at risk and requiring new or improved skills to compete in a global economy. The strategic context for AWM’s skills initiatives was set out in a Framework for Regional Skills and 44 Employment (FRESA) published in 2001 . The FRESA highlighted interventions that focused on improving the supply side infrastructure, basic skills and employability. Subsequently, in December 2004, AWM proposed the development of a Regional Skills Partnership (RSP) to act on behalf of stakeholders 45 in the region. One of the first actions of the RSP was to develop a skills performance index , which ranked the West Midlands as the worst performing English region in 2003, and reinforced the need for action. Over the period 2002/03 to 2004/05, AWM’s skills programme funded approximately £37m of activity. 46 Following a review of AWM’s skills priorities in ‘Delivering Advantage’ and in an updated FRESA , it was noted that many of the skills projects, especially those projects focusing on basic skills or those aged 1619, were available from alternative sources, notably the Learning and Skills Council and Job Centre Plus. Following the review, AWM focused its investment almost exclusively on raising demand for skills through addressing management and leadership and higher level skills needed for high value added products and services. It was also agreed that funding should be available to support the piloting of innovative demand-led projects. Impact 47

The outputs from AWM’s expenditure on people and skills are summarised in Table 20 . In addition to these outputs, other AWM funded programmes, notably the Single Regeneration Budget and Regeneration Zones programmes, have also contributed to people and skills development and these outputs are covered separately under those programme evaluations.

An Evaluation of AWM’s Skills Interventions, August 2008. Framework for Regional Skill and Employment (FRESA), Advantage West Midlands, October 2002. 45 The skills performance index has been developed by the West Midlands Regional Observatory and the Institute for Employment Research at Warwick University. The index combines indicators from individuals and employers and draws on data from the National Employer Skills Survey and the Labour Force Survey and gives a composite measure of the performance of the region in delivering skills improvements, 46 Updated Framework for Regional Skill and Employment (FRESA), Advantage West Midlands, August 2004. 47 There are no future potential outputs estimated to arise as a result of AWM’s spend on people and skills. 44

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Table 20: Net outputs of AWM’s people and skills interventions (2002/03-2006/07) Jobs created/safeguarded

Businesses assisted

People assisted in skills development

2,351

4,454

33,600

Net outputs achieved

517

979

8,744

Additionality (%)

Gross outputs achieved

Source: PwC analysis based on AWM evaluation evidence

The levels of additionality associated with AWM’s people and skills programme additionality is low and ranges from 22% for jobs created/safeguard and business assisted to 26% for skills assists. Across the RDAs additionality for skills assists is higher at 62% and for jobs created/safeguarded at 48%. The low levels of additionality are due to the high levels of deadweight and displacement reported by the evaluation: for example, 57% of businesses reported that they would have still generated the benefits in the absence of the intervention. The evaluation notes that similar levels of deadweight have been recorded elsewhere: for example, a study of Employer Funded Training Pilots found levels of deadweight 48 of 85% to 90% . The estimated impacts on GVA of AWM’s people and skills programme are summarised in Table 21. Annual achieved GVA impacts are limited at £22m, but are projected to increase if the impacts persist over the next ten years. Table 21: Outcomes of AWM’s people and skills interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Annual GVA achieved

Persistence assumption (years)

Achieved cumulative GVA

Achieved & future potential GVA (cumulative)

47.1

22.0

67.4

220.1

Source: PwC analysis based on AWM evaluation evidence

In addition to these quantitative impacts there are also a range of wider impacts, for example, over 20% of survey respondents stated that AWM has prompted them to invest more in skills and workforce development. As AWM has moved away from funding significant skills programmes, its Strategic Added Value role has also become an important part of its overall skills programme.

The Impact of Employer Funded Training Pilots on Take-up of training Among Employers and Employees, Institute for Fiscal Studies, 2005.

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AWM’s Strategic Added Value The evaluation of AWM’s skills activities

notes a number of specific examples of SAV including:



Strategic leadership and influence: The evaluation notes that “strategic leadership and influence has 50 been a key area of added value” . In particular, AWM has setup the Regional Skills Partnership (RSP) which brings together public and private partners to agree strategic priorities.



Synergy and alignment: The work of the RSP has helped to streamline and prioritise skills activities in the region. Using the evidence base developed by the West Midlands Regional Observatory (WMRO) (an initiative supporting by the RSP), it has been possible to challenge the prioritisation of delivery by partners.



Engagement and evidence: AWM has engaged with the private sector to ensure that there is a focus on the business benefits and an understanding of employers’ needs. AWM has also used the evidence produced by the WMRO to assess its own contribution to skills levels in the region.

Source: AWM

Value for money Table 22 presents the estimated GVA to cost ratios for AWM’s people and skills programme. To date, the impact estimated: the cumulative achieved cumulative GVA to cost ratio of 1.4:1, is below the average across the RDAs of 2.5:1. The total returns estimated are considerably higher at approximately double the national average. This reflects the high levels of persistence (10 years) applied in the evaluation, although this estimate was derived from a survey of businesses and is linked to AWM’s support for higher level skills over recent years. Table 22: Achieved and future potential GVA to cost ratios from AWM’s people and skills interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved GVA (annual):cost

Persistence assumption (years)

Achieved cumulative GVA:cost

Achieved and future potential cumulative GVA:cost

47.1

0.5

1.4

4.7

Source: PwC analysis based on AWM evaluation evidence

The evaluation of AWM’s people and skills activities has also estimated several measure of cost per net unit of output across the programme. The comparison of these measures with the available benchmarks suggests a mixed performance in value for money terms. Table 23: Achieved and future potential cost per net output from AWM’s people and skills interventions (2002/03-2006/07) Achieved cost per net job (£)

Achieved cost per net business assist (£)

Achieved cost per net skills assist (£)

46,943

22,953

1,017

Source: PwC analysis based on AWM evaluation evidence 51

The evaluation compares these measures to a ‘benchmark’ of £27,100 per net job and £14,200 per net business assist and notes that, against these measures, the programme appears poor value for money. The evaluation notes that one potential reason for the poor value for money is the high levels of both deadweight and displacement which means that proportionately few gross outputs translate into net outputs. It is also possible to compare these estimates to those across the RDAs. This shows that

An Evaluation of AWM’s Skills Interventions, August 2008. Ibid. 51 ‘Identification of benchmarks’ report to AWM, SQW, 2003. 50

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AWM’s cost per net job is consistent with the RDA average (£43,301). However; the cost per net skills assist for AWM’s people and skills programme is almost half of the national benchmark of £1,960. It is important to note when interpreting the cost per job estimates that jobs were not a primary objective of the programme.

AWM’s other/hybrid interventions This section summarises the available evidence with respect to the impact of two significant regeneration 52 programmes that AWM has supported: the Regeneration Zones (RZs) and the Single Regeneration 53 Budget (SRB). Total spending on these programmes over the period 2002/03 to 2006/07 was £498m, with £280m being spent on RZs and £218m on SRB. Both programmes are similar in the sense that they involved the delivery of a diverse range of interventions spanning business, physical regeneration and people and skills focused on specific geographical areas within the West Midlands. Rationale The strategic context and rationale for both initiatives was outlined in the first RES developed by AWM, ‘Creating Advantage’, and then reaffirmed in ‘Delivering Advantage’. ‘Delivering Advantage’ identified a range of social and economic challenges facing the West Midlands, including high levels of deprivation, 54 with a fifth of the population being amongst the most deprived 10% of the population in England . The Regeneration Zones (RZ) programme was identified as one of AWM’s key delivery mechanisms for promoting economic development. The aim of RZs was to connect need and opportunity in six Zones with relatively high levels of deprivation which, between them, included all of the 10% of most deprived wards in the West Midlands and the majority of the 20% most deprived. The SRB was launched in 1994 and AWM took over responsibility for the programme from the Government Office in 1999. The original aim of the SRB was to simplify and streamline the Government’s existing regeneration schemes, bringing some eighteen separate programmes into a single pot. In addition, the SRB aimed to promote a new way of tackling the problems faced by disadvantaged communities. Table 24 summarises the net outputs which have already arisen or will potentially arise from the RZ and 55 SRB . For RZs and SRB, additionality is broadly consistent across the different outputs. The use of national averages for the gross-to-net ratios for the SRB programmes means that the gross-to-net ratios are consistent with those estimated for the national evaluation of the SRB. Table 24: Gross and net attributable outputs from AWM's other/hybrid interventions (2002/032006/07) Jobs created / safeguarded

Businesses created

Businesses assisted

Brownfield land (ha)

People assisted in skills development

Gross outputs achieved

10,700

1,876

9,484

120

32,540

Net outputs achieved

5,703

850

4,039

19,270

1,200

560

Future potential net outputs

640

332

Additionality (%)

RZs

Additionality (%) Future potential gross outputs

An Interim Evaluation of the Regeneration Zones Programme, April 2008. Evaluation of the Single Regeneration Budget in the West Midlands, April 2008. 54 Based on the Index of multiple deprivation. 55 It should be noted that no future potential outputs were estimated in the SRB evaluation. 53

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Jobs created / safeguarded

Businesses created

Businesses assisted

Brownfield land (ha)

People assisted in skills development

Gross outputs achieved

25,217

745

1,499

331

107,891

Net outputs achieved

10,591

328

644

162

50,709

Gross outputs achieved

35,917

2,621

10,983

451

140,431

Net outputs achieved

16,294

1,178

4,683

230

69,979

1,200

560

Future potential net outputs

640

332

Additionality (%)

SRB

Additionality (%) Other/hybrid total

Additionality (%) Future potential gross outputs

Source: PwC analysis based on AWM evaluation evidence

The RZs have delivered a range of business related outputs including jobs created/safeguarded, businesses created and businesses assisted. In addition, there have also been outputs relating to land remediation and skills assistance. The majority of outputs have been achieved to date, although there are further future potential outputs that are forecast to occur. The SRB programme has delivered a significant number of jobs created/safeguarded: with more than half of the net job creation over the period occurred in the Black Country. More than 50,000 people have been assisted in skills development, although the evaluation notes that these may “have been subject to 56 a degree of subjective reporting” . Brownfield land has been remediated across the West Midlands, with most the most significant effects being in the Black Country and North Staffordshire. The SRB programme has also delivered a range of other outputs in six key themes: jobs, training and education, economic growth, housing, environmental improvements, community facilities, voluntary/community sector and childcare. Both the RZs and SRB programmes have levered in significant amounts of funding: 

the RZs levered in £150m of private sector funding between 2003 and 2007 and £152m of public sector funding between 2005 and 2007; and



the SRB levered in £2bn of public and private sector funding over the period 1994 to 2007/08.

Table 25 presents the available evidence for the GVA outcomes relating to the RZ and SRB programmes. For the RZs programme, given the wide range of outcomes from the programme the evaluation considered the impact on GVA (and the related persistence of these returns) from three sources: 

jobs created/safeguarded through capital spend;



jobs created/safeguarded through revenue spend; and



people assisted through skills support.

The SRB evaluation estimated the impact on GVA on the basis of jobs created/safeguarded.

Evaluation of the Single Regeneration Budget in the West Midlands, April 2008.

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Table 25: Outcomes of AWM’s other/hybrid interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Annual GVA achieved

Persistence assumption (years)

Achieved cumulative GVA

Achieved & future potential GVA (cumulative)

Regeneration Zones (by element) Jobs – capital

88.0

880.0

Jobs – revenue

132.0

396.0

Skills

33.0

165.0

Total

280.2

253.0

3-10

1,441.0

218.0

370.0

2.5

925.0

Single Regeneration Budget

Source: PwC analysis based on AWM evaluation evidence

The evaluation of the RZs estimated that the programme has achieved an annual GVA return of £253m, which is estimated to rise to £1,441m over time due to the persistence of the impacts. The evaluation notes that “ten year levels of persistence are subject to considerable uncertainty; we do not know how 57 successful a development will be in continuing to deliver a constant flow of benefits.” The SRB evaluation estimates an impact on GVA of £370m, rising to £925m if the benefits persist. For both programmes, the estimate of impact on GVA based on jobs created/safeguarded will potentially underestimate the impact as not all of the outcomes of the programme were economic. 58

In addition to these impacts the evaluation of the RZs notes a range of ways in which AWM has achieved Strategic Added Value through the development and operation of the RZs. AWM’s Strategic Added Value Overall, the consensus among consultations undertaken for the evaluation is that “AWM should be 59 praised for developing an innovative and ambitious policy response to tackling regeneration issues” . More specifically, the evaluation notes the following aspects of SAV: 

Partnership working: getting partners to work in ways that were not previously being exploited.



Strategic leadership and co-ordination: the Zone structure has provided leadership and co-ordination at a sub-regional level, allowing the effective prioritisation of projects.



Sub-regional thinking: the approach of the Zones, developing boundaries beyond current local authority geography, has helped to develop the concept of sub-regional policy.



Influence: the development of Zone Implementation Plans have help to bring organisations together to shape and influence the development of projects.

Source: AWM Value for money Table 26 presents the GVA to cost ratios associated with the RZ and SRB programmes. Both interventions have achieved similar returns; with SRB delivering higher annual returns, due to the numbers of jobs created/safeguarded and RZs delivering higher benefits over time, due to the higher assumed levels of persistence of these benefits.

An Interim Evaluation of the Regeneration Zones Programme - Revised net outputs and outcomes addendum, September 2008. An Interim Evaluation of the Regeneration Zones Programme, April 2008. 59 An Interim Evaluation of the Regeneration Zones Programme, April 2008. 58

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Table 26: Achieved and future potential GVA to cost ratios from AWM’s other/hybrid interventions (2002/03-2006/07) Programme

Expenditure covered by evaluations (£m)

Achieved GVA (annual):cost

Persistence assumption (years)

Achieved cumulative GVA:cost

Achieved and future potential cumulative GVA:cost

280.2

0.9

3-10

5.1

SRB

218.0

1.7

2.5

4.2

Source: PwC analysis based on AWM evaluation evidence

The GVA to cost ratios for other/hybrid interventions can be compared with the national evidence. For RZs it is challenging to find the appropriate benchmarks on the basis of the sub-themes analysed across the RDAs, with the most appropriate being the other/hybrid area interventions category, which has an average cumulative (achieved and future) potential return of 2.5, which is approximately half the return of AWM’s RZs programme. For SRB, the average GVA to cost ratio across the RDAs is 3.4 compared to 4.2 for AWM’s SRB programme. The RZs evaluation also estimates the cost per net job in the range £14,500-19,400. This can be compared to the benchmark across the RDAs of £41,775 for area based interventions. This suggests that the RZs programme has been effectively delivered. The SRB evaluation presents estimates of cost per net unit of outputs, however we do not believe it is appropriate to assess the value for money of SRB on the basis of the net additional outputs per £ spent. The SRB schemes were set up to achieve a variety of objectives, some of which were economic but many of which were not. In order to undertake a meaningful assessment of value for money, it is important to recognise the diversity of outputs and impacts and relate them to the relevant inputs. Performance against objectives The second RES, ‘Creating Advantage’, set out three key objectives for the RZs for the period 20042010: 

to create 19,000 jobs;



to provide 55,000 learning opportunities; and



to remediate 600 hectares of brownfield land.

The evaluation shows limited progress to date towards achieving these objectives, with approximately half of jobs created and a quarter of the brownfield land remediated to date compared to the objectives set out. It should, however, be recognised that not all the investments and outputs in the Zones will have been captured by the RZ evaluation. AWM has spent a further £443m in the RZs over the period 2002/03 to 2006/07 and this spending would also be expected to contribute to these objectives. The evaluation of the SRB programme did not assess performance against objectives due to a lack of available data.

National programmes Besides its own projects and programmes, AWM has been responsible for the management and delivery of up to ten national programmes which have been delivered by AWM within parameters closely defined by central government departments. Over the period 2002/03 to 2006/07, AWM has spent £147m on national programmes. Given the available evidence, however, it has only been possible to estimate the net jobs created as a result of AWM’s investment in two of these programmes by using the results of the available national evaluations of these programmes.

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Table 27: Estimated impact of AWM spending on national programmes (2002/03 and 2006/07) National programme

AWM spend (2002/03-2006/07 (ÂŁm))

Net jobs created

Business Link

42.4

3,662

Grants for R&D

15.1

359

Total

57.5

4,021

Source: PwC analysis based on AWM evaluation evidence

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East of England Development Agency Summary Overview 

From 1999/00 to 2006/07, EEDA spent approximately £580m (excluding administrative costs) on a range of interventions designed, individually or combined, to stimulate business development and competitiveness, promote regeneration through physical infrastructure and enhance employability and skills.



EEDA’s ‘relevant spend’ in the period from 2002/03 to 2006/07 is £405m, excluding £109m legacy spend (from 1999/00 to 2001/02) and £66m spent on nine national programmes. SRB is a substantive part of EEDA’s expenditure, accounting for just under £65m out of the total RDA ‘relevant spending’.



We have reviewed 23 evaluations

covering EEDA spend of more than £240m (or 60% of £405m).

Impact 

These evaluations show that EEDA has generated significant outputs already: –

more than 11,000 jobs have been created and safeguarded of which, on average 32%, are additional at the regional level;

–

over 10,500 businesses have been assisted of which, on average 42%, are additional;

–

almost 650 businesses have been created of which, on average 44%, are additional;

–

nearly 70 ha of land has been remediated of which, on average 84%, are additional; and

–

almost 45,000 skills assists have been delivered of which, on average 49%, are additional.



Significant future potential outputs are also anticipated as schemes are completed, although these estimates are more uncertain.



In addition to the impact of its project and programme spend, Strategic Added Value (SAV) is a key element of EEDA’s impact, particularly in terms of influencing investments by private sector investors and developers, developing and testing new approaches and developing regional and international networks.

Value for money 

The highest achieved return on an evaluated EEDA investment relates to a people and skills intervention, with an achieved annual average GVA to cost return of close to 6:1. The lowest return is from a business intervention with an achieved average GVA per annum return of between 0.2 and 0.4 to 1.

Performance against objectives 

Although not all of the 19 evaluations assessed performance against project/ programme objectives,

Five of the 23 evaluations relate to EEDA’s Investing in Communities programme. In order to avoid double counting of spend, outputs and outcomes, this annex focuses on the most recent evaluation, which is a comprehensive region-wide evaluation of relevant spend on and outputs/ outcomes from this intervention. Therefore the expenditure, impact, value for money and performance against targets reported in this regional annex is drawn from 19 evaluations.

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73% of the 15 evaluations which did assess performance against objectives have largely met, met or exceeded their objectives. This 73% of evaluations represented 81% of the value of these interventions.

Context Overview of the East of England 2

The East of England covers over 19,000 km across the six counties (Bedfordshire, Cambridgeshire, 61 Essex, Hertfordshire, Norfolk and Suffolk) and four unitary authorities (Luton, Peterborough, Southendon-Sea and Thurrock). Although most of its population live in urban areas, a large part of the region’s geography is rural with a long stretch of coastline, which creates issues in terms of the peripheral and remote nature of much of the East of England. In comparison to other English regions, it has no large cities, but instead is home to a network of medium sized towns and cities. However, the region’s close proximity to London provides a number of strategic advantages, such as access to international gateways and transport corridors, leaving it well placed to take advantage of the increasing globalisation of business activity. The downside of this close proximity is that London creates waste management issues for the East of England. It also influences the labour market in much of the East (and South East) of England: over 290,000 people commuted from the East of England to London in 2001 (i.e. 15% of the resident working age population). The East of England’s residence-based gross value added (GVA) has risen from £77.8 billion in 1999 to £109.9 billion in 2006, which at 9.7% of UK output makes it the fourth largest regional economy in the UK. Regional GVA per head (calculated on a residence basis) has risen from £14,577 in 1999 to £19,599 in 2006, making it one of only three regions with GVA per head above the UK average of £18,631, albeit 62 only marginally so. During the same period workplace GVA rose from £68.5 billion to £99.0 billion . The 63 64 region also boasts a high level of employment (77%) compared to the national average (of 74%) . The region has a particularly strong service sector and is renowned for its high quality research and development activity, conducted by both private and public sector organisations. The region has a growing population of around 5.5 million. 17% of the population is over 65. The East of England is in the vanguard of responding to the Government’s house building and sustainable communities policies. Significant plans for growth are centred on the region’s larger urban areas. This includes the provision of 508,000 net additions to the housing stock, over the period 2001 to 2021 on the 65 basis of projected population growth . The region also faces a range of challenges, a number of which are long-term in nature. These include: 66



managing the consequences of rapid population growth ;



a high proportion (25-30%) of 16 year olds leaving full time education in areas like Norfolk, Peterborough and Thurrock has contributed to a sub-regional economy characterised by low-wage, low-skilled jobs yet with major skills shortages, particularly at higher levels, and concerns over graduate retention;



a need for high quality, value adding jobs in the rural and coastal areas in particular;

From 1st April 2009 Bedfordshire county will be split into two separate unitary authorities: Bedford; and Central Bedfordshire. National Statistics: see http://www.statistics.gov.uk/pdfdir/gva1207.pdf. 63 Regional Economic Strategy for the East of England, Final Draft submitted to government, June 2008, p.19. 64 National Statistics: see http://www.statistics.gov.uk/instantfigures.asp. 65 EEDA (2008) Investing our future, Collective action for a sustainable economy. The regional economic strategy for the East of England 2008-2031 evidence base. 66 The East of England is the fastest growing region in England. The population increased 12.5% from 1981 to 2003 and is projected to grow a further 14% from 2003 to 2023, (East of England Regional Assembly: see http://www.eera.gov.uk/Documents/About EERA/Policy/Health/2006-05-31 Chapter 1 TS.pdf). 67 DCSF: see: http://www.dcsf.gov.uk/rsgateway/DB/SFR/s000792/AF1-16FTed.pdf. 62

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

a divergence between innovation and growth 'hot-spots' (such as Cambridge) and 'cold-spots' which are often experiencing a cycle of decline (such as Great Yarmouth);



pockets of acute deprivation in some of the region’s urban areas, costal towns and rural areas; and



a lack of the physical and transport infrastructure necessary to support current and predicted population growth.

EEDA’s purpose and strategy To date EEDA has developed, with partners, four Regional Economic Strategies (RESs) for the East of England in 1999, 2001, 2004 and 2008. The focus of the evaluations covers 2002/03 to 2006/07 and thus the prime focus of this impact evaluation is in relation to the 2004 RES. The Strategies provide the context for economic development and regeneration in the East of England. The overarching vision outlined in the 2004 RES was for the East of England to become a leading economy, founded on a worldclass knowledge base and the creativity and enterprise of its people, in order to improve the quality of life of all who live and work in the East of England. The six themes for economic growth described in the 68 69 2001 RES were developed into eight goals in the 2004 RES as follows: 

a skills base that can support a world-class economy;



growing competitiveness, productivity and entrepreneurship;



global leadership in developing and realising innovation in science, technology and research;



high quality places to live, work and visit;



social inclusion and broad participation in the regional economy;



making the most from the development of international gateways and national and regional transport corridors;



a leading information society; and



an exemplar for the efficient use of resources.

EEDA’s new 2008-2011 RES was formally launched in September 2008. The main differences between this and the 2004 RES are: an increased focus on environmental and sustainability issues; a stronger emphasis on place and spatial differences; and clearer and better monitoring frameworks with clear and quantified targets and a comprehensive and robust evidence base. EEDA’s Corporate Plan identifies and prioritises the Agency’s interventions, which are designed to meet the region’s objectives. EEDA has had four Corporate Plans over the period on which this report focuses: 

the 2002-2004 Corporate Plan which aligned to the themes outlined in the 2001 RES, but 70 acknowledged existing commitments to legacy programmes and grant aided ‘sister’ organisations ;



the 2003-2006 Corporate Plan which again linked its interventions to the six themes outlined in the 2001 RES;

The six themes were: competitive businesses and organisations for a world-class region; creativity, innovation and enterprise; ‘invest in success’ wherever it is found; regeneration plus - supporting our people and our communities; a clear identity and international profile; and leading-edge infrastructure and high-quality environment (East of England 2010 the regional economic strategy, June 2001). 69 A Shared Vision The regional economic strategy for the East of England, November 2004. 70 Key partners include Local Economic Partnerships; Regional Supply Network; and East of England International.

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

the 2005-2008 Corporate Plan which corresponds to the 2004 RES is focused on four products: a Business Support package, an Investing in Communities programme, an Enterprise Hub programme and a Regional Renaissance package; and



the 2008-2011 Corporate Plan which was endorsed by BERR in July 2008 .

It should be noted that during the evaluation period EEDA employed various approaches to intervention, although it has not had programmes in the same sense of other regions; i.e. with the exception of the Investing in Communities programme, it has not rolled out a suite of projects linked by a common theme, industry sector or delivery structure. Given the scale of EEDA's resources, the 2002-2004 Corporate Plan was constrained by significant commitments to legacy programmes. However, the 2005-2008 Corporate Plan set out four core intervention products, each with distinct contributions to make to specific national policies, RES goals and ambitions, and with different delivery structures (e.g. the Regional Renaissance product was significantly targeted and delivered through local delivery vehicles). The 20082011 Corporate Plan has moved to a fully programme-based approach. Key quantitative outputs arising from EEDA’s interventions cover: jobs created or safeguarded; people assisted to get a job; new businesses created and surviving 12 months; businesses assisted to improve their performance; businesses assisted via collaboration with the UK knowledge base; public and private regeneration investment levered; hectares of brownfield land reclaimed and redeveloped; and skills assists. The 2005-2008 Corporate Plan detailed the high-level targets that EEDA was expected to deliver over the period 2005/06 to 2007/08. These are in line with the objectives of the 2004 RES. EEDA is increasingly seeking to deliver its objectives through working with a range of partners, including local delivery vehicles at both regional and sub-regional levels. There are also important pan-regional links through the Milton Keynes and South Midlands Sub-Regional Strategy (MKSM) and Thames Gateway. In addition, some of its goals, for example in relation to innovation and the spatial economy, are addressed through multi-regional working across the Greater South East, specifically with the London and South East of England RDAs. Besides the impact of its project and programme spend, EEDA also influences its partners’ and stakeholders’ behaviour and performance in other ways. This ‘Strategic Added Value’ (SAV) is seen as a key element of EEDA’s impact. Indeed, the policy framework that led to its establishment was designed to enable EEDA to harness national, regional and local institutions in order to exploit the region’s indigenous strengths and tackle particular weaknesses, and to provide the environment for businesses and communities to maximise their potential through reforms that strengthen the key drivers of productivity and growth. EEDA’s profile In 2006/07, EEDA had an annual budget of £138.9m and spent around £648.0m from 1999/00 up to and including 2006/07. Although this report draws on evaluations which cover EEDA’s spending over the whole period since its establishment in 1999, its focus is on that spending for which EEDA was formally accountable, over which it has had the greatest influence and where at least the early evidence of impact should be apparent. In practice, this means that it focuses on understanding the impact of EEDA’s spending on interventions in the ‘relevant period’ between 2002/03 to 2006/07: thus, it focuses less on 72 those programmes and projects which EEDA inherited from its predecessors and the national programmes where EEDA has been responsible for delivery within parameters determined by central 73 government departments .

This Corporate Plan is currently being redrafted to reflect the July 2008 reduction in budget which will affect delivery. The exception here is the SRB programme, a legacy programme, which has recently been evaluated to asses the impact of RDA spending. 73 Ten national programmes have been defined. They are the Coalfields Programme, the Regional Innovation Fund, the Manufacturing Advisory Service, Regional Tourist Board Support, the Rural Development Programme for England and Sustainable Food and Farming, Market Town Initiative, Business Link, Regional Selective Assistance/Selective Finance for Investment, Grant for Research & Development and Phoenix Fund. However the Coalfields Programme was not delivered in the East of England. 72

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Table 28 provides a breakdown of EEDA’s overall spend per annum from 1999/2000 to 2006/2007 74 between the three broad intervention categories outlined in the IEF and on other EEDA interventions, national programmes and administrative costs. This indicates a general decline in administrative costs as a percentage of EEDA’s spend on interventions from 22% in 1999/00 to 9% in 2006/07. Table 28 shows, that more of EEDA’s expenditure has been devoted to place interventions than to people, business or other interventions. It is also evident that EEDA’s spending priorities have changed since its establishment, with increased amounts devoted to business and people interventions in the later years. However, it should be noted that the objectives and outputs/outcomes of EEDA’s interventions often span a number of intervention categories. For the purposes of analysis, however, each intervention, and its associated expenditure, has been classified into the most appropriate intervention category. Since its establishment, EEDA has spent £578.7m on interventions (excluding administration). Of this £404.9m was spent on EEDA (rather than national) interventions in the ‘relevant period’, which is the primary focus of this report (see shaded area in Table 28). Table 28: Analysis of EEDA spend by year and by category of expenditure (£m, 1999/00-2006/07) Business

Place

People

Other

National programmes

Administrative costs

Total

1999/2000

1.2

20.0

3.3

N/A

5.5

30.0

2000/2001

3.3

25.6

4.4

N/A

5.5

38.8

2001/2002

7.0

38.1

5.3

N/A

7.2

57.6

2002/2003

8.4

27.0

7.1

30.1

8.8

84.4

2003/2004

9.1

18.4

12.7

23.0

6.6

8.8

78.7

2004/2005

12.5

25.4

11.0

16.5

3.6

10.2

79.2

2005/2006

28.8

41.6

18.1

14.0

26.5

11.4

140.4

2006/2007

27.2

37.8

30.0

6.2

25.9

11.9

138.9

Total

97.4

234.0

92.0

89.7

65.6

69.3

648.0

Source: EEDA and PwC analysis

Table 29 summarises EEDA’s spend covered by the usable evaluation evidence. The evidence for the impact of EEDA’s spending, therefore, draws on 23 evaluations covering 60% (£241.1m) of EEDA’s project/ programme spend over the ‘relevant period’ (£404.9m) which are consistent with the requirements of the IEF. This provides a robust evidence base upon which EEDA’s impact can be assessed. Annex B provides a list of the evaluations used. The level of coverage varies across the intervention categories.

These IEF intervention categories have been applied consistently across all RDAs and bear no relationship to how EEDA organises itself. 75 Spend on ‘other’ interventions and National programme has not been extracted separately for the legacy period of 1999/00 to 2001/02.

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Table 29: Analysis of EEDA’s spend covered by IEF compliant evaluations (2002/03-2006/07) Expenditure covered by evaluations (£m)

% of spend

Number of evaluations

Business

37.3

Place

52.1

People

62.0

Other

89.7

100

Total

241.1

Source: PwC analysis based on EEDA evaluation evidence

It should be noted that the objectives and outputs/outcomes of EEDA’s interventions often span a number of intervention categories and sub-themes. For the purposes of analysis, however, each intervention, and its associated outputs/outcomes has been classified into the most appropriate intervention category and sub-theme on the basis of its objectives and/or the proportion of overall spend allocated to a particular sub-theme.

Key findings Before setting out details of the impact of EEDA’s spending on each type of intervention, this section draws together the key findings from the evaluation evidence base for EEDA as a whole in relation to the two key objectives of our work, namely to summarise the available evidence of the impact of spending by EEDA, at both regional and national level, and to assess EEDA’s achievements against the objectives of both the RES and its Corporate Plan (which have changed over time) and for each specific programme and project. It considers three key questions in turn: 

What has been the impact of EEDA’s spending both at the project and programme level and overall?



What does the available evidence suggest has been the value for money of EEDA’s interventions?



How has EEDA performed against its relevant targets and objectives both at the project and programme level and overall in relation to its Corporate Plan and the RES?

Impact The majority of EEDA’s evaluations covered in this annex have estimated net outputs on the basis of the gross outputs. A distinction has been drawn between outputs already achieved at the time of the evaluation and future potential outputs. The core Tasking Framework gross and net outputs identified 76 from the evidence base are summarised in Table 30 .

It should be noted that the majority of excluded national programmes would account for a large proportion of the overall business intervention outputs which EEDA reports to BERR: including 3,298 jobs created/ safeguarded, 4,273 businesses created, 11,085 businesses assisted and 374 skills assists resulting from the Regional Innovation Fund, Manufacturing Advisory Service, Regional Tourist Board Support, Business Link, Regional Selective Assistance/Selective Finance for Investment and Grant for Research & Development programmes (Source: EEDA PMS data).

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Table 30: Gross and net attributable EEDA outputs identified in IEF compliant evaluations 77 (2002/03-2006/07) Jobs created/ safeguarded

Businesses created

Businesses assisted

Brownfield land (ha)

Skills assists

Business competitiveness & development Gross outputs achieved

5,807

183

6,640

5,471

Net outputs achieved

1,014

2,651

1,596

Future potential gross outputs

246

339

251

Future potential net outputs

123

161

141

1,266

678

100

Future potential gross outputs

2,301

117

Future potential net outputs

1,298

100

1,649

181

3,939

31,023

840

1,839

15,598

Future potential gross outputs

1,364

Future potential net outputs

402

Additionality %, future potential

2,331

177

8,174

983

4,575

11,053

640

10,579

44,668

3,515

281

4,490

21,769

Future potential gross outputs

2,547

339

1,615

Future potential net outputs

1,421

161

593

100

Additionality %, achieved

Additionality %, future potential

Regeneration through physical infrastructure Gross outputs achieved Net outputs achieved Additionality %, achieved

Additionality %, future potential People and skills Gross outputs achieved Net outputs achieved Additionality %, achieved

Other Gross outputs achieved Net outputs achieved Additionality %, achieved Total Gross outputs achieved Net outputs achieved Additionality %, achieved

Additionality %, future potential

Source: PwC analysis based on EEDA evaluation evidence

The gross outputs from the Inspire East evaluation have been excluded from this table as there are no corresponding net outputs in the evaluation evidence. Outputs from national programmes have also been excluded as these are not linked to EEDAâ&#x20AC;&#x2122;s relevant spend.

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EEDA’s spending has created/ safeguarded jobs, assisted and helped to create new businesses, assisted people in skills development and remediated brownfield land. A large proportion of these outputs have already been achieved. However, a number of outputs are potentially to be achieved in the future. These are predominantly related to jobs created by physical infrastructure investments (such as capital investment in business premises and public realm and other infrastructure and revenue spend on Firstsite:newsite and EPIC), but also include business interventions (such as the Innovation Capital and Revenue projects) and people interventions (such as the University of Essex in Southend). All of these future outputs are subject to varying degrees of uncertainty. The additionality of EEDA’s evaluated business interventions varies across intervention and output type, but is relatively low for achieved net jobs created/ safeguarded, businesses created and skills assists (with ratios of 17%, 23% and 29% respectively) compared with its additionality ratios for physical regeneration (of 54% for job creation and 66% for business creation - no skills assists have been achieved for this theme), people and skills (of 51%, 52% and 50% respectively) and other interventions (of 42%, 45% and 56% respectively) . The additionality of business interventions increases in terms of future potential outputs. Future potential, jobs created/ safeguarded and businesses created in particular show a much greater level of additionality (50% and 41% respectively). Comparison of the overall additionality of EEDA’s interventions with the national findings shows a mixed picture. Whilst EEDA’s business competitiveness, people and skills and other interventions compare less well for achieved net outputs, its physical regeneration interventions have similar or higher average levels 78 of additionality across all of the national measures indicated . Table 31 sets out the outcomes of EEDA’s interventions expressed in terms of achieved and future potential impact on GVA estimates. As the table shows, some interventions have either already achieved GVA which is greater than EEDA’s initial investment, or have the potential to do so in the future. It was not appropriate to provide an aggregate figure for the impact on GVA (achieved and future potential) in relation to all of these interventions due to differences in the basis of measurement across individual evaluations. Not all of the evaluations reviewed assessed the outcomes of the intervention in terms of the impact on GVA. For those evaluations which did take GVA into consideration, the basis of these estimates is often inconsistent across interventions.

The average achieved additionality ratios across the RDAs varies by intervention type. For business interventions, the ratios were: 48% for jobs created/ safeguarded; 40% for businesses created; and 35% for businesses assisted. For physical regeneration interventions, the ratios were: 45% for jobs created/ safeguarded; 65% for businesses created; and 73% for land remediated. Whilst future potential national additionality ratios for physical regeneration interventions were: 45% for jobs created/ safeguarded; 64% for businesses created; and 64% for land remediated. For people and skills interventions, the ratios were: 48% for jobs created/ safeguarded; 82% for businesses created; and 62% for skills assists. For other interventions, the ratios were: 49% for jobs created/ safeguarded; 51% for businesses created; 59% for land remediated; and 57% for skills assists.

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Table 31: Outcomes of EEDA’s evaluated interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved GVA (annual, £m)

Future potential GVA (annual, £m)

Achieved GVA (cumulative, £m)

Future potential GVA (cumulative, £m)

Achieved & future potential GVA (cumulative, £m)

Business competitiveness and development Early Stage Business Support 80

Innovation Capital

Innovation Revenue

Attraction of Inward investment

2.9

15.4

3-6

6-12

1.5

4-9

5-12

10.6

Investing in Communities

36.4

Workforce Development

4.1

108

People and skills

Source: PwC analysis based on EEDA evaluation evidence

Finally, besides the impact of its project and programme spend, Strategic Added Value is a key element of EEDA’s impact. Aspects of EEDA’s Strategic Added Value in relation to the evaluated interventions are illustrated below. This is based on evidence from the evaluation reports as well as case study evidence provided by EEDA. EEDA’s Strategic Added Value Besides the impact of its project and programme spend, EEDA also influences its partners’ and stakeholders’ behaviour and performance in other ways as demonstrated by the following examples: 

Influencing investments by private sector investors and developers: EEDA’s support for the Trinity Lighthouse development in Harwich instilled confidence amongst potential backers and resulted in a highly visible, multimillion pound investment in a prominent waterfront location. Similarly EEDA’s intervention in the University of Essex in Southend was considered to have played a key role in wider regeneration plans for Southend, by signalling the regional importance of the development to other potential investors, such as the Office of the Deputy Prime Minister, which contributed £14m to EEDA’s overall expenditure on this project.



Developing and testing new approaches: EEDA used the SRB programme as a test-bed for new approaches and was able to demonstrate effective partnership working and the benefits of joining up spend and activity. EEDA was also instrumental in designing and piloting new approaches to support rural businesses. Its Investing in Communities programme was widely complimented by stakeholders for its focus on supporting skills, employment and enterprise activities to generate local economic participation.



Developing networks: a key objective of the Firstsite:newsite project was to create a high-profile landmark attraction, EEDA contributed to this objective by promoting the initiative and helping to establish international networks, which it is hoped will lead to increased inward investment. New partnerships and networks have also been formed around EEDA’s Investing in Communities programme, which has resulted in more local empowerment.

Source: EEDA

This relates to two out of four projects only (Proof of Concept and Running the Gauntlet). The ranges depend on whether a top down or bottom up approach is used to estimate GVA. The top down approach scales the estimated turnover per employee by the gross-to-net factor and gross jobs. The bottom up approach scales company turnover per employee or business by individual benefit factor and further scaled by total gross jobs. 81 The ranges depend on whether estimated GVA is scaled by employment at an individual company level or overall level. 80

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Value for money Table 32 considers the value for money of EEDA’s interventions from two perspectives: 

GVA to cost ratio; and, especially where this is not available,



measures of cost per unit of net output using a range of measures where these are available in the evaluation evidence.

In assessing the value for money of EEDA’s interventions we have sought to compare them with the evidence emerging from the evaluation of other RDAs’ activities. Care should, however, be taken when comparing the value for money of these interventions as these are set out in terms of both achieved and future potential (the latter being subject to uncertainty). Table 32 also sets out ratios of GVA to cost based on either cumulative GVA (including the persistence effects of the intervention) or annual GVA depending on the available evidence. Where annual GVA only was estimated, the evaluations gave no indication of the number of years over which the impact was expected to persist. As such this annex presents annual GVA as a ratio of total cost. Direct comparisons should not be made between the annual and cumulative GVA ratios. For the national report we have re-estimated the GVA impact using a consistent approach (and set of assumptions) allowing such comparisons to be made. Table 32: Summary of EEDA value for money from IEF compliant evaluations (2002/03-2006/07) Achieved GVA:cost ratio

Achieved & future potential GVA:cost ratio

Achieved cost per net job (£’000)

Future potential cost per net job (£’000)

Achieved cost per net business assist (£)

Achieved cost per net skills assist (£)

Business competitiveness & development 83

Rural Business Support

437-2,177

1,56984 2,665

Early Stage Business Support

1.6 85 (cumulative)

9.974

Innovation Capital

0.2-0.4 (annual)

0.4-0.8 (annual)

213

123

Innovation Revenue

2.7-6.0 (annual)

3.4-7.8 (annual)

Attraction of Inward Investment

1.4 (annual)

Sustainable Consumption and Production

9,562

15,484

Regeneration through physical infrastructure Trinity Lighthouse 87

Business Premises

185

179

This table excludes interventions for which the evaluation did not contain any assessment of value for money, i.e. Innovative Actions Programme, Inspire East, University of Essex in Southend, SRB and Ipswich. 83 The achieved cost per business assisted for three of the four projects in this intervention ranged from £437 to £2,177. 84 The achieved cost per business assisted for two of the four projects in this intervention ranged from £1,569 to £2,665. 85 Cost per unit measures were only available for two out of the four projects evaluated (Proof of Concept & Running the Gauntlet). 86 The achieved cost per net job of this intervention is skewed by the relative immaturity of this intervention and the capital nature of EEDA’s investment.

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Achieved GVA:cost ratio

Achieved & future potential GVA:cost ratio

Achieved cost per net job (£’000)

Future potential cost per net job (£’000)

Achieved cost per net business assist (£)

Achieved cost per net skills assist (£)

Capital Projects

Firstsite:newsite

EPIC

Investing in Communities

0.6 (annual)

6,946

1,584

Workforce development

5.9 (cumulative)

26.3 (cumulative)

2,200

Construction skills

2,03691 31,153

People and skills 88

Source: PwC analysis based on EEDA evaluation evidence

Table 32 shows that, for the evaluations which estimated GVA, there has been a significant range of returns from these interventions. Some interventions have already achieved GVA returns which exceed their costs, whilst others have achieved a more limited return including when taking into account future potential. It should be noted that some evaluations were interim in nature and, therefore, there may have been an insufficient time lag between spend and benefit realisation. There is also a large variation in terms of cost per job, both achieved and future potential, within and across intervention categories. The cost per net job created/ safeguarded for EEDA’s people and skills interventions are, however, relatively low when compared to its business and competitiveness and regeneration through physical infrastructure interventions. However, not all interventions had job creation as an explicit objective and therefore, in these instances, the cost per net job may not be the most appropriate measure of value for money. As such we have sought to identify other cost per net output measures within the individual intervention categories, where this is available in the evidence base. EEDA’s evaluated business interventions can be compared to the following national averages: 

Early Stage Business Support can be compared to the achieved and future potential cumulative GVA to cost ratio for individual enterprise support of 14.1:1;



Innovation Capital and Innovation Revenue can be compared to the achieved annual GVA to cost ratio for science, R&D and innovation infrastructure of 1.1:1; and



Attraction of Inward Investment can be compared to the achieved annual GVA to cost ratio for inward investment of 3.7:1.

Compared to these national averages, EEDA’s evaluated business interventions appear to show lower GVA to cost ratios. The exception here is Innovation Revenue, with an achieved annual GVA to cost ratio, which is higher than the national average for its sub-theme (of 1.1:1).

There was significant variation in the cost per job of the four projects covered by this evaluation, i.e. from £16,896 per net job achieved to £581,375 to £3,922,952. The fourth project has achieved no net jobs to date. Future potential cost per job was similarly wide ranging, i.e. from £16,896 per net future potential job to £564,313 to £1,364,505 to £6.4m. 88 This relates to cost per job created or person supported into employment. 89 This relates to cost per business assisted or business created. 90 This relates to cost per skills or qualification acquired. 91 The achieved cost per person assisted in skills development for the three projects in this intervention ranged from £2,036 to £4,011 to £31,153.

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EEDA’s people and skills interventions, particularly Workforce Development, appear to perform well against the national average (of 0.9:1 for achieved and 1.0:1 for achieved and future potential cumulative GVA to cost ratio for this sub-theme). There is limited evaluation evidence of quantitative outcomes from EEDA’s regeneration through physical infrastructure interventions. This is primarily due to the early stage of implementation of these interventions. A number of interventions have potential future returns which, by their nature, are uncertain. These interventions may also have had wider impacts in the areas in which they operate, for example raising confidence in the area, which will not be captured in the estimation of GVA. Comparing EEDA with the national picture for unit cost measures, the cost per net output of EEDA’s business interventions was mixed with some interventions e.g. the £17,000 per job for Rural Business Support, above the national average cost per job for its sub-theme (of £8,301), whilst the £25,000 per job for Innovation Revenue is below the national average for its sub-theme (of £37,938). On the other hand, in terms of cost per business assisted, Rural Business Support performed well against the national average for its sub-theme (of £8,502). Again comparing the cost per net job of EEDA’s regeneration interventions to the national averages gives mixed results. For instance, Capital Projects and Trinity Lighthouse in particular have costs per jobs which are around a quarter of the national average for their sub-themes (of £118,945 and £42,101 respectively). Business Premises on the other hand performed less well and was more than four times higher, in terms of cost per net job, than the national average for its sub-theme (of £42,101). This is due to the relative immaturity of this intervention. Similarly, comparisons show mixed results in terms of the cost per unit output measures of EEDA’s people and skills interventions - Investing in Communities and Workforce Development compare very well against the national average cost per job created/ safeguarded for these sub-themes (of £49,215 and £105,268 respectively). Investing in Communities also performs well in terms of the national average cost per skills assist for its sub-theme (of £2,570). However Workforce Development and Construction Skills perform less well in relation to the national average (of £1,242) for their sub-theme in this respect. Performance against objectives Table 33 presents EEDA’s performance against the Tasking Framework output targets set for it by DTI/BERR. For all of the measures, EEDA has achieved all bar one of the annual target set by DTI/BERR. EEDA has also exceeded its cumulative targets including for funding levered. Table 33: Comparison of EEDA performance against targets (2002/03-2006/07) Jobs created/ safeguarded

Businesses created

Brownfield land (ha)

Skills assists

Funding 93 levered (£m)

Targets set by DTI/BERR

12,888

4,335

139

60,983

136

Achieved EEDA gross outputs reported to DTI/BERR

16,232

6,016

177

102,239

216

Number of years when targets met

5 out of 5

3 out of 4

Source: DTI/BERR and PwC analysis

Like all the RDAs (except the London Development Agency), EEDA was subject in 2007 to the National Audit Office’s Independent Performance Assessment (IPA) which assessed how well EEDA had responded to the common challenges facing RDAs, namely balancing the interests of the region with national policy requirements, managing the conflicting demands of different regional stakeholders, looking outwards to promote the region while staying focused on what is happening inside, and responding to

92 93

Where targets were expressed as ranges (i.e. for 2005/06 and 2006/07) the minimum value has been used. Funding levered targets and outputs were not available for 2002/03.

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new duties imposed by central government. This assessment sheds further light on how well the Agency has been able to fulfil its role. Overall, EEDA was seen as ‘performing well’, particularly in terms of: 

ambition: the Regional Economic Strategy has goals that are broadly right for the region with strong buy-in by stakeholders and explicit links between EEDA’s activities and national targets; and



achievements: it was noted that EEDA has achieved some significant success with its focus on four core products. EEDA’s Enterprise Hubs, regeneration activities and the development of a sustainability toolkit were noted as particular strengths alongside the attraction of inward investment 94 by East of England International . EEDA also successfully tackled the transformation of the Business Link operation and was viewed to have responded well to economic shocks such as the fire at Buncefield fuel depot.

Whilst there was broad approval for EEDA’s lead role work, and particularly the strong leadership provided by the Chair and Chief Executive, it was noted that there were areas for development, particularly in terms of accountability and prioritisation, including: 

the RES goals lack specific measurable time-related targets and many stakeholders found difficulty in seeing the links between the eight goals and EEDA’s four main products, and which organisations take lead responsibility for the different goals; and



the Corporate Plan and Business Plan do not make explicit the relative priorities of EEDA’s activities.

The report also identified the need for: a greater emphasis on outcomes in EEDA’s reporting mechanisms; better management of large interventions to improve communication and decision making; a more consistent approach to partner relations and communication across the region; improving sustainability through improved appraisal and evaluation mechanisms; and becoming an exemplar for sustainable development. Table 34 sets out EEDA’s performance against the project/ programmes objectives for each of the individual interventions covered by the evaluations. These objectives include the budgeted outputs for the project/ programme as well as the intended contribution to the objectives outlined in the RES and Corporate Plan. Table 34: Comparison of EEDA’s performance against objectives across the IEF compliant evaluations (2002/03-2006/07) Exceeded

Met

Largely met

Mixed

Limited performance

Not assessed

Total

Business Number of evaluations

Expenditure covered by evaluations (£m)

2.8

21.0

Number of evaluations

Expenditure covered by evaluations (£m)

2.5

2.9

10.6

37.3

43.4

6.2

Place

52.1

EEDA’s sister organisation which is responsible for inward investment activity in the East of England.

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Exceeded

Met

Largely met

Mixed

Limited performance

Not assessed

Total

People 95

Number of evaluations

Expenditure covered by evaluations (£m)

62.0

Number of evaluations

Expenditure covered by evaluations (£m)

64.9

24.8

89.7

Number of evaluations

Expenditure covered by evaluations (£m)

2.8

64.9

85.5

46.3

41.6

241.1

Other

Total

Source: PwC analysis based on EEDA evaluation evidence

Table 34 shows that for most of the interventions evaluated (by number or by value of spend covered) where performance was assessed, the project/ programme objectives were exceeded, met or largely met. There was some variation across the intervention themes with place interventions showing more mixed results which may again be due to the early stage of implementation of these interventions.

Impact by intervention We have structured the analysis of the impact of EEDA’s spending, where possible, according to the three categories of intervention defined within the IEF (i.e. business, place and people). We have also analysed the impact of EEDA’s other activities that span more than one of these categories as well as the available evidence of the impact of the nine national programmes where EEDA has been responsible for delivery within parameters determined by central government departments. We have summarised the impact of EEDA’s interventions using a common structure in which: 

we summarise EEDA’s activities and expenditure on each intervention;



we report the estimated net Tasking Framework outputs arising from this expenditure (i.e. the additional outputs that are a result of the intervention);



we distinguish between those outcomes which have already been achieved and those potential impacts which are anticipated in the future as interventions are completed and/or their impacts persist; and



we summarise performance against objectives and the outcomes, where available, for each intervention.

Within this theme there are five evaluations relating to EEDA’s Investing in Communities programme, this annex has focused only on the most recent evaluation, which is a comprehensive region-wide evaluation of relevant spend on and outputs/ outcomes from this intervention.

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Business development and competitiveness interventions Rationale The East of England has a number of regional strengths in this area on which EEDA’s interventions have aimed to build including: 

growth in business start-ups – an additional 10,000 businesses became VAT registered in the East of England between 2004 and 2007;



leading technology companies and research capability - the East of England is home to a number of globally-renowned research departments and institutions. Business R&D expenditure (by UK businesses) in the region increased from £2.7 billion to £3.6 billion from 2004 to 2006; and



inward investment - the number of Foreign Direct Investment (FDI) projects in the East of England has been on an upward trend since 1999, increasing from 41 projects in 1999/00 to 52 in 2006/07.

There are, however, also a number of challenges linked to business activity in the region including: 

access to finance for early stage businesses;



low incidence of innovative activity amongst SMEs;



economic performance in target areas – areas such as North and West Norfolk, Waveney, Tendring and Thurrock, in particular, are characterised by high and persistent unemployment and low value added economic activity; and



climate change - the threat of climate change is important for the East of England as the region is particularly vulnerable to rising sea levels. This creates growing pressures in terms of the contribution of businesses to the sustainable use of resources and reduction of CO2 emissions.

The primary justification for EEDA’s businesses and competitiveness interventions was to address market failures; for example, the under-provision of training and innovation activity and addressing issues of asymmetric information (particularly to improve the flow of information on market and technology opportunities, sources of financial support and mainstream business support services). The evidence of the impact of EEDA’s business interventions comes from seven evaluations covering the four main sub-themes summarised in Table 35. Table 35: Summary of EEDA’s evaluated business development and competitiveness interventions (2002/03-2006/07) Intervention theme/sub-theme

Individual enterprise level support

Science, R&D & innovation infrastructure

Evaluation

Expenditure covered by evaluations (£m)

Rural Business Support

2.8

Early Stage Business Support

2.9

Innovative Actions Programme

1.7

Innovation Capital

15.4

Innovation Revenue

1.5

Inward investment promotion

Attraction of Inward Investment

Sustainable consumption and production

Sustainable Consumption and Production (SCP)

Total

10.6 2.4 37.3

Source: PwC analysis based on EEDA evaluation evidence

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Business spend is dominated by investment in innovation (particularly ‘Enterprise Hubs’) and attracting 96 inward investment . A number of projects have also been undertaken to support rural and early stage 97 businesses as well as sustainable consumption and production . These interventions contribute to a number of goals outlined in the 2004 RES: 

growing competitiveness, productivity and entrepreneurship;



global leadership in developing and realising innovation in science, technology and research;



high quality places to live, work and visit;



social inclusion and broad participation in the regional economy;



an exemplar for the efficient use of resources; and



contributing to ‘rural vitality’.

Impact Table 36 summarises the expenditure and key gross outputs associated with six of the seven business interventions evaluated. The primary outputs have been jobs created/safeguarded, businesses created and assisted, skills assists and employment support. Table 36: Gross achieved outputs of EEDA’s evaluated business development and 98 competitiveness interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Gross jobs created/ safeguarded

Gross businesses created

Gross businesses assisted

Gross skills assists

Gross people assisted into employment

Rural Business Support

2.8

3,724

4,245

Early Stage Business 99 Support

2.9

120

1,532

592

867

Innovation Capital

15.4

151

188

Innovation Revenue

1.5

241

630

10.6

5,274

108

2.4

603

425

Attraction of Inward Investment Sustainable Consumption and Production 100 (SCP)

As previously noted inward investment activity in the East of England is undertaken by East of England International (EEI) (a sister organisation of EEDA). The £10.6m spent on attracting inward investment also includes EEI’s administrative costs. Care should be taken in any cross regional comparisons as administrative costs will not be included in the inward investment costs for the RDAs who do not have separate inward investment organisations. 97 This relates to the sustainable use of resources and reduction of waste. 98 The Innovative Actions Programme (and related spend) has been excluded from this table as the only outputs reported in the evaluation were in terms of levels of engagement and network creation (30). 99 Plus eight businesses assisted via collaboration with UK knowledge base. 100 Plus 21 businesses assisted via collaboration with UK knowledge base.

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Expenditure covered by evaluations (£m) Total

35.6

Gross jobs created/ safeguarded

Gross businesses created

5,807

Gross businesses assisted

183

6,640

Gross skills assists

5,471

Gross people assisted into employment

891

Source: PwC analysis based on EEDA evaluation evidence

In addition to the achieved gross outputs set out in Table 36, two evaluations estimated future potential gross outputs resulting from expenditure during the relevant period: 

the Innovation Capital evaluation estimated additional future potential gross outputs of: 178 jobs created/ safeguarded; 22 businesses created; 12 businesses assisted; and 210 skills assists; and



the Innovation Revenue evaluation reported the following gross outputs subsequent to the relevant period for our report (i.e. outputs achieved in 2007/08 as well as future potential outputs): 68 jobs created/ safeguarded; 22 businesses created; 327 businesses assisted; 41 skills assists; and 44 people assisted into employment.

Table 37 summarises the expenditure and key net outputs associated with six of the seven business interventions evaluated. Table 37: Net achieved outputs of EEDA’s evaluated business development and competitiveness 101 interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Net jobs created/ safeguarded

Net businesses created

Net businesses assisted

Net skills assists

Net people assisted into employment

Rural Business Support

2.8

1,892

1,191

Early Stage Business 102 Support

2.9

311

138

162

15.4

107

Innovation Revenue

1.5

158

Attraction of Inward Investment

10.6

845

Sustainable Consumption and 103 Production (SCP)

2.4

251

155

35.6

1,014

2,651

1,596

168

Innovation Capital

Total

Source: PwC analysis based on EEDA evaluation evidence

101

Again the Innovative Actions Programme (and related spend) has been excluded from this table as no net outputs were reported in the evaluation. 102 Plus six businesses assisted via collaboration with UK knowledge base. 103 Plus 16 businesses assisted via collaboration with UK knowledge base.

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In addition to the achieved net outputs set out in Table 37, two evaluations estimated future potential net outputs resulting from relevant spend: 

the Innovation Capital evaluation estimated additional future potential net outputs of: 102 jobs created/ safeguarded; 12 businesses created; seven businesses assisted; and 130 skills assists; and



the Innovation Revenue evaluation reported the following net outputs subsequent to the relevant period for our report (i.e. outputs achieved in 2007/08 as well as future potential outputs): 21 jobs created/ safeguarded; 6 businesses created; 154 businesses assisted; 11 skills assists; and 17 people assisted into employment.

The level of additionality resulting from EEDA’s business interventions varied across intervention and output type, but was generally relatively low compared with its physical regeneration and people and skills interventions. Comparison of the additionality of EEDA’s business interventions with the national average shows that they compare less well for achieved outputs such as net jobs created/ safeguarded and businesses 104 created, than for net business assists, although this does vary by sub-theme . In terms of individual enterprise support, EEDA’s Rural Business Support demonstrated relatively high levels of additionality (51% for business assists), whilst its Early Stage Business Support had lower levels of additionality (21% for jobs created/ safeguarded and 20% for business assists) compared to the national average for this sub-theme (of 41% for jobs created/ safeguarded and 32% for business assists). Similarly EEDA’s science, R&D and innovation infrastructure interventions showed mixed results. The additionality of EEDA’s Innovation Capital intervention was similar for jobs created/ safeguarded (of 48%) and higher for business creation (of 48%), compared to the national averages (of 46% and 39% respectively) whereas the Innovation Revenue intervention performed less well against these averages (both 25%). Neither intervention achieved the national average additionality in terms of businesses assisted (of 67%). Compared to the national average additionality of jobs created/ safeguarded (of 43%), EEDA’s inward investment activity performed less well (with an additionality of 16%), while its Sustainable Consumption and Production activity achieved similar levels of additionality (i.e. 57%) to the national average for this sub-theme (of 55%). Table 38 summarises the impact on GVA (both achieved and future potential) of the evaluated EEDA interventions to promote business development and competitiveness. In the majority of cases the evaluations estimated either cumulative or annual GVA. Where annual GVA is presented in Table 38 no indication was given of the number of years over which the impact was expected (or assumed) to persist. Moreover, future potential impacts on GVA have not been discounted.

104

This means that EEDA’s overall additionality for evaluated business interventions was 17% for jobs created/ safeguarded, 23% for businesses created and 40% for business assists compared to the national averages of 48%, 40% and 35% respectively.

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Table 38: Outcomes of EEDA’s evaluated business development and competitiveness 105 interventions (2002/03-2006/07) Expenditure covered by evaluations (£m) Early Stage Business Support

2.9

Innovation Capital107

Achieved GVA (annual, £m)

Achieved & future potential GVA (annual, £m)

Achieved GVA (cumulative, £m)

Achieved & future potential GVA (cumulative, £m)

15.4

3-6

6-12

Innovation Revenue

1.5

4-9

5-12

Attraction of Inward Investment

10.6

108

106

Source: PwC analysis based on EEDA evaluation evidence

Additional net outcomes recorded in the evaluation evidence include: 

Rural Business Support: over £5m in increased business turnover and 337 increased employment (full time equivalents) achieved;



Early Stage Business Support : future potential increase in employment of 290 (full time equivalents) and £8.7m increased business turnover; and



Sustainable Consumption and Production: £7.9m increase in annual business turnover, 125 increase in employment (full time equivalents), £2m annual cost savings, £6m increase in business investment, 117 million tonnes of waste diverted from landfill, 29,000 tonnes of CO2 reduction and two businesses assisted in ISO 14001 accreditation.

109

As well as the impacts reported in this section, EEDA has delivered Strategic Added Value in relation to business development and competitiveness interventions. It is based on evidence from evaluations and case studies provided by EEDA. EEDA’s Strategic Added Value EEDA’s interventions have also had strategic value. For example, within Rural Business Support, EEDA 110 has taken the lead in piloting new approaches, working with partners. EEDA was also instrumental in stimulating the idea for particular Innovation Capital projects, sometimes catalysing the process and increasing stakeholder confidence. For example, in one project, EEDA contributed around 20% of funds but its Enterprise Hub Concept and overall endorsement were considered critical in overcoming some 111 challenging hurdles for new businesses . Source: EEDA

105

This table excludes interventions for which the evaluation did not contain any estimate of GVA, i.e. Rural Business Support, Innovative Actions Programme and Sustainable Consumption and Production. 106 This relates to two out of four projects only (Proof of Concept and Running the Gauntlet). 107 The ranges depend on whether a top down or bottom up approach is used to estimate GVA. The top down approach scales the estimated turnover per employee by the gross-to-net factor and gross jobs. The bottom up approach scales company turnover per employee or business by individual benefit factor and further scaled by total gross jobs. 108 The ranges depend on whether estimated GVA is scaled by employment at an individual company level or overall level. 109 Again this relates to two out of four projects only, i.e. Proof of Concept and Running the Gauntlet 110 Source: Rural Business Support evaluation report. 111 Source: Early Stage Business Support evaluation report.

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Value for money Table 39 sets out the achieved and future potential GVA to cost ratios of EEDA’s business development and competitiveness interventions. The GVA to cost ratio compares GVA impacts to the cost of the intervention: where there is a GVA to cost ratio of greater than one, the economic benefits of the interventions attributable to EEDA’s funding exceed their costs. This is the case for some, but not all of the interventions where GVA has been measured. Compared to the national averages, there was a mixed performance in terms of the EEDA business development and competitiveness interventions, for which GVA to cost ratios were available. Only Innovation Revenue exceeded the national average achieved annual GVA to cost ratio for its sub-theme (of 1.1:1). Early Stage Business Support, Innovation Capital and Attraction of Inward Investment are expected to have rates of return which are lower than the relevant national average for their sub-themes (of 14.1:1, 1.1:1 and 3.7:1 respectively). Although in the case of Innovation Capital at least there is evidence that the realisation of future potential outcomes may bring its GVA to cost ratio in line with the national average for its sub-theme. Table 39: Achieved and future potential GVA to cost ratios of EEDA’s evaluated business 112 development and competitiveness interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved (cumulative):cost ratio

Achieved & future potential (cumulative):cost ratio

1.6113

15.4

0.2-0.4

0.4-0.8

1.5

2.7-6.0

3.4-7.8

1.4

2.9

Innovation Capital

Attraction of Inward Investment

Achieved & future potential GVA (annual):cost ratio

Early Stage Business Support

Innovation Revenue

Achieved GVA (annual):cost ratio

10.6

Source: PwC analysis based on EEDA evaluation evidence Note: The GVA to cost ratios for the Innovation Capital and Innovation Revenue interventions set out in Table 39 are given as ranges based on the ranges of annual GVA set out in Table 38

As Table 39 shows some interventions such as Innovation Revenue and Attraction of Inward Investment have already achieved economic benefits which exceed their costs. The evaluation of Early Stage Business Support indicates that its economic benefits are likely to exceed its costs if its future potential outcomes are realised. Table 40 sets out the achieved and future potential cost per net output of EEDA’s business development and competitiveness interventions.

112

This table excludes interventions for which the evaluation did not contain any estimate of GVA, i.e. Rural Business Support, Innovative Actions Programme and Sustainable Consumption and Production. 113 The future potential GVA:cost ratio relates to two out of four projects only (Proof of Concept and Running the Gauntlet).

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Table 40: Achieved and future potential cost per net output of EEDA’s evaluated business 114 development and competitiveness interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved cost per net job (£’000) 115

Future potential cost per net job (£’000)

Achieved cost per net business assisted (£) 437 - 2,177116

Achieved cost per net skills assist (£) 1,569-2,665117

Rural Business Support

2.8

Early Stage Business Support

2.9

9,974

Innovation Capital

15.4

213

123

Innovation Revenue

1.5

Attraction of Inward Investment

10.6

2.4

9,562

15,484

Sustainable Consumption and Production (SCP)

Source: PwC analysis based on EEDA evaluation evidence

The cost per net job achieved from business and competiveness interventions ranged from £13,000 for Attraction of Inward Investment to £25,000 for Innovation Revenue. The £213,000 per net job achieved for Innovation Capital is skewed by the relative immaturity of this intervention and the capital nature of EEDA’s investment. The cost per net future potential job for this intervention is £123,000. Comparing EEDA with the national average cost per net output of business interventions presents a mixed picture. For example, Rural Business Support had a higher cost per net job than the national average for its sub-theme (of £8,301), but had a much lower cost per net business assisted than the national average for its sub-theme (of £8,502). The cost per net business assisted for Early Stage Business Support is similar to the national average for its sub-theme (of £8,502). EEDA’s Attraction of Inward Investment had a cost per net job which was higher than the national average cost per net job for inward investment (of £11,563). The cost per net job of EEDA’s science, R&D and innovation infrastructure interventions represented a mixed performance. The £25,000 per job for Innovation Revenue is below this national average cost per job for this sub-theme (of £37,938), whilst the £213,000 per job for Innovation Capital was more than five times this national average. Even taking future potential jobs into consideration, the £123,000 cost per job of this intervention is more than three times the national average for this sub-theme (of £37,938). Performance against objectives Table 41 summarises the performance against project objectives of EEDA’s evaluated interventions to promote business development and competitiveness. The evaluations indicate that performance against objectives was largely met. Performance against objectives was assessed for the majority of interventions by the IEF compliant evaluations reviewed. The exceptions are for the Attraction of Inward Investment performance (where the objectives were the same as the achieved outputs, suggesting that

114

Again the Innovative Actions Programme (and related spend) has been excluded from this table as no net outputs were reported in the evaluation. 115 The achieved cost per job for Rural Business Support is based on the increase in employment of 165 full time jobs resulting from increased business turnover. A further 343 part time jobs were reported in the evaluation, but were not included in this cost per job calculation. 116 The achieved cost per business assisted for three of the four projects in this intervention ranged from £437 to £2,177. 117 The achieved cost per business assisted for two of the four projects in this intervention ranged from £1,569 to £2,665.

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they had been added retrospectively) and one project within Sustainable Consumption and Production (where no objectives were set). Table 41: Performance against objectives of EEDA’s evaluated business development and competitiveness interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Performance against objectives

Rural Business Support

2.8

Exceeded

Innovative Actions Programme

1.7

Largely met

15.4

Largely met

Innovation Revenue

1.5

Largely met

Sustainable Consumption and Production (SCP)

2.4

Largely met

Early Stage Business Support

2.9

Mixed

Attraction of Inward Investment

10.6

Innovation Capital

Not assessed

Source: PwC analysis based on EEDA evaluation evidence

Regeneration through physical infrastructure interventions Rationale The East of England is characterised by localised areas of deprivation alongside relatively affluent areas. Therefore, many of EEDA’s regeneration initiatives aim to stimulate economic activity within the most deprived areas of the region. This section relates to physical regeneration initiatives supported by EEDA in order to improve regional economic performance. EEDA’s capital investments were primarily linked to goal four of the 2004 RES - achieving high quality places to live, work and visit. The revenue projects had more varied aims including: 

growing competitiveness, productivity and entrepreneurship (goal two);



social inclusion and broad participation in the regional economy (goal five) as well as stimulating regeneration and growth in the cultural and creative industries; and



targeting areas, such as Harwich, which are identified in the RES as containing significant regional regeneration priorities.

The main justification for EEDA’s regeneration through physical infrastructure interventions was to improve the area’s image or built environment. Some interventions were also considered to provide a public good through the development of new facilities or the redevelopment of derelict sites (i.e. Capital Projects and Inspire East). For Business Premises the justification for EEDA’s intervention related to improving the flow of information regarding the future returns of such an investment and overcoming barriers to entry. Evidence of the impact of EEDA’s regeneration initiatives is based on six evaluations covering the four main sub-themes summarised in Table 42.

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Table 42: Summary of EEDA’s evaluated regeneration through physical infrastructure interventions (2002/03-2006/07) Intervention theme/sub-theme

Evaluation

Expenditure covered by evaluations (£m)

Capital projects Bringing land back into use – employment sites

Trinity Lighthouse

2.5

Business premises

22.4

Public realm/other infrastructure

Capital projects

19.8

Firstsite:newsite

3.7

EPIC

2.5

Inspire East

1.2

Revenue projects Image/events/ tourism

Other Total

52.1

Source: PwC analysis based on EEDA evaluation evidence

This spend is dominated by capital investments in the Business Premises and Capital Projects evaluations, with a number of smaller scale revenue based projects. Impact EEDA’s evaluated physical regeneration interventions include supporting: 

the retention of Trinity Lighthouse, a key business within the Harwich area;



the development of Business Premises and other public realm Capital Projects;



the establishment of Firstsite:newsite, a major arts complex and England Production Innovation Centre (EPIC), which provides studio, post production and incubation facilities for media companies; and



Inspire East, a regional centre of excellence for sustainable communities.

The key gross outputs set out in Table 43 arising from the evaluated regeneration interventions have been jobs created/ safeguarded and brownfield land and commercial floorspace reclaimed or redeveloped. A number of these interventions are still in the early stages of implementation and, therefore, a distinction is drawn between achieved and future potential outputs.

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Table 43: Gross outputs (achieved and future potential) of EEDA’s evaluated regeneration through physical infrastructure interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Trinity Lighthouse

Achieved gross jobs created/ safeguarded

Future potential gross jobs created/ safeguarded

Achieved gross brownfield land reclaimed/ redeveloped (ha)

Future potential gross brownfield land reclaimed/ redeveloped (ha)

2.5

188

1.4

Business Premises

22.4

437

278

4.0

Capital Projects

19.8

636

1,721

Firstsite:newsite

3.7

EPIC

2.5 118

Inspire East

Total

Achieved gross commercial floorspace (m2)

Future potential gross commercial floorspace (m2)

0.2

16,664

36.6

22.7

47,858

5,359

139

0.2

3,059

163

1,591

1.2

52.1

1,268

2,301

64,522

10,009

Source: PwC analysis based on EEDA evaluation evidence

In addition to the gross outputs in Table 43, the Business Premises evaluation reported the creation of 20 new businesses, with the potential to create a further six in the future. The Capital Projects evaluation is also expected to lead to the creation of 91 achieved and future potential businesses whilst EEDA’s support of Firstsite:newsite from 2002/03 to 2006/07 is expected to result in an additional 19 future potential training places per annum. Similarly EPIC has the potential to result in 98 skills assists and Inspire East has the potential to result in 1,190 skills assists in the future. The resulting net outputs arising from the evaluations of regeneration interventions are set out in Table 44. In addition to the net outputs in Table 44, the expenditure covered by the Capital Projects evaluation is also expected to lead to the creation of 75 achieved and future potential businesses whilst EEDA’s support of Firstsite:newsite from 2002/03 to 2006/07 is expected to result in an additional 19 future potential training places per annum. Similarly EPIC has the potential to result in 31 skills assists in the future. When compared at a national level, EEDA’s physical regeneration interventions have similar or higher 119 levels of additionality across all of the national measures indicated . All of EEDA’s interventions were considered to be wholly additional in terms of the remediation of brownfield land (100%) and the future potential commercial floorspace created (100%). Achieved commercial floorspace created was almost wholly additional (98%). This is above the overall national average additionality (which is 73% for achieved outputs and 64% for future potential outputs from regeneration interventions). Within the subtheme of bringing land back into use EEDA’s performance is mixed in terms of jobs created/ safeguarded - Trinity Lighthouse has more than triple the level of additionality (of 165%) of the national average (of 50%) for this sub-theme, whilst Business Premises resulted in lower levels of additionality (of 28%). The additionality of EEDA’s Capital Projects (of 39%) was similar to the national average for Public Realm interventions for achieved jobs created/ safeguarded (of 40%).

118

No corresponding net outputs were calculated for Inspire East. EEDA’s evaluated physical regeneration interventions have overall additionality ratios of 53% for achieved jobs created/ safeguarded and 66% for achieved businesses created, compared to the national averages of 45% and 65% respectively. For future potential outputs EEDA’s evaluations estimated overall additionality ratios of 56% for achieved jobs created/ safeguarded and 56% for achieved businesses created through physical regeneration interventions, compared to the national averages of 45% and 50%. 119

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Table 44: Regional net outputs (achieved and future potential) of EEDAâ&#x20AC;&#x2122;s evaluated regeneration 120 through physical infrastructure interventions (2002/03-2006/07) Expenditure covered by evaluations (ÂŁm)

Trinity Lighthouse

Achieved net jobs created/ safeguarded

Future potential net jobs created/ safeguarded

Achieved net brownfield land reclaimed/ redeveloped (ha)

Future potential net brownfield land reclaimed/ redeveloped (ha)

Achieved net commercial floorspace 2 (m )

Future potential net commercial floorspace 2 (m )

2.5

310

1.4

Business Premises

22.4

121

4.0

0.2

16,664

Capital Projects

19.8

247

1,112

36.5

22.4

46,326

5,359

Firstsite: 121 newsite

3.7

0.2

3,059

EPIC

2.5

140

1,591

Total

50.9

678

1,298

62,990

10,009

Source: PwC analysis based on EEDA evaluation evidence

The Firstsite:newsite and EPIC interventions are still in the early stages of implementation. No national average future potential additionality ratio can be calculated for the sub-theme of image, events and tourism. However, comparing the future potential additionality of these projects in terms of jobs created/ safeguarded to the national average achieved additionality in this sub-theme (of 34%) suggests that the future potential additionality of Firstsite:newsite (of 29%) is in line with the national average, whilst EPIC has the potential to achieve higher levels of additionality in the future (of 86%). Due to the early stage of development of most of these projects the evaluations provided limited evidence of future potential outcomes and no systematic analysis of the actual or potential impact on regional GVA. The evaluations did, however, note examples of Strategic Added Value (see below).

120

The Inspire East intervention (and related spend) has been excluded from this table as no net outputs were reported in the evaluation. 121 The net outputs presented in this regional annex are 67% of the net outputs recorded in the evaluation report, as EEDA spend represented a 67% contribution to the project.

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EEDA’s Strategic Added Value EEDA’s support for Trinity Lighthouse resulted in a highly visible, multimillion pound investment in a prominent waterfront location. Feedback from local agents and the Head of Regeneration at Tendring District Council indicated that this instilled confidence amongst potential investors and developers, and will boost the town’s economic prospects in the medium to longer term. Strong communication between Trinity Lighthouse and the EEDA contract team helped the project progress effectively, and has led to further collaboration on other projects such as the Masterplan for the regeneration of Old Harwich. The project has enabled Trinity Lighthouse to develop a modern buoy maintenance facility and new office premises, which has facilitated an improvement in the efficiency and the quality of its service. Without EEDA’s involvement and funding it was considered by stakeholders that this would not have been 122 delivered . In the early stages of the Firstsite:newsite project, EEDA has added value to strategic partnership coordination and decision-making by transferring lessons on how to run capital projects. EEDA was considered to be an essential partner in the realisation of the project. Many partners felt that, without EEDA’s contribution and involvement in Firstsite:newsite it, would not have been possible to deliver the project at a sufficient scale and nature to achieve its key objective of creating a high-profile landmark 123 attraction . Source: EEDA

Value for money Table 45 summarises the value for money of EEDA’s interventions to promote regeneration through physical infrastructure. The majority of the regeneration evaluations reviewed value for money on the basis of cost per job only (achieved and future potential), although for EPIC a future potential cost per square metre of net commercial floorspace, of £1,545, was also noted. Table 45 shows considerable variation in the value for money of these interventions. The cost per job (achieved and future potential) of the Business Premises intervention was particularly high due to the high set-up costs and limited outputs associated with this intervention to date. Again comparing the cost per net job of EEDA’s regeneration interventions to the national averages generates mixed results. Trinity Lighthouse and Capital Projects had a cost per net job which was much lower than the national average for their sub-themes (of £42,101 and £118,945 respectively). Business Premises on the other hand performed less well and was considerably higher in terms of cost per net job for its sub-theme (of £42,101). Although this intervention is still relatively immature and therefore cost per net job may decrease overtime. Table 45: Cost per net job (achieved and future potential) of EEDA’s evaluated regeneration 124 through physical infrastructure interventions (2002/03-2006/07)

Trinity Lighthouse 125 Business Premises Capital Projects Firstsite:newsite EPIC

Expenditure covered by evaluations (£m) 2.5 22.4 19.8 3.7 2.5

Achieved cost per net regional job (£’000) 8 185 41 -

Future potential cost per net regional job (£’000) 179 15 92 18

Source: PwC analysis based on EEDA evaluation evidence

122

Source: Trinity Lighthouse evaluation report. Source: Firstsire:newsite evaluation report. 124 The Inspire East intervention (and related spend) has been excluded from this table as no net outputs were reported in the evaluation. 125 There was significant variation in the cost per job of the four projects covered by this evaluation, i.e. from £16,896 per net job achieved to £581,375 to £3,922,952. The fourth project has achieved no net jobs to date. Future potential cost per job was similarly wide ranging, i.e. from £16,896 per net future potential job to £564,313 to £1,364,505 to £6.4m. 123

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Table 45 sets out cost per job at a regional level. However, it should be noted that a number of these interventions aimed to tackle deprivation within specific and typically hard to reach target areas. 126 Therefore, they often had a greater impact, in terms of job creation, at a local than at a regional level and thus the cost per job of these interventions is lower at a local level. For example, the local cost per achieved and future potential job for the four Business Premises projects ranged from £15,044 to £189,568 with an overall local cost per job of £74,740. Similarly the local cost per achieved and future potential job for the four Capital Project interventions ranged from £6,000 to £24,000, with an overall local cost per job of £13,000. In the case of Trinity Lighthouse however, the intervention had a greater impact on jobs at a regional level and, therefore, the local cost per job achieved was higher at £32,667. Performance against objectives Table 46 summarises the performance against project objectives of the evaluated EEDA interventions to promote regeneration through physical infrastructure. It should be noted that a number of evaluations did not assess performance against objectives. In the case of Firstsite:newsite and EPIC this is because of the timing of these evaluation, i.e. all outputs are future potential outputs and consequently no outputs have yet been achieved. For those evaluations which did assess performance against objectives only Trinity Lighthouse largely met its objectives. The other interventions represented a more mixed performance. Table 46: Performance against objectives of EEDA’s evaluated regeneration through physical infrastructure interventions (2002/03-2006/07) Expenditure covered by evaluations (£m, 2002/03-2006/07) Trinity Lighthouse Capital Projects Inspire East Business Premises

2.5

Performance against objectives Largely met

19.8

Mixed

1.2

Mixed

22.4

Mixed

Firstsite:newsite

3.7

Not assessed

EPIC

2.5

Not assessed

Source: PwC analysis based on EEDA evaluation evidence

People and skills interventions Rationale This section relates to EEDA’s people and skills interventions. The 2004 RES for the East of England identifies a number of challenges in this area, including the following which are directly related to the evidence presented in the remainder of this section: 

to develop a skills base that can support a world class economy (goal one);



addressing issues of social exclusion, poor skills, unemployment, ill health and discrimination (linked to RES goal five); and



improving access to and participation in education and skills development in parts of the region with lower than average levels of attainment, such as Southend.

There were a range of market failure justifications for EEDA’s people and skills interventions, the most common being to improve the flow of information. The University of Essex in Southend intervention also sought to address equity issues in the area and tackle the lower than average number of higher education places in the region and facilitate the transfer of skills. EEDA’s skills and workforce

126

This implies that some of the jobs created/ safeguarded at a local level were displaced from elsewhere in the region.

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development initiatives aimed to bridge the funding gap between businesses and other public partners such as Jobcentre Plus and the Learning and Skills Council. Evidence of the impact of EEDA’s people and skills interventions relates to four evaluations covering three sub-themes summarised in Table 47. Table 47: Summary of EEDA’s evaluated people and skills interventions (2002/03-2006/07) Intervention theme/sub-theme

Evaluation

Expenditure covered by evaluations (£m)

127

Matching people to jobs

Investing in Communities

36.4

Skills/workforce development

Workforce Development

4.1

Construction Skills

2.8

Educational infrastructure development

University of Essex in Southend

18.7

Total

62.0

Source: PwC analysis based on EEDA evaluation evidence

The Investing in Communities programme, which aims to tackle barriers to economic participation, accounts for the largest proportion of the spend in this intervention area. Investment in the development of the University of Essex in Southend was also significant (at 30%). Two smaller skills and workforce development projects were also evaluated: Workforce Development and Construction Skills. Impact Table 48 summarises the expenditure and key gross outputs achieved through the EEDA people and skills interventions, which have been evaluated. The primary outputs have been jobs created/ safeguarded, people supported into employment, businesses created and assisted and skills assists. Table 48: Gross achieved outputs of EEDA’s evaluated people and skills interventions (2002/032006/07) Expenditure covered by evaluations (£m)

Gross jobs created/ safeguarded

Investing in Communities

36.4

1,569

Workforce Development

4.1

Construction Skills

2.8

University of Essex in Southend Total

Gross people assisted into employment 10.932

Gross businesses created

Gross businesses assisted

Gross skills assists

168

2,400

24,417

1,523

4,600

1,870

18.7

136

62.0

1,649

10,932

181

3,939

31,023

Source: PwC analysis based on EEDA evaluation evidence

In addition to the gross outputs achieved in Table 48 it was estimated that the University of Essex in Southend would result in 1,364 future potential skills assists (in gross terms). The Investing in Communities programme was also considered to have resulted in significant Strategic Added Value. The net outputs arising from the evaluated interventions are set out in Table 49.

127

There are five usable evaluations relating to EEDA’s Investing in Communities programme. This section focuses on the most recent evaluation which is a comprehensive region-wide evaluation of relevant spend on this intervention.

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Table 49: Net achieved outputs of EEDA’s evaluated people and skills interventions (2002/03 – 2006/07 Expenditure covered by evaluations (£m)

Net jobs created/ safeguarded

Net people assisted into employment

Net businesses created

Net businesses assisted

Net skills assists

Investing in Communities

36.4

825

5,862

1,240

12,834

Workforce Development

4.1

596

1,800

Construction Skills

2.8

924

University of Essex in Southend

18.7

Total

62.0

840

5,862

1,839

15,598

Source: PwC analysis based on EEDA evaluation evidence

In addition to the net outputs achieved in Table 49 it was estimated that the University of Essex in Southend would result in 402 future potential skills assists. It should be noted that due to a contractual agreement between EEDA and the Higher Education Funding Council for England (HEFCE), all of the outputs for this intervention relating to approximately 200 HEFCE funded students attending the University during the evaluation period, have been attributed to HEFCE (i.e. the evaluation evidence relates to non-HEFCE students only). As such the evidence may underestimate the full impact of EEDA’s involvement in this intervention. In addition, the wider regeneration objectives of this intervention were not evaluated in the evidence base. The additionality of EEDA’s people and skills interventions varied across output measure and intervention sub-theme. Investing in Communities had the highest level of additionality, across each output category (i.e. over 50%). This is considered particularly impressive given that this intervention sought to target hard to reach groups. Comparisons to the national average show that overall EEDA’s evaluated interventions have a mixed performance, achieving similar levels of additionality for jobs created/ safeguarded (of 51%) and people assisted into employment (of 54%), but lower levels for skills assists (of 50%) and business created (of 52%) compared to the overall national averages for people and skills interventions (of 48%, 51%, 62% and 82% respectively). Investing in Communities resulted in higher than average levels of additionality for the sub-theme of matching people to jobs in terms of jobs created/ safeguarded (of 53% compared to the national average of 47%)and similar levels of additionality for people assisted into employment (of 54% compared to 59%) and businesses created (of 55% compared to 60%), but lower than average levels of additionality in terms of skills assists (of 53% compared to 61%). The relatively high levels of additionality for this intervention are all the more impressive given that the target group is typically hard to reach. Workforce Development and Construction Skills had lower levels of additionality (of 39% and 49% respectively) in terms of skills assists than the national average for skills and workforce development interventions (of 70%). Similarly the University of Essex in Southend intervention resulted in lower levels of additionality in terms of jobs created/ safeguarded (of 19%), businesses created (of 15%) and skills assists (of 29%) compared to the national average for interventions which support the development educational infrastructure (of 63%, 48% and 60% respectively). Table 50 summarises the outcomes of EEDA’s evaluated people and skills interventions

128

Table 50 does not include outcomes linked to the outputs claimed by HEFCE as these were not captured in the evaluation evidence.

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Table 50: Achieved and future potential outcomes of EEDA’s evaluated people and skills 129 interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Investing in Communities

36.4

Workforce Development

Achieved

GVA (annual, £m)

GVA (cumulative, £m)

Achieved & future potential GVA (cumulative, £m)

4.1

108

University of Essex in Southend

18.7

Total

62.0

108

Achieved increase in employment (Full time equivalents)

Future potential increase in employment (Full time equivalents)

665.5

20.0

2.0

1.3

667.5

21.3

Source: PwC analysis based on EEDA evaluation evidence

EEDA’s £62.0m investment in people and skills interventions has already achieved an additional £24m of cumulative GVA. In addition the Workforce Development evaluation estimates a further future potential cumulative GVA of £84m. Care should be taken in interpreting these estimates of GVA as it has involved the aggregation of estimates of outcomes across different evaluations. Moreover, future potential impacts on GVA have not been discounted. The following additional outcomes were recorded in the evaluation evidence: 

Investing in Communities improved the management/ leadership skills of nearly 220 workers, supported nearly 40 community enterprises, attracted over 15,000 visitors and was judged to have enhanced the confidence of over 1,700 people;



the Bedfordshire Partnership, one of the projects in Construction Skills, was estimated to have the potential to increase the net income of beneficiaries by £8m over a ten-year period; and



based on a ten-year total of 1,500 full time equivalent students , University of Essex Southend, was expected to increase subsistence spending by students in the local area by £13m, tuition fee income from overseas students by £7m and (non-HEFCE) funding for student places by £6m. A future potential net uplift in student’s future incomes of £34m was also estimated.

130

As well as the impacts noted above, the box below sets out the Strategic Added Value of EEDA’s evaluated people and skills intervention. This is based on evaluation reports and case study evidence provided by EEDA.

129

This table excludes the Construction Skills intervention because the evaluation did not contain any estimate of GVA or increases in employment. 130 The University of Essex at Southend opened in autumn 2004 with 783 students; autumn 2007 student intake was 1,384 (a 75% increase).

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EEDA’s Strategic Added Value There is general agreement among stakeholders that EEDA should be complimented for developing Investing in Communities. The decision making process has led to more local empowerment. New partnerships and networks have been formed around the Investing in Community mechanisms and projects. By exercising both leadership and influence, EEDA gradually secured buy-in from sub-regional partnerships to the ethos of the programme and the coherent approach to community-based regeneration 131 on which it was premised . In 50% of cases EEDA and the sub regional partners were said to have had a positive influence on networking and partnership working with 35% of cases saying that this had been 132 very successful . The University of Essex is a central component of the regeneration plans for Southend, and forms a case study in the Thames Gateway Delivery Plan. While EEDA had a largely supporting role in the delivery of these projects, the project holders considered that EEDA had played a critical catalytic role in making the Southend development happen in the first instance. In the view of HEFCE, EEDA was, therefore, an essential stakeholder to secure, giving a signal to other potential investors that this development was of regional importance and aligned with regional priorities. The intervention by EEDA to develop a regionally agreed perspective on this expansion was recognised by stakeholders and funders as crucial in their decision to allocate funds to the region. The fact that EEDA had researched and presented a coherent case to HEFCE for the educational development of the East of England, was important in subsequent regional funding decisions and has had a significant impact on the provision of higher 133 education in the region . Furthermore, EEDA’s intervention into higher education provision was used as 134 an example of best practice in DIUS’s White Paper . Source: EEDA

Value for money While the majority of the evaluations reviewed provided some value for money assessment, the evaluation of the University of Essex in Southend concluded that it would be inappropriate to conduct a value for money assessment as the evidence base does not take into account the wider regeneration objectives and related impacts of this intervention. Table 51 sets out the available GVA to cost ratios (including achieved and future potential) in relation to the evaluated people and skills interventions. Whilst there is limited evidence, the return on investment for Investing in Communities and Workforce Development is positive and compares well against the national averages for similar people and skills interventions. Investing in Communities in line with the national average achieved annual GVA to cost ratio for this sub-theme (of 0.8:1), whilst Workforce Development has greatly exceeded the national average achieved and total achieved and future potential cumulative GVA to cost ratios (of 0.9:1 and 1.0:1 respectively). Table 51: Achieved and future potential GVA to cost ratios of EEDA’s evaluated people and skills 135 interventions (2002/03-2006/07) Expenditure covered by evaluations (£m) Investing in Communities

36.4

Workforce Development

4.1

Achieved GVA (annual):cost ratio

Achieved GVA (cumulative):cost ratio

Achieved & future potential GVA (cumulative): cost ratio

0.6

5.9

26.3

Source: PwC analysis based on EEDA evaluation evidence

131

Source: EEDA Investing in Communities case study. Source: Investing in Communities evaluation report. 133 Source: EEDA the expansion of higher education in the East of England, and the University of Essex at Southend case study. 134 ‘A new ‘University Challenge’: unlocking Britain’s talent’, Department for Innovation, Universities and Skills, 2008. 135 This table excludes the Construction Skills and University of Essex in Southend interventions because these evaluations did not contain any estimate of GVA. 132

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It is also estimated from the evaluated initiatives that this intervention category has generated an achieved and potential employment impact of 689 (in terms of full time equivalents). Care should be taken in interpreting these estimates of GVA as it has involved the aggregation of estimates of outcomes across different evaluations. Moreover, future potential impacts on GVA have not been discounted. Tbale 52 sets out the cost per net achieved output in relation to the evaluated people and skills interventions. Table 52: Cost per net achieved output of EEDA’s evaluated people and skills interventions 136 (2002/03-2006/07) Expenditure covered by evaluations (£m) Investing in Communities

Cost per net job created/ safeguarded

36.4

(£’000)

Cost per net business assisted/ created (£)

Cost per net skills assist (£)

137

6,946

1,584

138

2,200

2,036-31,153

Workforce Development

4.1

Construction Skills

2.8

139

Source: PwC analysis based on EEDA evaluation evidence

The cost per net job created/ safeguarded for EEDA’s people and skills interventions are relatively low, when compared to its business and competitiveness and regeneration through physical infrastructure interventions. The wide range of cost per skills assist for Construction Skills relates to an extreme outlier, Constructionarium, which has high priority national objectives, in addition to its regional objectives. This factor in combination with the highly mobile nature of construction work, has resulted in a high degree of leakage at a regional level and, therefore, a very high cost per skills assist when compared to EEDA’s other people and skills interventions. Again national level comparisons show mixed results in terms of the cost per unit output measures of EEDA’s evaluated people and skills interventions. Investing in Communities and Workforce Development compare very well against the national average cost per job created/ safeguarded for these sub-themes (of £49,215 and £105,268). Investing in Communities also performs well against the national average in terms of the cost per skills assist for its sub-theme (of £2,570). However Workforce Development and Construction Skills perform less well in relation to the national average for their sub-theme (of £1,242) in this respect. Performance against objectives Table 53 summarises the performance against project/ programme objectives of EEDA’s evaluated people and skills interventions and shows that whilst none of the interventions achieved all of their objectives, they were all largely met.

