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

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Independent Performance Assessment (IPA) Self Assessment

January 2006

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CONTENTS

CHIEF EXECUTIVE’S FOREWORD

SETTING THE SCENE - NWDA AND ENGLAND’S NORTHWEST

AIMS What is the RDA, together with its partners, trying to achieve? 1. AMBITIONS

2. PRIORITISATION

ACTIVITIES What is the capacity of the RDA, including its work with partners, to deliver what it is trying to achieve? 1. CAPACITY

2. PERFORMANCE MANAGEMENT

ACHIEVEMENTS What has been achieved?

INITIAL IMPROVEMENT PLAN

IPA GLOSSARY OF TERMS

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CHIEF EXECUTIVE’S FOREWORD In the 2005 Budget Government announced a new performance assessment process for RDAs. This is called Independent Performance Assessment (IPA) and is based on the Comprehensive Performance Assessment used for Local Authorities. I am strongly supportive of this new approach, which will reinforce the Agency’s focus on continuous improvement and learning and ensuring that we work with the region to develop the right approach to delivering the 2006 Regional Economic Strategy (RES).

improvements in internal controls and project management. NWDA now has sound management systems and accurate management data;

simplified and strengthened complex and overlapping delivery arrangements in the region, including creating new, focussed, regeneration companies and encouraging strong sub-regional partnerships;

a well regarded and strong regional evidence base;

strong alignment of EU funding with economic priorities, and alignment achieved between RES and regional housing and spatial strategies, and

all major targets and strategic commitments delivered since 1999.

I believe strongly in continuous improvement and learning and volunteered NWDA to be one of the first RDAs to undergo the new system. I am therefore very pleased to publish this self-assessment of our own performance. It has been written within an agreed template provided by the National Audit Office. We have consulted with a range of stakeholders and involved the Board and all staff in its preparation and I am very grateful for the honest and helpful feedback and contributions we have received. Self-assessment is a valuable opportunity to take stock of the progress we have made and to engage all at the NWDA in a structured discussion about how we can continue to improve and what we need to prioritise to do so. We have used improvement planning since 2003 and this self-assessment presents a further opportunity to embed continuous improvement across the Agency. NWDA is the largest of England’s Regional Development Agencies and the Northwest is one of England’s most complex regions. As an organisation we cover two of the countries biggest city economies, some of its most well known countryside as well as areas of long standing economic underperformance both alongside and remote from some of the highest growth areas in the country. Our economy is the largest of the northern regions, and its future contribution will have a major impact in reducing the productivity gap between north and south. We have a complex and important task to achieve and we have made good progress: -

2006 Regional Economic Strategy (RES) – NWDA secured strong regional buy in to prioritisation around three major drivers;

managing the transition from handling a very large number of expectations and projects reflecting inherited and previous programmes to new single pot arrangements reflecting Government economic policy priorities;

recent prioritisation around fewer and more transformational economic projects through the Strategic Investment Planning process. NWDA is in a good position to reallocate our resources and influence other organisations to deliver the new RES;

But we know that there are still areas where we can, and where we should be expected to, improve: -

working more closely with Sub Regional Partnerships, particularly in the city regions, to strengthen integration of their plans with new RES objectives and to ensure delivery occurs at the most effective point;

continuing to prioritise projects and programmes that are truly transformational and making clear what we are not going to support;

continuing to embed programme and project management improvements across all levels of the organisation, and to be as transparent as possible in investment appraisal and decisions;

NWDA has evolved and senior staff and structures changed at a rate unprecedented in the public sector. We need to continue to improve how we manage change, as it is clear that we must continue to adapt to changing priorities;

developing evaluation of past projects and increasing the use of evaluation in future investment decisions as a learning organisation, and

improving co-ordination of regional research and strengthening our internal policy capacity.

I hope that this self-assessment provides a realistic picture of the role that NWDA plays and the strengths that we bring to the region, as well as a demonstration of our commitment to continually improve, learn and develop our organisation and staff to deliver what the region and Government expects.

Steven Broomhead

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SETTING THE SCENE - NWDA AND ENGLAND’S NORTHWEST England’s Northwest

Recent Economic Performance

England’s Northwest is a £100bn economy with a population of 6.8 million people and 230,000 businesses. It is a large, diverse and complex region when compared to other UK and European regions. Manchester is the largest media hub and financial centre outside London. Liverpool has one of the world’s most famous waterfronts. Lancashire and Cheshire have the largest concentration of advanced manufacturing and chemical production in England and the Lake District in Cumbria is one of Europe’s leading national parks. Parts of Cumbria have a large manufacturing sector and Cumbria is a national centre for the Nuclear industry.

During the 1980s and 1990s our economy went through a major period of restructuring and underperformance. Since 2000 the region has been performing well in favourable conditions, but the region is still not contributing its full potential to the UK economy. Gross Value Added (GVA) per head is 13% lower than the England average, resulting in an output gap of £15.3bn with the England average. £3.8bn of this is due to fewer people working per head of population and £11.5bn is due to lower productivity (GVA per employee). Forecasts also indicate that the next few years will be tougher for the region, due in part, to demographic changes and a slower growth in public spending.

The Northwest has areas of economic and social deprivation close to areas of high recent growth. It has remote rural areas and urban areas that are also remote from the region’s main economic drivers. There are therefore sharp contrasts between the views of different regional partners and stakeholders on local needs and their relationship with the regional economy. Agreeing that prioritisation is required, and developing support for the implications of prioritisation is therefore very challenging. The differences between need and opportunity, urban and rural are all acutely expressed in the region.

Sub Regional Performance This diversity is reflected in substantial variations in the economies of the Northwest’s five administrative sub-regions, as illustrated in the table below1:

Although comparisons with England are not the only important measure, they are useful to illustrate the performance of the economy. Other “gaps” with the England average (based on the size of the population) include: -

80,000 fewer people working 120,000 more people with no qualifications 80,000 fewer people with degree level qualifications 90,000 fewer people working in the “knowledge economy” 38,000 fewer companies

In the past large manufacturing companies dominated the Northwest economy. The structure of the economy, however, is increasingly becoming similar to that of the UK as a whole. Manufacturing, nevertheless, is still vital to the Northwest and very productive. The majority of the GVA gap is in the service sector, especially business and professional services (40% of the £11.5bn gap).

Opportunities and Assets The Northwest has a range of assets and opportunities with which it can address the economic and social challenges it faces:

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the highest number of people with graduate level skills outside London and the South East;

above average levels of business Research and Development (R&D) per head of population driven by a core of internationally leading companies;

world class centres of excellence in our 14 Higher Education Institutions (HEIs) (87 Departments with 5 or 5* Research Assessment Exercise ratings – 11% of the England total);

Source: Regional Accounts, ONS, December 2005 N.B. At NUTS2 level GVA data is workplace based For statistical purposes ONS count Halton as part of the Cheshire sub region not as part of Merseyside

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internationally competitive sectors in biomedical, advanced engineering and materials (including aerospace, chemicals and automotive), energy and environmental technologies (including nuclear), food, creative and digital industries, business and professional services;

and make recommendations to the main Board. Each subcommittee consists of Board members with relevant expertise and is supported by the relevant NWDA Directorate. All major projects and issues come to the Board with the benefit of a discussion at their relevant sub-committee.

major cities of Manchester and Liverpool, and the emerging importance of Preston, as key drivers of city-regional growth;

Resources

significant growth opportunities around Crewe, Chester, Warrington, Lancaster and Carlisle;

major international gateways in Manchester International and Liverpool John Lennon airports (projected to grow to 50 and 12 million passengers per annum respectively); the Port of Liverpool which is a major national deep sea gateway and Blackpool Airport, one of the fastest growing in Europe;

a strong tourism industry worth £6bn with 18 million visits a year based on strong assets in the cities; a beautiful natural environment with nearly one third of the region designated as National Park (including the Lake District) or Area of Outstanding Natural Beauty; a world famous sporting and cultural offer; Britain’s top seaside resort (Blackpool); and impressive Roman and industrial heritage;

strong cultural diversity; an asset for innovation, enterprise and communities, and

an important rural economy which accounts for 23% of the region’s GVA and 40% of all businesses and an environmental economy which contributes 2.7% of the region’s GVA employing 116,000 people.

The Northwest Regional Development Agency The Northwest Regional Development Agency (NWDA) was established in 1999, through merging elements of English Partnerships (EP) Inward, the Rural Development Commission and Government Office. We are one of 9 Regional Development Agencies in England. The 1998 Regional Development Agencies Act sets out our statutory responsibilities and Governance arrangements.

