Document

Government and Public Sector

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

March 2009

PricewaterhouseCoopers LLP

Contents

Section Page

Introduction and approach............................................................................................................................ 1

Advantage West Midlands............................................................................................................................ 8

East of England Development Agency....................................................................................................... 38

East Midlands Development Agency.......................................................................................................... 74

London Development Agency .................................................................................................................. 102

North West Development Agency ............................................................................................................ 145

One North East......................................................................................................................................... 203

South East England Development Agency .............................................................................................. 235

South West Regional Development Agency ............................................................................................ 282

Yorkshire Forward .................................................................................................................................... 322

Annex A: List of AWM evaluations ........................................................................................................... 359

Annex B: List of EEDA evaluations .......................................................................................................... 360

Annex C: List of LDA evaluations............................................................................................................. 361

Annex D: List of NWDA evaluations......................................................................................................... 363

Annex E: List of ONE evaluations ............................................................................................................ 366

Annex F: List of SEEDA evaluations ........................................................................................................ 367

Annex G: List of SWRDA evaluations ...................................................................................................... 369

Annex H: List of YF evaluations ............................................................................................................... 371

PricewaterhouseCoopers LLP1

Introduction and approach

Terms of reference

In December 2007, PricewaterhouseCoopers LLP (PwC) was appointed by the Department for Business,Enterprise and Regulatory Reform (BERR), in its sponsorship role for the RDAs, and the RDAsthemselves to provide an independent assessment of the impact of the spending by each of the nineRDAs and the RDA network as a whole.

The primary purpose of this report is to summarise the available evidence of the impact of spending byRDAs, drawing on those evaluations commissioned since the last review which comply with the standardsset out in the Impact Evaluation Framework (IEF)

1as well as any other earlier evidence which is

consistent with the IEF principles. The secondary purpose is to assess RDAs’ achievements against theobjectives of both the Regional Economic Strategies (RESs) (and Economic Development Strategies(EDSs) in the case of London) and their Corporate Plans (all of which have changed over time) and foreach specific programme and project.

Report structure

This is the second of two volumes which together form the report of our work. This volume provides abrief summary of the key elements of our approach, and its limitations, and then analyses andsummarises the available evaluation evidence for each of the nine RDAs.

In order to provide a consistent analysis across the RDAs, each of the following nine sections considersone of the RDAs within a common structure which includes:

a summary of the key elements of the evidence;

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

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

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

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

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

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

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

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

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


A separate volume contains a national overview of the evidence of the impact of RDAs’ spending.

In addition, two separate documents provide a summary of:

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

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

Approach

The remainder of this section provides an overview of the key elements of our approach. It is divided intofour parts:

an explanation of the scope of our work;

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

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

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

Further details of our approach can be found in Volume 1 of our report.

Scope

Although this report draws on evaluations which cover RDAs’ spending over the whole period since theirestablishment in 1999

2, the focus is on that spending for which RDAs are formally accountable, over

which they have had the greatest influence and where (at least) the early evidence of impact should beapparent. In practice, this means that we focus on understanding the impact of RDAs’ spending on thoseprogrammes and projects where:

they were able to shape the programme or project;

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

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

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

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

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

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

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

2 The London Development Agency was established in 2000.


evidence as to the impact of ten national programmes which RDAs have been responsible for deliveringwithin parameters determined by central government departments

3.

Evaluation evidence

In the first part of our work in December 2007, we reviewed and assessed over 240 new evaluationswhich were either completed, in progress or planned and which had the potential to cover RDA spendingof £1.85bn in the period between 1999 and 2007

4. Of these evaluations, we found that about 40% could

potentially be used to assess the impact of RDA spending although very few were wholly compliant withthe requirements of the IEF.

It was agreed that such coverage (even if it could be achieved) would be some way short of beingcomprehensive and robust given that it would include many evaluations which were not wholly IEFcompliant. In response, RDAs launched an intensive programme of further project and programmeevaluations. As a result of this work, RDAs have increased their evaluation coverage significantly and allhave achieved a coverage of at least 60% of their spend in the ‘relevant period’ excluding nationalprogrammes and administration costs. Overall, the RDAs have IEF compliant evaluations covering 66%of their relevant spend.

Framework for impact assessment and methodology

Our framework for assessing the impact of RDAs’ spending reflects the key requirements of the IEF. Itinvolves five steps:

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

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

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

assess the value for money of the interventions; and

draw together the key conclusions.

We summarise the key issues arising in relation to each element of the framework below.

Understand purpose

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

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

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

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

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


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

Measure outputs

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

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

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

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

Assess outcomes

Many of the evaluations we have reviewed provide estimates of the impact of RDAs’ spending onregional GVA. These estimates cover different aspects of the impact on GVA. On the one hand, someconsider the impacts which have already been achieved and others consider future potential impacts overand above those already achieved. On the other hand, some express the impact on GVA on an annualbasis and others express it on a cumulative basis which takes account of the expected persistence of theimpacts.