136

This table excludes the University of Essex in Southend as the evaluators considered it would be inappropriate to assess the cost per net output of this intervention. 137 This figure relates to both jobs created and people assisted into employment. 138 Although the evaluation reported no direct jobs created/ safeguarded from this intervention, the cost per net job for Workforce Development is based on the net achieved increase in employment of 665.5 (in terms of full time equivalents). 139 The achieved cost per net person assisted in skills development for each of the three projects in this intervention ranged from £2,036 to £4,011 to £31,153.

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Table 53: Performance against objectives of EEDA’s evaluated people and skills interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Performance against objectives

Investing in Communities

36.4

Largely met

Workforce Development

4.1

Largely met

Construction Skills

2.8

Largely met

University of Essex in Southend

18.7

Largely met

Total

62.0

Source: PwC analysis based on EEDA evaluation evidence

Other EEDA interventions Rationale The evidence of EEDA’s impact on other interventions covers £89.7m of spend from 2002/03 to 2006/07. These comprise the Single Regeneration Budget (SRB) programme, which aimed to tackle issues affecting the most deprived communities, and the interventions focused on the Ipswich area. The East of England ran fewer SRB schemes than any other region in England. This is probably due to 140 the relatively low levels of deprivation in the region . The East of England is characterised by small pockets of deprivation, surrounded by relatively affluent areas, with almost half of the most deprived SOAs in the East of England in the Norfolk and Thames Gateway sub-regions. EEDA has also undertaken a number of interventions in Ipswich. The evaluation evidence covers 26 EEDA interventions in the Ipswich area between 2000 and 2007 covering: Ipswich Waterfront; Adastral Park; Ipswich Village; University Campus Suffolk; Regeneration; and other projects including local transport. These two interventions aimed to contribute to the following RES goals: 

a skills base that can support a world-class economy (goal one);



growing competitiveness, productivity and entrepreneurship (goal two);



high quality places to live, work and visit (goal four); and



social inclusion and broad participation in the regional economy (goal five).

The justification of EEDA’s intervention through the SRB programme was to address equity issues, while EEDA’s interventions in the Ipswich area sought to address market failures such as the provision of public goods and positive externalities through improvements to the built environment. Impact Key outputs arising from these other interventions have been jobs created/ safeguarded, skills assists, businesses created and land reclaimed/ redeveloped. Table 54 sets out the key gross outputs achieved in relation to these interventions. In addition to the new businesses identified in, the SRB programme led to the start-up of 96 gross 2 community enterprises. The Ipswich interventions also led to the redevelopment of 15,212m of gross commercial floorspace. The evaluations of these interventions did not report any future potential outputs.

140

Index of Multiple Deprivation Data from 2004 indicates that 4% of the 8,120 most deprived Super Output Areas (SOAs) in England are in the Eastern Region.

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Table 54: Gross achieved outputs of EEDA’s other interventions covered by IEF compliant evaluations (2002/03-2006/07) Expenditure covered by evaluations (£m) SRB

Gross jobs created/ safeguarded

Gross skills assists

Gross businesses created

Gross land reclaimed/ redeveloped (ha)

64.9

2,247

8,100

165

21.0

Ipswich area

24.8

4.4

Total

89.7

2,331

8,174

177

141

Source: PwC analysis based on EEDA evaluation evidence

Table 55 sets out the key net outputs achieved in relation to these interventions. Table 55: Net achieved outputs of EEDA’s other interventions covered by IEF compliant evaluations (2002/03-2006/07) Expenditure covered by evaluations (£m)

Net jobs created/ safeguarded

Net skills assists

Net businesses created

Net land reclaimed/ redeveloped (ha)

SRB

64.9

933

4,536

10.0

Ipswich area

24.8

3.7

Total

89.7

983

4,575

13.7

Source: PwC analysis based on EEDA evaluation evidence

Again in addition to the new businesses identified in Table 55, the SRB programme led to the start-up of 2 75 net community enterprises. The Ipswich interventions also led to the redevelopment of 10,649m of net commercial floorspace. Both interventions showed high levels of additionality relative to the other EEDA interventions for which we have evaluation evidence. EEDA’s interventions in the Ipswich area resulted in relatively high levels of additionality in terms of jobs created/ safeguarded (60%), businesses created (58%) and brownfield land remediated (84%) when compared to additionality of other interventions at a national level (i.e. 49%, 51% and 59%). Additionality in the SRB evaluation was calculated at a national level therefore there was no reported regional variation in terms of the additionality of the SRB programme. The quantitative evidence of outcomes and impacts in the individual evaluation reports which fed into the SRB Meta-evaluation was very limited. However, applying the 2006 workplace GVA per worker for the 142 East of England (of £41,643 ) to the 933 net jobs created (663) and safeguarded (270) gives an estimated achieved annual impact on GVA of £38.9m. The Ipswich evaluation did not provide quantitative outcomes. However, both evaluations provided evidence of EEDA’s Strategic Added Value in relations to these interventions.

141

It should be noted that while £4.0m of out of scope expenditure has been removed from the overall expenditure related to EEDA’s interventions in the Ipswich area no attribution of the gross or net outputs has been made. Therefore, these outputs may overstate the impact of EEDA’s interventions in the Ipswich area by circa 14%. 142 National Statistics.

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EEDA’s Strategic Added Value From EEDA’s perspective the SRB programme has demonstrated strategic leadership by providing a wider demonstration of good partnership working and the benefits of joining up spend and activity. This model is now more common, both within EEDA and at a national level. EEDA used the SRB programme as a test-bed for developing and learning from new leadership approaches such as work on social capital, 143 which was an emerging agenda in 2003 . EEDA’s investment in the Ipswich area generated SAV most significantly within the University Campus Suffolk (UCS) project, which is already influencing developments in the Peterborough area. The UCS model that has been developed by EEDA and its partners is innovative and may be applicable to other 144 regions . Source: EEDA

Value for money Due to the diverse range of outputs in the SRB programme and the difficulties in disaggregating economic and non-economic data a value for money calculation was considered to be inappropriate. The Ipswich evaluation did not provide quantitative value for money assessments. Performance against objectives The SRB programme represents a mixed performance against objectives. The region has exceeded its objectives in terms of the number of jobs safeguarded and the number of community enterprise start-ups, but not met its objectives in terms of the other four core outputs – relatively marginally in some cases (jobs created, qualifications obtained and land for development) and significantly in terms of number of supported new businesses surviving for one year. In terms of the over-performing outputs, this is a result of a small number of schemes which have significantly exceeded their objectives. This level of achievement may reflect a number of possible factors: an unexpectedly strong scheme performance, a lack of understanding of the scheme’s potential or overly cautious objective setting. Unfortunately, the majority of evaluation reports do not comment on the reasons behind schemes’ performance against their objectives. Evidence from the evaluation suggests that the key strengths of the SRB programme in the East of England were the level of community engagement, efficient project management systems, effective partnership working, innovative delivery approaches, close links to other projects (i.e. URBAN II and Objective 2) and the development of individuals’ skills and capabilities. According to the evaluation evidence, this has led to increased self-esteem within communities. The narrow geographical focus appears, however, to have been an inhibiting factor for EEDA, as the SRB programme in the East of England focused on relatively small areas. This was exacerbated by EEDA’s small proportion of overall SRB funding relative to the other regions, which limited the extent to which EEDA could target the funding and resulted in a focus on smaller areas of deprivation. The opportunities to impact on activities within those areas was necessarily limited by the physical or geographical characteristics of those wards e.g. a heavily residential ward with no land free for business development could not undertake any business development activities. 145

The performance against objectives of the Ipswich interventions was not assessed . Stakeholders believed that it was too early to make robust assessments of bottom-line impacts but there was a consensus that EEDA’s interventions in the Ipswich area had been appropriate and genuinely catalytic in shaping the future of the area’s economy in alignment with the objectives of the successive versions of the RES.

143

Source: Meta-evaluation of SRB. Source: An area-based evaluation of EEDA’s impact- Ipswich. 145 USC Ipswich results are now available and are being monitored by EEDA. 144

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National programmes Besides its own interventions, EEDA has been responsible for the management and delivery of nine of the ten national programmes which have been delivered within parameters closely defined by central government departments. Although the available evaluation evidence on national programmes does not disaggregate gross outputs at a regional level, we have been able to estimate the impact of some of these programmes on the East of England. This has been done by dividing EEDA spend on the programme by the regional cost per job and then making allowances for displacement, leakage and Table 56 summarises EEDA’s spend in the relevant period on each of the national programmes and summarises the estimated impacts where these are available. As the Table shows, three programmes have resulted in the achievement of 3,459 net jobs created/ safeguarded, with the potential to generate a further 523 in the future. Table 56: Estimated impact of EEDA’s spending on national programmes (2002/03-2006/07) National programme

EEDA spend (£m)

Achieved net jobs created/ safeguarded

Future potential net jobs created/ safeguarded

Business Link

33.0

3,011

Manufacturing Advisory Service

3.6

448

Phoenix Fund

0.2

Regional Innovation Fund

0.1

Rural Development Programme for England (& Sustainable Food and Farming Strategy)

0.3

Selective Finance for Investment

9.7

Regional Tourist Board Support

3.1

Market Town Initiative

5.8

Grant for Research & Development

9.6

523

Total

65.6

3,459

523

Source: PwC analysis based on EEDA evaluation evidence

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East Midlands Development Agency Summary Overview 

The East Midlands Development Agency (EMDA) has spent around £1,124m over the period 1999/2000 -2006/7 with approximately £537m being used to support directly a range of interventions designed, individually or collectively, to stimulate business development and competitiveness, promote regeneration through physical infrastructure, enhance employability and skills and benefit the East Midlands more widely. In addition, SRB is a substantive part of EMDA’s expenditure, accounting for just under £201m.



EMDA has also spent £154m on national programmes.



We have reviewed EMDA’s evaluation programme covering RDA spend of nearly £704m which includes direct interventions, SRB and other expenditures which support delivery.

Impact 

The evaluations show that EMDA has generated substantial outputs already with over 64,000 jobs having been created and safeguarded of which 44% are additional at the regional level.



Additional future potential outputs are also anticipated as schemes are completed, although these estimates are less certain.



In addition to the impact of its project and programme expenditure, Strategic Added Value (SAV) is a key element of EMDA’s impact, particularly in terms of providing strategic direction, leadership and innovative activities. For example, EMDA has taken the lead in enabling and managing the remediation, reclamation and redevelopment of the Avenue Coking Works in Derbyshire, which was one of the most polluted sites in Western Europe, through a programme involving broad partnership and engagement with stakeholders.

Value for money 

The highest achieved return is as a result of business interventions, with an achieved average return of 5.1 to 1. The lowest return is from place interventions with an achieved average return of 0.5 to 1.



The highest specific achieved returns are for business support (7.3), people and skills interventions (4.4) and inward investment (3.7).

Performance against objectives 

As part of its evaluation work, EMDA undertook an aggregate assessment of performance against objectives for a sample of their projects. Ninety percent of the projects reviewed were assessed as having been effective or very effective in meeting their output and outcome objectives.

Context Overview of the East Midlands The East Midlands - England's fourth largest region – covers six counties: Derbyshire, Leicestershire, Lincolnshire, Nottinghamshire, Northamptonshire and Rutland. The region occupies a central position in England with strong connections (economic, social and physical) to many of England’s major population

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centres. There is a wide range of sub-regional economic circumstances with the core Three Cities region around Derby, Leicester and Nottingham, large rural areas especially in the east, southern areas closely linked into the economy of the South East and other areas with closer links and similarities to Northern cities and towns, especially in the former mining areas. The region has a population of 4.3m, 7% of the UK total, with the main population centres being the cities of Derby, Nottingham, Leicester and Lincoln and the towns of Northampton and Mansfield. Population density in the region varies from around 70 per square kilometre in parts of Lincolnshire to more than 3,500 per square kilometre in Leicester and Nottingham. The East Midlands economy covers a wide range of activities and circumstances. The East Midlands is home to some of the UK’s most well-known large businesses (e.g. Rolls-Royce, Boots) but also has a large and diverse small business sector. There are important manufacturing concentrations and service centres but also areas with more limited economic activity as a result of economic restructuring and reliance on agriculture. The East Midlands’s workplace-based gross value added (GVA) in 2006 was £74 billion (6% of the UK 146 total). The East Midlands’ GVA per head was 91% of the UK average in 2006 . In mid-2008, the region had an employment rate of 75.7%, above the UK average of 74.8% and the fourth-highest of the nine 147 English regions . In 2005, there were 125,170 VAT-registered businesses in the East Midlands, 6.9% of the UK total. Over two-thirds of these businesses were in the service sector (68.6%) compared to 72.5% across the UK as a whole. The manufacturing and construction sectors account for a greater share of businesses than the UK average (10.9% and 12.3% compared to 8.4% and 11.3% respectively). EMDA’s purpose and strategy EMDA’s mission is to “use our influence and investment to deliver a measurable improvement in the 148 sustainable economic performance of the East Midlands.” Since its establishment, EMDA has produced a series of Regional Economic Strategies (RESs) developed jointly with a wide range of regional partners to provide the agreed regional context for economic development and regeneration policy and delivery in the East Midlands. The region’s vision, as set out in the most recent RES, is that by 2020 the East Midlands will be “… a flourishing region. A region made up of growing and innovative businesses. A region where skilled people are employed in good quality jobs. A region where we all feel part of healthy, inclusive communities and live in thriving, 149 attractive places.” There have been three RESs in the East Midlands since EMDA’s inception. The first RES, ‘Prosperity Through People’, published in 1999, set out the region’s vision to be one of Europe’s top 20 regions. In 2003 the second RES, ‘Destination 2010’, consolidated the strategic objectives into three drivers: employment, learning and skills; enterprise and innovation; and a climate for investment. It also organised EMDA’s activities and objectives into twelve thematic Strands (which were the basis for the approach adopted by EMDA’s evaluation programme). The third RES, ‘A Flourishing Region’, was published in 2006 and stretched targets and ambitions towards 2020. The 2006 RES was the result of the widest consultation process EMDA had ever undertaken and was underpinned by “the most comprehensive evidence base assembled on the East 150 Midlands, its economy and its strengths and its challenges ”. Although the ambition to become a leading region in Europe by 2010 is retained, the overall vision is that “By 2020, the East Midlands will be a flourishing region. Increasingly prosperous and productive, we will enjoy levels of sustainable economic well-being and a quality of life higher than the European average and comparable with the best 151 in the world ”. The vision is underpinned by the themes of raising productivity, ensuring sustainability,

146

Regional Trends 40 – 2008 Edition (Office of National Statistics). ONS (12 August 2008) Regional Labour Market Statistics. 148 EMDA Corporate Plan 2008-2011, Consultation Draft (November 2007). 149 A Flourishing Region, Regional Economic Strategy for the East Midlands 2006-2020. 150 ibid 151 ibid 147

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and achieving equality. Within these three themes are ten strategic priorities around employment, learning and skills; enterprise and business support; innovation; transport and logistics; energy and resources; environmental protection; land and development; cohesive communities; economic renewal; and economic inclusion. EMDA’s Corporate Plans identify and prioritise the specific interventions which EMDA and its related organisations will undertake themselves. EMDA has created three Corporate Plans since its inception, covering the periods 2001-02, 2003-06 and 2005-08. The Corporate Plans set out the high-level targets and activities that EMDA is expected to deliver over the relevant period and are consistent with the RES objectives. EMDA’s operations are structured around internal directorates and a number of related or ‘family’ organisations that provide specific services, where EMDA is the sole or the primary funder. EMDA’s delivery processes include a significant sub-regional dimension. A proportion of EMDA’s funding is directed to Sub-regional Strategic Partnerships (SSPs), which were developed and established by EMDA as a mechanism for improving the organisation’s responsiveness to sub-regional needs and opportunities. SSPs have administered an increasing share of EMDA’s budget in recent years – more 152 than £45m (24%) in 2006/07 . To meet its goals, EMDA aims to deliver a series of core outputs and also to work closely with other regional bodies to provide strategic direction and drive for the region. EMDA’s core outputs cover: jobs created or safeguarded; people assisted to get a job; new businesses created and surviving 12 months; businesses assisted to improve their performance; businesses assisted via collaboration with the UK knowledge base; public and private regeneration investment levered; hectares of brownfield land reclaimed and redeveloped; and people assisted in their skills development. In addition to its direct impacts from its programme expenditure, EMDA influences regional partners and national bodies in other important ways. By helping to deliver better outcomes than would have been achieved without EMDA’s involvement, the RDA is able to produce ‘Strategic Added Value’ (SAV) for the region. A central tenet of the policy framework behind the establishment of EMDA was that it would be able to help direct and influence the plans, activities and investments of local, regional and national bodies to achieve opportunities and tackle particular weaknesses. As the key regional economic development body, EMDA has worked with others to improve the social and economic environment in the East Midlands for the benefit of its population, benefits and the wider UK economy. EMDA’s profile EMDA spent £1,124m between 1999/2000 and 2006/2007 with the budget for 2006/2007 of £188m as shown in Table 57. Of the total expenditure, 66% was spent on EMDA’s programmes and 14% on national programmes which EMDA delivered on behalf of central government departments. Of the EMDA projects, the shares of expenditure based the IEF intervention categories were about half for business and competitiveness, 40% for physical infrastructure interventions and just over 10% on people and 153 skills . Business and competitiveness intervention expenditure has been increasing faster than the others in recent years with physical infrastructure intervention expenditure being fairly consistent across the expenditure period. Uniquely among the RDAs, EMDA initiated in 2004 a comprehensive evaluation of the impact of its spending before the IEF was developed. As a result, EMDA’s approach to evaluation informed the development of the IEF. EMDA’s approach to evaluation has involved a series of programme level evaluations using a project sampling approach which was designed to provide a reasonable cross-section in terms of expenditure, activities and outputs within different themes. Overall, 248 individual projects were reviewed which covered 28% of total EMDA expenditure from 1999/00 to 2006/07 and 7% of projects. The evaluation surveyed over 1,000 beneficiaries of EMDA funding to understand additionality, plus a booster survey of beneficiaries of business support and property development projects.

152 153

EMDA Annual Report and Accounts 2006-2007.

PwC analysis which was agreed with EMDA.

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EMDA’s approach to the evaluation was consistent across twelve thematic Policy Strands (based on the 2003 RES structure) and the underlying intervention types used to structure the analysis. For each selected project, an assessment was undertaken to quantify the net impact on employment and, thereby, the GVA impact. The outputs from each project review were assigned to individual Strands and intervention types, based on their functionality which were then aggregated across the individual Strands and intervention types. The programme generated individual Strand reports, which are considered Working Papers, and final outputs of an aggregate final report and a technical report setting out the allocations and calculations. The intervention types, not the Strand analysis, are the foundation for the evaluation analysis. Table 57: Analysis of EMDA’s total expenditure by year (1999/2000-2006/07) EMDA programmes and projects

Single Regeneration Budget

National programmes

Administrative costs

Total

1999/00

7.5

33.5

11.0

6.9

59.0

2000/01

26.9

35.2

10.1

11.8

83.9

2001/02

40.9

36.9

10.6

35.3

123.7

2002/03

56.5

31.2

18.6

7.6

114.0

2003/04

72.4

28.6

21.6

63.6

186.2

2004/05

85.7

18.2

16.5

32.8

153.2

2005/06

124.3

11.3

27.1

53.5

216.2

2006/07

122.5

6.1

38.4

21.2

188.2

Total

536.7

201.1

153.9

232.7

1,124.4

Source: PwC analysis based on EMDA evaluation evidence

The evaluations covered 95% of EMDA’s combined Single Programme and SRB expenditure as shown on Table 58. Table 58: Analysis of EMDA’s evaluation coverage (1999/2000-2006/07) Expenditure covered by evaluations (£m)

% of EMDA expenditure covered by evaluation

Business

110.2

100%

Place

241.6

100%

22.4

100%

Other

329.8

89%

Total

703.9

95%

People

Source: PwC analysis based on EMDA evaluation evidence

Key findings This section reports the key findings from EMDA’s evaluation evidence base as a whole. The details of the impact by intervention type are reported in the subsequent sections. The analysis has been undertaken with regard to two key objectives of our work: to summarise the available evidence of EMDA’s impact and to assess EMDA’s achievements against the objectives of both the RES and the Corporate Plan (which have changed over time) and the objectives of the underlying projects and programmes. The key findings consider on three key questions in turn: 

What has been the impact of EMDA’s spending both at the project and programme level and overall?



What does the available evidence suggest has been the value for money of EMDA’s interventions’?

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

How has EMDA performed against its relevant objectives both at the project and programme level and overall in relation to its Corporate Plan and the RES?

Impact First, we summarise the evidence with respect to the impact of EMDA’s relevant spending in the period from 1999/2000 to 2006/07. Table 59 summarises the gross attributed core outputs reported by EMDA to central government since its establishment. The evaluation approach that EMDA undertook is focussed on employment and the related economic output impacts. There was not therefore evaluation information available on the impact from EMDA interventions on other output areas. Table 59: EMDA’s gross outputs achieved (1999/2000-2006/07) Output

Total 154

Number of jobs created or safeguarded

53,145

Number of people assisted to get a job

10,046

Business creation

6,327

Businesses supported

28,891

Public and private regeneration expenditure levered

£223m

Brownfield land remediated

1,367 ha

Number of people assisted with skills development

63,938

Source: EMDA Annual Reports 1999/2000 to 2006/2007

Table 60 highlights the gross and net jobs created and safeguarded – both the currently achieved and those that could potentially arise from currently planned expenditure - as well as the additionality ratios that resulted from evaluation approach. Table 60: EMDA’s gross and net attributable jobs created and safeguarded (1999/2000-2006/07) Jobs created/safeguarded Achieved

Future potential

Gross outputs

27,074

3,727

Net outputs

12,807

1,888

47%

51%

Gross outputs

6,329

1,655

Net outputs

2,776

905

Additionality (%)

44%

55%

Gross outputs

5,113

Net outputs

2,378

Business development and competitiveness

Additionality (%) Regeneration through physical infrastructure

People and skills

154

The numbers in this table do not fully correspond to the figures reported to BERR as they include FDI jobs created (which are

reported to UKTI) and jobs created through RSA and SFIE which are not included in the BERR figures (Source: EMDA email response to PwC query).

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Jobs created/safeguarded Achieved

Future potential

47%

Gross outputs

25,627

Net outputs

10,364

40%

Gross outputs

64,143

5,382

Net outputs

28,326

2,793

44%

52%

Additionality (%) Other

Additionality (%) Total

Additionality (%)

Source: PwC analysis based on EMDA evaluation evidence

The additionality ratios from jobs created and safeguarded derived from the EMDA evaluations are comparable to the averages for all intervention areas from across the RDA evaluation programme of all nine RDAs. The EMDA business development and competitiveness additionality ratios of 47% and 51% are similar to the 48% reported across evaluations across all the RDAs. The additionality ratio for physical regeneration interventions is also similar at 44% and 55% than the national average of 45%. The additionality for people and skills interventions at 47% is closer to the national average additionality for these interventions of 48%. The estimates of net jobs arising from EMDA’s spending have been used to estimate the impact on annual GVA in the East Midlands. With the exception of the projected impacts of the next five or ten years on Table 62, all GVA impacts in this paper are calculated on an annual basis. Again, a distinction is made between the net impact already achieved and the potential additional future impact. Many interventions undertaken by EMDA – such as physical infrastructure – are not expected to have significant immediate impacts though they are designed to support and prepare for longer-term economic impacts in the future. Table 61 summarises the impact of EMDA’s spending expressed as additional GVA per annum. Table 61: EMDA’s net attributable GVA outcomes (1999/2000-2006/07) Intervention type

Achieved GVA (annual, £m)

Future potential GVA (annual, 155 £m)

Achieved & future potential GVA (annual, £m)

Business development and competitiveness

558

639

Physical regeneration

115

153

394

267

347

People and skills Single Regeneration Budget Other National programmes

Source: PwC analysis based on EMDA evaluation evidence

The impacts summarised above have the potential to persist into the future. In the absence of evidence from beneficiaries on persistence, the potential implications of such persistence effects for the impact of

155

This column highlights additional impacts which are expected to be delivered by expenditure that is already underway or planned. Table shows the expected continued impacts from outputs which have already been achieved as well as future potential outputs.

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EMDA’s spending have been examined under two scenarios, with impacts assumed to persist for five and ten years. The results of the analysis are in Table 62 below. These figures are based on EMDA’s allocation of spend to intervention types. They are slightly different to the ones used in this report which have been standardised across the RDAs. Table 62: EMDA’s projected economic impacts (1999/2000-2006/2007) GVA (cumulative, £m) Persistence assumption Business development and competitiveness

5 years

10 years

1,463

2,829

Physical regeneration

613

1,086

People and skills

435

870

1,060

2,120

387

774

1,326

2,501

Single Regeneration Budget Other National programmes

Source: Ecotec, “Present Value of GVA Created by EMDA Spending”

It should be noted that our remit for this work has been to look at the economic impacts of EMDA’s expenditure and activities. We have not considered directly the social or environmental benefits which these activities may have been targeted towards or contributed to. These impacts are likely to have been significant drivers of policy design, delivery and funding in certain areas across the intervention categories. Therefore, some of the economic impacts and value for money measures used in this analysis may understate the true additional wider value which these programmes have contributed to the East Midlands. Strategic Added Value As highlighted in the summary to this report, EMDA’s impact on economic performance and other impacts is more than simply the aggregate of the direct outputs and outcomes. A central tenet to EMDA’s purpose is to ensure that it delivers Strategic Added Value. SAV is generated where the activities and involvement of EMDA deliver outputs and outcomes which would not have occurred without the involvement of the RDA. As the key pan-regional body focused on economic development, EMDA needs to provide leadership and support to enable their own projects and those that others deliver to maximise benefits associated with these programmes. It is important to note that SAV is the impact beyond the direct impact of EMDA expenditure. Much of the impact is associated with ‘soft’ activities such as providing leadership on particular issues and helping to align activities. There are wider benefits related to the development of strategies and aligning of delivery activities which can have wider impacts on the region’s economic and social performance. There are a number of different ways in which EMDA produces SAV. This has been assessed in the evaluation process by looking at six specific dimensions of SAV: engagement with other stakeholders; 156 strategic leadership and catalyst; strategic influence; leverage; synergy; and innovation . The overall assessment of EMDA’s SAV impact is that it has been successful in providing strategic leadership, engagement and influence to support its objectives through “decisive and proactive approach” and pursuing innovative initiatives which have influence beyond the East Midlands. As examples of EMDA’s SAV impacts, the evaluations show impact through supporting and helping others to develop an agreed regional economic policy across a range of bodies, as has been seen with EMDA’s work on the development of the latest RES evidence base. This work programme provided regional partners with access to higher quality evidence to generate the plan and to agree their common purposes and goals. EMDA often brings together a wide range of bodies to work together on complex projects, such as Nottingham BioCity and the Regional Skills Partnership, in a way which aligns and coordinates activities. This should lead to clearer direction, more effective focus of resources and greater

156

Ecotec final report, Section 9.

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efficiencies in expenditure by addressing linked benefits. Given its size, remit and long-term perspective, EMDA can undertake projects which other parties are not able to tackle even though there are wider benefits to the society. Large regeneration and land reclamation projects, such the Avenue Coking Works, require a commitment of funding for the long term to deliver outputs which other parties will be able to build on in the future. EMDA has leveraged into the region an additional £223 million in private and public sector financing though evaluation evidence highlights variance in the leverage outcomes between projects. EMDA has also provided support for innovative delivery options, such as the blueprint programme, which enable the development of better ways of public sector bodies working together and leading to more effective and efficient outcomes. Value for money This section considers the value for money of EMDA’s interventions from two perspectives: 

the GVA to cost ratio; and,



measures of cost per net attributable job created/safeguarded.

Table 63 below shows the value for money estimates of achieved and the achieved plus potential impacts for EMDA’s evaluation. The key points which emerge are that: 

the low cost per net job created/safeguarded of EMDA’s business development and people and skills interventions, although these account for only a modest proportion of its expenditure;



the relatively high GVA to cost ratio of the business development and people and skills interventions; and



the relatively high cost per job of its Physical infrastructure interventions and low GVA to cost ratio, in part reflecting that physical infrastructure interventions will often have a long-term impact leading to further impacts through other interventions which at least partially depend on the outputs of the physical infrastructure projects to deliver their impacts.

Table 63: Summary of value for money across EMDA’s interventions (achieved & future potential outputs) (1999/2000-2006/07) Achieved GVA:cost ratio

Achieved & future potential GVA:cost ratio

Achieved cost per net job (£)

Achieved and potential cost per net job (£)

Business development and competitiveness

5.1

5.8

8,605

7,500

Regeneration through physical 157 infrastructure

0.5

0.6

87,881

72,505

People and skills

4.4

9,405

Single Regeneration Budget

2.0

21,224

Other projects

0.3

144,369

4.0

10,962

1.0

0.9

45,624

48,677

National programmes Business Link 158

Coalfields Programme

157

The potential benefits-to-cost and costs per net job ratios have been adjusted to include an additional £23.3m of expenditure post-2006/2007. 158 Includes adjustment for £79.5m of additional expenditure post 2006/2007.

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Achieved GVA:cost ratio Manufacturing Advisory Service Grants for Research and Development

4.9 n/a

Achieved & future potential GVA:cost ratio

Achieved cost per net job (£)

Achieved and potential cost per net job (£)

4.9

8,465

3.5

n/a

11,900

Selective Finance for Investment

2.9

15,070

Total

1.7

1.9

24,902

21,944



1.7

1.9

24,851

22,621

excluding national programmes

Source: PwC analysis based on EMDA evaluation evidence

In comparison to evaluation results for GVA to cost ratios reported across the RDAs in our programme, EMDA’s achieved results compare well to national averages when compared to the figures for the highlevel IEF intervention categories. EMDA’s business development and competitiveness ratio of 5.0 is noticeably higher than the level reported across the RDAs (2.8). The highest returns are in Business Support (7.3) and in the longer term Inward Investment (8.3 including potential benefits). The achieved business support benefits for business support are higher than the national average (of 4.9) for individual enterprise support. For physical development, EMDA’s 0.5 is comparable to the 0.7 achieved across the network with the highest returns in areas such commercial and industrial site development which are higher than the national averages for achieved results. Many physical infrastructure projects are undertaken in challenging environments where they also need to address social and environment objectives which may the primary reason for the policy and which add to the costs and complexity of delivering outcomes. EMDA’s people and skills GVA to cost return of 4.4 is considerably higher than the national figure (of 0.9). Performance against targets EMDA has met and exceeded most of its government output performance targets, especially in recent years. Across all measures, EMDA exceeded 68% (23 of 34) of its performance targets between 20022003 and 2006-2007, met 24% (8 of 34) and only fell short on three (none since 2003-2004). Table 64 shows the targets and reported outputs for five key gross output measures. Table 64: EMDA’s gross outputs reported to DTI/BERR (2002/2003-2006/2007) Jobs created/ safeguarded

Businesses created

Brownfield land (ha)

People assisted in skills development

Funding levered (£m)

Targets set by BERR

31,194

4,902

572

35,525

145

Achieved EMDA gross outputs reported to BERR

37,325

6,327

719

63,938

239

Number of years when targets met (out of five)

4 out of 5

5 out of 5

3 out of 4

Source: EMDA Annual Accounts 2002/2003 to 2006/2007

Like all the RDAs (except the London Development Agency), EMDA was subject in 2007 to the National Audit Office’s Independent Performance Assessment (IPA) which assesses how well it has responded to the common challenges facing RDAs, namely balancing the interests of the region with national policy requirements, managing the conflicting demands of different regional stakeholders, looking outwards to promote the region while staying focused on what is happening inside and responding to new duties imposed by central government. This assessment sheds some light on how well the Agency has been able to fulfil its role.

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Overall, EMDA was seen as ‘performing strongly’. Its key strengths cited in the IPA included: 

an inclusive and consultative approach to developing the RES and strong alignment between the RES, Corporate Plan and Business Plans for EMDA and SSPs;



impressive delivery of regeneration initiatives across the region;



consistent achievement of financial and output objectives and targets; and



leverage of investment into the region.

No significant areas for development were identified. EMDA’s evaluation programme assessed the performance of nearly 250 projects against their individual objectives. This showed that 90% of projects were considered to have been effective or very effective with regard to outputs and expected outcomes. Tbale 65 shows the assessments across the different Strands. The vast majority of evaluations showed good or reasonable value for money with most assessed as ‘good’. Tourism and culture, enterprising communities, inward investment and international trade, rural development and urban development strands were highlighted as having been particularly successful in meeting their objectives. Failure to meet objectives was associated with specific investments failing to produce their expected outputs, poor take-up rates for some skills and business support interventions and research studies which have not been followed up. Table 65: EMDA’s strand level project evaluation (1999/2000-2006/07) Strand

Number of evaluations

Generated longterm benefits (%)

Effective or very effective (%)

Good / reasonable value for money (%)

Economic Growth, Energy and the Environment

65%

82%

30% / 43%

Employment, Learning and Skills

72%

88%

60% / 32%

Enterprise and Business support

74%

95%

53% / 35%

Enterprising Communities

100%

95%

71% / 19%

43%

86%

43% / 43%

80%

73%

67% / 20%

100%

38% / 25%

Rural Development

87%

91%

57% / 26%

Site Provision and Development

72%

81%

59% / 16%

Transport and Planning

86%

29% / 43%

94%

100%

41% / 26%

68%

95%

64% / 23%

Information and Communications Technology Innovation International Trade and Inward Investment

Tourism, Culture and Sport Urban Regeneration

Source: Ecotec strand reports and Ecotec technical paper, Table 9.7

Impact by intervention We have structured the analysis of EMDA’s expenditure around the three categories of interventions defined within the IEF (i.e. business, place and people) to enable greater alignment with the analysis being undertaken for the other eight RDAs. This has required some reorganisation to the intervention categories used in the EMDA evaluation programme, i.e. moving some interventions classified as ‘other projects’ into the business and place intervention types where appropriate. We have also analysed those

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activities which do not fit readily into one of these three categories as well as the available evidence of the national programmes where EMDA has been responsible for delivery within parameters determined by central government departments. We have summarised the impact of EMDA’s interventions using a common structure: 

we summarise EMDA’s activities, rationales and expenditure in each area;



we report the estimated gross and net outputs arising from this expenditure;



we identify the estimated outcomes related to the outputs which have already been achieved and those which are anticipated; and



we report performance against objectives, where available, for each area.

Business development and competitiveness interventions Rationale The East Midlands has a diversified economy with relatively higher level of enterprise activity relative to its population and economic base. EMDA’s policy focus has been to increase the value added by the region’s businesses and so address the relative decline of manufacturing in the regional economy and improve economic conditions and performance in the struggling areas. There are substantial differences within the region with some former coalfields and rural areas struggling with developing more value added economic activity. Over the period 1999/2000 to 2006/07, EMDA spent £110m on business development and competitiveness interventions which include business support, inward investment and trade promotion, tourism marketing and other interventions as shown on Table 66. Table 66: EMDA’s expenditure covered by evaluations for business development and competitiveness sub-interventions (1999/2000-2006/07) Expenditure covered by evaluations (£m) Business Support

66.5

Inward investment and trade promotion

17.7

Tourism marketing

11.3

Other

14.7

Total

110.2

Source: Ecotec final report, Table 4.4

EMDA’s business development and competitiveness interventions address several market failures as well as equity issues. These interventions provide: 

higher performance and more internationally linked economy benefits which the entire society (externality)



information to improve business performance which may be difficult or costly for businesses to access (imperfect information);



support for the strengthening of the East Midlands’ regional profile (externality); and



specific programmes to support business and new enterprise in deprived locations and among disadvantaged groups (equity).

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Impact EMDA is estimated to have created or safeguarded 27,074 gross jobs through business development and competitiveness interventions since 1999/2000, as shown on Table 67. It also has the potential to add a further 3,727 gross jobs through currently planned expenditure on inward investment interventions. The other interventions have not calculated future potential impacts. Table 67: EMDA’s business development and competitiveness interventions: gross outputs (1999/2000-2006/07) Expenditure covered by evaluations (£m)

Achieved gross jobs created/ safeguarded

Future potential gross jobs created/ safeguarded

Business Support

66.5

22,890

Inward Investment and trade promotion

17.7

3,896

3,727

Tourism marketing

11.3

Other

14.7

267

Total

110.2

27,074

3,727

159

Source: PwC analysis based on Ecotec final report (Table 4.4), technical report (Sections 3, 4 and 6.3) and Additional Queries from PwC: Expenditure, ‘other’ activity and response rates (Working Paper).

Adjusting for additionality and wider economic impacts, the net impacts for EMDA’s business development and competitiveness interventions have produced 12,807 net jobs created or safeguarded with an additional 1,888 net jobs created or safeguarded in the future as shown on Table 68. Table 68: EMDA’s business development and competitiveness interventions: net outputs (1999/2000-2006/07) Expenditure covered by evaluations (£m)

Net jobs created/ safeguarded

Business Support

66.5

11,130

Inward investment and trade promotion

17.7

1,544

1,888

Tourism marketing

11.3

Other

14.7

124

Total

110.2

12,807

1,888

Based on the net jobs created or safeguarded, the estimated annual impact on net GVA outcomes is summarised in Table 69 with an achieved impact of £558m and an additional £81m in potential net GVA.

159

The impacts do not include the 2,000 net short-term employment impacts assessed in the evaluation which covered separately below.

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Table 69: EMDA’s business development and competitiveness interventions: net outcomes (1999/2000-2006/07) Expenditure covered by evaluations (£m)

Achieved GVA (annual, £m)

Future potential 160 GVA (annual, £m)

Business Support

66.5

487

Inward investment and trade promotion

17.7

Tourism marketing

11.3

Other

14.7

Total

110.2

558

Source: PwC analysis based on EMDA evaluation evidence

EMDA’s tourism marketing interventions have also contributed a net 2,000 short-term jobs created to the regional economy. These have been evaluated separately from the other impacts as it was decided that a more conservative approach should be taken with these given the evidence that the impacts were likely to be more temporary in nature compared to other programme impacts. Strategic Added Value Alongside the direct impacts, EMDA has also provided Strategic Added Value which generates additional impact on the region by providing leadership, direction and encouraging collaboration among other activities. The text box below sets out the results from the evaluations around SAV related to business development and competitiveness. EMDA’s business development and competitiveness interventions have been supported by SAV activities to further boost the East Midlands’s businesses and economy. According to EMDA’s “Enterprise” Strand report, EMDA have worked through these projects to build relationships, communicate the content of their programmes to targeted groups and to influence policies and strategies to support their objectives. EMDA have worked with a wide range of both public and private to pursue business development policies. This has required EMDA to play a leadership role in certain cases to develop new interventions and ways of working by coordinating activities towards particular objectives and influencing other parties. EMDA has used its own financial resources to leverage other funds to allow programmes and projects to be undertaken that would not have been otherwise. Finally, EMDA has focussed on ensuring that its activities are able to align with the existing and new policies to develop and deliver interventions which increase business and economic performance and support wider objectives and impacts. Source: EMDA

Value for money In assessing value for money, we have used estimates of both cost per net additional job created/safeguarded and a GVA:cost ratio. The ratio between economic benefit as measured by annual GVA and the cost of EMDA’s business development and competitiveness programmes is set out on Table 70. The highest returns for achieved outputs are for business support though the longer-term impact of inward investment expenditures look likely to be considerable based on the analysis of potential impacts. Many of these interventions are designed to provide long-term benefits and prepare local economic environments to benefit from other interventions and investments by EMDA, other public entities and/or the private sector.

160

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Table 70: EMDA’s achieved and potential GVA to cost ratio for business development and competitiveness interventions (£m) (1999/2000-2006/07) Expenditure covered by evaluations (£m)

Achieved GVA (annual):cost

Achieved & future potential GVA:cost

Business Support

66.5

7.3

Inward Investment and trade promotion

17.7

3.7

8.3

Tourism marketing

11.3

0.0

Other

14.7

0.4

Total

110.2

5.1

5.8

Source: PwC analysis based on EMDA evaluation evidence

In comparison to the national averages for achieved outcome to cost ratios, EMDA’s business interventions perform well. The overall impact of a 5.1 GVA to cost ratio is much higher than the national average (of 2.8). For specific sub-intervention groups, EMDA’s business support ratio of 7.3 is 60% higher than the national ratio (of 4.9). EMDA’s achieved inward investment return is in line with the national figure (of 3.7). The other interventions are smaller in scale and do not have good national comparisons. Cost per net job created or safeguarded for EMDA’s business development and competitiveness programmes is set on Table 71. The lowest achieved cost per net job are for business support interventions, but inward investment interventions have lower cost per net job when potential future impacts are included. Table 71: EMDA’s achieved and potential cost per net job created or safeguarded ratio for business development and competitiveness interventions (1999/2000-2006/07) Expenditure covered by evaluations (£m)

Achieved cost per net job

Achieved & future potential cost per net job

Business Support

66.5

5,977

Inward Investment and trade promotion

17.7

11,476

5,162

Tourism marketing

11.3

1,162,903

Other

14.7

118,662

Total

110.2

8,605

7,500

Source: PwC analysis based on EMDA evaluation evidence

EMDA’s cost per net job for business support, £5,977, is well below the average cost from the overall RDA assessment (of £14,221). EMDA’s cost per net job for inward investment, £11,476, is similar to the average across the RDAs (of £11,563). The impact for tourism marketing is based on permanent jobs and does not include 2,000 short term employment opportunities which are consider in the evaluation to have been created by EMDA’s interventions. Performance against objectives As part of their evaluation programme, Ecotec assessed the performance of nearly 250 EMDA projects was assessed against their objectives. This showed that 90% of projects were considered to have been effective or very effective with regard to outputs and expected outcomes. The majority of projects were assessed as good value for money with many others assessed as reasonable. The assessments related to business development and competitiveness interventions are shown on Table 72. Tourism and culture, enterprising communities, inward investment and international trade and rural development were particularly successful in meeting their objectives. Failure to meet objectives was associated with

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investment failing to meet their potential, poor rake-up rates for business support and research studies which have not been followed up. Table 72: EMDA’s strand level project evaluations linked to business development and competitiveness interventions (1999/2000-2006/07) Strand

Number of evaluations

Generated long-term benefits

Effective or very effective

Good / reasonable value for money

Economic Growth, Energy and the Environment

65%

82%

30% / 43%

Enterprise and Business support

74%

95%

53% / 35%

Enterprising Communities

100%

95%

71% / 19%

43%

86%

43% / 43%

80%

73%

67% / 20%

100%

38% / 25%

87%

91%

57% / 26%

94%

100%

41% / 26%

Information and Communications Technology Innovation International Trade and Inward Investment Rural Development Tourism, Culture and Sport

Source: Ecotec strand reports and Ecotec technical paper, Table 9.7

Regeneration through physical infrastructure interventions Rationale The physical and natural environment varies considerably across the East Midlands. The region’s cities have seen significant growth in recent years as service industries and retail activity have grown alongside the existing manufacturing base. The southern part of the region is linked into the economy of the Greater South East while the northern area links with Greater Manchester, Yorkshire, Humberside and the Sheffield City Region. The northern parts have large former coalfield areas with many areas of postindustrial brownfield land. The east is largely rural and often with relatively low population density. These different conditions have required EMDA to undertake quite diverse investments in physical infrastructure to meet the different sub-regional needs. In the faster growing areas, it has involved land remediation and infrastructure development to support economic growth. In the more deprived or less remote areas, activities have sought to address long-standing regeneration needs, to improve local economic performance and to increase the attractiveness of these areas for investors. EMDA’s expenditure on physical infrastructure interventions addresses a number of market failure rationales as well as addressing wider equity, social and environmental objectives. Interventions that bring brownfield land back into productive use – whether for business or housing – and improve the economic performance on existing sites address issues around negative externalities from a poor quality built and natural environment. They also co-ordinate activity which would be difficult for many private actors to initiate. Public realm and infrastructure activities provide public goods and help to support regional economic performance which provides benefits across society. Physical infrastructure investments can play an important role in improving the East Midlands image with business, investors and the general public which can lead to increased investment confidence and economic activity as areas become easier and more attractive to access. Finally, many physical regeneration projects are in, or linked to, areas with deprivation which is an important issue for the regeneration of the former coalfields areas and some of the urban centres in the East Midlands. Increasing economic, social and environment performance in these areas helps to address equity concerns and can improve social cohesion.

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EMDA has invested £242m in physical infrastructure interventions between its establishment and 2006/07 as shown on Table 73. Table 73: EMDA’s expenditure on physical infrastructure by intervention type (1999/2000-2006/07) Intervention type

161

Expenditure covered by evaluations (£m)

Acquisition plus

7.4

Reclamation

8.4

Reclamation plus

8.1

Site development – commercial

33.3

Site development – industrial

16.4

Site development – mixed

4.5

Site development – housing

11.3

Site development – tourist attractions and cultural infrastructure

21.9

Site development – community, sports and training facilities

34.4

Site servicing

3.8

Acquisition

25.3

Centres of excellence

10.7

Disposal

12.4

Site development – crime reduction initiative

2.8

Site development – public realm improvement

23.0

Technology centre

13.7

Transport infrastructure

4.3

Total

241.6

Source: Ecotec final report (Table 4.4)

Impact EMDA’s physical infrastructure interventions have created or safeguarded 6,329 gross jobs and are estimated to have the potential to create or safeguard a further 1,655 gross jobs in the future based on expenditure that is already currently being planned as shown on Table 74. Table 74: EMDA’s physical infrastructure gross outputs (1999/2000-2006/07) Expenditure covered by evaluations (£m)

Achieved gross jobs created/safeguarded

Future potential gross jobs created/safeguarded

Acquisition plus

7.4

482

Reclamation

8.4

Reclamation plus

8.1

102

122

Site development – commercial

57.7

1,930

1,200

Site development – industrial

16.4

926

4.5

Site development – mixed

161

Centres of Excellence and Technology Centres are included in Site Development – commercial in the impact and value for money analyses.

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Expenditure covered by evaluations (£m)

Achieved gross jobs created/safeguarded

Future potential gross jobs created/safeguarded

Site development – housing

11.3

Site development – tourist attractions and cultural infrastructure

21.9

1,190

Site development – community

34.4

475

3.8

Acquisition

25.3

Disposal

12.4

230

2.8

339

23.0

277

4.3

209

241.6

6,329

1,655

Site servicing

Site development - crime reduction Site development - public realm Transport infrastructure Total

Source: PwC analysis based on Ecotec final report (Table 4.4), technical report (Section 2) and Additional Queries from PwC: Expenditure, ‘other’ activity and response rates (Working Paper)

EMDA’s physical infrastructure interventions have already created or safeguarded 2,749 net jobs and have the potential to create or safeguard a further 905 net jobs as shown on Table 75. Table 75: EMDA’s physical infrastructure net outputs (1999/2000-2006/07) Expenditure covered by evaluations (£m)

Net jobs created/ safeguarded

Acquisition plus

7.4

258

Reclamation

8.4

Reclamation plus

8.1

Site development – commercial

57.7

1,032

652

Site development – industrial

16.4

415

4.5

Site development – housing

11.3

Site development – tourist attractions and cultural infrastructure

21.9

Site development - community

34.4

354

3.8

Acquisition

25.3

Disposal

12.4

106

2.8

157

23.0

128

4.3

241.6

2,749

905

Site development – mixed

Site servicing

Site development - crime reduction Site development - public realm Transport infrastructure Total

Source: PwC analysis based on Ecotec final report (Table 4.4), technical report (Section 2) and Additional Queries from PwC: Expenditure, ‘other’ activity and response rates (Working Paper)

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EMDA’s physical infrastructure interventions has accounted for £115m in additional annual GVA in the East Midlands economy. These interventions are expected to deliver an estimated future impact of £38m per annum to the regional economy. Table 76: EMDA’s physical infrastructure interventions net outcomes (1999/2000-2006/07) Expenditure covered by evaluations (£m)

Achieved GVA (annual, £m)

Future potential GVA (annual, £m)

Acquisition plus

7.4

Reclamation

8.4

Reclamation plus

8.1

Site development – commercial

57.7

Site development – industrial

16.4

4.5

Site development – housing

11.3

Site development – tourist attractions and cultural infrastructure

21.9

Site development - community

34.4

3.8

Acquisition

25.3

Disposal

12.4

2.8

23.0

4.3

114.4

37.6

Site development – mixed

Site Servicing

Site development - crime reduction Site development - public realm Transport infrastructure Total

241.6

Source: PwC analysis based on EMDA evaluation evidence

EMDA’s physical infrastructure interventions have also generated short-term economic impacts through increased construction employment. The evaluation estimates that these activities have generated 3,384 net construction-years with the potential for an additional 449 net construction-years from planned expenditure. These have been estimated to have added £165m to the regional economy with £22m in potential impact linked to future planned expenditure. Strategic Value Added Alongside the direct impacts, EMDA has also provided Strategic Added Value which generates additional impact on the region through a range of activities. The text box below sets out the results from the evaluations around SAV related to physical infrastructure interventions. EMDA’s physical infrastructure interventions require more than just expenditure and the direct impact from projects. EMDA regards its role as a regional intermediary and organiser of activity as a key area for its Strategic Added Value. To generate additional benefit for the region, EMDA undertakes wider SAV activities to increase the benefits related to these activities. One key role which EMDA plays is in taking strategic leadership on large physical infrastructure projects to provide both guidance and direction to other stakeholders. According to EMDA’s “Site Provision and Development” Strand report, this component has been strengthening though there remains the need to continually improve the engagement and consultation process with stakeholders. EMDA expenditure was often able to lever in significant additional public sector funding though there has been less success with private sector leverage according to the project evaluations. There was also feedback that EMDA’s activities were not as potentially innovative as they could have been in some cases. Source: EMDA

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Value for money In assessing the value for money of EMDA’s physical regeneration interventions, we have used estimates of both the GVA to cost ratio and the cost per net additional job created/safeguarded. As shown on Table 77, he highest returns are in those areas where EMDA has supported development that leads directly into business related activities, such as commercial and industrial developments. Table 77: EMDA’s physical infrastructure GVA to cost ratio

162

(1999/2000-2006/07)

Expenditure covered by evaluations (£m)

Achieved GVA (annual):cost

Achieved and potential GVA:cost

Acquisition plus

7.4

1.5

Reclamation

8.4

0.1

Reclamation plus

8.1

0.3

Site development – commercial

57.7

0.7

1.0

Site development – industrial

16.4

1.1

4.5

0.2

0.7

Site development – housing

11.3

0.0

Site development – tourist attractions and cultural infrastructure

21.9

0.1

Site development - community

34.4

0.4

0.5

3.8

0.5

0.9

Acquisition

25.3

0.0

Disposal

12.4

0.4

2.8

2.4

23.0

0.2

4.3

0.9

241.6

0.5

0.6

Site development – mixed

Site Servicing

Site development - crime reduction Site development - public realm Transport infrastructure Total

Source: PwC analysis based on EMDA evaluation evidence

Compared to the national average generated in our review of the RDA evaluations, the EMDA achieved result is marginally below the national achieved GVA to cost ratio of 0.7 but given the large scale of land reclamation sites in non-central areas related to the East Midland’s manufacturing and mining legacy this is not unexpected. The lower benefit levels for public realm interventions are in-line with the national average of 0.3. The cost per net job figures for physical infrastructure interventions are shown in Table 78.

162

The calculation of the GVA to cost ratio for potential benefits has been adjusted to include £23.3m of additional planned expenditure post-2006/2007.

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Table 78: EMDA’s physical infrastructure net cost per jobs

163

(1999/2000-2006/07)

Expenditure covered by evaluations (£m)

Achieved cost per net job (£)

Acquisition plus

7.4

28,605

28,650

Reclamation

8.4

422,450

404,714

Reclamation plus

8.1

149,333

137,483

Site development – commercial

57.7

55,938

41,221

Site development – industrial

16.4

39,446

37,863

4.5

166,667

59,211

Site development – housing

11.3

n/a

Site development – tourist attractions and cultural infrastructure

21.9

377,483

Site development - community

34.4

97,136

87,204

3.8

89,209

48,557

Acquisition

25.3

n/a

Disposal

12.4

116,746

2.8

17,571

23.0

179,031

4.3

43,956

241.6

87,881

72,505

Site development – mixed

Site Servicing

Site development - crime reduction Site development – public realm Transport infrastructure Total

Achieved & future potential cost per net job (£)

Source: PwC analysis based on EMDA evaluation evidence

The cost per net job of EMDA’s physical infrastructure interventions is higher than the overall RDA figure when only the achieved outputs are considered but when the potential impacts from the currently planned expenditure is included the cost per net job is very similar to the national average cost per job figure for physical infrastructure interventions (of £63,271). Performance against objectives As part of their evaluation programme, Ecotec assessed the performance of nearly 250 EMDA projects was assessed against their objectives. This showed that 90% of projects were considered to have been effective or very effective with regard to outputs and expected outcomes. The assessment for projects related to project infrastructure interventions are shown on Table 79. Enterprising communities, rural development and urban development strands were highlighted as having been particularly successful in meeting their objectives. Failure to meet objectives was associated with investment failing to meet their potential and research studies which have not been followed up.

163

The calculation for cost per net jobs for potential benefits has been adjusted to include £23.3m of additional planned expenditure post-2006/2007.

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Table 79: EMDA’s strand level project evaluations related to physical infrastructure interventions (1999/2000-2006/07) Strand

Number of evaluations

Generated long-term benefits

Effective or very effective

Good / reasonable value for money

Enterprising Communities

100%

95%

71% / 19%

Rural Development

87%

91%

57% / 26%

Site Provision and Development

72%

81%

59% / 16%

Transport and Planning

86%

29% / 43%

Urban Regeneration

68%

95%

64% / 23%

Source: Ecotec strand reports and Ecotec technical paper, Table 9.7

People and skills interventions Rationale Since its inception EMDA has sought to make the East Midlands one of Europe’s most economically competitive regions. Ensuring employment in high value-added jobs is a key driver in achieving this. All three of the RESs refer specifically to the importance of the people and skills agenda in meeting EMDA’s economic and social goals. They include initiatives to address both the demand and supply sides of the labour market by promoting skills enhancements and by encouraging firms to increase the quality of the labour that they hire and workers to pursue higher level qualifications. EMDA has also ensured that its employment, learning and skills activities are integrated into the wider national and regional skills and employment strategies. Taken together, the East Midlands has a relatively high employment rate but lower levels of skills than other regions. This has led to EMDA supporting activities which look to address the region’s ‘low skills equilibrium’ and to improve the match between skills demand and supply. The low skills equilibrium – where there is limited demand for higher skills and relatively high rates of employment for those with lower skills – is seen as a barrier for the region’s economic development. Alongside the regional skills profile, there are specific geographical areas within the region which suffer from high levels of deprivation, much of which is linked to worklessness and low skills. These predominate in the inner cities, the former coalfield areas and the more rural and coastal areas although pockets of such deprivation can be found across the region. To address these problems, EMDA has undertaken a series of activities under the Enterprising Communities Strand which aimed to improve the economic performance of these areas and their inhabitants. Impact Since its creation, EMDA has spent £22.4m on its interventions focused on people and skills. As shown on Table 80, the people and skills interventions are estimated to have already created or safeguarded 5,113 jobs, but there are no additional potential benefits for people and skills interventions as their impact is expected to be immediate.

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Table 80: EMDA’s people and skills interventions gross outputs (1999/2000-2006/07) Expenditure covered by evaluations (£m)

People and skills

Achieved gross jobs created/safeguarded

22.4

Future potential gross jobs created/safeguarded

5,113

Source: Economic Impact Assessment – Final Technical Paper for PwC, Table 5.2

The people and skills interventions have contributed 2,378 net jobs created or safeguarded shown on Table 81. Table 81: EMDA’s people and skills interventions net outputs (1999/2000-2006/07) Expenditure covered by evaluations (£m) People and skills

Net jobs created/ safeguarded

22.4

Net jobs created/ safeguarded

2,378

Source: Economic Impact Assessment – Final Technical Paper for PwC, Table 5.2

The evaluation estimates that the impact of EMDA’s expenditure on employment, learning and skills interventions have added £99m annually to the East Midlands’ economy through the net additional jobs created and safeguarded as shown on Table 82. Table 82: EMDA’s people and skills interventions net outcomes (1999/2000-2006/07) Expenditure covered by evaluations (£m) People and skills

Achieved GVA (annual, £m)

22.4

Future potential GVA (annual, £m)

Source: PwC analysis based on EMDA evaluation evidence

Strategic Added Value Alongside the direct impacts of its expenditure, EMDA has also provided Strategic Added Value which generates additional impact on the region through leadership, collaboration and other support. The text box below sets out the results from the evaluations around SAV related to people and skills interventions. People and skills interventions have required EMDA to go beyond the direct impact of its activities to create additional impact through SAV. According to EMDA’s “Employment, Learning and Skills” Strand report, operating in constructive partnership with other organisations, such as the Employment, Skills and Productivity Partnership (the regional skills partnership), has been a key aspect of EMDA’s people and skills activities delivery. EMDA provided strategic direction for economic policy related to people and skills interventions though there are some issues around the effectiveness of the detailed elements of these strategies. EMDA were recognised in the evaluations in linking its projects with activities that other parties were undertaking. There was more limited success in providing strategic influence, leverage and innovation in the people and skills areas which may reflect a relatively low prioritisation of these activities as driving factors within RDA compared to business and physical infrastructure interventions. Source: EMDA

Value for money On a GVA to cost ratio, people and skills interventions deliver 4.4 times as much GVA as their cost as shown on Table 83. This is much higher than the national average of 1.2 for achieved GVA to cost. Table 83: EMDA’s people and skills interventions GVA to cost ratios (1999/2000-2006/07) Expenditure covered by evaluations (£m) People and skills

22.4

Achieved GVA (annual):cost 4.4

Achieved & future potential GVA:cost 4.4

Source: PwC analysis based on EMDA evaluation evidence

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The evaluations estimate that the cost of each net additional job is £9,405 for people and skills interventions as shown on Table 84. This is considerably higher than the £43,302 per net job which have been observed across the evaluations of all the RDAs. Table 84: EMDA’s people and skills interventions cost per net job (1999/2000-2006/07) Expenditure covered by evaluations (£m)

People and skills

22.4

Achieved cost per net job (£)

Achieved & future potential cost per net job (£)

9,405

Source: PwC analysis based on EMDA evaluation evidence

Performance against objectives As part of their evaluation programme, Ecotec assessed the performance of nearly 250 EMDA projects was assessed against their objectives. This showed that 90% of projects were considered to have been effective or very effective with regard to outputs and expected outcomes. The assessment for projects related to people and skills interventions is shown on Table 85. Failure to meet objectives was associated with investment failing to meet their potential, poor take-up rates for skills and research studies which have not been followed up. Table 85: EMDA’s strand level project evaluation linked to people and skills interventions (1999/2000-2006/07) Strand

Employment, Learning and Skills

Number of evaluations 25

Generated longterm benefits 72%

Effective or very effective 88%

Good / reasonable value for money 60% / 32%

Source: Ecotec strand reports and Ecotec technical paper, Table 9.7

Other activities There are two other streams of EMDA expenditure which have been covered by the evaluation but which do not readily fall into any of the intervention types considered in previous sections. These are the Single Regeneration Budget (SRB) and a diverse range of EMDA programmes and projects identified by the evaluators as ‘other’. Rationale EMDA has spent £201m on the SRB programme which was a multi-faceted regeneration programme that delivered a diverse range of interventions spanning business, physical regeneration and people and skills. It sought to simplify and streamline regeneration funding and to promote a new way of tackling the problems faced by disadvantaged communities. The overall aim of the SRB programme was “to enhance the quality of life of local people in areas of need, by reducing the gap between deprived and other areas, 164 and between different groups” . The rationale for SRB centred on the Government’s desire to tackle social exclusion and promote equality of opportunity. The focus of support was on the most deprived communities in England, with the aim of reducing the gap between these areas and the rest of England, and between different groups in society. The aim of EMDA’s evaluation strategy was to provide comprehensive coverage of all its expenditure in the period up to 2006/07. Inevitably, this has meant that some expenditure did not fit easily into the intervention types which were used for the project assessments. It also meant that some early expenditure was difficult to assign to one of the intervention categories. In total, £212m (19% of EMDA’s expenditure from 1999/00 to 2006/07) was categorised by the evaluation as ‘other projects’. We have allocated £16m of these interventions to the Business Development and 164

Department for Communities and Local Government’s SRB website – Background and Overview: see http://www.communities.gov.uk/citiesandregions/regeneration/singleregenerationbudget/221229/.

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Competitiveness section and £67m to the Physical Infrastructure section. The remaining spend, £129m, is covered in the rest of this section as shown on Table 86. In some cases, these activities were linked to identifiable economic outputs whereas in other cases they supported wider EMDA activities and had no direct economic outputs associated with them. Table 86: EMDA’s expenditure on ‘other interventions’ (1999/2000-2006/07) Intervention type

Expenditure covered by evaluations (£m)

Administration, marketing and events

27.3

Capacity building

18.9

Initiatives to reduce energy consumption and minimise waste

1.7

Policy development initiatives and studies

44.6

Rural service delivery

3.3

Miscellaneous others

33.0

Total

128.8

Source: Ecotec, Additional Queries from PwC: Expenditure, ‘other’ activity and response rates (Working Paper)

Inevitably given their diversity of project goals, the rationale for the ‘other’ projects varies significantly between interventions. Economic activity generation and, in particular, employment creation were not the primary motivations in most cases, e.g. policy research or marketing activities. The outputs from many of the projects underpin the overall performance of EMDA, support other projects or work towards meeting other social and environmental goals. Some of the projects have contributed directly to delivering EMDA’s central role in the development and delivery of economic policy in the East Midlands. For example, EMDA’s support and direction in the development of the regional economic strategy has pulled together a large number of different policy Strands together to provide a coordinated vision for the region shared by a wide range of stakeholders and partners. Impact EMDA’s SRB and other activities have created or safeguarded 25,627 net jobs, mostly through SRB as shown on Table 87. Table 87: EMDA’s SRB and other projects gross outputs (1999/2000-2006/07) Expenditure covered by evaluations (£m)

Achieved gross jobs created/safeguarded

Future potential gross jobs created/safeguarded

Single Regeneration Budget

201.1

23,701

Other interventions

128.7

1,926

Total

329.8

25,627

Sources: Ecotec, final report (Table 4.2), technical report (Section 8.6) and Additional Queries from PwC: Expenditure, ‘other’ activity and response rates (Working Paper)

The net outputs were estimated using additionality coefficients for each output drawn from the national 165 evaluation of SRB . In this way, the evaluation was able to derive an estimate of the net outputs which would have arisen without SRB funding. For the other EMDA activities, they were calculated using the

165

The Single Regeneration Budget: A Partnership for Regeneration – The Final Evaluation Report – Department of Land Economy, University of Cambridge, 2003

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average rates for the wider project evaluations. SRB and other projects have created or safeguarded over 10,000 net jobs, again mostly through SRB as shown on Table 88. Table 88: EMDA’s SRB and other projects net outputs (1999/2000-2006/07) Expenditure covered by evaluations (£m)

Net jobs created/ safeguarded

Single Regeneration Budget

201.1

9,473

Other interventions

128.7

891

Total

329.8

10,364

Sources: PwC analysis based on Ecotec, final report (Table 4.2), technical report (Section 8.6) and Additional Queries from PwC: Expenditure, ‘other’ activity and response rates (Working Paper)

Based on the net outputs, net economic outcomes of £433m per annum have been calculated for SRB and other projects as shown on Table 89. Table 89: EMDA’s SRB and other projects net outcomes (1999/2000-2006/07) Expenditure covered by evaluations (£m)

Achieved GVA (annual, £m)

Future potential GVA (annual, £m)

Single Regeneration Budget

201.1

394

Other interventions

128.7

Total

329.8

433

Sources: PwC analysis based on EMDA evaluation evidence

Value for money For EMDA’s other projects, we have calculated value for money calculations based on the cost per net job created and safeguarded shown on Table 91 and for an annual GVA to cost ratio as shown on Table 90. These figures should be treated with considerable care as much of the expenditure for these projects was not designed to generate direct economic impact. They also reflect EMDA’s evaluation approach which was to cover all expenditure comprehensively, whether or not it was designed to generate economic activity directly. Therefore, these figures are not comparable with figures for the three IEF intervention types which are designed to deliver direct economic benefits. Table 90: EMDA’s SRB and other projects GVA to cost ratio (1999/2000-2006/07) Expenditure covered by evaluations (£m)

Achieved GVA (annual):cost

Achieved & future potential GVA:cost

Single Regeneration Budget

201.1

2.0

Other interventions

128.7

0.3

Total

329.8

1.3

Sources: PwC analysis based on EMDA evaluation evidence

The cost per net job ratios for other interventions are higher for other projects than for SRB as shown on Table 91 but this is due to the large amount of expenditure in other projects which is not primarily designed to generate employment and other direct economic impacts.

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Table 91: EMDA’s SRB and other projects net cost per job ratios (1999/2000-2006/07) Expenditure covered by evaluations (£m)

Achieved cost per net job (£)

Achieved & future potential cost per net job (£)

Single Regeneration Budget

201.1

21,224

Other interventions

128.7

144,369

Total

329.8

31,816

Sources: PwC analysis based on EMDA evaluation evidence

National programmes Besides its own projects and programmes, EMDA has been responsible for national programmes which it has delivered within parameters closely defined by central government departments. Table 92 summarises EMDA’s spend since its establishment on the five national programmes covered by EMDA’s evaluations. Table 92: EMDA’s expenditure on national programmes (1999/00-2006/07) National programme

Expenditure (£m)

Business Link

22.4

Coalfields Programme

104.0

Manufacturing Advisory Service

5.0

Grants for Research and Development

4.3

Selective Finance for Investment

18.2

Total

153.9

Source: Ecotec, Evaluating the Impact of East Midlands Development Agency – Final Report, Table 4.2

Impact In the absence of regional-specific evaluations, the potential impact of EMDA’s spending on national programmes has been assessed using the results of the relevant national evaluations. As shown in Table 93, national programmes have already created or safeguarded 6,122 jobs with the potential for an additional 1,850 net jobs to be created or safeguarded. Table 93: EMDA’s national programmes net outputs (1999/2000-2006/07) Expenditure covered by evaluations (£m) Business Link

Net jobs created/ safeguarded

Future potential net jobs created/safeguarded

22.4

2,040

104.0

2,280

1,491

Manufacturing Advisory Service

5.0

596

Grants for Research and Development

4.3

359

18.2

1,206

153.9

6,122

1,850

Coalfields Programme

Selective Finance for Investment Total

Source: Ecotec, final report (Table 4.2) and technical report (Section 8)

The net outcomes impacts of the national programmes on the East Midlands are assessed at £267m per annum and an additional £80m from future impacts as shown on Table 94.

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Table 94: EMDA’s national programmes net outcomes (1999/2000-2006/07) Expenditure covered by evaluations (£m)

Achieved GVA (annual, £m)

Future potential GVA (annual, £m)

22.4

104.0

100

Manufacturing Advisory Service

5.0

Grants for Research and Development

4.3

18.2

153.9

267

Business Link Coalfields Programme

Selective Finance for Investment Total

Source: PwC analysis based on EMDA evaluation evidence

EMDA’s Coalfields Programme have also generated short-term economic impacts through increased construction employment. The evaluation of the Coalfields Programme estimates that these activities have generate 3,095 net construction-years with the potential for an additional 3,552 net constructionyears from planned expenditure. These have been estimated to have added £150m to the regional economy with £173m in potential economic impact. Value for money There are a variety of value for money measures for the national programmes that EMDA has delivered. Returns in economic benefits to costs are shown on Table 95. The highest returns in GVA to cost ratios are for Manufacturing Advisory Service, Business Link and Grants for Research and Development. The lowest is for the Coalfields Programme. These are in-line with what would be expected in comparison to the national averages for RDA interventions which show higher returns for business development interventions as compared to those such as the Coalfields Programme which have a greater place focus. Table 95: EMDA’s national programmes GVA to cost ratio (1999/2000-2006/07) Expenditure covered by evaluations (£m) Business Link

Achieved GVA (annual):cost

Achieved & future potential GVA (annual):cost

22.4

4.0

104.0

1.0

0.9

Manufacturing Advisory Service

5.0

4.9

Grants for Research and Development

4.3

Coalfields Programme

Selective Finance for Investment Total

n/a

166

3.5

18.2

2.9

153.9

1.7

2.3

Source: PwC analysis based on EMDA evaluation evidence

In terms cost per net job, the lowest cost per net job are for Manufacturing Advisory Service, Business Link and, including potential impacts, Grants for Research and Development as shown on Table 96. The highest are for the Coalfields Programme but as stated before these have a wider regeneration focus rather than just job creation and safeguarding.

166

Includes adjustment for £79.5m of additional expenditure post 2006/2007.

100

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Table 96: EMDA’s national programmes cost per net job (1999/2000-2006/07) Expenditure covered by evaluations (£m)

Achieved cost per net job (£)

22.4

10,962

104.0

45,624

48,677

Manufacturing Advisory Service

5.0

8,465

Grants for Research and Development

4.3

n/a

11,900

18.2

15,070

153.9

25,135

19,302

Business Link Coalfields Programme

Selective Finance for Investment Total

Achieved & future potential cost per net job (£)

167

Source: PwC analysis based on EMDA evaluation evidence

167

Includes adjustment for £79.5m of additional expenditure post 2006/2007.

101

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London Development Agency Summary Overview 

Between its creation in 2000 and 2006/07, LDA has spent approximately £2.9bn on a range of interventions designed to stimulate business development and competitiveness, promote regeneration through physical infrastructure and enhance employability and skills.



In the ‘relevant period’ from 2002/03 and 2006/07, LDA spent approximately £1.1bn on programmes and projects which have been the focus of this study. The Single Regeneration Budget is a substantive part of this expenditure, accounting for just under £508m (46% of LDA ‘relevant spending’).



National programmes also account for £90 million.



LDA’s spending on preparations for the 2012 Olympic and Paralympic Games has been excluded from the analysis as its impact will be evaluated separately.



We have reviewed 40 evaluations, covering LDA spend of nearly £863 million (78% of LDA’s relevant expenditure).

Impact 

The evaluations show that LDA has generated significant outputs already: –

over 80,000 jobs have been created and safeguarded, of which 30% are additional at the regional level (i.e. directly attributable to LDA activity);

–

over 90,000 businesses have been assisted, of which 38% are additional;

–

over 5,500 businesses have been created, of which 38% are additional;

–

over 150 hectares of land has been remediated, of which 68% are additional;

–

almost 60,000 people have been assisted into employment, of which 48% are additional; and

–

almost 130,000 skills assists have been delivered, of which 56% are additional.



Significant future potential outputs are also anticipated as schemes are completed, although these estimates are more uncertain. This is particularly true of innovation and physical regeneration interventions, where impact is realised over a longer time period.



In addition to the impact of its project and programme spend, Strategic Added Value (SAV) is a key element of LDA’s impact, particularly in relation to: –

the co-ordination of activities to create synergies and operational efficiencies (as evidenced for example in the BioLondon evaluation);

–

providing a strategic focus (Wembley/Park Royal);

–

influencing the investment decisions of other organisations (Access to Finance);

–

piloting new approaches to service delivery (Secondment Into Knowledge); and

–

improving linkages and partnership working (Wembley/Park Royal).

Value for money 

102

From the evidence collected across all nine regions, we have generated benchmarks (weighted

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averages) of RDA returns on investment for different interventions. The value for money of LDA interventions is broadly consistent compared to these benchmarks, with some above-benchmark and some below-benchmark performance. 

Business interventions have the highest average achieved return. Achieved cumulative GVA to cost ratios for LDA business interventions range from 0.05 to 1 to 33 to 1, with an average cumulative achieved GVA to cost return of 2.1 to 1. The lowest average achieved return is from place interventions, with an average achieved cumulative GVA to cost return of 1.3 to 1.



Place interventions are expected to have the highest average return in the future, at 9.7 to 1, although this is largely based on future potential outputs. The lowest expected return is as a result of people interventions, with an average future potential GVA to cost return of 1.7 to 1.



The achieved and expected returns for the LDA’s business interventions are below the RDA benchmarks but the LDA’s performance in this theme is likely to be understated, because interventions that have reported annual (rather than cumulative) impact are not included in our analysis.



The achieved and future potential returns from the LDA’s physical regeneration interventions are above the RDA benchmarks.



The achieved returns for the LDA’s people and skills interventions are above the RDA benchmark but expected returns are below.

Performance against objectives 

Most evaluations have considered interventions’ performance against objectives but not all were able to provide a full assessment, as many interventions were evaluated at an early stage in their lifecycle. This is particularly true of regeneration and innovation interventions, where benefits typically take time to accrue. Around half of interventions were considered to have met or largely met their objectives.



Many interventions were considered to have successfully met shorter term objectives but to have not (yet) met longer-term objectives.

Context Overview of the London region The administrative area of Greater London was created in 1965 and covers the City of London and 32 London Boroughs. The same area now forms the London region, which covers 1,579 km² and had a 168 2006 mid-year estimated population of 7,512,400 , approximately 12% of the UK total. London is one of the most important business cities in the world, with key industry sectors including financial services, the creative industries, energy, environmental technologies, leisure, entertainment, life sciences, professional services and retail. In 2006, workplace-based gross value added (GVA) in London 169 was £218 billion (19% of the total for the United Kingdom) and GVA per head was £29,000, 55% above 170 the UK average of £19,100 . However, London also has the highest unemployment rate in the UK as a whole, and the three highest unemployment rates at local authority level. Around a fifth of London's 4.6 million jobs are filled by people who live outside the region. The economic interaction between London and its surrounding areas is an important context to understand London’s socio-economic performance, where areas of great wealth creation frequently sit alongside significant economic deprivation. In London itself, two out of five children live in low-income households and almost a third of Londoners are from non-white British ethnic groups.

168

Regional Trends 40, National Statistics, May 2008

169

Regional Trends 40, National Statistics, May 2008

170

Regional Trends 40, National Statistics, May 2008

103

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LDA’s purpose and strategy The London Development Agency (LDA) was established in 2000 and is the RDA which covers Greater London. Its purpose is to promote London's economy and to transform the region through sustainable economic development. In contrast to the eight other RDAs, the restoration of pan-London governance in 2000 and the establishment of the role of the Mayor of London have meant that the LDA is a functional body of the Greater London Authority (GLA) Group, with regional accountability to the elected Mayor. As a member of the GLA Group the LDA is one of four functional bodies accountable to the Mayor, alongside the Metropolitan Police Authority, the London Fire and Emergency Planning Authority and Transport for London. The business of the LDA is overseen by its Board and Executive Committees. The business-led Board gives strategic leadership to the Agency and is accountable to the Mayor for ensuring that the LDA meets its performance targets. Its thirteen members are appointed by the Mayor and reflect a range of interests across the public and private sectors, as well as including four statutory elected members. The LDA’s strategic direction and priorities are aligned with the Economic Development Strategy for London (EDS), which is one of eight that the Mayor is required to produce by law. The Mayor’s EDS is for London, not just the LDA, and sets out the priority programmes to be delivered in London over the coming three years. The 2001 EDS 'Success Through Diversity' was superseded in January 2005 by the current EDS, ‘Sustaining Success’. The LDA also contributes to the delivery of many of the Mayor’s strategies, including the London Plan, and its Corporate Plan is aligned with these responsibilities. The LDA produces a Corporate Plan every year describing how it will deliver the Mayor’s priorities and objectives, as set out in the EDS, in a three-year timeframe. The Plan also sets out how the LDA will meet its output targets, as set by the Mayor and as agreed with central government. The current Corporate Plan covers the period from 2007 to 2010. Delivery of the Corporate Plan is dependent on the partnership and leverage that the LDA can gain from private, public and third sector partners and on its role as a broker or co-ordinator of economic development activity. Both the Mayor’s EDS and the LDA’s Corporate Plan are structured around the themes of places and infrastructure; people; enterprise; and marketing and promotion. In addition, the Mayor and the GLA Group are required to have regard to the achievement of health, equality of opportunity and sustainable development in their activities. These are incorporated into both the EDS and Corporate Plan as crosscutting themes. The LDA’s core reported outputs cover: jobs created or safeguarded; people assisted to get a job; new businesses created and surviving 12 months; businesses assisted to improve their performance; businesses assisted via collaboration with the UK knowledge base; public and private regeneration investment levered; hectares of brownfield land reclaimed and redeveloped; and people assisted in their skills development. The LDA has two additional mayorally-directed core outputs of childcare places facilitated and creation/refurbishment of houses/business units. LDA’s profile In 2006/07 LDA had an annual budget of £546.6 million and including 2006/07.

171

and had spent around £2,858 million

172

up to

Table 97 sets out LDA’s spend by year and by broad intervention category from 1999/2000 to 2006/07; the shaded area highlights the relevant expenditure for this report. The expenditure figures in Table 97 are based on the LDA’s project database, Athena Projects. Allocating this expenditure to the different intervention categories outlined above has not always been straightforward, as programmes do not always fit neatly into one particular category. There can also be difficulties in separating out expenditure for programmes that run over several years.

171

LDA’s 2006/07 gross expenditure figure from LDA Annual Report and Accounts, 2006/07, p.107

172

The £2,858 million expenditure figure includes staff and non-staff administrative costs

104

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Table 97: Analysis of LDA spend by year and by intervention category (£m) Business

Place

People

Hybrid/Other

Marketing & promotion

National programmes

Total

1999/2000

0.0

61.4

0.0

136.4

0.0

197.8

2000/2001

0.5

37.3

5.9

191.1

0.0

1.3

236.1

2001/2002

2.8

54.6

6.5

236.0

2.0

6.0

307.9

2002/2003

8.5

76.9

0.5

208.0

5.5

6.8

306.2

2003/2004

23.3

124.0

7.8

158.9

26.5

18.8

359.3

2004/2005

37.2

213.6

9.0

125.2

31.2

2.6

418.8

2005/2006

43.4

213.0

12.2

116.2

31.4

28.6

444.8

2006/2007

52.0

365.3

36.2

70.3

37.2

25.9

586.9

Total

167.7

1,146.1

78.1

1,242.1

133.8

90.0

2,857.8

Source: PwC analysis of LDA programme expenditure data

The table shows that the majority of LDA spend has occurred in the Place and Hybrid/other categories. The spend in the Hybrid/other category relates to the Single Regeneration Budget (SRB), Corporate Services and Administration and expenditure on Strategic Activities, such as professional fees. Of this, the vast majority of expenditure (£1.1 billion) is attributed to SRB, although only £508 million of that occurred between 2002/03 and 2006/07. The spend in the Place category includes that related to the 2012 Olympic & Paralympic Games, which is out of scope for this report. The national programmes category includes spending on the Regional Innovation Fund, Manufacturing Advisory Service, Regional Tourist Board Support, Business Link, Selective Finance for Investment, Grants for Research and Development and the Phoenix Fund. This impact report focuses on LDA’s spending from 2002/03 to 2006/07. LDA’s relevant expenditure has been calculated using total project expenditure figures for the period after deducting spend on administration, non-cash costs and programmes that are deemed to be out of scope for this project. They consist of national programmes and, exceptionally, £518 million of expenditure in relation to the 2012 Olympic & Paralympic Games, which was excluded with the agreement of the Steering Group on the basis that it is too early to evaluate this expenditure and it will be evaluated as part of the broader evaluation of the 2012 Games. These exclusions reduce the LDA’s total relevant expenditure to £1.106 billion. LDA’s evaluation evidence provides consistent coverage across all the key intervention categories for which the Agency has been responsible. As Table 98 illustrates, in September 2008 LDA had 40 usable evaluations covering 78% of relevant expenditure – a significant increase from the 1% coverage in February 2008. We have assessed the vast majority of this evidence as being wholly or largely fit for our purpose of assessing LDA’s net impact. A full list of the evaluations used for this report is included at Annex C.

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Table 98: Analysis of LDA relevant spend covered by IEF compliant evaluations (2002/03-2006/07) % of spend

Number of evaluations

Business

66.7

Place

64.6

People

92.6

Marketing and Promotion

42.1

Other/hybrid

92.1

National programmes

n/a

Total

78.0

Source: PwC analysis based on LDA evaluation evidence Note: In this report, the LDA’s one Marketing and Promotion evaluation (Visit London) has been included under the Image, Events and Tourism sub-theme in Place.

Key findings This section draws together the key findings from the LDA evaluation evidence, focusing on our two key objectives: to summarise the available evidence of the impact of LDA spending and to assess LDA’s achievements against EDS and Corporate Plan objectives. It considers three key questions in turn: 

What has been the impact of LDA’s spending, both at the project and programme level and overall?



What does the available evidence suggest has been the value for money of LDA’s interventions?



How has LDA performed against its relevant objectives, both at the project and programme level and overall in relation to its Corporate Plan and the EDS?

The ‘core’ gross and net outputs achieved by LDA interventions are summarised in Table 99. Table 99: Gross and net attributable LDA outputs (2002/03-2006/07) Jobs created / safeguarded

Businesses created

Businesses supported

Brownfield land (ha)

Employment support

People assisted in skills development

Business development and competitiveness Gross outputs achieved

30,584

1,963

22,124

11,901

3,549

531

4,226

3,177

12%

27%

19%

27%

414

220

1,907

Future potential net outputs

1,213

190

2,455

Additionality % future potential

293%

86%

129%

89.5

116

Net outputs achieved Additionality % achieved Future potential gross outputs

Regeneration through physical infrastructure Gross outputs achieved

106

5,424

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Jobs created / safeguarded

Businesses created

Businesses supported

Brownfield land (ha)

Employment support

People assisted in skills development

1,998

76.5

116

37%

85%

100%

20,314

7,267

36%

100%

40%

207

3,965

33,006

59,316

2,795

12,250

36,225

25%

70%

37%

61%

Future potential gross outputs

577

Future potential net outputs

120

Additionality % future potential

21%

Gross outputs achieved

43,981

3,598

66,065

24,910

61,187

Net outputs achieved

18,333

1,583

28,408

15,444

34,265

42%

44%

43%

49%

62%

56%

Gross outputs achieved

80,196

5,580

92,154

167.5

57,916

132,520

Net outputs achieved

23,931

2,114

35,429

114.5

27,694

73,783

30%

38%

68%

48%

56%

20,728

220

2,509

8,480

246

2,585

41%

112%

100%

103%

Net outputs achieved Additionality % achieved Future potential gross outputs Future potential net outputs Additionality % future potential People and skills Gross outputs achieved Net outputs achieved Additionality % achieved

Single Regeneration Budget

Additionality % achieved Totals

Additionality % achieved Future potential gross outputs Future potential net outputs Additionality % future potential

Source: PwC analysis based on LDA evaluation evidence Note:

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(i) Gross and net figures for businesses created and businesses assisted in the three evaluated area

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programmes (London Riverside, Wembley/Park Royal and Woolwich/North Bexley) have been recorded under the Business Development and Competitiveness theme (ii) SRB employment support outputs are from output category 1D (Number of residents accessing employment through training advice) (iii) The dashes in this and all future tables mean “not assessed or not relevant”

In net terms, LDA’s spending between 2002/03 and 2006/07 has created and safeguarded around 24,000 jobs, assisted more than 35,000 businesses, helped to create over 2,000 new businesses, remediated over 100 hectares of brownfield land, provided employment support to over 27,000 people and assisted almost 75,000 people in their skills development. In addition, there are over 8,000 net jobs forecast to be created or safeguarded in the future, mostly as a result of the LDA’s large area-related physical infrastructure investments. All these future outputs are subject to varying degrees of uncertainty. The available gross and net output information varies across different outputs and themes, with the most information on additionality available for jobs created and safeguarded. Across the LDA’s activities as a whole, 30% of the jobs created or safeguarded by the LDA’s activities have been additional. The additionality of both business creation and business support is 38%; the land that has been remediated has been 68% additional; employment support has been 48% additional and the additionality of skills outputs has been 56%. There is a relatively low level of additionality for business interventions, compared with other types of intervention. At 12%, the additionality of jobs created through business interventions is lower than for regeneration interventions (37%), the Single Regeneration Budget (SRB) programme (42%) or people and skills interventions (25%). It is also lower than the 48% additionality achieved for job creation through business interventions across the RDA network. However, this 12% figure is significantly skewed by two evaluations (Up & Running and the Sub-Regional Partners’ Business Retention (SRPBR) programme) that have reported unusually low levels of additionality. Without these two evaluations the additionality of job creation in the LDA’s business interventions would be 43%, which is comparable to both other LDA intervention types and to the RDA average, and the additionality of the LDA’s overall job creation would be 41% instead of 30%. Beyond job creation, the additionality of LDA’s business interventions appears to be lower than for other intervention types. The proportion of net businesses supported is lower for business interventions (19%) than for people and skills (70%) or SRB (43%), and the additionality of skills outputs is lower for business interventions (27%) than for people and skills (61%) or SRB (56%). The additionality of jobs created through regeneration interventions (37%) is 8% lower than the average for job creation through regeneration activities across the RDA network (45%). At 85%, the additionality of land remediation through regeneration activities is 21% higher than the RDA average (64%). The additionality of jobs created through people and skills interventions (25%) is lower than the RDA average (48%); however, the numbers involved are very small and most evaluated LDA interventions in this theme focus on assisting people into employment, rather than creating jobs. Assisting people into employment is a related but different measurement to job creation and the 28,000 net people assisted into employment are not included in the jobs created figures. The additionality levels of employment support (48%) and skills assists (61%) through people and skills interventions are broadly in line with the averages across the RDA network (51% and 62% respectively). Information about future potential outputs is somewhat limited, as not all evaluations will have assessed future gross and net potential outputs. The output category with most information available on future potential outputs is jobs created and safeguarded, mostly through physical regeneration interventions. The additionality of future potential jobs created is expected to be 41%. Table 100 shows the estimated net outcomes associated with LDA’s investment. They are expressed in terms of additional GVA and aggregated across programmes where such an estimate has been generated. The table distinguishes between achieved and future potential impacts on GVA, and between cumulative and annual impacts.

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Table 100: Outcomes from the evaluation of LDA interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved GVA (annual, £m)

Future potential GVA (annual, £m)

Achieved GVA (cumulative, £m)

Future potential GVA (cumulative, £m)

Achieved & future potential GVA (cumulative, £m)

Business development and competitiveness Access to Finance

19.8

105.4

Business London

1.8

14.4

26.1

Supply London

1.6

4.8

2.4

7.2

London Value Chain

0.9

1.4

0.7

2.0

Collage Arts

1.0

0.1

0.2

Heathrow City Enterprise Project

0.7

0.3

0.2

0.5

Centre for Fashion Enterprise

2.2

0.2

BioLondon

24.4

20.8

JumpStart

3.4

5.5

0.6

Pre-Commercial Fund

5.6

3.2

Secondment Into Knowledge

0.3

22.3

12.6

SME Innovation Support

1.3

1.0

2.0

Regeneration through physical infrastructure London Riverside

77.4

206.5

668.7

875.2

Wembley/Park Royal

85.8

674.1

Woolwich/North Bexley

23.3

53.0

237.0

290.0

Laban Dance Centre

2.9

3.0

34.0

37.0

LDA/ESF Cofinancing Programme

9.5

6.7

ESF RSP Productivity

0.9

1.1

Non-ESF RSP Productivity

2.3

1.9

ESF RSP Inclusion

1.5

4.2

Non-ESF RSP Inclusion

1.8

LDA Opportunities Fund Round 1 (ESF and non-ESF)

12.9

27.9

Refugee and Migrant Qualifications

0.3

0.5

People and skills

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On Your Marks

Expenditure covered by evaluations (£m)

Achieved GVA (annual, £m)

Future potential GVA (annual, £m)

Achieved GVA (cumulative, £m)

Future potential GVA (cumulative, £m)

Achieved & future potential GVA (cumulative, £m)

0.6

1.0

507.8

1,004.9

6.8

12.3

Other interventions Single Regeneration Budget National programmes Manufacturing Advisory Service

Source: PwC analysis based on LDA evaluation evidence Notes:

(i) Figures for the London Riverside and Refugee & Migrant Qualifications Programmes are to March 2008 (ii) London Riverside, Wembley/Park Royal and Woolwich/North Bexley reported impacts are regional

This analysis should be interpreted with caution, as: 

GVA has not been measured consistently across these evaluations;



we have presented central estimates for some interventions where impact has been reported as a range;



future potential impacts are subject to uncertainty;



assumptions about the persistence of benefits have been made inconsistently;



future potential GVA has not always been discounted; and



the estimates are not presented on a consistent price basis.

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LDA’s Strategic Added Value 

Co-ordinating activities to create synergies: in some instances, LDA is considered to have helped increase synergies and operational efficiencies in partner organisations. For example, the LDA’s BioLondon activities have included helping to merge four sub-regional NHS Intellectual Property Hubs into one pan-London body – NHS Innovations London – which has improved the organisation of health innovation activity and leading to improved financial and operational benefits. Without the LDA’s assistance, the BioLondon evaluation considers it unlikely that the Office of Science and Technology or the Department of Health would have supported the venture, which has been running 173 since 2004. The BioLondon evaluation also credits the LDA with playing a significant role in 174 helping to co-ordinate a previously fragmented life sciences sector.