NWDA Board We have a business led Board of 15 members appointed by the Secretary of State for Trade and Industry from across the region’s private sector, local authorities and trade unions. The current Chief Executive joined the organisation in April 2003. The Board sets the strategic direction of the Agency and approves our strategic investment plans. The Board has a number of sub-committees that reflect the agency’s priorities

NWDA’s total 2005/06 budget is £474m and we have 374 staff organised into 4 Directorates. The 2002 and 2004 Government Spending Reviews charged NWDA with delivery of new responsibilities. These are set out in the table below. Corresponding increases in the Agency’s budget reflect this growing remit, although significant new delivery has also been funded from existing resources2. This is consistent with RDAs’ mission to increase the efficient use of public expenditure in their regions. However, this also presents a challenge for RDAs in terms of new skill requirements, requiring rapid evolution of the organisation to meet new expectations.

New Responsibilities since 2000 New tasks with new resource New tasks funded from existing resources 2000 - Regional Innovation Fund and delivery

2004 - Statutory planning role

2003 - Establishing Manufacturing Advisory Service

2005 - Establishing the Regional Skills Partnership

2004 - Developing and delivering a Regional Tourism Strategy

2005 - Regional implementation of Lambert review

2004 - Implementation of Sustainable Farming and Food Strategy and Market Town Initiative

2005 - Establishing regeneration centre of excellence (RENEW)

2005 - Business Link operation and integrated brokerage

2005 - Northern Way – strategic development and contribution to growth fund.

2005 - Regional Selective Assistance and GRAND grants

Corporate Plans 2003/06 and 2005/08

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Developing Approaches to Partnership Working with other organisations across the public, private and voluntary sectors is fundamental to delivering our mission and objectives. RDAs were created to develop and demonstrate new and innovative ways of working across sectors to maximise investment leverage, align public spending and generate shared priorities and solutions. Developing partnerships, and developing the capacity of the Agency itself and other bodies to work together, has therefore been a significant priority. Broadly speaking, we work in partnership in two ways: -

through agreement with other organisations to deliver actions or projects on NWDAâ&#x20AC;&#x2122;s behalf and,

through a strategic relationship where the aim is to work together to develop priorities or policy, align investment and plans across organisations, to share good practice or build capacity in other ways.

In our first three to four years we focussed on the need to manage inherited programmes and commitments. This largely involved social and physical regeneration projects, directly funded by the RDA. Partnerships were therefore characterised by direct contractual relationships related to funding streams, and involved a high degree of control by the Agency. As new approaches were established by the NWDA, it was necessary to begin with a detailed management approach, to ensure that organisations were established correctly, that governance systems were in place and that, first and foremost, effective delivery took place. Changes to our arrangement with Regeneration Companies such as Liverpool Vision and New East Manchester are good examples of how this relationship has developed progressively over time as we have worked together to rationalise inherited complexities. The removal of national Tier 2 outcome indicators and the introduction of the RDA single pot has proved particularly helpful in providing the flexibility for the RDA and partners to align regional and local objectives. Building on these early foundations, the Agency has sought to develop a more strategic approach to partnerships, increasing flexibilities and reducing management oversight as partnersâ&#x20AC;&#x2122; capacity has increased and delivery strengthened. We have strongly supported the development of Sub-Regional Partnerships (SRPs) to provide a strategic voice and focus for sub-regional priorities. We now have five effective SRPs in place. These have developed at a different rate and with different structures. Each SRP rightly reflects local circumstance and priorities. We have worked with SRPs to develop a joint approach to investment through sub-regional strategies and action plans, and established strong working relationships, with formal memoranda of understanding. This has enabled SRPs to provide a credible and representative input to development of the 2006 RES. Our current work on delivery of the new Regional Economic Strategy (RES) reflects a more transparent approach as a vital step towards implementing an integrated investment approach with partners for the 2006 RES, aligning delivery, investment and priorities at the regional, sub-regional and local level. This is described in the sections on prioritisation and capacity.

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However, NWDA has not always communicated a clear and consistent policy about what we expect from SRPs, particularly in terms of roles and delivery in the context of emerging policy on City Regions. Improving clarity and shared responsibilities is particularly important in the context of maximising the performance of our City Regions. We also inherited a fundamentally complex structure of delivery vehicles, and government departments have continued to establish new bodies. NWDAâ&#x20AC;&#x2122;s strategic approach has been to steadily improve capacity within the region and to work with stakeholders to simplify the network of organisations engaged in both strategic and delivery activity to reduce overlap and improve efficiency. Whilst we believe that these principles are correct, NWDA has not always been able to develop strong consensus to practical changes, so this work has not been without tensions. The first stage of recent work to integrate economic regeneration in Cumbria was challenging, for example. Moving towards a more strategic role and relationship with partners means that we must continue to adopt different partnership approaches and styles.

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AIMS - AMBITIONS What is the RDA, together with its partners, trying to achieve? Northwest Ambitions Working with the region on development and implementation of the Regional Economic Strategy (RES) lies at the heart of NWDA’s leadership role. The RES sets out a 20 year vision for the region, with a focus on action over three years. It is owned by the region as a whole, not just NWDA, and as such provides a framework for aligning public and private investment with a clear set of shared ambitions and priorities. The decision to prepare a RES was a radical and innovative step by UK Government, recognising the importance of regions as economic units competing with similar economies in Europe and globally, and devolving the prioritisation process to a regional level to enable them to contribute more effectively to UK Plc. Developing the 2000 RES was therefore the first attempt in the Northwest and other regions to establish a new culture of generating shared analysis and solutions to economic problems at a regional level. NWDA’s task has been to lead the preparation of a 20 year vision and strategy that is updated every three years. The approach we have taken since 1999 has been to build engagement, strengthen the regional evidence base, and through an iterative process build a growing consensus around the challenges, opportunities and solutions that the region needs to prioritise.

challenge of improving its productivity against the background of a steady shift from manufacturing to lower productivity service industries. These “daughter” strategies have also been updated regularly. Whilst not on the same review cycle as the RES, they continue to be aligned with it.

2003 – Innovative Approaches The 2003 RES built on the developing evidence base and moved the region towards a process of greater prioritisation of major economic drivers.6 The arrival of the RDA single pot funding regime in 2002 enabled some reallocation of RDA funding7, although the dominance of inherited programmes meant that this was not immediately significant. NWDA focussed instead on using our leverage with partners to further increase their level of engagement and stimulate activity that would not otherwise occur. The 2003 RES set out ten strategic objectives with activities identified for each. These involved innovative and unique approaches, with widespread support across the region, such as establishing the Northwest Energy Council8, and Project Access in Cumbria. Specific programmes to support the economic growth and physical regeneration of Manchester and Liverpool underpinned the importance of the region’s major cities and sub-regional economies as economic drivers9. The 2003 RES was underpinned by a detailed action plan in which partners signed up to deliver specific actions.

2000 – Building Engagement The first RES3 in 2000 was therefore a comprehensive document designed to engage as many relevant partners as possible and establish consensus around the issues that the region faced. The regional evidence base was at that time not well developed, and priority was given to improving understanding of the region’s position and the issues it faced. NWDA’s immediate aim was to build a strong commitment in the region to an economic agenda and improve capacity to enable the region to take a more co-ordinated and strategic approach to economic development. The economic assessment commissioned for the 2000 RES was the first attempt to draw together a consolidated picture of the region’s economy. This first RES, whilst overly general and unfocussed, did lead to the preparation of a series of more detailed thematic strategies, also owned by the region, setting out how specific priorities would be tackled. These included the Regional Science Strategy4 and Rural Renaissance5. The establishment of the Northwest Science Council was a UK first. It recognised explicitly for the first time the importance of the region’s strengths in science and innovation in meeting the

2006 – Shared Priorities and Transformational Actions In early 2005 NWDA began leading development of the third iteration of the RES. Previous work to build regional capacity and engagement resulted in partners and stakeholders now being very clear in calling for the Agency to lead a process of strong prioritisation10. For the first time, this could be driven by a strong evidence base and shared understanding of the issues and opportunities faced by the region and the detailed nature of its economic drivers11. NWDA established a RES Advisory Group consisting of a wide range of partners and stakeholders including Sub-Regional Partnerships, which played a vital role in drawing together the views of sub-regional stakeholders. This Advisory Group was involved before, during and after the formal consultation process, providing detailed input and generating shared ambitions and priorities. The Government Office North West (GONW) has commended this process12 and the Regional Assembly’s clearer mission and focus has played an important role.