Although all the estimates are IEF compliant, their basis is often inconsistent across interventions andbetween RDAs. For example:

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

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

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

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

These inconsistencies reflect the challenges inherent in quantifying the economic impact of interventionssuch as those of the RDAs and the absence of explicit guidance within the IEF.

In the Regional Annexes we have taken the estimates of the outcomes of RDAs’ spending from theevaluations and summarised them within an internally consistent framework for each RDA. We have alsomade clear, where we can, the basis of the outcome estimates. These estimates of impact on GVA aredrawn from the original evaluations and are summarised for each RDA in this Volume: as such, they are


based on a range of different assumptions with respect to the parameters determining the benefits profile.This means that the estimates in this Volume differ from those in the National Report, where we haveestimated the achieved and future potential impact of RDAs’ spending on GVA on a more consistentbasis by estimating the impact on GVA arising from jobs created and safeguarded as this is the mostfrequently estimated (net) output measure across the RDAs’ interventions and using a common set ofassumptions about the parameters determining the benefits profile. Care therefore needs to be takenwhen making comparisons between estimates for individual RDAs in this Volume and those in theNational Report.

Assess value for money

In assessing the value for money of RDAs’ interventions, we have focused on the ratio of the estimated(net) additional GVA to the cost to the RDA of the intervention. Ideally, net additional GVA will compriseboth achieved and future potential benefits. We concentrate mainly, however, on the estimated NPV ofthe stream of the stream of achieved benefits as the best available measure of the value for money of anRDA’s intervention given that many evaluations have not assessed the future potential impacts on jobs.

We also use a number of other measures to assess cost-effectiveness. These are primarily expressed asthe cost per (net) unit of output. They cover business assists, business creation, land remediation, skillsassist and people helped into employment

Where possible, we have compared the evidence from RDAs’ evaluations against the results of similarinterventions by other organisations. We have also compared each RDA’s estimated returns with thosederived from the evaluation evidence available across the RDA network as a whole.

Derive conclusions

Finally, in seeking to derive conclusions from the available evidence, we have addressed a series ofissues which arise from the nature of RDAs’ roles and responsibilities and the scope and form of theimpact evidence available.

In considering the impact of RDAs’ interventions, we have recognised the need to take account of thequantitative and qualitative evidence of the impact of the RDAs’ programme and project spend as well asevidence of their ability to work with and influence their partners’ and stakeholders’ behaviour to generateStrategic Added Value. The Regional Annexes, therefore, include illustrations of how RDAs havedelivered Strategic Added Value. We have not verified all the case studies provided by the RDAsincluded in this report: in some cases, they are based on evidence from evaluations but in other casesthey reflect information made available to us by the RDAs during our preparation of this report.

Many of the IEF compliant evaluations we have reviewed have assessed how well the RDAs’interventions have performed against their original objectives although some have been constrained bythe interim nature of the evaluation and the absence of specific, measurable objectives and targets. Aswith the measurements of outcomes, the evaluations have often used different categories. We have,therefore, sought to classify performance on the basis of a consistent set of definitions as follows:

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

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

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

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

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

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


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

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

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

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

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

Methodological limitations

The methodology which we have used to estimate the impact of RDA spending are IEF compliant, andlargely involve the use of well established means of assessing the economic impact of public sectorinterventions. However, the nature, quality and consistency of the available information mean that it issubject to some inherent limitations.

First, many of the estimates of the impact on GVA are derived (only) from the estimated impact on net joboutputs. This means that they do not take account of:

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

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

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

In part, evaluations that have not estimated net jobs do this because other outputs were regarded as amore important focus for the evaluation of the intervention. For example, an evaluation may haveassessed the net impact of an intervention on the number of people assisted into employment or thebusinesses created but may not have assessed how these outputs translate into additional jobs.

Second, the approach distinguishes between jobs which have already been achieved and those expectedto be delivered in the future. How quickly an intervention delivers an impact on jobs will vary betweentypes of intervention: revenue projects such as business support will deliver relatively quick impactswhereas some capital projects will need time before the full impact of the interventions becomes evident.

Third, most evaluations use some measure of the average regional GVA per job to estimate the impacton GVA. By doing so, they implicitly assume that the net jobs created and safeguarded within a regionwill generate the same economic impact although, in practice, the impact may vary depending on thequality of the job provided.

These methodological limitations also affect the interpretation of the GVA estimates (and value for moneymeasures derived from them such as the GVA to cost ratio) in several ways:

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

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


comparisons of the GVA impact or GVA to cost ratio between themes and sub-themes are likely to besensitive to the nature of the intervention, especially how quickly and over what period impacts arelikely to be realised: for example, interventions designed to promote R&D may take time before theycontribute to businesses’ employment levels.