Providing a strategic focus: in some instances, LDA is considered to have helped provide a strategic focus. For example, the LDA’s activities in the Wembley/Park Royal area programme are considered by the programme’s evaluation to have provided a distinct (and welcome) focus on the Wembley/Park Royal sub-regional economy, in contrast to the more rigid focus on geographical 175 boundaries held by some other public sector agencies in the area . The LDA’s approach is considered to have helped to facilitate more joint working across organisational boundaries. Over the lifetime of the intervention, the Wembley/Park Royal area programme is expected to achieve a potential return on investment of 7.8 to 1.



Influencing investments by private sector investors: in some instances, LDA is considered to have helped influence the operational and investment decisions of other organisations. For example, the LDA’s Access to Finance evaluation reports that the LDA discussed the need for an investment readiness support programme with a leading corporate advisory firm for five years before launching their Gateway to Investment (G2i) programme. As a result of the LDA’s involvement, the corporate advisory firm brought together a consortium of key players in the early-stage equity business. The 176 consortium says that this arrangement “would never have happened without the LDA” and the G2i programme is estimated to have achieved a current return on investment of 12.5 to 1.

Source: LDA

Value for money We have considered the value for money of the LDA’s interventions from two perspectives: 

the GVA to cost ratio; and, especially where this is not available,



measures of cost per unit of net output, using a range of measures where these are available.

We have also sought to compare the value for money of LDA interventions with those across the RDA network. We have derived RDA benchmarks for returns on investment and unit costs, using the evaluation evidence available across the RDA network. When reviewing these value for money figures, it is important to remember that in this table the achieved GVA to cost ratio measures the impacts of current outputs, whereas the benefit-cost ratio (BCR) measures total costs and benefits over the lifetime of the project, including the expected persistent effects of benefits. Although benefit-cost ratios are the LDA’s preferred value for money methodology, and will form the backbone of value for money judgements in the LDA’s future evaluation programme, we have used GVA to cost ratios in this analysis as they are available more consistently across the RDA network and have formed the basis of our RDA benchmarking work. Table 101 shows the aggregated value for money calculations across the LDA’s interventions. 173

BioLondon: London’s Life Sciences Strategy and Action Plan, Interim Economic Impact Evaluation – DTZ (August 2008), p.57

174

BioLondon: London’s Life Sciences Strategy and Action Plan, Interim Economic Impact Evaluation – DTZ (August 2008), p.74

175

Area Evaluation: Park Royal/Wembley – SQW Consulting (September 2008), p.145

176

Impact evaluation of four Access to Finance projects – SQW Consulting (September 2008), p.138

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Table 101: Summary of LDA value for money from evaluated interventions (2002/03-2006/07) Achieved GVA:cost ratio

Benefitcost ratio

177

Cost per net job (£)

Cost per net business assist (£)

Cost per net business created (£)

Cost per net skills assist (£)

Business development and competitiveness Access to Finance 

Objective 2

3.8

3.5



Pan-London

25.0

20.5



G2i

12.5

15.0



CBA

33.0

32.0

Up and Running

n/a

1,990

1,591

7,966

Business London

2.83

2,733

493

53,212

2.6

28,554 (achieved); 12,804 (potential)

0.93

1.8

10,360 (achieved); 9,797 (potential)

11,579

Collage Arts

0.05

0.2

Heathrow City Enterprise Project

0.23

0.7

Centre for Fashion Enterprise

n/a

259,000

345,000

BioLondon

1.9 - 2.3

JumpStart

5.54

13,000

Pre-Commercial Fund

0.45 - 0.55

2.2 - 3.5

217,000

Secondment Into Knowledge

71,100

SME Innovation Support

0.44

1.1 - 7.2

106,200

Enhance

1.08

1.3 - 2.4

Supply London

London Value Chain

London Fashion Forum

1.08

Regeneration through physical infrastructure

London Riverside

177

1.6 (achieved); 6.3 (potential)

15,000 (Enterprise support); 242,000 (Capital projects);

3,900 (Enterprise support); 10,600 (Capital Projects)

99,000 (Enterprise support)

1,100 18,000 (Enterprise support); 900 - 4,000 (Matching

This table only includes those evaluations that contained an assessment of value for money.

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Achieved GVA:cost ratio

Benefitcost ratio

Cost per net job (£)

Cost per net business assist (£)

Cost per net business created (£)

15,000 (Matching people to jobs)

Cost per net skills assist (£) people to jobs)

Wembley/Park Royal

7.8 (potential)

29,873

8,409

48,163

Woolwich/North Bexley

3.6 (potential)

37,900 39,400

34,700

9,200 (Matching people to jobs)

3.6

37,000

Thames Gateway Jobnet

3.6

6.9

7,173

LDA/ESF Cofinancing Programme

1.1

2.7

18,403 31,412

ESF RSP Productivity

0.8

1.2

18,410 26,642

Non-ESF RSP Productivity

0.7

1.2

1,211 - 23,853

ESF RSP Inclusion

1.7

2.2

13,803 36,602

Non-ESF RSP Inclusion

0.7

1.1

6,571 - 26,077

ESF 1.0

ESF 2.2

Non-ESF 0.7

Non-ESF 1.8

Refugee and Migrant Qualifications

1.5

2.2

49,614 793,832

On Your Marks

0.6

1.4

16,937

2.0

1.6

Laban Dance Centre 178

People and skills

Opportunities Fund Round 1 (ESF and non-ESF)

ESF 8,186 42,853 Non-ESF 15,128 25,577

Other/hybrid interventions Single Regeneration Budget National programmes Manufacturing Advisory Service

Source: PwC analysis based on LDA evaluation evidence Notes:

(i) Figures for the London Riverside and Refugee & Migrant Qualifications Programmes are to March 2008

178

With the exception of Thames Gateway Jobnet, People and Skills unit costs are for gross basic and Level 2 skills assists, as net unit cost information was not calculated

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(ii) London Riverside, Wembley/Park Royal and Woolwich/North Bexley reported impacts are regional

The cumulative achieved GVA return on investment of LDA’s evaluated interventions is 1.8 to 1 (based on an estimated cumulative GVA impact of £1,458m from £797m of interventions that have assessed cumulative GVA impact). This is expected to rise to 3.9 to 1, including future potential outputs (based on an expected cumulative GVA impact of £3,075m). The LDA’s business interventions have achieved the highest return on investment to date, at an estimated average of 2.1 to 1. Physical regeneration interventions have achieved an average return of 1.4 to 1 and people and skills interventions have achieved an average return of 1.3 to 1. When the GVA impacts of expected future potential outputs are included, physical regeneration interventions are expected to achieve the highest average return on LDA investment, at 9.7 to 1. Business interventions are expected to achieve an average 5.0 to 1 return in the future and people and skills interventions an average 1.7 to 1 return. The estimated achieved and expected returns for the LDA’s business interventions are both below the RDA benchmarks of 2.8 to 1 and 11.6 to 1 respectively but the LDA’s performance in this theme is likely to be understated, because interventions that have reported annual impact are not included in our analysis. The achieved and future potential returns from LDA physical regeneration interventions are both above the RDA benchmarks of 0.7 to 1 and 8.0 to 1 respectively. The achieved returns for LDA people and skills interventions are above the benchmark of 0.9 to 1 but expected returns are below the benchmark of 2.5 to 1. Our analysis shows that some programmes have already achieved GVA returns which exceed their investment. Of the LDA’s evaluated business development and competitiveness interventions, access to finance projects (under the enterprise support sub-theme) have generally achieved the highest returns to date. The evaluated sector and cluster support projects have produced a low return on investment. The evaluated science, innovation and R&D projects have achieved mixed returns to date but are expected to generate positive long-term returns, which is a reflection of the time lags between investment and returns associated with interventions in this area. Evaluated enterprise support interventions achieved a mixed performance against the RDA benchmark for achieved GVA to cost returns of 4.9 to 1. Three projects generated returns above the benchmark but four others all generated below-benchmark returns. The two evaluated sector/cluster support projects with value for money information both generated GVA to cost returns below the benchmark of 3.2 to 1. The value for money performance of the evaluated science, innovation and R&D projects was mixed, with two achieving returns well above the RDA benchmark of 1.1 to 1 and two others achieving returns on investment below the benchmark. For regeneration through physical infrastructure interventions, the LDA’s three evaluated area programmes (London Riverside, Wembley/Park Royal and Woolwich/North Bexley) are all expected to achieve positive returns in the future. Given the long-term nature of these interventions and their impacts, a substantial proportion of the benefits of these programmes are still to be realised, and the nature of these potential GVA to cost returns will depend on whether the expected benefits are realised. The area programmes are expected to generally perform well against value for money benchmarks over time. The LDA’s two biggest evaluated area programmes (London Riverside and Wembley/Park Royal) are both expected to achieve returns consistent with the benchmark of GVA to cost (including future potential outputs) for regeneration interventions of 8.0 to 1. The LDA’s people and skills projects have achieved mixed returns to date, with many current GVA to cost ratios near or below 1 to 1. All projects are expected by their evaluations to achieve returns above 1, once all benefits and their expected persistence are taken into account. The GVA to cost returns achieved have generally been relatively similar to the RDA benchmark of 0.9 to 1, although three projects achieved returns well above the benchmark. From our calculations of Single Regeneration Budget GVA impacts, based on the net jobs totals reported in the SRB meta-evaluation, we estimate the SRB programme generated a GVA to cost return of 2.0 to 1. Our calculations of the estimated GVA impact of national programmes also show positive returns.

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A range of cost per unit of output measures have been calculated, with most information available for cost per net job. Business development and competitiveness programmes have achieved the lowest cost per net job compared to other intervention categories, although there is significant variation within that intervention type. For example, enterprise support interventions have achieved the lowest cost per net job, with science/innovation programmes significantly higher (although their focus is often wider than creating and safeguarding jobs). The cost per output figures vary significantly within and between the three area interventions, reflecting the diverse nature of those programmes; the unit costs of all are expected to fall over time, as more of the potential benefits of the programmes are realised. For the LDA’s skills interventions only gross cost per job information is available; it shows a relative consistency across most of the programmes evaluated. Of the four enterprise support interventions with unit cost information (Up and Running, Business London, Supply London and London Value Chain), two programmes performed strongly against all unit cost benchmarks (£8,301 per net job, £74,196 per net business created and £8,502 per net business assisted); two others were above the cost per net job benchmark at the time of evaluation but were anticipated to achieve near-benchmark value for money performance over time. Unit cost information is only available for two sector/cluster support projects, with one above the RDA benchmark of £12,135 per net job and one slightly below. Unit cost information is available for cost per job in four of the science, innovation and R&D evaluations. Again the performance is mixed, with one project below the cost per job benchmark of £37,938 but three above. Unit cost information for regeneration through physical infrastructure interventions is generally positive too, with three of four programmes with unit cost information achieving a cost per net job below the RDA regeneration benchmark of £63,271. The net unit cost information available for the LDA’s people and skills interventions is very limited, with no cost per net job information available and cost per net skills assist information only available for two interventions (London Riverside and Thames Gateway Jobnet). The available information on skills unit costs is mixed, with one intervention achieving a cost per skills assist below the people and skills benchmark of £1,960 and one above. It is recognised that the tables above will not capture some of the wider impacts of these interventions, such as raising confidence in an area. It is also recognised that cost per net job is not a universallyappropriate indicator of unit costs for every project. Performance against objectives The LDA has been set a series of targets by the Mayor, to deliver outputs prescribed by DTI/BERR for all RDAs. All targets have been exceeded, particularly for jobs created and people assisted in skills development, and across almost all years for which targets have been set. Table 102 presents LDA’s performance against target information, based upon performance reported to DTIBERR. Table 102: Comparison of LDA performance against output targets (2002/03-2006/07) Jobs created/ safeguarded

Businesses created

Brownfield land (ha)

179

People assisted in skills development

Funding levered (£m)

Targets set by Mayor

58,700

6,590

220

112,625

1,100

Achieved LDA gross outputs reported to DTI/BERR

88,433

8,993

323

163,291

1,360

Number of years when targets met Source: DTI/BERR and PwC analysis

179

Based on information from LDA Annual Reports

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The LDA’s performance against the objectives for each of the individual intervention types covered by the evaluation evidence is set out in Table 103. It shows that 41 evaluations considered interventions’ performance against objectives. Of those 41, around half were considered to have met or largely met their objectives – 12 out of 21 business interventions, 3 out of 6 place interventions and 5 out of 14 people interventions. Few evaluations considered interventions to have fully met or exceeded their objectives and several reported a mixed performance. There are two main reasons for this: 

firstly, several interventions were evaluated at an early stage in their lifecycle – this is particularly true of the LDA’s regeneration interventions, where performance was assessed roughly five years into programmes that are designed to last for fifteen or twenty years, and for innovation projects, where benefits typically take time to accrue; and



secondly, many interventions were considered to have successfully met shorter term objectives such as engagement and awareness raising but to have not met longer term, more ambitious objectives such as altering service delivery models or establishing a cultural quarter.

Table 103: Comparison of performance against objectives across LDA evaluations (2002/032006/07) Exceeded

Met

Largely met

Mixed

Limited performa nce

Not assessed

Total

Business Evaluations

Spend (£m)

0.5

70.1

19.1

10.1

99.8

Evaluations

Spend (£m)

90.9

67.9

45.8

204.6

Evaluations

Spend (£m)

3.6

23.3

21.2

2.8

50.9

Evaluations

Spend (£m)

507.8

Evaluations

Spend (£m)

4.1

184.3

108.2

10.1

556.4

Place

People

Other

Total 180

863.1

Source: PwC analysis based on LDA evaluation evidence

The evaluations of the LDA’s enterprise support programmes were generally positive but indicated that performance has generally been stronger at meeting short-term objectives (particularly around engagement and awareness raising) than at achieving longer-term objectives or effecting structural change. The evaluations of projects that aimed to deliver sector or cluster support were generally negative, with performance against objectives considered to be mixed. Again, the information suggests

180

The total of evaluations shown in Table 7 is higher than the total number of evaluations recorded in Table 2, as the performance of the area programmes has been assessed under more than one IEF theme.

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that shorter-term objectives have been met more successfully than longer-term goals, with limited additional impact reported. The evaluations of the LDA’s projects and programmes related to science, R&D and innovation are generally positive about performance, with most interventions considered to have largely met their objectives. The LDA’s life sciences programme is considered to have been an important contributor to employment in the sector, and innovation projects are judged by their evaluators as having successfully facilitated engagement and collaboration between business and academia, with positive feedback from university and business beneficiaries. The evidence available for inward investment interventions suggests that tourism-related interventions have had more impact than business focused interventions. However, the LDA’s largest inward investment project – Think London/London First – has not been evaluated as part of this process, which means that the evidence available for this area is limited. Evidence about sustainable consumption and production interventions is also limited, with just one evaluation included in our analysis. Although considered by its evaluation to have been relatively successful, the programme was on too small a scale to have had any significant impact or to draw wider conclusions about the LDA’s activity in this area. The LDA’s evaluated area programmes are large, multi-faceted interventions, which have cut across investment themes but are predominantly focused on regeneration. All three are long-term programmes, taking place in relatively deprived areas of London. The evaluations of all three are broadly positive, with many shorter-term objectives (such as remediating land and providing business/skills support) having been met, providing a platform for future economic activity. There is also some evidence that all three areas are becoming more sought after for housing and/or business space. However, the final impacts of these programmes are unlikely to be known for several years. The evaluated building-specific capital projects appear to have had limited success so far but were all evaluated at an early stage in their lifecycle, which made it difficult for evaluators to assess impact. However, the evaluations refer to difficulties in project management and administration, including delays and cost over-runs. Many of the LDA’s people and skills projects have taken place in conjunction with the European Social Fund. Beneficiaries that have taken part in the projects have generally reported positive benefits from being involved, such as improved communication skills, new qualifications and access to new or better jobs. However, many of the evaluations noted only limited progress on achieving longer-term objectives such as helping those at risk of exclusion from or disadvantaged within the labour market, meeting skills shortages or increasing the management skills of small businesses. The SRB programme was not subject to a detailed assessment of its performance against objectives. In terms of its performance against output targets, it is possible to say that SRB met its output targets for creating jobs and businesses but fell short of targets for land remediation, skills development and community enterprise creation. In terms of overall organisational performance, the LDA, as part of the Greater London Authority, received an Initial Performance Assessment (IPA) in November 2004 from the Audit Commission. The IPA was similar to a Comprehensive Performance Assessment of a local council and assessed the performance of the GLA and its functional bodies in the delivery of their services (the other eight RDAs were subject to the National Audit Office’s Independent Performance Assessment). The LDA was assessed in the 2004 IPA as a “good” organisation, which had recognised the need for improvement to deliver its “complex and challenging” agenda over the long term. Its work was considered to be based on a well-founded analysis of London’s economic and social circumstances, with an “acute assessment of where it can intervene and invest most effectively to secure its objectives”. The IPA praised the LDA for the strength of its leadership, investment plans, stakeholder engagement, focus and for its contribution to major infrastructure developments. Against this, the LDA’s weaknesses were considered to be its internal communication, partnership working, skills gaps and performance

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management. The IPA was primarily concerned with the LDA’s organisational processes rather than impact, which is the focus of our work. Wider economic performance Our analysis shows that evaluated LDA spend of £841m has already resulted in an estimated impact on GVA of approximately £1,693m between 2002/03 and 2006/07, and is expected to contribute a further £1.6bn to the London economy in future years. This is in the context of a £44bn growth in the London 181 regional economy between 2002 and 2006, from £174bn to £218bn . The LDA’s investment is estimated to have created or safeguarded 28,400 net jobs over the period from 182 2002/03 to 2006/07. Between 2002 and 2007 the number of jobs in the region increased by 190,000 . The LDA’s interventions make a comparatively small impact on the London economy. However, that impact is broadly commensurate with the LDA’s modest budget in comparison with the size of the London economy and with other flows of funds from the public sector.

Impact by intervention We have structured the analysis of the impact of LDA’s spending, where possible, according to the three categories of intervention defined within the IEF (i.e. business, place and people). We have also analysed the impact of LDA’s other activities that span more than one of these categories, particularly the Single Regeneration Budget, as well as the available evidence of the impact of the nine national programmes where LDA has been responsible for delivery within parameters determined by central government departments. We have summarised the impact of LDA’s interventions using a common structure in which: 

we summarise LDA’s activities and expenditure on each programme;



we report the estimated net outputs arising from this expenditure (i.e. the additional outputs that are as a result of the intervention);



we distinguish between those outcomes which have already been achieved and those future potential impacts which are anticipated in the future as interventions are completed and/or their impacts persist; and



we summarise performance against objectives and the outcomes, where available, for each programme.

Business development and competitiveness interventions Rationale London has a large and diverse business sector, which makes a significant contribution to the UK and global economies. London’s first EDS, Success Through Diversity (2001), aimed for economic growth while at the same time promoting inclusion and diversity, with central themes of economic growth; knowledge and learning; diversity, inclusion and renewal; and sustainable development. The most recent EDS, Sustaining Success (2005), looks to maintain the success of London’s economy, which is considered to be increasingly driven by “competitive, high-wage businesses that are more productive 183 than average UK businesses” . The four main enterprise-related objectives in the 2005 EDS are: 

to address barriers to enterprise start-up, growth and competitiveness;



to maintain London’s position as a key enterprise and trading location;

181

Regional GVA, National Statistics, 2006.

182

London Economic Outlook, Autumn 2008, Greater London Authority Sustaining Success (2005)

183

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

to improve the skills of the workforce; and



to maximise the productivity and innovation potential of London’s enterprises.

The 2005 EDS objectives in relation to marketing and promotion are also relevant in this theme: 

ensure a coherent approach to marketing and promoting London;



co-ordinate effective marketing and promotion activities across London; and



maintain and develop London as a top international destination and principal UK gateway for visitors, tourism and investment.

The EDSs have formed the backdrop for a variety of business-related interventions between 2002/03 and 2006/07. This section covers 20 evaluations under the theme of business development and competitiveness. Enterprise support initiatives sought to help businesses (typically small and medium-sized enterprises (SMEs)) to overcome information barriers about the type of support available to them and to provide advice, skills, mentoring and support to help them meet their business needs. Interventions were developed in response to circumstances such as SMEs struggling to access sufficient finance, low business survival rates, low numbers of SMEs winning public sector contracts and low levels of economic activity and business start-up rates. Sector/cluster support initiatives had a particular emphasis on the cultural and creative sectors, through business support, co-ordination and initiatives to expand markets. Interventions were developed to respond to information and co-ordination failures that were perceived to be preventing the target beneficiaries from operating with maximum effectiveness or, in one case, from maximising the opportunities from beneficiaries’ proximity to a major international airport. Science, innovation and R&D interventions aimed to develop London’s innovation role in the UK and beyond, by developing a life sciences cluster, increasing collaboration between business and academia, supporting pre-commercial product development and providing SMEs with support to bring their ideas to market. Interventions were developed to respond to the information and co-ordination failures that were preventing effective collaboration between businesses and the knowledge base. Inward investment activity aimed to boost the regional economy by retaining strategically significant companies in London’s sub-regions. Sustainable consumption and production activity aimed to overcome the information and financial barriers to SMEs’ successful operations in the re-use, recycling and reprocessing sector. The evidence of the impact of LDA’s business interventions comes from 20 evaluations in five subthemes, as summarised in Table 104. Expenditure has been highest in the sub-themes of individual enterprise-level support and science, innovation and R&D. These sub-themes also have the highest volume of evaluation evidence. The evaluated sector/cluster support interventions were small in scale and only one evaluation has been assessed for the inward investment and sustainable consumption/production sub-themes.

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Table 104: Summary of LDA evaluated business development and competitiveness interventions (2002/03-2006/07) Intervention theme/sub-theme

Individual enterprise level support

Project/programme



Expenditure covered by evaluations (£m)

Access to Finance: –

A2F Objective 2

–

A2F Pan-London

–

Gateway to Investment

–

Creative Business Accelerator

19.8



Up and Running

1.3



Business London

1.8



Supply London

1.6



London Value Chain

0.9



London Riverside

14.9



Wembley / Park Royal

12.5



Woolwich / North Bexley

0.5



Theatre Audience Development

0.2



London Fashion Forum

0.5



Collage Arts

1.0



Heathrow City Enterprise Project

0.7



Centre for Fashion Enterprise

2.2



BioLondon

24.4



British Library Business and IP Centre

1.1



JumpStart

3.4



Pre-Commercial Fund

5.6



Secondment Into Knowledge

0.3



SME Innovation Support

1.3

Inward investment promotion



Sub-Regional Business Retention

2.3

Sustainable consumption/production



Enhance

3.5

Sector/cluster support

Science, R&D & innovation infrastructure

Total

99.8

Source: PwC analysis based on LDA evaluation evidence

Impact The gross achieved outputs associated with the LDA’s business development and competitiveness interventions are presented in Table 105. The main outputs arising from business interventions have been jobs created and safeguarded, businesses assisted, new businesses created and people assisted in skills development. More than 30,000 gross jobs have been created by these interventions, of which around half have been created by enterprise support projects.

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Table 105: Summary of LDA gross inputs and outputs for evaluated business development and competitiveness interventions (2002/03-2006/07) Programme

Expenditure covered by evaluations (£m)

Gross jobs created / safeguarded

Gross businesses created

Gross businesses supported

Gross people assisted in skills development

19.8

373

3,758

Up and Running

1.3

11,008

4,229

Business London

1.8

397

2,614

967

Supply London

1.6

330

2,147

London Value Chain

0.9

394

321

246

London Riverside

14.9

119

313

1,330

Wembley/Park Royal

12.5

1,147

5,626

Woolwich/North Bexley

0.5

464

Theatre Audience Development

0.2

London Fashion Forum

0.5

235

Collage Arts

1.0

316

227

364

222

Heathrow City Enterprise Project

0.7

264

213

272

Centre for Fashion Enterprise

2.2

Individual enterprise level support Access to Finance: 

A2F Objective 2



A2F Pan-London



Gateway to Investment



Creative Business Accelerator

Sector/cluster support

Science, R&D and innovation infrastructure BioLondon

24.4

411

1,000

8,818

British Library Business & IP Centre

1.1

1,170

JumpStart

3.4

176

Pre-Commercial Fund

5.6

Secondment Into Knowledge

0.3

SME Innovation Support

1.3

103

243

2.3

14,914

Enhance

3.5

272

857

292

Total

98.5

30,611

1,963

22,124

11,901

Inward investment promotion Sub-Regional Business Retention Sustainable consumption/production

Source: PwC analysis based on LDA evaluation evidence Notes:

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(i) All Access to Finance, Wembley/Park Royal and Woolwich/North Bexley output figures are to March 2008 (ii) London Riverside, Wembley/Park Royal and Woolwich/North Bexley figures are regional

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(iii) The gross jobs created by the Wembley/Park Royal programme have been apportioned to the Place theme (iv) The impact of Up and Running should be considered against overall programme costs of £27.9m (£21.9m from the public sector), rather than the £1.3m expenditure incurred by LDA

The net achieved outputs associated with the LDA’s business development and competitiveness projects are presented in Table 106. The evidence suggests that the LDA’s interventions have created or safeguarded, in net terms, up to 4,000 additional jobs and around 500 businesses, with an additional 4,200 businesses supported and around 3,000 additional people assisted in their skills development. Around half of the jobs created or safeguarded were from individual enterprise level support programmes. Most of the businesses supported or created were also through these programmes. The importance of this sub-theme to the overall totals is perhaps to be expected, given its large number of evaluations. Table 106: Summary of LDA net inputs and outputs for evaluated business development and competitiveness interventions (2002/03-2006/07) Programme

Expenditure covered by evaluations (£m)

Net jobs created / safeguarded

Net businesses created

Net businesses supported

Net people assisted in skills development

19.8

213

Up and Running

1.3

906

Business London

1.8

314

Supply London

1.6

1,205

London Value Chain

0.9

246

200

154

London Riverside

14.9

1,058

Wembley/Park Royal

12.5

217

1,274

Woolwich/North Bexley

0.5

101

Theatre Audience Development

0.2

London Fashion Forum

0.5

Collage Arts

1.0

Heathrow City Enterprise Project

0.7

Centre for Fashion Enterprise

2.2

Individual enterprise level support Access to Finance: 

A2F Objective 2



A2F Pan-London



Gateway to Investment



Creative Business Accelerator

Sector/cluster support

Science, R&D and innovation infrastructure BioLondon

24.4

279 - 371

23 - 32

429 - 571

1,468 - 1,984

British Library Business & IP Centre

1.1

200 - 667

JumpStart

3.4

11 - 148

Pre-Commercial Fund

5.6

Secondment Into Knowledge

0.3

3 - 20

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Programme

Expenditure covered by evaluations (£m)

Net jobs created / safeguarded

Net businesses created

Net businesses supported

Net people assisted in skills development

1.3

6 - 37

2.3

650

Enhance

3.5

136

771

292

Total

98.5

3,222 - 3,966

526 - 535

4,155 – 4,297

2,919 – 3,435

SME Innovation Support Inward investment promotion Sub-Regional Business Retention Sustainable consumption/production

Source: PwC analysis based on LDA evaluation evidence Notes:

(i) All Access to Finance, Wembley/Park Royal and Woolwich/North Bexley output figures are to March 2008 (ii) London Riverside, Wembley/Park Royal and Woolwich/North Bexley figures are regional (iii) The net jobs created by the Wembley/Park Royal programme have been apportioned to the Place theme (iv) The impact of Up and Running should be considered against overall programme costs of £27.9m (£21.9m from the public sector), rather than the £1.3m expenditure incurred by LDA

Net impact varied between and within different sub-themes and outputs. From assessing the gross and net outputs in Tables 105 and 106, it appears that business creation and skills assists have higher levels of additionality (as measured by net jobs as a proportion of gross) than job creation and business assists. In addition to the gross and net outputs highlighted above, several of the evaluations listed gross and particularly net future potential outputs. These were particularly prevalent in the area programmes and in innovation interventions, which were long-term interventions assessed at an early stage in their overall development: 

Business London is expected to create 413 net jobs in the future;



the business support elements of the London Riverside area programme are expected to create a range of net future potential outputs – 184 jobs created, 246 businesses supported, 58 businesses created and 3,513 people assisted in skills development;



the business support elements of the Woolwich/North Bexley area programme are expected to support 142 net businesses in the future;



JumpStart is expected to create 42 gross and between 6 and 31 net jobs in the future;



Pre-Commercial Fund is expected to create 59 net jobs in the future;



Secondment Into Knowledge is expected to create 372 gross and between 107 and 449 net jobs in the future; and



SME Innovation Support is expected to create between 59 and 200 net jobs in the future.

Table 107 summarises the impact on GVA (both achieved and future potential) of LDA’s interventions to promote business development and competitiveness. In the majority of cases the evaluations estimated either cumulative or annual GVA. Moreover, future potential impacts on GVA have generally not been discounted, nor have constant prices been applied.

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Table 107: Outcomes from LDA’s evaluated business development and competitiveness interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved GVA (annual, £m)

Future potential GVA (annual, £m)

Achieved GVA (cumulative, £m)

Future potential GVA (cumulative, £m)

Achieved & future potential GVA (cumulative, £m)

19.8

105.4

Business London

1.8

14.4

26.1

Supply London

1.6

4.8

2.4

7.2

London Value Chain

0.9

1.35

0.65

2.0

London Riverside (enterprise support element)

14.9

30.2

10.4

40.6

Wembley/Park Royal (enterprise support element)

12.5

211.0

Woolwich/North Bexley (enterprise support element)

0.5

Theatre Audience Development

0.2

London Fashion Forum

0.5

Collage Arts

1.0

0.08

0.11

0.19

Heathrow City Enterprise Project

0.7

0.25

0.23

0.48

Centre for Fashion Enterprise

2.2

0.2

BioLondon

24.4

20.8

British Library Business & IP Centre

1.1

JumpStart

3.4

5.5

0.6

Pre-Commercial Fund

5.6

3.2

Secondment Into

0.3

22.3

12.6

Individual enterprise level support Access to Finance: 

A2F Objective 2



A2F Pan-London



Gateway to Investment



Creative Business Accelerator

Sector/cluster support

Science, innovation and R&D

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Expenditure covered by evaluations (£m)

Achieved GVA (annual, £m)

Future potential GVA (annual, £m)

Achieved GVA (cumulative, £m)

Future potential GVA (cumulative, £m)

Achieved & future potential GVA (cumulative, £m)

1.3

1.0

2.0

2.3

Enhance

3.5

Total

98.5

43.2

44.5

163.1

224.8

387.9

Knowledge SME Innovation Support

Inward investment promotion Sub-Regional Business Retention Science, innovation and R&D

Source: PwC analysis based on LDA evaluation evidence Notes:

(i) Overall London Riverside, Wembley/Park Royal and Woolwich/North Bexley GVA and value for money figures are presented under Physical Regeneration (ii) London Riverside achieved impacts are to 2007/08 (iii) The impact of Up and Running should be considered against overall programme costs of £27.9m (£21.9m from the public sector), rather than the £1.3m expenditure incurred by LDA

The evaluation evidence suggests that the LDA’s investment of £99m between 2002/03 and 2006/07 has resulted in cumulative achieved GVA impacts of £163m, with the potential to rise to £388m. On top of that, there are achieved annual GVA impacts of £43m per annum, with the potential for those to rise to £88m per annum. The annual and cumulative GVA numbers are not calculated on a consistent basis and should not be added together. We have not added the annual and cumulative GVA totals together in this analysis. The future potential impacts on GVA have been mostly estimated through expected outputs, although some evaluations have also estimated persistence. In addition to the impact of its project and programme spend, the LDA has also influenced its partners’ and stakeholders’ behaviour and performance in other ways, as demonstrated by the following Strategic Added Value examples from the LDA’s business evaluation evidence. LDA’s Strategic Added Value LDA’s business development and competitiveness interventions have also had strategic added value. For example, in business support the LDA has supported the piloting of new approaches to service delivery. In the Business London programme a sub-regional consortium approach to providing business support has been adopted. The programme’s evaluation believes the consortium approach offers a new 184 model for delivery, encouraging collaboration in delivery and simplification to the user . In the innovation sub-theme, the Secondment Into Knowledge programme has piloted an approach where secondees from businesses have been placed in academic institutions, instead of the traditional 185 approach of seconding academics into a business environment . These two programmes are estimated to have achieved GVA to cost returns of 2.83 to 1 and 29 to 1 respectively. Source: LDA

184

Interim impact evaluation of Business London – Ecotec (September 2008), p. 91

185

Interim evaluation of the Secondment Into Knowledge project – Ecotec (September 2008), p. 45

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Value for money We have considered the value for money of the LDA’s interventions from three perspectives: the GVA to cost ratio; the benefit-cost ratio; and measures of cost per unit of net output. When reviewing the value for money figures in Table 108, it is important to remember that in this table the achieved GVA to cost ratio measures the impacts of current outputs, whereas the BCR measures total costs and benefits over the lifetime of the project, including the expected persistent effects of benefits. Table 108: Value for money of LDA’s evaluated business development and competitiveness 186 interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

GVA to cost ratio

Benefitcost ratio

Cost per net job (£)

Cost per net business assist (£)

Cost per net business created (£)

Individual enterprise level support Access to Finance: 

Objective 2



Pan-London



G2i



CBA

19.8

3.9

3.5

25.0

20.5

12.5

15.0

33.0

32.0

Up and Running

1.3

n/a

1,990

1,591

7,966

Business London

1.8

2.83

2,733

493

53,212

Supply London

1.6

1.08

2.6

28,554 (achieved); 12,804 (potential)

London Value Chain

0.9

0.93

1.8

10,360 (achieved); 9,797 (potential)

London Riverside (enterprise support element)

14.9

2.46

15,000

3,900

99,000

Sector/cluster support London Fashion Forum

0.5

11,379

Collage Arts

1.0

0.05

0.2

Heathrow City Enterprise Project

0.7

0.23

0.7

Centre for Fashion Enterprise

2.2

n/a

259,000

345,000

Science, innovation and R&D BioLondon

24.4

1.9 - 2.3

JumpStart

3.4

5.54

13,000

186

Table 108 only presents those interventions whose evaluations have assessed value for money.

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Expenditure covered by evaluations (£m)

GVA to cost ratio

Benefitcost ratio

Cost per net job (£)

Cost per net business assist (£)

Cost per net business created (£)

Pre-Commercial Fund

5.6

0.45 0.55

2.2 - 3.5

217,000

Secondment Into Knowledge

0.3

71,100

SME Innovation Support

1.3

0.44

1.1 - 7.2

106,200

Sustainable consumption and production Enhance

3.5

1.08

1.3 - 2.4

Source: PwC analysis based on LDA evaluation evidence

The LDA’s evaluated business development and competitiveness interventions have achieved an overall GVA to cost return of 2.1 to 1 (based on an estimated cumulative GVA impact of £163m, from £78m of interventions where the evaluations have assessed GVA impacts). This is expected to rise to 5.0 to 1, including future potential outputs (based on an expected cumulative GVA impact of £388m). Both returns are below the RDA GVA to cost benchmarks of an achieved 2.8 to 1 return and an expected 11.6 to 1 return but the LDA’s performance is likely to be understated, because interventions that have reported annual impact are not included in this analysis. Returns on investment and unit cost figures vary significantly across the theme. Evaluated enterprise support interventions achieved mixed GVA to cost returns against the RDA benchmark of 4.9 to 1, with three interventions achieving above average returns and four below. The evaluated sector/cluster support projects generated returns below the sector GVA to cost benchmark of 3.2 to 1. The value for money performance of the evaluated science, innovation and R&D projects was mixed, with two well ahead of the GVA to cost benchmark of 1.1 to 1 and two others below. The benefit-cost ratio information indicates that most LDA business interventions are expected to achieve positive returns (above 1). Enterprise support interventions achieved the lowest cost per net job. Of the four enterprise support interventions with unit cost information, two programmes performed strongly against the unit cost benchmarks for jobs created (£8,301), businesses created (£74,196) and businesses assisted (£8,502). Unit cost information is only available for two sector/cluster support projects, with one significantly above the RDA benchmark of £12,135 per net job and one slightly below. Unit cost information is available for cost per job in four of the science, innovation and R&D evaluations and performance is mixed, with one project significantly below the cost per job benchmark of £37,938 but three significantly above. Performance against objectives We have also reviewed how well interventions have performed against their specific objectives. Table 109 summarises the performance against objectives of business development and competitiveness interventions. Performance was generally positive, particularly for enterprise support and science, innovation and R&D interventions. Performance has generally been stronger at meeting short-term objectives (particularly around engagement and awareness raising) than at achieving longer-term, more ambitious objectives such as establishing alternative models of service delivery.

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Table 109: Performance against objectives of LDA’s evaluated business development and competitiveness interventions (2002/03-2006/07) Intervention

Expenditure covered by evaluations (£m)

Performance against objectives

Woolwich/North Bexley (enterprise support element)

0.5

Met

Access to Finance

19.8

Largely met

Up and Running

1.3

Largely met

Supply London

1.6

Largely met

London Value Chain

0.9

Largely met

Wembley/Park Royal (enterprise support element)

12.5

Largely met

BioLondon

24.4

Largely met

British Library Business & IP Centre

1.1

Largely met

JumpStart

3.4

Largely met

Secondment Into Knowledge

0.3

Largely met

SME Innovation Support

1.3

Largely met

Enhance

3.5

Largely met

Business London

1.8

Mixed

London Riverside (enterprise support element)

14.9

Mixed

Collage Arts

1.0

Mixed

Heathrow City Enterprise Project

0.7

Mixed

Theatre Audience Development

0.2

Mixed

London Fashion Forum

0.5

Mixed

Sub-Regional Partners’ Business Retention

2.3

Limited performance

Pre-Commercial Fund

5.6

Limited performance

Centre for Fashion Enterprise

2.2

Limited performance

Source: PwC analysis based on LDA evaluation evidence

Regeneration through physical infrastructure interventions Rationale The LDA’s regeneration interventions have fallen into three categories – large, multi-faceted area-based interventions, which have combined significant regeneration with elements of business and employment support; smaller capital projects, which have focused on the regeneration or development of a single building; and tourism marketing activities through Visit London. The regeneration-related objectives outlined in the 2005 EDS are to: 

support the delivery of the London Plan, to promote sustainable growth and economic development;



deliver an improved and effective infrastructure to support London’s future growth and development; and



deliver healthy, sustainable, high quality communities and urban environments.

The 2005 EDS objectives in relation to marketing and promotion are also relevant in this theme:

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

ensure a coherent approach to marketing and promoting London;



co-ordinate effective marketing and promotion activities across London; and



maintain and develop London as a top international destination and principal UK gateway for visitors, tourism and investment.

These objectives have formed the backdrop for a variety of physical regeneration interventions between 2002/03 and 2006/07. However, given the multi-faceted nature of the LDA’s area programmes, other EDS objectives related to enterprise and people will also be relevant. This section covers seven evaluations. The three evaluated area interventions were all developed to address market failures such as the negative externalities associated with vacant, contaminated or derelict land. These were often environmental (pollution), economic (underutilisation) or social (crime and vandalism) in nature. The programmes sought to improve infrastructure, bring land back into economic use and increase levels of economic activity. The LDA’s other evaluated capital projects sought to re-develop a discrete building or location. All three are related to culture and the creative industries. The interventions sought to increase the participation of the BAME community in cultural and creative industries and to use the regenerated buildings as a catalyst for wider economic regeneration, as all three interventions were located in areas of relative economic inactivity. The three projects were evaluated at the instruction of the London Assembly, following an audit of these projects. The rationale for co-ordinated tourism marketing relates to the benefits associated with tourism that are not accounted for by individual organisations when planning their promotions (such as visitor spending outside London and visitor spending outside the tourism sector), and the failure of a fragmented tourism market to promote the totality of London’s tourism offer. Table 110: Summary of LDA evaluated regeneration through physical infrastructure interventions (2002/03-2006/07) Intervention theme/sub-theme

Project/programme

Expenditure covered by evaluations (£m)



London Riverside area intervention

58.8



Wembley/Park Royal area intervention

37.1



Woolwich/North Bexley area intervention

22.8



Bernie Grant Centre

3.3



Rich Mix Centre

5.8



Laban Dance Centre

2.9

Public realm/other infrastructure (e.g. transport/community)



Wembley/Park Royal area intervention

28.1



Woolwich/North Bexley area intervention

1.0

Image, events and tourism



Visit London

45.8

Capital projects – area interventions

Capital projects – building-specific interventions

Total

204.6

Source: PwC analysis based on LDA evaluation evidence

As Table 110 shows, this spend is dominated by the large area programmes, with the LDA’s buildingspecific interventions being much smaller in nature. Impact Table 111 illustrates the key gross outputs arising from the LDA’s physical regeneration interventions.

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Table 111: Summary of key gross outputs of LDA’s evaluated physical regeneration interventions (2002/03-2006/07) Programme

Expenditure covered by evaluations (£m)

Gross jobs created / safeguarded (actual)

Gross jobs created / safeguarded (potential)

Gross land remediated (ha)

Gross housing units

London Riverside

58.8

652

5,954

37.0

Wembley/Park Royal

65.2

3,484

12,809

10.0

Woolwich/North Bexley

22.8

688

1,551

41.0

1,248

Bernie Grant Centre

3.3

0.5

Rich Mix Centre

5.8

106

Laban Dance Centre

2.9

482

1.0

438

Visit London

45.8

Total

204.6

5,424

20,314

89.5

1,686

Area-based interventions

Building-specific capital projects

Image, events and tourism

Source: PwC analysis based on LDA evaluation evidence Notes:

(i) Wembley/Park Royal and Woolwich/North Bexley output figures are to March 2008 (ii) All London Riverside, Wembley/Park Royal and Woolwich/North Bexley figures combine direct and indirect outputs and are regional (iii) All Potential outputs include Achieved outputs (iv) Gross and net outputs from Wembley/Park Royal are not specifically broken down into IEF theme; however, these are the overall outputs that most closely match those attributable to the Place theme.

Area interventions have provided the bulk of gross outputs, which is to be expected given that they account for 72% of the evaluated expenditure in this theme. There are also a significant number of potential gross jobs identified in the evaluations, notably through the Wembley/Park Royal programme. Table 112 illustrates the key net outputs arising from the LDA’s physical regeneration interventions.

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Table 112: Summary of key net outputs of LDA’s evaluated physical regeneration interventions (2002/03-2006/07) Programme

Expenditure covered by evaluations (£m)

Net jobs created / safeguarded (actual)

Net jobs created / safeguarded (potential)

Net land remediated (ha)

Net housing units

London Riverside

58.8

226

2,651

24.0

Wembley/Park Royal

65.2

1,396

3,985

10.0

Woolwich/North Bexley

22.8

333

631

41.0

1,248

Bernie Grant Centre

3.3

0.5

Rich Mix Centre

5.8

Laban Dance Centre

2.9

1.0

438

Visit London

45.8

Total

204.6

1,998

7,267

76.5

1,686

Area-based interventions

Building-specific capital projects

Image, events and tourism

Source: PwC analysis based on LDA evaluation evidence Notes:

(i) All London Riverside, Wembley/Park Royal and Woolwich/North Bexley output figures are to March 2008 and are regional (ii) Wembley/Park Royal and Woolwich/North Bexley figures combine direct and indirect outputs (iii) All Potential outputs include Achieved outputs (iv) Gross and net outputs from Wembley/Park Royal are not specifically broken down into IEF theme; however, these are the overall outputs that most closely match those attributable to the Place theme. (v) Visit London was not set any tasking framework outputs, as they were not relevant to the activities they deliver

As Table 112 illustrates, additionality has generally been much higher for the area programmes than for building-specific interventions. All of the remediated land and new housing units are considered to be additional. The disparity between net achieved and net potential jobs created is also noticeable; this indicates that the area programmes were evaluated at an early stage of their development, with much of their impact still to be realised. The evaluations of the area programmes listed additional gross and particularly net future potential outputs: 

the regeneration elements of the London Riverside area programme are expected to create 5 2 businesses, support 56 businesses, remediate 77 hectares of land, create 136,000 m of business floorspace and create 10 skills outputs; and



the regeneration elements of the Woolwich/North Bexley area programme are expected to create 44.84 gross and net hectares of remediated land and 3,565 gross and net housing units.

Table 113 summarises the impact on GVA (both achieved and future potential) of LDA’s regeneration through physical infrastructure interventions. The future potential GVA impacts of the area interventions have been discounted to current prices.

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Table 113: Outcomes from LDA evaluated regeneration through physical infrastructure interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved GVA (annual, £m)

Future potential GVA (annual, £m)

Achieved GVA (cumulative, £m)

Future potential GVA (cumulative, £m)

Achieved & future potential GVA (cumulative, £m)

Area-based interventions London Riverside

77.7

206.5

668.7

875.2

Wembley/Park Royal

85.8

674.1

Woolwich/North Bexley

26.8

53.0

237.0

290.0

Building-specific capital projects Bernie Grant Centre

3.3

Rich Mix Centre

5.8

Laban Dance Centre

2.9

3.0

34.0

37.0

45.8

262.5

1,613.8

1,876.3

Image, events and tourism Visit London Total

187

248.1

Source: PwC analysis based on LDA evaluation evidence Notes:

(i) The London Riverside, Wembley/Park Royal and Woolwich/North Bexley spend and GVA figures listed in the table are for the entire programme. The expenditure on the regeneration elements of the programme was: London Riverside £58.8m, Wembley/Park Royal £62.2m, Woolwich/North Bexley £22.8m (ii) London Riverside achieved impacts are to 2007/08 (iii) Visit London estimates the “total economic benefit to London”, by multiplying the net number of additional consumers who visited London or extended their stay due to VL activity by the total spend per visit. These “incremental spend” figures are added together to produce a figure for total economic benefit of £880m. The measurement of benefit is different to the GVA measures adopted in other evaluations and is therefore not presented in the table. However, the methodology VL employed is used by all regional tourism agencies and is approved by HM Treasury.

The evaluation evidence suggests that the LDA’s investment of £248m has resulted in achieved cumulative GVA impacts of £263m, with the potential to rise to a cumulative £1,876m if all potential outputs are achieved. The large disparity between achieved and future potential GVA for the area programmes is a further indication that these interventions were evaluated at an early stage in their development. This is also the reason why there are no GVA figures for two of the building-specific evaluations. In addition to the impact of its project and programme spend, the LDA also influences its partners’ and stakeholders’ behaviour and performance in other ways, as demonstrated by the following Strategic Added Value examples from the LDA’s physical regeneration evaluation evidence. LDA’s Strategic Added Value LDA’s regeneration through physical infrastructure interventions have also generated strategic added value. For example, the LDA’s activities in the Wembley/Park Royal area programme were noted by the programme’s evaluation for providing a distinct sub-regional focus on the Wembley/Park Royal economy.

187

This expenditure figure includes the total spend of the three area interventions, as the GVA totals are for the whole programmes.

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This was considered to have improved the public sector focus on the area and to have shifted the emphasis away from rigid geographical boundaries. As well as changing the geographical focus of other public sector agencies working in the area, the LDA’s activities were also considered to have facilitated 188 more and better joint working across organisational boundaries . The Wembley/Park Royal programme is expected to achieve a future potential GVA to cost ratio of 7.8 to 1. The Laban Dance Centre in Deptford is credited by its programme evaluation with helping to contribute to the wider regeneration of a deprived area of London. This wider regeneration has resulted in positive media coverage and a series of wider developments in the area, some of which are directly related to the 189 Laban Centre by its evaluation. The building itself won the Stirling Architecture Prize for RIBA Building 190 of the Year in October 2003 and has become a local landmark . The Laban project is expected to achieve a benefit-cost ratio of 3.6 over the lifetime of the intervention. Source: LDA

Value for money Table 114 considers the value for money of the LDA’s interventions from three perspectives: the GVA to cost ratio; the benefit-cost ratio (BCR); and measures of cost per unit of net output. When reviewing these value for money figures, it is important to remember that in this table the achieved GVA to cost ratio measures the impacts of current outputs, whereas the BCR measures total costs and benefits over the lifetime of the project, including the expected persistent effects of benefits. Table 114: Value for money of LDA’s evaluated regeneration through physical infrastructure interventions (2002/03-2006/07) 2002/032006/07 spend (£m)

Achieved GVA:cost ratio

Future potential GVA:cost ratio

Cost per net job (£)

Cost per net business assist (£)

Cost per net business created (£)

191

Area-based interventions London Riverside

77.7

1.6

6.3

242,000

Wembley/Park Royal

85.8

7.8

29,873

8,409

48,163

Woolwich/North Bexley

26.8

3.6

37,900 - 39,400

34,700

Building-specific capital projects Bernie Grant Centre

3.3

Rich Mix Centre

5.8

Laban Dance Centre

2.9

3.6*

37,000

45.8

Image, events and tourism Visit London

Source: PwC analysis based on LDA evaluation evidence. * Benefit-cost ratio. Notes:

(i) The London Riverside, Wembley/Park Royal and Woolwich/North Bexley spend and GVA to cost figures listed in the table are for the entire programme. The expenditure on the regeneration elements of the programme was: London Riverside £58.8m, Wembley/Park Royal £62.2m, Woolwich/North Bexley £22.8m (ii) London Riverside achieved impacts are to 2007/08 (iii) Visit London measures a return on investment, calculated as the ratio of economic benefit to campaign costs. Over the three years the figures suggest that the LDA has received a 26:1 return on its investment.

188

Area Evaluation: Park Royal/Wembley – SQW Consulting (September 2008), p.145

189

Royal Institute of British Architects

190

Evaluation of Laban Dance Centre – SQW Consulting (September 2008), p. 4, p.15

191

The total expenditure figures for the three area interventions are listed, as the GVA totals relate to the whole programmes.

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These results have been produced on a different basis to the GVA to cost figures in other evaluations and are therefore not presented in the table. However, the methodology VL used for calculating economic benefit is used by all regional tourism agencies and is approved by HM Treasury.

The LDA’s evaluated regeneration through physical infrastructure interventions have achieved a cumulative GVA to cost return of 1.4 to 1 (based on an estimated cumulative GVA impact of £263m, from £193m of interventions where the evaluations have assessed cumulative GVA impacts). This is expected to rise to 9.7 to 1 overall, including future potential outputs (based on a future potential cumulative GVA impact of £1,876m). Achieved and expected returns are above the RDA GVA to cost benchmarks for regeneration interventions, of 0.7 to 1 and 8.0 to 1 respectively. The three evaluated area programmes are all expected to achieve positive returns in the future. However, given the long-term nature of these interventions and their impacts, a substantial proportion of the benefits of these programmes are still to be realised, and the exact nature of these potential GVA to cost returns will depend on the accuracy of the number and persistence of expected future outputs. The area programmes are expected to generally perform well against value for money benchmarks over time. Unit cost information is generally positive, with three of the four programmes with available cost per net job information beating the RDA benchmark of £63,271. Performance against objectives Table 115 summarises the performance against target of LDA’s interventions to promote regeneration through physical infrastructure. The evaluations of all three area programmes were broadly positive, with many shorter-term objectives (such as remediating land and providing business/skills support) having been met. However, all three were evaluated at an early stage in their lifecycle, where it was considered to be too early to fully assess their performance against their long-term objectives. The final impacts of these programmes are unlikely to be known for several years. The mixed performance against objectives of evaluations in this theme is a reflection of the early stage at which they were evaluated. Many of the evaluations found it too early to fully assess performance against objectives at the time of evaluation. Table 115: Performance against objectives for LDA’s evaluated regeneration through physical infrastructure interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Performance against objectives

Wembley/Park Royal

65.2

Largely met

Woolwich/North Bexley

22.8

Largely met

Laban Dance Centre

2.9

Largely met

London Riverside

58.8

Mixed

Bernie Grant Centre

3.3

Mixed

Rich Mix Centre

5.8

Mixed

Visit London

45.8

Not assessed

Source: PwC analysis based on LDA evaluation evidence

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People and skills interventions Rationale Both of London’s EDSs have emphasised the importance of skills development to London’s continued economic success. The 2001 EDS Success Through Diversity had knowledge and learning as one of its four key themes; within that theme was a key objective to “work with the further education and training sector to increase skill and qualification levels throughout the population”. Improving the skills of the workforce is one of the key objectives under the Enterprise theme of the 2005 EDS, Sustaining Success. The people-related objectives outlined in the 2005 EDS are to: 

tackle barriers to employment;



reduce disparities in labour market outcomes between groups; and to



address the impacts of concentrations of disadvantage.

The LDA’s people and skills interventions cover the work the LDA has done to provide basic skills training, develop workforce skills, expand higher level skills and develop programmes to deliver leadership and management skills. This section covers 11 discrete evaluations, along with elements of the three area evaluations. It also includes the three area interventions, which have all included an element of skills and workforce development activity – aiming to tackle the market failures of low skills, low educational attainment and low economic activity. There have been several programmes related to the Regional Skills Partnership (RSP) and the European Social Fund (ESF). One of the primary drivers for these projects was to ensure greater opportunities for individuals or groups that were perceived to be excluded or disengaged from the labour market, in order to pursue equity and social inclusion objectives. The projects in this theme are summarised in Table 116, which shows that most expenditure took place under the skills/workforce development sub-theme. Table 116: Summary of LDA evaluated people and skills interventions (2002/03-2006/07) Intervention theme/sub-theme

Matching people to jobs

Skills/workforce development

Project/programme

Expenditure covered by evaluations (£m)



London Riverside

3.7



Wembley/Park Royal

8.1



Woolwich/North Bexley

2.4



Thames Gateway Jobnet

1.3



Woolwich/North Bexley

1.2



LDA Opportunities Fund Round 1

12.9



ESF Co-Financing Programme

9.5



RSP Productivity Programme (non-ESF)

2.3



RSP Inclusion Programme (non-ESF)

1.8



Supporting Talent into Enterprise Project (STEP)

1.6



RSP Inclusion Programme (ESF)

1.5



RSP Productivity Programme (ESF)

0.9



On Your Marks

0.6



Migrants and Refugees Qualifications Project

0.3



Southwark Works (CRP Employment & Enterprise)

2.8 Total

50.9

Source: PwC analysis based on LDA evaluation evidence

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Note: (i) Woolwich/North Bexley spend is listed separately in the table but is considered jointly in the analysis. Impact Table 117 summarises the achieved expenditure and key gross outputs achieved through LDA’s people and skills interventions. Over 33,000 gross employment support and almost 60,000 gross skills development outputs were delivered by evaluated interventions. The majority of outputs have been created by skills/workforce development interventions. Table 117: Summary of key gross outputs from LDA’s evaluated people and skills interventions (2002/03-2006/07) Programme

Expenditure covered by evaluations (£m)

Gross jobs created

Gross employment support

Gross skills – developed

London Riverside

3.7

284

3,932

Wembley/Park Royal

8.1

3,059

Woolwich/North Bexley

2.4

194

576

893

Thames Gateway Jobnet

1.3

6,882

1,323

Woolwich/North Bexley

1.2

LDA Opportunities Fund Round 1 (ESF and non-ESF)

12.9

12,382

12,501

ESF Co-Financing Programme

9.5

3,569

4,151

RSP Productivity Programme (non-ESF)

2.3

19,774

RSP Inclusion Programme (nonESF)

1.8

611

9,672

STEP

1.6

1,046

906

RSP Inclusion Programme (ESF)

1.5

3,281

3,923

RSP Productivity Programme (ESF)

0.9

865

992

On Your Marks

0.6

1,153

Migrants and Refugee Qualifications

0.3

378

Southwark Works (CRP Employment & Enterprise)

2.8

Total

50.9

207

33,006

59,316

Matching people to jobs

Skills/workforce development

Source: PwC analysis based on LDA evaluation evidence Notes:

136

(i) All Access to Finance, Wembley/Park Royal and Woolwich/North Bexley output figures are to March 2008 (ii) Gross and net outputs from Wembley/Park Royal are not specifically broken down into IEF theme; however, these are the overall outputs that most closely match those attributable to the People theme. (iii) London Riverside, Wembley/Park Royal and Woolwich/North Bexley figures are regional (iv) All London Riverside employment support outputs have been attributed to the People and Skills theme (v) Skills outputs combine basic, general, Level 2 and Level 3 skills (vi) Woolwich/North Bexley spend is listed separately in the table but is considered jointly in the analysis

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(vii) All skills/workforce development outputs (except ESF Co-financing) are to 2008

Table 118 summarises the achieved expenditure and key net outputs achieved through LDA’s people and skills interventions. Over 36,000 net skills assists and 12,000 employment support outputs were recorded. Employment support has been much more prominent in the evaluated interventions than job creation. Output totals and additionality levels (as measured by net outputs as a proportion of gross) are highest for skills development. Table 118: Summary of key net outputs from LDA’s evaluated people and skills interventions (2002/03-2006/07) Programme

Expenditure covered by evaluations (£m)

Net jobs created

Net employment support

Net skills – developed

London Riverside

3.7

146

2,058

Wembley/Park Royal

8.1

873

Woolwich/North Bexley

2.4

108

169

Thames Gateway Jobnet

1.3

783

151

Woolwich/North Bexley

1.2

LDA Opportunities Fund Round 1 (ESF and non-ESF)

12.9

7,175

9,030

ESF Co-Financing Programme

9.5

1,090

1,380

RSP Productivity Programme (non-ESF)

2.3

14,531

RSP Inclusion Programme (nonESF)

1.8

453

6,689

STEP

1.6

RSP Inclusion Programme (ESF)

1.5

1,047

1,356

RSP Productivity Programme (ESF)

0.9

276

369

On Your Marks

0.6

430

Migrants and Refugee Qualifications

0.3

245

Southwark Works (CRP Employment & Enterprise)

2.8

Total

50.9

12,250

36,225

Matching people to jobs

Skills/workforce development

Source: PwC analysis based on LDA evaluation evidence Notes:

137

(i) All Access to Finance, Wembley/Park Royal and Woolwich/North Bexley output figures are to March 2008 (ii) Gross and net outputs from Wembley/Park Royal are not specifically broken down into IEF theme; however, these are the overall outputs that most closely match those attributable to the People theme. (iii) London Riverside, Wembley/Park Royal and Woolwich/North Bexley figures are regional (iv) Skills outputs combine basic, general, Level 2 and Level 3 skills (v) Woolwich/North Bexley spend is listed separately in the table but is considered jointly in the analysis (vi) All skills/workforce development outputs (except ESF Co-financing) are to 2008

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LDA people and skills interventions delivered a range of other outputs, notably 3,965 gross and 2,795 net business support outputs, of which most (3,130 gross and 2,322 net) came through the Non-ESF Opportunities Fund Round 1 programme. The evaluations of two of the area programmes listed additional gross and net future potential outputs: 

the people and skills elements of the London Riverside area programme are expected to create 237 gross and 52 net general skills assists; and



the people and skills elements of the Woolwich/North Bexley area programme are expected to create 340 gross and 68 net general skills assists.

Table 119 summarises the outcomes of LDA’s people and skills interventions. The evaluation evidence suggests that the LDA’s investment of £51m has resulted in cumulative GVA impacts of £56m, with the potential to rise to £73m if all potential outputs are achieved. The additional future potential impact is expected to occur in two of the LDA’s area programmes, which were evaluated at an early stage in their development. The LDA Opportunities Fund has made the single biggest contribution to GVA. Table 119: Outcomes from LDA evaluated people and skills interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved GVA (annual, £m)

Future potential GVA (annual, £m)

Achieved GVA (cumulative, £m)

Future potential GVA (cumulative, £m)

Achieved & future potential GVA (cumulative, £m)

London Riverside

3.7

11.3

0.2

11.5

Wembley/Park Royal

8.1

12.5

Woolwich/North Bexley

3.6

Thames Gateway Jobnet

1.3

3.8

Matching people to jobs

Skills/workforce development LDA/ESF Cofinancing Programme

9.5

6.7

ESF RSP Productivity

0.9

1.1

Non-ESF RSP Productivity

2.3

1.9

STEP

1.6

ESF RSP Inclusion

1.5

4.2

Non-ESF RSP Inclusion

1.8

ESF Opportunities Fund Round 1 (ESF and non-ESF)

12.9

27.9

Refugee and Migrant Qualifications

0.3

0.5

On Your Marks

0.6

1.0

Southwark Works (CRP Employment & Enterprise)

2.8

Total

50.9

56.4

16.5

72.9

Source: PwC analysis based on LDA evaluation evidence

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Note:

Overall London Riverside, Wembley/Park Royal and Woolwich/North Bexley GVA figures are presented under Physical Regeneration

In addition to the impact of its project and programme spend, the LDA also influences its partners’ and stakeholders’ behaviour and performance in other ways, as demonstrated by the following Strategic Added Value examples from the LDA’s people and skills evaluation evidence. LDA’s Strategic Added Value The LDA’s people and skills interventions are also considered to have generated strategic added value. For example, the Wembley/Park Royal evaluation reports that the LDA’s funding had improved the linkages and partnership working between the Wembley Stadium development and Brent Council’s Brent in2Work programme, which had stimulated activity in the area and helped local people to gain 192 employment at Wembley Stadium . The Opportunities Fund programme has supported projects that have allowed mainstream delivery organisations to develop innovative approaches to tackling labour market skills and training issues. These organisations have aimed to address inequalities in local labour markets through supporting local and community-based organisations. The evaluation shows that the Fund has played a significant role in 193 developing the capacity of local community organisations. Source: LDA

Value for money Table 120 considers the value for money of the LDA’s interventions from three perspectives: the GVA to cost ratio; the benefit-cost ratio; and measures of cost per unit of net output. When reviewing these value for money figures, it is important to remember that in this table the achieved GVA to cost ratio measures the impacts of current outputs, whereas the BCR measures total costs and benefits over the lifetime of the project, including the expected persistent effects of benefits. Table 120: Summary of GVA outcomes from LDA evaluated people and skills interventions (2002/03-2006/07) Programme

Expenditure covered by evaluations (£m)

Achieved GVA:cost ratio

Benefit-cost ratio

Cost per net skills assist

London Riverside

3.7

900 - 4,000

Wembley/Park Royal

8.1

Woolwich/North Bexley

2.4

Thames Gateway Jobnet

1.3

3.6

6.9

7,173

1.2

Matching people to jobs

Skills/workforce development Woolwich/North Bexley

194

ESF LDA Opportunities Fund Round 1 (ESF and non-ESF)

12.9

ESF 1.0

ESF 2.2

8,186 - 42,853

Non-ESF 0.7

Non-ESF 1.8

Non-ESF 15,128 - 25,577

ESF Co-Financing

9.5

1.1

2.7

18,403 - 31,412

192

Area Evaluation: Park Royal/Wembley – SQW Consulting (September 2008), p.145

193

Impact Evaluation of ESF Opportunities Fund Round One – Adroit Economics (September 2008), p.57

194

Unit costs for gross basic and Level 2 skills assists, as net unit cost information was not calculated

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Programme

Expenditure covered by evaluations (£m)

Achieved GVA:cost ratio

Benefit-cost ratio

Cost per net skills assist

RSP Productivity Programme (non-ESF)

2.3

0.7

1.2

1,211 - 23,853

RSP Inclusion Programme (nonESF)

1.8

0.7

1.1

6,571 - 26,077

STEP

1.6

RSP Inclusion Programme (ESF)

1.5

1.7

2.2

13,803 - 36,662

RSP Productivity Programme (ESF)

0.9

0.8

1.2

18,410 - 26,642

On Your Marks

0.6

1.4

16,937

Refugees and Migrants Qualifications

0.3

1.5

2.2

49,614 - 793,832

Southwark Works (CRP Employment & Enterprise)

2.8

Source: PwC analysis based on LDA evaluation evidence. * Gross unit cost figures Notes:

(i) Overall London Riverside, Wembley/Park Royal and Woolwich/North Bexley GVA figures are presented under Physical Regeneration (ii) Potential figures for London Riverside and Wembley/Park Royal include achieved (iii) No net unit cost information available

The LDA’s evaluated people and skills interventions have achieved a cumulative GVA to cost return of 1.3 to 1 (based on an estimated cumulative GVA impact of £56m, from £43m of interventions where the evaluations have assessed cumulative GVA impacts). This is expected to rise to 1.7 to 1, including future potential outputs (based on an expected future potential cumulative GVA impact of £73m). The achieved return is above the RDA GVA to cost benchmark of 0.9 to 1 but the expected return is below the RDA benchmark of 2.5 to 1. The LDA’s people and skills projects have achieved mixed returns to date, with many current GVA to cost ratios near or below 1 to 1. As evidenced by the benefit-cost ratios, all projects are expected by their evaluations to eventually achieve returns above 1 once all benefits and their expected persistence are taken into account. The GVA to cost returns achieved have generally been relatively similar to the RDA GVA to cost benchmark for people and skills interventions of 0.9 to 1, although three projects achieved returns well above the benchmark. Net unit cost information was only available for two interventions; the unit cost of net skills assists is below the RDA benchmark of £1,960 for the London Riverside programme but is above it for the Thames Gateway Jobnet programme. In contrast, the gross unit cost figures available for skills assists in other people and skills interventions do not compare well to the benchmark. Performance against objectives Table 121 summarises the performance against target of LDA’s people and skills interventions. All assessed interventions were considered to have achieved a mixed performance. The three area programmes were evaluated at an early stage in their lifecycle but the Woolwich/North Bexley area programme’s efforts to match people to jobs were considered to have been successful. Other programmes were considered to have successfully reached target beneficiaries but were still to achieve their overarching goals. Similarly, many other evaluations considered it to be too early to assess overall progress, with initial objectives met but longer-term objectives still ahead.

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Table 121: Performance against objectives for LDA’s evaluated people and skills interventions (2002/03-2006/07) Intervention

Expenditure covered by evaluations (£m)

Performance against objectives

Woolwich/North Bexley (people and skills elements)

3.6

Met

ESF Co-Financing Programme

9.5

Largely met

LDA Opportunities Fund Round 1 (ESF and non-ESF)

12.9

Largely met

RSP Productivity Programme (ESF)

0.9

Largely met

London Riverside (people and skills elements)

3.7

Mixed

Wembley/Park Royal (people and skills elements)

8.1

Mixed

Thames Gateway Jobnet

1.3

Mixed

RSP Productivity Programme (non-ESF)

2.3

Mixed

RSP Inclusion Programme (non-ESF)

1.8

Mixed

STEP

1.6

Mixed

RSP Inclusion Programme (ESF)

1.5

Mixed

On Your Marks

0.6

Mixed

Migrants and Refugees Qualifications

0.3

Mixed

Southwark Works (CRP Employment & Enterprise)

2.8

Not assessed

Source: PwC analysis based on LDA evaluation evidence

Single Regeneration Budget The evidence of LDA’s impact on other interventions covers £507.8m of spend from 2002/03-2006/07 on the Single Regeneration Budget (SRB) programme – 46% of LDA’s overall relevant spend. The SRB evaluation evidence comes from a meta-evaluation of the SRB programme, which focused on SRB Rounds 3 to 6 on the basis that the RDAs were most effectively able to influence these later Rounds. SRB was a multi-faceted regeneration programme that delivered a diverse range of business, physical regeneration and people and skills interventions. It sought to simplify and streamline regeneration funding and to promote a new way of tackling the problems faced by disadvantaged communities. SRB was launched in 1994 and the LDA took over responsibility for the programme from the Government Office for London in 2000. The overall aim of the SRB programme was “to enhance the quality of life of local people in areas of 195 need, by reducing the gap between deprived and other areas, and between different groups” . Beneath this, a core set of common objectives underpinned the SRB throughout its six Rounds: 

improving the employment prospects of local people;



encouraging economic growth;



reducing crime;



improving housing; and



protecting and enhancing the environment.

195

Department for Communities and Local Government’s SRB website – Background and Overview: see

http://www.communities.gov.uk/citiesandregions/regeneration/singleregenerationbudget/221229/

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The rationale for SRB centred on the Government’s desire to tackle social exclusion and promote equality of opportunity. The focus of support was on the most deprived communities in England, with the aim of reducing the gap between these areas and the rest of England, and between different groups in society. Across the six Rounds of SRB 244 schemes were funded in London, of which 154 schemes were funded in Rounds 3 to 6. The LDA’s funding patterns reflected the region’s levels of deprivation, as measured by the Index of Multiple Deprivation. East London received the most funding across Rounds 3 to 6, followed by Central London. South London received the least amount of funding. Impact SRB schemes delivered a wide range of outputs, of which the key Tasking Framework-related gross and net outputs are listed in Table 122. The table illustrates that the SRB programme delivered substantial numbers of gross and net outputs, particularly in relation to job creation and skills development. Levels of additionality were relatively consistent across the output categories, with skills assists showing the highest additionality. Table 122: Achieved outputs from the London SRB programme (2002/03-2006/07) Expenditure covered by evaluations (£m)

Gross jobs created/ safeguarded

Gross skills developed

Gross businesses created

Gross land reclaimed/ redeveloped (ha)

Gross outputs

507.8

43,981

61,187

3,598

Net outputs

507.8

18,333

34,265

1,583

Source: PwC analysis based on LDA evaluation evidence

The SRB programme also delivered a huge range of other economic and non-economic outputs – more than sixty in total. The following are just a few examples of the breadth of the SRB programme’s impact: 

483,206 gross and 256,099 net pupils benefited from projects to improve educational attainment;



9,654 gross and 5,889 net people from targeted disadvantaged groups gained a job;



567,663 gross and 266,801 net young people benefited from projects to promote personal and social development;



203,446 m gross and 91,551 m net of new business/commercial floorspace was created;



1,188 gross and 630 net buildings were brought back into use;



484km gross and 256 net km of roads were built;



10,982 gross and 5,491 net local authority dwellings were improved; and



14,707 gross and 9,118 net voluntary organisations were supported.

Neither the SRB meta-evaluation nor the individual scheme evaluations provide a quantitative assessment of the interventions’ net impact on GVA. An indication of the potential scale of the impact on GVA can be gleaned by considering the contribution of the jobs created and safeguarded to GVA. 196 Assuming that each job generated in London contributes the average GVA per worker (£54,812 ), then this would imply that the SRB programme in London will have added £1,004.9 million to London’s economy over its existence. Such an estimate, however, does not take into account the likely persistence of each job (i.e. for how many years the job is sustained), nor does it take account of any

196

Regional Trends 40, National Statistics

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other impacts which may have contributed to the region’s economy. For example, if every job created was assumed to last for three years, the GVA impact of the programme would rise to £3,014.6 million. Strategic Added Value One of the more tangible strategic added value impacts of SRB funding was the external money leveraged by SRB funds. Table 123 highlights the levels of private and public sector funding generated by SRB, based on £283m of scheme evaluations reviewed in the meta-evaluation that contained leverage information. This spend of £283m leveraged £293m of private sector money and £449m of public sector money, at an overall leverage ratio of 2.62 to 1. Not all of this funding will have been additional; there is evidence that much of the public sector funding would have been spent anyway, although perhaps not always within the same geographies or in tackling the same issues as SRB sought to address. It is difficult to know the extent to which SRB skewed the geography of public sector intervention. Table 123: SRB leverage (£m) from the London SRB programme (2002/03-2006/07) SRB spend

Private sector funding

Other public sector funding

Leverage ratio (SRB spend: private sector and other public sector funding)

282.9

293.0

449.2

1:2.62

Source: PwC analysis based on LDA evaluation evidence

Some scheme evaluations concluded that SRB funding played an important catalytic role in getting partners talking. For some schemes there was a genuine sense that the multi-faceted nature of the problems meant that they could not have been addressed without the partnership approach funded by SRB. The London SRB programme contained a number of pan-London programmes which attempted to deliver more strategic interventions across the city. Some schemes and projects became self-sustaining before the end of SRB funding, such as the Finspace development in Finsbury Park. As well as being home to the Finfuture partnership that developed out of the SRB programme, it provides meeting and office space which help to pay for its ongoing running costs. The Finspace centre is still running today. Value for money Neither the SRB meta-evaluation nor the underlying scheme evaluations provide an analysis of the value for money of the SRB programme. However, from our calculations of the SRB programme’s GVA impacts, based on the net jobs totals reported in the SRB meta-evaluation, we estimate the SRB programme generated a GVA to cost return of 2.0 to 1 (based on a GVA return of £1,004.9 million from programme costs of £507.8m). Performance against objectives Table 124 indicates how London’s SRB schemes performed against their “core” output targets. Two targets were exceeded, one was virtually met and three were below target.

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Table 124: Performance against targets for “core” LDA outputs in the SRB programme (2002/032006/07) Output

Regional performance (% of target achieved)

Number of jobs created

Number of jobs safeguarded

125

New businesses at 12 months

108

Brownfield land remediated (ha)

People assisted in skills development

Number of community enterprise start-ups

Source: PwC analysis based on LDA evaluation evidence

National programmes Besides its own projects and programmes, the LDA has been responsible for the management and delivery of seven national programmes which have been delivered by the LDA within parameters closely defined by central government departments. Of these programmes, one, the London Manufacturing Advisory Service (LMAS), has been evaluated. The results are set out in Table 125 below. Table 125: Summary of findings from LDA evaluation of LMAS (July 2005 to June 2008) 

Jobs created 346



Businesses retained and/or expanding 381



Businesses supported 1,950



Jobs safeguarded around 900



Cost savings £23m



6% of increase in manufacturing GVA attributed to LMAS

Value for money



Cumulative achieved GVA: cost ratio is 1.6

Performance against objectives



LMAS has delivered sustainable results: one-third of surveyed businesses expected to benefit indefinitely and over half expected benefits to be sustained for up to 5 years



LMAS has addressed the key causes of market failure



93% of MAS users would recommend MAS services to others



Two-thirds of users (65%) would be more likely to use support in the future as a result of their experiences with MAS

Gross Impact

Source: PwC analysis based on LDA evaluation evidence

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North West Development Agency Summary Overview 

Since its establishment in 1999, NWDA has spent approximately £2.3bn between 1999/00 and 2006/07 on a range of interventions designed, individually or combined, to stimulate business development and competitiveness, promote regeneration through physical infrastructure, and enhance employability and skills.



The focus of this report is on the Agency’s spending over 2002/03 to 2006/07 which covered £1.5 billion (excluding national programmes and administrative costs).



We have reviewed 65 evaluations covering over £900m or 63.5% of this total spend of £1.5 billion.

Impact 

The evaluations show that NWDA has generated significant outputs already: –

over 97,000 jobs have been created and safeguarded of which 42% are additional at the regional level;

–

over 14,000 businesses have been assisted of which 46% are additional;

–

just over 3,500 businesses have been created of which 43% are additional;

–

over 1,900 ha of land has been remediated of which 45% is additional;

–

nearly 97,000 net skills assists have been delivered of which 50% are additional; and



Significant future potential outputs are also anticipated as schemes are completed although these estimates are more uncertain.



In addition to the impact of its project and programme spend, Strategic Added Value (SAV) is a key element of NWDA’s impact, particularly in terms of strategic leadership (Regional Strategic Sites Programme and the Blackburn Town Centre Renaissance project), synergies (such as through the West Lancashire Investing in Business Programme) and attracting substantial amounts of leverage from other funding sources (such as in the URC NEM Whitworth Media Technology Centre project).

Value for money 

The highest achieved return is as a result of business interventions, with an achieved average return of 3.5 – 5.2 to 1. The lowest return is from other interventions with an achieved average return of 1.7 to 1.



There does not appear to be a clear relationship between value for money and either the scale of the intervention, its additionality or its performance against objectives.

Performance against objectives 

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The interim nature of many evaluations means that many have not yet assessed performance against objectives. Of those which have made such an assessment, 15% (by volume) have met or exceeded their objectives.

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Context Overview of the North West of England The North West consists of the two metropolitan areas of Greater Manchester and Merseyside and the three counties of Cheshire, Cumbria, and Lancashire. The region stretches 250km from the Scottish border in the North to the Dee estuary and the Welsh border in the South and is bounded on the West by the Irish Sea and on the East by the Pennine hills. Some 80% of the region is rural, agricultural or open woodland, yet four-fifths of the population live in urban areas, with 60% living in Liverpool and 197 Manchester. In 2006 the North West had a population of 6.9 million, a decrease of 1.3% since 1981 . Population density was highest in Blackpool with 4,088 people per square kilometre in 2006. Liverpool and Manchester also had high population densities with 3,899 and 3,908 people per square kilometre respectively. The North West of England’s residence-based gross value added (GVA) has risen from £81.4m in 1999 to £111.2m in 2006, which makes it the third largest regional economy in the UK. Regional GVA per 198 head (calculated on a residence basis) has risen from £12,018 in 1999 to £16,234 in 2006 . In 2006, the GVA per head in the North West stood at 87% of the UK average. Each sub-region differs in terms of GVA performance, and thus gaps exist not only between the North West region and the UK as a whole, but also at a sub-regional level. The region has a strong service sector, and is home to the largest media hub outside of London, whilst also retaining a strong presence of manufacturing employment, with the largest concentration of 199 advanced manufacturing and chemicals production in the UK . However difficulties exist in terms of levels of innovation activity, as the North West is recorded as having one of the lowest levels of innovation activity amongst its enterprises in the UK, with only those in Yorkshire and Humber and 200 Scotland being at a lower level . Recent labour market data covering the period March to May 2008 indicates that the employment rate of 201 working age people in the region (72.5%) is slightly below the UK average (74.9%) . The structure of employment is broadly similar to that of the UK with the largest sources of employment being the public sector (28.2%), distribution, hotels and restaurants (23.4%) and banking, finance and insurance (20%). 202 The unemployment rate was 5.3% at March 2007 , which was slightly lower than the English average (of 5.6%). As in the rest of the UK the current North West population of 6.9 million is ageing. It is estimated that by 2031, the population of the region will have grown to 7.7 million, with 22% of this group over 65 years old 203 (4% will be over 85% years old) . Cultural diversity in the region is also increasing with a growing black and ethnic minority population – it is expected that this group will grow from 7.2% of the total North West population in 2006 to 9.7% by 2032. However this varies on a sub-regional basis, with Greater Manchester being the most ethnically diverse and Cumbria the least diverse.

197

National Statistics (2005) online.

198

National Statistics (online) Regional Gross Value Added (GVA) accessed via http://www.statistics.gov.uk/statbase/Product.asp?vlnk=14650 199

National Audit Office (2006) Independent Performance Assessment – NWDA.

200

DTI (2001) Regional Breakdown of the UK Innovation Survey [online] www.berr.gov.uk/files/fil9672.pdf

201

Economic and Labour Market Review

202

National Statistics (2007) Economic and Labour Market Review – March 2007 Edition [online] http://www.statistics.gov.uk/elmr/03_07/2.asp 203

NWDA (2006) Diversity in the North West – Setting the Scene [online] http://www.nwda.gov.uk/docs/Patrick_White.ppt

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NWDA’s purpose and strategy 204

As a business-led organisation , NWDA provides a crucial link between the needs of business and Government policies. As such, it is responsible for helping to create an environment in which businesses in the region can flourish through offering business support, encouraging new start-ups, matching skills provision to employer needs and bringing business investment into the region. To date NWDA has assisted in the development of three Regional Economic Strategies (RESs) for the North West of England in 2000, 2004 and 2006. The prime focus of this impact evaluation is in relation to the 2006 RES. The overarching vision outlined in the 2006 RES was for the North West of England to become: “a dynamic, sustainable international economy which competes on the basis of knowledge, advanced technology, and an excellent quality of life for all”. The 2006 RES identified three major drivers to achieving the strategy’s vision which are to: 

improve productivity and grow the market;



grow the size and capability of the workforce; and



create and maintain the conditions for sustainable growth.

From these three drivers, the RES identifies 45 transformational priorities to meet the opportunities and challenges of the next ten years and to close the economic gap with the rest of England. NWDA’s new RES is currently under development and will be published in 2010. This RES will be a new and clear strategic investment framework for the region which builds on the learning gained in the process of developing the RES 2006, the Regional Spatial Strategy and Partial Review and the Regional Housing Strategy. The current plans for the 2010 RES will be to: 

refresh and revise economic development actions and priorities building on the Regional Economic Strategy 2006-09;



focus on setting out vision and key principles on strategic issues;



integrate spatial and housing priorities with actions to achieve sustainable economic growth; and



prepare the region to work swiftly and effectively on an Single Regional Strategy after any necessary legislative changes

NWDA’s current Corporate Plan covers the period 2008/09 to 2010/11. It replaces the previous Corporate Plan covering the period 2005/06 to 2007/08. The Corporate Plan for 2005/06 to 2007/08 built upon the RES through focussing on those elements in which the Agency can take the lead in terms of influence, initiation and implementation. The Plan was also target driven, in that it is based around the delivery of a set of Tasking Framework outputs from BERR. The new Plan for 2008/09 to 2010/11 sets out the next stage of NWDA’s development, enhancing its strategic and commissioning role and delegating delivery and project decision making to sub-regional and local organisations as appropriate. It also sets out how the Agency will continue to deliver the RES; contribute to delivery of the regional growth objective and the Government’s Regional Economic Performance Public Service Agreement (REP PSA); and implement new responsibilities and duties arising from the Comprehensive Spending Review 205 settlement and Review of Sub-National Economic Development. The new RDA Tasking Framework came into effect in April 2005. This framework was aimed at ensuring RDAs work on regional priorities in a way that serves national interests most effectively. The Tasking Framework required each RDA to show in its Corporate Plan for 2005-08 how, in support of its statutory

204

NWDA (2007) Delivering for the Region, pp1.

205

HM Treasury (2007) Review of Sub-National Economic Development and Regeneration.

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role and responsibilities, it would address the priorities identified in the RES for its region and contribute to the delivery of Government’s relevant PSA Targets through the delivery of a series of ‘core outputs’. Key outputs arising from NWDA’s interventions cover: jobs created or safeguarded; people assisted to get a job; new businesses created and surviving 12 months; businesses assisted to improve their performance; businesses assisted via collaboration with the UK knowledge base; public and private regeneration investment levered; hectares of brownfield land reclaimed and redeveloped; and skills assists. These core outputs help to shape investment decisions in the region, and projects are appraised on their ability to deliver against these core output areas. Monitoring of these core outputs allows the Agency to assess the delivery of Corporate Plan and RES objectives. NWDA is increasingly seeking to deliver its objectives through working with a range of partners, including local delivery vehicles at both regional and sub-regional levels. In addition, some of its goals are addressed through multi-regional working across the North of England through the Northern Way Growth Strategy, specifically with the RDAs in the North East and Yorkshire and the Humber regions (ONE and Yorkshire Forward). Besides the impact of its project and programme spend, NWDA also influences its partners’ and stakeholders behaviour and performance in other ways. This ‘Strategic Added Value’ (SAV) is seen as a key element of NWDA’s impact. Indeed, the policy framework that led to its establishment was designed to enable NWDA to harness national, regional and local institutions in order to exploit the region’s indigenous strengths and tackle particular weaknesses, and to provide the environment for businesses and communities to maximise their potential through reforms that strengthen the key drivers of productivity and growth. NWDA’s profile The Agency’s total expenditure between its establishment and 2006/2007 was £2.3 billion. The report focuses on understanding the impact of NWDA’s spending on interventions in the ‘relevant period’ between 2002/03 and 2006/07 which covered a total of £1.5 billion: thus, it focuses less on those 206 programmes and projects which NWDA inherited from its predecessors . The Agency’s relevant expenditure (i.e. the project and programme expenditure by NWDA in the period between 2002/2003 and 2006/2007 other than on national programmes and administration which is the focus of recent evaluation activities) can be analysed between four categories: the three IEF themes of business, place and people and an ‘other’ category that covers projects or programmes which span more than one theme. Table 126 analyses the Agency’s total relevant expenditure. It shows that the Agency’s total expenditure has increased in each of the past three years. Between 2002/03 and 2006/07, most of the Agency’s expenditure falls within the theme of regeneration through physical infrastructure interventions, accounting for over 40% of total agency expenditure on programme interventions in the period from 2002/03 to 2006/07. Expenditure within the business competitiveness theme and the “other” theme each account for approximately a quarter of total expenditure, whilst spend in the people and skills theme accounts for approximately 8% of total spend. Table 126 also provides a breakdown of NWDA’s overall spend per annum from 1999/2000 to 2006/07 between the three broad intervention categories outlined in the IEF and on national programmes. Administrative costs have not been included in this analysis, as this data was not available. As Table 126 shows, more of NWDA’s expenditure has been devoted to place interventions than to people or business interventions. It is also evident that NWDA’s spending priorities have changed since its establishment, with an overall trend of increasing expenditure devoted to people interventions in the later years, and some increase in the amount devoted to business interventions (peaking in 2004/05). Since its establishment, NWDA has spent £2.3bn on interventions (excluding administration), of which £1.5bn was spend on programmes which were established and developed by NWDA (rather than

206

The exception here is the SRB programme, a legacy programme, which has recently been evaluated to assess the impact of RDA spending.

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207

national programmes area in Table 126).

) in the ‘relevant period’ and is, thus, the primary focus of this report (see shaded

Table 126: Analysis of NWDA’s spend by year and by category of expenditure (£m) Business

Place

People

Other

National programmes

208

Admin

209

Total

1999/00

153.9

24.4

153.9

2000/01

162.8

20.1

162.8

2001/02

278.9

22.7

278.9

2002/03

21.9

113.1

0.5

47.7

7.0

11.9

183.2

2003/04

62.6

124.3

13.7

101.9

39.2

47.7

302.6

2004/05

106.2

74.9

24.0

70.5

51.6

47.7

275.6

2005/06

99.5

129.2

29.3

75.6

60.6

47.1

333.5

2006/07

66.6

198.7

55.8

53.9

69.8

47.9

374.9

Total relevant spend (2002/03– 2006/07)

356.7

640.1

123.4

349.6

228.2

269.6

1,469.7

Source: PwC analysis based on NWDA evaluation evidence

Table 127 summarises NWDA’s spend covered by the usable evaluation evidence. The evidence for the impact of NWDA’s spending, therefore, draws on 65 evaluations covering £933.2m of NWDA’s programme spend over the ‘relevant period’ which are consistent with the requirements of the IEF. This provides a robust evidence base upon which NWDA’s impact can be assessed. Annex D provides a list of the evaluations used. The level of coverage varies across the intervention categories. NWDA’s total spend has increased each year from 2002/03 to 2006/07 (with the exception of 2004/05, where expenditure was £27m less than in the previous year). Whilst spend on business interventions peaked in 2004/05, spend on people and skills interventions has increased consistently since 2002/03 through to 2006/07. Spending on place and other interventions has been more variable, with less having been spent on place interventions in 2004/05 compared with other years, whilst most was spent on other interventions in 2003/04.

207

This figure rises to £1,471.8m when SRB programmes are included.

208

In some instances, figures shown may not add to total due to rounding.

209

Total spend excludes that on national programmes and administration spend.

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Table 127: Analysis of NWDA’s expenditure covered by IEF compliant evaluations (2002/03210 2006/07) Expenditure covered by evaluations (£m)

% of spend

Number of evaluations

Business

245.8

69%

Place

313.1

49%

People

29.5

24%

Other

344.8

99%

Total

933.2

63.5%

211

Source: PwC analysis

For those interventions which have been categorised in the ‘Other/hybrid’ theme, it should be noted that the objectives and outputs / outcomes of these interventions span a number of themes and sub-themes. For the purposes of analysis and comparison, however, each intervention and its associated outputs / outcomes, have been classified into this category due to the multiplicity of their objectives, outputs and outcomes, rather than repeating evaluation evidence within each of the business, place and people sections.

Key findings Before setting out details of the impact of NWDA’s spending on each type of intervention, this section draws together the key findings from the evaluation evidence base for NWDA as a whole in relation to the two key objectives of our work, namely to summarise the available evidence of the impact of spending by NWDA, at both regional and national level, and to assess NWDA’s achievements against the objectives of both the RES and its Corporate Plan (which have changed over time) and each specific programme and project. It considers three key questions in turn: 

What has been the impact of NWDA’s spending both at the project and programme level and overall?



What does the available evidence suggest has been the value for money of NWDA’s interventions’?



How has NWDA performed against its relevant objectives both at the project and programme level and overall in relation to its Corporate Plan and the RES?

Impact The majority of NWDA’s evaluations covered in this report have estimated net outputs on the basis of the gross outputs. These have been presented as outputs achieved and future potential outputs. The ‘core’ gross and net outputs are summarised in Table 128.

210

Table 2 shows the spend between 2002/03 and 2006/07 which was covered by evaluations. This can be compared with the data in Table 1, which shows the total spend under each theme by NWDA. For example, NWDA spent a total of £358.7m on business interventions in the relevant period, and of this amount, £203.8m has been covered by evaluations 211

The figure quoted for percentage of spend covered by evaluations under the theme of other is larger than the amount of spend. This is because, for the purposes of comparison, a number of evaluations which span two or more themes or sub-themes have been presented within this section. Therefore, some of the projects within this theme will have outputs and outcomes closely aligned to those in the themes of business, place and people. Funding and consequent outputs and outcomes have only been illustrated within the other theme to ensure that these are not double-counted.