NW Regional Economic Strategy 2000 and GONW report on performance 2002/03 page 25

GONW report on performance 2002/03 page 13 and http://www.northwestscience.co.uk

GONW report on performance 2002/03 page 18 and http://www.gos.gov.uk/gonw/EnvironmentRural/FarmingFood/RuralRecoveryPlan/

GONW 2003/04 Performance Report, page 14

GONW 2002/03 Performance Report

GONW 2003/04 Performance Report page 14

RES 2003

RES Consultation Report

Regeneris Economic Analysis for 2006 RES and Consultation Report

GONW RES consultation response and 2004/05 Performance report page 1

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At a strategic level partners and stakeholders now agree that the issues of worklessness and productivity are the region’s major challenges13 and that these are concentrated in a number of geographic areas and businesses sectors. The 2006 RES is currently with Ministers for endorsement having been formally agreed by all members of the RES Advisory Group, emphasising the degree of regional acceptance that it now has. It is designed to drive the region’s development forward more quickly and more dramatically than before. Recent growth has been welcomed, but we have acknowledged the need to increase the pace and led the region in developing an approach based on identifying transformational actions. In addition to agreeing high level challenges, the Northwest has made a major advance in agreeing across a wide range of public, private and voluntary sector bodies, the specific interventions that will have most impact in achieving the region’s ambitions and vision. The development of the RES since 2000 has therefore involved five years of building the evidence base, developing a shared regional economic agenda and ambition, and improving capacity and consensus so that the Northwest has made genuine choices about strategic priorities and actions to deliver them.

Shared and Aligned Ambitions In addition to the Regional Economic Strategy, Government has also required regions to produce Spatial and Housing Strategies and to establish regional frameworks for other public sector bodies operating within the region with their own national priorities and targets. NWDA has therefore looked beyond the effectiveness of the RES process to build alignment and shared economic ambitions across a range of initiatives and strategies, some of which it has limited or no direct control over. Since 2003 NWDA has brought its capacity to bear, particularly working with GONW and North West Regional Assembly as the other two major regional partners, to develop a strong regional approach to strategy alignment. Through joint working at the most senior level, the region has agreed that jobs/ worklessness, housing and access are the overarching priorities that all will work together to achieve. NWDA has played a proactive role in achieving this alongside partners. The RES, emerging Regional Spatial Strategy (RSS) and Regional Housing Strategy (RHS) are well aligned, and the region’s advice to Government on Regional Funding Allocations, facilitated by GONW, has also been aligned with economic priorities14. The Regional Strategy on Health and NW Equality and Diversity strategies are also aligned with economic priorities. The credibility of NWDA’s approach to the RES, the regional evidence base and prioritisation process has been important in achieving this15.

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Challenging ambitions Targets set out in the RES underpin the region’s ambitions. The 2006 RES sees the region setting itself challenging outcome targets across key areas ranging from GVA growth to reducing CO2 emissions16. The existing evidence base has been used to set short term targets for achievement by 2009, linked to longer term ambitions for 202617. In addition to eight targets the RES also sets out other indicators that will be monitored. Taken together, these will demonstrate how the region is contributing to national PSA targets as well as tracking its own progress towards the 20 year vision18.

Evidence Base Since 1999 NWDA has led a programme of building the regional evidence base, identifying gaps and the need for regular and comparable data to track economic improvement. Particular importance has been attached to developing a shared evidence base that can be used to drive prioritisation across the region. The Regional Intelligence Unit was a pioneering initiative by NWDA to lead this process and provide comprehensive extranet based access to the evidence base and a range of evaluation and social, economic and environmental data to a wide range of regional stakeholders and partners. The Unit also provides a co-ordinated point for access to national evidence and statistics in the region and a research function for partners19. The Regional Economic Forecasting Panel20 is unique to the Northwest and provides highly credible and independent forecasting data to track economic trends and underpin and test scenarios and assumptions. HM Treasury’s Allsop report into the availability of regional statistics acknowledged that the UK’s overall approach to economic and social statistics was still too concentrated at the national level. Against a background of delayed implementation of his findings at national level, NWDA has continued to work with partners to build a strong and very well regarded structure for collating and sharing data and analysis in the region. The Agency has, where appropriate, commissioned specific pieces of work to inform policy making and decision taking. The most significant of these recently was the economic baseline work undertaken by Regeneris to underpin the review of the RES. Other examples include the reports commissioned to underpin our work on Broadband in Cumbria and Rural Renaissance. The regional evidence base is therefore used both to inform the development of regional ambitions and priorities and NWDA’s own policy and investment decisions.

RES Consultation Report

Northwest response to Regional Funding Allocations – December 2005

GONW RES consultation response

2006 RES page 8

2006 RES page 4

RES 2006 Annex D

www.nwriu.co.uk

Regional Economic Forecasting Panel 2005 Reports

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European Funding Our approach to developing shared ambitions and priorities is reflected in our work on European funding. NWDA has aligned the Objective 1 and 2 Single Programme Documents with the RES through establishing a successful European Strategy Group. This has enabled the region to develop a shared understanding of its European priorities and culminated in the revised European Framework launched in May 2005. 2006 will see the launch of a single NW Regional European Partnership, a joint body of NWDA and NWRA. On specific European programmes such as the Objective 2 Regional Action Plan, the NW Brain Programme and Frameworks NW, we have levered European funding by leading delivery on behalf of the region. We have also successfully supported GONW in maximising EU funding available to the region and avoiding de-commitment. We have used our resources to provide match funding and secure European funding of £1.2bn over six years.

RDA Skills Directors are recognised as one of the more effective cross RDA groups and we liase regularly with the Skills Directors and their teams, ensuring that responses and briefings to Government are representative of an overall RDA view.21 We have identified major priorities for our lead-role workplan, which has been agreed by RDA Chair. We also have established good working relationships with other Agencies, including the National Learning and Skills Council, with a commitment to identifying and pursuing joint priorities in the Comprehensive Spending Review 2007, where appropriate.

Health Ambitions We have led an innovative partnership across the region’s strategic health authorities, recognising the importance of health to productivity and economic inclusion and also the direct economic importance of the healthcare sector through its procurement, capital planning, R&D and workforce development.

NWDA chaired the Mid Term Evaluations for both Objective 1 and 2, which provided a further opportunity for the region to ensure that its EU priorities were supporting emerging RES priorities. We are also working with HEIs to deliver a major Objective 2 European Regional Development Fund (ERDF) Action Plan focussing on linking business support with knowledge transfer. This is the first project of its kind in England. We also provide financial support to a three year project assisting Small and Medium Sized Enterprises (SMEs) access EU Research and Development (R&D) funding.

Skills Ambitions – Our Lead Role On behalf of the RDAs, NWDA has, since 2003, led on the skills agenda and the RDAs’ national relationship with DfES and DWP. Skills has consistently been identified by RDA Chairs and Chief Executives as one of the highest priority areas for all RDAs due to the importance of skills in increasing productivity, innovation and enterprise. RDAs have different priorities and emphases for skills and developing a joint RDA position is often challenging. Working through the RDA Skills Directors’ Group we have agreed priorities for joint RDA action and strong RDA wide input to the 2004 spending review on skills and the links with employment. We have also co-ordinated regular skills related input to the RDAs joint submission to successive Budget announcements. The RDAs’ main aim has been to increase action by Departments in creating stronger links between skills provision and training and the future needs of each region’s economy and its workforce.

SWOT analysis of RDA Lead Roles 2004.

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AIMS - PRIORITISATION What is the RDA, together with its partners, trying to achieve? The Region’s Priorities When the RDAs were established, regions lacked the capacity and frameworks required to establish economic priorities and move beyond inherited funding streams and delivery mechanisms. Our early priority was therefore to work with partners to develop delivery and strategic capacity by establishing regeneration companies, rural partnerships and cluster organisations. We funded capacity development in subregional bodies such as Digital Development Agencies and established the Northwest Science Council and Energy Council22. This has led to greater strategic input from across the region to the process of prioritisation and a much larger body of evidence and understanding23, which was also a requirement identified in the 2003 RES. The 2006 RES now has clearly defined priorities to underpin its ambitions. The consultation process involved a high quality debate about what priorities should be involving a very wide range of stakeholders and partners24. The involvement of subregional partnerships also ensured that the RES was built on a shared understanding of the contribution of sub-regional economies and City Regions. The RES Advisory Group enabled a much wider range of stakeholders to be involved in a structured debate than in 2003, with each organisation carrying out their own consultation events and programmes. This process is set out in the RES consultation report and provided comprehensive coverage of groups at risk of disadvantage and all the Northwest’s subregions and localities. Agreeing priorities inevitably involves some partners feeling that their priorities are not sufficiently prominent. This is particularly acute in our region, where we have to address both the opportunities of our biggest cities and the need to directly tackle worklessness and productivity in areas remote both geographically and economically from centres of growth.