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Table 128: Gross and net attributable NWDA outputs (2002/03–2006/07) Jobs created/ safeguarded

Businesses created

Businesses assisted

Brownfield land (ha)

Skills assists

Business competitiveness & development Gross outputs achieved

12,248

233

7,933

10,871

Net outputs achieved

6,542

119

3,715

1,916

Additionality %, achieved

53.4

51.1

46.8

100

17.6

Future potential gross outputs

1,759

Future potential net outputs

1,759

Additionality %, future potential

100%

Regeneration through physical infrastructure Gross outputs achieved

17,610

128

1,001

3,651

Net outputs achieved

5,899

421

2,357

Additionality %, achieved

33.5

28.1

42.1

65.9

64.6

Gross outputs achieved

2,267

276

5,146

Net outputs achieved

1,647

195

3,239

Additionality %, achieved

72.7

69.1

70.7

62.9

Gross outputs achieved

65,712

3,077

5,055

1,834.5

77,591

Net outputs achieved

26,706

1,310

2,135

803.4

40,717

40.6

42.6

42.2

43.8

52.5

Gross outputs achieved

97,837

3,532

14,265

1,914.5

97,259

Net outputs achieved

40,794

1,530

6,466

868.4

48,229

Additionality %, achieved

41.7%

43.3%

45.3%

45.4%

49.6%

Future potential gross outputs

1,759

Future potential net outputs

1,759

Additionality %, future potential

100%

People and skills

Other

Additionality %, achieved Total

Source: PwC analysis based on NWDA evaluation evidence

NWDA’s spending has created/safeguarded jobs, assisted and helped to create new businesses, assisted people in skills development and remediated brownfield land. A large proportion of these outputs have already been achieved. However, a number of outputs are potentially to be achieved in the future. These are predominantly related to jobs created by business interventions. All of these future outputs are subject to varying degrees of uncertainty and should, as such, be treated with caution. The level of additionality resulting from NWDA’s business interventions varied by intervention and output type. Outputs in relation to jobs created/safeguarded had the highest level of additionality (53%), whilst people assisted with skills was the output with the lowest level of additionality within this theme (18%). For the Physical Regeneration interventions, the creation of new floorspace had the highest level of additionality (71%), whilst outputs in relation to jobs created/safeguarded displayed the lowest level of additionality (34%). For People and Skills interventions, three of the output areas had additionality levels

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of above 70% - these were for jobs created/safeguarded (73%), people assisted into employment (72%) and businesses assisted (71%). When comparing additionality achieved by NWDA, business interventions have higher levels of additionality than the national averages. For example, in NWDA, additionality for jobs within the Business theme was 53%, whilst at the national level was 48%. Similarly for businesses created, additionality within NWDA stood at 51% (compared with 40% nationally) and for business supported was 47% within NWDA (compared with 35% nationally). For regeneration through physical infrastructure interventions, levels of additionality within NWDA were slightly lower than the national average for jobs created (33% in NWDA compared with 45% nationally) and were also lower for brownfield land (66% within NWDA and 73% nationally). For people and skills interventions, additionality within NWDA was higher for jobs 73% within NWDA compared with 48% nationally) and for skills assists (63% within NWDA compared with 62% nationally), although additionality was lower for business creation (69% within NWDA compared with 82% nationally). Within the theme of other interventions, the additionality of interventions delivered by NWDA was lower for both jobs (41% within NWDA compared with 49% nationally) and businesses created (43% within NWDA compared with 51% nationally). In Table 129 we set out those measures that have been produced in order to demonstrate the range of outcomes from those evaluations with GVA estimates. Table 129: Outcomes from the evaluation of NWDA’s interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved GVA (annual, £m)

Future potential GVA (annual, £m)

Achieved & future potential GVA (annual, £m)

Business competitiveness and development East Manchester Economic Programme

2.2

11.2

15.6

26.8

FP6 Dissemination Module 2

1.0

27.2

Salford Start 2 Centre Managed Workspaces

0.6

0.3

Social Enterprise

5.2

4.2

24.4

28.6

Agenda for Change

9.8

42.5

Bio Core Technology Facility

10.9

5.5

Bio Investments

10.1

5.0

Clusters Programme

25.9

45.5

22.9

68.4

ICT Aimes Project

3.4

5.5

Infolab 21

10.0

7.2

Lancashire Digital Technology Centre

2.0

Liverpool Digital Project

16.2

10.2

National Biomanufacturing Centre

31.7

2.4

30.8

33.2

Regional Rural Programme

6.8

8.3

7.5

15.8

Broadband Investments

12.3

26.0

Daresbury Science and Innovation Campus

16.3

0.5

1.0

Higher Education Initiative Funds (HEIF2)

7.4

3.0

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Expenditure covered by evaluations (£m)

Achieved GVA (annual, £m)

Future potential GVA (annual, £m)

Achieved & future potential GVA (annual, £m)

Supply of Defence Diversification Agency Technology Diversification Managers (DDA TDMs)

1.7

17.8

Motivating Merseyside Business to Innovate (MMBI)

1.2

11.5

Liverpool Science Park

6.2

0.1

0.5

0.6

Project Access

16.8

38.2

The North West Science Fund

11.5

1.5

Infrastructure work at Arvato Gravure Printing Site, Speke

2.7

33.6

5.8

39.4

Quinn Glass, former Ince Power Station

4.9

68.0

BREW Programme

1.5

3.8

Green Business Park Project

0.8

0.9

ENWORKS NW Minimisation Project

1.0

0.2

NW Business Investment Funds

11.6

5.3

61.6

66.9

PowderJect Project

14.1

5.0 - 8.0

5.0 – 8.0

Sub-total (Business)

245.8

390.4-393.4

169.6

560.0 – 563.0

Regeneration through physical infrastructure Ancoats Regeneration Programme

45.0

27.2

Barrow Call Centre

3.5

8.0

Futures Park, Bacup

3.1

1.5

George Street Quarter, St. Helens

1.3

Kingsway Project, Widnes

0.8

1.0

Liverpool Commercial District

7.4

48.5

The Regional Strategic Sites Programme

55.5

179.3

Whitemoss Business Park

3.9

7.5

3.9

Historic River Wall, Chester

0.8

Land Reclamation

17.3

1.6

LV Public Realm Interim

19.3

Liverpool Biennial International Festival

0.5

LV Waterfront Construction Impacts

38.0

Regional Marketing Programme

16.3

119.1

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Expenditure covered by evaluations (£m)

Achieved GVA (annual, £m)

Future potential GVA (annual, £m)

Achieved & future potential GVA (annual, £m)

NML Into the Future

1.8

0.3

Tourism Interim

8.4

Visitor Interim

12.2

4.5

World of Glass

0.9

1.4

Central Park

15.0

8.7

Liverpool Land Development Company SIA (LLDC SIA)

30.3

16.2

West Lakes Renaissance

31.8

10.7

65.3-79.7

76.0 – 90.4

Sub-total (Regeneration)

313.1

435.5

65.3-79.7

500.8 – 515.2

BESS Programme

0.9

5.3

Maximising opportunity in Warrington

0.7

0.6

Project Unity

20.0

46.7

URC NEM Whitworth Media Technology Centre

2.0

0.3

Lancaster University Leadership Centre

4.4

3.8

Eastserve project

1.5

0.3

Sub-total (People and Skills)

29.5

57.0

321.9

808.7

Halton Focus for Change (Round 5)

9.1

9.3

Hyndburn PACT (Round 6)

6.5

8.7

Beacons East Manchester (Round 5)

19.2

13.0

Blackburn Town Centre Renaissance (TCR) Programme

5.4

9.2

Cheshire Rural Recovery Programme

6.5

6.3

Lancashire Rural Recovery Programme

7.0

7.4

Sefton Village Partnership

0.8

2.5

West Lancashire Investing in Business Programme

3.2

2.3

344.8

867.4

People and skills

Other SRB

Sub-total (Other)

Source: PwC analysis based on NWDA evaluation evidence

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Finally, Strategic Added Value is a key element of NWDA’s impact, as illustrated in Box 1. Examples shown here have been drawn from the evaluation evidence base, demonstrating the additional impacts which have been delivered by NWDA, over and above the gross and net outputs and outcomes which have been quantified in this section. NWDA’s Strategic Added Value Besides the impact of its project and programme spend, NWDA also influences its partners’ and stakeholders’ behaviour and performance in other ways as demonstrated by the following examples: 

The Quinn Glass project within the Business theme, which illustrated strategic leadership in attracting an international company to the North West region, and levering funding from other partners to support this intervention;



The Bio Core Technology Facility project within the Business theme, in which NWDA enabled the creation of synergies by promoting the facility within the regional bioscience sector;



The Regional Strategic Sites Programme, in which NWDA levered substantial funds and other in-kind resources from other organisations to enable this project to move forward, whilst also engaging with stakeholders through the project team structure;



The URC NEM Whitworth Media Technology Centre project, whereby intervention by NWDA has had a catalytic effect in the remodelling of a campus nearby, whilst also raising the profile of the Centre through engagement with suppliers and local companies;



The West Lancashire Investing in Business Programme, where the strategic influence of NWDA has ensured that the project adopted a coherent approach, and that synergies were achieved through involvement with other similar projects in the area; and



Blackburn Town Centre Renaissance project, whereby the strategic leadership of NWDA has strongly influenced the development of the town centre, drawing in funding from other sources, and continuing the existence of the Town Centre Partnership.

Source: NWDA

Value for money Table 130 considers the value for money of NWDA’s interventions from two perspectives: 

the GVA to cost ratio; and, especially where this is not available,



measures of cost per unit of net output using a range of measures where these are available.

In assessing the value for money of NWDA’s interventions we have sought to compare them with the evidence emerging from the evaluation of other RDAs’ activities. Care should, however, be taken when comparing the value for money of these interventions as these are set out in terms of both achieved and future potential (the latter being subject to uncertainty). Table 130 also sets out ratios of GVA to cost based on annual GVA estimates. Where annual GVA only was estimated, the evaluations gave no indication of the number of years over which the impact was expected to persist.

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Table 130: Summary of NWDA’s value for money (2002/03–2006/07) Achieved GVA:cost 212 ratio

Future potential GVA:cost ratio

Achieved cost per net job (£‘000)

Future potential cost per net job (£‘000)

Achieved cost per net business assist (£)

Achieved cost per net skills assist (£)

Business competitiveness & development East Manchester Economic Programme

5.1

7.1

4.2

4.6

20.1-31.2

6.9-10.7

Salford Start 2 Centre Managed Workspaces

0.5

Social Enterprise

0.8

4.7:1

5,502

Agenda for Change

4.8

Bio Core Technology Facility

2.3

109

641,176

Bio Investments

0.4

104

1.2-27.4

0.9

35-90

ICT Aimes Project

1.6

Infolab 21

0.7

Liverpool Digital Project

0.6

100

National Biomanufacturing Centre

0.1

1.0

674

63.4

0.9-1.4

27,000

133,333

8,153

Broadband Investments

2.1

10,250

Daresbury Science and Innovation Campus

1.0

Higher Education Initiative Funds (HEIF2)

0.6

8,767

FP6 Dissemination Module 2

Clusters Programme

Lancashire Digital Technology Centre

Regional Rural Programme

212

Note that all GVA:cost ratios are based on annual GVA estimates from each evaluation, compared with the overall cost to NWDA of the project or programme.

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Achieved GVA:cost 212 ratio

Future potential GVA:cost ratio

Achieved cost per net job (£‘000)

Future potential cost per net job (£‘000)

Achieved cost per net business assist (£)

Achieved cost per net skills assist (£)

Supply of Defence Diversification Agency Technology Diversification Managers (DDA TDMs)

7.6-13.1

143-247

Motivating Merseyside Business to Innovate (MMBI)

7.3

Liverpool Science Park

0.01

Project Access

2.3

The North West Science Fund

0.1

205

259

Infrastructure work at Arvato Gravure Printing Site, Speke

12.4

14.6

Quinn Glass, former Ince Power Station

13.9

BREW Programme

2.5

Green Business Park Project

1.2

ENWORKS NW Minimisation Project

0.2

167

4,524

NW Business Investment Funds

0.5

5.3

0.4-0.6

1.6

37.6

60.5

117.3

PowderJect Project Average (Business)

Regeneration through physical infrastructure Ancoats Regeneration Programme

0.5

53.7

Barrow Call Centre

2.3

12.6

10.6

Futures Park, Bacup

0.5

4.8

George Street Quarter, St. Helens

Kingsway Project, Widnes

1.3

23.4

Liverpool Commercial District

6.6

3.7

The Regional Strategic Sites Programme

3.2

39.2

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Achieved GVA:cost 212 ratio

Future potential GVA:cost ratio

Achieved cost per net job (£‘000)

Future potential cost per net job (£‘000)

Achieved cost per net business assist (£)

Achieved cost per net skills assist (£)

Whitemoss Business Park

1.9

8.0

4.8

Historic River Wall, Chester

0.1

346.0

LV Public Realm Interim

Liverpool Biennial International Festival

LV Waterfront Construction Impacts

Regional Marketing Programme

14.0

0.6 – 3.1

NML Into the Future

0.2

180.0

Visitor Interim

0.4

90.1

World of Glass

1.6

25.7

Central Park

0.6

5,000,000

Liverpool Land Development Company SIA (LLDC SIA)

3.3

West Lakes Renaissance

0.3

2.0-2.5:1

1,135,714

338,297

Average (Regeneration)

1.4

53.1

BESS Programme

5.9

5.7

4,639

1,061

Maximising opportunity in Warrington

0.9

2.6

Project Unity

2.3

13.7

12.0

URC NEM Whitworth Media Technology Centre

0.2

251

2,000,000

4,192

Lancaster University Leadership Centre

0.9

359

5,307

Eastserve project

0.5

187

1,382

Average (People and Skills)

1.9

17.9

453,846

8,684

Land Reclamation

Tourism Interim

People and skills

Other

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Achieved GVA:cost 212 ratio

Future potential GVA:cost ratio

Achieved cost per net job (£‘000)

Future potential cost per net job (£‘000)

Achieved cost per net business assist (£)

Achieved cost per net skills assist (£)

SRB

1.3

24.1

Halton Focus for Change (Round 5)

1.0

5.1

202,222

3,398

Hyndburn PACT (Round 6)

1.3

6.0

89,041

17,060

Beacons East Manchester (Round 5)

0.7

46.9

2,133,333

Blackburn Town Centre Renaissance (TCR) Programme

1.7

105.6

1,800,000

Cheshire Rural Recovery Programme

1.0

77.2

Lancashire Rural Recovery Programme

1.1

50.9

24,561

Sefton Village Partnership

3.1

10.3

West Lancashire Investing in Business Programme

0.7

55.6

800,000

Average (Other)

2.5

12.9

8,468

Source: PwC analysis based on NWDA evaluation evidence

When comparing GVA to cost ratios between NWDA and the national averages, NWDA performed above average for achieved annual GVA:cost for regeneration through physical infrastructure interventions, with a ratio of 1.4:1 in NWDA compared to 0.7:1 nationally, and for people and skills, with a ratio of 1.9:1 achieved in NWDA compared with 0.9:1 nationally. However GVA:cost ratios for business interventions compared slightly less favourably, with a ratio of 1.8:1 achieved in NWDA compared to 2.8:1 nationally. In terms of unit costs, the picture is again mixed with NWDA comparing well against the national average for People and Skills, similar for Physical Regeneration but below average for business. For business interventions, average cost per net job created in NWDA was £34,400 across all sub-themes, whilst nationally averages for sub-themes ranged from £8,301 per net job (Individual Enterprise Level Support) up to £37,938 (Science, R&D and Innovation Infrastructure). Average cost per net business created and cost per net business assisted within business interventions in NWDA exceeded the maximum range across all sub-theme nationally – cost per net business created was in excess of £3m in NWDA (compared with the maximum figure of £1.6m for the Science, R&D and Innovation Infrastructure sub-theme) and cost per net business assisted was £60,500 in NWDA (compared with the average figure of £9,705 for the Science, R&D and Innovation Infrastructure sub-theme nationally). Within NWDA’s regeneration through physical infrastructure interventions, costs per net job created were more comparable. The NWDA average within this theme was £53,100 per net job created, whilst the national average was £63,271. For interventions within the theme of people and skills, cost per net job for NWDA was favourable at an average of £17,911 across all sub-themes compared with £43,302 nationally. Nationally cost per net job in this theme ranged from £24,007 in the sub-theme of “Hybrid People and Skills interventions” up to £105,268 in the sub-theme of “Skills and Workforce Development”.

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Performance against objectives Table 131 presents NWDA’s performance against target information based upon evidence drawn from the Tasking Framework. For all of the measures, NWDA has exceeded the targets set by DTI/BERR, particularly for jobs created / safeguarded, businesses created and people assisted with skills. Table 131: Comparison of NWDA’s gross outputs reported to DTI/BERR against targets (2002/03213 2006/07) Jobs created/ safeguarded

Businesses created

Brownfield land (ha)

Skills assists

Funding levered 214 (£m)

Targets set by DTI/BERR

54,520

5,147

1,655

72,887

917

Achieved NWDA gross outputs reported to DTI/BERR

76,825

8,509

1,793

118,386

1,115

Number of years when targets met

5 out of 5

4 out of 4

Source: DTI/BERR and PwC analysis

Like all the RDAs (except the London Development Agency), in 2006 NWDA was subject to the National Audit Office’s Independent Performance Assessment (IPA) which assessed how well NWDA has responded to common challenges facing RDAs, namely balancing the interests of the region with national policy requirements, managing the conflicting demands of different regional stakeholders, looking outwards to promote the region while staying focused on what is happening inside and responding to new duties imposed by central government. This assessment sheds further light on how well the Agency has been able to fulfil its role. Overall, NWDA was seen as ‘performing strongly’, particularly in terms of its: 

ambition: NWDA led on the review of the North West Regional Economic Strategy, which was based on a strong consultation process which allowed partners to agree and recognise that the ambitions are right for the region; and



prioritisation: the NWDA were seen as having made difficult decisions in order to identify priorities for action within the Corporate Plan. There is now a clear business planning process within the Agency, which links priorities from the RES to the Corporate Plan and into detailed projects and activities.

Whilst there was an overall approval for NWDA’s work, and particularly in relation to the vision, ambition and prioritisation which the organisation has displayed, it was noted that there were areas for development. These areas included: 

capacity: the organisation was viewed as having been subject to constant and ongoing reorganisation, and a lack of clarity over the roles and responsibilities of Executive and Non-Executive members. The absence of a workforce skills audit was highlighted as a concern, and training was found not to clearly link to organisational priorities, or to the promotion of management and personal development.



performance management: the organisation was criticised for its process once project appraisals were submitted, and the processes around the Systems and Process Improvement Programme (SAPIP)

213

Based on information from NWDA Annual Reports. NWDA was not required to report funding levered in 2002/03, so this is not included within the achieved gross outputs reported to BERR. 214

Funding levered targets and outputs were not available for 2002/03.

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were also viewed as inadequate based on lack of communication and incomplete roll-out. Evaluation and benchmarking systems were also highlighted as issues in this area. Since the Independent Performance Assessment was undertaken in 2006, NWDA has undertaken a series of actions to address the areas which were identified as requiring development. One example includes the 2008 Stakeholder Survey, which was carried out to measure improvement. Table 132 sets out NWDA’s performance against the targets for each theme of interventions covered by the evaluations. Table 132: Comparison of NWDA’s performance against objectives across the evaluations (2002/03-2006/07) Exceeded

Met

Largely met

Mixed

Limited performance

Not assessed

Total

Evaluations

Spend (£m)

28.9

37.3

60.4

89.5

29.7

245.8

Evaluations

Spend (£m)

45.0

48.9

62.1

63.4

93.7

313.1

Evaluations

Spend (£m)

26.3

0.9

0.7

1.5

29.5

Evaluations

Spend (£m)

31.8

43.3

269.7

344.8

Evaluations

Spend (£m)

100.2

118.9

166.5

154.4

393.1

933.2

Business

Place

People

Other

Total

Source: PwC analysis based on NWDA evaluation evidence

Table 132 shows that for the interventions evaluated (by volume or value) where performance was assessed, performance against target was found to vary. It should be noted however, that we have not assessed performance against qualitative objectives or wider outcome measures (including Strategic Added Value), and the data analysed relates only to performance against output targets. In total, although 10 interventions exceeded the targets which were set and ten were largely met, a further 31 were mixed or limited in terms of their performance. There were a large number of evaluations which did not assess performance against objectives (15 in total accounting for £733.5m in value) and this has a bearing on the spread of results. This variable performance contrasts with NWDA’s achievement of the targets set by BERR in the Tasking Framework, which as shown in Table 130, was found to exceed targets set.

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Impact by intervention We have structured the analysis of the impact of NWDA’s spending, where possible, according to the three categories of intervention defined within the IEF (i.e. business, place and people). We have also analysed the impact of NWDA’s other activities that span more than one of these categories as well as the available evidence of the impact of the nine national programmes where NWDA has been responsible for delivery within parameters determined by central government departments. We have summarised the impact of NWDA’s interventions using a common structure in which: 

we summarise NWDA’s activities and expenditure on each programme;



we report the estimated net outputs arising from this expenditure (i.e. the additional outputs that are generated as a result of the intervention).



we summarise performance against objectives and the outcomes, where available, for each programme.

Business development and competitiveness interventions Rationale Improving business performance in order to secure economic growth is a key priority for the NWDA and the North West region as a whole. The North West RES (2006) states that manufacturing is highly productive, exceeding the English average, with advanced manufacturing being seen as crucial to the 215 region and its future success . The RES also highlights that the region tends to have less ownermanaged businesses relative to other regions in England, partly due to the historic dominance of large manufacturing companies. NWDA’s business interventions seek to address the challenges presented by the continued presence of the manufacturing sector within the region (such as R&D spend concentrated on a minority of areas and lower productivity when compared with similar businesses in other regions), but also to address other pertinent issues in relation to business development and competitiveness, such as a lower number of businesses per head than the English average, lower than average productivity and the challenges presented by the rural economy (such as a decreasing reliance on agriculture and growth in other areas). Each of the projects and programmes delivered by NWDA seeks to contribute towards the RES by improving productivity and growing the market. Within the North West RES (2006), it is stated that in order to support businesses, the region needs to focus on seven key factors, namely: 

developing new enterprise and growing existing companies;



developing higher added-value activity in regional sectors, such as biomedical, advanced engineering and materials and the digital and creative industries sectors;



innovation to improve productivity in all companies and exploit the higher education base of the region;



exploiting the science/research and development base of the region;



improving international competitiveness;



using ICT more effectively and efficiently; and

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NWDA (2006) Northwest Regional Economic Strategy, pp 21.

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

focusing on sustainable consumption and production.

The evidence of the impact of NWDA’s business interventions comes from 29 evaluations covering the six main sub-themes summarised in Table 133. Table 133: Summary of NWDA’s business development and competitiveness interventions (2002/03-2006/07) Intervention theme/sub-theme

Individual enterprise level support

Sector or cluster support

Science, R&D & innovation infrastructure

Evaluation

Expenditure covered by evaluations (£m)

East Manchester Economic Programme

2.2

FP6 Dissemination Module 2

1.0

Salford Start 2 Centre Managed Workspaces

0.6

Social Enterprise

5.2

Agenda for Change

9.8

Bio Core Technology Facility

10.9

Bio Investments

10.1

Clusters Programme

25.9

ICT Aimes Project

3.4

Infolab 21

10.0

Lancashire Digital Technology Centre

2.0

Liverpool Digital Project

16.2

National Biomanufacturing Centre

31.7

Regional Rural Programme

6.8

Broadband Investments

12.3

Daresbury Science and Innovation Campus

16.3

Higher Education Initiative Funds (HEIF2)

7.4

Supply of Defence Diversification Agency Technology Diversification Managers (DDA TDMs)

1.7

Motivating Merseyside Business to Innovate (MMBI)

6.2

Liverpool Science Park

16.8

Project Access

11.5

The North West Science Fund Inward investment promotion

Sustainable consumption and production

Other interventions

1.2

Infrastructure work at Arvato Gravure Printing Site, Speke

2.7

Quinn Glass, former Ince Power Station

4.9

BREW Programme

1.5

Green Business Park Project

0.8

ENWORKS NW Minimisation Project

1.0

NW Business Investment Funds

11.6

PowderJect Project

14.1

Total

245.8

Source: PwC analysis based on NWDA evaluation evidence

These evaluations cover £245.8m of NWDA spend. This spend is dominated by projects within the subtheme of sector or cluster support, a number of which are focused on the development of high-technology

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and science sectors within the region. These interventions contribute to a number of key factors outlined in the 2006 RES, namely: 

developing new enterprise and growing existing companies;



developing higher added-value activity in Regional Sectors;



innovation to improve productivity in all companies and exploiting the Higher Education base of the region;



exploiting the Science/Research and Development base of the region;



improving international competitiveness;



using ICT more effectively and efficiently; and



focusing on Sustainable Consumption and Production.

Impact Table 134 summarises the expenditure and achieved key gross outputs associated with the 29 business interventions evaluated. The primary outputs have been jobs created / safeguarded (particularly in the sub-themes of Sector or Cluster support and Science, R&D and Innovation Infrastructure), businesses created and assisted (particularly by Individual Enterprise Support and Science, R&D and Innovation Infrastructure) and people assisted with skills. In addition to these outputs two projects reported a total of 216 36 gross hectares of brownfield land redeveloped / reclaimed , and a further three projects reported the 217 development of 4,987 gross square metres of floorspace developed . Table 134 Gross achieved outputs from NWDA’s business development and competitiveness interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Gross jobs created/ safeguarded

Gross businesses created

Gross businesses assisted

Gross skills assists

Gross people assisted into employment

Individual Enterprise Level Support East Manchester Economic Programme

2.2

571

FP6 Dissemination Module 2

1.0

Salford Start 2 Centre Managed Workspaces

0.6

4,538

Social Enterprise

5.2

617

1,351

2,512

216

The evaluation of the Infrastructure Work at the Arvato Gravure Printing Site in Speke reported the reclamation/redevelopment of 20 ha of brownfield land and the evaluation of the Quinn Glass project reported the reclamation/redevelopment of 16 ha of brownfield land. 217

The evaluation of the Salford Start 2 Centre Managed Workspaces reported the creation of 555 square metres of new floorspace and the evaluation of the Lancashire Digital Technology Centre reported the creation of 1,782 square metres of new floorspace. The evaluation of the Regional Rural Programme reported the creation of 2,650 square metres of new floorspace.

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Expenditure covered by evaluations (ÂŁm)

Gross jobs created/ safeguarded

Gross businesses created

Gross businesses assisted

Gross skills assists

Gross people assisted into employment

Sector or Cluster Support Agenda for Change

9.8

2,834

Bio Core Technology Facility

10.9

112

Bio Investments

10.1

222

Clusters Programme

25.9

1,723

ICT Aimes Project

3.4

187

275

Infolab 21

10.0

239

Lancashire Digital Technology Centre

2.0

Liverpool Digital Project

16.2

424

National Biomanufacturing Centre

31.7

Regional Rural Programme

6.8

631

118

5,137

2,059

Science, R&D and Innovation Infrastructure Broadband Investments

12.3

1,170

Daresbury Science and Innovation Campus

16.3

Higher Education Initiative Funds (HEIF2)

7.4

153

1,443

Supply of Defence Diversification Agency Technology Diversification Managers (DDA TDMs)

1.7

Motivating Merseyside Business to Innovate (MMBI)

1.2

Liverpool Science Park

6.2

Project Access

16.8

2,660

The North West Science Fund

11.5

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Expenditure covered by evaluations (ÂŁm)

Gross jobs created/ safeguarded

Gross businesses created

Gross businesses assisted

Gross skills assists

Gross people assisted into employment

Inward Investment Promotion Infrastructure work at Arvato Gravure Printing Site, Speke

2.7

109

Quinn Glass, former Ince Power Station

4.9

Sustainable consumption and production BREW Programme

1.5

318

Green Business Park Project

0.8

ENWORKS NW Minimisation Project

1.0

301

NW Business Investment Funds

11.6

295

PowderJect Project

14.1

740

Total

245.8

12,248

233

7,933

10,871

Other interventions

Source: PwC analysis based on NWDA evaluation evidence

In addition to the gross achieved outputs set out in Table 134, a number of evaluations highlighted the delivery of additional gross outputs. Within the Business theme, three projects delivered a total of 4,987 218 gross square metres of new floorspace and two projects delivered a total of 36 gross hectares of 219 220 reclaimed / redeveloped land . Five evaluations estimated future potential gross outputs . In each instance, the estimated future potential gross outputs were in relation to jobs created / safeguarded, totalling an additional 1,759 jobs. These were expected to be generated from the East Manchester Economic Programme (137 jobs), the ICT Aimes Project (888 jobs), the Lancashire Digital Technology Centre project (90 jobs), the Infrastructure Work at the Arvato Gravure Printing Site project (179 jobs) and the Liverpool Digital Project (465 jobs). Table 135 summarises the expenditure and key net outputs associated with the 29 business interventions evaluated.

218

The Social Enterprise project delivered 555 square metres of floorspace, the Lancashire Digital Technology project delivered 1,782 square metres of floorspace (although no net outputs were recorded) and the Regional Rural Programme delivered 2,650 square metres of floorspace. 219

The Infrastructure Work at the Arvato Gravure Printing Site redeveloped 20 gross hectares of brownfield land and the Quinn Glass project redeveloped 16 gross hectares of brownfield land. 220

The National Report has used all relevant evaluation evidence to estimate ranges of future potential gross and net outputs.

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Table 135: Net achieved outputs from NWDAâ&#x20AC;&#x2122;s business development and competitiveness interventions (2002/03-2006/07) Expenditure covered by evaluations (ÂŁm)

Net jobs created/ safeguarded

Net businesses created

Net businesses assisted

Net skills assists

Net people assisted into employment

Individual Enterprise Level Support East Manchester Economic Programme

2.2

343

FP6 Dissemination Module 2

1.0

126

Salford Start 2 Centre Managed Workspaces

0.6

Social Enterprise

5.2

432

945

Agenda for Change

9.8

1,200

Bio Core Technology Facility

10.9

104

Bio Investments

10.1

138

Clusters Programme

25.9

509

ICT Aimes Project

3.4

169

Infolab 21

10.0

214

Lancashire Digital Technology Centre

2.0

Liverpool Digital Project

16.2

315

National Biomanufacturing Centre

31.7

Regional Rural Programme

6.8

255

1,570

834

Sector or Cluster Support

Science, R&D and Innovation Infrastructure Broadband Investments

12.3

1,200

Daresbury Science and Innovation Campus

16.3

Higher Education Initiative Funds (HEIF2)

7.4

844

Supply of Defence Diversification Agency Technology Diversification Managers (DDA TDMs)

1.7

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Expenditure covered by evaluations (£m)

Net jobs created/ safeguarded

Net businesses created

Net businesses assisted

Net skills assists

Net people assisted into employment

Motivating Merseyside Business to Innovate (MMBI)

1.2

Liverpool Science Park

6.2

Project Access

16.8

1,128

The North West Science Fund

11.5

Inward Investment Promotion Infrastructure work at Arvato Gravure Printing Site, Speke

2.7

Quinn Glass, former Ince Power Station

4.9

Sustainable consumption and production BREW Programme

1.5

117

Green Business Park Project

0.8

ENWORKS NW Minimisation Project

1.0

221

NW Business Investment Funds

11.6

164

PowderJect Project

14.1

888

Total

245.8

6,542

119

3,715

1,916

Other interventions

Source: PwC analysis based on NWDA evaluation evidence

Further to the outputs shown in Table 135, a number of evaluations highlighted the delivery of other net 221 outputs. Two projects delivered a total of 1,732 net square metres of new floorspace and two projects 222 delivered a total of 36 net hectares of reclaimed / redeveloped land . In addition to the achieved net 223 outputs set out in Table 135, three evaluations estimated future potential net outputs: 

the East Manchester Economic Programme evaluation estimated additional future potential net outputs of 480 jobs created/safeguarded;



the National Biomanufacturing Centre evaluation estimated additional future potential net outputs of 500 jobs created/safeguarded; and

221

The Social Enterprise project delivered 555 net square metres of floorspace and the Regional Rural Programme delivered 1,177 net square metres of floorspace. 222

The Infrastructure Work at the Arvato Gravure Printing Site redeveloped 20 net hectares of brownfield land and the Quinn Glass project redeveloped 16 net hectares of brownfield land. 223

The evaluation of the Quinn Glass project indicated that there would be no future potential jobs created/safeguarded.

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

the evaluation of the Infrastructure Work at the Arvato Gravure Printing Site in Speke estimated additional future potential net outputs of 179 jobs created/safeguarded.

The level of additionality resulting from NWDA’s interventions varied across intervention and output type. Outputs in relation to jobs created/safeguarded had the highest level of additionality (53%), whilst people assisted with skills was the output with the lowest level of additionality within this theme (18%). When comparing levels of additionality within the theme of Business in NWDA with national averages, NWDA has higher levels of additionality in the three main areas where comparison is possible, as follows: 

additionality for jobs was calculated to be 53% in NWDA, compared with 48% nationally;



additionality for businesses created was calculated to be 51% in NWDA, compared with 40% nationally; and



additionality for businesses assisted was calculated to be 47% in NWDA, compared with 35% nationally.

Table 136 summarises the impact on GVA (both achieved and future potential) of NWDA’s interventions to promote business development and competitiveness. All evaluations estimated GVA on an annual basis. Where an estimate of GVA had not been undertaken within the evaluation, we have provided an estimate of GVA based on the number of net jobs created/safeguarded. Where annual GVA was estimated no indication was given of the number of years over which the impact was expected (or assumed) to persist. Moreover, future potential impacts on GVA have not been discounted nor have constant prices been applied. Table 136: Outcomes from NWDA’s business development and competitiveness interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Net GVA achieved (annual, £m)

Net GVA future potential (annual, £m)

East Manchester Economic Programme

2.2

11.2

15.6

FP6 Dissemination Module 2

1.0

27.2

Salford Start 2 Centre Managed Workspaces

0.6

0.3

Social Enterprise

5.2

4.2

24.4

Agenda for Change

9.8

42.5

Bio Core Technology Facility

10.9

5.5

Bio Investments

10.1

5.0

Clusters Programme

25.9

45.5

22.9

ICT Aimes Project

3.4

5.5

Infolab 21

10.0

7.2

Lancashire Digital Technology Centre

2.0

Liverpool Digital Project

16.2

10.2

National Biomanufacturing Centre

31.7

2.4

30.8

Regional Rural Programme

6.8

8.3

7.5

Individual Enterprise Level Support

Sector or Cluster Support

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Expenditure covered by evaluations (£m)

Net GVA achieved (annual, £m)

Net GVA future potential (annual, £m)

Science, R&D and innovation infrastructure Broadband Investments

12.3

26.0

Daresbury Science and Innovation Campus

16.3

0.5

Higher Education Initiative Funds (HEIF2)

7.4

3.0

Supply of Defence Diversification Agency Technology Diversification Managers (DDA TDMs)

1.7

17.8

Motivating Merseyside Business to Innovate (MMBI)

1.2

11.5

Liverpool Science Park

6.2

0.1

0.5

Project Access

16.8

38.2

The North West Science Fund

11.5

1.5

Infrastructure work at Arvato Gravure Printing Site, Speke

2.7

33.6

5.8

Quinn Glass, former Ince Power Station

4.9

68.0

BREW Programme

1.5

3.8

Green Business Park Project

0.8

0.9

ENWORKS NW Minimisation Project

1.0

0.2

NW Business Investment Funds

11.6

5.3

61.6

PowderJect Project

14.1

5.0 – 8.0

Total

245.8

390.4-393

169.6

Inward Investment Promotion

Sustainable consumption and production

Other interventions

Source: PwC analysis based on NWDA evaluation evidence

Additional net outcomes recorded in the evaluation evidence relate only to the ICT Aimes project which reported a net achieved increase in turnover of £9.7m to date, and a net future potential increase in turnover of £51m. The PowderJect Project evaluation estimated a net future potential increase in turnover of £28.9m per annum and the Regional Rural Programme evaluation estimated a future potential increase in turnover of £6.5m per annum. For the BREW and ENWORKS projects within the sub-theme 224 of sustainable consumption and production, additional savings were reported to be £26.9m , whilst the ENWORKS project expected to generate a further £23.4m in savings up until February 2008. Finally, besides the impact of its project and programme spend, Strategic Added Value is a key element of NWDA’s impact, as illustrated in Box 2 below. The examples shown have been drawn from the evaluations of the Quinn Glass project and the Bio Core Technology Facility, which demonstrates that additional impacts have been delivered by NWDA, over and above the gross and net outputs and outcomes which have been quantified in this annex. 224

The nature of these savings, and the basis to explain how this figure was calculated have not been outlined within the evaluation.

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NWDA’s Strategic Added Value Quinn Glass NWDA demonstrated many important elements of SAV when providing funding for Quinn Glass’s investment in the reclamation and infrastructure of the former Ince Power Station.

225

The NWDA demonstrated strategic leadership by playing a key role in attracting the Quinn Glass investment to the north-west when it became aware of Quinn’s interest. The NWDA brought together the key partners (Chester City Council, Ellesmere Port and Neston Borough Council, Learning and Skills Council and Job Centre Plus) as well as local and sub-regional partners to ensure that a suitable funding package was presented to Quinn Glass to entice them to the North West region. The support provided related to site reclamation, site infrastructure, skills development and staff recruitment. The NWDA levered funding support from RSA and LSC investment, and continuing management particularly from Chester City Council and Ellesmere Port and Neston Borough Council. Engagement with the community and local environment was necessary with this project. To achieve this, a local liaison group, which include Chester City Council, Ellesmere Port and Neston Borough Council, Quinn Glass, and the local Parish Councils in Ince and Elton, was created. NWDA also engaged with regional partners to provide on-going support to Quinn Glass. Bio-Core Technology Facility 226

NWDA has provided strategic leadership throughout the Core Technology Facility (CTF) programme . The Agency’s influence has ensured that RES objectives for encouraging growth in target sector and retaining key employers in the region were met. Manchester is increasingly recognised as a biotech centre of excellence. NWDA and UMIC have established strong working relationships and this has extended to other project deliverers. This collaborative approach has successfully created a facility that is the focus of activity of a number of business development support and networking initiatives, which reach the wider biotech sector. NWDA’s financial support has helped to lever further funding from the ERDF. In addition, funding was received from the University, the Florida High Tech Corridor and the city of Orlando. This funding has been used for construction and business support and the subsequent fit-out of specialist company accommodation. NWDA has demonstrated synergy through this project: CTF is developing a key role as a hub for interaction within the biotech community. The University, UMIC, UMIP, Bionow, BioStars, Innovation Funds and others are all using this space and the opportunities it brings to reach the biotech community. Source: NWDA

Value for money Table 137 sets out the achieved and future potential GVA to cost ratios of NWDA’s business development and competitiveness interventions. The GVA to cost ratio compares GVA impacts to the cost of the intervention: where there is a GVA to cost ratio of greater than one, the economic benefits of the interventions attributable to NWDA’s funding exceed their costs. This is the case for some, but not all of the interventions where GVA has been measured.

225

NWDA (2008) Evaluation of the Quinn Glass Project, former Ince Power Station.

226

NWDA (2008) Evaluation of the Bio Core Technology Facility.

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Table 137: Achieved and future potential GVA to cost ratios from NWDAâ&#x20AC;&#x2122;s business development and competitiveness interventions (2002/03-2006/07) Expenditure covered by evaluations (ÂŁm)

Achieved GVA:cost ratio (annual)

Future potential GVA:cost ratio (annual)

East Manchester Economic Programme

2.2

5.1

7.1

FP6 Dissemination Module 2

1.0

20.1-31.2

Salford Start 2 Centre Managed Workspaces

0.6

0.5

Social Enterprise

5.2

0.8

4.7

Agenda for Change

9.8

4.8

Bio Core Technology Facility

10.9

2.3

Bio Investments

10.1

0.4

Clusters Programme

25.9

1.2-27.4

0.9

ICT Aimes Project

3.4

1.6

Infolab 21

10.0

0.7

Lancashire Digital Technology Centre

2.0

Liverpool Digital Project

16.2

0.6

National Biomanufacturing Centre

31.7

0.1

1.0

Regional Rural Programme

6.8

0.9-1.4

Broadband Investments

12.3

2.1

Daresbury Science and Innovation Campus

16.3

1.0

Higher Education Initiative Funds (HEIF2)

7.4

0.6

Supply of Defence Diversification Agency Technology Diversification Managers (DDA TDMs)

1.7

7.6-13.1

Motivating Merseyside Business to Innovate (MMBI)

1.2

7.3

Liverpool Science Park

6.2

0.1

Project Access

16.8

2.3

The North West Science Fund

11.5

0.1

Infrastructure work at Arvato Gravure Printing Site, Speke

2.7

12.4

14.6

Quinn Glass, former Ince Power Station

4.9

13.9

Individual Enterprise Level Support

Sector or Cluster Support

Science, R&D and innovation infrastructure

Inward Investment Promotion

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Expenditure covered by evaluations (£m)

Achieved GVA:cost ratio (annual)

Future potential GVA:cost ratio (annual)

Sustainable consumption and production BREW Programme

1.5

2.5

Green Business Park Project

0.8

1.2

ENWORKS NW Minimisation Project

1.0

0.2

NW Business Investment Funds

11.6

0.5

5.3

PowderJect Project

14.1

0.4-0.6

Total

245.8

Other interventions

227

1.6

0.7

Source: PwC analysis based on NWDA evaluation evidence

When GVA to cost ratios achieved in NWDA are compared across sub-themes, the highest ratios were for Individual Enterprise Level Support (4.8:1) and Inward Investment Promotion (13.4:1). The ratios were lower, within the sub-themes of Sector/Cluster Support and Science, R&D and Innovation Infrastructure, both at 1.3:1. The overall GVA to cost ratio for Business interventions in NWDA was 1.6:1, which was lower than the ratio for the People and Skills theme (1.9:1), but higher than the Physical Regeneration theme at 1.4:1. When GVA to cost ratios achieved in NWDA are compared with the national averages for annual GVA, performance is mixed. Overall, NWDA business interventions achieved an average GVA:cost ratio of 1.6:1, which was lower than the national average of 2.8:1 for interventions in this theme, driven by two sub-themes performed less well than the national average – these were for “Sector/Cluster support” (1.0:1 in NWDA compared to 3.2:1 nationally) and for other business interventions (0.4:1 in NWDA compared to 1.7:1 nationally). However, when analysed at sub-theme level, three sub-themes had very similar or higher GVA:cost ratios than the national average – this was for “Individual Enterprise Level Support” (4.8:1 in NWDA compared to 4.9:1 nationally), “Science, R&D and Innovation Infrastructure” (1.3:1 in NWDA compared to 1.1:1 nationally) and “Inward Investment Promotion” (13.4:1 in NWDA compared to 3.7:1 nationally). As Table 137 shows, there are 15 interventions within this theme (of 29 interventions in total) which have already achieved economic benefits which exceed their costs. Five of these interventions are expected to deliver increased returns on the initial investment in the future, with each evaluation reporting higher future potential GVA to cost ratios than have been achieved to date. Both investments within the subtheme of Inward Investment Promotion performed particularly well, with achieved GVA benefits much in excess of cost. Table 138 sets out the achieved and future potential cost per net output of NWDA’s business development and competitiveness interventions.

227

Interventions in the theme of inward investment promotion have higher than average GVA to cost ratios, both within NWDA and nationally, and thus these interventions tend to skew the average GVA: cost ratio within the business theme.

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Table 138: Achieved and future potential cost per net output from NWDA’s business development and competitiveness interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved cost per net job (£‘000)

Future potential cost per net job (£‘000)

Achieved cost per net business supported (£)

Achieved cost per net skills assist (£)

Individual Enterprise Level Support East Manchester Economic Programme

2.2

4.2

4.6

FP6 Dissemination Module 2

1.0

6.9-10.7

Salford Start 2 Centre Managed Workspaces

0.6

Social Enterprise

5.2

5,502

Agenda for Change

9.8

Bio Core Technology Facility

10.9

109

641,176

Bio Investments

10.1

104

Clusters Programme

25.9

35-90

ICT Aimes Project

3.4

Infolab 21

10.0

Lancashire Digital Technology Centre

2.0

Liverpool Digital Project

16.2

100

National Biomanufacturing Centre

31.7

647

63.4

Regional Rural Programme

6.8

133,333

8,153

Sector or Cluster Support

Science, R&D and innovation infrastructure Broadband Investments

12.3

10,250

Daresbury Science and Innovation Campus

16.3

Higher Education Initiative Funds (HEIF2)

7.4

8,767

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Expenditure covered by evaluations (£m)

Achieved cost per net job (£‘000)

Future potential cost per net job (£‘000)

Achieved cost per net business supported (£)

Achieved cost per net skills assist (£)

Supply of Defence Diversification Agency Technology Diversification Managers (DDA TDMs)

1.7

143-247

Motivating Merseyside Business to Innovate (MMBI)

1.2

Liverpool Science Park

6.2

Project Access

16.8

The North West Science Fund

11.5

205

259

Inward Investment Promotion Infrastructure work at Arvato Gravure Printing Site, Speke

2.7

Quinn Glass, former Ince Power Station

4.9

Sustainable consumption and production BREW Programme

1.5

Green Business Park Project

0.8

ENWORKS NW Minimisation Project

1.0

167

4,524

NW Business Investment Funds

11.6

PowderJect Project

14.1

245.8

37.6

60.5

117.3

Other interventions

Average - Business Business

Source: PwC analysis based on NWDA evaluation evidence

The cost per net job achieved from business development and competitiveness interventions was very variable, ranging from £4,200 for the East Manchester Economic Programme to £674,000 for the National Biomanufacturing Centre. However the figure for the National Biomanufacturing Centre is skewed as a large proportion of the expenditure to date has related to the fact that the intervention has been mainly capital in nature, with further revenue and employment related effects expected in the future. When comparing value for money achieved through business interventions delivered by NWDA with the RDA national average, the picture is also somewhat variable. Overall the average figure for cost per net job created across all NWDA business interventions was £37,572, whilst the cost per net job at

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sub-theme level nationally ranged from £8,301 (Individual Enterprise Level Support) up to £37,938 (Science, R&D and Innovation Infrastructure). Analysis at sub-theme level revealed the following: 

within the sub-theme of Individual Enterprise Level support, the national average cost per net job was £8,301. Two of NWDA’s interventions within this sub-theme had lower costs per net job (East Manchester Economic Programme and FP6 Dissemination Module 2), whilst two interventions had a higher cost per net job figure (Salford Start 2 Centre Managed Workspaces and Social Enterprise);



within the sub-theme of Sector / Cluster support, the national average cost per net job was £12,135. Three of NWDA’s interventions within this sub-theme had lower costs per net job (Agenda for Change, ICT Aimes and InfoLab) whilst six interventions had a higher cost per net job figure (Bio Core Technology Facility, Bio Investments, Clusters, Liverpool Digital Project, the National Biomanufacturing Centre and the Regional Rural Programme);



within the sub-theme of Science, R&D and Innovation Infrastructure, the national average cost per net job was £37,938. Three of NWDA’s interventions had a lower cost per net job figure (Daresbury Science and Innovation Centre, MMBI and Project Access) whilst four interventions had a higher cost per net job figure (HEIF2, DDA TDM’s, Liverpool Science Park and NW Science Fund); and



within the sub-theme of Inward Investment Promotion, the national average cost per net job was £11,563. Both of NWDA’s interventions (Quinn Glass and Infrastructure Works at the Arvato Gravure Printing Site) within this category had higher costs per net job, at £20,000 and £36,000 respectively).

It was not possible to compare average cost per net business created by NWDA with the national picture due to the small number of evaluations which recorded evidence of this output. For Businesses Assisted, three evaluations calculated net costs per assist. This was for the Social Enterprise Programme, which had a cost per net business assist of £5,502, which compared favourably with the national average of £8,502 for interventions in the sub-theme of Individual Enterprise Level Support. Similarly the evaluation of the Broadband Investments project had a cost per net business assist of £10,250 compared with the national average of £24,640 for interventions in the sub-theme of Science, R&D and Innovation Infrastructure. The Regional Rural Programme had a cost per net business assist of £133,333, which did not compare well to the national average of £3,901 for interventions in the sub-theme of Sector/Cluster Support. Performance against objectives Table 139 summarises the performance against objectives of NWDA’s interventions to promote business development and competitiveness. The evaluations indicate that performance against objectives was on the whole mixed, although six interventions exceeded the objectives set and four interventions largely 228 met most of the objectives set. Considering the performance of the five highest value interventions against objectives, it was found that performance was variable, with two interventions having limited performance (Clusters and Daresbury Science and Innovation Campus) and one largely meeting the objectives set (Liverpool Digital Project). The remaining two interventions (Broadband Investments and Project Access) did not provide an assessment of performance against objectives.

228

The five highest value interventions within the business theme were the Clusters Programme, Liverpool Digital Project, Broadband Investments, Daresbury Science and Innovation Campus and Project Access.

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Table 139: Performance against objectives of NWDAâ&#x20AC;&#x2122;s business development and competitiveness interventions (2002/03-2006/07) Expenditure covered by evaluations (ÂŁm)

Performance against objectives

FP6 Dissemination Module 2

1.0

Exceeded

Social Enterprise

5.2

Exceeded

East Manchester Economic Programme

2.2

Mixed

Salford Start 2 Centre Managed Workspaces

0.6

Individual Enterprise Level Support

Not assessed

Sector or Cluster Support Infolab 21

10.0

Largely met

Liverpool Digital Project

16.2

Largely met

Agenda for Change

9.8

Mixed

Bio Core Technology Facility

10.9

Mixed

Bio Investments

10.1

Mixed

ICT Aimes Project

3.4

Mixed

Lancashire Digital Technology Centre

2.0

Mixed

Clusters Programme

25.9

Limited performance

National Biomanufacturing Centre

31.7

Limited performance

Regional Rural Programme

6.8

Exceeded

Science, R&D and innovation infrastructure Supply of Defence Diversification Agency Technology Diversification Managers (DDA TDMs)

1.7

The North West Science Fund

11.5

Exceeded

Liverpool Science Park

6.2

Largely met

Higher Education Initiative Funds (HEIF2)

7.4

Mixed

Motivating Merseyside Business to Innovate (MMBI)

1.2

Daresbury Science and Innovation Campus

16.3

Limited performance

Broadband Investments

12.3

Not assessed

Project Access

16.8

Not assessed

Exceeded

Mixed

Inward Investment Promotion Infrastructure work at Arvato Gravure Printing Site, Speke

2.7

Quinn Glass, former Ince Power Station

4.9

Largely met

Green Business Park Project

0.8

Mixed

ENWORKS NW Minimisation Project

1.0

Mixed

Exceeded

Sustainable consumption and production

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Expenditure covered by evaluations (£m)

Performance against objectives

1.5

Limited performance

NW Business Investment Funds

11.6

Mixed

PowderJect Project

14.1

Limited performance

BREW Programme Other interventions

Source: PwC analysis based on NWDA evaluation evidence

Regeneration through physical infrastructure interventions Rationale Regeneration through physical infrastructure is a key priority for NWDA, identified under the theme of “Infrastructure” within the North West RES. The RES identifies the particular challenges facing the region in terms of transport infrastructure, particularly due to the region featuring the highest trunk road congestion of any region outside London. Similar challenges exist in relation to redevelopment of vacant and derelict land, with the North West being home to 24% of the English total for this type of land. The North West also hosts four of the nine Housing Market Renewal areas in England, and between 2000 and 2006, the region received £2.1bn in EU Structural Funds, emphasising the need for interventions in relation to regeneration through physical infrastructure developments. Each of the projects and programmes delivered by NWDA seeks to contribute towards the vision set out in the RES. Within the North West RES (2006), it is stated that in order to achieve this vision, the region needs to focus on six key factors, namely: 

developing our transport infrastructure to connect the region internally and with the rest of the world and using it more effectively;



ensuring appropriate land use – both in terms of brownfield land and new employment sites;



developing housing to facilitate growth;



ensuring planning supports sustainable growth;



developing appropriate use and supply of energy; and



encouraging public and private investment.

Evidence of the impact of NWDA’s regeneration initiatives is based on 21 evaluations covering the three main sub-themes summarised in Table 140.

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Table 140: Summary of NWDA’s regeneration through physical infrastructure interventions (2002/03-2006/07) Intervention theme/sub-theme

Evaluation

Expenditure covered by evaluations (£m)

Capital projects Bringing land back into use – employment sites

Public realm/other infrastructure

Ancoats Regeneration Programme

45.0

Barrow Call Centre

3.5

Futures Park, Bacup

3.1

George Street Quarter, St. Helens

1.3

Kingsway Project, Widnes

0.8

Liverpool Commercial District

7.4

The Regional Strategic Sites Programme

55.5

Whitemoss Business Park

3.9

Historic River Wall, Chester

0.8

Land Reclamation

17.3

LV Public Realm Interim

19.3

Liverpool Biennial International Festival

0.5

LV Waterfront Construction Impacts

38.0

Regional Marketing Programme

16.3

NML Into the Future

1.8

Tourism Interim

8.4

Visitor Interim

12.2

World of Glass

0.9

Central Park

15.0

LLDC SIA

30.3

West Lakes Renaissance

31.8

Revenue projects Image/events/ tourism

Cross Cutting Themes

Total

313.1

Source: PwC analysis based on NWDA evaluation evidence

This spend is dominated by capital investments under the sub-theme of ‘Bringing Land Back into Use for Employment Sites’, with the Ancoats Regeneration Programme and the Regional Strategic Sites Programme representing over £100m in expenditure. The revenue projects were more diverse in nature, with support ranging by sector and scope (geographically and financially). Impact Key gross outputs set out in Table 141 arising from the regeneration interventions have been new floorspace developed and jobs created/safeguarded. Given the longer term nature of some of these interventions, and the fact that some are still in the implementation stages (such as the LV Waterfront Construction and the Regional Strategic Sites Programme), therefore, a distinction is drawn between 229 achieved and future potential outputs .

229

Not all evaluations which were undertaken at an early or interim stage were able to quantify potential future outputs. Where such potential future outputs have been quoted within evaluations, we have used these to inform our report.

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Table 141: Gross outputs (achieved and future potential) of NWDA’s regeneration through physical infrastructure interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved gross jobs created/ safeguarded

Future potential gross jobs created/ safeguarded

Achieved gross brownfield land reclaimed/ redeveloped (ha)

Achieved gross commercial floorspace 2 (m )

Future potential gross commercial floorspace 2 (m )

29,937

Bringing land back into use – employment sites Ancoats Regeneration Programme

45.0

Barrow Call Centre

3.5

300

4,383

Futures Park, Bacup

3.1

298

2,090

George Street Quarter, St. Helens

1.3

Kingsway Project, Widnes

0.8

2,094

Liverpool Commercial District

7.4

5,051

The Regional Strategic Sites Programme

55.5

5,908

Whitemoss Business Park

3.9

467

379

12,900

2,525

230

895

Public realm/other infrastructure Historic River Wall, Chester

0.8

Land Reclamation

17.3

LV Public Realm Interim

19.3

Liverpool Biennial International Festival

0.5

LV Waterfront Construction Impacts

38.0

Regional Marketing Programme

16.3

NML Into the Future

1.8

Image/events/tourism

230

These are defined as “opportunities for jobs” within the evaluation however are quoted as “jobs created” within the value for money section of the Ancoats evaluation.

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Expenditure covered by evaluations (£m)

Achieved gross jobs created/ safeguarded

Future potential gross jobs created/ safeguarded

Achieved gross brownfield land reclaimed/ redeveloped (ha)

Achieved gross commercial floorspace 2 (m )

Future potential gross commercial floorspace 2 (m )

Tourism Interim

8.4

Visitor Interim

12.2

399

World of Glass

0.9

Central Park

15.0

549

15,700

LLDC SIA

30.3

2,670

West Lakes Renaissance

31.8

925

2,041-2,489

5,799

Total

313.1

17,610

2,420-2,868

72,903

2,525

Cross Cutting Themes

Source: PwC analysis based on NWDA evaluation evidence

In addition to the gross outputs in Table 141, the evaluation of the Regional Marketing Programme highlights that this programme will have a future potential impact of £100.2m annually on tourism revenue in the region. None of the evaluations highlighted any future potential impact in terms of gross brownfield land reclaimed / redeveloped. However, the following gross outputs were also identified by projects within this theme: 

128 gross new businesses were created (six were created by the Central Park project, 109 were created by the West Lakes Renaissance project and 13 were created by the Futures Park project);



1,001 gross businesses were assisted (38 by the Kingsway Project in Widnes, 97 by the Central Park project and 866 by the Tourism project);



3,651 gross skills assists were delivered (145 by the Barrow Call Centre project, 1,500 by the Futures Park project, 1,421 by the Kingsway Project in Widnes and 585 by the West Lakes Renaissance project); and



2,928 people were assisted to get a job (771 assists were generated by the West Lakes Renaissance Project and a further 2,157 assists were delivered by the Tourism project).

231

The resulting net outputs arising from these regeneration interventions are set out in Table 142.

231

A further 2,367 gross business assists were delivered by the West Lakes Renaissance project, although no net outputs were calculated.

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Table 142: Regional net outputs (achieved and future potential) of NWDA’s regeneration through physical infrastructure interventions (2002/03- 2006/07) Expenditure covered by evaluations (£m)

Achieved net jobs created/ safeguarded

Future potential net jobs created/ safeguarded

Achieved net brownfield land reclaimed/ redeveloped (ha)

Achieved net commercial floorspace 2 (m )

Future potential net commercial floorspace 2 (m )

Bringing land back into use – employment sites Ancoats Regeneration Programme

45.0

838

25,446

Barrow Call Centre

3.5

245

3,068

Futures Park, Bacup

3.1

794

George Street Quarter, St. Helens

1.3

Kingsway Project, Widnes

0.8

942

Liverpool Commercial District

7.4

1,493

The Regional Strategic Sites Programme

55.5

1,586

Whitemoss Business Park

3.9

231

6,376

Public realm/ other infrastructure Historic River Wall, Chester

0.8

Land Reclamation

17.3

LV Public Realm Interim

19.3

Liverpool Biennial International Festival

0.5

LV Waterfront Construction Impacts

38.0

Regional Marketing Programme

16.3

NML Into the Future

1.8

Tourism Interim

8.4

Visitor Interim

12.2

139

Image/events/tourism

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Expenditure covered by evaluations (£m)

Achieved net jobs created/ safeguarded

Future potential net jobs created/ safeguarded

Achieved net brownfield land reclaimed/ redeveloped (ha)

Achieved net commercial floorspace 2 (m )

Future potential net commercial floorspace 2 (m )

0.9

Central Park

15.0

269

10,009

LLDC SIA

30.3

465

West Lakes Renaissance

31.8

452

5,219

Total

313.1

5,899

51,854

World of Glass Cross Cutting Themes

Source: PwC analysis based on NWDA evaluation evidence

In addition to the net outputs shown in Table 142, various other net outputs were also recorded. As with the gross outputs within this theme, none of the evaluations highlighted any future potential impact in terms of gross brownfield land reclaimed / redeveloped. 

36 net new businesses were created (five were created by the Futures Park project, three were created by the Central Park project and 28 were created by the West Lakes Renaissance project);



421 net businesses were assisted (17 were assisted by the Kingsway Project in Widnes, 41 were assisted by the Central Park project and 363 were assisted by the Tourism Project);



2,357 net skills assists were delivered (52 assists were delivered by the Barrow Call Centre project, 580 were delivered by the Futures Park project, 639 were delivered by the Kingsway Project in Widnes, 992 assists were delivered by the Tourism project and 94 assists were delivered by West Lakes Renaissance); and



193 net people were assisted to get a job (these were all delivered under the West Lakes Renaissance project).

Overall, the creation of new floorspace had the highest level of additionality (71%), whilst outputs in relation to jobs created/safeguarded displayed the lowest level of additionality (34%). Given that few net outputs were reported within the sub-themes of Public Realm and Image, Events and Tourism, it is difficult to provide an analysis of the variation in additionality between sub-themes. When comparing levels of additionality within the theme of regeneration through physical infrastructure in NWDA with national averages, NWDA was found to have a lower level of additionality in relation to jobs (34% in NWDA compared with 45% nationally), whilst the level of additionality for brownfield land which was remediated or reclaimed was lower within NWDA (66%) when compared with the national average (73%). Table 143 summarises the impact on GVA (both achieved and future potential) of NWDA’s interventions within the theme of regeneration through physical infrastructure. Each of the evaluations estimated GVA on an annual basis. Where an estimate of GVA had not been undertaken within the evaluation, we have provided an estimate of GVA based on the number of net jobs created/safeguarded. Where annual GVA was estimated no indication was given of the number of years over which the impact was expected (or assumed) to persist. Moreover, future potential impacts on GVA have not been discounted nor have constant prices been applied.

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Table 143: GVA (achieved and future potential) from NWDA’s regeneration through physical infrastructure (2002/03-2006/07) Expenditure covered by evaluations (£m)

Net GVA achieved (annual, £m)

Net GVA future potential (annual, £m)

Bringing land back into use – employment sites Ancoats Regeneration Programme

45.0

27.2

Barrow Call Centre

3.5

8.0

Futures Park, Bacup

3.1

1.5

George Street Quarter, St. Helens

1.3

Kingsway Project, Widnes

0.8

1.0

Liverpool Commercial District

7.4

48.5

The Regional Strategic Sites Programme

55.5

179.3

Whitemoss Business Park

3.9

7.5

Historic River Wall, Chester

0.8

Land Reclamation

17.3

1.6

LV Public Realm Interim

19.3

Liverpool Biennial International Festival

0.5

LV Waterfront Construction Impacts

38.0

Regional Marketing Programme

16.3

119.1

NML Into the Future

1.8

0.3

Tourism Interim

8.4

Visitor Interim

12.2

4.5

World of Glass

0.9

1.4

Central Park

15.0

8.7

LLDC SIA

30.3

16.2

West Lakes Renaissance

31.8

10.7

65.3-79.7

Total

313.1

435.5

65.3-79.7

Public realm/ other infrastructure

Image/events/tourism

Cross Cutting Themes

Source: PwC analysis based on NWDA evaluation evidence

Finally, besides the impact of its project and programme spend, Strategic Added Value is a key element of NWDA’s impact within the regeneration through physical infrastructure theme, as illustrated in Box 3 below. The example shown has been drawn from the evaluation of the Regional Strategic Sites Programme, which demonstrates that additional impacts have been delivered by NWDA, over and above the gross and net outputs and outcomes which have been quantified in this section.

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NWDA’s Strategic Added Value Regional Strategic Sites In the evaluation of the strategic sites, the Agency was identified as the lead authority for implementation of this programme of work, and consultations demonstrated that the Agency provided strategic vision and leadership. Within the evaluation, it was also found that the NWDA instilled confidence in Local Authority partners. The NWDA levered £122.1m of funding from the private sector, ERDF and other public sector sources. In addition to financial leverage, the NWDA secured leverage in the form of staff time, project management, provision of accommodation and bespoke reports. The Agency also demonstrated synergy by ensuring that the regional partners amended their programmes and policies to align with the Agencies position. In addition, LA partners had also put complementary business support packages in place to support businesses on the strategic sites. Finally the NWDA demonstrated SAV by helping to create engagement with the stakeholders. One of the examples where stakeholders engaged effectively is in the case of the Rochdale Kingsway and Baillrigg / Lancaster University. Here, dedicated project teams were established which included representatives from NWDA as well as other key stakeholders such as developer partners; masterplanners; consultant engineers; project managers and legal advisors. Source: NWDA

Value for money Table 144 sets out the achieved and future potential GVA to cost ratios of NWDA’s regeneration through physical infrastructure interventions. All GVA:cost ratios presented are based on annual estimate of GVA impact. The GVA to cost ratio compares GVA impacts to the cost of the intervention where there is a GVA to cost ratio of greater than one, the economic benefits of the interventions attributable to NWDA’s funding exceed their costs. This is the case for some, but not all of the interventions where GVA has been measured. For example, the Ancoats Regeneration Programme has a ratio of 0.6:1, whilst the Regional Strategic Sites Programme estimates a ratio of 3.2:1. Table 144: Achieved and future potential GVA to cost ratios from NWDA’s physical regeneration interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved GVA:cost ratio (annual)

Future potential GVA:cost ratio (annual)

Bringing land back into use – employment sites Ancoats Regeneration Programme

45.0

0.6

Barrow Call Centre

3.5

2.3

Futures Park, Bacup

3.1

0.5

George Street Quarter, St. Helens

1.3

Kingsway Project, Widnes

0.8

1.3

Liverpool Commercial District

7.4

6.6

The Regional Strategic Sites Programme

55.5

3.2

Whitemoss Business Park

3.9

1.9

Historic River Wall, Chester

0.8

Land Reclamation

17.3

0.1

LV Public Realm Interim

19.3

Public realm/ other infrastructure

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Expenditure covered by evaluations (£m)

Achieved GVA:cost ratio (annual)

Future potential GVA:cost ratio (annual)

Liverpool Biennial International Festival

0.5

LV Waterfront Construction Impacts

38.0

Regional Marketing Programme

16.3

14.0

NML Into the Future

1.8

0.2

Tourism Interim

8.4

Visitor Interim

12.2

0.4

World of Glass

0.9

1.6

Central Park

15.0

0.6

LLDC SIA

30.3

3.3

West Lakes Renaissance

31.8

0.3

2.0-2.5

Total

313.1

1.4

0.2

Image/events/tourism

Cross Cutting Themes

Source: PwC analysis based on NWDA evaluation evidence

When annual GVA to cost ratios achieved in NWDA are compared with the national averages, performance was found to be largely favourable. Overall, NWDA regeneration through physical infrastructure interventions achieved an average GVA:cost ratio of 1.4:1, which was higher than the national average of 0.7:1 for interventions in this theme. When analysed at sub-theme level, two subthemes were found to have higher GVA:cost ratios than the national average – this was for “Bringing Land Back into Use” (2.3:1 in NWDA compared to 1.0:1 nationally) and “Image, Events and Tourism” (1.6:1 in NWDA compared to 0.5:1 nationally). Only one sub-theme performed less well than the national average – this was for “Public Realm” (0.0:1 in NWDA compared to 0.3:1 nationally). As Table 144 shows, some interventions such as the Liverpool Commercial District and the Regional Marketing Programme have already achieved economic benefits which exceed their costs. Unfortunately as only one of the evaluations in this theme have quantified net future potential outputs, it is not possible to assess the degree to which GVA to cost ratios are likely to change in the future. Table 145 summarises one measure of the value for money of NWDA’s interventions to promote regeneration through physical infrastructure, i.e. cost per achieved and future potential net jobs. Table 145: Cost per net job (achieved and future potential) from NWDA’s regeneration through physical infrastructure (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved cost per net regional job (£’000)

Future potential cost per net regional job (£’000)

Bringing land back into use – employment sites Ancoats Regeneration Programme

45.0

53.7

Barrow Call Centre

4.6

12.6

10.6

Futures Park, Bacup

3.1

4.8

George Street Quarter, St. Helens

2.2

Kingsway Project, Widnes

0.75

23.4

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Expenditure covered by evaluations (£m)

Achieved cost per net regional job (£’000)

Future potential cost per net regional job (£’000)

Liverpool Commercial District

7.4

3.7

The Regional Strategic Sites Programme

62.3

39.2

Whitemoss Business Park

5.3

8.0

4.8

Historic River Wall, Chester

0.85

Land Reclamation

17.3

346.0

LV Public Realm Interim

16.9

Liverpool Biennial International Festival

0.5

LV Waterfront Construction Impacts

38.0

Regional Marketing Programme

16.3

0.6 – 3.1

NML Into the Future

1.8

180.0

Tourism Interim

8.9

Visitor Interim

12.6

90.1

World of Glass

0.95

25.7

Central Park

15.0

68.0

LLDC SIA

30.3

96.0

West Lakes Renaissance

31.8

86.0

53.1

Public realm/ other infrastructure

Image/events/tourism

Cross Cutting Themes

Regeneration through Physical Infrastructure - Average Regeneration Theme

313.1

Source: PwC analysis based on NWDA evaluation evidence

Table 145 shows considerable variation on this measure of the value for money of these interventions. The cost per job (achieved) figure for the Land Reclamation programme can be explained by the early stage of this intervention, where most outputs have been physical in nature. The high cost per job (achieved) figure for the NML Into the Future project can also be explained as NWDA funding was used to supplement funding which had been exhausted from a range of other sources, and thus job related outputs were attributable to other funding sources, and did not include to any significant degree outputs attributable to NWDA. When comparing value for money achieved by regeneration through physical infrastructure interventions delivered by NWDA, the picture is somewhat variable. Overall the average figure for cost per net job created across all NWDA regeneration through physical infrastructure interventions was £53,077, whilst the cost per net job at sub-theme level nationally ranged from £42,101 (Bringing Land Back into Use) up to £118,945 (Public Realm). Analysis at sub-theme level revealed the following: 

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within the sub-theme of Bringing Land Back into Use the national average cost per net job was £42,101. Six of NWDA’s interventions within this sub-theme had lower costs per net job, whilst only one intervention had a higher cost per net job figure (Ancoats Regeneration Programme);

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

Within the sub-theme of Public Realm, the national average cost per net job was £118,945. Only one of NWDA’s interventions within this sub-theme calculated a figure for cost per job – this was the evaluation of the Land Reclamation programme. The cost per net job for this programme was considerably higher than the national average, at £346,000; and



Within the sub-theme of Image, Events and Tourism, the national average cost per net job was £79,133. Two of NWDA’s interventions had a lower cost per net job figure (this was for the Regional Marketing Programme and the World of Glass) whilst two interventions had a higher cost per net job figure (NML Into the Future and Visitor Attractions).

It was not possible to compare average cost per net business created, nor average cost per hectare of land remediated by NWDA with the national picture due to the small number of evaluations which recorded evidence of this output. Performance against objectives Tabel 146 summarises the performance against objectives of NWDA’s interventions to promote regeneration through physical infrastructure. Performance of interventions in this theme is more mixed overall. It should be noted that nine of the evaluations within this theme did not assess performance against objectives. For the remaining evaluations which did undertake an assessment of performance against objectives, only the Ancoats Regeneration Programme has met (and exceeded) the objectives which were set. A further four projects have largely met their objectives. Table 146: Performance against objectives of NWDA’s regeneration through physical infrastructure (2002/03-2006/07) Expenditure covered by evaluations (£m)

Performance against objectives

Bringing land back into use – employment sites Ancoats Regeneration Programme

45.0

Barrow Call Centre

3.5

Mixed

Futures Park, Bacup

3.1

Mixed

George Street Quarter, St. Helens

1.3

Largely met

Kingsway Project, Widnes

0.8

Limited performance

Liverpool Commercial District

7.4

Largely met

The Regional Strategic Sites Programme

55.5

Mixed

Whitemoss Business Park

3.0

Not assessed

Historic River Wall, Chester

0.8

Not assessed

Land Reclamation

17.3

Limited performance

LV Public Realm Interim

19.3

Not assessed

Exceeded

Public realm/ other infrastructure

Image/events/tourism Liverpool Biennial International Festival

0.5

LV Waterfront Construction Impacts

38.0

Regional Marketing Programme

16.3

Not assessed

NML Into the Future

1.8

Not assessed

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Expenditure covered by evaluations (£m)

Performance against objectives

Tourism Interim

8.4

Largely met

Visitor Interim

12.2

Not assessed

World of Glass

0.9

Not assessed

West Lakes Renaissance

31.8

Largely met

Central Park

15.0

Limited performance

LLDC SIA

30.3

Limited performance

Cross Cutting Themes

Source: PwC analysis based on NWDA evaluation evidence

People and skills interventions Rationale This section relates to NWDA’s people and skills interventions. These interventions fall under the headings of “Skills and Education” and “People and Jobs” within the North West’s 2006 RES which identifies the skills base of the workforce as critical to the economic development of the region. It also notes that, whilst the region has a comparable proportion of people with Level 2 and 3 skills to other parts of England, a larger proportion of the population has no qualifications and that these people tend to be concentrated in nine local authority districts. Each of the projects and programmes delivered by NWDA seeks to contribute towards the vision of creating “a dynamic, sustainable international economy which competes on the basis of knowledge, advanced technology, and an excellent quality of life” as set out in the RES. Within the North West RES (2006) it is stated that in order to achieve this vision the region needs to focus on five key factors, namely: 

tackling the lack of basic skills and qualifications to improve employability and reduce worklessness;



meeting the skills needs of sectors and growth opportunities;



investing in workforce development to drive productivity and economic growth;



developing leadership, management and enterprise skills to improve business survival, innovation and productivity improvement; and



developing the educational infrastructure and skills of the future workforce.

Evidence of the impact of NWDA’s people and skills interventions relates to six evaluations covering three sub-themes summarised in Table 147.

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Table 147: Summary of NWDA’s people and skills interventions (2002/03-2006/07) Intervention theme/sub-theme

Evaluation

Expenditure covered by evaluations (£m)

Matching people to jobs

BESS Programme

0.9

Skills/workforce development

Maximising opportunity in Warrington

0.7

Educational infrastructure development

Whitworth Media Technology Centre

2.0

Project Unity

20.0

Leadership

Lancaster University Leadership Centre

4.4

Other

Eastserve project

1.5

Total

29.5

Source: PwC analysis based on NWDA evaluation evidence

The evaluation evidence of NWDA’s impact on people and skills development covers £29.5m of spend from 2002/03 to 2006/07. Project Unity makes up the largest proportion of this spend, with £20.0m of investment targeted at this project alone. Impact Table 148 summarises the expenditure and key gross outputs achieved through NWDA’s people and skills interventions. The primary outputs have been jobs created/ safeguarded, businesses assisted, people assisted with skills and people assisted into employment. Table 148: Gross achieved outputs from NWDA’s people and skills interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Gross jobs created/ safeguarded

Gross people assisted into employment

Gross businesses created

Gross business supported

Gross skills assists

0.9

259

272

1,256

0.7

669

Skills and workforce development BESS Programme Matching people to jobs Maximising opportunity in Warrington

Educational infrastructure development URC NEM Whitworth Media Technology Centre

2.0

121

1,096

Project Unity

20.0

1,925

4.4

1,348

Eastserve project

1.5

1,446

Total

29.5

2,267

790

276

5,146

Leadership Lancaster University Leadership Centre Other

Source: PwC analysis based on NWDA evaluation evidence

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In addition to the gross outputs achieved in Table 148, the evaluation of the Maximising Opportunity in Warrington project recorded the creation of 1,074 square metres of new floorspace (gross). In addition to this, the Whitworth Media Technology Centre project created 2,234 square metres of new floorspace (gross). The BESS programme also assisted 272 gross businesses in their skills needs. None of the evaluations highlighted any future potential impacts. The net outputs arising from these interventions are set out in Table 149. Table 149: Net achieved outputs from NWDA’s people and skills interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Net jobs created/ safeguarded

Net people assisted into employment

Net businesses created

Net business supported

Net skills assists

0.9

163

194

848

0.7

493

Skills and workforce development BESS Programme Matching people to jobs Maximising opportunity in Warrington

Educational infrastructure development Project Unity

20.0

1,437

URC NEM Whitworth Media Technology Centre

2.0

477

4.4

829

Eastserve project

1.5

1,085

Total

29.5

1,647

567

195

3,239

Leadership Lancaster University Leadership Centre Other

Source: PwC analysis based on NWDA evaluation evidence

Three of the output areas had additionality levels of above 70% - these were for jobs created/safeguarded (73%), people assisted into employment (71.8%) and businesses supported (71%). Levels of additionality were slightly lower for businesses created (69%) and people assisted with skills (63%), although additionality levels across all five output areas had a relatively small range. The additionality levels for these interventions within NWDA were higher than those at the national level, where additionality for jobs created/safeguarded was 48%, for people assisted into employment was 51% and for skills assists was 62%. Only one group of outputs had a higher level of additionality at the national level than within NWDA – this was for businesses created where the national level of additionality was 82%, but was only 69% within NWDA. In addition to the net outputs achieved in Table 149 above, the evaluation of the Maximising Opportunity in Warrington project recorded the creation of 1,074 square metres of new floorspace (net). In addition to this, the Whitworth Media Technology Centre project created 1,117 square metres of new floorspace (net). The BESS programme also assisted 194 net businesses in their skills needs. Only the evaluation of Project Unity stated that any additional future potential outputs were likely to occur, as the evaluation has been conducted at an interim point of the intervention. However the effects which could be expected have not been quantified in terms of jobs or other output measures. When comparing levels of additionality within the theme of people and skills in NWDA with national averages, NWDA had a lower level of additionality in relation to businesses created (69% in NWDA compared with 82% nationally), whilst the Agency demonstrated higher levels of additionality for jobs

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(73% in NWDA compared with 48% nationally) and skills assists (63% in NWDA compared with 61% nationally). Tabel 150 summarises the outcomes of NWDA’s people and skills interventions. Table 150: Outcomes (annual achieved and future potential) from NWDA’s people and skills interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Net GVA achieved (annual, £m)

0.9

5.3

0.7

0.6

URC NEM Whitworth Media Technology Centre

2.0

0.3

Project Unity

20.0

46.7

4.4

3.8

Eastserve project

1.5

0.3

Total

29.5

Skills and workforce development BESS Programme Matching people to jobs Maximising opportunity in Warrington Educational infrastructure development

Leadership Lancaster University Leadership Centre Other

Source: PwC analysis based on NWDA evaluation evidence

None of the evaluations highlighted any future potential impacts in terms of gross or net outputs, therefore no future potential impact in terms of GVA has been stated within the evaluations in this theme. Finally, besides the impact of its project and programme spend, Strategic Added Value is a key element of NWDA’s impact within the people and skills theme, as illustrated in Box 4 below. The example shown has been drawn from the evaluation of the URC Whitworth Media Technology Centre project, which demonstrates that additional impacts have been delivered by NWDA, over and above the gross and net outputs and outcomes which have been quantified in this section. NWDA’s Strategic Added Value URC NEM Whitworth Media Technology Centre The refurbishment of disused warehouse space on the Openshaw campus into a training centre – Whitworth has acted as a catalyst to the regeneration of East Manchester and more specifically, it has had a positive catalytic effect in terms of the remodelling of the Openshaw campus. NWDA contributed £2m towards the refurbishment which levered funding from public sector sources – including European funding, New East Manchester projects and from the college itself, through the Learning and Skills Council. The NWDA support also created leverage from the private sector (through employer engagement). Through its links with local employers, the Whitworth Centre has managed to raise the profile of the benefits of learning more generally. Engagement has improved as a result of the Centre; Whitworth is seen as a “hub” – i.e. a focal point for learning in East Manchester. This has helped to develop supplier linkages and improve communications between local companies. Source: NWDA

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Value for money Tabel 151 sets out the achieved and future potential GVA to cost ratios of NWDA’s people and skills interventions. The GVA to cost ratio compares GVA impacts to the cost of the intervention: where there is a GVA to cost ratio of greater than one, the economic benefits of the interventions attributable to NWDA’s funding exceed their costs. This is the case for some, but not all of the interventions where GVA has been measured. The highest value intervention within this theme (Project Unity which received £20m of NWDA funding) had a GVA:cost ratio of 2.3:1 which has impacted strongly on the overall GVA:cost ratio for this theme, as this project represents 68% of total expenditure within this theme. Table 151: Achieved and future potential GVA to cost ratios from NWDA’s people and skills interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved GVA:cost ratio (annual)

0.9

5.9

0.7

0.9

URC NEM Whitworth Media Technology Centre

2.0

0.2

Project Unity

20.0

2.3

4.4

0.9

Eastserve project

1.5

0.5

Total

29.5

1.9

Skills and workforce development BESS Programme Matching people to jobs Maximising opportunity in Warrington Educational infrastructure development

Leadership Lancaster University Leadership Centre Other

Source: PwC analysis based on NWDA evaluation evidence

As Table 151 shows, some interventions such as the BESS Programme and Project Unity have already achieved economic benefits which exceed their costs. Unfortunately as none of the evaluations in this theme have quantified net future potential outputs, it is not possible to assess the degree to which GVA to cost ratios are likely to change in the future. When GVA to cost ratios achieved in NWDA are compared with the national averages, performance was found to be above average. Overall, NWDA people and skills interventions achieved an average GVA:cost ratio of 1.9:1, which was higher than the national average of 0.9:1 for interventions in this theme. When analysed at sub-theme level, two sub-themes were found to have higher GVA:cost ratios than the national average – this was for “Skills and Workforce Development” (5.9:1 in NWDA compared to 0.4:1 nationally) and “Matching People to Jobs” (2.3:1 in NWDA compared to 0.8:1 nationally). Only one sub-theme performed less well than the national average – this was for “Supporting the Development of Educational Infrastructure” (0.2:1 in NWDA compared to 1.1:1 nationally). Table 152 sets out the achieved and future potential cost per net output of NWDA’s people and skills interventions.

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Table 152: Cost per net job (achieved and future potential) from NWDA’s regeneration through physical infrastructure (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved cost per net regional job (£)

Future potential cost per net regional job (£)

Achieved cost per net business supported (£)

Achieved cost per net skills assist (£)

5,719

4,639

1,061

2,558

Matching people to jobs BESS Programme

0.9

Skills and workforce development Maximising opportunity in Warrington

0.7

Educational infrastructure development 232

URC NEM Whitworth Media Technology Centre

2,000,000 2.0

251,000

Project Unity

20.0

13,663

12,039

4.4

359,000

Eastserve project

1.5

187,000

Total

29.5

17,911

4,192

5,307

1,382

453,846

8,684

Leadership Lancaster University Leadership Centre Other

Source: PwC analysis based on NWDA evaluation evidence

The cost per net job achieved from people and skills interventions ranged from £2,558 within the Maximising Opportunity in Warrington project to £359,000 for the Lancaster University Leadership Centre project. However, it was also possible to calculate cost per net person assisted with skills. This measure, although not consistently available across all projects, was found to vary from £1,061 within the BESS Programme, up to £5,307 for the Lancaster University Leadership Centre project. When comparing value for money achieved by people and skills interventions delivered by NWDA with the national RDA average, the picture is largely positive. Overall the average figure for cost per net job created across all NWDA people and skills interventions was £17,911, whilst the cost per net job at subtheme level nationally ranged from £24,007 (Hybrid People and Skills Interventions) up to £105,268 (Skills and Workforce Development). Analysis at sub-theme level revealed the following: 

within the sub-theme of Skills and Workforce Development the national average cost per net job was £105,268 and the national average cost per net skills assist was £1,242. The Maximising Opportunities in Warrington project had a net cost per skills assist of £2,558 and Project Unity had a net cost per skills assist of £13,663. Therefore, both performed less well in terms of value for money when compared to the national average;



Within the sub-theme of Matching People to Jobs, the national average cost per net job was £49,215 and the national average cost per skills assist was £2,570. The BESS project performed better in terms of value for money in both categories, with a net cost per job of £5,719 and a net cost per assist of £1,061; and

232

This project was at an early stage of its development at the time of the evaluation, thus only one business had been created to date. The main objective of the project – a new capital build project at the Technology Centre was completed, thus the main output and objective for the project was achieved.

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

Within the sub-theme of Educational Infrastructure Development, the national average cost per net job was £33,995 and the national average cost per skills assist was £6,454. Again the Whitworth Media Technology Centre performed better in terms of net cost per assist of £4,192, but performed less well in terms of net cost per job, which was calculated to be £251,000.

Performance against objectives Table 153 summarises the performance against objectives of NWDA’s people and skills interventions, where all evaluations provided an illustration of how the intervention had performed against objectives. Performance against objectives was found to vary within this theme, although it was found that three of the six interventions had exceeded in terms of performance against objectives, with one other project largely meeting the objectives which had been set. When considered in terms of overall expenditure, Project Unity represented 67.8% of expenditure within the theme, and this project exceeded the objectives which had been set. Table 153: Performance against objectives from NWDA’s people and skills interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Performance against objectives

BESS Programme

0.9

Largely met

Maximising opportunity in Warrington

0.9

Mixed

URC NEM Whitworth Media Technology Centre

2.0

Exceeded

Project Unity

34.0

Exceeded

4.3

Exceeded

1.5

Limited performance

Matching people to jobs

Educational infrastructure development

Leadership Lancaster University Leadership Centre Other Eastserve project Source: PwC analysis based on NWDA evaluation evidence

Other NWDA interventions Rationale The evidence of NWDA’s impact on other interventions covers £344.8m of spend from 2002/03 to 2006/07. These comprise the Single Regeneration Budget (SRB) programme, which aimed to tackle issues affecting the most deprived communities. Interventions were focused on deprived areas throughout the North West, with a substantial amount of activity covering areas in the two metropolitan areas of Greater Manchester and Merseyside, along with Lancashire. Between them, Greater Manchester, Merseyside and Lancashire accounted for 92% of SRB spend across Rounds 3 to 6, split approximately into equal thirds. The largest single Round for a sub-region was Round 6 for Lancashire, which received £115 million. The North West of England ran 151 of the 1,028 national SRB schemes, with nearly two thirds (64%) of activity taking place in Rounds 3 to 6. In each round, the North West received a fairly common proportion of national SRB funds, ranging from 15% in Round 3 to 21% in Round 5. Overall, the North West received 19% of the national share of SRB funds, which compares quite favourably with its 21% share of deprivation. The Index of Multiple Deprivation Data from 2004 indicates that 21.3% of the 8,120 most deprived Super Output Areas (SOAs) in England are in the North West region. This is the highest proportion of any English region (by comparison, London is the next highest, accounting for 20.5% of the most deprived SOAs).

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NWDA has also undertaken a number of other interventions throughout the North West which have been evaluated, besides SRB programme activity. These include: 

three individual SRB project evaluations commissioned by NWDA; and



five area based regeneration programmes (where each individual project covers multiple output areas) initiated by the NWDA.

Impact Key outputs arising from these other interventions have been jobs created/ safeguarded and skills developed, and to a lesser extent businesses created and land reclaimed/ redeveloped. Table 154 sets out the key gross outputs achieved in relation to these interventions. Table 154: Gross achieved outputs from NWDA’s other interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Gross jobs created/ safeguarded

Gross skills assists

Gross businesses created

Gross land reclaimed/ redeveloped (ha)

321.9

59,287

67,246

2,026

861

Halton Focus for Change (Round 5)

9.1

692

4,782

108

760

Hyndburn PACT (Round 6)

6.5

602

522

109

Beacons East Manchester (Round 5)

19.2

1,742

4,118

SRB Meta Evaluation SRB Other SRB projects

Area based regeneration programmes Blackburn Town Centre Renaissance (TCR) Programme

5.4

599

111

Cheshire Rural Recovery Programme

6.5

1,154

155

Lancashire Rural Recovery Programme

7.0

374

923

608

0.5

Sefton Village Partnership

0.8

West Lancashire Investing in Business Programme

3.2

1,168

344.8

65,712

77,591

3,077

1,834.5

Total

Source: PwC analysis based on NWDA evaluation evidence

In addition to the gross outputs identified in Tabel 154, the evaluations within the sub-theme of other SRB projects contributed 760 gross people assisted to get a job, 2,538 gross businesses assisted and 4,591 gross square metres of new floorspace. Within the sub-theme of area based regeneration programmes, the interventions also delivered 139 gross people assisted to get a job, 2,672 gross businesses assisted and 64,446 gross square metres of new floorspace. None of the evaluations highlighted any future 233 potential gross outputs .

233

The evaluations of the Cheshire Rural Recovery Programme, the Lancashire Rural Recovery Programme and the Blackburn Town Centre Renaissance Programme each highlighted that there would be zero impact in terms of gross future potential outputs for jobs created/safeguarded.

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Table 155 sets out the key net outputs achieved in relation to these interventions. Table 155: Net achieved outputs from NWDAâ&#x20AC;&#x2122;s other interventions (2002/03-2006/07) Expenditure covered by evaluations (ÂŁm)

Net jobs created/ safeguarded

Net skills assists

Net businesses created

Net land reclaimed/ redeveloped (ha)

321.9

24,888

37,658

891

422

Halton Focus for Change (Round 5)

9.1

287

2,678

372

Hyndburn PACT (Round 6)

6.5

268

381

Beacons East Manchester (Round 5)

19.2

409

SRB Meta Evaluation SRB Other SRB projects

Area based regeneration programmes Blackburn Town Centre Renaissance (TCR) Programme

5.4

283

Cheshire Rural Recovery Programme

6.5

195

Lancashire Rural Recovery Programme

7.0

228

285

0.4

Sefton Village Partnership

0.8

West Lancashire Investing in Business Programme

3.2

344.8

26,706

40,717

1,310

803.4

Total

Source: PwC analysis based on NWDA evaluation evidence

In addition to the net outputs identified in Tabel 155, the evaluations within the sub-theme of other SRB projects contributed 471 net people assisted to get a job, 933 net businesses assisted and 1,973 net square metres of new floorspace. Within the sub-theme of area based regeneration programmes, the interventions also delivered 111 net people assisted to get a job, 1,202 net businesses assisted and 35,189 net square metres of new floorspace. None of the evaluations highlighted any future potential net 234 outputs . In three of the four output areas assessed in Table 155, additionality was found to be under 50% - this relates to the outputs for jobs created/safeguarded (41%) and businesses created (43%). For the output in relation to skills assists, additionality was slightly higher at 53%. It is difficult to assess additionality overall for hectares of brownfield land reclaimed/redeveloped as two evaluations provided net outputs in this area, but did not quantify the gross outputs upon which these were based. When comparing levels of additionality within the theme of other interventions in NWDA with national averages, NWDA has a lower level of additionality in relation to jobs (41% in NWDA compared with 49% nationally) and also for businesses created (43% in NWDA compared with 51% nationally). Given the significance of the SRB project evaluation within this theme in terms of relevant spend covered, it is

234

The evaluations of the Cheshire Rural Recovery Programme, the Lancashire Rural Recovery Programme and the Blackburn Town Centre Renaissance Programme each highlighted that there would be zero impact in terms of net future potential outputs for jobs created/safeguarded.

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important to consider the additionality generated by these schemes given the impact which it will have on the overall averages. The levels of additionality ranged from 42% for jobs up to 56% for skills assists. Table 156 summarises the outcomes of NWDA’s other interventions. Table 156: Outcomes (annual achieved and future potential) from NWDA’s other interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Net GVA achieved (annual, £m)

321.9

808.7

Halton Focus for Change (Round 5)

9.1

9.3

Hyndburn PACT (Round 6)

6.5

8.7

Beacons East Manchester (Round 5)

19.2

13.0

Blackburn Town Centre Renaissance (TCR) Programme

5.4

9.2

Cheshire Rural Recovery Programme

6.5

6.3

Lancashire Rural Recovery Programme

7.0

7.4

Sefton Village Partnership

0.8

2.5

West Lancashire Investing in Business Programme

3.2

2.3

344.8

867.4

SRB Meta Evaluation SRB Other SRB projects

Area based regeneration programmes

Total Source: PwC analysis based on NWDA evaluation evidence

None of the evaluations within this theme highlighted any future potential gross or net outputs, therefore there has been no evidence to suggest potential changes to GVA in the future. The quantitative evidence of outcomes and impacts in the evaluation reports which fed into the SRB 235 evaluation was very limited. However, applying the three year rolling average GVA per worker for the North West of England (of £32,495) to the 24,888 net jobs created and safeguarded gives an estimated GVA impact of £808.7m. Finally, besides the impact of its project and programme spend, Strategic Added Value is a key element of NWDA’s impact within the ‘other’ theme, as illustrated below. The examples shown have been drawn from the evaluation of the West Lancashire Investing in Business Programme and also from the evaluation of the Blackburn Town Centre Renaissance programme, which demonstrates that additional impacts have been delivered by NWDA, over and above the gross and net outputs and outcomes quantified in this section. NWDA’s Strategic Added Value West Lancashire Investing in Business Programme NWDA encouraged West Lancashire Forum (superseded by the Local Strategic Partnership (LSP)), to implement an economic regeneration programme for the district of West Lancashire (as opposed to just the Skelmersdale area). The Agency’s influence, through the LSP has extended throughout the duration of the programme. This continued involvement has helped to ensure that NWDA requirements are met and that the programme has had a coherent approach throughout.

235

The rolling average was calculated using labour market data for the years 2004/05, 2005/06 and 2006/07.

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In addition, NWDA’s commitment to the Investing in Business (IIB) Programme has helped to leverage other public funding (including WLDC and the LSP). It has also helped to ensure that the key partners remained engaged and involved in IIB. NWDA has contributed to the overall synergy of the IIB Programme through its involvement with other regeneration programmes in West Lancashire such as the Ormskirk Town Centre. Although the projects have been largely co-ordinated by WLDC, NWDA have retained an important oversight role. Blackburn Town Centre Renaissance The regeneration of Blackburn town centre was led by the Council, however this would not have happened without the funding support and strategic leadership provided by NWDA. The Renaissance Programme has influenced the town centre in a variety of ways, for example, Blackburn College is preparing to invest £80 million in the Knowledge Zone: This would not have occurred without the initial regeneration of the town centre. To date, NWDA funds have enabled a leverage of 1:2.14 to be achieved. The Agency, through the funding has ensured the continued existence of the Town Centre Partnership and therefore the Agency has played a role in ensuring effective engagement amongst stakeholders. Strong links have been created in the Partnership, the fact that joint marketing and strategy decisions have been made, is testament to the effective working relationships that have been established. Finally, the engagement that has been forged between the stakeholders on this partnership has had many benefits, for instance, without the Partnership; the developments at the Cathedral Quarter may not have come to fruition. Source: NWDA

Value for money Table 157 sets out the outcomes from NWDA’s other interventions. Table 157: Achieved and future potential GVA to cost ratios from NWDA’s other interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved GVA:cost ratio (annual)

321.9

1.3

Halton Focus for Change (Round 5)

9.1

1.0

Hyndburn PACT (Round 6)

6.5

1.3

Beacons East Manchester (Round 5)

19.2

0.7

Blackburn Town Centre Renaissance (TCR) Programme

5.4

1.7

Cheshire Rural Recovery Programme

6.5

1.0

Lancashire Rural Recovery Programme

7.0

1.1

Sefton Village Partnership

0.8

3.1

West Lancashire Investing in Business Programme

3.2

0.7

344.8

2.5

SRB Meta Evaluation SRB Other SRB projects

Area based regeneration programmes

Total Source: PwC analysis based on NWDA evaluation evidence

As Table 157 shows, some interventions such as the overall SRB programme and many of the area based regeneration programmes have already achieved economic benefits which exceed their costs,

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including the SRB evaluation which achieved a return of 1.3:1. As none of the evaluations in this theme have quantified net future potential outputs, it is not possible to assess the degree to which GVA to cost ratios are likely to change in the future. Table 158 sets out the achieved and future potential cost per net output of NWDA’s other interventions. Table 158: Cost per net job (achieved and future potential) from NWDA’s other interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved cost per net regional job (£)

Achieved cost per net business 236 assisted (£)

Achieved cost per net skills assist (£)

321.9

24,148

674,523

15,959

Halton Focus for Change (Round 5)

9.1

5,100

202,222

3,398

Hyndburn PACT (Round 6)

6.5

6,000

89,041

17,060

Beacons East Manchester (Round 5)

19.2

46,943

2,133,333

Blackburn Town Centre Renaissance (TCR) Programme

5.4

105,594

1,800,000

Cheshire Rural Recovery Programme

6.5

77,204

Lancashire Rural Recovery Programme

7.0

50,945

24,561

Sefton Village Partnership

0.8

10,256

West Lancashire Investing in Business Programme

3.2

55,557

800,000

344.8

12,910

SRB Meta Evaluation SRB Other SRB projects

Area based regeneration programme

Total

8,468

Source: PwC analysis based on NWDA evaluation evidence

The cost per net job achieved from other interventions ranged from £5,100 within the Halton’s Focus for Change project to £105,594 within the Blackburn Town Centre Renaissance project. However, it was also possible to calculate cost per net person assisted with skills and cost per net business created. In terms of cost per net person assisted with skills, this measure, although not consistently available across all projects, was found to vary from £3,398 within the Halton’s Focus for Change project, up to £17,060 for the Hyndburn PACT Project. The SRB project evaluation costs compared favourably across the three output areas where effects were noted. The cost per net job figure of £24,148 was the third lowest figure of the 14 evaluations in this category, and the cost per net skills assist figure was the median figure for this unit cost area, based on the three evaluations where cost per skills assist could be calculated. Performance against objectives Table 159 summarises the performance against objectives of NWDA’s other interventions and shows that of the seven evaluations which assessed performance of the interventions, the majority (six) including SRB found that performance was mixed. One intervention performed well – the Sefton Village Partnership largely met the objectives set. Table 159: Performance against objectives from NWDA’s other interventions (2002/03-2006/07)

236

The costs per net business created for the Beacons East Manchester project is considerably higher than others within this theme. The Beacon’s project delivered a range of outputs, not just business creation.

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Expenditure covered by evaluations (£m)

Performance against objectives

321.9

Mixed

Halton Focus for Change (Round 5)

9.1

Mixed

Hyndburn PACT (Round 6)

6.5

Mixed

Beacons East Manchester (Round 5)

19.2

Mixed

Sefton Village Partnership

0.8

Largely met

Blackburn Town Centre Renaissance (TCR) Programme

5.4

Mixed

West Lancashire Investing in Business Programme

3.2

Mixed

Cheshire Rural Recovery Programme

6.5

Not assessed

Lancashire Rural Recovery Programme

7.0

Not assessed

SRB Meta Evaluation SRB Other SRB projects

Area based regeneration programmes

Source: PwC analysis based on NWDA evaluation evidence

National programmes Besides its own interventions, NWDA has been responsible for the management and delivery of eight of the ten national programmes which have been delivered within parameters closely defined by central government departments. Although the available evaluation evidence on national programmes does not disaggregate gross outputs at a regional level, we have been able to estimate the impact of two of these programmes on the North West of England (this was undertaken from Business Link and the Grants for Research and Development). This has been done by dividing NWDA spend on the programme by the regional cost per job and then making allowances for displacement, leakage and multiplier effects. In addition, NWDA have also evaluated the impact of the Coalfields Programme and the Market Town Initiative within the North West, and the findings from these evaluations have also been used to assist in assessing the impact of national programmes. Table 160 summarises NWDA’s spend in the relevant period on each of the national programmes and summarises the estimated impacts where these are available. As the Table shows, four of the eight national programmes delivered by NWDA have resulted in the achievement of 9,082.6 net jobs created/safeguarded. The estimated impact on the regional economy is £336.5m per annum.

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Table 160: Estimated impact of NWDA spending on national programmes between 2002/03 and 2006/07 (£m) National programme

NWDA spend – 2002/032006/07 (£m)

Net jobs created/ safeguarded

90.1

8,221

Manufacturing Advisory Service

Phoenix Fund

Regional Innovation Fund

Rural Development Programme for England (& Sustainable Food and Farming Strategy)

1.9

Selective Finance for Investment

55.4

Coalfields Programme

16.3

104

Regional Tourist Board Support

17.2

Market Town Initiative

10.3

414.6

Grant for Research & Development

6.3

343

197.5

9,082.6

Business Link

Total Source: PwC analysis based on NWDA evaluation evidence

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One North East Summary Overview 

Since its establishment One North East (ONE) has spent approximately £1,647m (excluding administrative costs) on a range of interventions designed, individually or collectively, to stimulate business development and competitiveness, promote regeneration through physical infrastructure and enhance employability and skills.



The total ONE ‘relevant spending’ for this report is £1,082m, that is spend from 2002/03 to 2006/07, excluding £419m legacy spend (from 1999/00 to 2001/02) and £146m spend on five national programmes. SRB was a substantive part of ONE’s expenditure, accounting for just under £205m out of total ONE ‘relevant spending’.



We have reviewed 12 evaluations covering ONE spend of £698m.

Impact 



The evaluations show that ONE has generated significant outputs already: –

more than 43,600 jobs have been created and safeguarded, of which between 56% and 58% are estimated to be additional at the regional level;

–

over 9,500 businesses have been assisted, of which 18% are estimated to be additional;

–

over 1,900 businesses have been created, of which 60% are estimated to be additional;

–

nearly 350 hectares (ha) of land has been remediated, of which 60% are estimated to be additional;

–

over 12,200 people have been assisted into employment, of which 52% are estimated to be additional; and

–

almost 158,600 skills assists have been delivered, of which 62% are estimated to be additional.

In addition to the impact of its project and programme spend, Strategic Added Value (SAV) is a key element of ONE’s impact, particularly in terms of influencing investments by private sector investors and developers, developing and testing new approaches and developing regional and international networks.

Value for money 

The highest achieved return in the evaluation evidence is as a result of a business intervention, with 237 an achieved average return of 86 to 1 . The lowest return is from a place intervention with an achieved average GVA per annum return of between 0.04 and 0.24 to 1.

Performance against objectives 

Only 14.5% of the evaluations (by value) assessed performance against objectives. It is therefore not possible to draw comparisons on ONE’s overall performance from the limited evaluation evidence.

237

It is important to note that this evaluation has been excluded from the national report as an outlier due to the exceptionally high GVA to cost ratio of 86 to 1 compared to the national average for this sub-theme of 3.5 to 1.

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Context Overview of the North East The North East is one of the smallest of the nine English regions in terms of both area and population. 2 Covering the 8,612 km which lie between the Scottish Borders to the north, Yorkshire & the Humber to the south and the North-West Region to the west, the North East is home to 2.5 million people, most of whom live along the three rivers of the Tyne, the Wear and the Tees. The region is divided into the four sub-regions (or sub-regional partnerships) of County Durham, Northumberland, Tyne & Wear and the Tees Valley. 238

The gross value added (GVA) of the North East was £38.8bn in 2006. The average GVA per capita in the region was £15,177 compared to the UK level of £18,631 – representing 81.5% of the national average and an increase of 1.5% since ONE’s inception. 239

The State of the Region report highlights the dominant sectors within the North East including manufacturing, business services and the public sector. The region’s economy differs from the national economy in its sectoral composition with respect to: 

manufacturing which accounts for a bigger proportion of the North East economy than it does nationally (just under 21% in 2002 compared to just under 16% nationally);



the public sector, which accounted for 23% of the regional economy compared to 17% nationally; and



business services which accounted for 25% of the regional economy but 35% nationally.

Although the North East remains below the national average on certain social and economic indicators recent years have seen the region start to close the gap with the UK in many of these areas. For example, whilst the region has relatively low levels of business stocks and start ups, both at around 60% of national rates, each of the past six years have seen the region’s business stock grow at a faster rate than the national average. The employment gap is now approximately 50% less compared to the past five years at around 4% below the UK rate but worklessness remains a problem with 21.1% of households in the region classed as workless in April-June 2008 compared with 16.1% for the UK. Finally, in 2007 13.8% of the region’s working age population had no qualification compared to 13.4% nationally – a significant narrowing of the gap in qualification levels over the past few years ONE’s purpose and strategy ONE is responsible for helping create and sustain jobs, prosperity and a higher quality of life within the North East. The vision of ONE is: “to be the best economic regeneration agency in the UK” to progress the regional vision of driving sustainable economic growth and, in particular, to increase GVA per head from 80% to 90% of the UK average. In doing so the Agencies values are aspiration to be the best, pride and respect, openness and honesty and commitment and responsibility. The priorities for ONE’s and the wider region’s investment in the North East’s economy are set out in a series of Regional Economic Strategies (RES), the first of which was published in 1999. The RES has since been updated, in 2002 and again in 2006. The prime focus of this impact evaluation is in relation to the 2002 RES. The overarching vision outlined in the 2002 RES was for the North East to become a vibrant, self reliant and outward looking region by raising the aspirations and profile of the region, thereby making it more prosperous and inclusive. The six main strategic priorities to deliver a vision of economic renewal for the region, described in the 1999 RES and retained within the 2002 RES, are: 

creating wealth by raising the productivity of all businesses;



establishing a new entrepreneurial culture;

238 239

Regional Gross Value Added, National Statistics, 2006. State of the Region, 2006.

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

creating a healthy labour market supported by a skilled workforce;



recognising universities and colleges at the heart of the region’s economy;



meeting 21st century transport, communication and property needs; and



realising the renaissance of rural and urban communities.

The latest RES: ’Leading the Way: Regional Economic Strategy, 2006 – 2016’, published in 2006, moves away from the earlier structural focus to a more transformational agenda based around the three themes 240 of business, people and place. The RES sits alongside the Regional Spatial Strategy and they inform 241 regional strategies, for example the Regional Housing Strategy , and are underpinned by the Integrated 242 Regional Framework .” It sets out the North East’s main economic development priorities in the next decade and provides a framework within which regional and sub-regional organisations from the public, private and voluntary sectors will deliver actions for sustainable prosperity. It contains three key targets for the Agency: 

increasing GVA per capita in the North East to 90% of the national average (from 80% currently);



creating between 18,500 and 22,000 net additional new businesses; and



providing employment for between 61,000 and 73,000 more people than current levels. 243

This, and earlier RESs, were supported by Corporate Plans which identify and prioritise the Agency’s interventions and are designed to meet the region’s objectives. ONE has had five Corporate plans over the period on which this report focuses: 

2002-2005 Corporate Plan detailed Agency and associated regional activity over this period. The Plan was the first opportunity to utilise the flexibilities and opportunities available under the RDA’s Single Financial Framework and was prepared within the (then) new Government Target 244 Framework used to measure the economic performance of the Regions. It contained proposals to develop the four Sub Regional Partnerships (SRPs) which became increasingly important and influential over the three year period as commitments from existing programmes came to an end;



2005-2008 Corporate Plan which set out the new strategic direction of the Agency in the lead up to the development of ONE’s revised Regional Economic Strategy in 2005/06;



2006-2009 Corporate Plan which aligned to the themes outlined in the 2006 RES and represented the contribution that the Agency would make over the next three years towards the delivery of the RES; and



2007-2012 Corporate Plan and Business Plan set out more specifically the region’s priorities, indicating what the Agency intends to deliver and detailing its expenditure proposals and targets over 245 the next five years. As identified in the RES Action Plan , the focus of the Agency is on: “concentrating on the areas in which the North East has world class strengths and huge potential for future growth”. Beyond this, the Corporate Plan and Business Plan outline eight key programmes:

240

The North East England Regional Spatial Strategy, 2008.

241

Quality Places for a Dynamic Region: NE Regional Housing Strategy, 2007.

242

The Integrated Regional Framework for the North East of England, 2008.

243

These Corporate Plans covered the periods 2002-2005, 2005-2008, 2006-2009, 2007-2012 and finally, 2008-2013.

244

The framework identified four core generic ‘milestone’ target areas (jobs created/safeguarded; businesses created or attracted; learning opportunities; and land reclaimed), common to all RDAs, that directly relate to one or more of the Tier 2 policy areas. 245

The RES Action Plan translates the RES priorities from the Corporate and Business Plans into a clear investment framework, channelling partners’ spend into key areas in order to deliver more jobs and businesses

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

–

Business Solutions;

–

Enterprise;

–

Innovation, Industry and Science;

–

Leadership;

–

Promoting the Region;

–

Quality of Place;

–

Skills; and

–

Economic Inclusion;

The latest Corporate Plan covering the period from 2008 to 2013 builds on the 2007-2012 Plan by setting out how ONE will contribute to the growth targets of the RES over the next five years, in addition to reviewing the eight programmes that have been implemented to fit with the three strategic priority themes of business, people and place. These programmes align closely with operational arrangements within the Agency and have been re-categorised as: –

Business Investment;

–

City Regional and Rural;

–

Culture and Tourism;

–

Economic Inclusion;

–

Enterprise and Business Support;

–

Innovation and Business Development;

–

Promoting the Region; and

–

Skills and Higher Education.

ONE’s core outputs cover: jobs created or safeguarded; people assisted to get a job; new businesses created and surviving 12 months; businesses assisted to improve their performance; public and private regeneration investment levered; hectares of brownfield land reclaimed and redeveloped; and people assisted in their skills development (skills assists). These core outputs, together with the programme 246 structure, form the context for evaluating ONE’s activity and impact . Besides the impact of its project and programme spend, ONE also influences its partners’ and stakeholders’ behaviour and performance in other ways. This ‘Strategic Added Value’ (SAV) is seen as a key element of ONE’s impact. Indeed, the policy framework that led to its establishment was designed to enable ONE to harness national, regional and local institutions in order to exploit the region’s indigenous strengths and tackle particular weaknesses, and to provide the environment for businesses and communities to maximise their potential through reforms that strengthen the key drivers of productivity and growth.

246

In addition to the core outputs described above the Corporate Plan also included businesses assisted via collaboration with the UK knowledge base. This output is not consistent across all the RDA’s and as such has not been included within our impact analysis.

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ONE’s profile In 2006/07, ONE had an annual budget of £283m and had spent around £1.8bn up to and including 2006/07. Although this report draws on evaluations which cover ONE’s spending over the whole period since its establishment in 1999, its focus is on that spending for which ONE is formally accountable, over which it has had the greatest influence and where at least the early evidence of impact should be apparent. In practice, this means that this report focuses on understanding the impact of ONE’s spending on interventions in the ‘relevant period’ between 2002/03 to 2006/07: consequently, it focuses less on 247 those programmes and projects which ONE inherited from its predecessors and the five national programmes where ONE has been responsible for delivery within parameters determined by central 248 government departments . Table 161 provides a breakdown of ONE’s overall spend per annum from 1999/2000 to 2006/2007 249 between the three broad intervention categories outlined in the IEF and on national programmes and administrative costs. As Table 161 shows, relatively more of ONE’s total expenditure between 1999/2000 to 2006/2007 has been devoted to business interventions (27%) than to place (25%), people (20%) or other interventions (11%). It is also evident that ONE’s spending priorities have changed since its establishment, with increased amounts devoted to business and place interventions in the later years covered by the evaluation evidence in this report. Since its establishment, ONE has spent £1,647m on interventions (excluding administrative costs), of which £1,082m was spent on ONE (rather than national) interventions in the ‘relevant period’ (2002/03 to 2006/07). This subset of spend is the primary focus of this report (see shaded area in Table 161). Table 161: Analysis of ONE spend by year and by category of expenditure (£m)

250

Business

Place

People

Other

National programmes

Administrative costs

Total

1999/2000

18.2

30.0

64.3

14.2

126.7

2000/2001

32.8

29.2

66.7

144.7

2001/2002

52.6

35.3

89.4

16.2

193.5

2002/2003

23.0

44.4

18.8

£45.4

18.6

232.2

2003/2004

64.2

66.2

23.2

£27

21.1

260.7

2004/2005

84.1

76.9

28.5

£27.1

21.8

274.4

2005/2006

88.8

90.5

37.2

£23.3

22.1

283.9

2006/2007

118.1

73.3

40.2

£22.8

22.7

283.1

Total

481.8

445.8

368.3

204.9

145.6

152.7

1,799

Source: PwC analysis based on ONE evaluation evidence

Table 162 summarises ONE’s spend covered by usable evaluation evidence. The evidence for the impact of ONE’s spending draws on 12 programme level evaluations covering 65% (£698m) of ONE’s

247

The exception here is the SRB programme, a legacy programme, which has recently been evaluated to asses the impact of RDA spending 248

Ten national programmes have been defined. They are the Coalfields Programme, the Regional Innovation Fund, the Manufacturing Advisory Service, Regional Tourist Board Support, the Rural Development Programme for England and Sustainable Food and Farming, Market Town Initiative, Business Link, Regional Selective Assistance/Selective Finance for Investment, Grant for Research & Development and Phoenix Fund. However the Coalfields Programme was not delivered in the North East of England. 249 These IEF intervention categories have been applied consistently across all RDAs and bear no relationship to how ONE organises itself. 250 Table 1 also includes the entire sub-regional partnership (SRP) monies spent by the Agency over this period.

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programme spend over the ‘relevant period’ which are consistent with the requirements of the IEF. This provides a robust evidence base upon which ONE’s impact can be assessed. Annex E provides a list of the evaluations used. The level of coverage varies across the intervention categories. Table 162: Analysis of ONE’s spend covered by IEF compliant evaluations (2002/03-2006/07) Total Expenditure covered by evaluations (£m)

% of spend

Number of evaluations

204

54%

Place

193.4

55%

People

94.8

64%

Other

205

100%

Total

698

65%

Business

Source: PwC analysis based on ONE evaluation evidence

It should be noted that the objectives and outputs/outcomes of ONE’s interventions often span a number of intervention categories and sub-themes. For the purposes of analysis, however, each intervention, and its associated outputs/outcomes, has been classified into the most appropriate intervention category and sub-theme on the basis of its objectives and/or the proportion of overall spend allocated to a particular sub-theme.

Key findings Before setting out details of the impact of ONE’s spending on each type of intervention, this section draws together the key findings from the evaluation evidence base for ONE as a whole in relation to the two key objectives of our work, namely to summarise the available evidence of the impact of spending by ONE, at both regional and national level, and to assess ONE’s achievements against the objectives of both the RES and its Corporate Plan (which have changed over time) and each specific programme and project. It considers three key questions in turn: 

What has been the impact of ONE’s spending both at the project and programme level and overall?



What does the available evidence suggest has been the value for money of ONE’s interventions’?



How has ONE performed against its relevant objectives both at the project and programme level and overall in relation to its Corporate Plan and the RES?

Impact The majority of ONE’s programme level evaluations covered in this report have calculated net outputs on the basis of the gross outputs. These have been presented as outputs achieved and future potential outputs. The ‘core’ gross and net outputs are summarised in Table 163.

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Table 163: Gross and net attributable ONE outputs (2002/03-2006/07) Jobs created/ safeguarded

Businesses created

Businesses supported

Brownfield land (ha)

People assisted into employment

Skills assists

Business competitiveness & development Gross outputs achieved

29,516

1,202

4,809

46,017

Net outputs achieved

19,068

619

1,509

18,152

31.3

1,163

Future potential net outputs

786

Additionality %, future potential

67.5

1,041

12,456

216

767-1,726

108

20.5-46

Future potential gross outputs

Future potential net outputs

Additionality %, future potential

1,302

450

4,772

12,234

92,702

Net outputs achieved

734

436

174

6,306

71,344

Additionality %, achieved

97%

3.6

51.5

Future potential gross outputs

Future potential net outputs

Additionality %, future potential

Gross outputs achieved

9,081

1,525

133

19,889

Net outputs achieved

3,821

853

101

8,513

Future potential gross outputs

Future potential net outputs

Additionality %, future potential

Additionality %, achieved Future potential gross outputs

Regeneration through physical infrastructure Gross outputs achieved Net outputs achieved Additionality %, achieved

3,748 251

People and skills Gross outputs achieved

Other

Additionality %, achieved

251

The range is reflective of the range of sub-themes with different employment effects within the Quality of Place evaluation.

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Jobs created/ safeguarded

Businesses created

Businesses supported

Brownfield land (ha)

People assisted into employment

Skills assists

349

12,234

158,608

Total Gross outputs achieved Net outputs achieved

43,647

252

3,177

253

9,581

24,390 - 25,349

1,908

1,683

209

6,306

98,009

Additionality %, achieved

56-58

51.5

Future potential gross outputs

1,163

Future potential net outputs

786

Additionality %, future potential

67.5

Source: PwC analysis based on ONE evaluation evidence

ONE’s spending has created/safeguarded jobs, assisted and helped to create new businesses, assisted people in skills development and employment and remediated brownfield land. A large proportion of these outputs have already been achieved. Only three evaluations provided an indication of outputs that are potentially to be achieved in the future; these are predominantly related to jobs created by the E Business programme and Access to Finance. These future outputs are subject to varying degrees of uncertainty and should, as such, be treated with caution. Based on the sample of interventions evaluated in Table 3 the level of additionality resulting from ONE’s business interventions varied across intervention and output type, but is generally relatively high (65%) compared with ONE’s regeneration (20.5% - 46%) and people and skills (56%) and other (42%) interventions for jobs created/safeguarded. The additionality of business interventions in terms of achieved business creation (51%) is generally lower than that of people and skills (97%) and other (56%) interventions. Conversely the additionality of people assisted in skills development is much higher for ONE’s people and skills interventions (77%) compared to business (39%) and other interventions (43%). Comparison of the additionality of ONE’s interventions with the national findings (based on the averages from the evaluations undertaken across the RDA network) shows a mixed picture. Whilst ONE’s business interventions compare favourably for achieved net outputs in terms of jobs created and safeguarded (65%) and businesses created (51%) compared to the national average (48% and 40% respectively), physical regeneration interventions have lower levels of additionality in terms of jobs created and safeguarded (20-46%) and land remediated (50%) compared to 45% and 73% nationally. ONE’s people and skills interventions have higher levels of additionality across all output categories at the national level. In Table 164 we set out those measures that have been produced in order to demonstrate the range of outcomes from the evaluations with GVA estimates. As the table shows, eight evaluations have either already achieved GVA which is greater than ONE’s initial investment, or have the potential to do so in the future.

252

It is important to note that this does not include the gross businesses created under ONE’s regeneration through physical infrastructure interventions of 1,041 due to the lack of associated net output data. 253

As above this does not include the gross businesses supported under ONE’s regeneration through physical infrastructure interventions of 12,456 due to the lack of associated net output data.

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Table 164: Outcomes from the evaluation of ONE interventions (2002/03-2006/07) Expenditure

Achieved GVA (annual, £m)

Future potential GVA (annual, £m)

Achieved GVA (cumulative, £m)

Future potential GVA (cumulative, £m)

Achieved & future potential GVA (cumulative, £m)

Business competitiveness and development 254

Access to Finance

0.6

15.8

1.8

17.6

Enterprise Support

9.4

Sectors Programme

23.7

82.6

E-Business Programme

13.7

Innovation, Industry and Science (IIS)

150.6

Investment, Aftercare and Overseas Function

6.1

526

Midas

0.6

0.85

5.4

Regeneration through physical infrastructure Quality of Place Promoting the Region

180.9

7 - 42.5

12.5

Economic Inclusion

11.1

1.1

Skills and Higher Education

83.7

135

People and skills

22.1 -

Source: PwC analysis based on ONE evaluation evidence

As indicated previously only three evaluations (Access to Finance, E Business Programme and Economic Inclusion) provided an indication of future impacts (at a level of £26m annual GVA and £5.4m of cumulative GVA for Economic Inclusion). This is not, therefore, representative of the likely level of future GVA that might be generated by ONE’s interventions in general especially in the areas of physical regeneration and people interventions. Finally, as highlighted in the summary Strategic Added Value is a key element of ONE’s impact, as set out below. ONE’s Strategic Added Value Besides the impact of its project and programme spend, ONE also influences its partners’ and stakeholders’ behaviour and performance in other ways in terms of securing private sector investment 255 and leverage as demonstrated by the Evaluating the Impact of ONE report. Based on consultations with partners and stakeholders the SAV scoring assessment of ONE was found to be positive. Overall ONE is judged to have been successful in creating SAV that would not otherwise have been created through its strategic/ coordinating, capacity building and performance enhancing roles.

254

The total gross amount of Access to Finance funding support until the end of 2007 was £32.4m. This however includes a significant proportion of legacy funding. In calculating the contribution of ONE of £7.2m out of this £32.4m a legacy value of 91% has been applied. 255

Evaluating the Impact of ONE, 2006.

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The five SAV sub areas where ONE received most support for some or significant impact made were: 

exerting strategic influence over partners and aligning their priorities with the RES;



creating a climate for regional growth;



encouraging economic development that might not otherwise have taken place;



scaling up beneficial economic development activity; and



creating confidence between partners in the prospects for regional growth.

Based on partner comments, ONE has made the most impact and created the most SAV in its place, as opposed to its people or business, programme areas. This is largely due to the regional image campaign and physical regeneration. Specific examples of SAV generated by ONE can be found in the SAV sections for individual themes. Source: ONE

Value for money Table 165 considers the value for money of ONE’s interventions from two perspectives: 

GVA to cost ratio; and, especially where this is not available,



measures of cost per unit of net output using a range of measures where these are available in the evaluation evidence.

In assessing the value for money of ONE’s interventions we have sought to compare them with the evidence emerging from the evaluation of other RDAs’ activities. Care should be taken when comparing the value for money of these interventions as these are set out in terms of both achieved and future potential where available (the latter being subject to uncertainty). Table 5 also sets out ratios of GVA to cost based on either cumulative GVA (including the persistence effects of the intervention) or annual GVA depending on the available evidence. Where annual GVA only was estimated, the evaluations gave no indication of the number of years over which the impact was expected to persist and as such are likely to under-estimate total GVA impact. As such this annex presents annual GVAs as a ratio of total cost. Direct comparisons should not be made between the annual and cumulative GVA ratios. For the national report we have re-estimated the GVA impact using a consistent approach (and set of assumptions) allowing such comparisons to be made.' Based on the available evaluation evidence, GVA to cost ratios and cost per net job could only be calculated for one of the national programmes undertaken by ONE (i.e. Business Link).

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Table 165: Summary of ONE’s value for money (2002/03-2006/07) Achieved GVA:cost ratio (annual)

Achieved & future potential GVA:cost ratio (annual)

Achieved cost per net job (£’000)

Future potential cost per net job (£’000)

Achieved cost per net business assist (£’000)

Achieved cost per net skills assist (£’000)

Business competitiveness & development Access to Finance

25.4

28.3

1.2

10.7

3.6

Enterprise Support

2.6

15.3

7.2

0.52

Sectors Programme

3.5

10.7

E-Business Programme

0.5

2.2

18.8

Innovation, Industry and Science (IIS)

0.3

115.7

Investment, Aftercare and Overseas Function

0.43

Midas

1.4

157.9 – 972.5

21.5

Regeneration through physical infrastructure Quality of Place

0.04 – 0.24

Promoting the Region

1.2

People and skills Economic Inclusion

1.9

103.8

1.25

Skills and Higher Education

1.6

133.5

1.34

3.6

0.2

10.9

288.8

National programmes Business Link

Source: PwC analysis based on ONE evaluation evidence

Table 165 shows that, for the evaluations which estimated achieved GVA, there has been a significant range of returns from these interventions. Some interventions have already achieved GVA returns which exceed their costs, (particularly the Investment, Aftercare and Overseas programme with a GVA to cost ratio of 86:1) whilst others have achieved a more limited return. It should be noted that one evaluation was interim in nature (Midas) and, therefore, did not allow for the time lag between spend and benefit realisation. Similarly not all business interventions had job creation as an explicit objective. There is also limited evidence of quantitative outcomes from the regeneration through physical infrastructure interventions. This is primarily due to the early stage of implementation of these interventions (and the consequent anticipation that such interventions are likely to generate future impacts).

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Not all interventions had job creation as an objective. As such there is also a large variation between interventions in terms of cost per job, both within and across intervention categories. The cost per net job created/ safeguarded for ONE’s business interventions are, however, generally relatively low, when compared to its people and skills interventions. However not all interventions had job creation as an explicit objective and therefore, in these instances, the cost per net job may not be the most appropriate measure of value for money. As such we have sought to identify other cost per net output measures, where this is available in the evidence base. When compared with other RDAs, business interventions appear to show a lower annual achieved GVA to cost ratio for Science, R&D (0.3:1 regionally compared to 1:1 nationally) and Enterprise Support (2.6:1 regionally compared to 4.9:1 nationally) whilst the people interventions, appear to achieve a better than average return (with an average of 1.6 :1 regionally compared to 0.9:1 nationally). At the sub-theme level the regeneration through physical infrastructure interventions performs below average in comparison to the national picture for public realm interventions (0.04 – 0.24:1 regionally compared to 0.3:1 nationally) but above average for image and tourism interventions (1.2:1 regionally compared to 0.5:1 nationally). Comparing ONE with the national picture for unit cost measures, the cost per net output of ONE’s business interventions was mixed with some interventions e.g. the £115,700 per job for Innovation, Industry and Science above the national average cost per job for this sub-theme (of £37,938), whilst the £431 per job for Investment, Aftercare and Overseas Function was well below the national average (of 11,563 for inward investment interventions). Again comparing the cost per net job of ONE’s regeneration interventions to that at a national level gives mixed results. For instance, the Quality of Place programme has costs per jobs which are much higher than the national average (of £118,945). Promoting the Region on the other hand performed better and was considerably lower in terms of cost per net job (£21,500 regionally compared to £79,133 nationally). Similarly, comparisons show mixed results in terms of the cost per unit output measures of ONE’s people and place interventions – both Economic Inclusion and Skills and Higher Education have higher cost per jobs against the national average cost per job created/ safeguarded for these sub-themes (of £49,215 and £105,268 respectively). However they perform well in terms of the national average cost per skills assist for its theme (of £1,960). Performance against objectives Table 166 presents ONE’s performance against target information based upon evidence drawn from the Tasking Framework. For all of the measures, ONE has exceeded the targets set by BERR and across all years for which targets have been set. Table 166: Comparison of ONE’s performance against targets, (2002/03-2006/07)

256

Jobs created/ safeguarded

Businesses created

Brownfield land (ha)

Skills assists

Funding levered, 257 (£m)

Targets set by BERR

48,595

7,177

418

146,615

388

Achieved ONE gross outputs reported to BERR

68,433

9,795

584

267,745

619

5 out of 5

4 out of 4

Number of years when targets met

Source: DTI/BERR and PwC analysis

Like all the RDAs (except the London Development Agency), in 2006 ONE was subject to the National Audit Office’s Independent Performance Assessment (IPA) which assessed how well ONE has responded to the common challenges facing RDAs, namely balancing the interests of the region with 256

Where targets were expressed as ranges (i.e. for 2005/06 and 2006/07) the minimum value has been used.

257

Funding levered targets and outputs were not available for 2002/03

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national policy requirements, managing the conflicting demands of different regional stakeholders, looking outwards to promote the region while staying focused on what is happening inside and responding to new duties imposed by central government. This assessment sheds further light on how well the Agency has been able to fulfil its role. Overall, ONE was seen as ‘performing strongly’ and was rated as the joint top-performing RDA in the IPA exercise, particularly in terms of its: 

ambition: the Regional Economic Strategy has been informed by a significant review and consultation process and has set ambitious goals for the region with strong buy-in from regional partners and stakeholders. ONE has set up a RES Advisory Group which is made up of a range of key partners/stakeholders from across the region. This group has been proactive in approach with a pivotal role in delivery of the ambitions in the RES through the Action Plan. ONE is also leading on a number of initiatives to focus on economic performance and productivity through both the RES and the Corporate Plan (e.g. setting up Business Link North East and the Newcastle Science City Project);



performance management: ONE has a strong Planning and Reporting framework which is embedded across the Agency. This is integrated with strong financial controls and risk management processes. ONE has fully embedded evaluation as an overarching requirement for all its activities. The Agency supports continuous learning throughout the business process and routinely evaluates all organisational systems and procedures. ONE is leading on work to develop evaluation training with OffPAT and to disseminate the practice throughout its partners; and



achievements: it was noted that ONE has consistently achieved its financial and output targets set out in the 2003/12 RES. Specifically the Agency has demonstrated strong leadership on knowledge based sciences and the centres of excellence have been instrumental in their successful delivery. It was also viewed to be a pioneer nationally in delivering broadband access and to have successfully attracted significant private sector and foreign investment, raised awareness of the region and delivered regeneration initiatives such as Newcastle/Gateshead Quayside.

Whilst there was significant approval for ONE’s strong vision and partnership working with strong leadership from the Chairman and Chief Executive, it was noted that there were areas for development, particularly communication and the regional evidence base including: 

the intelligence base of the 2006 RES, which needs to be strengthened, analysed and disseminated further;



the Agency needs to continue to explain the rationale behind its structure and how it operates; and



ensuring that the right balance is struck between the Agency’s strategic role and the management of high quality implementation such as its tourism role.

ONE has been proactively monitoring these issues through its continuous improvement strategy. The Improvement Plan is reviewed quarterly and a progress report provided to the Agency’s Board. Table 167 sets out ONE’s performance against the targets for each of the individual interventions covered by the evaluations.

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Table 167: Comparison of performance against target across the evaluations Exceeded

Met

Largely met

Mixed

Limited performance

Not assessed

Total

Evaluations

Spend (£m)

6.1

0.6

198

204.7

Evaluations

Spend (£m)

193.4

Evaluations

Spend (£m)

94.8

Evaluations

Spend (£m)

205m

205

Evaluations

Spend (£m)

94.8

6.1

0.6

596.4

698

Business

Place

People

Other

Total

Source: PwC analysis based on ONE evaluation evidence

Table 167 shows that for most of the interventions evaluated only 14.5% of the evaluations (by value) provided an assessment of performance against objectives. It is therefore not possible to draw comparisons on ONE’s overall performance from the limited evaluation evidence.

Impact by intervention We have structured the analysis of the impact of ONE’s spending, where possible, according to the three categories of intervention defined within the IEF (i.e. business, place and people). We have also analysed the impact of ONE’s other activities that span more than one of these categories as well as the available evidence of the impact of the nine national programmes where ONE has been responsible for delivery within parameters determined by central government departments. We have summarised the impact of ONE’s interventions using a common structure in which we: 

summarise ONE’s activities and expenditure on each programme;



report the estimated net outputs arising from this expenditure (i.e. the additional outputs that are as a result of the intervention);



distinguish between those outcomes which have already been achieved and those future potential impacts which are anticipated in the future as interventions are completed and/or their impacts persist; and



summarise performance against objectives and the outcomes, where available, for each programme.

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Business development and competitiveness interventions Rationale The North East has relatively low levels of business stocks and start ups, both at around 60% of national rates; however recent years have seen an improving situation. Each of the past six years have seen the region’s business stock grow at a faster rate than the national average. 2002 through to the start of 2008 saw an increase of 7,300 in the NE business stock, an average percentage increase of around 2.5% However, to achieve the ambitious RES target of 20,000 additional businesses by 2016 then a further improvement to around 3% p.a. will be required. At the same time existing businesses are generally less productive than the English average with lower levels of specialisation in high tech value added sectors. There is also pressure from global markets on the North East’s manufacturing sector, which whilst suffering from employment decline and ongoing restructuring issues, continues to have relatively high productivity levels compared with many other sectors and regions. The 2006 RES also identified the “GDP gap” between the North East and the rest of England (latest 258 figures suggest that this currently stands at 18.5%) resulting from low productivity, low valued-added and poor participation of its business base. Each of the projects and programmes delivered by ONE seek to contribute towards the RES by improving productivity and growing the market in high technology sectors. The primary justification for ONE’s business and competitiveness interventions was to address market failures in relation to: 

the provision of positive externalities arising from, for example, training provision and innovative activity and addressing issues of asymmetric information (i.e. to improve the flow of information around aspects such as market and technology opportunities, sources of financial support and mainstream business support services); and



collective action failure (whereby actions that are in the collective interests of the businesses in a sector do not take place because businesses are unable to communicate their cumulative needs to suppliers or the public sector).

The evidence of the impact of ONE’s business interventions comes from seven programme level evaluations covering the five main sub-themes summarised in Table 168. Table 168: Summary of business development and competitiveness interventions (2002/032006/07) Intervention theme/sub-theme

Evaluation

Expenditure covered by evaluations (£m)



Access to Finance

0.6



IEF Impact Evaluation of the Business Theme – Enterprise Support

9.4

Sector/ cluster support (including business networks)



Sectors Programme

23.7



E-Business Programme Evaluation

13.7

Science, R&D & innovation infrastructure



ONE Innovation, Industry and Science (IIS) Programme – Strategy for Success

150.6

Inward investment promotion



Evaluation of ONE Investment, Aftercare and Overseas Function

6.1

Sustainable consumption/ production



Midas Project Evaluation

0.6

Individual enterprise level support

Total

204

Source: PwC analysis based on ONE evaluation evidence 258

Regional Gross Value Added, National Statistics, 2006.

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These evaluations cover £204m of ONE spend. This spend is dominated by investment in innovation and to a lesser extent access to funding for small and medium businesses. A number of interventions have also been undertaken to support ONE’s priority sectors, inward investment as well as sustainable 259 consumption and production . These interventions contribute to a number of goals outlined in the 2006 RES Action Plan: 

growing new businesses by encouraging and supporting entrepreneurship;



support existing businesses through quality business support services;



building international competitiveness based on science, innovation and creativity;



integrating skills and employment services;



raising aspiration and attainment especially amongst young people;



attract and retain skilled people; and



promoting economic inclusion by addressing worklessness and promoting equality and diversity in skills and employment.

Impact Table 169 summarises the expenditure and key current gross outputs associated with the seven business interventions evaluated. The primary outputs have been jobs created/safeguarded, businesses created and assisted, people assisted with skills development and improved business performance in terms of increased turnover. Table 169: Gross achieved outputs from ONE’s business development and competitiveness interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Gross jobs created/ safeguarded

Gross businesses created

Gross businesses assisted

Gross skills assists

Increase in business turnover (£m)

Access to Finance

0.6

1,605

129

558

130.8

Enterprise Support

9.4

860

675

1,821

25,770

Sectors Programme

23.7

5,466

197

1,895

19,975

E-Business Programme Evaluation

13.7

244

272

ONE Innovation, Industry and Science (IIS) Programme – Strategy for Success

150.6

5,096

187

369

Evaluation of ONE Investment, Aftercare and Overseas Function

6.1

16,245

Midas Project Evaluation

0.6

N/R

487

Total

204

19,068

619

1,5094

18,152

181.9

Source: PwC analysis based on ONE evaluation evidence

259

This relates to the sustainable use of resources and reduction of waste.

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In addition to the achieved gross outputs set out in Table 9, the Midas evaluation reported the gross cost savings to businesses of £1.4m whilst the E-Business evaluation also estimated future potential gross outputs subsequent to the relevant period for this report (i.e. outputs achieved in 2007/08 as well as future potential outputs) of 973 jobs created/ safeguarded. The Access to Finance evaluation evidence also suggested an additional 190 gross future potential jobs created/safeguarded are likely to be generated post 2006/07. Table 170 summarises the expenditure and key net outputs associated with the seven business interventions evaluated. Table 170: Net achieved outputs from ONE’s business development and competitiveness interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Gross jobs created/ safeguarded

Gross businesses created

Gross businesses assisted

Gross skills assists

Increase in business turnover (£m)

Access to Finance

0.6

500

173

Enterprise Support

9.4

652

519

1,294

25,770

Sectors Programme

23.7

2,222

19,975

E-Business Programme Evaluation

13.7

244

272

ONE Innovation, Industry and Science (IIS) Programme – Strategy for Success

150.6

1,301

124

Evaluation of ONE Investment, Aftercare and Overseas Function

6.1

14,149

Midas Project Evaluation

0.6

N/R

Total

204

19,068

619

1,509

18,152

182

Source: PwC analysis based on ONE evaluation evidence

In addition to the achieved outputs set out in Table 170, the Midas evaluation reported the net cost savings to businesses of £850,000 and the E-Business evaluation estimated additional future potential net outputs of 728 jobs created/ safeguarded. We have also estimated additional future potential net outputs of 58 jobs created/safeguarded based on the evaluation evidence for Access to Finance. The level of additionality resulting from ONE’s business interventions varied across intervention and output type, but was generally relatively high compared with ONE’s place and people interventions. The E-Business evaluation had the highest level of additionality in terms of jobs created/ safeguarded (100%), whilst the Investment, Aftercare and Overseas Function had the greatest additionality in terms of businesses supported (87.5%). Finally the Enterprise Support evaluation had the greatest additionality in terms of people assisted in skills development (70%). Across the entire theme ONE compares favourably to the national average with regard to additionality in jobs created / safeguarded (65% compared to 48%) and recorded a higher level of additionality in business creation (51% compared to 40%). However, performance does vary when analysed at sub theme level. Enterprise Support (76%) demonstrated high levels of additionality compared to the national average for its sub-theme (41%) in terms of jobs created and safeguarded. However, ONE’s other individual enterprise support programme (Access to Finance) demonstrated levels of additionality below the national average for its sub theme (of 31% regionally compared to 41% nationally) as did the Cluster /

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sector support sub-theme (41% compared to 67% nationally). The inward investment promotion intervention compared favourably to the national average for its sub theme (87% compared to 43% nationally). Table 171 summarises the impact on GVA (both achieved and future potential) of ONE’s interventions to promote business development and competitiveness. In the majority of cases the evaluations estimated annual GVA. Where evaluations did not provide an analysis of GVA an annual average GVA per 260 employee of £37,200 has been applied to the number of net jobs created and safeguarded. Where annual GVA was estimated no indication was given of the number of years over which the impact was expected (or assumed) to persist. Moreover, future potential impacts on GVA have not been discounted nor have constant prices been applied. Table 171: Outcomes from ONE’s business development and competitiveness interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved GVA (annual, £m)

Future potential GVA (annual, £m)

Achieved & future potential GVA (cumulative, £m)

Access to Finance

0.6

15.8

1.8

17.6

Enterprise Support

9.4

Sectors Programme

23.7

82.6

E-Business Programme Evaluation

13.7

ONE Innovation, Industry and Science (IIS) Programme – Strategy for Success

150.6

Evaluation of ONE Investment, Aftercare and Overseas Function

6.1

526

Midas Project Evaluation

0.6

0.85

30 -

Source: PwC analysis based on ONE evaluation evidence

Additional net outcomes recorded in the evaluation evidence include: 

Midas Project: providing advice and consultancy support for resource efficiency investment to 255 organisations in the period 2005/06 to 2007/08 based on full service provision including subsidised intensive assistance.

In addition to the direct impact evidence above ONE also delivered Strategic Added Value under its business interventions which are discussed in the box below.

260

Latest average GVA per head figure for the North East as per the Annual Business Inquiry, 2006.

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ONE’s Strategic Added Value ONE’s interventions have also had strategic value in terms of developing the North East’s financial and training infrastructure. For example, through Access to Finance ONE has contributed to the North East’s financial infrastructure, market intelligence and business capacity. By December 2007 fund managers had leveraged over £55m from the private sector into the area demonstrating the programme’s success in building the North East’s reputation for SME opportunity. The programme’s work with target industries has also led to the development of clusters of industry expertise within the region which are working to build capacity, knowledge, networks, product portfolios and the North East’s international reputation. The proof of concept fund (operating as a convertible loan for early stage investment) was one of the first in the country to invest (rather than grant fund). This has been successful in both identifying ideas but also preparing businesses for the next stage of investment. This unique and innovative approach to fund development was driven by ONE creating the confidence for public sector investment and partnership and changing the long term investment climate in the region.. ONE’s development of the North East Productivity Alliance (NEPA) project (part of ONE’s Sectors Programme) has increased employer demand for, and investment in, skills by introducing companies to the NVQ framework for learning with the enrolment of more than 5,000 people for NVQ2 qualifications in manufacturing related subjects since the project was initiated. In addition, the project has been influential on the supply side helping to develop the Level 5 NVQ in partnership with SEMTA. The activities of ONE’s Investment, Aftercare and Overseas team has provided strategic leadership and been a catalyst through raising awareness of the region overseas as a location to invest and conduct business. In addition to influencing a company’s initial and further investment decisions and working in partnership with the North of England Investment Agency. Source: ONE

Value for money Overall, AWM’s achieved returns from its business development and competitiveness interventions are consistent with the average returns across the RDAs (2.7 compared to 2.8). However, the cumulative returns are higher across the RDAs with an achieved and future potential return at a national level of 11.6 compared to 5.9 for AWM’s business development and competitiveness interventions. This reflects the fact that there are only limited future potential impacts anticipated for AWM’s business development and competitiveness interventions and the different levels of persistence assumed. Table 172 sets out the achieved and future potential GVA to cost ratios of ONE’s business development and competitiveness interventions. The GVA to cost ratio compares GVA impacts to the cost of the intervention: where there is a GVA to cost ratio of greater than one, the economic benefits of the interventions attributable to ONE’s funding exceed their costs. This is the case for some, but not all of the interventions where GVA has been measured. For instance, interventions such as Access to Finance, Enterprise Support, the Sectors Programme, Investment, Aftercare and Overseas Function and Midas have already achieved economic benefits which exceed their costs. However in value terms ONE’s GVA to cost ratios for business interventions is heavily weighted to a negative return on cost due to the size (in value terms) of the Innovation, Industry and Science Programme. It is important to note that this is skewed by the fact that ONE’s investment in this intervention was capital in nature with most of the outputs likely to be delivered in the future. The evaluation of the E Business programme indicates that its economic benefits are likely to exceed its costs if its future potential outcomes are realised. In general the ONE business development and competitiveness interventions, for which GVA to cost ratios were available, did not compare favourably against the national average for similar interventions. Only the Access to Finance, Sectors Programme and Inward Investment interventions exceeded the national average achieved annual GVA to cost ratio for their sub-themes (4.9:1, 3.2:1, 3.7:1 respectively).

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Table 172: Achieved and future potential GVA to cost ratios from ONE’s business development and competitiveness interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved GVA (annual):cost ratio

Future potential GVA (annual):cost ratio

Access to Finance

0.6

25.4

2.9

Enterprise Support

9.4

2.6

Sectors Programme

23.7

3.5

E-Business Programme Evaluation

13.7

0.5

1.7

ONE Innovation, Industry and Science (IIS) Programme – Strategy for Success

150.6

0.3

Evaluation of ONE Investment, Aftercare and Overseas Function

6.1

Midas Project Evaluation

0.6

1.4

Source: PwC analysis based on ONE evaluation evidence

Table 173 sets out the achieved and future potential cost per net output of ONE’s business development and competitiveness interventions. Table 173: Achieved and future potential cost per net output from ONE’s business development and competitiveness interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved cost per net job (£’000)

Future potential cost per net job (£’000)

Achieved cost per net business supported (£’000)

Achieved cost per net skills assists (£’000)

Access to Finance

0.6

1,246

10.7

3.6

n/a

Enterprise Support

9.4

15.28

n/a

7.2

0.52

Sectors Programme

23.7

10.66

n/a

E-Business Programme Evaluation

13.7

18.8

n/a

ONE Innovation, Industry and Science (IIS) Programme – Strategy for Success

150.6

115.7

n/a

Evaluation of ONE Investment, Aftercare and Overseas Function

6.1

0.43

n/a

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Expenditure covered by evaluations (£m)

Achieved cost per net job (£’000)

Future potential cost per net job (£’000)

Achieved cost per net business supported (£’000)

Achieved cost per net skills assists (£’000)

0.6

n/a

Midas Project Evaluation

Source: PwC analysis based on ONE evaluation evidence

The cost per net job achieved from business and competiveness interventions is wide, ranging from £431 for Investment, Aftercare and Overseas Function to £115,700 for Innovation, Industry and Science. The high cost per job ratios for Innovation, Industry and Science is skewed by the fact that ONE’s investment in this intervention was capital investment with most of the outputs likely to be delivered in the future. The cost per net job figures for ONE’s business interventions compare unfavourably to the national average with the exception of the Access to Finance, Sectors and Inward Investment interventions which are considerably lower (£8,301, £12,135, 11,563 respectively nationally). Performance against objectives Table 174 summarises the performance against target of ONE’s interventions to promote business development and competitiveness. Performance against target has not been assessed for the majority of the interventions by the IEF compliant evaluations reviewed. The exceptions are for the attraction of inward investment performance and the Midas project (where limited progress against the target of providing advice to companies had been achieved). Table 174: Performance against objectives from ONE’s business development and competitiveness interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Performance against objectives

Evaluation of ONE Investment, Aftercare and Overseas Function

6.1

Midas Project Evaluation

0.6

Limited performance

Access to Finance

0.6

Not assessed

Enterprise Support

9.4

Not assessed

Sectors Programme

23.7

Not assessed

E-Business Programme Evaluation

13.7

Not assessed

ONE Innovation, Industry and Science (IIS) Programme – Strategy for Success

150.6

Largely met

Not assessed

Source: PwC analysis based on ONE evaluation evidence

Regeneration through physical infrastructure interventions Rationale The North East is perceived as having a strong ‘quality of place’ with a distinctive regional identity compared to the rest of the English regions and outstanding natural and heritage assets. However in order to meet the challenge of sustained and successful economic growth there is a need to successfully utilise and protect this natural competitive advantage, while strengthening the role of the North East’s urban centres in terms of driving economic growth. Therefore, many of ONE’s regeneration initiatives aim to stimulate economic activity within the city regions. ONE is also committed to raising awareness of the North East of England and increasing visitor numbers to the region thus: “promoting, protecting and improving our natural, cultural and heritage assets” is cited

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as one of the key aims of the RES (2006-2016). This commitment is evident in ONE’s strategy of substantial investment in the region’s visitor economy assets. The North East England Tourism Strategy (2005-2010) notes a commitment to increase the value of ONE investment in tourism from April 2005 thereby increasing investment to approximately £20 million over a three-year period. The challenge is to ensure that the North East gains the maximum benefit from this investment (economic, social and environmental). This section relates to regeneration initiatives supported by ONE in order to improve regional economic performance and raise awareness of the region. The evidence presented is primarily linked to the following challenges outlined in the 2006 RES: 

providing the physical infrastructure necessary to attract and support business;



attracting and retain highly skilled, creative individuals;



connecting labour markets with areas of opportunity; and



building on the region’s competitive advantage in terms of quality of place.

The main justification for ONE’s regeneration through physical infrastructure interventions was the underpinning nature of physical regeneration investment and its links to ONE’s business and people initiatives and the improvements to the area’s image or built environment. Some interventions were also considered to provide a public good through the development of new facilities or the redevelopment of derelict sites (i.e. Quality of Place projects such as Mima and Sunniside Gardens). For employment site interventions (such as Newburn Riverside and Northumberland Business Park projects within Quality of Place) the justification for ONE’s intervention related to improving the flow of information regarding the future returns of such an investment and overcoming barriers to entry. As indicated in Table 175 evidence of the impact of ONE’s regeneration initiatives is based on two evaluations. Table 175: Summary of ONE’s regeneration through physical infrastructure interventions (2002/03-2006/07) Intervention theme/sub-theme

Evaluation

Expenditure covered by evaluations (£m)

Capital projects Public realm/other infrastructure

A Programme-Level Evaluation of ONE's Quality of Place activities

180.9

Regional Image and Tourism Marketing (Promoting the Region)

12.5

Revenue projects Image/events/ tourism Total

193.4

Source: PwC analysis based on ONE evaluation evidence

This spend is dominated by capital investments in the Quality of Place programme evaluation and one revenue based image/tourism programme. The capital programme was primarily related to the areas of strategic transformational regeneration and delivering a portfolio of high quality business accommodation. The rationale behind the revenue projects was around promoting, enhancing and protecting the regions natural, heritage and cultural assets.

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Impact ONE’s regeneration interventions include the following key activities: 

Quality of Place Programme, covering a range of physical place investments, transport infrastructure and investment in cultural, historical and natural assets undertaken to improve the region’s image and productivity; and



Promoting the Region Programme, involving a series of marketing and promotional interventions to improve the North East’s image as a ‘great place’ to live, work, invest, do business, study and visit.

Key gross outputs set out in Table 176 arising from these regeneration interventions have been jobs created/ safeguarded, businesses created and attracted, businesses supported and brownfield land reclaimed or redeveloped. A number of these interventions are still in the early stages of implementation and, therefore, the achieved outputs provided may significantly under record the total potential impact of these interventions. Table 176: Gross outputs (achieved) from ONE’s regeneration through physical infrastructure interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Gross jobs created/ safeguarded

Gross Businesses created

Gross Businesses attracted

Gross Businesses supported

Gross brownfield land reclaimed/ redeveloped (ha)

Quality of Place

180.9

3,748

1,041

12,456

216

Promoting the Region

12.5

N/R

Total

193.4

3,748

1,041

12,456

216

261

Source: PwC analysis based on ONE evaluation evidence

The resulting net outputs arising from these regeneration interventions are set out in Table 177. Table 177: Regional net outputs (achieved) from ONE’s regeneration through physical infrastructure interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Net jobs created/ safeguarded

Net Businesses created

Net Businesses attracted

Net Businesses supported

Net brownfield land reclaimed/ redeveloped (ha)

108

Quality of Place

180.9

Promoting the Region

12.5

581

Total

193.4

767-1,726

108

262

186-1,145

Source: PwC analysis based on ONE evaluation evidence

261

The evaluation of Promoting the Region based its net employment figures on turnover per employee figures of £35,000 from net visitor expenditure in the region and as such no gross employment figures were calculated. 262

A range of net outputs attributable to the Agency were calculated as the evaluation evidence covers a series of sub-themes (public realm, business environment and culture and education) with differing levels of employment impacts.

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In addition to the net outputs in Table 177, the Quality of Place evaluation also estimated future potential gross employment effects for two case studies (the Newburn and Northumberland projects) of between 263 23-76 jobs . The expenditure covered by the Promoting the Region evaluation is also estimated to have led to an increase in business turnover of between £10,000 and £20,000 (across the sample of 264 beneficiaries surveyed) and advertising value equivalent of £2m. The evaluation of Promoting the Region based its net employment figures on turnover per employee figures of £35,000 from visitor expenditure in the region hence no gross employment figures have been calculated. The advertising value equivalent was generated from the marketing activities undertaken. The Quality of Place evaluation additionality ranges from 20.5% to 46% for employment effects - the only measure for which gross to net adjustments were undertaken and is the lowest level of additionality for jobs created and safeguarded across ONE’s business and people. When compared at a national level, the higher end of the range for Quality of Place is above the national average for public realm interventions of 45%. However the additionality of Quality of Place in terms of brownfield land remediated (50%) is below the national average at both the sub-theme (58%) and theme level (73%). Table 178 summarises the outcomes of ONE’s evaluated place interventions. In both cases annual GVA has been estimated. Where annual GVA was estimated no indication was given of the number of years over which the impact was expected (or assumed) to persist. Table 178: Outcomes (achieved) from ONE’s regeneration through physical infrastructure 265 interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved GVA (annual, £m)

Quality of Place

180.9

7-42.5

Promoting the Region

12.5

Source: PwC analysis and RDA evaluation evidenceThe evaluations did not provide evidence of future potential outcomes and no systematic analysis of the potential impact on regional GVA although the evaluations noted examples of Strategic Added Value as shown below.

263

The range of future potential jobs is reflective of the fact that the evaluation study undertook its impact analysis on two scenarios the: base case and optimistic scenario. 264

The survey covered 177 branded businesses from a population of 1,084 businesses. Given the survey covered only one aspect of the Regional Image component and only 20% of expenditure under the Tourism Marketing strand has been analysed in net terms, the results of the evaluation should be interpreted with some caution. 265

This table excludes the Construction Skills intervention because the evaluation did not contain any estimate of GVA or increases in employment.

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ONE’s Strategic Added Value ONE’s investments under the Quality of Place programme have demonstrated a number of SAV attributes primarily leverage, synergy and catalytic behaviour. For example it has generated leverage in the way that an objective of improving places for investment has mobilised the development of investment proposals and the generation of private and public sector match-funding to bring projects to fruition which otherwise would not have occurred or would have taken longer to be implemented. Evidence of synergy is provided by the involvement of ONE staff in delivery teams of large quality of place investments. The experience of project delivery has led to several models of engagement between ONE, Sub-Regional Partnerships and project developers being developed. Through the Promoting the Region programme the Agency has played the lead role in identifying and working to address the informational asymmetry market failure facing the North East. 87% of external stakeholders interviewed believe that the programme has had either ‘some’ or ‘a great influence’ on the strategic direction of the way the region was portrayed and marketed and all external stakeholders consulted believed that the programme has had a substantial impact on aspirations and confidence within the region. The flexibility of the brand and the ease of use of the branding materials allowed for support to be leveraged from businesses in promoting the region. Over 1,000 businesses adopted the brand and used it in their own literature, websites etc which increase the reach of the campaign. Source: ONE

Value for money Table 179 sets out the achieved and future potential GVA to cost ratios of ONE’s regeneration through physical infrastructure interventions. The return on investment for Promoting the Region is positive and compares well against the national averages for similar place interventions (0.5:1), whilst the value for money for Quality of Place performs poorly against the national average (0.3:1). Table 179: Achieved GVA to cost ratios from ONE’s regeneration through physical infrastructure interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved GVA (annual):cost ratio

Quality of Place

180.9

0.04 – 0.24:1

Promoting the Region

12.5

1.2:1

Source: PwC analysis based on ONE evaluation evidence

Table 180 summarises one measure of the value for money of ONE’s interventions to promote regeneration through physical infrastructure, i.e. cost per achieved net job. Table 180 shows considerable variation in the value for money of these interventions. The cost per job (achieved) of the Quality of Place intervention was particularly high due to the high set-up costs and limited current net outputs in this intervention. This is higher than the national average for public realm interventions (of £118,945). However the Promoting the Region programme outperforms the national picture with a much lower than average cost per job (£79,133 nationally). Table 180: Cost per net job (achieved) from ONE’s regeneration through physical infrastructure (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved cost per net regional job (£’000)

Quality of Place

180.9

157,900-972,500

Promoting the Region

12.5

21,500

266

Source: PwC analysis based on ONE evaluation evidence

266

We have not provided the future potential cost per net regional job for the Quality of Place evaluation as the future potential job figures refers to one project level evaluation and is therefore likely to severely under-represent the potential future potential employment impact at the programme level.

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However, it should be noted that the key focus of these interventions was not aimed at job creation and as such this may under represent the full impact of these interventions within the region. Performance against objectives Neither of the evaluations assessed performance against target due to a lack of overarching programme level objectives.

People and skills interventions Rationale This section relates to ONE’s people and skills interventions. These interventions cover ONE’s support in relation to programmes aimed at improving basic skills training, developing workforce skills, expanding higher level skills, widening participation and delivering leadership and management skills. The 2006 RES for the North East identifies two key challenges in this area, which are directly related to the evidence presented in the remainder of this section: 

developing the skills needed to succeed in a global economy by investing in higher level skills; and



utilising the skills of those people who are economically inactive by tackling worklessness and promoting equality and diversity in the workforce.

There were a range of justifications for ONE’s people and skills interventions, including: 

to stimulate the demand and supply for higher-level skills from businesses and employers, in order to tackle the low-skills equilibrium;



to improve the information given to providers, employers and individuals to guide their investment decisions;



to promote greater social equity in labour market participation and outcomes;



tackling the link between poor health and worklessness; and



to address the prejudices and misconceptions that employers may hold about the potential contribution of particular groups of people.

Evidence of the impact of ONE’s people and skills interventions relates to two evaluations covering two sub-themes summarised in Table 181. Table 181: Summary of ONE’s people and skills interventions (2002/03-2006/07) Intervention theme/sub-theme

Evaluation

Expenditure covered by evaluations (£m)

Matching people to jobs

Economic Inclusion Programme Evaluation

11.1

Skills/workforce development

Skills and Higher Education Programme Impact Evaluation

83.7

Total

94.8

Source: PwC analysis based on ONE evaluation evidence

The evaluation evidence of ONE’s impact on people and skills development covers £94.8m of spend from 2002/03 to 2006/07. The Skills and Higher Education programme, which incorporates ONE’s investment since 2002 in a range of regional skills development activities, accounts for the largest proportion of this spend. The Economic Inclusion programme aimed to increase and widen participation in both skills

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development and in employment. It also brought forward the three Northern Way Worklessness Pilots in the region. Impact Table 182 summarises the expenditure and key gross outputs achieved through ONE’s people and skills interventions. The primary outputs have been jobs created/ safeguarded, employment support, businesses created and supported and skills developed. Table 182: Gross achieved outputs from ONE’s people and skills interventions (2002/03-2006/07) Expenditure covered by evaluations (£m) Economic Inclusion Programme Evaluation

11.1

Skills and Higher Education Programme Impact Evaluation

83.7

Total

94.8

Gross jobs created/ safeguarded

Gross people assisted into employment

Gross businesses created

Gross business supported

Gross skills assists

398

7,056

418

10,964

904

5,178

443

4,354

81,738

1,302

12,234

450

4,772

92,702

Source: PwC analysis based on ONE evaluation evidence

The net outputs arising from these interventions are set out in Table 183. Table 183: Net achieved outputs from ONE’s people and skills interventions (2002/03-2006/07) Expenditure covered by evaluations (£m) Economic Inclusion Programme Evaluation

11.1

Skills and Higher Education Programme Impact Evaluation

83.7

Total

94.8

Net jobs created/ safeguarded

Net people assisted into employment

Net businesses created

Net business supported

Net skills assists

107

6,068

174

8,880

627

238

429

267

62,464

734

6,306

436

174

71,344

Source: PwC analysis based on ONE evaluation evidence

The Economic Inclusion programme had the highest level of additionality, across businesses created (100%), people assisted into employment (86%) and skills assists (81%), whilst the Skills and Higher Education Programme had higher levels of additionality in terms of jobs created and safeguarded (70%). National level comparisons show that ONE’s evaluated interventions have a good performance, achieving higher levels of additionality for jobs created/safeguarded, skills assists and business created (of 56%, 77% and 97% respectively) compared the overall national averages for people and skills interventions (of 48%, 62% and 82% respectively). Table 184 summarises the outcomes of ONE’s people and skills interventions in terms of achieved and future potential GVA.

267

The Skills and Higher Education evaluation did not undertake an analysis of net impact for businesses supported although gross figures of 4,345 were provided as demonstrated in Table 22.

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Table 184: Outcomes (achieved) from ONE’s people and skills interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved GVA (annual, £m)

Future potential GVA (annual, £m)

Achieved GVA (cumulative, £m)

Economic Inclusion Programme Evaluation

11.1

21.0

1.1

22.1

Skills and Higher Education Programme Impact Evaluation

83.7

135.0

Source: PwC analysis based on ONE evaluation evidence

As illustrated ONE’s £94.8m investment in people and skills interventions has led to an additional £157m of achieved and future GVA per annum. The evaluation evidence for Skills and Higher Education did not provide an indication of the future potential impacts arising from this evaluation and as such the GVA data in Table 24 potentially under represents the Agency’s total impact. The cumulative GVA impact for Economic Inclusion was estimated to be a total £26.5m (based on potential future cumulative GVA of £5.4m over 5 years). In addition the evaluations provided evidence of ONE’s Strategic Added Value through its people interventions which is provided in the following box. ONE’s Strategic Added Value ONE’s has also demonstrated SAV through its people interventions through strategic leadership, influence, engagement and synergy. For example, the Economic Inclusion programme demonstrated the Agency’s SAV role based on stakeholder consultations. It was found that the Agency has played a vital role in strengthening the evidence base for intervention and supporting development of appropriate interventions including, most markedly, the creation of the Regional Employability Framework. ONE has also increased its influence in supporting partnership activity and capacity building across a number of dimensions with investment, funding and resources across sub-regional activity and with major partners such as DWP/JobCentre Plus and LSC being levered in. At a national level, stakeholders also identified the influence that the programme has had as a pioneer of economic inclusion activity at the regional scale. Finally Agency activity on, for example, the REF or Equality Forum reflected the strong coordination role played by the programme with support for intelligence sharing, partnership working and collaboration from national through supra--regional (Northern Way) to sub-regional levels. In terms of the Skills and Higher Education programme stakeholder responses overwhelmingly indicated that the Programme has been successful in generating Strategic Added Value initially, in facilitating identification of the regional problem and bringing partners together (such as JobCentre Plus, LSC, and the Universities). This process has continued with greater expertise and influence continuing to be exerted across a broader set of partners, their strategies and priorities. Source: ONE

Value for money Table 185 sets out the achieved and future potential GVA to cost ratios in relation to people and skills interventions. The annual achieved return on investment for both the Economic Inclusion and Skills and Higher Education programmes compares well against the national averages of 0.8:1 and 0.4:1 achieved annual GVA to cost ratio for their respective sub-themes.

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Table 185: Achieved GVA to cost ratios from ONE’s people and skills interventions (2002/032006/07) Expenditure covered by evaluations (£m)

Achieved GVA (annual):cost ratio

Future potential GVA (annual):cost ratio

Economic Inclusion Programme Evaluation

11.1

1.9:1

2:1

Skills and Higher Education Programme Impact Evaluation

83.7

1.6:1

Source: PwC analysis based on ONE evaluation evidence

Table 186 sets out the cost per net achieved output in relation to people and skills interventions. Table 186: Cost per net achieved output from ONE’s people and skills interventions (2002/032006/07) Expenditure covered by evaluations (£m)

Cost per net job created/ safeguarded

Cost per net business supported (£)

Cost per net skills assists (£)

Economic Inclusion Programme Evaluation

11.1

103.8

£64,000

£1,250

Skills and Higher Education Programme Impact Evaluation

83.7

133.5

n/a

£1,340

(£’000)

Source: PwC analysis based on ONE evaluation evidence

The cost per net job created/ safeguarded for ONE’s people and skills interventions are relatively high, when compared to its business and competitiveness interventions (between £431 – £115,700) and also to the national average (£43,302). However the low cost per skills assisted is in line with the rationale for these interventions to enhance the regions skills base and lower than the national average for these interventions (£1,960). Performance against objectives Table 187 summarises the performance against target of ONE’s people and skills interventions and shows that in both cases the interventions exceeded all of their targets. Table 187: Performance against objectives from ONE’s people and skills interventions (2002/032006/07) Expenditure covered by evaluations (£m)

Performance against objectives

Economic Inclusion Programme Evaluation

11.1

Exceeded

Skills and Higher Education Programme Impact Evaluation

83.7

Exceeded

Source: PwC analysis based on ONE evaluation evidence

Other ONE interventions The evidence of ONE’s impact on other interventions covers £205m of spend from 2002/03 to 2006/07. This comprised the Single Regeneration Budget (SRB) programme, which aimed to tackle issues affecting the most deprived communities within the North East of England. The North East received £650m of funding over the six rounds of SRB. This equated to 11% of the national SRB spend, making the North East the fourth largest regional recipient of SRB funding. This

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amount of funding was in keeping with levels of deprivation in the region – 11% of the most deprived Super Output Areas (SOAs) in England are located in the North East. SRB funding in the North East was focussed in the more urban sub-regions, especially in the early Rounds of SRB. In Rounds 1-3 of the programme, Tyne and Wear and Tees Valley received an average 86% of the available funding. However, by Rounds 5 and 6, this level had reduced to 66%, with County Durham and Northumberland developing sub-region-wide bids which attracted significant funds. The SRB intervention aimed to contribute to four RES goals: 

raising aspiration and attainment especially amongst young people;



attract and retain skilled people;



promoting economic inclusion by addressing worklessness and promoting equality and diversity in skills and employment; and



high quality places to live, work and visit.

The justification of ONE’s intervention through the SRB programme was to address equity issues. Impact Key outputs arising from the SRB intervention has been jobs created/ safeguarded, skills developed, businesses created and land reclaimed/ redeveloped. Table 188 sets out the key gross outputs achieved in relation to these interventions. Table 188: Gross achieved outputs from ONE’s other interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Gross jobs created/ safeguarded

Gross skills assists

Gross businesses created

Gross land reclaimed/ redeveloped (ha)

SRB

205

9,081

19,889

1,525

133

Total

205

9,081

19,889

1,525

133

Source: PwC analysis based on ONE evaluation evidence

In addition to the new businesses identified in Table 188, the SRB programme led to the start-up of 42 gross community enterprises. Table 189 sets out the key net outputs achieved in relation to these interventions. Table 189: Net achieved outputs from ONE’s other interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Net jobs created/ safeguarded

Net skills assists

Net businesses created

Net land reclaimed/ redeveloped (ha)

SRB

205

3,821

8,513

853

101

Total

205

3,821

8,513

853

101

Source: PwC analysis based on ONE evaluation evidence

Again in addition to the new businesses identified in Table 189, the SRB programme led to the start-up of 33 net community enterprises. The quantitative evidence of outcomes and impacts in the evaluation reports which fed into the SRB evaluation was limited across all RDAs. However, applying the 2006 GVA per worker for the North East

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of England (of £39,244 GVA of £150m.

268

) to the 3,821 net jobs created and safeguarded gives an estimated per annum

The SRB evaluation study did not undertake an analysis of the Strategic Added Value; as such, this has not been included within our report. Value for money Due to the diverse range of outputs in the SRB programme and the difficulties in disaggregating economic and non-economic data a value for money calculation was considered to be inappropriate. Performance against objectives The evaluation of the SRB programme in the North East does not consider the performance of the programme against its targets or defined objectives. The evaluation study notes that “Gauging the extent to which SRB has made an impact is hard to judge. Given the limited documentary or data evidence detailing SRB impact, much of the evidence of impact is anecdotal”. The evaluation study makes various observations on impact with reference to the North East: SRB was successful where it ‘tipped the balance’ in favour of an area: for example, the Graingertown project in Newcastle. While SRB money only funded a small part of the project, it was recognised that the early up-front commitment made by SRB ensured the buy-in from key private and pubic sector agencies; Overall impact of some estate based regeneration programmes was low: in some of the estate based regeneration programmes, SRB had a minimal impact in improving the fortunes of areas. It is believed that SRB funds were not of the magnitude required to address systemic socio-economic problems. The key findings were: Socio-economic impacts may not be realised during the lifetime of a programme: the impacts of some interventions, especially softer skills interventions, may not be realised until after programmes are finished. SRB did not use a post-programme monitoring approach, so these impacts were not captured; 

Diversity can dilute impact: the magnitude of project level interventions funded through the SRB programme complicated programme management, incurred higher levels of deadweight and led to a lack of overall programme focus;



Inter-project co-operation: where the programme made cross-project linkages the scope for scale and synergy benefits was increased; and



Key impacts may not always be measurable: one significant outcome from the SRB programme has been the increased capacity and confidence among local communities to not only contribute to local regeneration programmes but also to engage with wider mainstream stakeholders. However, these impacts are not effectively reflected in the quantitative performance measurement systems used for SRB (e.g. jobs and business output measures).

National programmes Besides its own interventions, ONE has been responsible for the management and delivery of five of the ten national programmes which have been delivered within parameters closely defined by central government departments. Although the available evaluation evidence on national programmes does not disaggregate gross outputs at a regional level, it is possible to estimate the impact of some of these programmes on the North East. This has been undertaken by dividing ONE spend on the programme by the regional cost per job and then making allowances for displacement, leakage and multiplier effects. Table 190 summarises ONE’s spend in the relevant period on each of the national programmes and summarises the estimated impacts where these are available. As the Table shows, one programme has

268

Office of National Statistics, 2006 workplace GVA per worker for the North East of England.

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resulted in the achievement of 3,759 net jobs created/ safeguarded, with the potential to generate a further 180 jobs in the future. Table 190: Estimated impact of ONEâ&#x20AC;&#x2122;s spending on national programmes between (2002/03 2006/07) National programme

ONE spend (ÂŁm)

Net jobs created/ safeguarded

41.2

3,759

Manufacturing Advisory Service

Phoenix Fund

21.3

72.9

6.9

3.3

145.6

3,759

Business Link

Regional Innovation Fund Rural Development Programme for England (& Sustainable Food and Farming Strategy) Selective Finance for Investment Coalfields Programme Regional Tourist Board Support Market Town Initiative Grant for Research & Development Total Source: PwC analysis based on ONE evaluation evidence

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South East England Development Agency Summary Overview 

SEEDA has spent approximately £1bn on a range of interventions designed, individually or collectively, to stimulate business development and competitiveness, promote regeneration through physical infrastructure, and enhance employability and skills.



This study focuses on the impact of the £580m spent by SEEDA between 2002/03 and 2006/07. This includes expenditure on SRB of £129m but excludes National programmes which account for an additional £203m.



We have reviewed 25 evaluations covering spend of nearly £470m by SEEDA in the relevant period.

Impact 

The evaluations show that SEEDA has generated significant outputs already: –

nearly 39,500 jobs have been created and safeguarded, of which 43% are estimated to be additional at the regional level;

–

almost 33,000 businesses have been assisted of which 59% are estimated to be additional;

–

just over 2,500 businesses have been created of which 39% are estimated to be additional;

–

over 216 ha of land has been remediated of which 56% are estimated to be additional;

–

over 6,500 people have been assisted into employment of which 65% are estimated to be additional;

–

over 66,000 skills assists have been delivered of which 60% are estimated to be additional; and

–

over 191,000 sqm of commercial floorspace has been built of which 80% is estimated to be additional



Significant future potential outputs are also anticipated, particularly through business interventions, as schemes are completed although these estimates are more uncertain.



In addition to the impact of its project and programme spend, Strategic Added Value (SAV) is a key element of SEEDA’s impact, particularly in: influencing national decisions through an evidence base to safeguard or create new economic activity, leading place based regeneration through the engagement and coordination of public and private sector partners/funders, and identifying synergies between partners to develop creative solutions to pressing regional or national problems.

Value for money 

The highest achieved return on investment relates to SEEDA’s business interventions: the three major business evaluations covering 81% of the evaluated spend in this category achieved a GVA to cost ratio of 6 to 1. The lowest return relates to people interventions: the Skills & Employability evaluation (the largest evaluation estimating GVA in this category) estimated a cumulative achieved GVA to cost ratio of 1.5 to 1.

Performance against objectives 

235

The interim nature of many evaluations means that some have not fully assessed performance against

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objectives. Of those which have made such an assessment, 28% have met or exceeded their objectives. Three evaluations, which cover more than 60% of the evaluated spend were assessed as ‘mixed’ in achieving their objectives by their evaluators.

Context Overview of the South East of England The South East region encompasses 19 county and unitary authorities and 55 districts stretching in an arc around London from Thanet in the south-east to the New Forest in the south-west and to Aylesbury Vale and Milton Keynes in the north-west. Whilst it is without a single dominant urban centre, the region is home to two urban areas with populations of around 250,000 (Medway and Brighton and Hove) and five urban areas with populations of greater than 100,000. The population of the South East is 8.2 million 269 people and is expected to increase by more than 10% between 2005 and 2021 . The South East of England is regarded as one of the UK’s most successful regions: 

The region’s gross value added (GVA) was around £177 billion in 2006, making it the second largest regional economy in the UK, and GVA per head was £21,514 compared with the English average of 270 £19,082 .



The South East has the largest number of businesses of any region in the UK. The private services 271 sector accounts for around 60% of the region’s total output and employment, with financial and business services accounting for almost a third of output and a quarter of employment. As such, the South East is the 31st largest economy in the world and home to a high concentration of global headquarters for multinational businesses.



The South East has the highest employment participation rate of any region at around 82 per cent. Its employment rate has also been consistently above the national average in recent years. The proportion of working age people with no qualifications is also relatively low.



The region has a strong concentration of higher education institutions. This has led to a concentration of highly skilled and specialist workers in a region that supports word class research and knowledge transfer. In addition, the region is the principal hub for international travel to and from the UK.

The high average levels of GVA per head and employment, however, mask significant sub-regional disparities. In particular, parts of the coastal fringe perform significantly below both the regional and national averages. In fact the South East has the widest variation in GVA per head of any region outside London. While GVA per head in the Thames Valley is 60 per cent above the national average, the levels in areas such as North Kent, East Sussex and the Isle of Wight are similar to those found in the North East of England. These areas also suffer high levels of deprivation and one million people across the South East lack basic literacy and numeracy skills. This complex picture highlights three distinct economic contours within the South East of England: a relatively wealthy core to the west and south of London; a rural land mass (80 per cent of the region) with high economic activity rates and business start-up rates, but with dispersed patterns of rural deprivation; and a coastal region of major environmental assets, but with an ageing population and substantial untapped potential in terms of productivity, economic activity, skill levels and infrastructure. London and the South East are inextricably interlinked in terms of workforces, incomes, services, markets, supply chains and migration patterns.

269

SEEDA (2007) The Regional Economic Strategy 2006-2016 Annual Monitoring Report Issue 1 October 2007

270

ONS (2007) Regional, sub-regional and local gross value added

271

HM Treasury, BERR, SEEDA (2008) South East England Economy: A joint response to changing economic circumstances

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SEEDA’s purpose and strategy SEEDA aims to “create a prosperous, dynamic and inspirational region by helping businesses compete more effectively, training a highly skilled workforce, supporting and enabling our communities, while 272 safeguarding our natural resources and cherishing our rich cultural heritage”. The South East is a relatively new administrative region. Prior to establishing the RDA there were no regional structures other than the Government Office, and the region’s constituent parts had no strong tradition of working together. Against this backdrop, SEEDA has worked to build a regional identity and develop a unifying vision and tackle distortions e.g. in transport provision, caused by the magnet effect of a London on the surrounding, and separate, region which has lacked an equivalent counter-weight. Since its establishment, SEEDA has set out how its statutory purposes could be met within the South East through the development of three Regional Economic Strategies (RESs) for the South East which have been developed jointly with its partner organisations from all sectors. The Strategies provide the context for economic development and regeneration in the South East: 

RES 2000–2001: focused on ‘Building a World Class Region’ which fully utilises its formidable business, social, educational, cultural, heritage and environmental strengths to provide an enhanced quality of life for all;



RES 2002–2012: focused on sustainable development as its core theme which bound together five objectives: competitive business; successful people; vibrant communities; effective infrastructure; and sustainable use of natural resources; and



RES 2006–2016: which is currently being implemented and is designed to realise the South East’s vision to “be a world class region achieving sustainable prosperity” based on achieving three main objectives: increased GVA per capita; increased productivity; and a reduced ecological footprint of the region.

The Agency’s approach to contributing towards the RES objectives is set out in its Corporate Plans: 

SEEDA’s first Corporate Plan covered the period 2002-2004 and set out how it planned to exploit the flexibilities that the Single Pot, a single funding source for RDAs, offered within a set of principles including: –

balancing investing in success with tackling deprivation;

–

driving outcomes not programmes; and

–

having either a specific spatial focus or addressing region-wide priorities.

The Plan also identified the primary dimensions of SEEDA’s activities as business competitiveness, learning, skills and workforce development, and community regeneration and physical development. 

Relying on the same principles and spatial priorities as the previous Plan, the subsequent Corporate Plan (2003-2005) identified key linkages with other regional strategies and policy frameworks (beyond the RES). The Plan defined the Agency’s contributions under each of the five RES 2002-12 objectives.



SEEDA’s Corporate Plan for 2005-2008 set out how SEEDA would continue to deliver the RES and support the delivery of national objectives. It focused the Agency’s resources on three objectives where it could add the most value: –

272

Strategic Influence: identifying clear goals and actions to support the region’s economic future in a revised RES, working with other RDAs to influence strategic frameworks and policies in Whitehall and in Europe, whilst working with Partnerships across the region to join up the work of public,

SEEDA’s website: http://www.seeda.co.uk/work_in_the_region/ (accessed 13 August 2008)

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private and voluntary sectors.



–

Sustainable Economic Growth: helping drive up productivity as the basis for wealth creation, supporting innovation and enterprise.

–

Sustainable Communities: helping build economic, social and environmental sustainability into all our communities, through creating quality places and area-focused regeneration.

The latest Corporate Plan covering the period from 2008 to 2011 is linked to the most recent RES 2006-2016. By the end of the Corporate Plan period, SEEDA aims to have worked closely with local authorities, local partners and stakeholders and be a strong and effective advocate for the region’s needs. SEEDA aims to deliver against RES targets through its Global Competitiveness, Smart Growth and Sustainable Prosperity portfolios. In addition, its Enabling Infrastructure and Development directorate ensures that SEEDA’s investment in major regeneration sites and infrastructure priorities delivers across all RES objectives. The Corporate Plan also describes how SEEDA will work with each of the regional economic contours described above which is underpinned in the need for it to show regional leadership in co-ordinating the aspirations and actions of numerous partnership organisations. An important part of SEEDA’s strategy is to collaborate with London and the East of England to develop ‘breakthrough’ solutions in areas of global excellence, such as the Oxford to Cambridge Arc Initiative.

SEEDA’s core outputs cover: jobs created or safeguarded; people assisted to get a job; new businesses created and surviving 12 months; businesses assisted to improve their performance; businesses assisted via collaboration with the UK knowledge base; public and private regeneration investment levered; hectares of brownfield land reclaimed and redeveloped; and people assisted in their skills development. These core outputs form the context for evaluating SEEDA’s activity and impact. Besides the impact of its project and programme spend, SEEDA also influences its partners’ and stakeholders’ behaviour and performance in other ways. This ‘Strategic Added Value’ (SAV) is seen as a key element of SEEDA’s impact. Indeed, the policy framework that led to its establishment was designed to enable SEEDA to harness national, regional and local institutions in order to exploit the region’s indigenous strengths and tackle particular weaknesses, and to provide the environment for businesses and communities to maximise their potential through reforms that strengthen the key drivers of productivity and growth. SEEDA’s profile 273

In 2006/07, SEEDA had an annual budget of £203m and spent around £1,130m up to and including 2006/07 including programme spend and administrative costs. SEEDA has the second-lowest budget overall of the English Regional Development Agencies, and the lowest budget per head of population. Although this report draws on evaluations which cover SEEDA’s spending over the whole period since its establishment in 1999, its focus is on that spending for which SEEDA is formally accountable, over which it has had the greatest influence and where at least the early evidence of impact should be apparent. In practice, this means that it focuses on understanding the impact of SEEDA’s spending on interventions in the ‘relevant period’ between 2002/03 to 2006/07: thus, it focuses less on those programmes and projects which SEEDA inherited from its predecessors and seven national programmes where SEEDA has been responsible for delivery within parameters determined by central government departments . Table 191 provides a breakdown of SEEDA’s overall spend per annum from 1999/2000 to 2006/2007 274 between the three broad intervention categories outlined in the IEF and on national programmes . As Table 191 shows, more of SEEDA’s expenditure has been devoted to place interventions than to people or business interventions. It is also evident that SEEDA’s spending priorities have changed since

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South East England Development Agency

274SEEDA’s expenditure data already exclude administrative costs as it is based on total programme expenditure and capital additions from SEEDA’s accounts.

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its establishment. Expenditure has fallen in the other category, mainly due to the phasing out of SRB, and increased at a faster rate in business interventions. Since its establishment, SEEDA has spent £1,001m on interventions (excluding administration costs), of which £577m (shaded area in Table 191) was spent on SEEDA (other than national) interventions in the ‘relevant period’. This subset of spend is the primary focus of this report. Table 191: Analysis of SEEDA spend by year and by intervention category (£m) Business

Place

People

Other

National programmes

Administrative costs

Total

1999/2000

17.9

4.6

36.8

2.0

6.8

68.1

2000/2001

1.7

8.9

5.7

50.4

5.3

8.9

80.9

2001/2002

3.5

22.8

5.0

63.8

1.9

10.5

107.5

2002/2003

7.9

40.4

9.9

42.8

5.4

15.2

121.6

2003/2004

14.1

46.5

13.7

49.6

5.2

19.4

148.5

2004/2005

16.8

44.8

11.9

33.6

58.0

21.1

186.3

2005/2006

22.7

54.6

8.4

32.9

72.7

22.3

213.6

2006/2007

28.5

57.5

10.5

29.7

52.9

24.3

203.4

Total

95.3

293.5

69.7

339.5

203.3

128.5

1,129.9

Source: PwC analysis based on data supplied by SEEDA

Table 192 summarises SEEDA’s spend covered by the usable evaluation evidence. The evidence for the impact of SEEDA’s spending, therefore, draws on 25 evaluations covering 81% (£469m) of SEEDA’s programme spend over the ‘relevant period’ which are consistent with the requirements of the IEF. This provides a robust evidence base upon which SEEDA’s impact can be assessed. Annex F provides a list of the evaluations used. Table 192: Analysis of SEEDA relevant spend covered by IEF compliant evaluations Expenditure covered by evaluations (£m)

% of spend

Number of evaluations

Business

72.6

275

Place

197.4

276

People

38.6

Other

160.3

Total

468.9

National programmes

28.0

Total (including national programmes)

496.9

277

Source: PwC analysis based on SEEDA evaluation evidence

275

The Innovation Infrastructure evaluation has been counted in the business category but the evidence linked to Managed Workspaces has been discussed in the place section of this report. In addition, the Gosport Business Park evaluation which was initially classified in business was transferred to place given its role mainly as managed workspace. 276

The Sea Space evaluation has been allocated to place. This is because all its evidence relates to regeneration through physical infrastructure, including educational infrastructure and incubation sites, and also because it was decided that the evidence should be kept together to demonstrate the holistic contribution to the regeneration of Hastings. However, spend has been distributed across people, place and business categories accordingly. 277

The Chatham Drill Hall and Canteen (University of Medway) evaluation has also been re-allocated from the people category to the place category to demonstrate linkages with the wider Chatham maritime interventions, but spend has been allocated to people due to its classification as “development of educational infrastructure”.

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These evaluations have been allocated to the intervention category most relevant to the project or programme being evaluated. However, as the Agency seeks to pursue multiple objectives from its activities, the impacts from one project / programme can achieve a range of outcomes, some of which may be more in line with the objectives of other intervention themes. The multiple impacts of interventions are acknowledged where they have been identified in the evaluation evidence.

Key findings Before setting out details of the impact of SEEDA’s spending on each type of intervention, this section draws together the key findings from the evaluation evidence base for SEEDA as a whole in relation to the two key objectives of our work, namely to summarise the available evidence of the impact of spending by SEEDA, at both regional and national level, and to assess SEEDA’s achievements against the objectives of both the RES and its Corporate Plan (which have changed over time) and each specific programme and project. It considers three key questions in turn: 

What has been the impact of SEEDA’s spending both at the project and programme level and overall?



What does the available evidence suggest has been the value for money of SEEDA’s interventions’?



How has SEEDA performed against its relevant objectives both at the project and programme level and overall in relation to its Corporate Plan and the RES?

Impact The majority of SEEDA’s evaluations covered in this report have estimated net outputs on the basis of the gross outputs. These have been presented as outputs achieved and future potential outputs. The ‘core’ gross and net outputs are summarised in Table 193. Table 193: Gross and net attributable SEEDA outputs Jobs created/ safeguarded

278

Businesses created

Businesses assisted

Brownfield land (ha)

Skills assists

Business development and competitiveness Gross outputs achieved

25,538

2,002

14,984

Net outputs achieved

8,018

601

8,566

Additionality %, achieved

31%

30%

57%

114%

Future potential gross outputs

144,970

Future potential net outputs

106,752

74%

Additionality %, future potential

279

Regeneration through physical infrastructure Gross outputs achieved

6,776

132

29.0

427

Net outputs achieved

5,371

132

25.3

299

Additionality %, achieved

79%

75%

100%

87%

70%

Future potential gross outputs

5,191

31.5

Future potential net outputs

2,427

29.9

Additionality %, future potential

47%

95%

278

The gross outputs from evaluations that did not estimate net outputs have been excluded from this Table.