NWDA Prioritisation Once established, an immediate priority for the NWDA was to develop the projects that would improve the region’s economy, and seek to increase the flexibility of inherited funding streams. As the region has developed its priorities, we have used the flexibilities gained from the single pot in 2002 and our growing capacity to support the regions emerging priorities. As delivery capacity and opportunities for investment increased then so did the requirement for prioritisation, which our existing programme and project management systems did not support25. In 2004, the NWDA Board and senior management took the fundamental decision to develop a three-year Strategic Investment Plan (SIP). This was based on priorities set by the

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Board in February 200426. The aim was to make a step change in our ability to focus on a smaller number of larger scale actions, drive forward key priorities and create the headroom that would be required to reallocate resources as new priorities were developed in the 2006 RES27. The development of a Strategic Investment Plan (SIP) also recognised that the Corporate Plan, whilst very clearly linked to RES priorities, is a document based on detailed guidance from Government departments that has to bring together regional and national requirements. It does not, therefore, naturally support ongoing performance management with SMART targets and objectives. The Strategic Investment Plan, supported by an annual business planning round, now provides the framework required. Our business planning structure is set out below: 20 year Regional Economic Strategy revised every 3 years (Inc. regional outcomes)

3 year Corporate Plan, produced every 2 years Inc. NWDA strategic added value, outputs and efficiency plan/corporate performance indicators)

Policy and Programme Evaluation

Performance Management

3 year Strategic Investment Plan, rolled forward every year (Detailed budgets)

Team and Individual Objectives Annual Business Plan

Increasing Focus The prioritisation process begun in 2004 involved a reduction in the number of projects that NWDA supports from 3000 to around 900 in 2005/0628. This is still too many to represent an optimal focus on major priorities, so as projects finish the current SIP reduces the number of projects and programmes already agreed to 537 in 2006/0729. This has not involved withdrawing approved funding, but has seen the Agency being much clearer about those projects that it is going to support. Executive Directors now review all proposals for investment at the concept stage, to enable the agency to provide an early view to partners and stakeholders on whether a particular project or programme is a priority in line with the RES. Subcommittees of the Board are also involved at an early stage of developing major and transformational projects. This approach has included negotiating the costs of delivery down and improving value for money with partners in order to free up resource for delivery of new activity.

2003 RES

RES 2006 Consultation Report

GONW Consultation Response to 2006 RES

GONW Performance Report 2003/04 page 1

NWDA SIP – page 1

GONW performance report 2003/04 page 1

SIP 2005/06 It is important to note that the large majority of these are relatively small grants to specific businesses under various schemes with their own scheme rules and monitoring. It is not the case that NWDA has 537 priority economic regeneration projects. SIP 2006/07 – 08/09

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We acknowledge that this has been a challenging process for partners and stakeholders, despite their support for prioritisation in principle. Our work with partners to make this step change in 2004 could have been more effective and transparent. The principle that new priorities had to be funded from within existing resources, rather than steadily increasing overall funding was a new approach that was not well handled initially. But we believe that this change of direction was vital to drive prioritisation and focus the Agency’s resources. By providing a strong lead, the Agency is now well positioned to focus on priorities for the 2006 RES30 and is working with partners on targeting investment to new priorities31.

Risk Management As part of its implementation of a structured approach to Business Planning and setting priorities the Agency has adopted an integrated risk management approach32. At a regional and strategic level, each action in the new RES is subject the to risk management framework of the organisation that is leading delivery. Actions led by the NWDA are subject to a full corporate risk framework. This meets the demands of HM Treasury risk guidance. Each directorate maintains a risk register, which informs the corporate risk register and enables NWDA to identify our most important risks. In their quarterly performance reports to the Chief Executive, the Executive Directors provide an update on existing and new risks. These are considered quarterly by the Risk and Performance Management group to ensure that mitigating action is taken within the business cycle and risk register updated. The Head of Risk provides comprehensive support to directorates and is responsible for moderating risks across the Agency to ensure that an even approach is taken and emerging risks or groups of risks are readily identified. In 2005 the Agency introduced new procedures to ensure that all project level risks are identified and managed throughout the project lifecycle.

Delivering with Partners The 2003 RES was supported by a detailed action plan that identified organisations across the region to take the lead on specific actions33. Whilst progress was sustained, and responsibility identified for each action, the approach could have been more closely linked to the business planning process of organisations leading delivery. For the 2006 RES therefore, the NWDA has led a different approach. Through the RES Advisory Group, delivery partners and stakeholders have agreed to build those priorities for which they are responsible into their own business plans. This ensures that existing corporate governance and monitoring arrangements will cover each priority, and that the prioritisation process is supported by the planning functions of a wide range of bodies across the

region’s public, private and voluntary sectors. This increased integration has also benefited from progress made through the Regional Skills Partnership34, Northern Way and Regional Funding Allocations35 to align the plans of a wide range of regional and trans-regional stakeholders around shared priorities.

Greater Integration of Priorities and Delivery NWDA’s strategic investment planning enables us it to plan ahead for priorities emerging from the new RES, identifying resources that can be allocated accordingly36. The RDA is now sharing the results of this with Sub-Regional Partnerships to develop a transparent and integrated approach to investment planning from 2006/07 onwards37. NWDA also reviews the business plans of all Regeneration Companies, as major delivery partners responsible for some 20% of our resources, to ensure that they are consistent with regional priorities and deliver value for money. Tourist Board business plans and those of other delivery vehicles are also agreed by NWDA. We are also refreshing our own Corporate Plan in early 2006 to make sure that it is consistent with the new RES and can inform business planning for 2006/07 onwards. The RES has identified our City Regions as the main drivers of the region’s economy, but City Regions in the Northwest do not yet have contiguous and defined delivery arrangements. We are therefore working with the City Regions and relevant SubRegional Partnerships to identify the roles, relationships and appropriate points of delivery to ensure that we maximise their contribution to the region’s economy. This work is innovative and not without tensions. However, we believe that it is in the interest of the region to have the debate and seek the right solutions.

Sustainable Development Sustainable Development is a statutory duty for RDAs. The aim of the RES is sustainable economic development. In developing the RES, a regional Social and Environmental Issues Analysis was completed. Priorities identified in the 2006 RES were subjected to a full strategic environmental assessment (SEA) and sustainability appraisal, with each RES chapter setting out how the actions within it will contribute to the UK’s priorities for sustainable development38. The NWDA has developed Environmental and Equality and Diversity39 policies to inform all our activities. An Environmental Action Plan40 has been developed to describe our current activities and identify future priorities across all Agency teams under the headings of Influencing, Projects, Mainstreaming and Internal Environmental Management. Sub-committees of the Board on Environment and Social Inclusion are constituted to provide strategic direction and governance at the highest level, backed up by training and awareness raising for all staff. The NWDA also undertakes independent biennial environmental and social audits of its business to drive continuous improvement.

SIP 2006/07 – 08/09 and 2006/07 Draft Business Plan

RES implementation process in letter to URCs and SRPs December 2005

The Agency’s Risk Management and Assurance Frameworks

GONW performance report 2002/03 page 18 and RES Action Plan

NW Regional Skills Partnership update to DfES SoS October 2005

Northwest response to Government on Regional Funding Allocations Jan 2006 (draft?)

SIP 2005/08

Letter to SRPs January 2006

2006 RES Page 11

NWDA Equality and Diversity Strategy 2001

NWDA Environmental Action Plan

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In assessing its options for intervention the NWDA’s appraisal process, used internally and externally by partners accessing NWDA funds, involves a sustainability assessment which specifically addresses the four priorities for action in the UK Sustainable Development Strategy: Sustainable Consumption and Production; Climate Change and Energy; Natural Resources Protection and Environmental Enhancement; and Sustainable Communities. Certain projects require a full sustainable development appraisal; the agreed regional “Integrated Appraisal Toolkit41” is used for this purpose.

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http://www.actionforsustainability.org/tools/introduction.php?id=31

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ACTIVITIES - CAPACITY What is the capacity of the RDA, including its work with partners, to deliver what it is trying to achieve? Investment and Strategic Leadership The prioritisation section above sets out how NWDA derives its own priorities from the RES and national priorities, guided by strategic direction from its Board. NWDA delivers its contribution to regional and national priorities through three types of activity, direct investment, strategic leadership and the direct delivery of business support and tourism services. Though a relatively small organisation in Government terms, these three areas of activity are a complex mixture of investment, influencing and direct management across a wide range of policy areas. To meet this challenge NWDA’s 2005/06 budget of £474m is deployed across five areas of activity42: -

direct investment in programme and services managing the programme effectively delivery of the RDAs strategic leadership role delivery of direct services management of our asset and property management activity

Direct investment in programme and services accounts for £420m with £54m allocated to the other four.