279

Net outputs are higher than the gross outputs due to low levels of deadweight and the positive multiplier effects.

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Jobs created/ safeguarded

Businesses created

Businesses assisted

Brownfield land (ha)

Skills assists

Gross outputs achieved

328

3,786

13,395

Net outputs achieved

284

3,411

10,579

Additionality %, achieved

87%

90%

79%

Future potential gross outputs

1,008

2,280

Future potential net outputs

948

2,071

75%

94%

91%

Gross outputs achieved

6,880

504

14,143

187

52,371

Net outputs achieved

3,517

370

7,498

28,725

Additionality %, achieved

51%

73%

53%

51%

55%

Future potential gross outputs

Future potential net outputs

Additionality %, future potential

Gross outputs achieved

39,522

2,542

33,045

216

66,226

Net outputs achieved

17,190

998

19,607

121

39,641

43%

39%

59%

56%

60%

Future potential gross outputs

150,212

1,008

2,280

Future potential net outputs

109,217

948

2,071

73%

94%

95%

91%

People and skills

Additionality %, future potential Other

Total

Additionality %, achieved

Additionality %, future potential

Source: PwC analysis based on SEEDA evaluation evidence

SEEDA’s spending has created/safeguarded jobs, assisted and helped to create new businesses, assisted people in skills development and remediated brownfield land. A large proportion of these outputs have already been achieved. However, a significant number of outputs are expected to be achieved in the future. These are predominantly related to jobs created by business interventions (such as sector support, individual enterprise support and knowledge transfer / R&D projects). All of these future potential outputs are subject to varying degrees of uncertainty and should, as such, be treated with caution. When comparing SEEDA’s additionality factors across intervention categories the following conclusions can be drawn: 

People and skills interventions achieved the highest levels of additionality for jobs created/safeguarded;



Place and other interventions achieved the highest additionality levels for business creation;



Regeneration through physical infrastructure achieved the highest levels of additionality for business creation, businesses supported and brownfield land remediation. However, the evidence for businesses supported and created comes from one project evaluation;



Business interventions achieved the highest levels of additionality for achieved skills assists, although the evidence has been sourced from the evaluation of just one programme;

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

For jobs created/safeguarded and skills assists, both people and place interventions achieved a high level of additionality in comparison with business interventions for which one in every three gross jobs created/safeguarded were translated into net outputs; and



Regeneration through physical infrastructure and ‘other’ interventions generated evidence on brownfield land remediated. Regeneration demonstrated a much higher level of additionality than ‘other’ interventions.

When comparing SEEDA’s additionality factors for achieved outputs with the averages for RDAs nationally, the following conclusions can be drawn: 

Businesses interventions additionality for achieved outputs is higher than the comparable national measures in terms of businesses assisted (35%) but lower in terms of jobs created/safeguarded (48%) and business creation (40%);



Regeneration interventions additionality for achieved outputs is higher than the comparable national measures for jobs created/safeguarded (45%), land remediation (73%) and businesses created (65%);



People and skills interventions additionality for achieved outputs is higher than the comparable national measures in terms of skills assists (62%), employment assists (51%) and jobs created/safeguarded (48%);



Other interventions achieved higher levels of additionality in comparison with national measures for all output types except for land remediated (59%) and skills assists (57%).

It has not been possible to provide a cumulative figure for the GVA (achieved and future potential) in relation to all of these interventions due to differences across individual evaluations. Not all the evaluations reviewed assessed the outcomes of the intervention in terms of the impact on GVA. For those evaluations which did take GVA into consideration, the basis of these estimates is often inconsistent across interventions. There is, therefore, no aggregate assessment of net outcomes across interventions. However, in Table 194 we set out those measures that have been produced in order to demonstrate the range of outcomes from the evaluations with GVA estimates. Achieved and future potential impacts on GVA are distinguished as well as annual and cumulative (i.e. taking into account persistence effects over time) impacts. Table 194: Outcomes from the evaluation of SEEDA interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved GVA (annual, £m)

Future potential GVA (annual, £m)

Achieved GVA (cumulative, £m)280

Future potential GVA (cumulative, £m)

Achieved & future potential GVA (cumulative, £m)

58 - 66

782 - 901

840 - 967

281

Business competitiveness & development Individual Enterprise 282 Support

280

18.2

43 - 50

Ranges relate to the margin of error from the beneficiary survey.

281

Six evaluations make up the evidence for this intervention category; however, the evaluation of Redundant Buildings Grant and Farm Diversification Programmes did not quantify any outcomes. 282

To note that this evaluation covered Enterprise Hubs, Enterprise Gateways and ICT/Broadband Advice projects. The projects have relatively different objectives but fall under the category of individual enterprise support.

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Expenditure covered by evaluations (£m)

Achieved GVA (annual, £m)

Future potential GVA (annual, £m)

Achieved GVA (cumulative, £m)280

Future potential GVA (cumulative, £m)

Achieved & future potential GVA (cumulative, £m)

Business Competitiveness (Sector Support)

8.6

106 - 116

186 - 204

1,119 - 1,229

1,305 - 1,433

Emerging Technologies Collaborative R&D

2.0

0.6

283

Innovation infrastructure (Knowledge Transfer and R&D)

16.4

18-21

41 - 48

632 - 742

673 - 790

Business Competitiveness (Inward 285 Investment)

4.8

17 - 21

37 - 45

92 - 112

129 - 157

Business Competitiveness (Trade)

2.5

18- 21

20 - 23

158 - 186

178 – 209

5.8

Sustainable Use of Natural Resources

286

5.8

284

0.3 – 0.8

287

Regeneration through physical infrastructure Physical Regeneration (residential led schemes)

34.1

1.8

40.4

42.1

Physical Regeneration (employment led schemes)

77.4

5.1

10.3

242.6

252.9

Innovation Infrastructure

13.9

0.5 – 0.6

29 - 45

30 – 46

283

This was estimated on the basis of jobs created / safeguarded. The evaluation argues that this is low due to the fact that the aim of ‘Emerging Technologies – Collaborative R&D’ was to promote collaborations between businesses and the knowledge base, and not job creation. According to the programme evaluation, Emerging Technologies – Collaborative R&D has been successful in promoting collaborations. 284

Estimated on the basis of expected profits only. Range reflects a sensitivity in expected profits by businesses.

285

It should be noted that the evidence available for SEEDA on Inward Investment has been sourced from a sampling evaluation which assessed only one inward investment project “Locate in Kent”. 286

The GVA is associated to spend of only £1.7m although the evaluation covered £5.8m.

287

Seven evaluations make up the evidence for this intervention category; however, the evaluation of Gosport Business Centre, Strategic Sites (Chatham Maritime), Chatham Maritime (University Buildings) and Oxford Castle and Prison did not quantify GVA impacts. Other quantitative outcomes reported by evaluations include Oxford Castle & Prison attracting £3.7m (achieved, cumulative) of additional expenditure to the local Oxford area for the first four years of the project.

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Expenditure covered by evaluations (£m)

Achieved GVA (annual, £m)

Future potential GVA (annual, £m)

Achieved GVA (cumulative, £m)280

Future potential GVA (cumulative, £m)

Achieved & future potential GVA (cumulative, £m)

Sea Space

31.2

8.5

17.2

St Cross Business Park

5.5

289

Physical Regeneration (Public Realm)

15.1

27.8

(Managed workspaces) 288

290

People & skills interventions Skills & Employability

14.3

17.1

Area Programme

3.9

4.1

SRB

128.8

70.0

Area Investment Framework

31.5

109.2

291

27.4

44.5

Other RDA interventions

Source: PwC analysis based on SEEDA evaluation evidence

This analysis needs to be interpreted with some caution since: 

the analysis includes impacts already achieved and those expected to accrue in the future: the latter are inevitably less robust and subject to greater degrees of uncertainty;



in all cases where future potential cumulative impacts have been estimated, the results have been discounted with the exception of the Skills & Employability evaluation.



the estimates are not presented on a constant price basis.

Finally, besides the impact of its project and programme spend, Strategic Added Value is a key element of SEEDA’s impact, as illustrated in the text box below. SEEDA’s Strategic Added Value Besides the impact of its project and programme spend, SEEDA also influences its partners’ and stakeholders’ behaviour and performance in other ways as demonstrated by the following examples: 

Influencing national decisions in order to safeguard economic activity: Through its campaign to safeguard the Portsmouth Naval Base, SEEDA, with its partners, influenced the eventual decision to retain and expand the base. SEEDA’s major contributions included: commissioning a socio-

288

GVA figures links to SEEDA plus other expenditure channelled through Sea Space; however the VfM estimations relate only to SEEDA’s investment. 289

Based on GVA per worker in the SE being £55,230

290

Only the two evaluations in this section quantified GVA contributions.

291

Impacts relate to future potential GVA linked not only to the relevant spend period but also to 2007/08 – 2008/09 expenditure in the programmes evaluated.

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economic impact assessment of closing, minimising or expanding the Portsmouth Naval Base use the study results to increase Government awareness and stimulate a major debate; and using its networks to engage the media and hold meetings with MPs and senior civil servants across Government. The campaign was able to safeguard 17,000 jobs at the base, 35,000 jobs and 750 businesses in the wider supply chain, and contracts worth circa £680m. 292 

Influencing the direction of regional and national policy: Since its inception the Insights Programme, a research programme established by SEEDA and the South East Business Link Providers (BLPs), has completed 10 waves of the Business Monitor, interviewing more than 15,000 businesses. It has produced 3 annual research reports and has generated more than 15 ‘hot topic’ papers which look at specific issues that are of particular relevance to Business Link, SEEDA and to Government policy and strategy. Through the programme SEEDA has been able to influence stakeholders at the regional and national levels. For instance, through the development of a paper looking into the current economic climate from the perspective of South East businesses through a paper entitled; ‘Credit Crunch’, the Agency has been able to exert influence upon central Government to take action to support business as well as providing support to citizens. 293

Leading place regeneration and engaging public and private sector stakeholders: SEEDA has been successful in remediating and undertaking land assembly of the Ropetackle site despite numerous previous attempts by Adur District Council (ADC) to bring it to the market. The land had been derelict for 35 years and faced a number of development constraints. SEEDA’s strategic role is well represented in three ways. First, it played a catalytic role through its use of CPO legislation during the land assembly process. This is particularly significant given that Ropetackle was the first example of an RDA issuing such an order. Second, SEEDA’s synergistic approach is demonstrated mainly by the quality of project’s outputs. The residential units were awarded BREEAM and ECO HOMES ratings of “excellent” and set new sustainability standards for the time. Thirdly, SEEDA set up the mechanisms to engage the private sector to share risks appropriately. It established a joint venture with Berkeley Homes. 294 Source: SEEDA

Value for money Table 195 considers the value for money of SEEDA’s interventions from two perspectives: 

the ratio of GVA to cost as an indicator of the benefit:cost ratio; and



measures of cost per unit of net output using a range of measures where these are available.

In assessing the value for money of SEEDA’s interventions we have sought to compare them with the evidence emerging from the evaluation of other RDAs’ activities. The GVA to cost ratio compares GVA impacts to the cost of the intervention: where there is a GVA to cost ratio of greater than one, the economic benefits of the interventions attributable to SEEDA’s funding exceed their costs. Care should be taken when comparing the value for money of these interventions as these are set out in terms of both achieved and future potential. Table 195 also sets out ratios of GVA to cost based on either cumulative GVA or GVA per annum depending on the available evidence.

292

SAV Case Study prepared by SEEDA

293

SAV Case Study prepared by SEEDA

294

SAV Case Study prepared by SEEDA based on Physical Regeneration Evaluation.

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Table 195: Summary of SEEDA value for money (2002/03-2006/07) Achieved GVA:cost ratio

Future potential GVA:cost ratio

Achieved & future potential GVA:cost ratio

Achieved cost per net job (£’000)

Future potential cost per net job (£’000)

Achieved cost per net business assist (£)

Achieved cost per net skills assist (£)

9.5

0.7

1.2

3.2

0.2

1.3

Business competitiveness & development Individual Enterprise Support Business Competitiveness (Sector Support) Emerging Technologies Collaborative 296 R&D Innovation infrastructure (Knowledge Transfer and R&D) Business Competitiveness (Inward Investment) Business Competitiveness (Trade) Sustainable Use of Natural Resources

(cumulative)

(cumulative) 295

23 (cumulative)

0.2 (annual)

137

(cumulative)

0.1 – 0.3 (cumulative)

(cumulative)

9 (cumulative)

297

329 - 482

31.1

0.6

3.3

6.8

1.2

14.4

69 (cumulative)

0.4

2.8

3.5 (cumulative)

Regeneration through physical infrastructure Physical Regeneration 298 (residential led schemes)

0.1 (cumulative)

3.4 (cumulative)

158.3

299

37.3

295

This estimation should be interpreted with caution as it is based on optimist expectations for growth expressed by large and small businesses about future growth. 296

This programme was not designed to create jobs but to facilitate collaborations between businesses and the knowledge base.

297

The range represents the cost per net job achieved by the nanotechnology (£482K) and transport (£329K) themes including jobs created /safeguarded. 298

All Physical Regeneration VfM ratios have been estimated on the basis of net spend (i.e. taking account of realised land sale receipts and recent book asset values). 299

Includes achieved and future potential

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Achieved GVA:cost ratio

Physical Regeneration (employment led schemes) Innovation Infrastructure (Managed workspaces)

2.4 (cumulative)

Future potential GVA:cost ratio

Achieved & future potential GVA:cost ratio 60.1 (cumulative)

Achieved cost per net job (£’000)

Future potential cost per net job (£’000)

Achieved cost per net business assist (£)

Achieved cost per net skills assist (£)

17.4

2.6

487.9

51.3

84.2

44.1

42.3

1.9

0.7

1.1

0.3

1.9

35.8

17.3

2.0

54.9

0.04

0.5

(cumulative)

Sea Space

0.6 (annual)

34.5 – 159.0

St Cross Business Park

(cumulative)

6.5

6.4

Physical Regeneration (Public Realm)

2.8 (cumulative)

300

301

People and skills Skills & Employability (Skills/workforce development) Skills & Employability (Matching people to jobs) Skills & Employability (Educational infrastructure development) Area Programme

1.5

4.1

(cumulative) (refers to entire Skills & Employability evaluation)

0.7 (annual)

Other Area Investment Framework

2.8 (cumulative)

302

National programmes

300

Range refers to the different cost per job estimates presented by the evaluation which includes: £34,549 per job for the ICH and CMC which are employment-led development, £159,000 per job for the University Centre Hastings and £57,803 per job for all the Early wins projects which includes all the projects mentioned. 301

PwC estimate taking total costs of £6.4m divided by total net jobs of 988

302

Based on the available evaluation evidence GVA to cost ratios and cost per net job could only be calculated for some of the national programmes undertaken by SEEDA.

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Achieved GVA:cost ratio

East Kent Coalfields

303

4.3

Future potential GVA:cost ratio

Achieved & future potential GVA:cost ratio

Achieved cost per net job (£’000)

Future potential cost per net job (£’000)

Achieved cost per net business assist (£)

Achieved cost per net skills assist (£)

6.6

15.1

Business Link

4.2

11.6

Manufacturing Advisory Service

5.4

8.5

Grants for Research and Development

2.5

18.3

Source: PwC analysis based on SEEDA evaluation evidence

Table 195 shows that, for the evaluations which estimated GVA, there has been a significant range in the return on investment figures relating to these interventions. Overall, a positive picture arises where most interventions have already achieved GVA return on investment which exceed their costs, although others have achieved a more limited return to date (e.g. some evaluations were interim in nature and, therefore, recognised that there is a time lag between spend and benefit realisation). Also, a number of interventions are expected to generate potential future returns on investment which, by their nature, are uncertain. There is also a large variation between interventions in terms of cost per job figures (both achieved and future potential). However, it is important to acknowledge that not all interventions were designed with job creation as an explicit objective e.g. Emerging Technologies - Collaborative R&D and projects in the Innovation Infrastructure (Knowledge Transfer and R&D) evaluation. Business development and competitiveness interventions have achieved the highest GVA returns to date, especially sector support, trade and inward investment initiatives. Future potential returns also provide a positive picture with individual enterprise support and knowledge transfer initiatives would be expected to achieve some of the highest returns for the intervention, while sector support and trade interventions continue to have a favourable position. These estimates are significant but need to be interpreted carefully as they are based on business growth expectations expressed by beneficiaries which the evaluators considered to be optimistic. Regeneration through physical infrastructure interventions, in particular employment-led schemes, have significant future potential GVA returns expected based on the investment made to date. This is primarily due to the early stage of implementation of these interventions. These interventions are also associated with wider impacts, for example raising confidence in the area of impact, which will not be captured in the estimation of GVA. A range of cost per unit of output measures have been calculated, with a focus on the cost per net job. The following can be noted: 

Business development and competitiveness programmes have achieved lower cost per net job ratios than other intervention categories (although their focus is often wider than just creating/safeguarding jobs), closely followed by national programmes. The exception is Knowledge transfer and R&D initiatives that tend to present a higher cost than other business interventions which reflects that many initiatives require significant investment by SEEDA (e.g. grants) and are not focused on job creation but on business development and profit making. However, when future potential impacts are considered, costs per net job tend to drop significantly (from £31K to £0.6K) which demonstrates the long term nature of such initiatives.

303

According to the evaluator, in terms of SEEDA’s return in relation to GVA outcomes at the local level, SEEDA has achieved 426% return on its cost investment - after completion of all the schemes, this return is forecast to increase to 661%.

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

With the exception of inward investment, business interventions cost per net business assists tends to be low in comparison with regeneration and at a similar level to people and skills interventions. However, very limited evidence was available for regeneration and the relatively high cost per business assist demonstrated by Area Programmes may be related to its focus on skills and employment assists.



In comparison with other interventions, regeneration through physical infrastructure initiatives tend to have relatively high cost per job. The exceptions are more mature office workspace initiatives such as St Cross Business Park and employment-led developments.

When comparing SEEDA’s GVA to cost ratios to national cross-RDA averages and to output unit costs, the following conclusions can be drawn: 304



Business interventions: Both sector/cluster support and trade intervention evaluations reported higher achieved GVA to cost ratios than the national averages, both annually (3.2:1 and 1.7:1 respectively) and cumulatively (7.7:1 and 4.1:1 respectively). However, both individual enterprise support and science, R&D and innovation infrastructure intervention evaluations reported lower achieved GVA to cost ratios than the national annual (4.9:1 and 1.1:1 respectively) and cumulative (12.0:1 and 3.4:1 respectively). Similarly, the area of sustainable consumption and production also reported a lower achieved GVA to cost ratio in comparison to the national average for other business development and competitiveness interventions (4.1:1). In comparison with national averages, SEEDA tends to have a lower cost per net job and net business assist across all intervention subcategories where averages are available, with the exception of Emerging Technologies - Collaborative R&D and individual enterprise support which presents cost per net achieved job slightly higher than the national average.



Place interventions: Except for St Cross Business Park, which is a relatively mature intervention, other SEEDA bringing back land into use interventions compare unfavourably to the national average achieved cumulative GVA to cost ratio (5.1:1). However, achieved and future potential GVA to cost ratios for bringing back land into use employment-led schemes are higher than the national ratios (6.5:1). This is because SEEDA’s infrastructure projects are at a relatively immature stage of development and are expected to accrue most benefits in the future. In comparison with the national achieved and future potential cumulative GVA to cost ratio for bringing land back into use (6.5:1) the Physical Regeneration evaluation reported a lower ratio for residential-led schemes. The same relationship applies to the public realm schemes in comparison to the respective national achieved and future potential cumulative GVA to cost ratio (8.7:1). In comparison with a national average of £42,101 per net job for bringing land back into use, SEEDA’s employment-led schemes achieve a lower cost per net job, with the exceptions of managed workspaces and the residential-led developments



People interventions: In comparison with the national ‘total’ achieved cumulative GVA to cost ratio (2.5:1) SEEDA’s Skills & Employability evaluation, which covers all sub-themes, reported a lower ratio. However, the future potential GVA to cost ratio is higher than the national ratio for achieved and future potential (2.5:1). In addition, the Area Programmes evaluation reported an achieved annual GVA to cost ratio almost equal to the matching people to jobs comparator (0.8:1). SEEDA’s Skills & Employability and Area Programme evaluations reported lower unit costs than respective national averages across all output types and intervention categories, where measures were available.



Other interventions: The AIF evaluation estimated a GVA (cumulative) achieved: cost ratio of 2.8:1 which is higher than the national average of 2.3:1, but a cost per job created/safeguarded of £54,900 which is higher than the national average of £41,775.

304

No national average GVA to cost ratios have been developed for trade interventions, therefore SEEDA’s evidence on this area has been compared to the national average for ‘other’ business development and competitiveness interventions as presented in the national report.

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Performance against objectives Table 196 presents SEEDA’s performance against targets based upon evidence drawn from the Tasking Framework. For all of the measures, except hectares of brownfield land remediated, SEEDA has exceeded the targets set by BERR, particularly for jobs created/safeguarded and people assisted in skills development. This has happened across all years for which targets have been set with the exception of businesses created which have exceeded targets in three occasions out of five. Table 196: Comparison of SEEDA performance against targets (2002/03-2006/07)

305

Jobs created/ safeguarded

Businesses created

Brownfield land (ha)

People assisted in skills development

Funding levered (£m)

Targets set by BERR

16,946

3,841

317

67,254

315

Achieved SEEDA gross outputs reported to BERR

21,918

5,965

303

126,695

535

Number of years when targets met

5 out of 5

3 out of 5

4 out of 5

5 out of 5

4 out of 4

Source: DTI/BERR and PwC analysis

Like all the RDAs (except the London Development Agency), in 2007 SEEDA was subject to the National Audit Office’s Independent Performance Assessment (IPA) which assessed how well SEEDA has responded to the common challenges facing RDAs, namely balancing the interests of the region with national policy requirements, managing the conflicting demands of different regional stakeholders, looking outwards to promote the region while staying focused on what is happening inside and responding to new duties imposed by central government. This assessment sheds further light on how well the Agency has been able to fulfil its role. Overall, SEEDA was seen as ‘performing strongly’, particularly in terms of its: 

ambition: a inclusive and consultative approach as well as a comprehensive intelligence base to developing the ambitions for the region in the new RES which presents goals that reflect the needs of the region;



achievement: SEEDA has demonstrated an impressive delivery of regeneration initiatives across the region as well as a systematic approach to business support and the use of the skills agenda in support of sustainable regeneration and innovation. This has been delivered through effective partnership working, rural delivery programmes and significant leverage of investment into the region.

The IPA concludes that SEEDA has been ‘performing well’ in terms of prioritisation, performance management and capacity. In particular, it acknowledges that SEEDA has been positively targeting resources on the basis of impact with an emphasis on investing in success, clearly identifying PSA targets in its Corporate Plan and implementing new project management systems and an evaluation framework. The IPA further suggests some development areas including: better linkage between the RES and the Corporate Plan, a process sitting between the Corporate Plan and Division Plans, greater clarity with partners over decision making process, and doing more to help the board consider likely future performance, including regular consideration of key strategic risks. SEEDA is already in the process of addressing some of these issues through the establishment of a programme office. Table 197 sets out SEEDA’s performance against the objectives for each of the individual interventions covered by the evaluations.

305

Based on information from SEEDA Annual Reports

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Table 197: Comparison of performance against objectives across SEEDA evaluations (2002/03306 2006/07) Exceeded

Met

Largely met

Mixed

Limited performance

Not assessed

Total

Evaluations

Spend (£m)

18.2

46.2

2.0

9.6

76.0

Evaluations

Spend (£m)

31.2

5.5

13.2

126.6

25.8

202.3

Evaluations

Spend (£m)

4.8

14.3

0.2

3.1

0.2

7.8

30.4

Evaluations

Spend (£m)

160.3

Evaluations

Spend (£m)

54.2

19.8

59.6

290

2.2

43.2

469

Business

Place

People

Other

Total

Source: PwC analysis based on SEEDA evaluation evidence

Table 197 shows that eleven out of all the evaluations, covering about one third of the relevant spend evaluated, have achieved a positive assessment by evaluators by largely meeting, meeting or exceeding their objectives. One major regeneration evaluation has demonstrated mixed results; this is largely due to the early stage of implementation of these interventions and the fact that the evaluation covered a number of projects at the same time. A significant amount of spend covered by ‘other’ evaluations also fall into the mixed performance category. This is mainly because they refer to major regional initiatives with a wide range of objectives and targets and in some cases (e.g. SRB) incomplete evidence. Only two relatively small initiatives achieved an assessment of limited performance and seven evaluations, particularly older ones covering less than 10% of spend evaluated, did not present an assessment of performance. This variable performance contrasts with SEEDA’s achievement of the targets set by BERR in the Tasking Framework. Only two relatively small interventions achieved limited performance. In one case this is due to the fact that the programme is not completed (Emerging Technologies – Collaborative R&D) and in the other case there has been a lack of performance due to unexpected changes in the scope and delivery of the project (GRIST).

Impact by intervention We have structured the analysis of the impact of SEEDA’s spending, where possible, according to the three categories of intervention defined within the IEF (i.e. business, place and people). We have also analysed the impact of SEEDA’s other activities that span more than one of these categories as well as the available evidence of the impact of the seven national programmes where SEEDA has been responsible for delivery within parameters determined by central government departments. We have summarised the impact of SEEDA’s interventions using a common structure in which:

306

For a list of interim evaluations please see Annex F.

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

we summarise SEEDA’s activities and expenditure on each programme;



we report the estimated net outputs arising from this expenditure (i.e. the additional outputs that are as a result of the intervention);



we summarise performance against objectives and the outcomes, where available, for each programme.

Business development and competitiveness interventions Rationale The South East of England has a number of regional strengths in this area on which SEEDA’s interventions have aimed to build including: 

Competitiveness: In 2004 South East businesses accounted for £29 billion of exported goods, higher than any other UK region.



Enterprise: 7% of the South East’s adult population was involved in entrepreneurial activity in 2004, second only to London among UK regions and well ahead of most European regions.



Innovation and creativity: the South East is second only to the East of England in the proportion of regional GDP accounted for by R&D expenditure, and in terms of patents per million inhabitants. In the South East, creative businesses achieved double the national average growth between 1995 and 2000.

There are, however, also a number of challenges facing businesses in the region including: 

Competitiveness: Becoming more enterprising, innovative and skilled means exposing many more of the region’s businesses to the stimulus of global markets through interchanges of trade, investment, people and knowledge; building trading links with emerging economic powerhouses and collaborating to innovate across regional, national and continental borders; and creating an entrepreneurial spirit across all businesses in all sectors that seeks out new opportunities and new markets, rather than relying on existing products, processes and supply chains;



Enterprise: Raising the level of start-up activity in less prosperous parts of the South East, while in the more prosperous areas survival rates should be higher; and



Innovation and creativity: From 1997 to 2002 business expenditure on R&D grew by less than 1% annually and was only marginally ahead of the UK average. The South East must avoid the risk of stagnation and find ways of matching the performance of its most successful international competitors.

The primary justification for SEEDA’s businesses development and competitiveness interventions was to address market failures in relation to asymmetric information (i.e. to improve the flow of information fir areas such as sector related market and technology opportunities, sources of financial support, facilities for investors, foreign market intelligence and mainstream business support services). Some interventions have sought to tackle under-performance in areas which are lagging behind economically and aim to foster a more equitable distribution of enterprise and business growth across the region by encouraging enterprise or technology access (e.g. broadband). The evidence of the impact of SEEDA’s business interventions comes from six evaluations covering six sub-themes summarised in Table 198. Note that the Business Competitiveness evaluation has been mentioned three times below as it provides evidence for three intervention sub-themes.

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Table 198: Summary of SEEDA’s business development and competitiveness interventions Intervention theme/sub-theme

Evaluation

Expenditure covered by evaluations (£m)



Redundant Buildings Grant and Farm Diversification Programmes

3.8



Individual Enterprise Support

18.2

Sector/cluster support



Business Competitiveness (Sector Support)

8.6

Science, R&D & innovation infrastructure



Emerging Technologies – Collaborative R&D

2.0



Innovation infrastructure (Knowledge Transfer and R&D)

16.4

307

Individual enterprise level support

Inward investment promotion



Business Competitiveness (Inward Investment)

4.8

Internationalisation of indigenous business



Business Competitiveness (Trade)

2.5

Sustainable Consumption & Production



Sustainable Use of Natural Resources

5.8

Total

308

62.1

Source: PwC analysis based on SEEDA evaluation evidence

These evaluations cover £62.1m of SEEDA spend. This spend is dominated by investment in knowledge transfer and R&D projects as well as individual enterprise support including enterprise hubs, enterprise gateways and ICT support projects. A number of projects have also been undertaken to support sector development, inward investment, trade promotion as well as sustainable consumption and production. These interventions contribute to a number of targets outlined in the 2006 RES related to increases in the percentage of businesses located in the South East operating internationally, the business stock, the proportion of businesses in the South East reporting R&D links with universities, and the percentage of total South East business turnover attributable to new products. Impact Table 199 summarises the expenditure and key gross outputs associated with the business interventions evaluated. The primary outputs arising from the business interventions have been: jobs created/safeguarded, businesses assisted, new businesses created and people assisted in their skills development.

307

The Individual Enterprise Support, Business Competitiveness and Innovation Infrastructure evaluations were commissioned with the same evaluator and have followed a consistent evaluation approach. Most of the evidence presented in this section has been sourced from these evaluations as they cover £50m of relevant spend and 81% of the evidence presented in this section. 308

This is the total expenditure covered in this section. For the purpose of expenditure coverage purposes, a further (£10.6m) linking to the evaluation of Sea Space has also been accounted for and presented in Table 2.

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Table 199: Gross achieved outputs from SEEDA’s business development and competitiveness interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Gross jobs created/ safeguarded

Gross businesses created

Gross businesses assisted

Gross people assisted in skills development

Gross people assisted into employment

Redundant Buildings Grant and Farm Diversification Programmes

3.8

1,601

Individual Enterprise 309 Support

18.2

6,901

2,000

7,700

2,757

610

Business Competitiveness (Sector Support)

8.6

10,250

5,550

3,180

142

Emerging Technologies – 310 Collaborative R&D

2.0

Innovation infrastructure (Knowledge Transfer and R&D)

16.4

3,095

1,500

278

Business Competitiveness (Inward Investment)

4.8

1,885

216

158

Business Competitiveness (Trade)

2.5

1,773

460

222

Total gross outputs

62.1

25,538

2,293

15,444

6,628

859

Total gross outputs associated to net outputs

62.1

25,538

2,002

14,984

Source: PwC analysis based on SEEDA evaluation evidence

Table 199 presents all gross outputs presented in business evaluations even if they have not generated any net output findings. However as noted in the table, some evaluations identified gross outputs which were not assessed for additionality. In addition to the achieved gross outputs set out in Table 199, the Individual Enterprise Support, Business Competitiveness and Innovation Infrastructure evaluations estimated future potential gross jobs which are presented in Table 200.

309

The gross output data associated with the Individual Enterprise Support, Business Competitiveness and Innovation Infrastructure evaluations has been derived, in most cases, from beneficiary surveys and project reviews rather than from SEEDA’s PMS. 310

The results reported by this evaluation cover the period to 07/08.

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Table 200: Gross future potential outputs from SEEDA’s business development and competitiveness interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Gross jobs created/ safeguarded

Individual Enterprise Support

18.2

37,908

Business Competitiveness (Sector Support)

8.6

61,018

Innovation infrastructure (Knowledge Transfer and R&D)

16.4

33,063

Business Competitiveness (Inward Investment)

4.8

6,045

Business Competitiveness (Trade)

2.5

6,936

Total

50.5

144,970

Source: PwC analysis based on SEEDA evaluation evidence

The business competitiveness evaluations suggest that the gross future potential jobs created and safeguarded are very significant, almost six times those achieved. These output estimates have been derived through a survey of beneficiaries, but are described by the evaluator as based on highly optimistic assumptions about the future impact of SEEDA interventions. Table 201 summarises the expenditure and key net outputs associated with the six business interventions evaluated. Table 201: Net achieved outputs from SEEDA’s business development and competitiveness interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Net jobs created/ safeguarded

Net businesses created

Net businesses assisted

Net skills assists

Net employment assists

Redundant Buildings Grant and Farm Diversification Programmes

3.8

1,175

Individual Enterprise Support

18.2

2,245

600

4,700

Business Competitiveness (Sector Support)

2,704

2,700

Emerging Technologies – 311 Collaborative R&D

Innovation infrastructure (Knowledge Transfer and R&D)

528

1,100

Business Competitiveness (Inward Investment)

700

311

The results reported by this evaluation cover the period to 07/08.

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Expenditure covered by evaluations (£m)

Net jobs created/ safeguarded

Net businesses created

Net businesses assisted

Net skills assists

Net employment assists

627

62.1

8,018

601

8,566

Business Competitiveness (Trade) Total

Source: PwC analysis based on SEEDA evaluation evidence

In addition to the achieved net outputs set out in Table 201, the Individual Enterprise Support, Business Competitiveness and Innovation Infrastructure evaluations estimated future potential net jobs which are presented in Table 202. Table 202: Net future potential outputs from SEEDA’s business development and competitiveness interventions Expenditure covered by evaluations (£m)

Jobs created/ safeguarded

Individual Enterprise Support

18.2

29,487

Business Competitiveness (Sector Support)

8.6

42,232

Innovation infrastructure (Knowledge Transfer and R&D)

16.4

25,343

Business Competitiveness (Inward Investment)

4.8

3,866

Business Competitiveness (Trade)

2.5

5,824

Total

50.5

106,752

Source: PwC analysis based on SEEDA evaluation evidence

The level of additionality resulting from SEEDA’s interventions varied across intervention and output types, but was relatively low compared with its regeneration and people and skills interventions. The Emerging Technologies - Collaborative R&D evaluation reported the highest level of achieved additionality across all output types, while the Innovation Infrastructure (knowledge transfer) programme evaluation reported those high levels of achieved additionality only in terms of businesses assisted to improve performance. The RBG & FDP demonstrated high levels of additionality in terms of net jobs created/safeguarded. Comparison of the additionality of SEEDA’s business interventions with the national findings shows that: 

Overall, for business development and competitiveness, relevant evaluations reported that SEEDA’s additionality was higher than the national measures for businesses assisted (35%) but lower for jobs created/safeguarded (48%) and businesses created (40%).



For the individual enterprise support sub-theme, SEEDA’s additionality is higher than the national measure for businesses assisted (32%) but lower for business creation (39%). While the Redundant Buildings Grant and Farm Diversification Programmes evaluation reports higher levels of additionality than the national measures for jobs created/safeguarded (41%), the Individual Enterprise Support Evaluation reports lower levels of additionality for this output type;



For the sector/cluster support sub-theme, SEEDA’s additionality is higher than the national measure for businesses assisted (39%) but lower for jobs created/safeguarded (67%);



For the science, R&D and innovation infrastructure sub-theme, SEEDA’s additionality is higher than the national measure both for businesses assisted (67%) and for businesses created (39%). While the Emerging Technologies – Collaborative R&D evaluation reports higher (74%) levels of additionality than the national measures for jobs created/safeguarded (46%), the Innovation

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Infrastructure (knowledge transfer) evaluation reports lower levels of additionality (29 percentage points) for this output type; and 

For the inward investment and other (i.e. internationalisation of indigenous businesses) sub-themes, SEEDA’s additionality is lower than the national measure for jobs created safeguarded (43% for inward investment and 55% for internationalisation of indigenous businesses).

Table 203 summarises the impact on GVA (both achieved and future potential) of SEEDA’s interventions to promote business development and competitiveness. In all cases except one, the evaluators estimated cumulative GVA. Future potential GVA has been discounted back to 2007. Table 203: Outcomes from SEEDA’s business development and competitiveness interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved GVA (annual, £m)

Achieved GVA (cumulative, 312 £m)

Future potential GVA (cumulative, £m)

Achieved & future potential GVA (cumulative, £m)

Individual Enterprise Support

18.2

43 - 50

58 - 66

782 - 901

840 - 967

Business Competitiveness (Sector Support)

8.6

106 - 116

186 - 204

1,119 - 1,229

1,305 - 1,433

Emerging Technologies 313 Collaborative R&D

2.0

0.6

Innovation infrastructure (Knowledge Transfer and R&D)

16.4

18-21

41 - 48

632 - 742

673 - 790

Business Competitiveness (Inward Investment)

4.8

17 - 21

37 - 45

92 - 112

129 - 157

Business Competitiveness (Trade)

2.5

18- 21

20 - 23

158 - 186

178 - 209

Sustainable Use of Natural Resources

5.8

314

315

0.3 – 0.8

Source: PwC analysis based on SEEDA evaluation evidence

Estimates of GVA have not been consistently calculated across the evaluations so it is not possible to provide an aggregate estimate of GVA for SEEDA’s business interventions. However, the three sampling 312

For the Individual Enterprise Support, Business Competitiveness and Innovation Infrastructure evaluations, the assessment takes into account the fact that supplementary financial impacts will have accrued to the company and region in the intervening years between 2008 and the start date of the intervention. The future potential assessment is based on responses in the beneficiary survey on business’ future expected growth in the next 5 years and the degree to which they would attribute these changes back to the support received. The Future Impact Assessment is not cumulative due to the way in which the future impact questions were asked. 313

The results reported by this evaluation cover the period to 07/08.

314

Although GVA was estimated on the basis of jobs created / safeguarded., this programme was not designed to create jobs but to facilitate collaborations between businesses and the knowledge base. 315

Estimated on the basis of expected profits only. Range reflects a sensitivity in expected profits by businesses.

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316

based evaluations , which represent almost 81% of total evaluated expenditure in the business intervention category, cumulative achieved GVA contribution of between £356m and £371m is estimated, and a future potential GVA contribution of £2.9 billion - £3 billion. It should be noted that the high return on investment on all the Business Competitiveness, Individual Enterprise Support and Innovation Infrastructure evaluations should be treated with caution as these are based on the level of expressed business optimism regarding the future potential impact of these interventions. The text box below provides some examples of how SEEDA has created strategic added value through business development and competitiveness interventions. SEEDA’s Strategic Added Value Some of SEEDA’s initiatives have created strategic value for the region as well supported the creation of value outside the region with public and private sector partners. For example, as lead RDA for Innovation, SEEDA co-manages the Strategic and Operational Advisory Groups that are co-ordinating the partnership between RDAs and the Technology Strategy Board as recommended by the Sainsbury 317 Review . Through these fora, SEEDA is informing other RDAs of the regional benefits of sponsoring collaborative R&D through which the Agency has already been able to support the development of key platform technologies which would not have been developed in such a short timescale, offering potential 318 to generate significant value to partners. SEEDA has also played a strategic role in attracting inward investments to the South East. For example, since 1999, SEEDA has assisted 444 foreign companies to set up, retain or expand their operations in the region. At the time of investment, these companies were forecast to create/safeguard 23,470 gross jobs over the forthcoming 3 years. To achieve this SEEDA has built up a network of public and private sector organisations in the region which share the goal of attracting, expanding and retaining foreign investment. These organisations include local councils, economic partnerships, universities, lawyers, 319 accountants, banks and property management firms. Source: SEEDA

Value for money Table 204 sets out the achieved and future potential GVA to cost ratios of SEEDA’s business development and competitiveness interventions. Table 204: Achieved and future potential GVA to cost ratios from SEEDA’s business development and competitiveness interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved GVA (annual):cost ratio

Achieved GVA (cumulative, £m):cost

Future potential GVA (cumulative, £m):cost

Individual Enterprise Support

18.2

Business Competitiveness (Sector Support)

8.6

137

Emerging Technologies Collaborative R&D

2.0

0.2

0.1 – 0.3

Innovation infrastructure (Knowledge Transfer and R&D)

16.4

316

Business Competitiveness, Innovation Infrastructure (Innovation and Knowledge Transfer) and Individual Enterprise Support

317

http://www.hm-treasury.gov.uk/d/sainsbury_review051007.pdf

318

SAV Case Study prepared by SEEDA

319

SAV Case Study prepared by SEEDA

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Expenditure covered by evaluations (£m)

Achieved GVA (annual):cost ratio

Achieved GVA (cumulative, £m):cost

Future potential GVA (cumulative, £m):cost

Business Competitiveness (Inward Investment)

4.8

Business Competitiveness (Trade)

2.5

Sustainable Use of Natural Resources

5.8

3.5

Source: PwC analysis based on SEEDA evaluation evidence

As Table 204 shows all interventions have already achieved economic benefits which exceed their costs. Overall, all themes have demonstrated an achieved positive return on investment while sector support activities, inward investment and trade have demonstrated the highest returns. Knowledge transfer and R&D projects have demonstrated lower achieved returns in comparison with other themes; however, at least the Innovation Infrastructure evaluation, forecasts higher future potential returns than individual enterprise support and inward investment activities. For a number of initiatives, in particular sector support and trade investments, the significant although optimistic future potential outcomes imply high future potential GVA: cost ratios. When comparing SEEDA’s achieved GVA to cost ratios with the national ratios, the following conclusions can be drawn: 320



Both sector/cluster support and trade intervention evaluations reported higher GVA to cost ratios than the national averages, both annually (3.2:1 and 1.7:1 respectively) and cumulatively (7.7:1 and 4.1:1 respectively);



Both individual enterprise support and science, R&D and innovation infrastructure intervention evaluations reported lower GVA to cost ratios than the national annual (4.9:1 and 1.1:1 respectively) and cumulative (12.0:1 and 3.4:1 respectively) averages; similarly, the area of sustainable consumption and production also reported a lower GVA to cost ratio in comparison to the national ratio for other business development and competitiveness interventions (4.1:1), and



The inward investment intervention evaluation reported a higher achieved GVA to cost ratio than the national annual ratio (3.7:1) but lower than the national cumulative ratio (13.5:1).

If future potential GVA to cost ratios from evaluations are compared to joint national average achieved & future potential GVA to cost ratios, all sub-themes demonstrate higher value for money with the exception 321 of inward investment . In addition, while the Innovation infrastructure (Knowledge Transfer and R&D) evaluation reported a similar future potential GVA to cost ratio than the national achieved and future potential average, the Emerging Technologies - Collaborative R&D reported a lower than ratio lower than 322 one. It is relevant to note than the national GVA to cost ratios used in this comparison were: 27.8:1 for 323 324 individual enterprise support, 23.0:1 for sector/cluster support, 44.0:1 for science, R&D and 320

It should be noted that the result of these comparison should be treated with caution as this is not comparing like for like and given that significant impacts are expected in the future then GVA to cost ratios on the basis of future potential impacts could be higher than achieved & future potential GVA to cost ratios. 322

This estimate includes 29,487 future potential jobs created/safeguarded estimated by SEEDA’s individual enterprise support evaluation. The average included in the national report (14.1:1) excludes these numbers as it treats those figures as outliers. 323

This estimate includes 42,232 future potential jobs created/safeguarded estimated by SEEDA’s Business Competitiveness (Sector support) evaluation. The average included in the national report (8.7:1) excludes these numbers as it treats them as

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innovation infrastructure, 33.4:1 competitiveness interventions.

325

for inward investment and 15.8:1 for other business development and

Table 205 sets out the achieved and future potential cost per net output of SEEDA’s business development and competitiveness interventions. Table 205: Achieved and future potential cost per net output from SEEDA’s business development and competitiveness interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved cost per net job (£’000)

Future potential cost per net job (£’000)

Achieved cost per net business assisted (£’000)

Individual Enterprise Support

18.2

9.5

0.7

1.2

Business Competitiveness (Sector Support)

8.6

3.2

0.2

1.3

Emerging Technologies Collaborative R&D

2.0

Innovation infrastructure (Knowledge Transfer and R&D)

16.4

31.1

0.6

3.3

Business Competitiveness (Inward Investment)

4.8

6.8

1.2

14.4

Business Competitiveness (Trade)

2.5

0.4

2.8

Sustainable Use of Natural Resources

5.8

326

329 - 482

Source: PwC analysis based on SEEDA evaluation evidence

The cost per net job achieved from business and competiveness interventions ranged from £3,200 for sector support initiatives to £31,000 for knowledge transfer and R&D initiatives. The £329,000 - £482,000 per net job achieved for Emerging Technologies - Collaborative R&D is affected by the fact that this 327 project was not directed primarily at job creation and is still ongoing. The higher cost per output presented in R&D and knowledge transfer projects can, to some extent, be explained by the fact that these projects usually take a longer period of time to deliver benefits (e.g. from product development to market) and are usually based on providing grants to academics and/or entrepreneurs which can be relatively expensive for SEEDA. As a result higher value jobs could be developed through these interventions. This may be reflected in the future potential impacts, which are estimated to be higher for R&D and knowledge transfer projects in comparison with most other business intervention sub-themes. In comparison with national averages, SEEDA tends to have a lower cost per net job and net business assist across all intervention sub-categories where averages are available, with the exception of Emerging Technologies - Collaborative R&D and also individual enterprise support, the latter having a cost per net achieved job higher than the national average (£8,301).

outliers. 324

This estimate includes 25,343 future potential jobs created/safeguarded from SEEDA’s Innovation infrastructure evaluation. The average included in the national report (8.3:1) excludes these numbers as it treats them as outliers. 325

This estimate includes 3,866 future potential jobs created/safeguarded estimated by SEEDA’s inward investment evaluation. The average included in the national report (20.5:1) excludes these numbers as it treats them as outliers. 326

The range represents the cost per net job achieved by the nanotechnology (£482K) and transport (£329K) themes including jobs created /safeguarded. 327

This programme was not designed to create jobs but to facilitate collaborations between businesses and the knowledge base.

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Performance against objectives Table 206 summarises the performance against objectives of SEEDA’s interventions to promote business development and competitiveness. Performance against objectives has been assessed for the majority of interventions by the IEF compliant evaluations reviewed. The evaluations indicate that performance against objectives is mostly positive as three of the major programme evaluations covering a significant proportion of the evaluation spend have exceeded or largely met objectives. This demonstrates an alignment and contribution to the RES objectives and Corporate Plan targets relevant to the interventions as well as largely achieving or exceeding contracted output targets. The limited performance of the Emerging Technologies – Collaborative R&D refers mainly to it being an interim evaluation as well as lack of performance against some of its target outputs. Overall, projects have demonstrated better success in achieving business support targets compared with job and business creation targets. Table 206: Performance against objectives from SEEDA’s business development and competitiveness interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Performance against objectives

Individual Enterprise Support

18.2

Exceeded

Business Competitiveness

15.9

Largely met

Innovation infrastructure

30.3

Largely met

Emerging Technologies - Collaborative R&D

2.0

Limited performance

Redundant Buildings Grant and Farm Diversification Programmes

3.8

Not assessed

Sustainable Use of Natural Resources

5.8

Not assessed

328 329

Source: PwC analysis based on SEEDA evaluation evidence

Regeneration through physical infrastructure interventions Rationale The South East of England is characterised by three broad economic contours: the inner South East which forms a generally wealthy core around London with some pockets of deprivation, the Rural South East accounts for 80% of the region’s land mass, a third of its business base and a quarter of its population; and Coastal South East which is characterised by unique environmental assets and a string of distinctive coastal cities and towns, yet it is an area which has seen continued economic and social decline. Place based investments in infrastructure are critical to supporting productivity growth. Physical development in the region is characterised by high demand and inelastic supply. Average house prices in the region have risen by 70% since 1999 while average annual earnings have risen by 30%, and first time buyers accounted for just 18% of house purchases in 2003, compared with 48% in 1993. With housing comes the need for physical infrastructure, and for the cultural and social infrastructure necessary for healthy and sustainable communities. Quality employment sites are also required across the region to support business growth. The strategic rationale for regeneration through physical infrastructure interventions was set out in the Regional Economic Strategy for South East England (2002-2012), which highlighted the need for intervention in a number of specific areas in order to stimulate and manage growth, whilst also tackling deprivation. The areas identified were: 

Thames Gateway Kent – a national priority Growth Area incorporating the Medway Towns and Isle of Sheppey;

328

This assessment includes both the Knowledge Transfer as well as the Managed Workspaces elements of this evaluation. The Managed Workspaces section is discussed in the regeneration through physical infrastructure section of this regional annex. 329

Evaluation is interim and the project is still ongoing.

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

Kent Coastal – a number of schemes along the Kent coast in areas of high deprivation including isolated seaside towns, such as Hastings; and



South Hampshire and the Isle of Wight – an area of high untapped potential along the M27 corridor between the Portsmouth and Southampton conurbations.

The Regional Economic Strategy (RES) 2006-2016 reinforced the spatial priorities of the previous RES and identified the need for a range of physical infrastructure interventions, including the remediation of contaminated land to produce useable space, public realm investment to improve the economic performance of urban areas, and strategic acquisition of multiple sites to accelerate and co-ordinate the development of employment or residential development. Moreover, the RES also identified a need for the provision of specialist business premises in order to stimulate levels of enterprise and business competitiveness in less prosperous parts of the region, particularly in relation to a number of specific sectors. Land acquisition, remediation, flood protection and master planning with the aim of bringing forward development to create or safeguard jobs is the focus of several current SEEDA initiatives. They typically involve strategic site assembly, acting alone or with public and private partners, remediation and the creation of development platforms. The main rationale for intervention by SEEDA in land assembly focuses on: 

Co-ordination: SEEDA acquires land that the private sector would not be prepared to do, given potential economic risk, uncertainty or unattractiveness.



Rent-seeking: where individual investors attempt to capture all the additional benefit despite offering limited economic value themselves



Positive externalities: There is often a mismatch between the aims of the private sector, and the demands of the public sector in terms of job creation and wider community regeneration.

Evidence of the impact of SEEDA’s regeneration initiatives is based on eight evaluations covering the three sub-themes summarised in Table 207 (note that the Physical Regeneration evaluation provides evidence on residential-led schemes, employment-led schemes and public realm). All evidence comes from capital rather than revenue projects. Table 207: Summary of SEEDA’s regeneration through physical infrastructure interventions 330

Intervention sub-theme

Bringing land back into use – housing led developments

Bringing land back into use – employment-led developments

Public realm/other infrastructure (e.g.: transport/community)

Evaluation

Expenditure covered by evaluations (£m)



Physical Regeneration (residential led schemes)

34.1

    

77.4 21.1 13.9 31.2 7.1

 

Physical Regeneration (employment led schemes) Strategic sites evaluation (Chatham Maritime) Innovation Infrastructure (Managed workspaces) Sea Space Chatham Maritime University Buildings (Universities at Medway) St Cross Business Park Gosport Business Centre

 

Physical Regeneration (Public Realm) Oxford Castle & Prison

15.1 6.1

Total

5.5 4.7

216.2

Source: PwC analysis based on SEEDA evaluation evidence

330

No evaluation evidence was allocated to the image, events and tourism sub-theme

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Impact Table 208 summarises the expenditure and key gross outputs associated with the regeneration through physical infrastructure interventions. Key gross outputs arising from these regeneration interventions have been jobs created/ safeguarded and brownfield land and commercial floorspace reclaimed or redeveloped. In addition, significant levels of public/private sector leverage have also been achieved. A number of these interventions are still in the early stages of implementation and, therefore, a distinction is drawn between achieved and future potential outputs. Table 208: Gross outputs (achieved and future potential) from SEEDAâ&#x20AC;&#x2122;s regeneration through physical infrastructure interventions (2002/03-2006/07) Expenditure covered by evaluations (ÂŁm)

Achieved gross jobs created/ safeguarded

Sea Space

31.2

297

Physical Regeneration (employment led schemes)

77.4

Strategic sites evaluation (Chatham Maritime)

Achieved gross brownfield land reclaimed/ redeveloped (ha)

Future gross potential brownfield land reclaimed/ redeveloped (ha)

Achieved gross commercial floorspace (m2)

Future gross potential commercial floorspace (m2)

Gross public and private investment levered ÂŁm

456

3,757

8,588

567

2,996

9,809

106,019

21.1

4,173

168,400

Innovation Infrastructure (Managed workspaces)

13.9

571

St Cross Business Park

5.5

1,254

Gosport Business Centre

4.7

Chatham Maritime university 332 buildings

7.1

Physical Regeneration (residential led schemes)

34.1

213

697

4,297

67,964

Physical Regeneration (Public Realm)

15.1

471

6,897

331

Future gross potential jobs created/ safeguarded

331

This evaluation has not estimated net outputs and therefore is the only figure from evaluations that does not have associated net outputs 332 Given overlaps between this evaluation and the Strategic Sites (Chatham Maritime) evaluation, the only output that has been considered was brownfield land remediated.

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Expenditure covered by evaluations (£m)

Achieved gross jobs created/ safeguarded

Oxford Castle & Prison

6.1

198

Total

216.2

Total gross outputs associated to net outputs

216.2

Future gross potential jobs created/ safeguarded

Achieved gross brownfield land reclaimed/ redeveloped (ha)

Future gross potential brownfield land reclaimed/ redeveloped (ha)

Achieved gross commercial floorspace (m2)

Future gross potential commercial floorspace (m2)

Gross public and private investment levered £m

4,820

6,841

5,191

191,083

189,468

145

6,776

5,191

191,083

189,468

145

Source: PwC analysis based on SEEDA evaluation evidence

In addition to the gross outputs presented in Table 208, the Sea Space evaluation reported the creation of 29 businesses, 132 businesses assists and 427 people assisted in their skills development. In addition the Gosport Business Centre evaluation reported the creation of 45 businesses and Oxford Castle and Prison reported 7 businesses created. The resulting net outputs arising from these regeneration interventions are set out in Table 209. Table 209: Regional net outputs (achieved and future potential) from SEEDA’s regeneration through physical infrastructure interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved net jobs created/ safeguarded

Future net potential jobs created/ safeguarded

Achieved net brownfield land reclaimed/ redeveloped (ha)

Future net potential brownfield land reclaimed/ redeveloped (ha)

Achieved net commercial floorspace (m2)

Future net potential commercial floorspace (m2)

Net Public and private investment levered £m

Sea Space

31.2

268

342

3,757

8,588

Physical Regeneration (employment led schemes)

77.4

234

1,332

7,254

85,834

Strategic sites evaluation (Chatham Maritime)

21.1

3,630

168,400

Innovation Infrastructure (Managed workspaces)

13.9

268

St Cross Business Park

5.5

988

Chatham Maritime university buildings

7.1

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Expenditure covered by evaluations (£m)

Achieved net jobs created/ safeguarded

Future net potential jobs created/ safeguarded

Achieved net brownfield land reclaimed/ redeveloped (ha)

Future net potential brownfield land reclaimed/ redeveloped (ha)

Achieved net commercial floorspace (m2)

Future net potential commercial floorspace (m2)

Net Public and private investment levered £m

Physical Regeneration (residential led schemes)

34.1

290

4,297

52,707

Physical Regeneration (Public Realm)

15.1

195

5,336

Oxford Castle & Prison

6.1

134

4,820

Total

216.2

5,371

2,427

188,528

152,465

140

Source: PwC analysis based on SEEDA evaluation evidence

In addition to the net outputs in Table 209, the Sea Space evaluation reported the creation of 21 net businesses, 132 net businesses assists and 299 net people assisted in their skills development. In addition the Oxford Castle and Prison evaluation reported 6 net businesses created. Also, 4,902 net learning opportunities have been created by these interventions. In comparison with other SEEDA interventions, regeneration through physical infrastructure achieved the highest levels of additionality for business creation, businesses supported and brownfield land remediation. However, the evidence for business assists and businesses created is drawn from just one evaluation. The Sea Space interventions demonstrated the highest levels of additionality in terms of jobs created/safeguarded. Most interventions, with the exception of Physical Regeneration (employment led schemes), achieved between 90-100% of additionality in terms of commercial floorspace developed and public/private investment levered. Comparison of the additionality of SEEDA’s regeneration through physical infrastructure interventions with the national findings shows that: 

Overall, regeneration interventions additionality for achieved outputs is higher than the comparable national measure for jobs created/safeguarded (measure is 45%), land remediation (measure is 73%) and businesses created (measure is 65%). The same happens when looking at future potential additionality measures. However, the picture becomes mixed when comparing intervention subcategory evaluations to national cross-RDA measures.



For the bringing land back into use for employment or housing intervention sub-theme, the Physical Regeneration and the Innovation Infrastructure (Managed Workspaces) evaluations are below the additionality measure (50%) for job creation while the rest are above. For future potential jobs created / safeguarded all relevant evaluations reported additionality measures slightly below the national measure (52%) with the exception of Sea Space which reported a higher additionality measure. In terms of achieved land remediation outputs, all evaluations are above or slightly below the national measure (88%) except for Sea Space which reported lower additionality measures (60 percentage points below the national average). Future potential land remediation additionality measures are the same or higher than the national measure (95%). In addition, Sea Space was the only evaluation which reported gross and net business creation outputs which had a level of additionality slightly below national measure (76%).



For the public realm intervention sub-theme, the Oxford Castle and Prison evaluation reported higher measures of additionality for all output types in comparison with national measures (40% for jobs

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created/safeguarded and 58% for land remediated). However, the Physical Regeneration (Public Realm) evaluation reported no additionality for jobs created/safeguarded. The future potential additionality measures reported by the Physical Regeneration (Public Realm) for jobs created/safeguarded were below national measures (66%) and for land remediation were slightly below (100%). Table 210 summarises the impact on GVA (both achieved and future potential) of SEEDA’s interventions to promote regeneration through physical infrastructure. In the majority of cases the evaluators estimated cumulative GVA. Where future potential GVA has been estimated, in most cases this has been discounted back to 2007. Table 210: Outcomes from SEEDA’s regeneration through physical infrastructure interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved GVA (annual, £m)

Future potential GVA (annual):cost ratio

Achieved GVA (cumulative, £m)

Future potential GVA (cumulative, £m)

Physical Regeneration (residential led schemes)

34.1

1.8

40.4

42.1

Physical Regeneration (employment led schemes)

77.4

5.1

10.3

242.6

252.9

Innovation Infrastructure (Managed workspaces)

13.9

0.5 – 0.6

29 - 45

30 - 46

Sea Space

31.2

8.5

17.2

St Cross Business Park

5.5

334

Physical Regeneration (Public Realm)

15.1

27.8

333

Achieved & future potential GVA (cumulative, £m)

Source: PwC analysis based on SEEDA evaluation evidence

Other quantitative outcomes reported by evaluations include Oxford Castle & Prison attracting £3.7m (achieved, cumulative) of additional expenditure to the local Oxford area for the first four years of the project. Estimates of GVA have not been consistently calculated across the evaluations so it is not possible to provide an aggregate estimate of GVA for SEEDA’s regeneration through physical regeneration interventions. However, the Physical Regeneration evaluation that covers 67% (£127m) of the total evidence base suggests an estimated cumulative achieved GVA contribution of £12m; however, most of the projects covered by the evaluations are at a relatively early stage of development and only a few have

333

All estimates from the Physical Regeneration evaluation are based on actual + expected impacts.

334

Based on GVA per worker in the SE being £55,230

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already generated jobs. Future potential GVA contribution of up to £311m employment growth forecasts.

335

is expected on the basis of

The text box below provides some examples of how SEEDA has created strategic added value through regeneration through physical infrastructure interventions.

SEEDA’s Strategic Added Value Bringing together partner contributions to multiply a regeneration outcome. For example, following the closure of the Chatham Dockyard by the Royal Navy with the loss of 7,000 jobs, SEEDA put forward a case for higher education to play an important part in securing the vibrant mixed use regeneration of Chatham Maritime and transforming the economy of the Medway. SEEDA encouraged the Universities of Greenwich and Kent and Mid Kent College to work together and bring in other academic and nonacademic partners to create a substantial multiversity (various universities) campus at Chatham, enabling universities to share resources and avoid duplication. SEEDA provided £8.6m of investment which helped leverage a further £42m funding package from seven other partners. SEEDA’s involvement with the scheme has helped to promote the development of a major new university campus in the South East, which will have a long-term skills benefit for local employers, encouraging growth in local businesses. At the end of the academic year 2006/2007 264 gross new FTE Jobs have been created directly from the project and 2,019 gross additional FTE students have registered at the new campus, with outputs ahead 336 337 of forecast . Leading the strategic planning to regenerate an area. For example, the Hastings & Bexhill Task Force, formed in 2002 by SEEDA with a range of partners, created a 10-year programme to revitalise a failing local economy characterised by a historic lack of private sector investment and a strong reliance on public sector employment; low economic activity, wages, business survival rates and skills; and deep338 rooted deprivation . First, SEEDA marshalled key politically disparate stakeholders behind a shared vision: the Five Point Plan for regenerating the area through urban renaissance, business support, educational improvement, broadband and transport. SEEDA’s Chief Executive chairs a Steering Group comprising three councils, EP, Government Office for the South East and the two local MPs. Second, SEEDA has influenced partner organisations to take action at a regional and national level. It has led to major commitments from key national bodies: for example, the national Learning and Skills Council (LSC) decision to overhaul 16+ education in the area and build two new college campuses. Also, major improvements to the road infrastructure between Hastings and London have been prioritised by the Regional Transport Board and ministers at SEEDA’s request. “The achievements to date have come about through the direct involvement of SEEDA and would not have been deliverable by the local authorities alone” – Chief Executive, Hastings Borough Council. Third, the Five Point Plan has acted as a catalyst for attracting public funding, including £112m from the LSC, £7m from Higher Education Funding Council for England (HEFCE), £9m from European Regional Development Fund, £15.1m from EP, £9m from Network Rail, £21.7m from local authorities and £21m from the Primary Care Trust. East Sussex County Council is leading delivery of the £89m Hastings & Bexhill Link Road. Private sector funding is 339 vital: £15m of bank finance is being spent with up to £120m committed. Source: SEEDA

335

This figure is the sum of the three Future Expected GVA figures linked to the Physical Regeneration evaluation presented in Table 20. 336

Annual Report 06/07 to SEEDA from University of Medway

337

SAV Case Study prepared by SEEDA based on Chatham Maritime University Buildings Evaluation (Drill Hall and Canteen)

338

Grant Thornton Report: “Sea Space: Evaluation of Early Wins and Phase Two Projects” Aug 2008

339

SAV Case Study prepared by SEEDA

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Value for money Table 211 sets out the achieved and future potential GVA to cost ratios of SEEDA’s regeneration through physical infrastructure interventions. Table 211: Achieved and future potential GVA to cost ratios from SEEDA’s regeneration through physical infrastructure interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved GVA (annual):cost ratio

Achieved GVA (cumulative, £m):cost ratio

Future potential GVA (annual):cost ratio

Future potential GVA (cumulative, £m):cost ratio

Achieved & Future potential GVA (cumulative, £m):cost ratio

Physical Regeneration (residential led schemes)

34.1

0.1

3.4

Physical Regeneration (employment led schemes)

77.4

2.4

60.1

Innovation Infrastructure (Managed workspaces)

13.9

0.04

0.5

Sea Space

12.4

0.6

St Cross Business Park

5.5

6.4

Physical Regeneration (Public Realm)

15.1

2.8

Source: PwC analysis based on SEEDA evaluation evidence

As Table 211 shows some interventions have already achieved economic benefits which exceed their costs. The highest achieved returns have been demonstrated by employment-led sites, i.e. Physical Regeneration (employment led schemes) and St Cross Business Park. The relatively low achieved returns of Managed workspaces reflect the early stage of development of these interventions. Residential-led schemes have also showed lower returns mainly to the lack of jobs generated in these developments. In addition, all Physical Regeneration evaluation programmes are expected to demonstrate a positive return on investment in the future. It is not possible to make full comparisons across evaluations, except for the different elements of the Physical Regeneration evaluation, as different approaches have been used to estimate GVA impacts and value for money estimates. Except for St Cross Business Park, which is a relatively mature intervention, other SEEDA bringing back land into use evaluations reported lower achieved cumulative GVA to cost ratios than the national ratio (5.1:1). However, achieved and future potential GVA per cost ratios for bringing back land into use employment-led schemes are higher than the national ratios (6.5:1). This is because SEEDA’s infrastructure projects are at a relatively immature stage of development and are expected to accrue most benefits in the future. In comparison with the national achieved and future potential cumulative GVA to cost ratio for bringing land back into use (6.5:1) the Physical Regeneration evaluation reported a lower

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ratio for residential-led schemes. The same applies to the public realm schemes in comparison to the respective national achieved and future potential cumulative GVA to cost ratio (8.7:1). Overall, regeneration through physical infrastructure interventions, in particular employment-led schemes, have significant future potential GVA returns expected based on the investment made to date. This is primarily due to the early stage of implementation of these interventions. These interventions are also associated with wider impacts, for example raising confidence in the area of impact, which will not be captured in the estimation of GVA. Table 212 sets out unit costs at a regional level for physical regeneration interventions. Table 212: Cost per net job (achieved and future potential) from SEEDA’s regeneration through physical infrastructure (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved cost per net hectare of land remediated (£’000)

Future potential cost per net hectare of land remediated (£’000)

Achieved and future potential cost per net hectare of land remediated (£’000)

Achieved cost per net regional job (£’000)

Future potential cost per net regional job (£’000)

Achieved and future potential cost per net regional job (£’000)

Physical Regeneration (residential led schemes)

34.1

2,129.3

158.3

37.3

Physical Regeneration (employment led schemes)

77.4

11,345.3

2,991.7

2.367.4

17.4

2.6

Innovation Infrastructure (Managed workspaces)

13.9

487.9

51.3

Sea Space

12.4

34.5 340 159

St Cross Business Park

5.5

6.5

Physical Regeneration (Public Realm)

15.1

7,836.9

44.1

341

Source: PwC analysis based on SEEDA evaluation evidence

In comparison with a national average of £42,101 per job for bringing land back into use, employment-led schemes, including St Cross Business Park and the incubation centres developed by Sea Space, as well as the employment-led programmes assess through the Physical Regeneration evaluation, achieve a lower cost per net job. The exceptions were the managed workspaces evaluated in the Innovation

340

PwC estimate taking total costs of £6.4m divided by total net jobs of 988

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Infrastructure evaluation and the housing-led developments in the physical Regeneration evaluation which reported a cost per net job which was more than ten times higher than the national average. No achieved comparators have been produced in the South East for achieved cost per job linked to public realm projects. The national average cost per net hectare of land remediated (£4,748,326) is lower than the cost per net hectare of land remediated reported by the Physical Regeneration evaluation for employment-led developments but higher than that reported by the same evaluation for residential-led developments. This may be explained by the fact that for most of these initiatives most outputs are expected in the future; in fact, as Table 212 suggests, the cost per net hectare of land remediated reduces significantly when future potential outputs are considered (by 80% in the case of employment-led developments according to the Physical Regeneration evaluation). Performance against objectives Table 213 summarises the performance against objectives of SEEDA’s interventions to promote regeneration through physical infrastructure. Given that most of the evaluation evidence is derived from projects that have not yet been fully completed, the achievements to date are interim in nature. Only the more mature initiatives have achieved their objectives, although some of the evaluations have not performed a detailed assessment against them. Overall, performance is mixed driven by the large spend attached to the Physical Regeneration evaluation. However, the important achievements of mature initiatives such as St Cross Business Park and Chatham Maritime University Buildings, as well as the exceeded performance of Sea Space particularly on exceeded many of its ‘early wins’ objectives has to be acknowledged. Table 213: Performance against objectives from SEEDA’s regeneration through physical infrastructure (2002/03-2006/07) Expenditure covered by evaluations (£m)

Performance against objectives 342

Sea Space

31.2

Exceeded

St Cross Business Park

5.5

Met

Chatham Maritime university buildings

7.1

Largely met

Oxford Castle & Prison

6.1

Largely met

Physical Regeneration

126.6

Mixed

Strategic sites evaluation (Chatham Maritime)

21.1

Not assessed

Gosport Business Centre

4.7

Not assessed

Source: PwC analysis based on SEEDA evaluation evidence

People and skills interventions Rationale This section relates to SEEDA’s people and skills interventions. The South East enjoys high employment rates and skill levels in comparison with other UK and European regions. However, it faces low economic activity rates among certain groups (e.g. women) and geographies (e.g. most coastal districts), as well as skills gaps in the workplace. These three issues have been frames as part of the RES as priorities. SEEDA’s interventions sought to address the skills needs in the region at all levels from Basic to Higher Level skills. Main activities have included the delivery of training at NVQ level 3 and above, the development of new qualification programmes and the development of infrastructure to support new higher level skills provision. There were a range of justifications for SEEDA’s people and skills interventions, the most common being promoting positive externalities through workplace training (e.g. NHS Skills for Life); addressing imperfect information in the labour market (e.g. Redundancy Support 342

Refers to completed projects only (I.e. Early wins)

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Services), provision of public goods (e.g. university campuses), as well as supporting deprived areas (e.g. Area Programmes). Evidence of the impact of SEEDA’s people and skills interventions relates to 10 evaluations covering three sub-themes summarised in Table 214. The Skills & Employability evaluation has covered evidence relating to each of the intervention sub-themes presented below, therefore the spend attached to each sub-theme has been presented as appropriate in Table 214. Table 214: Summary of SEEDA’s people and skills evaluations Intervention theme/sub-theme

Skills/workforce development

Matching people to jobs

Educational infrastructure development

Evaluation

Expenditure covered by evaluations (£m)



Skills and employability (skills)

6.5



Area Programmes

3.9



Basic skills

2.3



NHS Skills for Life Programme

2.1



Management Development

2.0



Great Ideas in Science and Technology (GRIST)

1.0



Skills and employability ((matching people to jobs)

0.1



Exodus

3.5



Redundancy Support Service

0.9



Skills Gateway

0.2



UP for Enterprise

0.2



Skills and employability (educational infrastructure development)

7.8

Total

30.5

Source: PwC analysis based on SEEDA evaluation evidence

The evaluation evidence of SEEDA’s impact on people and skills development covers £30.5m of spend from 2002/03 to 2006/07. The Skills & Employability evaluation, which covers a number of separate programmes, covers almost 50% of this expenditure. Impact Table 215 summarises the expenditure and key gross outputs achieved through SEEDA’s people and skills interventions. The primary outputs arising from these interventions have been: job, skills and businesses assists. Table 215 shows an overall total and a total for the Skills & Employability and Area Programme evaluations because these are the only evaluations with attached net outputs. Therefore, the total for the Skills & Employability and Area Programme evaluations is the one to use for comparison purposes with the net outputs on Table 216.

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Table 215: Gross achieved outputs from SEEDA’s people and skills interventions 343 (2002/03-2006/07) Expenditure covered by evaluations (£m)

Gross jobs created/ safeguarded

Gross employment assists

Gross businesses created

Gross business assists

Gross skills assists

Skills & Employability

14.3

157

3,261

8,699

Area Programmes

3.9

171

1,604

525

4,696

344

Basic skills

2.3

600

12,000

NHS Skills for Life Programme

2.1

1,406

Management Development

2.0

Great Ideas in Science and Technology (GRIST)

1.0

Exodus

3.5

Redundancy Support Service

0.9

220

22,178

Skills Gateway

0.2

228

Up for Enterprise

0.2

Total (Skills & Employability and Area Programme evaluations)

18.2

328

1,630

3,786

13,395

Total

30.5

631

23,808

4,445

27,083

Source: PwC analysis based on SEEDA evaluation evidence

In addition to the gross outputs achieved in Table 48, the Skills & Employability evaluation estimated the following future potential outputs: 51 jobs created, 170 employment assists, 2,280 people involved in skills development and 1,008 businesses assisted. The evaluation also reported of £9.8m from public and private sector funders. Similarly the Area Programmes evaluation reported gross public and private investment levered £9.4m. The net outputs arising from these interventions are set out in Table 216; only the Skills & Employability and Area Programmes evaluations estimated net outputs.

343

This table excludes Up for Enterprise and Management Development which had no outputs to report.

344

It should be noted that although the relevant spend is £3.9m, the outputs relate to spend of £6m which includes 2005-08.

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Table 216: Net achieved outputs from SEEDA’s people and skills interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Net jobs created/ safeguarded

Net employment assists

Net business assisted

Net skills assists

Skills & Employability

14.3

117

3,066

7,568

Area Programmes

3.9

167

1,380

345

3,011

Total

18.2

284

1,400

3,411

10,579

Source: PwC analysis based on SEEDA evaluation evidence

In addition to the net outputs achieved in Table 216, the Skills & Employability evaluation estimated the following future potential outputs: 38 jobs created, 128 employment assists, 2,071 people involved in skills development and 948 businesses assisted. Overall, the evaluations that estimated net outputs reported high levels of additionality for all output types. The lowest being Area Programmes with 64% calculated additionality for skills assists, and the highest was also reported by the same evaluation being 98% additionality for jobs created/safeguarded. All other coefficients are between those two points. In addition, people and skills interventions achieved the highest levels of additionality for jobs created/safeguarded across all intervention categories. Comparison of the additionality of SEEDA’s people and skills interventions with the national findings shows that: 

Overall, SEEDA’s people and skills interventions evaluations reported higher additionality measures than the national cross-RDA measures across all outputs types, including a measure of 48% for jobs created/safeguarded, 75% for future potential jobs created safeguarded, 51% for people assisted into employment and 62% for skills assists; and



On their own, both the Skills & Employability as well as the Area Programmes evaluations reported higher additionality measures than the cross-RDA additionality measures for all output types. The Skills & Employability evaluation results were compared against each intervention sub-theme set of national additionality measures as well as the total given the fact that the evaluation assessed a mix of projects from different sub-themes. The Area Programmes evaluation results were compared against the matching people to jobs sub-theme national additionality measures.

Table 217 summarises the outcomes of SEEDA’s people and skills interventions. Table 217: Outcomes (achieved and future potential) from SEEDA’s people and skills interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved

Future potential

GVA (annual, £m)

GVA (cumulative, £m)

Skills & Employability

14.3

17.1

Area Programmes

3.9

4.1

345

27.4

Achieved & future potential GVA (cumulative, £m) 44.5

Source: PwC analysis based on SEEDA evaluation evidence

345

Impacts relate to future potential GVA linked not only to the relevant spend period but also to 2007/08 – 2008/09 expenditure in the programmes evaluated.

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The approach to estimating GVA has not been consistent across the evidence base, and therefore it is not possible to provide an aggregate GVA estimate of SEEDA’s people interventions. It should be noted that future potential impacts on GVA have not been discounted nor have constant prices been applied. The text box below provides some examples of how SEEDA has created strategic added value through people and skills interventions. SEEDA’s Strategic Added Value SEEDA has developed and led partnerships to develop joint plans and address pressing regional issues: For example, SEEDA has led the development of the South East Regional Skills Partnership (the RSPA) since its inception in 2003. The RSPA brings together 20 partner organisations, including employer representative organisations and providers of learning and skills provision to enable them to jointly plan against shared objectives and closer align the supply and demand for skills. As part of this work and through the development with the LSC of Action for Business College programme, SEEDA has been able to influence provision to meet the training needs of businesses and offer a quality standard. Evaluation evidence has concluded that the first 6 Action for Business Colleges over the period 2004-05 had the following achievements: fee income from employers has increased by 35% to over £7 million, number of employer clients has increased by 26% to 6,676, number of employers receiving customised courses has increased by 51% to over 1000; and number of employees receiving training has increased by 18% to 19,719. Furthermore, SEEDA levered in a further £300,000 from other partners. During 2007/08, 15 LSPA-supported initiatives resulted in gross outputs of 385 people assisted towards getting a job, 779 businesses assisted to improve their performance and 378 people assisted in terms of their skills 346 development. SEEDA has influenced central government to support and roll-out elsewhere innovative solutions to regional and national problems. An example is Computer Clubs for Girls, an innovative and award winning programme which aimed to reduce ICT skills gaps in the South East by inspiring girls aged between 10 and 14 to become excited by ICT, raise their ICT skills and, ultimately, change their propensity to move into careers in the sector. As a result of the success of the pilot and the strength of the relationship established with e-skills, SEEDA worked to influence DTI and DfES policy, securing £8.8 million to fund a four year National Roll-out, thus ensuring the sustainability of the programme. CC4G was subsequently launched nationally in England in June 2005 and in Scotland the following year; in both cases with great success. Pilots have since been run in both Wales and Northern Ireland. In addition, the programme has already received matched funding in kind to the value of £28 million from the private 347 sector, representing considerable leverage. Source: SEEDA

Value for money Table 218 presents the GVA to cost ratios (including achieved and future potential) in relation to people and skills interventions. The return on investment achieved to date in relation to the interventions covered by the Skills & Employability evaluation is higher than the costs. However, the Skills & Employability evaluation suggests that higher returns on investment could arise from the future potential impacts of these interventions. No cumulative GVA to cost ratio has been developed for Area Programme, however the annual GVA to cost ratio indicates that the programme could be achieving a positive return if benefits persist for more than one year.

346

SAV Case Study prepared by SEEDA

347

SAV Case Study prepared by SEEDA

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Table 218: Achieved and future potential GVA to cost ratios from SEEDA’s people & skills interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved GVA (annual):cost ratio

Achieved GVA (cumulative, £m): cost ratio

Future potential GVA (cumulative, £m): cost ratio

Skills & 348 Employability

14.3

1.5

4.1

Area Programme

3.9

0.7

Source: PwC analysis based on SEEDA evaluation evidence

In comparison with the national ‘total’ achieved cumulative GVA to cost ratio (2.5:1) SEEDA’s Skills & Employability evaluation, which covers all sub-themes, reported a lower ratio. However, the future potential GVA to cost ratio is higher than the national ratio for achieved and future potential (2.5:1). Overall, over 60% of GVA impacts are expected in the future which may relate in part to the long term nature of education led regeneration projects. In addition, the Area Programmes evaluation reported an achieved annual GVA to cost ratio almost equal to the matching people to jobs comparator (0.8:1). Table 219 summarises the performance of SEEDA’s people and skills interventions in terms of their cost effectiveness. This analysis suggests that skills/workforce development initiatives tend to have the lowest unit cost per skills assist (the only measure common to all of the evaluations) in comparison with other people & skills sub-themes. Overall, skills assists tend to have a relatively homogenous cost across intervention sub-themes, including Area Programmes which represents a hybrid intervention addressing job and skills assists mainly. Cost per job created/safeguarded also seems to be at a similar level when comparing intervention sub-themes. However, big differences when comparing cost per jobs assists (not the main focus of skills/workforce development projects) and the cost per business assist which puts educational infrastructure development projects at a disadvantage. Although infrastructure projects, particularly capital ones, would be expected to be more expensive. Table 219: Cost per net achieved output from SEEDA’s people and skills interventions 349 (2002/03-2006/07) Cost per net job (£’000)

Cost per net skills assist (£’000)

Cost per net person assisted into employment (£’000)

Cost per net business assist (£’000)

42.3

0.7

200.1

1.9

Skills & Employability Matching people to jobs

1.1

Skills & Employability Educational infrastructure development

1.9

280.0

35.8

2.0

4.3

17.3

Skills & Employability Skills/workforce development

350

Area Programmes

Source: PwC analysis based on SEEDA evaluation evidence

SEEDA’s Skills & Employability and Area Programme evaluations reported lower unit costs than respective national averages across all output types and intervention categories, where measures were 348

Impacts presented in the table assume persistence effects. Future expected impacts VfM has been estimated using spend planned for 2008/09. 349

PwC estimated mid points for the Skills and Employability cost per output ranges presented in the evaluation for comparison purposes. 350

Unit costs for Area Programmes Evaluation have been estimated by PwC using £5.98m of expenditure and net outputs presented in the evaluation.

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available. The only exception was the costs per person assisted into employment reported by the Skills & Employability evaluation in respect to projects focused on skills/workforce development, which compared unfavourably with the national unit cost average of £9,677. One possible reason for this performance is the focus of the evaluated interventions on skills development rather than employment support. Performance against objectives Table 220 summarises the performance of SEEDA’s people and skills interventions against identified objectives. Overall, the picture tends to be positive with about two thirds of the evaluation evidence (measured by spend) either largely meeting, meeting or exceeding objectives. Only 10% of the evidence, mainly related to older programme and project evaluations has demonstrated a mixed or limited performance. Table 220: Performance against objectives from SEEDA’s people and skills interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Performance against objectives

Redundancy Support Service

0.9

Exceeded

Area Programme

3.9

Exceeded

Skills & Employability

14.3

Met

Skills Gateway

0.2

Largely met

NHS Skills for Life Programme

2.1

Mixed

Great Ideas in Science and Technology (GRIST)

1.0

Mixed

UP for Enterprise

0.2

Limited performance

Exodus

3.5

Not assessed

Basic skills

2.3

Not assessed

Management Development

2.0

Not assessed

351

Source: PwC analysis based on SEEDA evaluation evidence

Other SEEDA interventions Rationale The evidence of SEEDA’s impact on other interventions covers £160m of spend from 2002/03 to 2006/07. These comprise the Single Regeneration Budget (SRB) programme (£129m) and Area Investment Framework (£31m), both aimed at tackling issues affecting the most deprived communities through the delivery of a diverse range of interventions spanning business, physical regeneration and people and skills focused on specific geographical areas within the South East. The rationale for SRB centred on the Government’s desire to tackle social exclusion and promote equality of opportunity. The focus of support was on the most deprived communities in England, with the aim of reducing the gap between these areas and the rest of England, and between different groups in society. The South East region received over £270 million between Rounds 3 and 6. Expenditure was dominated by three sub-regions – Hampshire & Isle of Wight (£86.2 million), Sussex (£77.2 million) and Kent & Medway (£75.6 million). A very small proportion of the South East’s SRB spend was in the Surrey and 352 Berkshire or MKOB sub-regions. These expenditure figures correspond fairly closely to the proportion

351

A full assessment of performance against targets was not performed but the evaluation concluded that the initiatives evaluated had a significant contribution to the relevant RESs and Corporate Plans. 352

Milton Keynes, Oxfordshire, Bucks and Berks

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of super output areas these sub-regions have in the lowest Index of Multiple Deprivation quartile nationally. The overall aim of the SRB programme was “to enhance the quality of life of local people in areas of 353 need, by reducing the gap between deprived and other areas, and between different groups” . Beneath this, a core set of common objectives underpinned the SRB throughout its six Rounds: 

improving the employment prospects of local people;



encouraging economic growth;



reducing crime;



improving housing; and



protecting and enhancing the environment.

The rationale for Area Investment Framework interventions was set out in SEEDA’s Regional Economic Strategy in 1999. This intervention was focused in particular on the target to start bringing the residents in the 119 wards in the South East that were in the bottom 20% of wards nationally (as indicated by the Index of Multiple Deprivation) back into mainstream economic life (i.e. tackling social exclusion through economic development and inclusion). In summary, the most common activities supported within this intervention were: 

Improvement of skills and participation in learning.



Business support and enterprise growth.



Physical regeneration and community engagement.

Impact Key outputs arising from these other interventions have been jobs created/ safeguarded, skills developed, businesses assisted and land reclaimed/ redeveloped. Table 221 sets out the key gross outputs achieved in relation to these interventions. Table 221: Gross achieved outputs from other interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Gross jobs created/ safeguarded

Gross skills assists

Gross employment support

Gross businesses created

Gross businesses assisted

128.8

3,655

22,228

155

5,001

174

AIF

31.5

3,225

30,143

4,864

349

9,142

Total

160.3

6,880

52,371

4,864

504

14,143

187

SRB

354

Gross land reclaimed/ redeveloped (ha)

Source: PwC analysis based on SEEDA evaluation evidence

In addition to the outputs identified in Table 221, the SRB programme levered more than £240m of public and private sector funding. The Area Investment Framework levered approximately £65m of public and private sector funding. For SRB there are also 57 wider outputs relating to six key themes that are not captured in the key outputs as presented in the table above. The themes are: jobs, training and

353

Department for Communities and Local Government’s SRB website – Background and Overview: see http://www.communities.gov.uk/citiesandregions/regeneration/singleregenerationbudget/221229/ 354 It should be noted that SRB was not originally set up to deliver against the RDA tasking framework but it had a much wider remit. Many of the evaluations used to inform the SRB meta-evaluation were carried out before the RDA Impact Evaluation Framework was published.

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education; economic growth; housing; environmental improvements; community facilities; voluntary/community sector; and childcare. Table 222 sets out the key net outputs achieved in relation to these interventions. Table 222: Net achieved outputs from SEEDA’s other interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Net jobs created/ safeguarded

Net skills assists

Net employment support

Net businesses created

Net businesses assisted

Net land reclaimed/ redeveloped (ha)

SRB

128.8

1,526

12,448

2,150

AIF

31.5

1,991

16,277

2,845

302

5,348

Total

160.3

3,517

28,725

2,845

370

7,498

Source: PwC analysis based on SEEDA evaluation evidence

The SRB reported lower additionality measures in comparison with national ‘other area regeneration interventions’ additionality measures for jobs created safeguarded (49%), businesses created (51%), businesses assisted (50%), land remediated (59%), skills assists (57%) and people assisted into employment (59%). The additionality measures reported in the Area Investment Framework evaluation were higher than the national measures for all output types except for skills assists and employment assists. Overall, SEEDA other interventions evaluated achieved higher levels of additionality in comparison with national measures for all output types except for land remediated and skills assists, and a similar level for employment assists. The quantitative evidence of outcomes and impacts in the evaluation reports which fed into the SRB evaluation was very limited. However, applying the 2006 GVA per worker for the South East of England 355 (of £45,884 ) to the 1,526 net jobs created (941) and safeguarded (585) gives an estimated cumulative GVA of around £70m. The AIF evaluation reported an achieved cumulative contribution to GVA of £109.2m. The text box below provides some examples of how SEEDA has created strategic added value through its SRB and AIF interventions.

355

Office of National Statistics

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SEEDA’s Strategic Added Value Beyond the leverage of significant public and private sector funding, the strategic impact of the SRB programme in the South East consists of helping to increase levels of partnership working and created valuable networks. For instance, East Oxford Action Limited is a community-led social enterprise that took over the running of East Oxford Action SRB in 2003. It is led by a partnership that would arguably not have come together in the first place, were it not for the original SRB scheme. SRB has also been seen to have brought forward the timing of activities. For example, it is considered that the redevelopment of Littlehampton would have taken place without the Littlehampton 2000 SRB scheme, but that the redevelopment would have occurred over a significantly longer timescale. Some stakeholders also commented that areas such as Hastings and Slough benefited significantly from SRB and perhaps would have gone into decline without it. SRB was considered by some stakeholders to be responsible for kick356 starting the regeneration of those areas and for bringing the right people and organisations together. SEEDA has made a difference in terms of partnership engagement, leadership, leverage and sustainability of deprived areas. For example, the AIFs have been instrumental in bringing people together to take decisions on needs and priorities but also deliver projects. In some cases, this was the first time that local and sub-regional organisations, in particular Local Authorities came together. The overall structure of the programme indicates that in principle SEEDA’s devolved approach offered the opportunity for local engagement, decision making, responsibility and accountability in managing and 357 implementing AIFs. Source: SEEDA

Value for money Due to the diverse range of outputs in the SRB programme and the difficulties in disaggregating economic and non-economic data, a value for money calculation was considered to be inappropriate. The AIF evaluation estimated a GVA (cumulative) achieved: cost ratio of 2.8:1 which is higher than the national average of 2.3:1, but a cost per job created/safeguarded of £54,900 which is higher than the national average of £41,775. Performance against objectives The SRB evaluation evidence suggests that the region has had a mixed performance in meeting core output targets. Although ‘jobs created’ was 18% above its target, jobs safeguarded was 36% below. The survival rate of supported businesses was also lower than expected, achieving two-thirds of target. Land reclamation and community enterprise start-ups both achieved roughly half of their targets. The best performance was for the number of people trained who obtained qualifications, which exceeded its target by 20%. In terms of other economic outputs, the programme mostly performed well or very well, achieving close to or above-target performance. Overall, the AIF evaluator found challenges in assessing the extent to which the AIFs had achieved their objectives given the lack of a clear performance management framework established at the outset. It was concluded though that some AIF areas are improving more than others. Some areas supported by the programme continue to underperform across nearly all indicators whilst others present improvements only in some indicators.

National programmes delivered by SEEDA Besides its own projects and programmes, SEEDA has been responsible for the management and delivery of seven out of ten national programmes which have been delivered by SEEDA within parameters closely defined by central government departments. Although the available national evaluation evidence on national programmes does not disaggregate gross outputs at a regional level, we 358 have been able to estimate the impact of some of these programmes on the South East of England .

356

Based on PwC (2008) Single Regeneration Budget Meta-evaluation

357

Based on DTZ (2008) Area Investment Framework Evaluation

358

This has been undertaken by dividing SEEDA spend on the programme by the regional cost per job and then making allowances

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In addition, SEEDA has undertaken regional evaluations of East Kent Coalfields and Tourism South East. The gross outputs from these interventions are summarised in Table 223 and the net outputs in Table 224. Table 223: Gross national programme outputs in the South East (2002/03-2006/07) National programme

Expenditure covered by evaluations (£m)

Gross Jobs created/ safeguarded

Gross skills assists

Gross business creation

Gross business assists

Gross regeneration spend leveraged (£m)

Gross brownfield land (ha)

Gross new floorspace (sq m)

Coalfields Programme

20.9

1,852

152.6

52,954

Tourism South East

7.1

9,954

11,057

1.3

Source: PwC analysis based on SEEDA evaluation evidence

In addition to the gross outputs above, the East Kent Coalfields evaluation states that future potential outputs are anticipated. These include a further £32.3m of private sector leverage, 924 further jobs created and a further 32,017 sq m of floorspace. These forecasts have no comments on the likelihood of their achievement and should be treated with caution. The net outputs from these interventions are summarised in Table 224. Table 224: Net national programme outputs in the South East (2002/03-2006/07) National programme

Expenditure covered by evaluations (£m)

Net Jobs created/ safeguarded

Net skills assists

Net business creation

Net business assists

Net regeneration spend leveraged (£m)

Net brownfield land (ha)

Net new floorspace (sq m)

Coalfields Programme

20.9

1,117

149.7

44,036

Tourism South East

7.1

4,354

5,299

0.8

Source: PwC analysis based on SEEDA evaluation evidence

The East Kent Coalfields evaluation achieved good levels of additionality from 60% (jobs created/safeguarded) to 98% (brownfield land reclaimed) of gross outputs. The jobs creation/safeguarded factor is lower that SEEDA’s regeneration through physical infrastructure additionality factor (79%) and the brownfield land reclaimed is higher than regeneration through physical infrastructure additionality factors (87%). Tourism South East additionality ratios were lower; from 44% (skills development) to 62% (physical regeneration spend levered). No appropriate national averages are available for comparison. In respect of GVA, SEEDA’s interventions across the coalfields have achieved more than £127m GVA outcome at the local level, which is forecast to rise to more than £205m after completion of all the schemes. At the regional level, SEEDA’s interventions have achieved a £265m GVA outcome, which is 359 forecast to rise to £412m with completion of all the schemes. This implies a GVA to cost ratio of 6.6. Future potential figures are based on forecast job figures mentioned above. According to the evaluation, in respect of net cost per net job, the four projects in total produce a cost of £15,156 per job. In terms of

for displacement, leakage and multiplier effects. 359

Includes £147m of cumulative future potential GVA.

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net cost of net hectare of brownfield remediated, the cost of the four projects overall amounts to £175,786 per hectare. The regional evaluation of Tourism South East revealed that the SEEDA’s expenditure has levered a further £93.2m of tourism expenditure through marketing campaigns. Evaluation estimates suggest that 360 TSE’s work over the period 2003-08 is worth £144.3 to £182.8m to regional achieved GVA from 2003-2008. No appropriate value for money comparators have been produced by the evaluator. Overall, over the period 2002/03 to 2006/07 SEEDA has spent £101.7m on national programmes. The estimated impact on the regional economy of these programmes is the creation of 6,295 jobs achieved with a potential addition of 556 jobs in the future. In addition, it has generated £62.1m of annual GVA on the basis of £54.7m of spend on Business Links and Manufacturing Advisory Service. Grants for Research and Development has the potential to generate returns of £25.5m in the future. In addition, up to £595m of cumulative and future potential cumulative GVA is associated with the East Kent Coalfields Programme and Tourism South East which account for total expenditure of £28m over the period 2002/03 to 2006/07. Table 225 summarises the estimated impacts where these are available. Table 225: Estimated impact of SEEDA spending on national programmes between 2002/03 and 2006/07 (£m) National programme

SEEDA spend – 2002/032006/07 (£m)

Net additional jobs

Achieved GVA (annual, £m)

Future potential GVA (annual, £m)

Achieved GVA (cumulative, £m)

Future potential GVA (cumulative, £m)

Business Link

48.0

4,380

201.0

Coalfields Programme

20.9

1,117

Manufacturing Advisory Service

6.7

789

36.2

Selective Finance for Investment

7.3

Market Town Initiative

1.5

7.1

144.3 361 182.8

Grants for Research and Development

10.2

556 (future potential)

25.5 (future potential)

Total

101.7

201.0

25.5

445.5 – 484.0

147.0

Tourism South East

6,295 (achieved)

265

147

556 (future potential) Source: PwC analysis based on SEEDA evaluation evidence

The annual GVA to cost ratio of Business Link in the South East of England was 4:1, which compares well against the range of overall annual GVA to cost ratios for Business Link at a national level (i.e. 2.3:1 to 2.5:1). 360

The evaluator applied a range to GVA estimations in order to account for a potential overall in GVA contributions from skills /business assists and tourism expenditure. 361

Range represents a sensitivity for a potential overlap on GVA estimations identified by the evaluator.

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South West Regional Development Agency Summary Overview 

Since its establishment in 1999, SWRDA has spent approximately £942.9m on a range of interventions designed, individually or collectively, to stimulate business development and competitiveness, promote regeneration through physical infrastructure and enhance employability and skills. Of this total, £601m has been spent in the ‘relevant period’. This includes SRB, which is a substantive part of SWRDA’s expenditure, accounting for £55.2m out of total RDA ‘relevant spending’.



We have reviewed 30 evaluations covering RDA spend of £456.2 million.

Impact 



The evaluations show that SWRDA has generated significant outputs already: –

over 25,000 jobs have been created and safeguarded, of which 48% are estimated to be additional at the regional level;

–

over 22,500 businesses have been assisted, of which 64% are estimated to be additional;

–

over 800 businesses have been created, of which 51% are estimated to be additional;

–

over 4,900 hectares (ha) of land has been remediated, of which 49% are estimated to be additional; and

–

nearly 78,000 skills assists have been delivered, of which 61% are estimated to be additional.

In addition to the impact of its project and programme spend, Strategic Added Value (SAV) is a key element of SWRDA’s impact, particularly engagement and support of priority sectors such as aerospace, reacting to shocks within the region, and undertaking co-ordinating and collaborative role with key stakeholders to articulate and drive forward regional policy and strategy.

Value for money 

The highest achieved return is for people interventions, with an achieved average annual return of 2.3 to 1, the lowest is for place interventions with a return of 0.8 to 1.



There does not appear to be a clear relationship between value for money and either the scale of the intervention, its additionality or its performance against objectives.

Performance against objectives 

282

As 50% of the expenditure covered by evaluation evidence has been provided by multi-project evaluations, it has not been possible to assess the extent to which these projects performed against project level objectives. All of the individual project evaluations, which represent approximately 23% of relevant expenditure, have exceeded, met or largely met objectives.

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Context Overview of the South West of England 2

The South West is the largest region in England, covering an area of 23,829 km . It includes 15 county 362 and unitary authorities extending from Gloucestershire and Wiltshire to Cornwall and the Isles of Scilly. The South West is characterised by a largely rural landscape, 1,130 km of coastline, and numerous small settlements and relatively few major cities. It is an environmentally and historically rich area with two National Parks and four World Heritage Sites. The population of the South West is around 5 million, and has grown significantly over the last 20 years, primarily from inward migration of which a large proportion has been older people. The region has the lowest population density in England, with a concentration of people within 5 – 10 km of the coast. The ageing population, pressure on infrastructure due to dispersed population, limited access to services for people living in the rural areas and pockets of deprivation are significant issues facing the region. The South West economy is dominated by the service sector, which accounts for 75% of regional output and employment. Although manufacturing output has remained fairly stable, its share of the overall regional economy has fallen steadily – 19% in 1998 to 14% of regional output in 2005. The economic output of the region was around £89.5 billion in 2006, contributing around 8% to national gross value added (GVA). Between 2001 and 2006 the regional economy grew on average at 363 approximately 5.7% per annum, above the English average of 5.4%. Growth in employment has also exceeded national averages: the number of jobs in the South West has grown by 19% from 2.1m in 1993 to 2.5m in 2007. This compares to a 15% increase nationally (from 25.3m to 29.2 m over the 364 same period). Productivity, as indicated by GVA per capita, was £17,467 in 2006, which is around 6% lower than the 365 UK average making it the most productive English region outside London and the Greater South East. 366 Trends in GVA per hour indicate that there have been significant increases in productivity in the region compared to national trends. In 1996, the GVA per hour index was 91.9, (where the UK is 100), which 367 increased to 96.7 in 2006 . The 'productivity gap' between the South West and England’s most productive regions, London and the 368 rest of the Greater South East , has been identified as a challenge for the region. Research has attributed this gap to a number of reasons: relatively low levels of capital stock; differences in industrial size and composition; higher levels of part time working; skills gaps; and the time/distance from some of 369 the United Kingdom’s major markets. The region is also characterised by wide intra-regional differences in terms of output, productivity and the drivers of productivity – competitiveness, enterprise, innovation, investment and skills. The northern part of the region is the main economic engine for growth, with its urban areas consistently experiencing amongst the highest productivity levels in the United Kingdom in recent years. There are clear imbalances across the region, however, with some areas, particularly rural and peripheral areas, performing far less well than the rest of the country. For example, Swindon, the best performing sub-

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County Councils of Cornwall, Devon, Dorset, Gloucestershire, Somerset, Wiltshire; Unitary Authorities of Bath and North East Somerset, North Somerset Council, Plymouth City Council, South Gloucestershire Council, Swindon Borough Council, Torbay Council; and Local Councils: Bristol City Council, Bournemouth Borough Council, Council for the Isles of Scilly, and Borough of Pool. 363 South West Observatory 2008, State of the South West 2008 364 Office of National Statistics 365 Office of National Statistics 366 GVA per hour takes into account any variation in labour market structures across the regions, such as the proportions of full-time and part-time workers or job share availability 367 ONS Regional statistics. 368 Including London, South East England and East of England 369 South West Observatory 2008, State of the South West 2008

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region, was 50% more productive than the English average in 2005, while Torbay, the poorest performing 370 area, was 38% below. As a consequence the South West has been eligible for funding from the European Structural Funds through Objectives One, Two and Three. This has generally been concentrated in Cornwall and the Isles of Scilly where the GVA per head of £11,510 is almost half the £20,300 GVA per head in Gloucestershire, 371 Wiltshire and Northern Somerset. SWRDA’s purpose and strategy In response to the RDA’s five statutory purposes, SWRDA makes long-term investments in partnership with other public and private organisations that seek to address market failures, stimulate the economy and create the conditions to achieve sustainable growth. Climate change, population growth and globalisation are key issues for the future of the economy identified by SWRDA. As a consequence the core strategy, articulated by the Regional Economic Strategy (RES) 2006 – 2015, is focused on: 

creating the conditions for productivity-led growth;



developing a low-carbon economy; and



creating successful places – particularly those places identified as priorities.

To date three RESs have been developed for the South West in 2000, 2003 and 2006. The prime focus of this impact evaluation is in relation to the 2003 RES. The overall goal of the 2003 to 2012 RES is for a more competitive and productive economy, which is identified as an essential requirement for a sustainable region. The key areas of focus to achieve this are: 

skills of employees and employers;



investment in capital equipment, property, infrastructure and research;



innovation and application of new technology in product and process development;



enterprise and the growth of new firms; and



competition, providing strong incentives for firms to innovate and adopt new technologies and working practices.

The RES identified the need to improve coherent partnerships in the South West, stressing the importance of a consistent strategy to promote investment in the region and develop relevant and focused policies. In comparison, the priorities of the first RES 2000 to 2010, articulated a focus on improving the competitive position of the South West in both England and the EU through increasing prosperity and wealth creation. The current 2006-2015 RES, builds on the focus on productivity to pursue “economic growth within environmental limits.” The RES seeks to differentiate the region through its approach to sustainable development and reflects the rural and natural heritage of the area, which is a key attraction for tourists and people moving to the area. SWRDA’s Corporate Plan specifically identifies how the Agency will contribute to delivering the objectives of the RES. The 2003-2006 Corporate Plan, the first developed by SWRDA, covers the period most relevant to this study. The corporate plan mirrors the structure and format of the RES and sets out the

370 371

South West Observatory 2008, State of the South West 2008 Office of National Statistics

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strategic response and work programme to deliver the strategy over the three year period. The three strategic objectives of the plan are to: 

raise business productivity;



increase economic inclusion; and



improve regional communications and partnership.

SWRDA’s current Corporate Plan for 2008-11 shifts the focus toward productivity-led growth, developing a low-carbon economy and creating successful places by identifying and focusing resources in key areas in the South West. It should be noted that, SWRDA has implemented individual projects to deliver its agenda to promote sustainable economic development. It has not designed its interventions as a programme in the same sense as other regions, i.e. it has not rolled out a suite of projects linked by a common theme, industry sector or delivery structure linked to programme objectives. SWRDA’s core outputs as defined by the Tasking Framework cover: jobs created or safeguarded; people assisted to get a job; new businesses created and surviving 12 months; businesses assisted to improve their performance; businesses assisted via collaboration; public and private regeneration investment levered; hectares of brownfield land reclaimed and redeveloped; and people assisted in their skills development (skills assists). Besides the impact of its project and programme spend, SWRDA also influences its partners’ and stakeholders’ behaviour and performance in other ways. This ‘Strategic Added Value’ (SAV) is seen as a key element of SWRDA’s impact. Indeed, the policy framework that led to its establishment was designed to enable SWRDA to harness national, regional and local institutions in order to exploit the region’s indigenous strengths and tackle particular weaknesses, and to provide the environment for businesses and communities to maximise their potential through reforms that strengthen the key drivers of productivity and growth. SWRDA’s profile SWRDA’s total project expenditure (excluding administrative and overhead costs) since 1999 is approximately £942.9m. Although this report draws on evaluations which cover SWRDA’s spending since its establishment, the focus is on spending for which SWRDA is formally accountable, over which it has had the greatest influence and where at least the early evidence of impact should be apparent. Therefore, this study focuses on the ‘relevant period’ between 2002/03 to 2006/07, and so places less 372 emphasis on programmes and projects which SWRDA inherited from its predecessors and the national programmes where SWRDA has been responsible for delivery within parameters determined by central 373 government departments . Table 226 shows SWRDA’s spend by year and breaks down this spend between programmes and projects covering business, place and people categories. It also identifies spend on other projects, which do not fit into the other intervention categories, and national programmes. Since its establishment, SWRDA has spent £1,033.6m, of which £601.4m was spent directly on SWRDA’s own interventions in the ‘relevant period’, in addition to £73.8m on national programmes which SWRDA delivered on behalf of central government departments. The largest proportion of spend has been on place interventions, which comprised almost 60% of total project spend, with relatively similar spend on business and people projects. This reflects the capital /

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The exception here is the SRB programme, a legacy programme, which has recently been evaluated to asses the impact of RDA spending 373

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revenue split of funding provided to the RDA, which requires SWRDA to invest a certain proportion of their expenditure in long-term capital assets (e.g. buildings or infrastructure) and non-capital or revenue projects. Over time the proportion of expenditure on place interventions has decreased slightly while the proportion of expenditure of businesses interventions has increased from a relatively low base in 2002/03. Other expenditure includes projects that can not be easily attributed to the other intervention categories. Table 226: Analysis of SWRDA spend by year and by category of expenditure (£m) Business

1999/002001/02

2002/2003

Place

People

Other

374

National programmes

Administrative costs

Total

32.4

267.7

375

9.9

71.7

21.1

2.6

4.1

14.9

124.3

2003/2004

32.8

50.6

23.6

4.9

5.3

17.1

134.3

2004/2005

30.6

57.8

27.9

1.5

8.5

17.0

143.3

2005/2006

23.9

78.5

25.8

2.4

28.3

19.7

178.6

2006/2007

31.5

83.9

17.7

2.7

27.6

22.0

185.4

128.7

342.5

116.1

14.1

73.8

90.7

1,033.6

Total

Source: PwC analysis of SWRDA programme expenditure data

Table 227 summarises SWRDA’s spend covered by the usable evaluation evidence. The evidence for the impact of SWRDA’s spending, therefore, draws on 30 evaluations which are compliant with the principles of the IEF, and cover 75% (£452.6m) of SWRDA’s project spend over the ‘relevant period’. This provides a robust evidence base upon which SWRDA’s impact can be assessed. The level of coverage varies across the intervention categories. Around 50% of relevant expenditure is covered by four studies that measure the economic impact of a number of projects. These studies, called Economic Impact Reviews draw together multiple projects and assess the impact of a sample of projects, the results of which are then extrapolated to the entire population of projects to generate an estimate of total impact. The four intervention areas covered by the EIR’s are Business Support, Sites and Premises, Physical Regeneration, and Skills and Learning. A full list of the evaluations used for this report is included at Annex G.

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This analysis has taken financial information from published annual accounts and programme management system. This analysis focuses on administration, project and national programme expenditure, and does not take account of non-cash costs (bad debts, depreciation and stock write off), fixed asset additions, grants credited to reserves and asset disposal. As such the total expenditure listed here differs from total expenditure in statutory accounts. Expenditure on SRB is included in the business, people and place expenditure. 375

For expenditure over the period 1999/2000 to 2001/2002, given the available data, it has not been possible to classify by IEF intervention categories. The programme spend during this period is approximately £235.3m.

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Table 227: Analysis of SWRDA’s spend covered by IEF compliant evaluations (2002/03-2006/07) Total Spend covered

% of spend

Number of evaluations

Business

101.2

79%

Place

252.6

73%

People

98.6

86%

Other

0.3

National programmes

3.5

Total

456.2

n/a 75%

2 30

Source: PwC analysis based on SWRDA evaluation evidence

The calculation of coverage in Table 227 is based on classification of individual projects to each IEF intervention category. The evaluations have also been classified to the relevant IEF theme based on the main type of activity they evaluate, which means that they will contain projects and their associated expenditure that relate to other IEF themes. For example the majority of expenditure included in the Rural Renaissance programme relates to place activities, however it also covers a variety of business and people activities. The key implication of this is that the ‘project’ based coverage set out in Table 227 differs from the ‘evaluation’ based coverage within each theme.

Key findings Before setting out details of the impact of SWRDA’s spending on each type of intervention, this section draws together the key findings from the evaluation evidence base for SWRDA as a whole in relation to the two key objectives of our work, namely to summarise the available evidence of the impact of spending by SWRDA, at both regional and national level, and to assess SWRDA’s achievements against the objectives of both the RES and its Corporate Plan (which have changed over time) and each specific programme and project. It considers three key questions in turn: 

What has been the impact of SWRDA’s spending both at the project and programme level and overall?



What does the available evidence suggest has been the value for money of SWRDA’s interventions’?



How has SWRDA performed against its relevant objectives both at the project and programme level and overall in relation to its Corporate Plan and the RES?

Impact Table 228 summarises the gross and net outputs of SWRDA’s interventions and provides an estimate of the additionality of ‘core’ outputs across the IEF intervention categories. Where a project has multiple funding partners the impact presented here is SWRDA’s proportion of the total impact of the project or 376 programme . It should be noted that Table 228 only includes results from evaluations that provide estimates of both gross and net outputs. Total net impact results, including those from evaluations that provide only net estimates, are presented in Table 229.

376

The attribution of total project impact to the RDA is undertaken either through definition of the counterfactual that considers the proportion of gross outputs attributable to the RDA; or, where this is not the case, the impact of the total project is attributed based on the RDA’s contribution to the funding of the project.

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Table 228: Gross and net attributable SWRDA outputs (2002/03-2006/07) Jobs created/ safeguarded

Businesses created

Businesses assisted

Brownfield land (ha)

Skills assists

Funding leveraged (ÂŁm)

Business competitiveness & development Gross outputs achieved

6,568

2,094

3,897

63.8

Net outputs achieved

3,139

2,108

101

377

Additionality (%), achieved

Regeneration through physical infrastructure Gross outputs achieved

5,814

132

7,153

115

11,992

781.5

Net outputs achieved

3,501

119

6,510

10,913

n/a

Gross outputs achieved

716

347

12,871

Net outputs achieved

274

159

6,909

Additionality (%), achieved

Gross outputs achieved

12,071

650

12,937

4,855

49,039

Net outputs achieved

5,110

287

5,563

2,379

27,462

Gross outputs achieved

25,169

820

22,531

4,922

77,757

845.3

Net outputs achieved

12,024

420

14,340

2,379

45,259

Additionality (%), achieved People and skills

Other

Additionality (%), achieved Total

Additionality (%), achieved

378

379

n/a

Source: PwC analysis based on SWRDA evaluation evidence

SWRDAâ&#x20AC;&#x2122;s spending has created/safeguarded jobs, assisted and helped to create new businesses, assisted people in skills development, remediated brownfield land and leveraged private and public sector funding. Almost all of these outputs have already been achieved. However, a small number of outputs are potentially to be achieved in the future. These are related to jobs created by physical infrastructure investments (such as Sites and Premises workspace and incubation and science park initiatives). Estimates of future potential jobs provided by evaluations are summarised in the relevant sections below. An aggregate estimate can not be provided as future potential jobs were not considered consistently across the evidence base

377

The net businesses assisted for ICTaaEE project are slightly higher than the gross businesses assisted. This project seeks to increase the capacity of partnership delivery bodies that promote the use of ICT in businesses. The evaluation found that the proportion of businesses assists attributable to the ICTaaEE project is higher that recorded in formal monitoring data, which is why gross output is higher than net. 378

The additionality calculation excludes 67 ha gross brown field land remediated by regeneration interventions as there is no net estimate 379

The additionality calculation excludes the 3,897 gross skills assists achieved by business competitiveness interventions as there is no net estimate.

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SWRDA’s regeneration through physical infrastructure interventions have the highest average additionality for jobs created / safeguarded, followed by business support interventions. SWRDA’s place interventions have had strong additional impact, with 60% of gross jobs created / safeguarded are additional, compared to the national RDA average of 45%. The additionality of the jobs created / safeguarded by business interventions is consistent with the RDA average for business interventions (48%), while additionality of people interventions is lower than the national RDA average (48%). Looking at other outputs, the additionality of SWRDA’s businesses created by business interventions is slightly below the national RDA average of 40%, as is the additionality of skills assists delivered by people interventions (61%) compared to 62% national RDA average. Table 229 below summarises the total net outputs of SWRDA’s interventions. This includes net outputs excluded from Table 228 above as they were from evaluations that do not provide estimates of both gross and net outputs. Table 229: Total net attributable SWRDA outputs (2002/03-2006/07) Jobs created/ safeguarded

Businesses created

Businesses assisted

Brownfield land (ha)

Skills assists

Business competitiveness & development

3,916

2,108

Regeneration through physical infrastructure

3,501

119

6,510

People and skills

1,861

159

6,909

Other

5,110

287

5,563

2,379

27,462

Total

14,388

420

14,340

2,379

45,284

10,913

Source: PwC analysis based on SWRDA evaluation evidence

The net achieved annual GVA of SWRDA’s interventions is summarised in Table 230, which provides a break down of business, people and place. Place has generated the highest total GVA impact of £120.5m, followed by people and skills at £88.1m. Table 230: Outcomes from SWRDA interventions (2002/03-2006/07) Number of evaluations

Expenditure covered by evaluations (£m)

Achieved GVA (annual, £m)

Business competitiveness & development

80.6

70.7

Regeneration through physical infrastructure

253.4

120.5

People and skills

38.3

88.1

SRB

55.0

51.5

Source: PwC analysis based on SWRDA evaluation evidence

Estimates of cumulative GVA and future potential GVA are provided by some evaluations and are summarised in the relevant sections below. As this has not been undertaken consistently across the evidence base it has not been possible to provide an aggregate estimate for each of the IEF themes. The annual GVA figures above estimate the economic impact of the interventions in the year prior to the evaluation. Therefore these projects would have had economic impacts in the years other than the year for which impact was assessed, both before and after, that are not captured in this estimate.

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Finally, Strategic Added Value is a key element of SWRDA’s impact, as illustrated below. SWRDA’s Strategic Added Value Besides the impact of its project and programme spend, SWRDA also influences its partners’ and stakeholders’ behaviour and performance in other ways as demonstrated by the following examples: 

Strategic engagement and support for priority sector: SWRDA’s engagement with the Aerospace sector to develop more strategic and collaborative relationships between aerospace companies and their suppliers to increase R&D activity and to help retain it in the UK;



Response to economic shocks within the region: SWRDA’s rapid response to the needs of businesses in Gloucestershire in the aftermath of the summer 2007 floods ensured collaboration and mobilisation of other organisations; and



Improved quality of regeneration projects: SWRDA’s involvement in regeneration projects has helped to improve the quality and mix of outputs achieved. The Agency’s involvement in regeneration projects, such as Gloucester Docks and Temple Quay, has accelerated the development of a better quality and blend of outputs to promote the economic development and place making of the area.

Source: SWRDA Value for money Table 231 considers the value for money of SWRDA’s interventions from two perspectives: 

the ratio of GVA to cost as an indicator of the benefit-cost ratio; and, especially where this is not available,



measures of cost per unit of net output using a range of measures where these are available.

In assessing the value for money of SWRDA’s interventions we have sought to compare them with the evidence emerging from the evaluation of other RDAs’ activities. Table 231: Summary of SWRDA value for money (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved GVA (annual):cost ratio

Achieved & future potential GVA:cost ratio

Achieved cost per net job (£)

Achieved cost per net business created (£)

Achieved cost per net skills assist (£)

1.6 cumulative

3,810

Business competitiveness & development 380

Business Support EIR: general support

3.4

0.4

ICTaaEE

0.2

9.5

Gloucestershire Floods

2.0

0.9

Business Support EIR: sector / cluster projects

2.7

0.4

South West Food and Drink

5.7

3.1

381

29,850 -

2,340

3.2 annual

3,800

380

This future potential GVA impact of £21.8m is for all projects covered by Business Support EIR, not just Individual support interventions, which is why it is lower than the cumulative GVA return of individual support. 381

The return on investment of Gloucestershire Floods project is based on the average increase in business turnover to grant per business. As a total estimate of GVA is not provided, the return of Gloucestershire Floods has not been included in the aggregate estimate.

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Expenditure covered by evaluations (£m)

Achieved GVA (annual):cost ratio

Achieved & future potential GVA:cost ratio

Achieved cost per net job (£)

Achieved cost per net business created (£)

Achieved cost per net skills assist (£)

Business EIR: Technology and R&D

8.7

0.04

42,770

Sites & Premises EIR: Incubation & science

46.5

0.3

0.6 annual

155,000

Enterprise Pavilion

2.5

0.5

32,800

Tamar Science Park

5.0

0.7

Coral Reef

3.3

15.3

3,064

Total – Business

78.0

382

1.5

Regeneration through physical infrastructure Sites and premises EIR: Workspace

59.6

0.3

1.0 annual

141,000

1.27m

Sites and premises EIR: Transport

4.2

4.3 annual

12,000

9.6m

9.6

Sites and premises EIR: Community

0.02

0.02 annual

5.2m

5.5

National Maritime Museum of Cornwall

0.9

7.7

Sites and Premises – Tourism / Cultural

0.3

0.5 annual

78,000

7.68m

46.3

Eden Project

11.0

1.6

23,800

Physical Regen. EIR

95.5

0.1

59,400

Rural Renaissance

16.6

1.5

21,177

Total – Place

251.8

0.8

1.1

Skills EIR: Skills develop. for individuals

2.0

2.3

AESP

2.9

0.2

Skills EIR: Skills development for firms

11.0

4.8

Skills EIR: Infrastructure

6.5

2.4

Gloscat

1.1

People and skills

a a

CUC

14.7

0.2

Strength. Community Foundations

0.1

1.5

22,900 40,278

7,900

383

1,226

1.4 annual

41,900

23,404

94,839

46,226

19,500

1,595

4,700

382

The GVA to cost ratio is calculated by the evaluation based on net expenditure of £13.7m which generated the economic impact. The remaining expenditure was on projects that were in early development stage and had not yet generated impact. 383

Skills EIR does not provide net skills assists.

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Total – People

Expenditure covered by evaluations (£m)

Achieved GVA (annual):cost ratio

Achieved & future potential GVA:cost ratio

Achieved cost per net job (£)

Achieved cost per net business created (£)

Achieved cost per net skills assist (£)

38.3

2.3

55.0

0.9

36,407

Other SRB

Source: PwC analysis based on SWRDA evaluation evidence Notes: a) These unit costs have been calculated by PwC based on the expenditure and GVA results provided by evaluations. b) Aggregate GVA to cost ratios are calculated based on proportion of expenditure directly related to the outputs generated, for Business support this is £45.8m, Place £159.6m. Total net expenditure is £298.9m.

People and skills have generated the highest annual return of 2.3:1, followed by business interventions 1.5:1 and place interventions 0.8:1. In addition to the other unit costs presented below, SWRDA has a positive overall leverage funding ratio of 2.7:1384. Physical regeneration initiatives have generated the lowest returns to date, which is a result of the high capital costs and development lifecycle which is expected to generate benefits over a longer time period compared to business support and people interventions. A large proportion of SWRDA’s physical regeneration interventions evaluated by the Physical Regeneration and Sites and Premises EIR were in the early stages of development and hence do not capture the full potential impact, which is at least partly reflected by the forecast of future potential annual returns which increases to 1.1:1. SWRDA’s people and physical regeneration interventions exceed the national RDA averages for achieved annual GVA:cost of 0.9:1 and 0.7:1, respectively. The return on SWRDA’s people and skills interventions is notably higher in part reflecting the inclusion of productivity improvements in the evaluations of SWRDA’s interventions, which is not included in the national analysis. The return on Skills EIR: Skills development for firms of 4.8 is six times higher than the national average of 0.8. The return on SWRDA’s business competitiveness interventions of 1.5:1 is just over half of the national RDA average of 2.8:1. This reflects the socio-economic conditions of the South West, which has had structurally full employment over the past five years, which limits the potential for job creation and safeguarding. Therefore, the focus for SWRDA has been on unlocking productivity through encouraging research and innovation. Around 75% of SWRDA’s expenditure during the relevant period has been focused on Science, R&D and innovation infrastructure interventions, which have long-term benefit profiles and the lowest national RDA average annual GVA for business interventions of 1.1:1. In interpreting these results it is important to note that these figures are annual, and as such represent a one year snapshot of the returns of the interventions evaluated. They do not present the cumulative return on these interventions to date. As noted above a number of these annual calculations have been developed based on information presented in the evaluation to enable an aggregate estimate of GVA to be developed. The risk with this approach is that for many of the projects the benefits and expenditure are concentrated in the latter years of the project following a period of build up. As a result dividing the cumulative GVA by the total number of years of the project could potentially underestimate the GVA impact. In general, the cost per job measure mirrors the returns on investment, with lowest cost per job figures demonstrated for the business and people interventions, albeit with significant variation. The relatively higher cost per job figures for the place based interventions reflects the core objective of these interventions to create the conditions that will attract private sector involvement in development and regeneration projects that aim to stimulate economic activity, and to create jobs through this process over the longer term. The majority of SWRDA’s people interventions have delivered jobs lower than the national RDA average. 384

Based on £845.3m of public and private sector leveraged funding against associated expenditure of £308.2m.

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Performance against objectives Table 232 presents SWRDA’s performance against target information based upon evidence drawn from the Tasking Framework. For all of the measures, SWRDA has exceeded all of the annual targets set by BERR, significantly so for funding levered. Table 232: Comparison of SWRDA performance against targets (2002/03-2006/07)

385

Jobs created/ safeguarded

Businesses created

Brownfield land (ha)

People assisted in skills development

Funding levered (£m)

Targets set by BERR

28,578

1228

595

34,400

325

Achieved SWRDA gross outputs reported to BERR

30,442

1,437

624

69,811

608

Number of years when targets met (out of five)

386

Source: DTI/BERR and PwC analysis

Like all the RDAs (except the London Development Agency), in 2007 SWRDA was subject to the National Audit Office’s Independent Performance Assessment (IPA) which assessed how well SWRDA has responded to the common challenges facing RDAs, namely balancing the interests of the region with national policy requirements, managing the conflicting demands of different regional stakeholders, looking outwards to promote the region while staying focused on what is happening inside and responding to new duties imposed by central government. This assessment sheds further light on how well the Agency has been able to fulfil its role. Overall, SWRDA was seen as ‘performing well’, particularly in terms of its ambition, prioritisation, performance management and achievement. Key strengths within these themes identified by the NAO review include: 

RES: the current version is significantly more focused with a clearer delivery framework. It has been built upon an exemplary evidence base, and sets challenging sustainability ambitions. There are clear links between RES, Corporate Plan and Business Plans. Stakeholder consultation process has been noted to be very extensive and strongly inclusive.



Delivery: The Agency was noted as having a strong record for delivering large urban regeneration schemes and acts successfully as a broker and has achieved partnership working. The Agency has achieved successful engagement in the key aerospace sector, and has set up some key delivery bodies to build capacity in the region

Some key areas for development in relation to its economic impact were also identified by the review and include: 

In common with other RDAs, SWRDA needs to improve its performance in respect of evaluation. It notes that while the Agency does use performance management information to inform policy development and appraisal decisions and has established the mechanisms to determine the impact of its activities, it is not yet at the stage of being able to do this consistently.



The Agency needs to raise the profile of its prioritisation and achievements in respect of skills, innovation and business support.

385

Based on information from SWRDA Annual Reports.

386

No funding leverage information available for 2002/03. Achieved 4/4 years targets.

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

Communication needs to be clearer and more proactive especially in terms of the Business Community.

Table 233 sets out SWRDA’s performance against the objectives for each of the individual interventions covered by the evaluations. Table 233: Comparison of SWRDA’s performance against objectives across the evaluations

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Exceeded

Met

Largely met

Mixed

Limited performance

Not assessed

Total

Evaluations

Spend (£m)

17.7

31.5

51.2

Evaluations

Spend (£m)

28.7

265.6

305.3

Evaluations

Spend (£m)

1.1

18.9

20.0

40.0

Evaluations

Spend (£m)

0.0

57.2

Evaluations

Spend (£m)

31.8

93.7

317.1

453.7

Business

Place

People

Other

Total

Source: PwC analysis based on SWRDA evaluation evidence

Across all sub-themes, the majority of interventions, in terms of number, have met or largely met objectives. These interventions only make up around 23% of relevant expenditure, the majority of interventions, by expenditure have not been assessed against objectives. This is because 50% of expenditure is covered by the multi-project Economic Impact Reviews which measure the economic impact of a large number of relatively heterogeneous projects, which do not form part of a cohesive programme, with associated programme wide objectives. It is not feasible to apply the performance against objectives of the projects sampled for evaluation to the broader population of projects.

Impact by intervention We have structured the analysis of the impact of SWRDA’s spending, where possible, according to the three categories of intervention defined within the IEF (i.e. business, place and people). We have also analysed the impact of SWRDA’s other interventions that span more than one of these categories and the impact of the nine national programmes where SWRDA has been responsible for delivery within parameters determined by central government departments. We have summarised the impact of SWRDA’s interventions using a common structure in which we: 

summarise SWRDA’s activities and expenditure on each programme;

387

The expenditure figures are based on expenditure of evaluations classified to the relevant IEF theme. A number of evaluations include projects that relate to different IEF categories, therefore these expenditure figures differ from those Table 227 which are based on the classification of individual projects to each IEF intervention category.

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

report the estimated net outputs arising from this expenditure (i.e. the additional outputs that are as a result of the intervention);



summarise performance against objectives and the outcomes, where available, for each programme.

Business development and competitiveness interventions Rationale The South West is a relatively productive and wealthy region that, in line with national trends, has been through a period of sustained growth since the early 1990s. SWRDA interventions have been able to build on the strengths of the South West economy which has relatively high rates of business stock and investment and employment in Research & Development (R&D). In 2006, South West businesses spent 388 £1.3 billion on R&D, which is the equivalent of 1.5% of GVA, slightly higher than the English average. A number of key challenges to increasing economic output of businesses in the region include:

389



low rate of business start ups: The South West had 437 VAT registered businesses per 10,000 adults in 2006, compared to only 407 nationally. However, the region had the lowest rate of business registration and deregistration, an indicator of business start ups, of any region, 8.6% and 6.6% (of business stock), respectively;



modest international trade performance: In 2006, South West exports amounted to £11 billion. South West England exported just £4,978 per employee job in 2006, ranking bottom of all regions and more than a third less than the English average; and



wide intra-regional differences in productivity: and the underlying drivers of productivity competitiveness, enterprise, innovation, investment and skills. The northern part of the region is the main economic engine for growth, while rural and peripheral areas perform less well.

In response to these challenges SWRDA’s business competitiveness interventions aim to increase productivity by supporting innovative and entrepreneurial activity, encouraging information exchange, promoting the development of key sectors. Key rationales for the business sub-theme interventions include: 

Individual enterprise level support: interventions generally seek to address barriers to business start-ups and expansion and the efficiency of existing businesses. Lack of access to information and guidance is a key market failure, which may result from high costs, lack of contacts or networks, or relative geographic isolation. Insufficient information and collaboration with other business and government stakeholders can lead to sub-optimal decision making, such as underinvestment in ICT.



Sector/cluster support: aims to promote embryonic growth sectors (digital, media, biotechnology) as well as providing support to mature sectors (marine, food and drink, aerospace/advanced engineering, ICT and tourism). While the market failure issues are the same as those identified for individual enterprise support, these interventions seek to address the varying needs of specific sectors that are not necessarily met through generic mainstream provision. It also seeks to generate greater efficiency by bringing together related organisations including supply chains, research establishments and business support organisations.



Promotion and development of science, R&D and innovation infrastructure: interventions to develop incubators and science parks in order to exploit regional research activities. The provision of

388

South West Observatory 2008, State of the South West 2008.

389

South West Observatory 2008, State of the South West 2008.

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facilities, access to services, expertise and collaboration with HE institutions helps to decrease risk and hence encourage investors. Innovative activity and incubation of new businesses has the potential to provide benefits to other businesses and the community in general that would not be factored into private sector investment decisions. 

Other strategic business interventions: The SWRDA also funds strategic and enabling projects, which do not intend to directly affect the behaviour or performance of individuals’ businesses chains, but rather to create an environment in which businesses can operate more effectively. Examples include the development of networks, national policy initiatives and research activities. 390

There are eleven evaluations that provide evidence of the impact of SWRDA’s business interventions. These evaluations have been categorised according to the type of business intervention, as shown in Table 234. The evidence provided by the Business Support EIR has been split across the relevant business sub-themes. Table 234: Summary of SWRDA’s business development and competitiveness interventions Intervention theme/sub-theme

Individual enterprise level support

Sector/cluster support

Science, R&D & innovation infrastructure

Strategic business interventions

Evaluation

Expenditure covered by evaluations (£m)



Business EIR: General Business support

3.4



ICT as an Economic Enabler

0.17



Beacon South West



Gloucestershire Floods

2.0



Business EIR: Sector based support

2.7



South West Food and Drink

5.7



SWRDA Support for the Aerospace Industry



BioApproaches

0.74



Business EIR: Technology and R&D

8.7



Sites and Premises: Incubation facilitates and science parks



Coral Reef

3.3



Enterprise Pavilion

2.5



Tamar Science Park

5.0



Business EIR: Strategic and enabling projects

2.5

13.6

Total

46.5

97.8

Source: PwC analysis based on SWRDA evaluation evidence

Business interventions that have been evaluated are concentrated in science, R&D and innovation infrastructure sub-theme and sector / cluster support initiatives. This addresses the following objectives set by the 2003-2006 Corporate plan, which covers the majority of the interventions being assessed: 

support key sectors: advanced engineering, food and drink, ICT, marine, tourism;



promote the development of regional and local supply chains;



develop incubators and science parks to support the exploitation of regional research;



undertake key activities to encourage innovation in business;

390

Business EIR provides four estimates of sub-theme impact, therefore as shown in Table there are a total of 14 estimates of impact.

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

increase the rate of knowledge transfer between further education (FE) and higher education (HE) institutions, public sector research establishment and business; and



promote the renaissance of the regions largest urban areas as dynamic and international cities.

Impact Table 235 summarises the expenditure and gross outputs generated by business interventions evaluated. The primary outputs have been jobs created/safeguarded, businesses created and assisted and people assisted with skills development. Table 235: Gross achieved outputs from SWRDA’s business development and competitiveness interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Gross jobs created/ safeguarded

Gross businesses 391 created

Gross businesses assisted

Gross skills assist

Individual enterprise support Business EIR: Individual 392 support

3.4

2,480

ICTaaEE

0.2

2,094

Beacon South West

1.0

358

1,320

Gloucestershire Floods

2.0

542

Business EIR: Sector support

2.7

2,826

Food and Drink

5.7

709

Sector / cluster support

3,897

Science, R&D and innovation infrastructure Business EIR: Technology R&D

8.7

288

46.5

Enterprise Pavilion

2.5

Tamar Science Park

5.0

249

Coral Reef

3.3

547

80.0

6,568

3,307

Sites EIR: Incubation & science park

Total

5,217

Source: PwC analysis based on SWRDA evaluation evidence

391

The Business Support EIR, which evaluates a large proportion of business competitiveness interventions, focused on the creation of net jobs created and safeguarded as the key driver of economic impact. Moreover, business creation was an explicit objective of only a small number (6) of the 55 projects in the sample frame. 392

The gross jobs created for Business Support EIR have been calculated by multiplying the Gross jobs created for the sample, by the grossing up factor and the attribution factor.

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In addition to the gross outputs listed in Table 235 above 5,244m2 of gross workspace 394 created and £63.8m of private sector funding leveraged .

393

has been

Table 236 summarises the expenditure and key net outputs generated by SWRDA’s business competitiveness interventions. In total 3,916 net additional jobs have been created and safeguarded and14 net businesses created. Table 236: Net achieved outputs from SWRDA’s business development and competitiveness interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Net jobs created/ safeguarded

Future potential net jobs created / safeguarded

Net businesses created

Net businesses assisted

Individual enterprise support 396

Business EIR: 395 Individual support

3.4

899

2,429

ICTaaEE

0.2

Gloucestershire Floods

2.0

Business EIR: Sector support

2.7

979

South West Food and Drink

5.7

397

2,108

710

1,900

8.7

180

46.5

654

Enterprise Pavilion

2.5

Tamar Science Park

5.0

Coral Reef

3.3

859

80.0

3,916

Sector / cluster support

Science, R&D and innovation infrastructure Business EIR: Technology R&D Sites EIR: Incubation & science park

Total

4,983

2,108

Source: PwC analysis based on SWRDA evaluation evidence

There is a wide variance in the additionality of the business support initiatives, which ranges from 24% for 398 399 Tamar Science Park to 157% for Coral Reef , with an overall average of 48%. Overall, the net

393

Enterprise Pavillion created 1,444m2 and Tamar Science Park created 3,800m2 of workspace

394

Sites and Premises EIR: Incubation and science park leveraged £6.5m, Tamar Science Park £1.3m and Coral Reef £56m.

395

The gross jobs created for Business Support EIR have been calculated by multiplying the Gross jobs created for the sample, by the grossing up factor and the attribution factor. 396

This estimate is a cumulative estimate to 2010/11 including net jobs created / safeguarded to date is for all interventions covered by the Business Support EIR (not just Individual support). 397

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additionality of SWRDA’s business competitiveness interventions is the same as the national RDA average of 48%. Table 237 summarises the impact on GVA (both achieved and future potential) of SWRDA’s interventions to promote business development and competitiveness. The total net annual achieved GVA contribution of the business interventions is £70.7m. Table 237: Outcomes from SWRDA’s business development and competitiveness interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved GVA (annual, £m)

Achieved GVA (cumulative, £m)

Future potential GVA (£m)

Business Support EIR: Individual support

3.4

1.4

7.0

21.8 cumulative

ICTaaEE

0.2

2.0

4.9

Business Support EIR: sector / cluster

2.7

1.0

5.1

South West Food and Drink

5.7

17.5

Individual enterprise support 400

Sector / cluster support 18.1 annual

Science, R&D and innovation infrastructure Business EIR: Technology and R&D

8.7

0.3

Sites & Premises EIR: Incubation & science park

46.5

3.5

Enterprise Pavilion

2.5

Tamar Science Park

1.7

26.2 annual

1.2

3.7

5.0

3.7

5.6

Coral Reef

3.3

40.1

Total

78.0

70.7

28.0

Source: PwC analysis based on SWRDA evaluation evidence Note: These estimates of annual GVA have been calculated by dividing the cumulative GVA estimate by the number of years of the programme to provide an annual estimate.

In addition to the outcomes listed above, Gloucestershire Floods intervention helped business to return to trading on average 3.5 days faster, resulting in gross additional turnover of £4,330 per business, of which £2,120 is net. Across its interventions, SWRDA seeks to achieve a range of outcomes not all of which can be captured in the above estimates of GVA. One of the main qualitative outcomes outlined in evaluations of SWRDA’s interventions is the increase in collaboration and networking between private and public stakeholders.

398

Additionality of net jobs created is higher than gross for Coral Reef evaluation due to low estimate of deadweight (4%) and relatively high multiplier of 1.6 (SW regional accounts) being applied. 399

This is calculated on evaluations that provide estimates of both gross and net jobs created, which totals 6,658 gross net jobs and 3,139 net jobs. 400

This future potential GVA impact of £21.8m is for all projects covered by Business Support EIR, not just Individual support interventions.

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While difficult to quantify and potentially long-term in nature, such activities would inevitably lead to an increase in the productivity of businesses. Key examples include the creation of 6 successful clusters of over 3,000 businesses in the creative and media industries, and tenants at the science parks and incubation centres have reported increased engagement with HEIs to access knowledge and employment of students and graduates. SWRDA’s business interventions also provide additional strategic impact. Notable examples summarised below relate to the Agency’s engagement with the aerospace industry and response to assist businesses in the aftermath of the summer 2007 floods. SWRDA’s Strategic Added Value 

Strategic engagement and support for priority sector: As noted by the NAO IPA, SWRDA have effectively engaged with the aerospace sector to develop more strategic and collaborative relationships between the aerospace companies and their suppliers. With an estimated 27% of the industry located in the South West, it is a priority sector for the RDA. SWRDA have worked through the West of England Aerospace Forum to deliver a variety of interventions that enhance the competitiveness of the supply chain and support strategic research and technology projects, such as the innovative Airbus Composite Structures Development centre. The key aerospace companies have reported that SWRDA engagement with the industry has increased the scale of many of the R&D projects and helped to retain them in the UK.



Response to economic shocks within the region: Gloucestershire was one of the most severely affected counties in the 2007 floods. Within 48 hours SWRDA coordinated a partnership response and authorised a £2m recovery fund that provided Business Recovery grants of up to £2,500 to flooded businesses and a Town Centre Recovery fund. In addition to the rapid response to crisis within the region, SWRDA effectively collaborate and deliver assistance package with Gloucestershire First and Business Link, who also committed significant resources in terms of infrastructure and people.

Source: SWRDA Value for money Table 238 sets out the achieved GVA to cost ratios of SWRDA’s business development and competitiveness interventions. The GVA to cost ratio compares GVA impacts to the cost of the interventions, to assess the return on RDA investment. The achieved cumulative GVA to cost ratio provides an estimate of the total return to date of the intervention, while the achieved annual GVA to cost ratio provides an estimate of the annual return to total project cost.

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Table 238: Achieved GVA to cost ratios from SWRDA’s business development and competitiveness interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved GVA (annual):cost ratio

Achieved GVA (cumulative):cost ratio

Future potential GVA:cost ratio

Business Support EIR: general support

3.4

0.4

1.6 cumulative

ICTaaEE

0.2

9.5

30.9

Gloucestershire Floods

2.0

0.9

402

Business Support EIR: sector / cluster

2.7

0.4

2.2

South West Food and Drink

5.7

3.1

Individual enterprise support 401

Sector / cluster support 3.2

Science, R&D and innovation infrastructure Business EIR: Technology and R&D

8.7

0.04

Sites & Premises EIR : Incubation & science park

46.5

0.3

Enterprise Pavilion

2.5

0.5

Tamar Science Park

5.0

0.7

1.1

Coral Reef

3.3

15.3

Total

82.4

403

1.5

0.22 n/a 1.5

0.6 annual -

Source: PwC analysis based on SWRDA evaluation evidence Notes: a) These estimates of GVA to cost have been calculated by dividing the annual GVA estimates by expenditure as listed in Table 237. b) Calculated based on net expenditure of £45.8m.

Where there is a GVA to cost ratio of greater than one, the economic benefits of the interventions attributable to SWRDA’s funding exceed their costs. The overall annual GVA to cost ratio is 1.5:1, which means that the annual return of these interventions cover the whole project costs within one year. Notably high GVA impact has been generated by the Coral Reef and ICTaaEE projects, with GVA to cost ratios of 15:3 and 9.5, respectively. The return on SWRDA’s business competitiveness interventions of 1.5:1 is just over half of the national RDA average of 2.8:1. This is a result of the socio-economic conditions in the region and the types of interventions implemented and evaluated. As the South West has experienced full structural employment over the past five years, job creation and safeguarding, which is one of the key drivers of GVA, is more difficult and has been less of a priority for the RDA. Instead, the RDA has sought to unlock productivity

401

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improvements in the region by encouraging innovation in business and develop incubators and science parks. In line with the objectives articulated in the Corporate Plan around 75% of SWRDA’s expenditure during the relevant period, and a large proportion of evaluated expenditure, has been focused on Science, R&D and innovation infrastructure interventions. These interventions are long-term investments and have generated the lowest return on investment of all business competitiveness sub-themes, with the national RDA average annual GVA of 1.1:1. Table 239 sets out the achieved cost per net output of SWRDA’s business development and competitiveness interventions. Table 239: Achieved cost per net output from SWRDA’s business development and competitiveness interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved cost per net job created / safeguarded (£)

Achieved cost per business created (£)

Individual enterprise support Business EIR: Individual support

3.4

3,810

Gloucestershire Floods

2.0

29,850

Business Support EIR: sector projects

2.7

2,340

Food and Drink

5.7

3,800

Sector / cluster support

Science, R&D and innovation infrastructure Business EIR: Technology and R&D

8.7

42,770

Sites & Premises EIR: Incubation & science park

46.5

155,000

1.7m

Enterprise Pavilion

2.5

32,800

129,900

Tamar Science Park

5.0

Coral Reef

3.3

3,064

404

405

2.5m -

Source: PwC analysis based on SWRDA evaluation evidence

There is relatively wide variability in the cost per job figures presented in Table 239 above. The cost per job figures of the sector / cluster support performed significantly better than the national RDA average of £12,135. The unit costs of science, R&D and innovation infrastructure is more mixed. The national RDA average is £37,938 for science, R&D and innovation interventions, therefore Enterprise Pavilion and Coral Reef have performed well compared to the average. The high cost per job of the Sites and Premises EIR: Incubation and science park reflects the capital intensive nature of the activities evaluated.

404

Calculated based on information from the evaluation £13.7m net cost of incubation and science park interventions and 8 net businesses created. 405

Calculated based on total expenditure of £5.0m and 2 net businesses created.

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Performance against objectives Table 240 summarises the performance against objectives of SWRDA’s interventions to promote business development and competitiveness. By number the majority of evaluations provide an assessment of performance against objectives and / or rationale for intervention. All of these interventions that provide an assessment have met or largely met their objectives. However, on an expenditure basis, the majority of interventions have not assessed performance against objectives. The Business Support EIR assesses the economic impact of 55 relatively heterogeneous projects. As these projects do not comprise a cohesive programme with common objectives, it was not possible to assess the performance against objectives. Table 240: Performance against objectives from SWRDA’s business development and competitiveness interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Performance against objectives

Gloucestershire Floods

2.0

Met

Beacon South West

1.0

Largely met

Tamar Science Park

5.0

Largely met

Coral Reef

3.3

Largely met

Enterprise Pavilion

2.5

Largely met

ICT as an Economic Enabler

0.2

Largely met

South West Food and Drink

5.7

Largely met

Business Support EIR

17.2

n/a

SWRDA Support for the Aerospace Industry

13.6

Not assessed

BioApproaches

0.7

Not assessed

Source: PwC analysis based on SWRDA evaluation evidence

Regeneration through physical infrastructure interventions Rationale The South West region is the largest and has the most dispersed population of all English regions. This means that the region has the highest number and percentage of people living in villages, hamlets or isolated dwellings (17%, compared to 8% in England) and the lowest percentage of people living in urban 406 settlements (67%, compared to 82% in England as a whole). This settlement pattern creates significant challenge to the provision of, and access to, services and infrastructure. This is further compounded by other socio-economic characteristics in the region particularly relevant to regeneration activities including: 

a high level of intra-regional disparity with wide intra-regional variations in economic performance;



rapid increase in population over the past 10 years which has placed increasing pressure on the infrastructure (transport and communications), created excess demand for utilities and basic services ( e.g. health and education) and exacerbated skills gaps, particularly in higher level skills in some parts of the region;



significant economic change and declining services in rural communities; and

406

Census Output Area 2001, Census Population, DEFRA rural / urban definition

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

an imbalance of housing and workspace development leading to housing shortages and rising land values which have impacted on the land available for employment sites, thus compounding shortage issues in some areas

SWRDA works with a range of local and national public sector organisations, primarily local authorities and English Partnerships, to deliver regeneration projects across the region. Public sector intervention looks to address market barriers to development faced by the private sector and seeks to create the conditions that will encourage increased involvement and investment in the region. The main rationales cited by evaluations are market failure and equity objectives, including: 

public sector is better able to bear the long-term risks implicit in long-term capital projects, and are able to meet the higher costs of development (from contaminated land or fragmented ownership) in order to induce private sector investment in target areas;



co-ordinating role for major regeneration projects where no other stakeholders have the economic incentive or resources to coordinate and deliver the investment. Activities may include the provision and dissemination of information, for example master planning activities or regeneration frameworks, co-ordination of key stakeholders and provision of funding to assemble land;



broader economic, social or environmental benefits, or positive externalities, may be sought which 407 would not be achieved by private sector investments, e.g. BREEAM compliant buildings, improved streetscape, reclaiming derelict land to reducing the negative impact on the surrounding area; and



public and merit goods, which are goods that are judged by the public sector to have higher merit than would be delivered by the market based on the amount that consumers are willing to pay for such goods. Examples of such initiatives are projects that deliver community and tourism infrastructure and facilities.

In addressing issues of intra-regional disparity, the rationale of a number of SWRDA place initiatives is to achieve equity objectives through economic regeneration in deprived areas. For example, a key objective of the Rural Renaissance project is to help rural communities to respond to, and influence, economic change by supporting projects that generate employment, improve delivery and access to services and realise the value of the environment as an economic asset. 408

The evidence of impact of SWRDA’s place based activities is covered by eight evaluations that cover spend of around £268.1m. The majority of this spend is covered by two Economic Impact Reviews (EIRs), Physical Regeneration and Sites and Premises.

407

BRE Environmental Assessment Method

408

Sites and Premises EIR provides three estimates of sub-theme impact, therefore as shown in Table there are a total of ten estimates of impact.

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Table 241: Summary of place evaluations Intervention theme/sub-theme

Evaluation

Expenditure covered by evaluations (£m)



Sites and Premises: Workspace



Temple Quay

Public realm / other infrastructure (including transport and community)



Sites and Premises: Transport and Community Infrastructure

15.1

Image, events and tourism



Sites and Premises: Tourism and cultural projects

46.3



National Maritime Museum Cornwall



The Eden Project

11.0

Cross-cutting regeneration interventions



Physical Regeneration EIR

95.5



Rural Renaissance

16.6

Co-ordination role (e.g. spatial strategies / delivery mechanisms)



The Way Ahead

2.6



Creating Excellence

2.5

Bringing land back into use

59.6 1.9

7.7

Total

258.8

Source: PwC analysis based on SWRDA evaluation evidence

These initiatives respond to the objectives of the 2003-2006 Corporate Plan to: 

ensure regionally significant sites are bought forward, such as major strategic employment sites;



ensure there is a range of workspace to support the needs of developing companies;



improve the economic performance of deprived communities;



address changing needs of rural economies;



improve transport and communications (ICT) network;



promote the renaissance of the regions largest urban areas as dynamic international cities; and



encourage an integrated, partnership approach to economic development.

Impact The evidence base has quantified a number of key gross and net outputs arising from these regeneration interventions, with a focus on those that stimulate economic activity, which include jobs created and safeguarded, businesses created. Table 242 below presents the gross outputs from SWRDA’s regeneration interventions.

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Table 242: Gross outputs (achieved) from SWRDA’s regeneration through physical infrastructure interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved gross jobs created/ safeguarded

Achieved gross businesses created

Gross brownfield land (ha) reclaimed

Gross people assisted in skills development

Bringing land back into use S&P: Workspace

59.6

254

Public realm / other infrastructure (including transport and community S&P: Transport

9.6

551

S&P: Community

5.5

383

1,935

Image, events and tourism S&P: Tourism and Cultural projects

46.3

Eden

11.0

409

887

Cross-cutting regeneration interventions Physical Regeneration EIR

95.5

2,880

Rural Renaissance

16.6

830

11,992

244.1

5,814

132

115

13,927

Total

Source: PwC analysis based on SWRDA evaluation evidence

Table 243 presents the net outputs of SWRDA’s physical regeneration interventions, including private sector leverage . A number of these interventions are still in the early stages of implementation and therefore estimates of future potential jobs have been provided to give an indication of the future benefit stream of these interventions. As with any estimates of future impact, there is an implicit degree of uncertainty that should be recognised when interpreting these figures.

409

The gross and net jobs created presented in the evaluation are not attributed to proportion of SWRDA expenditure. The total gross jobs created by the project is 5,187 and net jobs 2,034 (p.61 of the evaluation). These figures have been attributed according to SWRDA proportion of total public sector and Millennium Commission funding (17.1%).

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Table 243: Net outputs (achieved and future potential) from SWRDA’s regeneration through physical infrastructure interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved net jobs created/ safeguarded

Future net potential jobs created

Achieved net businesses created

Achieved private sector funding leveraged (£m)

287

1,170

28.6

Bringing land back into use S&P: Workspace

59.6

Public realm / other infrastructure (including transport and community S&P: Transport

9.6

802

822

31.3

S&P: Community

5.5

1.2

395

836

26.8

Image, events and tourism S&P: Tourism and Cultural projects

46.3

Eden

11.0

410

348

411

86.9

Cross-cutting regeneration interventions Physical Regeneration EIR

95.5

440

Rural Renaissance

16.6

1,223

Total

244.1

3,501

412

866

582

24.7

3,700

119

781.5

Source: PwC analysis based on SWRDA evaluation evidence

In addition to the core gross and net outputs listed in the tables above Rural Renaissance also achieved the following: 

skills assists: gross 11,992, of which net 10,913;



people assisted into employment: gross 2063 of which net 1,879;



businesses assists: gross 7,153, of which 6,510 are net; and



workspace created: 18,763m2 of which 17,074 are net.

410

Includes public and Millennium Commission funding, excludes loans, donations and private sector funding.

412

The estimate of future potential jobs for Physical regeneration study is based on programme management data for the expected lifetime outputs. As a result of this approach the results presented may lead to an underestimate of impact as some of these figures have already been attributed between public sector funders, only includes direct jobs created, excluding indirect jobs created; and includes high estimates of expenditure from other public and private sector. In addition to this, in some instances, forecast outputs based on programme management data will already have been apportioned according to SWRDA expenditure. Therefore, it is likely that the net forecast figures contained in this Regional Annex - displayed on attributed basis - will represent a further underestimate for some projects.

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Additional outputs have also been achieved by two interventions that focused on the regeneration of the local area. These evaluations measured the net economic impact on the sub-region, and as such have 413 been excluded from the regional analysis above. As shown in Table 244 these two interventions have almost generated 250 net additional jobs in Bristol and Cornwall. At a regional level the net additional impact is likely to be lower as displacement of employment and workers is considered at larger spatial scale, which would be partially offset by greater knock-on, or multiplier impacts. Table 244: Gross and net outputs (achieved) from SWRDA’s sub-regional regeneration through physical infrastructure interventions (2002/03-2006/07)

Temple Quay

Sub-region

Gross jobs created / safeguarded

Greater Bristol

6,200

Net jobs created / safeguarded

Gross businesses created

Private sector leveraged (£m)

414

261

415

22.6

135

NMMC Cornwall 193 113 Source: PwC analysis based on SWRDA evaluation evidence

The overall additionality of the jobs created and safeguarded from SWRDA’s place interventions is 60%, and net additionality of businesses created is 90%. Both of these figures exceed the national RDA average of 45% and 50%, respectively. Table 245 summarises the impact on GVA (both achieved and future potential) of SWRDA’s physical regeneration interventions. The total net achieved annual GVA contribution of physical regeneration interventions is £120.5m. The total achieved and future potential annual GVA estimate is £140.3m. As with any forecasts, these estimates of future potential GVA are subject to some uncertainty, and not all of these estimates have been discounted, nor have constant prices been applied. Table 245: Outcomes from SWRDA’s physical regeneration interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved GVA (annual, £m)

Achieved GVA (cumulative, £m)

Achieved & future potential GVA (annual, £m)

45.7

Capital projects – employment land and premises Sites and premises EIR: Workspace

59.6

11.2

Public realm / other infrastructure (including transport and community Sites and premises EIR: Transport

9.6

40.1

41.1

Sites and premises EIR: Community

5.5

0.1

46.3

8.9

18.5

11.0

17.6

134.1

Promoting impact / culture and tourism Sites and Premises – Tourism / Cultural 416

Eden Project

Cross-cutting regeneration interventions

413

The leveraged funding has been retained in the regional level analysis as net adjustments for spatial level analysis have not been applied. 414

The net jobs created in Central Bristol is 815. These are total net impacts of the project, and have not be directly attributed to SWRDA. 415

This is the net estimate for Cornwall, the net estimate for Falmouth is 203 net jobs created.

416

The GVA result is for the South West region. The GVA estimates in the evaluation are not attributed to SWRDA. Therefore, attributed SWRDA figures have been calculated by multiplying GVA from total project by SWRDA proportion of public sector costs (37%).

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Expenditure covered by evaluations (£m)

Achieved GVA (annual, £m)

Achieved GVA (cumulative, £m)

Achieved & future potential GVA (annual, £m)

Physical Regeneration EIR

95.5

3.4

34.9

Rural Renaissance

16.6

39.2

Total

244.1

120.5

140.3

417

Source: PwC analysis based on SWRDA evaluation evidence

In addition to the results presented in Table 245 above, NMMC generated an annual GVA impact of £7m in Cornwall and the Physical Regeneration EIR also estimated net cumulative investment by businesses of £2.8m in the region. SWRDA’s physical regeneration projects generate a number of additional qualitative outputs that are not always captured in estimates of GVA. Regeneration projects that address issues of social exclusion and physically depressed areas can result in increased community cohesion and confidence in the local area. Many also achieve improved environmental outcomes, for example remediation of Mineral Tramways turned former mine sites into recreational tracks, and the iconic Eden project has successfully promoted education and awareness raising of environmental sustainability. In addition, SWRDA role in these projects also generates strategic impact by collaborating and influence the behaviour of key stakeholders, as outlined below. The NAO IPA specific noted SWRDA’s strong, well deserved, reputation in respect of major capital funded regeneration and physical development 418 projects. SWRDA’s Strategic Added Value 

Leading development of regional strategy: SWRDA led the development of the South West Sustainable Communities plan, titled The Way Ahead, which articulates how the region will respond to the national agenda on Sustainable Communities. A strategic and regional approach is necessary to address variety of socioeconomic issues that transcend local authority boundaries such as population growth, housing affordability and supply, peripherality and strategic transport links. The evaluation of The Way Ahead found that SWRDA demonstrated strong regional lobbying capacity, and enabled strong engagement between key central government infrastructure providers, private developer interests and local authority planning and regeneration departments. This has helped to bring about more debate and positive attitudes towards economic growth across the region and has led to successful negotiations with Treasury and DfT to establish the UK’s first regional infrastructure fund.



Improved quality of regeneration projects: SWRDA’s involvement in regeneration projects has helped to improve the quality and mix of outputs achieved. For example private developers initially planned to develop leisure facilities at Gloucester Docks in pursuit of the potentially high returns. SWRDA stepped in to provide funding support and help overcome planning impasse which had delayed any regeneration of the derelict Docks area. The Agency’s involvement in the project accelerated the development of a better quality and blend of outputs which is now a mixed use development including housing units and some ancillary retail. Without SWRDA involvement the ‘place’ making aspect of this regeneration project would not have been achieved.

Source: SWRDA Value for money Table 246 summarises the GVA to cost ratio of SWRDA’s physical regeneration interventions.

417

This figure has been calculated based on estimate presented in evaluation of 866 future potential jobs, multiplied by the average GVA per worker of £40,315. 418

National Audit Office 2006, Independent Performance Assessment: South West Regional Development Agency, p.4

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Table 246: Achieved GVA to cost ratios from SWRDA’s regeneration through physical infrastructure interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved GVA (annual):cost ratio

Achieved GVA (cumulative):cost ratio

Future achieved & potential GVA (annual):cost ratio

59.6

0.3

1.1

Brining land back into use Sites and premises EIR: Workspace

Public realm / other infrastructure (including transport and community) Sites and premises EIR: Transport

9.6

4.2

4.3

Sites and premises EIR: Community

5.5

0.02

Promoting image, events, tourism National Maritime Museum of Cornwall

7.7

0.9

Sites and Premises – Tourism / Cultural

46.3

0.3

0.6

Eden Project

11.0

1.6

7.5:1

Cross-cutting regeneration interventions Physical Regeneration EIR

95.5

0.1

Rural Renaissance

16.6

1.5

Total

251.8

1.1

419

0.8

Source: PwC analysis based on SWRDA evaluation evidence Note: This figure is calculated based on the expenditure and annual GVA figures stated above.

The annual achieved GVA to cost ratio for SWRDA’s physical regeneration interventions is 0.8:1, which indicates that on average, investment costs would be covered within two years. The GVA returns reflect the long-term nature of regeneration and capital investments. At the time of evaluation many of these interventions were at the beginning of their lifecycle and are yet to reach the stage where economic impacts will be generated. For the estimates of future potential GVA provided by the Sites and Premises EIR, the GVA to cost ratio increases to 0.9:1. These are short to medium term forecasts and may not capture the full lifetime impact of these interventions. The overall annual achieved GVA to cost ratio of 0.8 for SWRDA’s place interventions, slightly higher than the RDA average of 0.7:1. At a sub-theme level there are a number of interventions that exceed the RDA national average, including: Transport: the returns of SWRDA’s Sites and premises EIR: Transport intervention is 14 times higher than the RDA national average of 0.3, however the latter also includes public realm and community infrastructure projects; Promoting image and tourism: The majority of SWRDA’s tourism interventions also exceed the national RDA average of 0.5:1, with the exception of the tourism projects evaluated by the Sites and premises EIR.

419

Net expenditure figures stated in the evaluations are used to calculate the return on investment, which are Physical regeneration £29.0m and Sites and Premises £99.7m.

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Cross-cutting regeneration initiatives: the 1.5:1 annual GVA to cost ratio of Rural Renaissance exceeds the RDA national average of 0.5. This is likely to reflect the inclusion of business and people interventions in the Rural Renaissance intervention. On the other hand, a number of interventions are lower than the national average, most notably Physical Regeneration and Sites and premises EIR: Workspace, which both make up a significant proportion of expenditure. Table 247 summarises one measure of the value for money of SWRDA’s interventions to promote regeneration through physical infrastructure, i.e. cost per achieved and future potential net job. Table 247: Cost per net job (achieved and future potential) from SWRDA’s regeneration through physical infrastructure (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved cost per net job (£)

Future potential cost per net job (£’000)

Achieved cost per net business created (£)

Leverage ratio

141,000

38,500

1.27 m

0.7

Bringing land back into use S&P: Workspace

59.6

Public realm / other infrastructure (including transport and community) S&P: Transport

9.6

12,000

11,700

9.6m

3.3

S&P: Community

5.5

5.2m

0.2

0.9

Promoting image, events, tourism S&P: Tourism / Cultural

46.3

78,000

40,000

7.68m

Eden Project

11.0

23,800

4.9

420

Cross-cutting regeneration interventions Physical regeneration

95.5

59,400

54,800

Rural 421 Renaissance

16.6

21,177

1.5

Source: PwC analysis based on SWRDA evaluation evidence

In addition to the value for money indicators provided in the table above, the Physical Regeneration study also estimated private sector leverage ratio of 22.9:1 over the lifetime of interventions, which includes future potential leverage. There is considerable variation in the value for money of these interventions, from £12,000 per net achieved job for transport interventions up to £141,000 for workspace interventions. Interventions have lower costs per job for public realm and other infrastructure (£118,945), promoting image, events and tourism (£79,133) and cross-cutting interventions (£79,514). However, bringing land back into use evaluation exceeds the national average of £42,101 reflecting the number of interventions evaluated that were at the beginning the development lifecycle.

420

The leverage ratio is calculated on £17.93m of SWRDA expenditure, which includes expenditure outside of the relevant period, as a proportion of total public sector (£48.47m) and Millennium Commission (£56.37m) funding Private sector loans (£16.8m), donations (£9.7m) and other private (£2.7) funding are not included. 421

Unit costs for Rural Renaissance have been calculated based on net expenditure of £25.9m, 1,223 net jobs created and £39.2m of additional GVA.

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Performance against objectives Table 248 summarises the performance against objectives of SWRDA’s interventions to promote regeneration through physical infrastructure. All of the evaluations of individual projects provide an assessment of performance against objectives and / or rationale for intervention. All of these interventions that provide an assessment, have met or largely met their objectives. The evaluation of the Eden project notes that it has exceeded initial targets for visitor numbers, and has achieved its core objectives of becoming a world class visitor destination and developing range of educational programmes. In terms of expenditure, it has not been possible to assess the objectives of the majority of activities which are covered by the Physical Regeneration and Sites and Premises Economic Impact Reviews. As stated above these two studies cover multiple individual projects, and as such it is not possible to infer the performance of sampled case studies to the total population of projects. The Way Ahead is an interim evaluation, which notes that the Sustainable Communities Plan and associated interventions have begun to make progress in achieving objectives, but is not able to provide definitive assessment against objectives. Table 248: Performance against objectives from SWRDA’s regeneration through physical infrastructure (2002/03-2006/07) Expenditure covered by evaluations (£m)

Performance against objectives

The Eden Project

11.0

Exceeded

Rural Renaissance

16.6

Met

Creating Excellence

2.5

Met

Temple Quay

1.9

Met

National Maritime Museum of Cornwall

7.7

Met

167.7

n/a

The Way Ahead

2.6

n/a

Physical Regeneration

95.5

n/a

Sites and Premises

Source: PwC analysis based on SWRDA evaluation evidence

People and skills interventions Rationale Over the past 10 years, the South West has achieved above national average rates of economic activity and employment, and has historically had the lowest unemployment rate of all the regions. Underneath this overall economic activity, skill levels in the South West vary considerably across the region, with some areas reporting relatively low levels of educational attainment. Spatially, this tends to correspond with places where multiple deprivation is high. The key issues that the Agency has sought to address include: 

quality and level of employment;



under utilisation of graduate skills;



attracting and retaining higher levels of skills in the region; and



inter-regional disparity in skills levels.

In response to these challenges there is a strong rationale for the RDA to support the development of the skills and employability of the workforce to increase the region's productivity and help close the gap with the national average. The key market failure issues identified by evaluations include:

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

individuals may have limited access to finance training, or may lack sufficient information about the potential returns resulting in a sub-optimal level of investment in education and training;



firms may be reluctant to fund investment in skills and training due to the risk that the individuals may leave, and that individuals may not want to meet the cost of workplace training if there is no demand, and hence return for these skills outside the firm.

One project evaluated sought to achieve equity objectives of increasing employment of older workers (over 45) by providing employment support and addressing employers’ perceptions and recruitment practices. 422

There are seven evaluations that provide evidence of the impact of SWRDA’s people and skills 423 activities, as set out in Table 249 which cover £40.1m of expenditure. This represents around 40% of SWRDA expenditure between 2002/03 and 2006/07 that has been classified as people and skills. The remaining evaluated skills interventions are included in business, place and other expenditure. Skills and training interventions were implemented in the marine, advanced engineering, food and drink, and aerospace in order to promote the productivity of priority sectors. Table 249: Summary of SWRDA’s people and skills interventions Intervention theme/sub-theme

Evaluation

Expenditure covered by evaluations (£m)

Matching people to jobs (individual skills development)



Skills EIR: Skills development for individuals

2.0



South West Opportunities for Older People (SWOOP)

0.6

Skills workforce development



Skills EIR: Skills development for firms



Advanced Engineering Skills

2.9



Skills EIR: Infrastructure

6.5



Combined Universities in Cornwall



Genesis – Somerset Sustainable Construction Centre

1.2



Relocation of Gloucester FE College

1.1



Strengthening Community Foundations

0.1

Education infrastructure development

Other

11.0

14.7

Total

40.1

Source: PwC analysis based on SWRDA evaluation evidence

The people and skills interventions have been implemented in line with the 2003 - 2006 Corporate Plan objectives: 

improve workplace skills and learning, deliver a coherent skills development framework;



raise individual’s aspirations and skills for work;



encourage more small business and social enterprise in disadvantaged areas; and



ensure there is equality of access to work, training and business advice.

422

Skills and Learning EIR provides three estimates of sub-theme impact, therefore as shown in Table there are a total of nine estimates of impact. 423

This figure does not match the total shown in coverage analysis in Table as some of the activities in these evaluations will cover business or place spend, and some of the evaluated people expenditure is contained in business, people or other evaluations.

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Impact Table 250 summarises the relevant expenditure and key gross outputs achieved through SWRDA’s people and skills interventions. The main outputs are jobs created / safeguarded, skills assists, people assisted into employment and businesses assists. Table 250: Gross achieved outputs from SWRDA’s people and skills interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Gross jobs created/ safeguarded

Gross skills assist

Gross people assisted into employment

Gross business assists

Matching people to jobs Skills EIR: Individual skills support

2.0

1,944

638

SWOOP

0.6

137

416

368

11.0

22,653

4,862

2.9

116

4,296

Skills and workforce development Skills EIR: Skills development for firms AESP

Supporting the development of educational infrastructure Skills EIR: Infrastructure

6.5

8,146

302

Gloscat

1.1

427

Genesis

1.2

14.7

173

387

0.1

40.1

716

37,679

CUC

424

Other people interventions Strengthening Community Foundations Total

468

6,215

Source: PwC analysis based on SWRDA evaluation evidence

The net outputs of SWRDA’s people and skills interventions are summarised in Table 251 below. Evaluations have focused on quantified outputs that lead to increased economic activities, which include 1,861 net additional jobs created/ safeguarded and 6,909 net additional skills assists.

424

The evaluation did not attribute the figures to SWRDA. Therefore, this has been calculated by multiplying the GVA analysis by proportion of SWRDA expenditure 12%. The regional outputs for the total project are 1,442 gross jobs created / safeguarded of which 1,291 net.

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Table 251: Net achieved outputs from SWRDA’s people and skills interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Net jobs created/ safeguarded

Future potential jobs created /safeguarded

Net skills assist

Net business assists

Matching people to jobs Skills EIR: Individual skills support

2.0

SWOOP

0.6

11.0

1,398

2.9

2,365

Skills and workforce development Skills EIR: Skills development for firms AESP

Supporting the development educational infrastructure Skills EIR: Infrastructure

6.5

4,201

131

Gloscat

1.1

Genesis

1.2

14.7

155

318

0.1

40.1

1,861

6,909

159

425

CUC

426

Other people interventions Strengthening Community Foundations Total

Source: PwC analysis based on SWRDA evaluation evidence

The average additionality of jobs created and safeguarded for SWRDA’s people and skills interventions is 427 38%, and the average additionality of skills assists is 54%. There is wide variance in the additionality of jobs created / safeguarded generated by people and skills interventions, from 11% for relocation of Gloucestershire College to 90% for Combined Universities in Cornwall. There does not appear to be a clear trend between the additionality of interventions in different sub-themes, and the analysis of additionality is limited by the fact that the Skills EIR, which covers a large proportion of expenditure, does not provide gross employment figures. There is much less variability in the additionality of skills assists. The average additionality of jobs and skills assists generated by SWRDA’s people and skills interventions are both lower than the average national RDA result of 48% and 62%, respectively. Again there is variability between SWRDA additionality of outputs compared to the national average, with no clear pattern within the sub-themes. Table 252 summarises the outcomes of SWRDA’s people and skills interventions. The total annual GVA is £88.1m. Future potential impacts have been estimated for the infrastructure projects evaluated by the

425

These figures have not been attributed to SWRDA.

426

The evaluation did not attribute the figures to SWRDA. Therefore, this has been calculated by multiplying the outputs by proportion of SWRDA expenditure (12%). The regional outputs for the total project are 1,442 gross jobs created / safeguarded of which 1,291 net. 427

These average additionality ratios are calculated only on interventions that provide an estimate of both gross and net outputs.

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Skills EIR. Future potential impacts have not been estimated for the revenue projects which would generally be expected to generate the majority of impacts within one to three years. Table 252: Outcomes (achieved) from SWRDA’s people and skills interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved GVA (annual, £m)

Achieved GVA (cumulative, £m)

Future potential GVA (annual, £m)

2.0

4.8

AESP

2.9

0.5

3.1

Skills EIR: Skills development for firms

11.0

67.5

6.5

9.0

9.1

1.1

3.3

14.7

2.8

18.5

Strengthening Community Foundations

0.1

0.15

0.4

Total

38.3

88.1

Matching people to jobs Skills EIR: Skills development for individuals

Skills and workforce development -

Supporting the development educational infrastructure Skills EIR: Infrastructure 428

Gloscat CUC

429

Other people interventions -

430

9.1

Source: PwC analysis based on SWRDA evaluation evidence

In addition to the estimates summarised in Table 252 the evaluation of Genesis also estimated gross GVA of £220,000. As net calculation has not been included, this estimate has not been included in the above estimate. In addition to the quantitative outcomes of SWRDA’s people and skills interventions, a number of strategic and qualitative impacts have been achieved, as noted below. SWRDA’s Strategic Added Value 

428

Support skills development in priority sectors: SWRDA have responded to the skills needs of the marine and maritime industry, a priority sector for the region, by developing three centres of marine training excellence which provide all marine businesses with appropriate short courses, events or apprentices. This initiative was developed in response to a report commissioned by SWRDA to review the skill needs for the sector. The training network is based on the need of the a ‘prime’ contractor and their suppliers. The training network has been regarded by stakeholders as an example of national best practice which has exceeded expectations. Since the development of the network there has been an increase in the number of local marine engineering apprentices and growth in employment at Sunseeker, which is one of the UK largest exporters.

These figures have not been attributed to SWRDA.

429

The evaluation did not attribute the figures to SWRDA. Therefore, this has been calculated by multiplying the GVA analysis by proportion of SWRDA expenditure 12%. 430

This cumulative figure incorporates the one off GVA estimate of £200,000

431

The current South West Skills Strategy covers 2006 – 2009, and follows the South West Framework for Regional Employment and Skills Action (FRESA) which was the previous key skills strategy document for the region.

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

Strategic role in addressing skills needs of the region: SWRDA’s interventions in skills development have sought to complement the activities of the Learning and Skills Council, which is the primary public agency delivering skills programmes in the region, particularly for individuals. The RDA has focused its relatively limited resources in providing gap funding particularly with respect to business investment in skills development, and in undertaking a strategic role to influence and align the resources of other relevant skills organisations in the region. This latter objective is undertaken through SWRDA's key role in the Regional Skills Partnership and through funding and guiding 431 research and analysis to inform reviews of the South West Skills Strategy.

Source: SWRDA

Value for money Table 253 summarises the GVA to cost ratios from SWRDA’s people and skills interventions. The aggregate annual GVA to cost ratio is 2.3:1. Table 253: Achieved GVA to cost ratios from SWRDA’s people and skills interventions (2002/032006/07) Expenditure covered by evaluations (£m)

Achieved GVA (annual):cost ratio

Achieved GVA (cumulative):cost ratio

2.0

2.3

AESP

2.9

0.2

1.7

Skills EIR: Skills development for firms

11.0

4.8

Future potential GVA (annual):cost ratio

Matching people to jobs Skills EIR: Skills development for individuals

Skills and workforce development 432

Supporting the development of educational infrastructure Skills EIR: Infrastructure

6.5

2.4

Gloscat

1.1

CUC

14.7

0.2

Strengthening Community Foundations

0.1

1.5

Total

38.3

2.3

433

a a

1.4

1.2

Other people interventions a

Source: PwC analysis based on SWRDA evaluation evidence Notes: a) These GVA:cost ratios have been calculated by PwC based on the information in Table 252 above.

SWRDA’s people and skills interventions have demonstrated high returns compared with the average for RDAs of 0.9. The skills and workforce development intervention generated the highest returns, which is six times more than the RDA national average annual GVA of 0.4:1. This is partly due to the inclusion of estimates of the additional productivity generated by skills and learning initiatives in SWRDA evaluation evidence, which is not included in the national RDA analysis.

432

Cumulative GVA: cost ratio assumes that benefits are sustainable for three years from the end of the project, and have been discounted at a rate of 3.5% in line with Treasury Guidance. 433

These figures have not been attributed to SWRDA.

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Table 254 summarises the unit costs of SWRDA’s people and skills interventions. These figures are from evaluation evidence where available, and have been calculated based on expenditure and output information where not provided. Table 254: Achieved cost per net output from SWRDA’s people and skills interventions (2002/032006/07) Expenditure covered by evaluations (£m)

Achieved cost per net job (£)

Cost per net skills assist (£)

2.0

22,900

AESP

2.9

40,278

Skills EIR: Skills development for firms

11.0

7,900

Matching people to jobs Skills EIR: Individual skills support Skills and workforce development a

1,226

Supporting the development of educational infrastructure Skills EIR: Infrastructure

6.5

41,900

1,595

Genesis

1.2

Gloscat

1.1

23,404

CUC

14.7

94,839

46,226

Strengthening Community Foundations

0.1

19,500

4,700

Total

38.3

Other people interventions

Source: PwC analysis based on SWRDA evaluation evidence Note: These unit costs have been calculated by PwC based on the information in Table 252 above. All other cost ratios are from evaluations.

There is relatively wide variability in the unit costs of people and skills interventions. The unit costs of educational infrastructure projects are generally higher than interventions to matching people to skills and skills development for firms, which reflects the long-term nature of the infrastructure projects. Almost all of the jobs generated by SWRDA’s people and skills interventions were delivered at a lower cost compared to national RDA average of £43,302. Interventions in the majority of sub-themes are also delivered more cheaply than the national RDA averages, matching people to jobs (£49,215), skills and workforce development (£105,268) and other people interventions (£33,995). The cost per job of supporting the development of educational infrastructure varies compared to the national RDA average of £33,995. Performance against objectives Table 255 summarises the performance against objectives of SWRDA’s interventions in relation to people and skills. The majority of individual project evaluations provide an assessment of performance against objectives and / or rationale for intervention. All of these interventions, that provide an assessment, have met or largely met their objectives. In terms of expenditure, around 50% has not been assessed against objectives. As with the other EIR’s, it was not possible to assess the performance of the multiple projects in the Skills and Learning EIR. The South West Opportunities for Older People is an interim evaluation, and is will assess performance against objectives in the final report.

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Table 255: Performance against objectives from SWRDA’s regeneration through people and skills interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Performance against objectives

Relocation of Gloucester FE College

1.1

Met

Advanced Engineering Skills

2.9

Largely met

Strengthening Community Foundations

0.1

Largely met

Combined Universities in Cornwall

14.7

Largely met

Genesis

1.2

Largely met

South West Opportunities for Older People

0.6

n/a

Skills and Learning EIR

19.4

n/a

Source: PwC analysis based on SWRDA evaluation evidence

Other SWRDA interventions This section contains information on activities that could not be classified as specific business, people or place interventions. These include Single Regeneration Budget (SRB) and regional research and information services. 434

SWRDA invested £55.2m in the SRB programme over the period 2002/03 to 2006/07 . SRB involved the delivery of a diverse range of interventions spanning business, physical regeneration and people and skills, focused on specific geographical areas within the South West. The rationale for SRB centred on the Government’s desire to tackle social exclusion and promote equality of opportunity. The focus of support was on the most deprived communities in England, with the aim of reducing the gap between these areas and the rest of England, and between different groups in society. Within the South West, the SRB programme focused on deprived areas attempting to address the pockets of deprivation within the region through a focus on skills and business support initiatives. Impact Table 256 summarises the net achieved outputs from the SRB programme, which has primarily resulted in jobs created / safeguarded, new businesses created, people assisted in skills development and brownfield land remediation. Table 256: Gross and net SRB outputs in the South West (2002/03-2006/07) Jobs created

Jobs safeguarded

New businesses at 12 months

Brownfield land (ha)

People assisted in skills development

Businesses assisted

Gross outputs

4,031

8,040

650

4,855

49,039

12,937

Net outputs

1,653

3,457

287

2,379

27,462

5,563

Source: PwC analysis based on SWRDA evaluation evidence

SWRDA has also invested £2.0m in regionally based research and information services to provide a reliable, accurate and timely analysis. The RDA investment in providing such services ensures greater cost efficiency and consistency, compared to each regional public agency developing their own evidence base. These activities have improved the quality and analysis of regional trends, however, due to the lack of direct market activity from these projects, not direct quantified economic outputs were generated.

434

Evaluation of the Single Regeneration Budget programme in six English Regions, August 2008.

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The region significantly exceeded targets for the number of people receiving training and obtaining qualifications, the amount of land improved or reclaimed for development and the number of businesses surviving for one year. The region performed to target in terms of jobs created and safeguarded but significantly under-performed in terms of community enterprise start-ups. The SRB meta-evaluation did not provide a quantitative assessment of the interventions’ net impact on GVA. An indication of the potential scale of the impact on GVA can be gleaned by considering the contribution of the jobs created and safeguarded to GVA. Assuming that each job generated in the South West contributes the average GVA per worker (£40,315), then this would imply that the SRB programme in the region will have added £206.0m to the South West economy over its existence. If the total GVA contribution is divided over the four years of the programme, the annual GVA contribution would be £51.5m. The evidence base assessed by the evaluation does highlight some qualitative outcomes from the interventions in the South West. These indicate that there has been a positive outcome in improving access for disadvantage people, reducing crime, drug abuse and community safety. Outcomes in relation to employment, education and skills appear to be more mixed. The evaluation concludes that partnership working and community engagement are considered to have been noteworthy achievements of the SRB programmes delivered in the region. Stakeholders felt the programme had been successful at developing and strengthening community ties and is considered to have fostered closer working relationships between various agencies, bringing together key partners from the public, private and voluntary sector. Table 257 presents the performance against objectives of SWRDA’s other interventions, of which all have met or largely met their objectives. Table 257: Performance against objectives from SWRDA’s other interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Performance against objectives

ONS Regional Presence

435

Met

SRB

96.1

Largely met

Business Economy Module and Skills Learning Intelligence Module

2.0

Largely met

Source: PwC analysis based on SWRDA evaluation evidence

National programmes Besides its own interventions, SWRDA has been responsible for the management and delivery of nine of the ten national programmes which have been delivered within parameters closely defined by central government departments. Although the available evaluation evidence on national programmes does not disaggregate gross outputs at a regional level, we have been able to estimate the likely employment impact of two of these programmes on the South West (this was undertaken from Business Link and Manufacturing Advisory Service436). This has been done by dividing SWRDA spend on the programme by the regional cost per job437 and then making allowances for displacement, leakage and multiplier effects. In addition, SWRDA have also evaluated the impact of the Grants for R&D and the findings from these evaluations have also been used to assist in assessing the impact of national programmes. Table 258 summarises SWRDA’s spend in the relevant period on each of the national programmes and summarises the estimated impacts where these are available. Three programmes have resulted in 3,475 435

Funding for ONS Regional Service is provided centrally before funding is allocated to the RDA’s, and as such is not counted as direct RDA expenditure. 436

The interim evaluation of SW Manufacturing Advisory Service undertaken in 2005 did not find any employment impact as a result of the intervention, therefore the national evaluation has been used to estimate the likely employment impact of the programme. 437

Based on the Office of National Statistics 2006 workplace GVA per worker for the South West of £ 40,315.

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net additional jobs created / safeguarded. It is estimated that 245 future potential jobs may be created by the Grants for R&D interventions which reflects the long-term nature of investment in research and development activities. The Grants for R&D evaluation has estimated that SWRDA’s investment in the programme has generated net additional annual GVA of £806,300, which indicates an annual return on investment of 0.3. Table 258: Estimated impact of SWRDA’s spending on national programmes (2002/03 and 438 2006/07) National programme

SWRDA spend – (£m)

Net additional jobs

Potential additional jobs

Business Link

30.6

2,792

Grants for R&D

2.4

245

Manufacturing Advisory Service

5.2

663

Phoenix Fund

0.7

Rural Development Programme for England (& Sustainable Food and Farming Strategy)

3.0

Selective Finance for Investment

21.9

Coalfields Programme

1.5

Regional Tourist Board Support

3.7

Market Town Initiative

5.8

Total

38.2

3,475

245

Source: PwC analysis based on SWRDA evaluation evidence

438

The outputs for Grants for R&D have been derived from an evaluation of the programme within the region. All other outputs have been estimated by applying the estimates from the national evaluations to the expenditure in the South West.

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Yorkshire Forward Overview 

Since its inception in 1999 YF has spent approximately £2bn on a range of interventions designed, individually or collectively, to stimulate business development and competitiveness, promote regeneration through physical infrastructure and enhance employability and skills.



This study focuses on the impact of the £1.2bn spent by YF between 2002/03 and 2006/07. This includes expenditure on SRB of £331m but excludes spending on national programmes of £445m.



We have reviewed 33 evaluations covering spend of nearly £750 million by YF between 2002/03 and 2006/07 (or 62.5% of the relevant expenditure of £1.2 bn).

Impact 439



Those projects that have been evaluated show that YF has generated significant outputs already

–

over 40,000 jobs have been created and safeguarded, of which 57% are estimated to be additional at the regional level;

–

over 2,000 businesses have been assisted, of which 32% are estimated to be additional;

–

just over 330 businesses have been created, of which 38% are estimated to be additional;

–

over 350 hectares (ha) of land has been remediated, of which 49% are estimated to be additional; and

–

over 74,000 net skills assists have been delivered, of which 55% are estimated to be additional.



Significant future potential outputs are also anticipated across intervention themes as schemes are completed although these estimates are more uncertain.



In addition to the impact of its project and programme spend, SAV is a key element of YF’s impact, particularly in terms of providing a strategic focus and leadership (Holbeck Urban Village), influencing and providing synergy amongst its partners and stakeholders (Graduates Yorkshire), improving linkages and partnership working (Directions Finningley), leveraging private sector investment (EBusiness Unlimited), and co-ordinating responses to the regions challenges (Flood Response).

Value for money 

The highest achieved net GVA return in the evaluation evidence is as a result of a business intervention, with an achieved average return of 7.6 to 1. The lowest return is also from a business 440 intervention with an achieved average return of 0.6 to 1 .

Performance against objectives 

The interim nature of many evaluations means that many have not assessed performance against objectives. Of those which have made such an assessment most have produced a mixed performance against their objectives.

439

The outputs listed relate only to those YF interventions for which both gross and net outputs are available to provide an estimate of additionality. They will, therefore, under-represent the Agency’s total outputs. 440

There are, however, significant future potential benefits associated with this project (Broadband Gap & NYnet).