Systems and Process Improvement (SAPIP) The processes that NWDA inherited and then initially established in 1999 were not adequate for the complex mixture of strategy, delivery and investment that our remit covers. Since 2004 NWDA has implemented a major programme of improvements to the way that it plans, delivers and performance manages its investment programme. This is based around the Systems and Process Improvement Programme (SAPIP)1. The SAPIP programme has implemented improvements in project and programme management skills and systems within the Agency, and projects are now given dedicated management resource early on in their development. This has been supported by radical improvements in NWDA’s internal management information systems, designed to underpin a new approach to performance management.

Investment planning As prioritisation has been improved at the regional level NWDA systems have been strengthened to support the reallocation of resource to priorities. Significant senior management changes in 2003/04 were used to embed a more rigorous performance management system and develop a more realistic approach to RDA intervention, balancing the need for managing existing commitments and programmes effectively with developing headroom to reallocate resource effectively to transformational projects43. 42

NWDA Business Plan 2005/06

GONW Performance Report 2003/04

SIP 2006/07 – 08/09

NWDA Business Plan 2005/06

NWDA Race Equality Scheme 2005

NWDA has put in place a robust and clear system to provide a strategic approach to developing new investments44. Projects are considered at the concept stage by Executive Directors collectively, and if they are consistent with the RES and Corporate Plan, appropriate resources are allocated to develop the project and a full appraisal is carried out. The results of this appraisal are then considered by Executive Directors who approve or reject the project. Where a project is of sufficient size it requires agreement of the full Board or Government Departments. This process is enabling the Agency to provide much greater transparency to partners earlier on in the project development process than previously. Major investments for each individual year are reflected in the annual Business Plan45.

Strategic Activity and Service Delivery Alongside the Strategic Investment Plan, the Agency also develops an annual Business Plan that sets out what it is going to achieve in that year to deliver the objectives set out in the RES and Corporate Plan. This sets objectives for each Directorate and is the basis for team and individual plans. It covers all aspects of the Agency’s remit - strategic activity, programme and project delivery and provision of services – as well as internal organisational objectives. The Executive Management Board recommend final approval of this plan to the Chief Executive and Board. It then forms the basis of in year performance management. The Agency’s integrated planning has enabled it to develop a stronger corporate approach to strategic issues, such as the development of a strong Agency role in energy, the BBC relocation or the nuclear sector, where the business planning system has been used effectively to identify and agree emerging priorities and allocate staff and other resources effectively.

Ethics Our strong ethical approach is particularly important for NWDA as a body that seeks to develop corporate governance and capacity in other regional partners. This is underpinned by our core values, arrived after significant staff involvement. The Agency has systems in place to meet its corporate responsibilities such as a register of interests and an effective whistle blowing policy. At a strategic level NWDA has a well regarded Race Equality Scheme46 and strong links with Business in the Community and the Corporate Social Responsibility (CSR) agenda.

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Evaluation

Change Management

On the introduction of the single pot in 2002 we focussed on strengthening decision making on projects to ensure value for money. This took precedence over detailed evaluation of existing and past projects that did not have the requisite economic focus and so were, in the main, not a useful comparator for the future. We have introduced improvements as part of SAPIP to ensure that we fully meet the requirements introduced under the single programme.

The rapid evolution of NWDA’s structure and responsibilities has involved senior staff change largely unprecedented in the public sector and presents particular internal communication and change management challenges. The rapid pace of this change has meant that we have not developed a structured approach to cultural and organisational change. The fundamental review of the Enterprise Innovation and Skills (E,I & S) directorate in 2004/05 was challenging for staff and senior management. This resulted in compulsory redundancies and significant changes to most jobs and had a significant impact on the organisation. In reviewing other areas of the organisation in the light of the new RES, we are learning lessons from the EIS review. We recognise that successful implementation of structural and systems changes requires further improvements in the way in which we manage and communicate change.

However, we have also recognised since 2004 that an approach to evaluation based simply on meeting Government requirements may not provide enough of an evaluative framework. We have recognised that we need to do much more and welcome the increased focus on evaluation that Government is now developing. Full policy evaluations are underway on the Rural Renaissance Strategy and the Manufacturing Action Plan, both major interventions in priority areas of the Northwest economy. These pilots will inform the development of a medium term evaluation programme which will be rolled out in 2006/07. The Agency is implementing the recently published DTI framework for evaluation within RDAs and from 2006/07 the Agency’s appraisal process will include consideration of relevant and available evaluation.

Our People and Skills After establishing the NWDA and delivering inherited programmes the challenge over the last 3 years has been to move from an inherited skill set and programmes to a new approach to strategic delivery. The Board’s aim, which reflects regional priorities, has been to move to fewer, more transformational actions, with a higher level of strategic leadership. This has required a change in the Agency’s skills and, in common with other RDAs we have seen significant managed staff turnover. The Agency’s major directorates have been reviewed and significantly restructured47, with new staff recruited whilst staying within the agency’s overall staffing levels. Significant change in the senior management team has driven improvements to prioritisation and our internal processes. We were awarded Investors In People (IIP) in 2005 and have an integrated approach to learning, driven by business priorities and delivered through team and individual learning plans. At the most senior levels, rapid changes in the Agency’s responsibilities and a focus on organisational restructuring have meant that development and training has not had sufficient priority. A Director of HR, Organisational Change and Development was recruited in 2005. The priorities of this post are to further strengthen skills development activity to meet both new responsibilities from Government and the Agency’s continued focus away from physical and social regeneration projects to economic and enterprise development.

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EIS review 2005/06 and D and P review 2005/06

ICT and Knowledge Management NWDA has made harnessing the benefits of ICT and Egovernment a priority both internally and in delivery across the region. The Regional Intelligence Unit has led both the development of the regional evidence base and good practice sharing, but also innovative use of extranets to ensure that knowledge is widely shared across the region. We use ICT as a fundamental enabler in improving our systems and processes under the SAPIP programme, in sharing knowledge, policies and guidance internally and in reducing costs through video conferencing and virtual teams. The internal ICT department’s focus on service delivery and the implementation of best practice has resulted in the achievement of the highest score in the 2005 Society of Information Technology Manager’s customer satisfaction survey. This represents the best ever score achieved by a Public Sector organisation and demonstrates commitment to providing Agency ICT users with high quality ICT systems. 105 members of staff now hold the initial ECDL qualification and are working towards the full award. This continued focus on staff’s ICT skills, together with other ICT training, is increasing competency and effective use of ICT systems throughout the Agency. By the end of February 2006 all relevant staff with have undergone training in new systems, processes and project management as part of the SAPIP process. Staff have been given time and support to attend training sessions with follow up assistance fully available.

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The review of the Development and Partnership Directorate has had a high degree of staff involvement and support. We are now reviewing our management structure in the light of its emerging findings and the requirements of delivering the new RES. The effectiveness of the SAPIP process has been enhanced by involvement in its design of over 100 staff at all levels in the Agency. There is an active and constructive Staff Consultative and Negotiation Committee (SCNC) and overall employee relations are extremely positive. NWDA has benefited from a high degree of staff commitment in rapidly changing circumstances and with more flexible employment patterns and changing skill requirements than in most other public service bodies. Our second staff survey48, completed at the end of 2005, confirms that staff wish to see an increased focus on continuing personal and professional development, alongside a more structured approach to change management. The survey also confirmed that staff understood their own contribution to team and NWDA objectives and how they played a role in delivering regional and national priorities. Looking forward, the Agency has identified the need to further increase the involvement of team leaders and equivalent managers in ensuring that the organisational and system improvements are sustained as new staff enter the Agency and new projects and activities are developed to implement the 2006 RES. Motivation in the Agency remains good despite large scale changes. Absenteeism is stable at below public sector average and within our targets49.

Building Project Capacity Our involvement in Daresbury International Science and Technology Park (DISTP) began when the £600m Diamond Synchrotron project was awarded to Oxford rather than Daresbury in Cheshire in 2000. NWDA led the development of a vision for an internationally important multi-use science park, to build on the regions science strengths and provide a national centre for publicly funded and commercial research. It was clear in mid 2004 that the project was being run with under resourced project management and little formal structure and as a consequence was overspent and late. Introduction of new NWDA processes ensured that the project is now delivering on time and in budget and NWDA has used Daresbury as a learning example at Board level and throughout the organisation. Development of DISTP now involves a partnership with three of the regions leading research Universities (Manchester, Liverpool and Lancaster) together with the Central Laboratory of the Research Council (CCLRC), Halton Borough Council and NWDA. We have invested £25m in this innovative initiative, and Daresbury International Science and Technology Park is now recognised by Government as one of two of the UK’s major science sites, with recent approval for significant further investment.