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Context Overview of Yorkshire & the Humber Yorkshire and Humber is the fifth largest region in England in terms of land area covering 15,512 sq km with a population of over 5 million people. It contains a highly diverse geography and culture including a rural area the size of Northern Ireland, three National Parks, and 22 Local Authority Districts in four functional sub regions. The region includes the cities of Bradford, Hull, Leeds, Sheffield and York, a wealth of sizeable towns, more remote rural communities, and coastal towns and resorts. This diversity is now beginning to be matched in the region’s economic structure. Over the last decade, the Yorkshire and Humber region has made significant economic progress. From a largely traditional industrial base comprised of coal, steel and textile industries, the region has restructured into a dynamic diversified economy comprising over 300,000 businesses and an estimated 2,620,000 employees across a variety of industrial sectors. Between 2002 and 2007, regional GVA increased by 21%, to £82.1bn, marginally above the UK’s trend growth over the same period. The region’s infrastructure is pivotal to this economic growth and includes 3,700 km of motorways and major roads, five ports, high speed railways and easy access to six airports. Over the 5 year period from 2001 to 2006, the region’s employment grew by 5.5%, above the English average of 3%. The main catalyst for this expansion has been growth in financial and business services and public services. In 2006, these sectors employed approximately 36% of the region’s workforce. This has been augmented by the emergence of new growth sectors in creative and digital technologies, environmental goods and services, and advanced engineering whilst the region’s construction sector, underpinned by the UK property boom, has enjoyed strong growth. Though manufacturing industry is in decline, it continues to be a significant employer accounting for 14% of the region’s workforce. The sector is increasingly characterised by companies producing high value-added products for domestic and global markets. Specialist steel companies in Sheffield exemplify the potential that exists within the region to commercialise knowledge. However, this regional prosperity masks the entrenched problems facing the region. GVA per employee in 2008 stands at approximately £32,100 compared to a UK average of £35,900 . Looking forward over the next 5 years, without significant intervention, this labour productivity gap is unlikely to close as regional forecasts anticipate baseline GVA per employee growth at 1.9% below the UK average. Skill levels too continue to fall behind the English average. In 2007, the proportion of the region’s working-age population qualified to NVQ level 4+ was 4.5% below the English average, whilst the percentage of the region’s working-age population with no qualifications was 14.5%, 1.6% above the number recorded in England. Yorkshire and Humber’s productivity and employment potential is also inhibited by the enterprise and innovation gaps that exist between the regional and UK averages. In 2006 the VAT registration rate per 10,000 residents was 31 compared to a UK average of 37, whilst as a proportion of GVA, investment in business research continues to fall short of the English average. The region exhibits marked contrasts in the economic fortunes of its sub-regions and diverse localities. The decline of traditional industry has left a legacy of uneven development, which continues to define social and economic outcomes within our communities. The Index of Deprivation 2007 shows that 17% of Yorkshire Humber’s Super Output Areas were in the 10% most deprived in England and 28% are in the 20% most deprived. Deprivation, low skills and enterprise levels, and high levels of worklessness and incapacity benefit claimants are concentrated within parts of South Yorkshire such as Rotherham and Barnsley and the inner-city suburbs of the region’s large cities such as Leeds and Sheffield. Most recently, the impacts of the credit crunch and economic slowdown are a major cause for concern. A significant proportion of the region’s economic strengths lie in the financial services, manufacturing and property sectors, all of which have been greatly affected by the recession. ILO unemployment has recently increased and in September 2008 stood at 6.8%, an increase of 1.5% on the previous year. As the economic slowdown deepens, the regional challenge over the short term will be to focus support on business to foster economic resilience and competitiveness and assist individuals through the downturn. Yorkshire Forward’s Purpose and strategy.

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YF’s purpose and strategy As the Regional Development Agency, Yorkshire Forward is tasked with working with partners across the region to meet these challenges, improve the economy and respond to economic shocks. The Agency has produced the Regional Economic Strategy (RES), a ten year blueprint that outlines the region’s shared vision to “be a great place to live, work and do business, that fully benefits from a prosperous and sustainable economy”. YF has led the development of three Regional Economic Strategies (RESs). The first RES, ’Advancing Together towards a World Class Economy’, set out a vision for the region: ‘to create a world-class, prosperous sustainable economy’, for the period 2000 to 2010. In meeting this vision, three key aims were identified: 

releasing and enhancing the potential of all Yorkshire and Humber’s people to achieve a healthy, learning region and social inclusion;



growing existing and new businesses to achieve high and stable levels of economic growth and jobs; and



utilising the full potential of Yorkshire and Humber’s physical and cultural assets and conserving and enhancing its environment to achieve a balanced, sustainable economy.

In addition, to fulfil these aims the first RES had six key strategic objectives: 

grow the region’s businesses in key economic sectors to create a radical improvement in their competitiveness and contribution to the region’s wealth;



achieve higher business birth and survival rates to create a radical improvement in new, competitive businesses that last;



attract and retain more investment by providing the right product for investors and more effective marketing of the region;



radically improve the development and application of education, learning and skills, particularly high quality vocational skills;



implement targeted community-based regeneration programmes to improve the living standards of the regions most deprived, ethnic, young and excluded communities in urban and rural areas including the former coalfields; and



get the best out of the region’s physical assets and conserve and enhance its environmental assets.

The second RES set out the direction for the period from 2003 to 2012. It retained the strategic aims and objectives set out in the first RES but provided greater focus on linking rationale with action and emphasised that the strategy is for the region (not just the Agency). The most fundamental change in the second RES was the recognition that sustainability was an overarching concept and a cross-cutting theme for all future actions. The most recent RES, which covers the period from 2006 to 2015, is based on three core aims: to realise the potential of all the region’s people; grow existing and new businesses; and protect, enhance and utilise the region’s environment. Six key objectives translate these aims into action on the ground: 

more businesses that last;



competitive businesses;



skilled people - benefiting business;



connecting people to good jobs;

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

enhanced transport, infrastructure and the environment; and



stronger cities, towns and rural communities.

Yorkshire Forward receives Government and EU funds to help deliver key elements of the RES, aligning its interventions to meet the RES strategic objectives. As a business-led, non-political, objective organisation with a long-term Regional Economic Strategy, Yorkshire Forward is able to provide strategic leadership that galvanises the public and private sector to invest around a set of clear and distinct economic priorities tailored to the different needs of the region. The Agency is geared up to respond swiftly and effectively to economic shocks that cross administrative and policy boundaries and that have a differential impact across the country. Yorkshire Forward’s Corporate Plan sets out how the organisation will undertake this role and contribute to the region’s economic goals as set out in the RES. The current Corporate Plan covers the three year period 2008-2011 and adopts a stronger programme approach to delivery. It sets out five Corporate Objectives to help deliver the RES: 

championing RES delivery;



helping people to access good jobs, skills and transport;



helping businesses to start-up, grow and compete through innovation;



regenerating cities, towns and rural communities; and



improving Yorkshire Forward’s capacity.

In order to deliver the corporate plan, a series of 11 Policy Products Ranges (PPRs) have been developed to provide the rationale and basis for commissioning all of Yorkshire Forward’s policy priorities: skills, transport, economic inclusion, competitiveness, enterprise/access to finance, international business, urban renaissance, rural renaissance, lower carbon economy, property, marketing the region through tourism and major events. The PPRs are delivered through Geographic Programmes which are being developed with each of the region’s local authorities and will set out how and where the 11 PPRs will be delivered ensuring that there is full integration with other investments. In total, 15 Geographic Programmes will be developed each underpinned by strong economic analysis in the form of an agreed economic masterplan. Each Geographic Programme will comprise three main elements: 

the Policy Product Ranges that are to be delivered through a Local Authority contract;



those Policy Product Ranges that will be delivered regionally, but will have a local impact; and



investment within a locality that does not require any single-pot investment. The initial Geographic Programmes will cover the period 2009/10 to 2013/14 with five-year rolling targets and annualised allocations. The contractual relationship with Local Authorities will be primarily in the areas of Urban and Rural Renaissance, Property and more limited Skills and Inclusion Policy Product Ranges. All other Policy Product Ranges will be contracted regionally.

YF’s core outputs within the current corporate plan cover: jobs created or safeguarded; people assisted to get a job; new businesses created and surviving 12 months; businesses assisted to improve their performance; businesses assisted via collaboration with the UK knowledge base; public and private regeneration investment levered; hectares of brownfield land reclaimed and redeveloped; and people assisted in their skills development (skills assists). These core outputs, together with the organisation of work, form the context for evaluating YF’s activity and impact. YF’s profile Table 259 provides an analysis of YF’s overall spending since its establishment. This expenditure is broken down into various categories namely programme/project expenditure by year, administrative

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spend and expenditure on ten national programmes. Programme/project spend is also broken down across the three themes of business, place, people. In addition, other denotes an intervention where it is not possible to categorise the programme expenditure uniquely by business, place or people, or where the intervention cuts across two or more of these categories The Agency’s relevant expenditure for this report (i.e. the project and programme expenditure by YF in the period between 2002/2003 and 2006/2007 other than on national programmes and administration spend) is highlighted in Table 259 below. It is interesting to note the change in the distribution of expenditure over the relevant period. Business interventions account for an increasing proportion of total spend over the relevant period, while other interventions have accounted for a decreasing proportion. The proportion of spend accounted for by place and people interventions has fluctuated quite significantly from year to year over the relevant period. Since its establishment, YF has spent £1,982.3m on interventions (rather than administration), of which £1,171.2m was spent on YF (rather than national) interventions in the ‘relevant period’ and is, thus, the primary focus of this report (see shaded area in Table 259). Table 259: Analysis of YF spend by year and by category of expenditure (£m) Business

Place

People

Other

National programmes

Admin

Total

1999/2000

3.5

100.0

38.7

11.9

154.1

2000/2001

5.1

111.7

33.9

14.2

164.9

2001/2002

0.5

11.7

7.0

126.7

69.9

14.6

230.4

2002/2003

21.6

65.1

28.2

116.2

44.5

16.3

291.9

2003/2004

45.2

38.9

36.2

94.4

53.3

19.1

287.1

2004/2005

66.7

69.7

62.8

64.2

56.8

17.1

337.3

2005/2006

61.0

85.9

41.4

38.6

70.2

19.3

316.4

2006/2007

77.8

76.1

52.6

28.6

77.6

18.6

331.3

272.8

347.4

236.8

680.4

444.9

131.1

2,113.4

Total

Source: PwC analysis of Yorkshire Forward data

Overall, YF has usable evaluation evidence covering 64% (£747.1m) of its relevant expenditure based on 33 evaluations. As Table 260 below indicates, the YF evaluation evidence provided greater than 60% coverage across the business, place, people and other intervention categories, therefore providing a robust evidence base upon which YF’s impact can be assessed. Table 260: Analysis of YF relevant spend covered by IEF compliant evaluations (2002/03-2006/07) Total Spend covered by evaluations £m)

% of spend covered by evaluations (£m)

Number of IEF compliant evaluations

Business

148.8

Place

231.5

335.9

People Other

Total 747.1 Source: PwC analysis based on YF evaluation evidence

It should be noted that the objectives and outputs/outcomes of YF’s interventions often span a number of intervention categories and sub-themes. For the purposes of analysis, however, each intervention, and its associated outputs/outcomes, has been classified into the most appropriate intervention category and

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sub-theme on the basis of its objectives and/or the proportion of overall spend allocated to a particular sub-theme

Key findings Before setting out details of the impact of YF’s spending on each type of intervention, this section draws together the key findings from the evaluation evidence base for YF as a whole in relation to two key objectives of this study, namely to summarise the available evidence of the impact of spending by YF, at both regional and national level, and to assess YF’s achievements against the objectives of both the RES and its Corporate Plan (which have changed over time) and each specific programme and project. Consequently, consideration is given to three key questions: 

What has been the impact of YF’s spending both at the project and programme level and overall?



What does the available evidence suggest has been the value for money of YF’s interventions’?



How has YF performed against its relevant objectives both at the project and programme level and overall in relation to its Corporate Plan and the RES?

Impact The majority of YF’s evaluations covered in this report have estimated net outputs on the basis of gross outputs. These have been presented as outputs achieved and future potential outputs. However, it should be noted that Table 261 includes outputs where both gross and net output estimates have been provided from the evaluation evidence over the period 2002/03-2006/07. The ‘core’ gross and net outputs are summarised in Table 261. Table 261: Gross and net attributable YF outputs Jobs created/ safeguarded

441

(2002/03-2006/07)

Businesses created

Businesses supported

Brownfield land (ha)

Skills assist

Business competitiveness & development Gross outputs achieved

13,747

297

Net outputs achieved

11,686

104

442

Additionality % achieved

Future potential gross outputs

9,513

225

Future potential net outputs

6,617

Additionality % future potential

1,473

839

Future potential gross outputs

20,418

Future potential net outputs

11,285

Regeneration through physical infrastructure Gross outputs achieved Net outputs achieved Additionality % achieved

Additionality % future potential

441

The dashes in this Table and in all subsequent Tables relate to instances where outputs have either not been estimates or where it has not been relevant to estimate outputs. 442

This is largely attributable to the clusters initiative which accounted for almost 85% of net attributable jobs created / safeguarded for business interventions

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Jobs created/ safeguarded

Businesses created

Businesses supported

Brownfield land (ha)

Skills assist

People and skills Gross outputs achieved

1,414

2,745

375

733

Additionality % achieved

Future potential gross outputs

283

1,197

Future potential net outputs

245

Additionality % future potential

Gross outputs achieved

24,847

712

353

71,600

Net outputs achieved

10,356

313

173

40,096

Future potential gross outputs

Future potential net outputs

Additionality % future potential

Gross outputs achieved

40,092

336

2,126

353

74,345

Net outputs achieved

22,891

129

688

173

40,829

Future potential gross outputs

29,999

236

283

1,197

Future potential net outputs

17,907

245

Net outputs achieved

Other

Additionality % achieved

Total

Additionality % achieved

Additionality % future potential

Source: PwC analysis based on YF evaluation evidence

YF’s spending has created/safeguarded jobs, assisted and helped to create new businesses, assisted people in skills development and remediated brownfield land. A large proportion of these outputs have already been achieved. However, a number of outputs are potentially to be achieved in the future. 443 These are predominantly related to jobs created by physical infrastructure investments , but also 444 445 include business interventions and people interventions . All of these future outputs are subject to varying degrees of uncertainty and should, as such, be treated with caution. The level of additionality resulting from YF’s business and regeneration interventions varies across intervention and output type, but is generally relatively high compared with YF’s people and skills interventions for jobs created/safeguarded. The additionality of business interventions in terms of achieved business creation is also generally lower than that of regeneration and people and skills interventions and is similar to the additionality showed for the future potential businesses created. Comparison of the additionality of YF’s interventions with the national findings for achieved outputs shows a mixed picture. Regeneration interventions compare favourably with regard to jobs created / safeguarded (57% compared to 45%) and was the same with regard to business created (65%).

443

For example, Bradford Centre Regeneration and Holbeck Urban Village

444

For example, E-Business Unlimited, South Yorkshire Design Works and Investment in Cluster Initiatives

445

For example, Graduates Yorkshire and Directions Finningley

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Business interventions also compared favourably with regard to jobs created / safeguarded (85% compared to 48%), while the additionality recorded for business creation was slightly lower than the national average (35% compared to 40%). People and skills interventions compared less favourably to the national average with regard to jobs created / safeguarded (39% compared to 48%), business creation (42% compared to 82%) and skills assists (27% compared to 62%). It has not been possible to provide a cumulative figure for the GVA (achieved and future potential) in relation to all of these interventions due to differences across individual evaluations. Not all the evaluations reviewed assessed the outcomes of the intervention in terms of the impact on GVA. For those evaluations which did take GVA into consideration, the basis of these estimates is often inconsistent across interventions. There is, therefore, no aggregate assessment of net outcomes. However, in Table 262 we set out those measures that have been produced in order to demonstrate the range of outcomes from the limited number of evaluations with GVA estimates. Table 262: Attributable outcomes from the evaluation of YF interventions (2002/03-2006/07) Expenditure

Achieved GVA (annual, £m)

Future potential GVA (annual, £m)

Achieved GVA (cumulative, £m)

Future potential GVA (cumulative, £m)

Achieved & future potential GVA (cumulative, £m)

446

Business competitiveness & development E-Business Unlimited

6.0

16.7

South Yorkshire Design Works

1.0

7.6

South Yorkshire Generic and Intermediate Start Up Programme

3.9

15.3

York and North Yorkshire Business Support and Enterprise Programme

3.9

12.0

92.4

498.0

Broadband Gap & NYnet

6.7

3.2

Centres of Industrial Collaboration

9.1

13.7

12.4

20.5

3.8

9.3

Sector / Cluster support

Inward Investment Promotion Sustainable Consumption / Production

14.4 - 89.7

17.6 - 92.9

447

Regeneration through physical infrastructure Bradford Centre Regeneration

17.8

48.0

Holbeck Urban Village

26.2

152.9

446

The E-Business Unlimited, industrial Research and Development Award, Science City York and Targeted Export Support Scheme Programmes did not report GVA outcomes 447

The Sheffield One Urban Regeneration, Stainborough Park, Hull Quays, Renaissance South Yorkshire, Renaissance Market Towns, Modernising Rural Delivery and Hull city Bid Programmes did not report GVA outcomes

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Renaissance Towns and Cities Rail Rolling Stock

Expenditure

Achieved GVA (annual, £m)

Future potential GVA (annual, £m)

Achieved GVA (cumulative, £m)

Future potential GVA (cumulative, £m)

Achieved & future potential GVA (cumulative, £m)

96.8

188.8

5.9

7.5

Graduates Yorkshire

1.5

2.4

Directions Finningley

5.7

University Centre Barnsley

2.0

1.0

0.5

448

People & skills

4.6 - 5.3

Source: PwC analysis based on YF evaluation evidence

Finally, besides the impact of its project and programme spend, Strategic Added Value is a key element of YF’s impact, as illustrated in Box 1. YF’s Strategic Added Value Besides the impact of its project and programme spend, YF also influences its partners’ and stakeholders’ behaviour and performance in other ways including strategic influence, leverage and synergy. This is demonstrated by the following examples : 

Yorkshire Forward showed strategic leadership and influence; playing a major role in shaping the aims and direction of the E-business Unlimited project. Again, they provided the vision in the Holbeck Urban Village project which meant that the project developed coherently



In it’s flood response, Yorkshire Forward used its leadership and understanding of the economy and business agenda to influence others to act. Yorkshire Forward’s flexible use of the Agency’s resources sent a clear message of commitment to the business community. The effectiveness of the external communication was key to success and is good practice that will be applied in future rapid response situations.



Yorkshire Forward established the Renaissance Towns and Cities (RTC) programme in 2001 as a new way to deliver urban regeneration; capture economic growth; create quality sustainable places where people want to live and work and where businesses want to invest. The visionary approach adopted within renaissance is firmly based on longer-term economic goals. Whilst the majority of projects are at an early stage in terms of economic benefits, the programme has delivered significant SAV; particularly in terms of engagement, clear leadership and influence. Yorkshire Forward created synergy in the Clusters programme – there was much evidence of organisations working together to optimise support delivery and to ensure effective knowledge and technology transfer.



In the Holbeck Urban Village Programme, Yorkshire Forward was instrumental in ensuring that there was community involvement and there was community engagement.

Source: YF

Value for money Table 263 considers the value for money of YF’s interventions from two perspectives: 

the ratio of GVA to cost as an indicator of the benefit: cost ratio; and, especially where this is not available,



measures of cost per unit of net output using a range of measures where these are available.

448

The Train to Gain, South Yorkshire Social Infrastructure and South Yorkshire Skills Programme

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In assessing the value for money of YF’s interventions we have sought to compare them with the evidence emerging from the evaluation of other RDAs’ activities and benchmarks arising from the evaluation of other similar programmes. Care should be taken when comparing the GVA: cost ratios of these interventions as these are set out in terms of both achieved and future potential (the latter being subject to uncertainty). Table 263 sets out ratios of GVA to cost based on either cumulative GVA or GVA per annum (p.a.) depending on the available evidence. Where only annual GVA is cited this is primarily because the relevant evaluation gave no indication of the number of years over which impacts were expected to persist. Table 263 also sets out value for money measures for achieved outputs in the form of cost per unit of output measures. Table 263: Summary of YF value for money Achieved GVA:cost 450 ratio

449

(2002/03-2006/07)

Future potential GVA:cost 451 ratio

Cost per net job (achieved) (£)

Cost per net business assist (achieved) (£)

Cost per net business created (achieved) (£)

Cost per net skills assist (achieved) (£)

Business competitiveness & development E-Business Unlimited

2.8

22,599

South Yorkshire Design Works

7.6

5,650

South Yorkshire Generic and Intermediate Start Up Programme

3.9

12,037

York and North Yorkshire Business Support and Enterprise Programme

3.1

23,136

Investment in Cluster initiatives

5.4

9,331

Broadband Gap & NYnet

0.6

Centres of Industrial Collaboration

1.5

102,477

1.4m

South Yorkshire Inward Investment Grant

1.7

22,403

Targeted Export Support Scheme

Investment in Resource Efficiency

2.4

2.1 – 13.4

18,357

40,000

Regeneration through physical infrastructure Bradford Centre Regeneration

2.7 (Annual)

Holbeck Urban Village

7.9 (Annual)

Renaissance Market Towns

Renaissance Towns and Cities

2.7 (Annual)

292,411 -

1.1m

449

Figures in brackets refer to project level evaluations that have been rolled up into subsequent programme evaluations to avoid double counting. 450

Values refer to cumulative GVA unless otherwise stated

451

Values refer to cumulative GVA unless otherwise stated

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Achieved GVA:cost 450 ratio

Future potential GVA:cost 451 ratio

Cost per net job (achieved) (£)

Cost per net business assist (achieved) (£)

Cost per net business created (achieved) (£)

Cost per net skills assist (achieved) (£)

Stainborough Park

3.2m

Hull Quays

0.9m

3.7m

Rail Rolling Stock

1.3 (Annual)

Renaissance South Yorkshire

Hull City Build

22,497

452

People & skills Graduates Yorkshire

1.6: (Annual)

South Yorkshire transitional Labour Market

Directions Finningley

University Centre Barnsley

0.3 (Cumulative)

2.3 (Annual) 1.3 – 1.5 (Annual) 0.5 (Annual)

602,113 -

4,000

12,0000

34,167

12,935

Source: PwC analysis based on YF evaluation evidence

The analysis above shows that all but two programmes, where measured, have already achieved GVA returns which exceed investment. Businesses development and competitiveness along with people and skills interventions have achieved the highest GVA returns to date. Three evaluations within regeneration, two evaluations within people and skills and one evaluation within business estimated that future potential GVA returns will exceed investment. There is also limited evidence of quantitative outcomes from the regeneration through physical infrastructure interventions. This is primarily due to the early stage of implementation of these 453 interventions. A number of interventions have potential future returns which, by their nature, are uncertain. These interventions may also have had wider impacts in the areas in which they operate, for example raising confidence in the area, which will not be captured in the estimation of GVA. A range of cost per unit of output measures has been calculated, with a focus on the cost per net job. Business development programmes have generally achieved higher returns overall compared to regeneration through physical infrastructure interventions. Regeneration projects have a higher cost per net job but it is important to recognise that more benefits might be generated by these projects in the future. When compared with other RDAs, place interventions, with the exception of Holbeck Urban Village, appear to have a lower GVA: cost ratio for future outcomes compared to other RDA’s, with a national average across RDAs of 8.0. With the exception of South Yorkshire Design Works business interventions appear to show a lower GVA: cost ratio relative to other RDAs for achieved outcomes, with a national average of 7.3. YF’s people interventions display a mixed performance against the national average. The achieved annual GVA: cost ratio for Graduates Yorkshire is larger than the national average for similar interventions (0.9) whereas University Centre Barnsley is lower.

452

This has been calculated as per the total YF contribution of £3.7m to the Renaissance South Yorkshire Project.

453

For example Bradford Centre Regeneration, Holbeck Urban Village and Renaissance Town’s and Cities

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When comparing YF with the National picture for unit cost measures, the cost per net output achieved 454 455 was mixed. The Centre for Industrial Collaboration , York and North Yorkshire Business support , 456 South Yorkshire Inward Investment Programme , E-Business Unlimited and Investment in Resource Efficiency had a cost per net job achieved higher than the national average for business interventions (£14,221). The South Yorkshire Design Works, South Yorkshire Generic and Intermediate Start-up Programme and Investment in Cluster Initiatives compared favourably to this benchmark. For regeneration interventions YF have a cost per net job achieved in excess of the national average (£63,271) in all programmes evaluated with the exception of Hull City Build. For people and skills interventions YF did not compare favourably against national benchmarks, in the three evaluations where information was available YF programmes had a greater cost per net person assisted with their skills development than the national average (£1,960). Performance against objectives Table 264 shows the gross outputs attributable to YF’s expenditure as reported to BERR over the period 457 2002/03 to 2006/07 and compares them with the aggregated gross attributable outputs across the 33 evaluations covered in this report. It should be noted that these outputs represent the ‘core’ outputs that have been reported over time and across the evaluations. In addition to these outputs a wide range of other outputs will also have been reported for different programmes. Table 264: Comparison of YF gross reported outputs to parliament with evaluation outputs (2002/03-2006/07) Jobs created/ Safeguarded Targets set by BERR Achieved YF gross outputs reported to BERR Number of years when targets met

Businesses created

Brownfield Land (ha)

Skills assists

Funding levered (£m)

75,550

3,661

367

163,686

386

100,808

4,809

564

256,721

540

458

Source: DTI/BERR and PwC analysis

Table 264 shows that YF has made progress against the target range set by BERR in all of the five output areas highlighted, particularly in terms of assisting people with their skills development and brownfield land. Like all the RDAs (except the London Development Agency), in 2007 YF was subject to the National Audit Office’s Independent Performance Assessment (IPA) which assessed how well YF has responded to the common challenges facing RDAs, namely balancing the interests of the region with national policy requirements, managing the conflicting demands of different regional stakeholders, looking outwards to promote the region while staying focused on what is happening inside and responding to new duties imposed by central government. This assessment sheds further light on how well the Agency has been able to fulfil its role. Overall, YF was seen as performing ‘strongly’, particularly in terms of its:

454

This intervention has had wider benefits than jobs alone. The intervention had substantial SAV benefits and national / international benefits 455

This intervention has had wider benefits than jobs alone. The intervention has included a substantial proportion of activity with ‘lifestyle’ business and in rural areas 456

The South Yorkshire inward investment programme had substantial potential future benefits that have not been assessed

457

Changes to the outputs reported by YF over time mean that the businesses supported target and outputs reported to BERR are only available from 2005/06 to 2006/07. 458 No data available for 2002/03

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

Ambition: the Regional Economic Strategy clearly outlines the key issues in the region and is derived from a robust evidence base. It sets out how these are to be tackled and allocates actions amongst partner organisations;



Capacity: The chair and chief executive form an effective partnership and are highly visible across the region. The Board has a wide range of expertise and are thoroughly engaged, including in subregions; and



Achievement: Yorkshire Forward has performed well in championing the region. The cutting edge Renaissance programme, which has been one of Yorkshire Forward’s major successes, has been central in this and is delivering real results. Renaissance projects have helped to turn around the local economy, lever in investment in both rural and urban settings and raise aspirations. Yorkshire Forward has also done well on responding swiftly and decisively to economic shocks to the region.

The IPA also identified some areas for development: 

Communication – Promotional activity was seen to be very effective, but simpler and clearer communication would help stakeholders more effectively engage with Yorkshire Forward; and



Decision making – the performance Management Framework is relatively streamlined but problems can arise in the process which can make decision making slow.

Table 265 sets out YF’s performance against objectives for each of the individual interventions covered by the evaluations. Table 265: Comparison of performance against objectives across the evaluations (2002/032006/07) 459 Exceeded

Met

Largely met

Mixed

Limited performance

Not assessed

Total

Business Evaluations

Spend (£m)

5.2

20.2

123.6

148.8

Evaluations

Spend (£m)

5.9

37.6

114.6

73.4

231.5

Evaluations

Spend (£m)

1.5

5.7

23.7

30.9

Evaluations

Spend (£m)

335.9

Evaluations

Spend (£m)

7.4

6.7

63.5

238.2

433.0

748.6

Place

People

Other

Total

Source: PwC analysis based on YF evaluation evidence

459

The interventions listed in the Table are at differing stages in their lifecycle. Therefore, some interventions will be at early stages in their development and will not have made significant progress against their objectives.

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Table 265 shows that for most of the interventions evaluated (by volume or value) where performance was assessed against the objectives the results were mixed. There was some variation across the intervention themes with most place interventions, in volume terms, not being assessed in these terms (which may again be due to the early stage of implementation of these interventions). However, in value terms around half of place interventions were mixed.

Impact by intervention The analysis of the impact of YF’s spending, where possible, is structured according to the three categories of intervention defined within the IEF i.e. business, place and people. We have also analysed the impact of YF’s other activities that span more than one of these categories as well as the available evidence of the impact of the nine national programmes where YF has been responsible for delivery within parameters determined by central government departments. The impact of YF’s interventions is summarised using a common structure which: 

summarises YF’s activities and expenditure on each programme;



reports the estimated net outputs arising from this expenditure i.e. the additional outputs that are as a result of the intervention; and



summarises performance against objectives and the outcomes, where available, for each programme.

Business development and competitiveness interventions Rationale The 2006-2015 RES for Yorkshire and Humber identifies a number of regional strengths in this area on which YF’s interventions can build including: 

Increase in the number of businesses – Since 2001 the region has gained around 1,000 businesses.



Innovation – 7% of businesses are now involved in R&D activity with regional higher education providers, a 13% improvement since 2001.

There are, however, also a number of challenges facing businesses in the region including: 

Low business start-up rate – Business start-up rates are notably lower than the UK average: 32 business starts per year compared to 39 in the UK, and lower still in deprived areas.



Attracting inward investment – The picture on new business and investment coming into the region is mixed. Foreign investment has fluctuated in recent years, with a decrease in numbers of new businesses from abroad.

The primary justification for YF’s businesses and competitiveness interventions were to address market failures in relation to the provision of positive externalities arising from, for example, addressing issues of asymmetric information which may prevent people from setting up a business or implementing new business practices (i.e. to improve the flow of information around aspects such as market and technology opportunities, sources of financial support and mainstream business support services). The evidence of the impact of YF’s business interventions relates to twelve evaluations covering the six main sub-themes as summarised in Table 266.

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Table 266: Summary of business development and competitiveness interventions Intervention theme/sub-theme

Individual enterprise level support

Evaluation

Expenditure covered by evaluations (£m)

E-Business Unlimited

6.0

South Yorkshire Design Works

1.0

South Yorkshire’s Generic and Intermediate Business Start-Up Programme

3.9

York and North Yorkshire Business Support and Enterprise Programme

3.9

Sector/Cluster Support (including business networks)

Investment in Cluster Initiative

92.4

Science, R&D & innovation infrastructure

Broadband Gap and NYnet

5.2

Centres of Industrial Collaboration

9.1

Industrial Research and Development Award

7.4

Science City York

0.8

Inward investment promotion

South Yorkshire Inward Investment scheme

Internationalisation of indigenous business

Targeted Export support scheme (TESS)

2.9

Sustainable consumption and production

Investment in Resource Efficiency

3.8

Total

12.4

148.8

Source: PwC analysis based on YF evaluation evidence

Over the period 2002/03 to 2006/07, on evaluated interventions YF spent £148.8 million on business development and competitiveness interventions. To grow both existing and new businesses to achieve sustainable economic growth and jobs is one of the three key strategic aims set out in YF’s RES . The region needs its existing businesses to grow in addition to encouraging new business creation and attracting investment if it to continue to prosper and become even more successful. Within the RES it is stated that the region will focus on a number of key actions: 

encourage more people to start a business;



improve support to help new businesses start-up;



increase, retain and embed business investment in the region;



foster innovation to develop new markets and products; including good links between business and higher education institutions;



grow business and employment in knowledge based regional clusters;



boost key sectors of regional significance;



improve business support to support growth and cut red tape;



apply best practice for business success and to help recruit and retain good staff; and



help businesses to win and expand markets through supply chains, trade and procurement

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Impact Table 267 summarises the expenditure and key gross outputs associated with the twelve business interventions evaluated. The primary outputs have been jobs created/ safeguarded, businesses created and businesses assisted. Table 267: Gross attributable achieved outputs from YF’s business development and competitiveness interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Gross jobs created/ safeguarded

E-Business Unlimited

6.0

1084

SY Design Works

1.0

270

2.1

SY Generic & Intermediate Start-up Programme

3.9

1,256

900

26.0

York & North Yorkshire Business Support

3.9

502

290

384

34.7

Investment in Cluster initiatives

92.4

13,170

55.9

Broadband Gap & NYnet

5.2

240

18.4

Centres of Industrial Collaboration

9.1

470

21.4

Industrial R&D Award

7.4

743

Science City York

0.8

181

South Yorkshire Inward Investment Grant Scheme

12.4

1,080

299.8

Targeted Export Support Scheme

2.9

317

482

51.5

Investment in Resource Efficiency

3.8

459

16.1

19,532

1,239

1,706

669.8

148.8

Gross businesses created

Gross businesses assisted 539

Gross increase in business performance (turnover, £m) 144.7

Source: PwC analysis based on YF evaluation evidence

Table 268 summarises the expenditure and key net outputs associated with the twelve business interventions evaluated, taking into consideration the outputs which would not have occurred without YF’s support.

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Table 268: Net attributable achieved outputs from YF’s business development and competitiveness interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Net jobs created/ safeguarded

Net new businesses created

Net businesses assisted

Net increase in business turnover (£m)

E-Business Unlimited

266

41.2

SY Design Works

177

0.8

SY Generic & Intermediate Start-up Programme

3.9

324

5.7

York & North Yorkshire Business Support

3.9

169

11.6

92.4

14,853

997.0

Broadband Gap & NYnet

5.2

4 - 18

Centres of Industrial Collaboration

9.1

10.4

Industrial R&D Award

7.4

Science City York

0.8

South Yorkshire Inward Investment Grant

12.4

554

Targeted Export Support Scheme

2.9

23.5

Investment in Resource Efficiency

3.8

207

7.5

148.8

16,639

104

1,097.7

Investment in Cluster Initiatives

Total

Source: PwC analysis based on YF evaluation evidence

The level of additionality resulting from YF’s interventions varied across intervention and output type. Investment in Cluster Initiatives (113%) and South Yorkshire Design Works (66%) had the highest level of additionality in terms of jobs created/ safeguarded and the Centres of Industrial Collaboration (89%) had the highest level of additionality with regard to new business created. Across the entire theme YF compares favourably to the national average with regard to additionality in jobs created / safeguarded (85% compared to 48%) and recorded a similar level of additionality in business creation (38% compared to 40%). However, performance does vary when analysed at sub theme level. South Yorkshire Design Works (66%) demonstrated high levels of additionality compared to the national average for its sub-theme (41%). However, YF’s other three individual enterprise support programmes all demonstrated levels of additionality below the national average for their sub theme. Investment in Cluster Initiatives (113% compared to 67%) and the South Yorkshire Inward Investment Grant both compared favourably to the national average for their sub themes. The Centre of Industrial Collaboration recorded a level of additionality well below the national average for its sub-theme (19% compared to 46%). Table 269 summarises the impact on GVA (both achieved and future potential) of YF’s interventions to promote business development and competitiveness. In all cases where GVA has been estimated, the evaluation estimated the GVA impact in cumulative terms. It is important to note that future potential impacts on GVA have not been discounted nor have constant prices been applied.

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Table 269: Attributable outcomes from YF’s business development and competitiveness interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved GVA (cumulative, £m)

Future potential GVA – (cumulative, £m)

Achieved & future potential GVA (cumulative, £m)

E-Business Unlimited

16.7

SY Design Works

7.6

SY Generic & Intermediate Start-up Programme

3.9 15.3

15.3

York & North Yorkshire Business Support

3.9

12.0

498.0

3.2

14.4 - 89.7

17.6 – 92.9

13.7

Investment in Cluster Initiatives

92.4

Broadband Gap & NYnet

5.2

Centres of Industrial Collaboration

9.1

Industrial R&D Award

7.4

Science City York

0.8

20.5

9.3

South Yorkshire Inward Investment Grant

12.4

Targeted Export Support Scheme

2.9

Investment in Resource Efficiency

3.8

20.5

Source: PwC analysis based on YF evaluation evidence

Additional outcomes recorded in the evaluation evidence include: 

Industrial R&D award: An increase of 1,486 gross jobs created/safeguarded. The future potential 460 benefits associated with this intervention are substantial;



Science City York: A total of 271 gross jobs created, 49 gross businesses created and 92 gross businesses assisted; and



Targeted Export Support Scheme: an net attributable increase in business turnover of £23.5m achieved.

YF’s Strategic added Value Yorkshire Forward has shown evidence of elements of SAV through strategic influence, creating synergy and attracting leverage. This is demonstrated by the following example : 

E-business Unlimited. For example, Yorkshire Forward has played a strategic influencing role and has shaped the aims and approaches adopted for the programme. They have also exercised their influence when they have been called upon to make the final decision on issues that have emerged.

460

The evaluation of the programme noted that the IRD scheme had succeeded in creating the potential for significant future economic growth by supporting research into innovative projects which otherwise would not have been undertaken, and by stimulating a proactive and self-sustaining culture of innovation.

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There has been evidence of leverage – some recipients ‘up-rated’ their project plans following the receipt of funding from the Agency. Finally, this programme has increased the links between the business community and it is likely that this engagement will increase in the future. 

Yorkshire Forward launched the innovative £11.6m Centres of Industrial Collaboration (CIC) programme in 2003 to provide high profile business access to the world-class research facilities and scientific expertise contained within the region’s universities. Yorkshire Forward’s catalytic investment in this programme has generated significant SAV. Stakeholders gave a very strong view that CICs were correcting an important failure and that they are a strategic intervention in addressing the innovation agenda. From a university perspective, Yorkshire Forward’s role is seen to be crucial. Without its “intervention and support, very little of the valuable collaborative work would have taken 461 place”.

Source: YF

Value for money Table 270 sets out the achieved and future potential GVA to cost ratios of YF’s business development and competitiveness interventions. The GVA to cost ratio compares GVA impacts to the cost of the intervention: where there is a GVA to cost ratio of greater than one, the economic benefits of the interventions attributable to YF’s funding exceed their costs. This is the case for some, but not all of the interventions where GVA has been measured. Table 270 shows that all interventions, where information is available, have already achieved economic benefits which exceed their costs, with the exception of the Broadband Gap and NYnet programme which had only started by the end of 2006/07. However, it is estimated that its economic benefits are likely to exceed its costs if its future potential outcomes are realised. Table 270: Achieved and future potential attributable GVA to cost ratios from YF’s business 462 development and competitiveness interventions (2002/03-2006/07) Spend covered by evaluations 2002/032006/07 (£m)

Achieved GVA (cumulative, £m)

Future potential GVA (cumulative, £m)

Achieved GVA (cumulative):cost

Future potential GVA (cumulative):cost

E-Business Unlimited

16.7

2.8

SY Design Works

7.6

SY Generic & Intermediate Start-up Programme

3.9

15.3

3.9

York & North Yorkshire Business Support

3.9

12.0

3.1

92.4

498.0

5.4

Broadband Gap & NYnet

5.2

3.2

Centres of Industrial Collaboration

9.1

13.7

1.5

Industrial R&D Award

7.4

Science City York

0.8

Investment in Cluster Initiatives

461

14.4 - 89.7

0.6

2.1 – 13.4

(Taken from Evaluation of CICs by GHK

462

Most of the programmes listed in Table 12 are expected to have future benefits, however these have not been quantified in all evaluations

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Spend covered by evaluations 2002/032006/07 (£m)

Achieved GVA (cumulative, £m)

Future potential GVA (cumulative, £m)

Achieved GVA (cumulative):cost

Future potential GVA (cumulative):cost

South Yorkshire Inward Investment Grant

12.4

20.5

1.7

Targeted Export Support Scheme

2.9

Investment in Resource Efficiency

3.8

9.3

2.4

Source: PwC analysis based on YF evaluation evidence

Table 270 demonstrates that variation was also found in terms of performance across the business and competitiveness theme when the current GVA: cost ratios were considered. The highest performing projects relative to others with regard to achieved outputs were found to be the: 

South Yorkshire Design Work’s Programme with a ratio of 7.6:1; and



Investment in Cluster Initiatives with a ratio of 5.4:1. It is important to highlight that this intervention accounts for over 61% of business spend evaluated.

463

The lowest performing projects relative to others within the theme of business development and competitiveness interventions in terms of achieved GVA: cost ratio (where evidence of some impact had been demonstrated) were found to be: 

Broadband Gap and NYnet with a ratio of 0.6:1, however the future potential GVA: Cost ratio for this project are estimated at between 2.1:1 and 13.4:1; and



the Centres of Industrial Collaboration and the South Yorkshire Inward Investment Grant with ratios of 1.5:1 and 1.7:1.

In general the YF business development and competitiveness interventions, for which GVA to cost ratios were available, compare less favourably against the national average for similar interventions. EBusiness Unlimited, South Yorkshire Generic and Intermediate Start-up programme and the York and North Yorkshire Business Support Programmes all recorded a GVA: cost ratio below the national average of achieved cumulative GVA for their sub theme (12.0). However, the South Yorkshire Design Work’s Programme recorded an average in excess of this benchmark. The Broadband Gap and NYnet and Centre for Industrial Collaboration programmes also recorded a GVA: cost ratio below that of the national average for their sub-theme (3.4). The South Yorkshire Inward Investment Grant also recorded a GVA: cost ratio below that of the national average for its sub-theme (13.5). Investment in Cluster Initiatives recorded a GVA: cost ratio below the national average for its sub-theme (7.7). Table 271 sets out the achieved and future potential cost per net output of YF’s business development and competitiveness interventions.

463

The performance of the Investment in Clusters Initiatives is likely to be understated as the figures in the table exclude the chemicals cluster (which accounts for nearly 40% of expenditure on clusters initiatives).

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Table 271: (achieved and future potential) cost per net output from YF’s business development and competitiveness interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved cost per net job (£’000)

Future potential cost per net job (£’000)

Achieved cost per net business created(£)

Future potential cost per skills assist (£)

E-Business Unlimited

6.0

22,599

15,819

SY Design Works

1.0

5,650

SY Generic & Intermediate Startup Programme

3.9

12,037

3,383

York & North Yorkshire Business Support

3.9

23,136

2,506

40,000

4,333

92.4

9,331

6,233

Broadband Gap & NYnet

5.2

Centres of Industrial Collaboration

9.1

102,477

49,550

1,421,875

687,500

Industrial R&D Award

7.4

Science City York

0.8

South Yorkshire Inward Investment Grant

12.4

22,403

11,563

Targeted Export Support Scheme

2.9

Investment in Resource Efficiency

3.8

18,357

Investment in Cluster Initiatives

Source: PwC analysis based on YF evaluation evidence

The cost per net job achieved from business and competiveness interventions ranged from £102,477 for 464 the Centres of Industrial Collaboration Programme to £5,650 for the South Yorkshire Design Works programme. As the sector/cluster support programme accounts for 61% of business spend it is had a cost per achieved job of £9,331 and a cost per future potential job of £6,233. Comparing YF with the national picture the cost per net output achieved for YF’s business interventions was mixed. For example, Investment in Cluster Initiatives performed well against national costs per net job created / safeguarded for its sub-theme (£9,331 compared to £12,135). Similarly South Yorkshire Design Works performed well against national costs per net job created / safeguarded for its sub-theme (£5,650 compared to £8,301). The E-Business unlimited (£22,599), South Yorkshire Generic and Intermediate Start-up Programme (£12,037) and York and North Yorkshire Business Support (23,136) did not compare favourably to the national average for their sub theme (£8,301). The £22,403 cost per net job achieved for the South Yorkshire Inward Investment Grant Scheme fell below the national average for its sub-theme (£11,563). The cost per net job achieved for the Centres of Industrial Collaboration (102,477) was above the national average for its sub theme (£37,938). Performance against objectives Table 272 summarises the performance against objectives of YF’s interventions to promote business development and competitiveness. Performance against objectives has been assessed for the majority of interventions by the IEF compliant evaluations reviewed. The evaluations indicate that performance

464

It should be noted that the CICs have had substantial benefits beyond the region which ranged beyond jobs alone. This would partly explain the relatively high cost per job figure.

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against output targets is mixed, particularly as sector/cluster support is mixed which accounts for 61% of total business spend. Table 272: Performance against objectives from YF’s business development and competitiveness interventions (2002/03-2006/07)465 Expenditure covered by evaluations (£m)

Performance against objectives

E-Business Unlimited

6.0

York and North Yorkshire Business Support and Enterprise Programme

3.9

Industrial Research and Development Award

7.4

Largely met

Targeted Export Support Scheme

2.9

Largely met

Broadband Gap & NYnet

5.2

Met

South Yorkshire Design Works

1.0

Mixed

South Yorkshire Generic and Intermediate Start Up Programme

3.9

Investment in Cluster Initiatives

Largely met Largely met

Mixed

92.4

Mixed

Centres of Industrial Collaboration

9.1

Mixed

Science City York

0.8

Mixed

12.4

Mixed

4.0

Mixed

South Yorkshire Inward Investment Grant Investment in Resource Efficiency Source: PwC analysis based on YF evaluation evidence

Regeneration through physical infrastructure interventions Rationale Yorkshire and Humber is characterised by localised areas of deprivation alongside relatively affluent areas. Therefore, many of YF’s regeneration initiatives aim to stimulate economic activity within the most deprived areas of the region. This section relates to regeneration initiatives supported by YF in order to improve regional economic performance. The evidence presented is primarily linked to two key 2006-12 RES objective, namely: The region will deliver high quality physical development that supports urban and rural renaissance, helps YF’s environmental goals, and builds on the distinctive assets of the regions cities and towns through attracting new private investment; and Promoting diversity and renewal to fully utilise the talents of all people in all communities to improve economic opportunities, particularly in disadvantaged areas. The main justification for YF’s regeneration through physical infrastructure interventions was the improvements to a specific area’s image or built environment. Some interventions were also considered to provide a public good through the development of new facilities or the redevelopment of derelict sites (i.e. Bradford Centre Regeneration, Holbeck Urban Village, Renaissance Towns and Cities and Sheffield One). Evidence of the impact of YF’s regeneration initiatives is based on eleven evaluations covering the three

465

The interventions listed in the Table are at differing stages in their lifecycle. Therefore, some interventions will be at early stages in their development and can not be expected to have made significant progress against their objectives.

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main sub-themes summarised in Table 273. Table 273: Summary of YF’s regeneration through physical infrastructure interventions (2002/032006/07) Intervention theme/sub-theme

Evaluation

Expenditure covered by evaluations (£m)

Capital projects Bringing land back into use – employment sites

Bradford Centre Regeneration

17.8

Holbeck Urban Village

26.2

Renaissance Market Towns

9.7

Renaissance Towns & Cities

96.8

Sheffield One Urban Regeneration

37.6

Wentworth Castle & Stainborough Park

Public Realm/other infrastructure (e.g. transport/community)

1.5

Hull Quays

14.5

Hull City Build

16.4

Rail Rolling Stock

5.9

Renaissance South Yorkshire

3.7

Modernising Rural Delivery

1.4

Revenue projects Co-ordination role (e.g. spatial strategies/delivery mechanisms) Total

231.5

Source: PwC analysis based on YF evaluation evidence

This spend is dominated by capital investments, in particular the Renaissance Towns and Cities, Sheffield One Urban Regeneration and Holbeck Urban Village programmes account for 69% of total expenditure within this theme.. The capital and revenue projects were primarily related to Objective’s 5 – Transport, Infrastructure and Environment - and Objective 6 – Stronger Cities, Town’s and Communities of YF’s 2006-2015 RES. Impact Given the variety of projects supported within this sub-theme, activities delivered using the funding varied depending on the individual project objectives. However, in summary the most common activities supported within the projects were: 

city centre regeneration (Hull Quays, Bradford Centre Regeneration, Holbeck Urban Village, Sheffield One, Renaissance Towns and Cities);



revitalisation of rural towns (Renaissance Market Towns)



redevelopment of waterfront areas (Hull Quays);



restoration of historic buildings and heritage sites (Stainborough Park);



increased synergy and linkages between business investments (Renaissance South Yorkshire); and



delivering physical improvements through partnerships (Bradford Centre Regeneration).

Key gross outputs set out in Table 274 arising from these regeneration interventions have been jobs created/ safeguarded, businesses created and brownfield land reclaimed or redeveloped. A number of these interventions are still in the early stages of implementation and therefore a distinction is drawn between achieved and future potential outputs.

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Table 274: Gross attributable outputs (achieved and future potential) from YFâ&#x20AC;&#x2122;s regeneration through physical infrastructure interventions (2002/03-2006/07) Expenditure covered by evaluations (ÂŁm)

Achieved gross jobs created/ safeguarded

Future potential gross jobs created/ safeguarded

Achieved gross brownfield land reclaimed/ redevelope d (ha)

Future potential gross brownfield land reclaimed/ redevelope d (ha)

Achieved gross businesse s created

Future potential gross businesse s created

Bradford Centre Regeneration

17.8

2,637

Holbeck Urban Village

26.2

138

6,421

Renaissance Mkt Towns

9.7

791

Renaissance Towns & Cities

96.8

9,484

Sheffield One Urban Regeneration

37.6

143

Wentworth Castle & Stainborough Park

1.5

Hull Quays

14.5

135

Rail Rolling Stock

5.9

Renaissance South Yorkshire

3.7

7,017

6,626

174

Modernising Rural Delivery

1.4

Hull City Build

16.4

1,268

945

Total

231.5

8,686

27,059

183

Source: PwC analysis based on YF evaluation evidence

In addition to the gross outputs in Tble 274, the Renaissance Towns and cities evaluation reported that 108 businesses had been assisted, with the potential to assist a further 144 in the future. The Modernising Rural Delivery evaluation reported that 100 businesses had been assisted, with the potential to assist a further 100 in the future. The Renaissance South Yorkshire evaluation reported that 188 businesses had been assisted. The Renaissance Towns and Cities evaluation also reported that 300 people had been assisted with their skills development, with the potential to assist a further 400 in the future. The Modernising Rural Delivery evaluation also reported that 148 people had been assisted with their skills development, with the potential to assist a further 148 in the future.

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The resulting net outputs arising from these regeneration interventions are set out in Table 275. Table 275: Regional net outputs (achieved and future potential) from YF’s regeneration through physical infrastructure interventions (2002/03-2006/07) Expenditur e covered by evaluations (£m)

Achieved net jobs created/ safeguarde d

Future potential net jobs created/ safeguarde d

Achieved net brownfield land reclaimed/ redevelope d (ha)

Future potential net brownfield land reclaimed/ redevelope d (ha)

Achieved net businesse s created

Future potential net businesse s created

Bradford Centre Regeneration

17.8

1,599

Holbeck Urban Village

26.2

3,640

Renaissance Mkt Towns

9.7

995

Renaissance Towns & Cities

96.8

4,463

Sheffield One Urban Regeneration

37.6

Wentworth Castle & Stainborough Park

1.5

Hull Quays

14.5

Rail Rolling Stock

5.9

Renaissance South Yorkshire

3.7

Modernising Rural Delivery

1.4

Hull City Build

16.4

729

512

Total

231.5

839

11,285

Source: PwC analysis based on YF evaluation evidence

The evaluations of Sheffield One Urban Regeneration, Renaissance South Yorkshire and Modernising Rural delivery do not make any gross to net adjustments in terms of jobs created/safeguarded. As a result of this no net outputs have been recorded with regard to brownfield land reclaimed / redeveloped. Holbeck Urban Village had the greatest additionality with regard to jobs created / safeguarded (65%), followed by Wentworth Castle & Stainborough Park (32%) and Hull Quays (30%). When future impacts are considered Renaissance Market Town’s were considered have the greatest additionality with regard to jobs created (126%).

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A comparison of the additionality of the achieved outputs of YF’s business interventions highlights a mixed performance against national averages for RDAs. While Holbeck Urban Village (65%) and Hull City Build (57%) have recorded levels of additionality above the national average for their sub-theme of bringing land back into use (50%) in terms of jobs created / safeguarded, while Wentworth Castle & Stainborough Park (32%) and Hull Quays (30%) recorded levels of additionality below this level. Due to the early stage of development of many of these projects there is limited evidence of future potential outcomes and no systematic analysis of the actual or potential impact on regional GVA. Table 276 summarises the impact on GVA (both achieved and future potential) of YF’s interventions to promote regeneration through physical infrastructure. In three of the four evaluations where GVA has been estimated, the evaluators have only focussed on future potential GVA. This is due to the early stage in development of these programmes, where only limited outcomes have been achieved to date. Where annual GVA was estimated no indication was given of the number of years over which the impact was expected (or assumed) to persist. Moreover, future potential impacts on GVA have not been discounted 466 nor have constant prices been applied. This has been assessed in GVA terms (for a single year) across four of the eleven programmes. Table 276: Attributable outcomes from YF’s regeneration through physical infrastructure 467 interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved GVA (annual, £m)

Achieved GVA (cumulative, £m)

Future potential GVA (annual, £m)

Bradford Centre Regeneration

17.8

48.0

Holbeck Urban Village

26.2

152.9

Renaissance Towns & Cities

96.8

188.8

7.5

Rail Rolling Stock

5.9

Source: PwC analysis based on YF evaluation evidence

YF’s Strategic Added Value Yorkshire Forward has shown evidence of elements of SAV through strategic influence, providing 468 leadership and developing synergy. The Holbeck Urban Village programme is an example which demonstrates how YF fulfils these functions. The programme has allowed YF to deliver SAV in the following ways: The Development Framework and Vision has acted to stimulate interest and provide focus for the type of development envisaged for the HUV. The evaluation of the programme noted that without this leadership by Yorkshire Forward, it is unlikely that the focus on design would have been maintained. Yorkshire Forward has shown strategic influence by providing a strategic vision for the HUV. This has meant that the development work has been focused and has not fragmented as has happened previously elsewhere in the City. Yorkshire Forward has worked closely with Leeds City Council in the development of the HUV and has had a major influence in the degree of community engagement undertaken, a result of the Agency’s interpretation of the importance of community involvement in the renaissance approach. Yorkshire Forward has successfully aligned its investments with those of the City Council to maximise

466

It is important to note that in all cases no GVA calculations have been made of cumulative GVA impact therefore there is likely to be under-recording of GVA impact. Specifically in those instances where a significant proportion of outputs have been generated early in the programme and the intervention has been running for at least 2-3 years. 467

Example has been extracted from the evaluation of the Holbeck Urban Village programme

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impact. The partnership has developed its approach to take account of the SNR, and there are clear areas of responsibility, reducing duplication and encouraging synergy and collaboration across key areas of intervention. Another example of SAV is through the Renaissance Towns and Cities Programme. Yorkshire Forward established the Renaissance Towns and Cities (RTC) programme in 2001 as a new way to deliver urban regeneration; capture economic growth; and create quality sustainable places where people want to live and work and where businesses want to invest. The visionary approach adopted within renaissance is firmly based on longer-term economic goals. The effect of this SAV has been: 

Development of an integrated programme to secure the revival of our towns and cities, thereby maximising their economic contribution and building sustainable communities



Engaging the private sector and giving the confidence to invest



Bringing diverse groups together to agree the long term priorities and vision for their town



Creating a long term framework for aligning investment behind a set of shared goals



Engaging citizens, raising aspirations and engendering civic pride



Improving perceptions and profile of the region’s urban areas



Emphasising the importance of quality design in modernising urban areas

Source: YF

Value for money Table 277 sets out the achieved and future potential GVA to cost ratios of YF’s regeneration through physical infrastructure interventions. The GVA to cost ratio compares GVA impacts to the cost of the intervention: where there is a GVA to cost ratio of greater than one, the economic benefits of the interventions attributable to YF’s funding exceed their costs. This is the case for some, but not all of the interventions where GVA has been measured. Table 277: Achieved and future potential attributable GVA to cost ratios from YF’s regeneration 469 through physical infrastructure interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved GVA (annual, £m)

Bradford Centre Regeneration

17.8

Holbeck Urban Village

26.2

Renaissance Towns & Cities

96.8

Rail Rolling Stock

5.9

7.5

Future potential GVA (annual, £m)

Achieved GVA (annual):cost

Future potential GVA (annual):cost

48.0

2.7

152.9

7.9

188.8

2.7

1.3

7.5

Source: PwC analysis based on YF evaluation evidence

Table 277 demonstrates that only one programme had estimated impacts on GVA to date, namely the Rolling Rail Stock Programme with a ratio of 1.3:1. Table 277 also shows that the Rail Rolling Stock programme has already achieved economic benefits which exceed their costs. The Rail Rolling Stock programme compares favourably against the national average for achieved outputs for its sub theme of public realm (0.3).

469

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The future economic impact has been estimated for four evaluations, in each one it is anticipated that its economic benefits are likely to exceed its costs if its future potential outcomes are realised. A comparison against the national average highlights a mixed picture. Holbeck Urban Village has a future potential GVA: cost ratio in excess of the national average for its sub-theme (6.5), while Bradford Centre Regeneration and Renaissance Towns and Cities have a future potential benefit cost ratio below this benchmark. Table 278 sets out the achieved and future potential cost per net output of YF’s business development and competitiveness interventions. Table 278: Achieved and future potential cost per net attributable output from YF’s regeneration through physical infrastructure interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved cost per net job (£)

Future potential cost per net job (£)

Bradford Centre Regeneration

17.8

11,132

Holbeck Urban Village

26.2

292,411

5,289

9.7

31,860

96.8

15,725

1.5

317,460

Hull Quays

14.5

939,815

32,973

Hull City Build

16.4

22,497

Renaissance Mkt Towns Renaissance Towns & Cities Wentworth Castle & Stainborough Park

Source: PwC analysis based on YF evaluation evidence

The cost per achieved net job achieved from regeneration through physical infrastructure interventions ranged from £317,460 for Wentworth Castle and Stainborough Park to £22,497 for the Hull City Build programme. Only Hull City Build compares favourably to the national average for its sub theme (£42,101) with regard to cost per achieved net job, Holbeck Urban Village. Wentworth Castle and Stainborough Park and Hull Quays all have a cost per net achieved job above this benchmark. However, all five of the programmes for which future job estimates are available are expected to have a cost per job below this benchmark if potential future net job outputs are achieved. Performance against objectives Table 279 summarises the performance against objectives of YF’s interventions to promote regeneration through physical infrastructure. It should be noted, however, that a number of evaluations did not assess performance against objectives. For those evaluations which did assess performance against objectives only Rail Rolling stock met its targets in full, although the Sheffield One Urban Regeneration programme has largely met its objectives. The other interventions represented a more mixed performance, with some objectives exceeded and others not met.

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Table 279: Performance against objectives from YF’s regeneration through physical infrastructure (2002/03-2006/07)470 Expenditure covered by evaluations (£m) Rail Rolling Stock

5.9

Performance against objectives Exceeded

Sheffield One Urban Regeneration

37.6

Largely met

Renaissance Towns & Cities

96.8

Mixed

Bradford Centre Regeneration

17.8

Mixed

Holbeck Urban Village

26.2

Not assessed

Renaissance Mkt Towns

9.7

Not assessed

Wentworth Castle & Stainborough Park

1.5

Not assessed

14.5

Not assessed

Renaissance South Yorkshire

3.7

Not assessed

Modernising Rural Delivery

1.4

Not assessed

16.4

Not assessed

Hull Quays

Hull City Build Source: PwC analysis based on YF evaluation evidence

People and skills interventions Rationale This section relates to YF’s people and skills interventions. The 2006-12 RES for the Yorkshire and Humber identifies a number of objectives in this area, including the following which are directly related to the evidence presented in the remainder of this section: 

raising attainment in the region’s educational infrastructure;



improving the skills of the working age population who have few or no qualifications; and



matching the skills available in the region to the needs of local employers.

There were a range of justifications for YF’s people and skills interventions, the most common being to improve the flow of information (i.e. Graduates Yorkshire, Train to Gain). The South Yorkshire Transitional Labour Market and West Yorkshire Skills Programme also sought to address equity issues in the area and provide positive externalities through the provision of skills and workforce development. Evidence of the impact of YF’s people and skills interventions relates to seven evaluations covering three sub-themes summarised in Table 280. Table 280: Summary of YF’s people and skills interventions (2002/03-2006/07) Intervention theme/sub-theme

Matching people to jobs

Skills/workforce development

Evaluation

Expenditure covered by evaluations (£m)

Graduates Yorkshire

1.5

SY Transitional Labour Market Evaluation

5.7

Directions Finningley

5.7

470

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Intervention theme/sub-theme

Evaluation

Expenditure covered by evaluations (£m)

Train to Gain

7.8

South Yorkshire (SY) Social Infrastructure Programme

6.8 1.4

471

West Yorkshire Skills Programme Educational Infrastructure

University Centre Barnsley

2.0

Total

31.0

Source: PwC analysis based on YF evaluation evidence

The evaluation evidence of YF’s impact on people and skills development covers £31.0m of spend from 2002/03 to 2006/07. The Train to Gain programme and South Yorkshire (SY) Social Infrastructure Programme, which fall within the Skill/workforce development sub-theme, accounts for the largest proportion of this spend. Investment in the South Yorkshire Transitional Labour Market and Directions Finningley programmes were also significant. Impact Table 281 summarises the expenditure and key gross outputs achieved through YF’s people and skills interventions. The primary outputs have been jobs created/ safeguarded, employment support, businesses assisted and supported and skills developed. Table 281: Gross attributable achieved outputs from YF’s people and skills interventions (2002/032006/07) Expenditure covered by evaluations (£m)

Gross jobs created/ safeguarded

Gross people assisted into employment

Gross businesses created

Gross business assisted

Gross skills assists

Graduates Yorkshire

1.5

1,696

1,414

156

SY Transitional Labour Market

5.7

718

258

Directions Finningley

5.7

635

2,332

Train to Gain

7.8

633

3,646

South Yorkshire (SY) Social Infrastructure Programme

6.8

127

309

554

7,291

West Yorkshire Skills Programme

1.4

University Centre Barnsley

2.0

31.0

102

3,357

2,601

13,682

Total

Source: PwC analysis based on YF evaluation evidence

In addition to the net outputs achieved in Table 281 it was estimated that the South Yorkshire Social Infrastructure Programme would result in a potential 56 gross additional jobs created / safeguarded and 861 gross additional businesses assisted.

471

There have been outputs for this programme, however all initial outputs have been attributed to ESF

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The net outputs arising from these interventions are set out in Table 282. Table 282: Net attributable achieved outputs from YF’s people and skills interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Net jobs created/ safeguarded

Net people assisted into employment

Net businesses created

Net business assisted

Net skills assists

Graduates Yorkshire

1.5

679

375

125

SY Transitional Labour Market

5.7

216

168

Directions Finningley

5.7

266

441

Train to Gain

7.8

South Yorkshire (SY) Social Infrastructure Programme

6.8

West Yorkshire Skills Programme

1.4

University Centre Barnsley

2.0

Total

31.0

1,161

375

733

Source: PwC analysis based on YF evaluation evidence

The evaluations of Train to Gain, South Yorkshire Social Infrastructure Programme, West Yorkshire Skills Programme and University Centre Barnsley did not make any gross to net adjustments for the measures used in the Table above. Directions Finningley had the highest level of additionality with regard to assisting people into employment (42%), followed by Graduates Yorkshire (40%). The Graduates Yorkshire (80%) and the South Yorkshire Transitional Labour Market (65%) programmes had the highest level of additionality with regard to assisting people with their skills development. Comparison of the additionality of YF’s people and skills interventions with the national average shows that they compare quite favourably for achieved net outputs. In terms of net skill assists achieved, Graduates Yorkshire and the South Yorkshire Transitional Labour Market programme both recorded levels of additionality above the national average for their sub theme (61%). The additionality for Directions Finningley was reported as below the national average for its sub-theme (70%) with regard to net skill assists. Table 283 summarises the outcomes of YF’s people and skills interventions.

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Table 283: Attributable outcomes (achieved and future potential) from YF’s people and skills 472 interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Achieved GVA (annual, £m)

473

Future potential GVA (annual, £m)

Achieved GVA (cumulative, £m)

Future potential GVA (cumulative, £m)

Achieved & future potential GVA (cumulative, £m)

2.4

Graduates Yorkshire

1.5

2.4

Directions Finningley

5.7

4.6 - 5.3

University Centre Barnsley

2.0

1.0

0.5

Total

9.2

2.4

3.4

0.5

4.6 - 5.3

4.6 – 5.3

Source: PwC analysis based on YF evaluation evidence 474

YF’s £14.9m investment in people and skills interventions has led to an additional £0.5m of achieved cumulative GVA and £2.4m of achieved GVA per annum. In addition the Directions Finningley evaluation estimates a further future potential GVA of between £4.6m to £5.3m. The evaluation of University Centre Barnsley estimates future benefits of £1.0m per annum, and the evaluation of Graduates Yorkshire estimates future benefits of £2.4m per annum. Care should be taken in interpreting these estimates of GVA as they involve the aggregation of estimates of outcomes across different evaluations. Moreover, future potential impacts on GVA have not been discounted nor have constant prices been applied. In addition to the outputs and outcomes discussed above, Strategic Added Value has also been one of YF’s key impacts, some examples are given in the box below: Examples of Strategic Added Value YF also plays a key role in developing synergy and providing strategic influence. This is demonstrated by the following examples: 

On the Graduates Yorkshire programme, there has been good regional learning and development from leaving a solid legacy for the future. This was due to the synergy that was created by Yorkshire Forward.



In the Directions Finningley programme, Yorkshire Forward contributed to SAV by operating as a catalyst and facilitator, leading on new developments such as Hangar 3 (and the National Aviation Academy) and Hangar 2. Finally, Yorkshire Forward demonstrated strategic influence by leading a multi agency coordinated approach to employment and training at Meteor House.

Source: YF

Value for money Table 284 sets out the GVA to cost ratios (including achieved and future potential) in relation to people and skills interventions. Whilst there is limited evidence, the return on investment for Graduates Yorkshire is positive. In other words, it exceeds spend.

472

The evaluations of Train to Gain, South Yorkshire Infrastructure Programme and the West Yorkshire Skills Programme did not report GVA outcomes 473

Outputs and Outcomes occurred over six years

474

Figure refers only to People and Skills interventions where GVA estimates are available

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Table 284: Achieved and future potential attributable GVA to cost ratios from YF’s people and 475 skills interventions (2002/03-2006/07) Spend covered by evaluations 2002/032006/07 (£m)

Achieved GVA (annual): cost ratio

Future potential GVA (annual, £m): cost ratio

Achieved GVA (cumulative, £m): cost ratio

Future potential GVA (cumulative): cost ratio

Graduates Yorkshire

1.5

1.6

2.3

Directions Finningley

5.7

1.3 - 1.5

University Centre Barnsley

2.0

0.5

0.3

Source: PwC analysis based on YF evaluation evidence

The Graduates Yorkshire programme recorded an achieved annual GVA: cost ratio higher than the national average (0.8). Directions Finningley recorded a future potential cumulative GVA: cost ratio above the national average (1.0) whereas the University Centre Barnsley recorded an achieved annual GVA: cost ratio lower than the national average (1.1). Table 285 sets out the cost per net achieved output in relation to people and skills interventions. Table 285: Cost per net attributable achieved output from YF’s people and skills interventions 476 (2002/03-2006/07) Expenditure covered by evaluations (£m)

Cost per net job created/ safeguarded (£’000)

Cost per net person assisted into employment (£)

Cost per net skills assist (£)

Graduates Yorkshire

1.5

£2,209

£12,000

SY Transitional Labour Market Mid Term Evaluation

5.7

£26,566

£34,167

Directions Finningley

5.7

£602,113

£21,429

£12,935

Source: PwC analysis based on YF evaluation evidence

The cost per net person assisted into employment was £2,209 for Graduates Yorkshire, £21,429 for 477 478 Directions Finningley and £26,566 for the South Yorkshire Transitional Labour Market Programme . The cost per net person assisted in their skills development was £12,000 for Graduates Yorkshire, £12,935 for Directions Finningley and £34,167 for the South Yorkshire Transitional Labour Market Programme. In all three of these evaluations the cost per net skills assist was above the national average for people and skills interventions at £1,960. Performance against objectives Table 286 summarises the performance against objectives of YF’s people and skills interventions and shows that only two of the programmes were assessed against their objectives, the graduates Yorkshire

475

The evaluations of Train to Gain, South Yorkshire Social Infrastructure programme and the West Yorkshire Skills Programme did not make estimates of GVA outcomes 476

The evaluations of Train to Gain, South Yorkshire Social Infrastructure programme and the West Yorkshire Skills Programme did not make estimates of net outputs 477

This intervention included a significant amount of capital spend, which has contributed to the high cost per job figure.

478

This programme was an intensive intervention targeted at hard to reach beneficiaries, which has contributed to the high cost per job figure.

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evaluation exceeded its objectives while the South Yorkshire Transitional Labour Market programme had largely met its objectives. Table 286: Performance against objectives from YF’s people and skills interventions (2002/03479 2006/07) Expenditure covered by evaluations (£m)

Performance against targets

Graduates Yorkshire

1.5

Exceeded

SY Transitional Labour Market Mid Term Evaluation

5.7

Largely met

Directions Finningley

5.7

Not assessed

Train to Gain

7.8

Not assessed

South Yorkshire (SY) Social Infrastructure Programme

6.8

Not assessed

West Yorkshire Skills Programme

1.4

Not assessed

University Centre Barnsley

2.0

Not assessed

Total

31.0

Source: PwC analysis based on YF evaluation evidence

Other YF interventions Rationale 480

YF has also dedicated its resources to one significant regeneration programme: the SRB Programme, with a total spend of £331m over the period 2002/03 to 2006/07. The programme has involved the delivery of a diverse range of interventions spanning business, physical regeneration and people and skills focused on specific geographical areas within the Yorkshire and Humber. 481

Over the six rounds of SRB funding, Yorkshire and Humber received £880.5 million to implement 100 schemes. The rationale for SRB centred on the Government’s desire to tackle social exclusion and promote equality of opportunity. The focus of support was on the most deprived communities in England, with the aim of reducing the gap between these areas and the rest of England and between different groups in society. Within Yorkshire, the SRB programme focused on deprived areas within the region 482 containing 14.1% of the 8,120 most deprived (national) Super Output Areas (SOAs) . In addition, two other programmes (both involving expenditure of £2.2 million by Yorkshire Forward) have been evaluated under this category namely: 

Yorkshire Futures a Regional Intelligence Network (or observatory) for Yorkshire and Humber, providing information and intelligence (across and between public sector and other stakeholders) about the region to improve decision making and forecasting; and



the Churches Regional Commission that aimed to ensure that faith groups made an effective contribution to regional policy and programme development with a particular emphasis upon supporting the delivery of regeneration activity.

479

482

Evaluation of the Single Regeneration Budget Programme in Yorkshire and Humber, May 2008. Representing 15% of the national total. Index of Multiple Deprivation Data, 2004.

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Impact Key outputs arising from these other interventions have been jobs created/ safeguarded, skills developed, businesses assisted, land reclaimed/ redeveloped and skill assists. Table 287 summarises the net outputs which have arisen from the SRB programme. The SRB programme has had a focus on creating and safeguarding jobs and reducing the skills deficit in the areas it has supported. Table 287: Gross attributable outputs from YF’s other Interventions (2002/03 and 2006/07) Expenditure covered by evaluations (£m)

Jobs created/ safeguarded

Businesses assisted

Brownfield land remediated (ha)

Skills assists

331.5

24,831

712

353

71600

Yorkshire Futures study

2.2

Churches Regional Commission

2.2

618

335.9

24,847

712

353

72,218

SRB

Total

Source: An Evaluation of the SRB Programme in the Yorkshire and Humber, May 2008.

Table 288 sets out the key net outputs achieved in relation to these interventions. Table 288: Net attributable achieved outputs from YF’s other interventions (2002/03-2006/07) Expenditure covered by evaluations (£m)

Jobs created/ safeguarded

Businesses assisted

Brownfield land remediated (ha)

Skills assists

SRB

331.5

10356

313

173

40096

Yorkshire Futures study

2.2m

2.2

10,356

313

173

40,096

Churches Regional Commission Total

335.9

Source: PwC analysis based on YF evaluation evidence

The SRB programme showed high levels of additionality, particularly with regard to people assisted with their skills development (56%). Additionality in the SRB evaluation was calculated at the national level, therefore there is no regional variation in terms of additionality. The quantitative evidence of outcomes and impacts in the evaluation reports which fed into the SRB evaluation was very limited. However, applying the 2006 GVA per worker for Yorkshire and Humber (33,863) to the 10,356 jobs created and safeguarded gives an estimated GVA of £350.7m. In addition to the outputs and outcomes discussed above, Strategic Added Value has been one of YF’s key impacts. This is discussed further in the box below. Examples of Strategic Added Value Yorkshire Forward played a strategic catalyst role in the co-ordination of activities, to create synergies and operational efficiencies. For example: 

356

Yorkshire Forward played a strategic catalyst role in the Yorkshire Futures which helped to achieve developments in information collection, sharing, and dissemination at the regional level. Specifically organisations operating in the region are now more willing to share data, research and information than previously. Yorkshire Forward also played a catalytic role by encouraging developments and improvements in sub-regional research functions and in the establishment of the Public Health and Cultural observatories. Engagement between organisations in the region has improved as a result of

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Yorkshire Forward’s involvement. 

With minor exceptions, partnership development, community development, governance and programme management were considered by evaluators and stakeholders to have been effective. Whilst the views regarding the sustainability of SRB schemes were more mixed SRB investment acted as a catalyst for a wide range of post-SRB activity (particularly in regard to regeneration related activities in areas such as Bradford.

Source: YF

Value for money Due to the diverse range of outputs in the SRB programme and the difficulties in disaggregating economic and non-economic data a value for money calculation was considered to be inappropriate. Performance against objectives The evaluation of the SRB programme did not assess performance against objectives due to a lack of available data. The general consensus of evaluators was that all of the YF schemes reviewed were either partially or largely successful. This view stems from the achievement, and in some cases, substantial overachievement of gross RDA core, other economic and other non-economic outputs (with underperformance only recorded for six out of the total of sixty-two SRB output categories). South Yorkshire, and to a lesser extent, West Yorkshire were the main beneficiaries of SRB activity in the region. This suggests that funding was effectively targeted at the sub-regions with the highest number of most deprived Super Output Areas (SOAs). When leverage is factored in there were eight schemes that invested over £40 million each within the region. Two of the largest schemes - Regen 2000 in Bradford and Aire Valley in Leeds - received just under a quarter of a billion pounds support. In short a substantial number of outputs were delivered by a relatively small number of large schemes.

National programmes Besides its own projects and programmes YF has been responsible for the management and delivery of various national programmes (with delivery within parameters closely defined by central government 483 departments). For a variety of reasons, not all the programmes have been evaluated and not all national programmes are relevant to every region. Table 289 summarises the estimated impacts where these are available. As the Table shows, these programmes have resulted in the achievement of 10,121 net jobs created / safeguarded. The estimated 484 impact on the regional economy is £262.7m in cumulative terms .

483

No national evaluations have yet been completed of the Market Towns Initiative, Support for Regional Tourist Boards and Grant for R&D, although the latter is underway. 484

Based on the Office of National Statistics 2006 GVA per worker for Yorkshire and Humber

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Table 289: Estimated impact of YF spending on national programmes between 2002/03 and 2006/07 (ÂŁm) National programme

YF spend (ÂŁm)

Net jobs created / safeguarded

Business Link

27.5

2,509

Manufacturing Advisory Service

3.7

3,078

136.8

Phoenix Fund

0.5

Regional Innovation Fund

11.6

Rural Development Programme for England (& Sustainable Food and Farming Strategy)

1.5

Selective Finance for Investment

63.3

Total

244.9

5,587

Coalfields Programme

Source: PwC analysis based on YF evaluation evidence

The GVA to cost ratio of the Business Link in Yorkshire and Humber was 3.1: 1, which compares well against the range of overall GVA to cost ratios for Business Link at the National level (i.e. 2.3: 1 to 2.5: 1).

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Annex A: List of AWM evaluations Annex A provides a list of all those evaluations undertaken by AWM which are regarded as at least capable of use which have been used to underpin the report. Intervention category Business development and competitiveness

Evaluation title

AWM spend covered by evaluation (£m)

Evaluation of the High/Higher Technology Corridors

38.7

Evaluation of the Rover Task Force 2000 and MG Rover Task Force 2005 Programmes

36.2

Evaluation of AWM’s clusters programme 2002/03 to 2007/08

72.8

PARD: Third Interim Programme Report

32.7

An independent evaluation of the Mercia Spinner Programme

3.2

Regeneration through physical infrastructure

Evaluation of major land and property investments

261.5

People and skills

An evaluation of AWM’s skills interventions

47.1

Other/hybrid interventions

Evaluation of the Single Regeneration Budget in the West Midlands

218.0

An Interim Evaluation of the Regeneration Zones Programme

280.2

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Annex B: List of EEDA evaluations Annex B provides a list of all those evaluations undertaken by the EEDA which are regarded as at least capable of use which have been used to underpin the report. Intervention category Business development and competitiveness

Evaluation title Rural Business Support

2.8

Early Stage Business Support

2.9

Innovative Actions Programme

1.7

Innovation Capital

15.4

Innovation Revenue

Regeneration through physical infrastructure

People and skills

Other interventions

National programmes

Expenditure covered by evaluations (£m)

1.5

Attraction of Inward Investment

10.6

Sustainable Consumption and Production

2.4

Trinity Lighthouse

2.5

Business Premises

22.4

Capital Project

19.8

Firstsite:newsite

3.7

EPIC

2.5

Inspire East

1.2 485

Investing in Communities

36.4

Workforce development

4.1

Construction skills

2.8

University of Essex in Southend

18.7

Meta-evaluation of SRB

64.9

An area-based evaluation of EEDA’s impact - Ipswich

24.8

Intermediate Evaluation of the Manufacturing Advisory Service (MAS) - East

2.2

485

There are five useable evaluations relating to EEDA’s Investing in Communities programme. This annex has focused on the most recent evaluation, which is a comprehensive region-wide evaluation of relevant spend on and outputs/ outcomes from this intervention.

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Annex C: List of LDA evaluations Annex C lists of all those evaluations undertaken by LDA which are regarded as at least capable of use and which have been used to underpin this report. Intervention category Business development and competitiveness

Evaluation title

LDA spend covered (£m)

Impact evaluation of four Access to Finance projects

19.8

Final Evaluation of the Up and Running programme 1.3 Up and Running Evaluation – Remedial Work Interim Impact Evaluation of Business London

1.8

Supply London/London Value Chain Interim Evaluation

2.4

Evaluation of the Theatre Audience Development Project

0.2

Evaluation of the London Fashion Forum

0.5

Collage Arts: Economic Impact Evaluation

1.0

Impact Evaluation of Heathrow City Enterprise Project

0.7

Centre for Fashion Enterprise

2.2

BioLondon: London’s Life Sciences Strategy and Action Plan – interim economic impact evaluation

24.4

British Library Business & IP Centre: A capital resource for enterprise and innovation

1.1

British Library Business & IP Centre – Additional Survey Analysis JumpStart Evaluation 3.4 Economic Impacts of the JumpStart Programme

Regeneration through physical infrastructure

361

Impact Evaluation of the London Pre-Commercial Fund

5.6

Impact Evaluation of the Secondment Into Knowledge project

0.3

Impact Evaluation of the SME Innovation Support project

1.3

Economic Impact Evaluation of the Sub-Regional Partners’ Business Retention Programme

2.3

Enhance Programme Impact Evaluation

3.5

Area Evaluation: London Riverside

77.4

Area Evaluation: Park Royal/Wembley

85.8

Woolwich/North Bexley Area Evaluation

26.8

Evaluation of the Bernie Grant Centre

3.3

Evaluation of the Rich Mix Centre

5.8

Evaluation of Laban Dance Centre

2.9

Visit London

45.8

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Intervention category

People and skills

Evaluation title

LDA spend covered (ÂŁm)

Thames Gateway Jobnet Interim Impact Evaluation

1.3

Impact Evaluation of ESF Opportunities Fund Round 1 12.9 Impact Evaluation of Non-ESF Opportunities Fund Round 1 Impact Evaluation of LDA Objective 3 ESF Co-Financing Programme 2005-2007

9.5

Impact Evaluation of Non-ESF RSP Productivity Programme

2.3

Impact Evaluation of Non-ESF RSP Inclusion Programme

1.8

The Supporting Talent into Enterprise Programme (STEP) 2006-2008

1.6

Impact Evaluation of ESF RSP Inclusion Programme

1.5

Impact Evaluation of ESF RSP Productivity Programme

0.9

Impact Evaluation of On Your Marks Programme

0.6

Impact Evaluation of Migrants and Refugee Qualifications Programme

0.3

Evaluation of Southwark Works

2.8

Other

An evaluation of the Single Regeneration Budget programme in six English regions

National

Evaluation of London MAS

362

507.8 6.8

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Annex D: List of NWDA evaluations Annex D provides a list of all those evaluations undertaken by the NWDA which are regarded as at least capable of use which have been used to underpin the report. Intervention category Business development and competitiveness

363

Evaluation title

NWDA spend covered (ÂŁ million)

Agenda for Change Programme

9.8

Bio Core Technology Facility

10.9

Bio Investments

10.1

BREW Programme

1.5

Broadband Investments

12.3

Clusters Programme

25.9

Daresbury Science and Innovation Centre

16.3

East Manchester Economic Programme

2.2

ENWORKS NW Minimisation Project

1.0

FP6 Dissemination Module 2

1.0

Green Business Park

0.8

Higher Education Innovation Funds Round 2 (HEIF2)

7.4

ICT Aimes Programme

3.4

InfoLab21 Programme

10.0

Infrastructure Work at Arvato Gravure Printing Site, Speke

2.7

Lancashire Digital Technology Centre

2.0

Liverpool Digital Project

16.2

Liverpool Science Park

6.2

Motivating Merseyside Business to Innovate (MMBI)

1.2

National Biomanufacturing Centre

31.7

North West Business Investment Fund

11.6

PowderJect Project

14.1

Project Access

16.8

Quinn Glass

4.9

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Intervention category

Regeneration through physical infrastructure

People and skills

Other

364

Evaluation title

NWDA spend covered (ÂŁ million)

Regional Rural Programme

6.8

Salford Start 2 Centre Managed Workspaces

0.6

Social Enterprise

5.2

Supply of Defence Diversification Agency Technology Diversification Managers (DDA TDMs)

1.7

The North West Science Fund

11.5

Ancoats Regeneration Programme

45.0

Barrow Call Centre

3.5

Central Park

15.0

Futures Park, Bacup

3.1

George Street Quarter, St Helens

1.3

Historic River Wall, Chester

0.8

Kingsway Project, Widnes

0.8

Land Reclamation

17.3

Liverpool Biennial International Festival

0.5

Liverpool Commercial District

7.4

LLDC SIA

30.3

LV Public Realm Interim

19.3

LV Waterfront Construction Impacts

38.0

Marketing Interim

16.3

NML Into the Future

1.8

Regional Strategic Sites Programme

55.5

Tourism Interim

8.4

Visitor Interim

12.2

Whitemoss Business Park

3.9

West Lakes Renaissance

31.8

World of Glass

0.9

BESS Programme

0.9

Eastserve Programme

1.5

Lancaster University Leadership Centre

4.4

Maximising Opportunity in Warrington

0.7

Project Unity

20.0

URC NEM Whitworth Media Technology Centre

2.0

Beacons East Manchester (Round 5)

19.2

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Intervention category

Evaluation title

NWDA spend covered (ÂŁ million)

Blackburn Town Centre Renaissance

5.4

Cheshire Rural Recovery Programme

6.5

Halton Focus for Change (Round 5)

9.1

Hyndburn PACT (Round 6)

6.5

Lancashire Rural Recovery Programme

7.0

Sefton Village Partnership

0.8

Single Regeneration Budget (SRB) Meta Evaluation

National programmes

365

286.2

West Lancashire Investing in Business Programme

3.2

Coalfields Evaluation Programme

3.2

Evaluation of the Market Towns Initiative

9.5

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Annex E: List of ONE evaluations Annex E provides a list of all those evaluations undertaken by the ONE which are regarded as at least capable of use which have been used to underpin the report. Intervention category

Business development and competitiveness

Regeneration through physical infrastructure

People and skills

Other interventions

366

Evaluation title

ONE Expenditure covered by evaluations (£m)

Access to Finance

0.6

IEF Impact Evaluation of the Business Theme – Enterprise Support

9.4

A Review of the ONE Sectors Programme

23.7

E-Business Programme Evaluation

13.7

ONE Innovation, Industry and Science (IIS) Programme – Strategy for Success

150.6

Evaluation of ONE Investment, Aftercare and Overseas Function

6.1

Midas Project Evaluation

0.6

A Programme-Level Evaluation of ONE's Quality of Place activities

180.9

Regional Image and Tourism Marketing (Promoting the Region)

12.5

ONE Economic Inclusion Programme Evaluation

11.1

ONE Skills and Higher Education Programme Impact Evaluation

83.7

An Evaluation of the SRB Programme in the North East

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Annex F: List of SEEDA evaluations Annex F will provide a list of all those evaluations undertaken by the SEEDA which are regarded as at least capable of use which have been used to underpin the report. Intervention category

Evaluation title

SEEDA spend covered (£m)

Business development and competitiveness / Regeneration through physical infrastructure

Innovation infrastructure Evaluation*

30.3

Business development and competitiveness

Individual enterprise Support Evaluation*

18.2

Business Competitiveness Evaluation*

15.8

Interim Evaluation of the Redundant Buildings Grant and Farm Diversification Programmes*

3.8

End point evaluation of SEEDA’s Emerging Technologies Programme – Part I*

2.0

Evaluation of the Projects and Partnerships Supported By SEEDA to Achieve Sustainable Use of Natural Resources

5.8

Physical Regeneration Evaluation*

126.6

Regeneration through physical infrastructure

People and skills

486

487

Sea Space Evaluation

31.2

Strategic sites evaluation – Chatham Maritime

21.1

Evaluation of the Oxford Castle and Prison Project

6.1

St Cross Business Park, Isle of Wight: Ex Post Evaluation

5.5

Evaluation of Gosport Business Centre

4.7

Chatham Maritime University Buildings Evaluation (Drill Hall and Canteen)

7.1

Skills and Employability Evaluation*

14.3

486

Evidence was divided between two categories

487

Expenditure covered by this evaluation has been allocated across intervention categories

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Intervention category

Evaluation title

SEEDA spend covered (ÂŁm)

MKOBB Sub-region Area Programmes End of Programme Evaluation

3.9

Evaluation of Exodus

3.5

Evaluation of the SEEDA

2.3

Basic Skills Programme

Other interventions

National programmes

NHS Skills for Life ProgrammeEvaluation

2.1

Management Development Evaluation

2.0

Evaluation of Great Ideas in Science and Technology (GRIST)

1.0

Redundancy Support Service Evaluation

0.9

Skills Gateway Interim Evaluation Report*

0.2

UP for Enterprise -Phase One RollOut: Project Evaluation*

0.2

Single Regeneration Budget Metaevaluation

128.8

Evaluation of the Area Investment Frameworks in the South East

31.5

Tourism South East Evaluation

7.1

East Kent Coalfields Evaluation

20.9

*Evaluations are interim. Sampling evaluations have also been marked as interim as they include projects at all stages of their lifecycle.

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Annex G: List of SWRDA evaluations The table below lists of all those evaluations undertaken by SWRDA that are compliant with the principles of the IEF and have been used to inform this report. Intervention category Business development and competitiveness

Evaluation title

SWRDA spend covered (ÂŁm)

Business Support Economic Impact Review

17.2

ICT as an Economic Enabler

0.2

Beacon South West

1.0

South West Food and Drink

5.7

SWRDA Support for the Aerospace Industry

Regeneration through physical infrastructure

13.6

BioApproaches

0.7

Coral Reef

3.3

Enterprise Pavilion

2.5

Tamar Science Park

5.0

Gloucestershire Floods

2.0

Physical Regeneration Economic Impact Review

95.5

Sites and Premises Economic Impact Review

167.5

Rural Renaissance

People and skills

16.6

Temple Quay I

1.9

National Maritime Museum Cornwall

7.7

The Eden Project

11.0

The Way Ahead

2.6

Creating Excellence

2.5

Skills and Learning Economic Impact Review

19.5

South West Opportunities for Older People

0.6

Advanced Engineering Skills

2.9

Combined Universities in Cornwall

369

14.7

Genesis â&#x20AC;&#x201C; Somerset Sustainable Construction Centre

1.2

Relocation of Gloucester FE College

1.1

Strengthening Community Foundations

0.1

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Intervention category

Other interventions

National programmes

370

Evaluation title

SWRDA spend covered (ÂŁm)

Single Regeneration Budget

55.2

Business Economy Module and Skills Learning Intelligence Module

2.0

Office of National Statistics Regional Presence

Grants for R&D

2.4

South West Manufacturing Advisory Service (interim)

1.05

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Annex H: List of YF evaluations Annex H provides a list of all those evaluations undertaken by YF which are regarded as at least capable of use which have been used to underpin the report. Intervention category

Business development and competitiveness

Evaluation title

E-Business Unlimited

6.0

South Yorkshire Design Works

1.0

South Yorkshire Generic and Intermediate Start Up Programme

3.9

York and North Yorkshire Business Support and Enterprise Programme

3.9

Investment in Cluster Initiatives

5.2

Centres of Industrial Collaboration

9.1

Industrial Research and Development Award

7.4

Science City York

0.8 12.4

Targeted Export Support Scheme

2.9

Investment in Resource Efficiency

3.8

Bradford Centre Regeneration

17.8

Holbeck Urban Village

26.2

Renaissance Market Towns

9.7

Renaissance Towns and Cities

96.8

Sheffield One Urban Regeneration

37.6

Stainborough Park Hull Quays

1.5 14.5

Rail Rolling Stock

5.9

Modernising Rural Delivery

1.4

Renaissance South Yorkshire

3.7

Hull City Build

371

92.4

Broadband Gap & NYnet

South Yorkshire Inward Investment Grant Scheme

Regeneration through physical infrastructure

YF spend covered by evaluations 2002/032006/07(ÂŁm)

16.4

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Intervention category

People and skills

Other interventions

372

Evaluation title

YF spend covered by evaluations 2002/032006/07(ÂŁm)

Graduates Yorkshire

1.5

South Yorkshire Transitional Labour Market

5.7

Directions Finningley

5.7

Train to Gain

7.8

South Yorkshire Social infrastructure Programme

6.8

West Yorkshire Skills Programme

1.4

University Centre Barnsley

2.0

SRB Programme Evaluation

331.5

Yorkshire Futures

2.2

Churches Regional Commission

2.2

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