Staff survey December 2005

NWDA half year report to GONW 2005/06

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ACTIVITIES – PERFORMANCE MANAGEMENT What is the capacity of the RDA, including its work with partners, to deliver what it is trying to achieve? Performance management is vital for NWDA to measure three different, but related levels of activity: • • •

regional performance against RES objectives; NWDA’s own performance against its objectives, priorities and targets, and performance by partners funded to deliver programmes by the RDA.

Regional Performance Improving the credibility and availability of data on regional performance has been a major task for NWDA50. This is important for national, regional and local bodies, who need a better understanding of economic and social factors in smaller geographical units but also in terms of measuring the implementation and delivery of actions and priorities to improve performance of the Northwest economy. This data is used to assess the region’s performance against targets and ambitions. The Regional Intelligence Unit, working with the Regional Economic Forecasting Panel provides comprehensive and regular data on the regional economy, structured so that it relates closely to RES priorities. This is widely used by stakeholders and partners. It forms part of the regional evidence base for future interventions and actions and is also available for NWRA scrutiny of NWDA. This is carried out through the Regional Review, which was established by the Regional Assembly to assist in its scrutiny role. This has been put into effect by reviewing the Agency’s own performance assessments, monitoring changes and improvements in regional economic performance and holding select committee style hearings into specific NWDA policies and programmes such as the cluster strategy and the sub regional agenda.

Vital Signs The Regional Performance Indicator Group (RPI Group) also represents an innovative NWDA led initiative to develop accessible approaches to assessing regional performance. This is a partnership between GONW, NWDA, NWRA, Department of Health and the Environment Agency. The group developed the Vital Signs initiative in 2003, with the aim of harmonising key headline indicators and providing a benchmarking tool to provide stakeholders with a picture of the region that can be updated on a yearly basis. The project defined and assessed a series of Vital Signs indicators to provide a strategic approach to, and analysis of, regional economic, social and environmental development.

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2003 RES

See Business Planning diagram in prioritisation section

2005/06 Q1,2 and 3 Reports – available on request

NWDA performance In support of the Agency’s approach to business and investment planning a comprehensive internal performance management system is in place. One of the major lessons of the first three years of the Agency’s activity is that with such a broad remit and diverse kinds of activity to be managed, then flexible and innovative delivery must be underpinned by a strong performance management approach. A strength of the Agency is now the extent to which a wide range of innovative approaches can be directly linked with contributions to RES priorities. The annual Business Plan, derived from the RES and Corporate Plan, is the starting point for performance management inside NWDA51. Each Executive Directorate sets out their contribution to the business plan with specific targets and milestones. Individuals are set objectives by their line managers in support of this, and team and individual learning plans set to support the Business Plan priorities. A number of corporate objectives are included in the performance plans of managers and Directors, reflecting their individual leadership responsibility for the Agency’s organisational improvement plan, ethics, equality and values. Each Executive Director reports performance against the business plan on a quarterly basis52. Their report includes an updated risk register and progress on organisational and improvement priorities. Corporate resources are included in this process, so quarterly reports include HR, procurement, property and internal services such as ICT. Executive Directors meet with the Chief Executive to review performance reports and discuss emerging issues and risks, so that mitigating action or resource reallocation can be implemented quickly within the business planning cycle. The Board reviews performance against financial targets monthly. We report on overall performance to the Board, Government and public on a 6 monthly basis based on Executive Directors (EDs’) quarterly performance reports and data on outputs. This gives the region and national Government a very clear picture of progress at the half-year and end of year point. NWDA fully meets all central Government reporting requirements.

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Managing Performance with Partners The Agency’s strategic approach to partnership is described in the section on our operating context. A range of performance management systems are in place to reflect different relationships with and capacity of delivery partners. The RDA is committed to maximising the flexibilities available to partners and minimising detailed management relationships to free up resources for delivery. However, we have not been able to meet the expectations of all partners, due to the need to secure planned outcomes, protect public resource and ensure that public investment remains targeted at instances of real market failure. We have recognised the need to improve this, and the roll out of new programme and process management (through SAPIP) to all external partners in 2006 will provide a more structured, consistent and balanced framework. Performance management arrangements with partners vary, therefore, but all retain common elements that provide consistent information to NWDA and partners themselves on output information, financial performance, corporate governance and future planning. NWDA is working with partners through the new RES to strengthen assessment of progress towards longer-term economic objectives. It is also important to note that whilst the majority of NWDA programme funding is channelled through the major partners described below, in terms of numbers of projects, of 537 projects that the 2006/07 SIP supports, the majority are smaller relationships with specific grant receiving businesses for example. Performance management for these relationships will be based on specific scheme rules or programme parameters, but with the area of commonality required for NWDA to collate and share data on aggregate outputs and impact.

Linking the RES with Changing National Data Requirements The first RES, published in 2000, included baselines and targets for each of the Government’s then core performance indicators for the RDAs. It also included targets against an additional set of regional performance indicators. However, this initial approach was dependent on data sets developed prior to the RDA being established and which were not collected in a timely or reliable way. Effective tracking over time therefore proved extremely difficult and priority was given to improving the evidence base. In April 2002 the Government introduced a new Performance Management Framework for RDAs, to accompany the Single Pot, which included a new set of national indicators, known as Tier 2 indicators, with some targets set by Government and others set by individual regions. These replaced the previous core performance indicators and were embedded into the second RES, published in 2003. The RDAs and their partners experienced some difficulty in using these indicators to measure regional performance, again due to an absence of

timely or robust data as new data was required for the new set of indicators. These problems were acknowledged by national Government as not being of RDAs making and Tier 2 indicators were not included in the new RDA Tasking Framework introduced in April 2005. The RDA Tasking Framework focuses on the RDAs’ direct contribution to certain Government PSA targets through programme outputs and does not prescribe regional performance indicators. During the course of 2004, therefore, NWDA undertook a major research project, with extensive consultation, to identify a robust set of regional indicators which could underpin the RES, show how the region was contributing to PSA targets and could be aligned with the Agency’s programme outputs, as set out in the RDA Tasking Framework, and the Agency’s strategic activities as defined in the 2005-08 Corporate Plan. These were formally adopted as part of the Agency’s Performance Management Framework in April 2005 and are used to monitor change in regional conditions. These are being reviewed, and a limited number of targets have been set, as part of the 2006 RES review process.

Efficiency and Financial Systems A fundamental financial issue for NWDA has been that long term commitments, which are an integral part of economic regeneration, have to be balanced against securing the capacity reallocate resource if priorities or the economic context change. Robust financial systems are therefore fundamental to manage resources, deliver ambitious and innovative projects, avoid cost overruns and control future commitments. Since 2004, NWDA has recognised this and strengthened its financial management and planning systems53. The NAO’s most recent report on NWDA financial and control systems confirms that issues raised previously have been addressed and areas for further improvement are addressed in the Agency’s improvement plan54. Efficiency continues to be fundamental to NWDA’s drive to free up resource for front line delivery55. Efficiency is achieved both in programme delivery and operating costs, with activity regularly reviewed to identify savings or lever in external funding to release resources. NWDA has reviewed its procurement approach and now has a procurement strategy in place. Whilst NWDA has and will continue to deliver its efficiency plan targets, we are determined to further improve awareness and ownership of efficiency throughout the Agency. The Business Planning round for 2006/07 will be used to drive this forward and further opportunities for efficiencies identified as part of the 2007 Spending Review.

NAO Management letter 2004/5

NWDA’s improvement plan has been used to inform the draft improvement plan attached

NWDA Efficiency Plan and 2005/06 six monthly report to Board and DTI

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Examples of the RDAs performance management arrangement with partners include:

Direct Delivery Single Regeneration Budget and other local regeneration partners, where targets are set for annual performance and outputs and performance management data gathered and reviewed as a condition of ongoing funding Digital Development Agencies. These new delivery vehicles have detailed Service Level Agreements with the Agency and a supporting reporting framework Business Links, contracted to provide specific business support services with a combination of national and regional targets, branding and reporting requirements

Major Projects and Strategic Activity Regeneration Companies, through which 20% of NWDA funding is channelled. NWDA approves RC business plans in advance and retains appraisal control over RDA contributions to their largest projects. NWDA also engages with RCs at a strategic level on performance management issues, working with their Chair on the appointment of a Chief Executive and maintaining the broad agenda in line with regional priorities through Board membership.

Strategic Partnerships Sub-Regional Partnerships. NWDAâ&#x20AC;&#x2122;s investment in capacity building within sub-regional partnerships is supported by a memorandum of understanding and robust monitoring and reporting. Regional Skills Partnership. Led by NWDA, shared priorities are developed by members of the RSP, and form the basis for progress reporting, including to Ministers.

Tourism Alongside other RDAs, we were given strategic responsibility for tourism in April 2004. NWDA moved quickly to review existing support mechanisms for the industry establishing five sub regional tourist boards. The tourist boards are responsible for delivering the newly produced regional strategy within each of the sub regions. NWDA approves the Boardsâ&#x20AC;&#x2122; destination management plans and service level agreements are in place with each Board to monitor performance. The Destination Management Plan (DMP) is an action plan for all organisations involved in developing the visitor economy. It identifies the actions and strategic relationships that will deliver the sub-regional and regional tourism strategies. It therefore provides an integrated framework for investment in tourism, which a major growth sector of the Northwest economy. Within this framework, Tourist

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Boards have a high degree of flexibility to meet sub-regional priorities. We have invested in capacity through project management training and systems development for Tourist Boards. We are now seeking to implement a three year funding settlement providing increased flexibility and certainty in recognition of Tourist Boardsâ&#x20AC;&#x2122; strong capacity and governance arrangements. NWDA also led the establishment and marketing of a Regional Tourism Forum to co-ordinate an industry led strategic approach to the regions tourist marketing and improving standards. NWDA has received an 'excellent' rating from GONW for its performance across the Tourism field.

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ACHIEVEMENTS What has been achieved? Our plans for delivery against regional and national priorities are set out in our Corporate Plan and annual Business Plans. As described in the capacity section, NWDA delivers through direct investment in projects and programmes, delivering services, investing through others and in strategic and influencing activity. This section sets out how the NWDA reports achievements and its performance against nationally set targets and gives some examples of major achievements and learning points in the region itself.

Measuring Achievement Since NWDA was established in 1999, and in line with changing Government requirements, NWDA achievements have been measured in three broad categories: i.

Outputs – such as jobs and businesses created as a direct result of NWDA activity. ii. Regional outcomes – economic indicators such as GVA or skills attainment measured at a regional level iii. Strategic Added Value – activities that increase net value for the taxpayer by aligning public strategies, investment and activity within the region.

Brownfield Land The Northwest has a high proportion of England’s previously developed land. NWDA has contributed an average of 35% per annum of the total RDA Brownfield Land reclamation target since it was established in 2002. A particular issue for the region is balancing the recognition that productivity and worklessness require increased investment, with the need to continue to bring land back into use and create the different infrastructure required for the region’s science and service based growth sectors.

Regional Outcomes During the period 2002-05 we were required by Government to set targets and report performance against 11 regional outcomes, known as Tier 2. 7 of these were achieved in whole or in part (some contained sub-targets). Others were not met or could not be measured due to an absence of relevant data56.

Many NWDA or partner led projects will deliver in all three ways. For example, the Agency’s strategic work with partners to build on the region’s competitive advantage in healthcare research was fundamental in securing investments such as the £60m UK Biobank in Manchester, against strong competition, with a consequent direct increase in jobs and R&D in the region.

Targets that were met include reduction of Job Seekers Allowance and unemployment claimants in target areas, the amount of new housing on previously developed land, the region’s employment rate, proportion of adults qualified at NVQ Levels 2, 3 and 4 and inward investment levels. NWDA will continue to report on regional outcomes as an important part of monitoring performance against the 2006 RES, which sets targets against a range of indicators57.

Outputs

Strategic Added Value (SAV)

In aggregate terms (1999-2005) the Agency has exceeded its targets for the five main outputs that have remained constant since NWDA was established. Data on our performance against targets in individual years is published on our website and in Annual Reports

The strategic activity that NWDA undertakes as a regional leader, influencer and facilitator is at the heart of the unique role that we have as a business led organisation looking across the whole region. Our Corporate Plan now makes an explicit distinction between investment and SAV activity and sets out what are seeking to achieve. Our reporting is aligned to that and sets out what we have achieved in terms of strategic activity. Since 1999 NWDA has either achieved or is making sound progress against all its major strategic objectives58.

Jobs New Brownfield New and Private created/ Business Land Refurbished Sector safeguarded Created (Hectares) Floorspace Investment (Sqm) Levered TOTAL Target 130,965

8,447

2,713

2,115,259

£1.5b

Actual 166,430

9,375

3,500

2,442,661

£1.9b

GONW NWDA performance report 2004/05

2006 RES page 8

NWDA report against corporate plan commitments

Ongoing and future challenges for NWDA include successfully integrating the strengths of City Regions and sub-regional partnerships to maximise their contribution to the regional economy, developing the regions approach to climate change and future energy policy and continuing to develop the relationship between business and workforce skills requirements and the provision of learning and training. Improving delivery and value for money of Business Support is also a major strategic challenge. All these will require the agency to influence and bring together public sector organisations with often diverse interests, constituencies and targets.

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Reporting Six monthly reports are also produced for the Board, DTI and publicly on performance, achievements and progress against targets. NWDA reports progress to national and regional partners in a number of ways. We publish both a statutory annual report and a more accessible annual review to coincide with our AGM. NWDA’s AGM has consistently been extremely well attended, with more than 800 people in 2005. It is also a public opportunity for NWDA’s approach and progress to be questioned. Delivery partners report annually on what has been achieved. Since 2002 GONW has prepared an annual report on NWDA performance and NWDA has consistently been rated as good, with the 2004/05 report noting improved performance towards the highest performance level with the NWDA’s improvement plan having implemented suggestions from the previous year’s report59. The North West Regional Assembly also provides constructive scrutiny both in terms of forward policy and accountability. We have worked closely with the NWRA as they have developed their scrutiny plans for the next 3 years60.

Successes and Learning Points Since 2003 major improvements have been made in the NWDA’s capacity both to deliver and to learn from previous activity. The following section sets out major achievements against the priority areas identified in the 2003 RES and how the NWDA has learned and developed in the process.

Business Development The Northwest has been England’s leading region for inward investment in recent years. In 2004/05 this created 5,376 jobs with a further 2,590 safeguarded.61 Since 2000, 286 Foreign Direct Investment projects have generated 22,000 new jobs and safeguarded another 16,000. Working jointly with UKTI we have seen the region increase its share of overseas trade, with a rise in the number of exporting businesses. NWDA has taken an innovative approach to access to finance for start ups and growing SMEs not covered by the investment marketplace, with new funds investing £55m in 115 companies. By developing leverage through equity and loan investment we have created an ongoing legacy for reinvestment in the region. Our different funds address different parts of the equity gap. We have also learned from the provision of targeted incubator space, and focussed NWDA investment on sites with strong growth potential for specific sectors.

Ancoats Urban Village involved the first compulsory purchase order of its kind by an English RDA and was recently highlighted by Lord Rogers and the Urban Task Force Report for its innovation and quality of design. This and similar projects demonstrate how by managing risk well and aligning Housing Market Renewal Areas, URCs, we can reverse market failure and the lack of historic viability of major areas. Through strong engagement with ODPM, NWDA and partners were able to ensure that the Northwest was at the forefront of investment in the Neighbourhood Renewal Fund and Housing Market Pathfinders. After a tentative start, NWDA has now worked to provide a strong alignment with the RES and to develop a strong partnership. NWDA has also worked successfully with EP as a strategic partner in coalfields, HMRF areas and URC areas (especially Liverpool, Manchester and Salford)62. Building on experience and lessons from existing Regeneration Companies, we have established new URCs in Salford and Blackpool and have been involved in the first full evaluation of a URC in England - Liverpool Vision.

Skills and Employment The Regional Skills Partnership has made good progress in developing a closer relationship between Learning and Skills Council (LSC) led planning and regional skills requirements and shared priorities. NWDA has provided funding for a range of innovative measures, including the Skills for Life projects, to ensure the appropriate number of skilled and qualified tutors. NWDA has also led support for establishing the highest number of Centres of Vocational Excellence in any English region.

Infrastructure Project ACCESS has delivered broadband to over 95% of the population of Cumbria. This is a unique project, which has opened up an opportunity for Cumbria to be a location of choice for home workers and international businesses, particularly in the creative and media sector, building on existing regional strengths. By playing a strong role in the development of the Northern Way proposals, NWDA played a full part in securing an extra £50M ODPM funding into three northern regions. Learning from lessons and good practice from other regions we have launched an innovative property partnership with the private sector, to maximise long term benefit from our investment property portfolio.

Regeneration Following the Foot and Mouth crisis we moved rapidly to establish a Rural Renaissance programme with £100m of NWDA funding and the UK’s first Rural Regeneration Company in Cumbria. The Rural Renaissance programme is now being fully evaluated, so that the lessons from this innovative programme can be used in future investment decisions.

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Image Since 2001, MORI data shows that there has been a 12% increase in the number of UK residents who thought the region a success and businesses outside the region are now more than twice as likely to say that the region has improved as a place to do business.

GONW Performance Report 2004/05 and NWDA Improvement Plan

NWRA Draft Business Plan 2006/08 Page 15

UKTI Inward Investment 2004/05

NW has 4 of 9 pathfinders and 21 of 82 NRF areas.

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The Regional Marketing Forum was established by the Agency in 2000 and represents all the major public and private sector organisations in the Northwest with an interest in promoting the region. Its role is to co-ordinate regional marketing activity and collaborate on delivering a major programme of activity designed to improve the image of the region. It is chaired by Agency board member Brenda Smith.

The regional brand signifier "England's Northwest" has been developed by the Agency through the Regional Marketing Forum to provide a single and consistent brand to describe the Northwest on all marketing materials. It is underpinned by a set of brand values and key messages, which are promoted by partner organisations throughout the region. Following the success of the 2002 Commonwealth Games, the Agency developed a major events strategy, which recognises the significant economic impact the staging of major sporting, cultural and business events can have on the region. The Northwest was the first English region to publish such a strategy, which has already successfully led to the bidding and hosting of a series of major events.

Lead Role NWDA has developed very effective working level relationships both with Departments and Ministers and with other RDAs. Significant shifts in Government policy have occurred since 2003, the most notable being the second Skills White Paper, with a clearer articulation of regional need and delivery though RSPs. NWDA has led RDA success in securing major improvements in the link between skills, employment and economic need, including: -

Regional Skills Partnerships established to link assessment of regional needs with LSC and Job Centre Plus planning rounds. Good progress in 2005/0663.

Inclusion of 14-19 age group in enterprise and business skills development. Progress towards closer integration of business support and workforce skills training.

Stronger regional influence in HEIF funding.

Improved recognition in Government that basic skills is not a primary issue in all parts of the country. Employer demands focussed in some areas on level 3,4 and 5.

Regional Skills Partnership update to Ministers Oct 2005

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INITIAL IMPROVEMENT PLAN This outline improvement plan identifies the main areas in which NWDA will plan to improve during the three years from 06/07. NWDA has used an improvement planning process since 200464, and this plan takes into account issues previously identified as well as those emerging from the self assessment process and informal consultation with partners and stakeholders. In line with the NAO guidance on IPA, this initial plan is a summary of the main areas on which we are committed to improvement. A more detailed plan will be completed alongside the final IPA report in May 2006.

OBJECTIVE

ACTIONS

TIMEFRAME

LEAD

Embed new organisational structure required to deliver 2006 RES through structured internal change management process.

NWDA to be reviewed by February 2006 and new structure in place for 2006/07

April 2006

Chief Executive

Establish Agencyâ&#x20AC;&#x2122;s change management strategy

April 2006

Director of Organisational Change

Communicate our change management strategy effectively

August 2006

Director of Organisational Change

Develop resource planning and management processes in order to manage conflicting demands and competing priorities

2006/07

Director of Organisational Change

Management and leadership development programme for senior management linked to delivery of RES and Corporate Plan priorities

July 2006

Director of Organisational Change

Leadership programme for Executive Management Board developed to underpin future strategy and RES delivery.

July 2006

Director of Organisational Change

Focus future investment on RES 2006 transformational actions

2006/07

Board

Develop vfm benchmarks and develop methodology for assessing GVA contribution of prospective projects

July 2006

Executive Director of Operations

Share SIP headlines with SRPs as part of business planning

March 2006 and then Dec 2006 for 07/08

Chief Executive

Work with SRPs to align business and action plans with 2006 RES,

April 2006

Executive Director of Development and Partnerships

Enhance communication with stakeholders on SRP and City Region agenda and links

May 2006

Chief Executive

Develop learning and development strategies to support skills required for delivery of 2006 RES

Increase scale of RDA intervention and develop a more transparent strategic investment planning process, improving communication and consultation with partners

Clarify and strengthen role of SRPs, including improving consultation and communication

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NWDA Improvement Plan for 2004/05 and 2005/06 (draft developed into IPA initial improvement plan)

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Strengthen business planning process for 2007/08 to improve integrated investment

Dec 2006

Executive Director of Development and Partnerships

Develop shared approach to identify investment in RES 2006 delivery

Dec 2006 for 07/08

Executive Director of Development and Partnerships with EMB

New policy group to co-ordinate policy underpinning for Agency delivery of Corporate Plan priorities and input into CSR 2007

April 2006

Executive Director of Operations

Improve engagement and joint working with the Regional Assembly on the strategic issues facing the region.

Dec 2006

Director of Strategy and Policy

“Audit” of available research to increase awareness and use amongst partners of existing evidence base

May 2006

Executive Director of Operations

Further develop project management skills and strengthen central programme management

2006/07

EMB

Ensure all new or revised NWDA teams are engaged and trained in new processes and systems

May 2006

EMB

Improve internal and external corporate performance reporting

From April 2006

Executive Director of Operations

Roll out new project processes to partners

2006/07

Executive Director of Operations

Commission medium term evaluation programme

April 2006

Executive Director of Operations

Develop and implement mechanisms to share best practice and learning internally and externally to aid future policy and project development and delivery

2006/07

Executive Director of Operations

Complete NWDA contribution to national evaluation

July 2006

Director of Strategy and Policy

Improve regional monitoring of economic targets and build performance into policy reviews

Set up monitoring regime for 2006 RES targets

2006/07

Director of Strategy and Policy

Improve enterprise policy and business support across the region

Implement review of Business Link operations

2006/07

Executive Director of Enterprise, Innovation and Skills

Fully embed new EIS structure in context of 2006 RES and 2006/07 business plan.

April 2006

Executive Director of Enterprise, Innovation and Skills

Strengthen the region’s strategic policy capacity, underpinned by further co-ordination of regional research and strengthened internal policy co-ordination

Fully embed new project processes and systems, including with partners

Roll out policy and programme evaluation plan

Continue to develop alignment between the LSC and RDAs in our lead role capacity.

Work with LSC on joint contribution to CSR 2007 and prepare RDA input

2006/07

Executive Director of Enterprise, Innovation and Skills

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IPA GLOSSARY OF TERMS TERM

MEANING

AGM

Annual General Meeting

CCLRC

Central Laboratory of the Research Council

CoVE

Centre of Vocational Excellence

CSR Agenda

Corporate Social Responsibility Agenda

DfES

Department for Education and Skills

DISTP

Daresbury International Science and Technology Park

DMP

Destination Management Plan

DWP

Department for Work and Pensions

EDs

Executive Directors

English Partnership

ERDF

European Regeneration Development Fund

GONW

Government Office North West

GRAND Grants

Grants for Research and Development

GVA

Gross Value Added

HEI

Higher Education Institutions

HEIF

Higher Education Innovation Fund

HMR Pathfinder

Housing Market Renewal Pathfinder

IIP

The Investors in People (IiP) Standard, a straightforward, proven framework for delivering business improvement through people.

LSC

Learning Skills Council

NW BRAIN

Building Regional Applications and Innovative Networks. A two-year EU information society programme, match funded by the Agency.

NWRA

North West Regional Assembly

ODPM

Office of the Deputy Prime Minister

PSA Targets

Public Service Agreement Targets

R&D

Research and Development

RENEW

RENEW Northwest is the Northwest's Regional Centre of Excellence (RCE) for skills for sustainable communities.

RES

RES - Regional Economic Strategy. A Strategy for the economic development of the region, written by the NWDA, in consultation with regional stakeholders, and revised every three years.

RFA

Regional Funding Allocations

RHS

Regional Housing Strategy

RIU

Regional Intelligence Unit. Provides regular flow of accurate and reliable information and research to inform regional economic policy. The Research Team is divided into three sections: Information Generation; Economic Intelligence; Strategic Intelligence.

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TERM

MEANING

RPI Group

Regional Performance Indicator Group

RSP

Regional Skills Partnership

RSS

Regional Spatial Strategy

SAPIP

System and Process Improvement Programme. A programme to integrate and improve all project related systems and processes.

SAV

Strategic Added Value

SCNC

Staff Consultative and Negotiation Committee

SEA

Strategic Environmental Assessment

SIP

Strategic Investment Plan. Three year Strategic Investment Plan, reviewed every year. A detail three-year budget which converts the strategic resource allocations.

SMART Targets

Specific Measurable Achievable Realistic and Timed Targets

SMEs

Small and Medium Enterprises

SRPs

Sub-Regional Partnerships

URC

Urban Regeneration Company

VFM

Value for Money

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