Taking into account these limitations, in the remainder of this Volume we summarise the availableevidence with respect to the impact of RDAs’ spending.


Advantage West Midlands

Summary

Overview

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

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

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

Impact

The evaluations show that AWM has generated significant outputs already:

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

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

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

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

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

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

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

Value for money

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

Performance against objectives

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


Context

Overview of the West Midlands

The West Midlands region includes the counties of Shropshire, Staffordshire, Warwickshire, andWorcestershire, the unitary authorities of Herefordshire, Stoke-on-Trent, and Telford & Wrekin, and theseven metropolitan districts of Birmingham, Coventry, Dudley, Sandwell, Solihull, Walsall andWolverhampton.

The West Midlands is a diverse region, with natural assets such as parts of the Peak District NationalPark and the Shropshire hills, cultural assets like Warwick Castle and Stratford-upon-Avon, and majorurban centres such as Birmingham, Coventry, North Staffordshire, and the Black Country. The regionhas a population of 5.36 million people

5(9% of the UK total) and the main city is Birmingham, with

approximately 1 million people.

The gross value added (GVA) of the West Midlands economy in 2006 was £89bn6. The regional

economic strategy ‘Connecting to Success’ compares the average GVA per capita in the region of£15,812 to the average across the UK of £17,677

7and finds that current output is about £10bn below the

potential output of the West Midlands economy8. Of this gap, it has been estimated that 80% is

attributable to the structure and the level of productivity of the region’s economy, while the remaining 20%can be accounted for by economic exclusion.

9

The service sector has expanded in recent years, increasing by over 250,000 jobs, and now representsnearly 70% of the region’s employment, with the key sectors being property & business services, health &social work, education and financial services. Despite a recent decline, manufacturing remains animportant element in the regional economy, accounting for 20% of all employment. The region is also asignificant employer in the automotive sector, accounting for 28% of UK automotive employment.

The West Midlands is a major exporter, accounting for approximately 8% of national exports10

. It has alsoattracted significant foreign direct investment: nearly 2,000 overseas companies have set up facilities inthe region, with the main centres being Birmingham, Solihull, Coventry and Telford. The largest singleinvestor is the Tata Group of India, which acquired Corus (ex-British Steel), Land Rover and Jaguar. TheUnited States is the largest investor, followed by Germany, Sweden, India, France and Japan.

11

AWM’s purpose and strategy

AWM’s purpose is to lead the economic development of the West Midlands, working alongside a widerange of public, private and voluntary sector partners to help the West Midlands to prosper - buildingupon its strengths and addressing the unique challenges. AWM’s Board and Corporate ManagementTeam aim to develop and deliver AWM’s own programmes and projects, shape and influence thestrategies and activities of public and private sector partners, secure external funding and developcoordinated regional agreement to deliver improved economic, social and environmental outcomes forthe West Midlands.

One of AWM’s key tasks is to lead the development and delivery of the West Midlands EconomicStrategy, which provides the policy framework for the West Midlands economy. Since its inception AWMhas developed three Regional Economic Strategies (RESs):

‘Creating Advantage’ (1999);

‘Delivering Advantage’ (2004); and

5 Sub-regional population, National Statistics, 2006.6 Regional Gross Value Added, National Statistics, 2006.7 West Midlands Economic Strategy - Connecting to Success, Advantage West Midlands, 2007.8 Evaluation of West Midlands Regional Economic Strategy, July 2006.9 Economic exclusion covers economic inactivity and unemployment in the West Midlands.10 Regional Profile, Government Office for the West Midlands.11 Regional Statistics, Advantage West Midlands.


‘Connecting to Success’ (2007).

The first two RESs were based around four strategic pillars:

developing a diverse and dynamic business base;

promoting a learning and skilful region;

creating the conditions for growth; and

regenerating communities in the West Midlands.

The latest RES, which was launched in December 2007, was developed by AWM using a more extensiveconsultation process and utilising a deeper evidence base. It concentrates on three key components ofthe economy: business, people and place. In addition, the RES emphasises the importance of providinga ‘powerful voice for the region’ to communicate its strengths, opportunities and needs to the businesscommunity and to other public sector partners.

To deliver the objectives of the successive RESs, AWM has created five Corporate Plans since itsinception:

‘Business Plan’ (2001-2002);

‘Committed to Succeed’ (2002-2004);

‘Delivering the Advantage’ (2003-2006);

‘Corporate Plan’ (2005-2008); and

‘Corporate Plan’ (2008-2011).

AWM’s Corporate Plans identify the specific programmes and projects that AWM will contribute towardsmeeting the RES objectives. AWM’s core outputs, as stated in these Corporate Plans, cover: jobscreated or safeguarded; people assisted to get a job; new businesses created and surviving 12 months;businesses assisted to improve their performance; businesses assisted through collaboration with the UKknowledge base; public and private regeneration investment levered; hectares of brownfield landreclaimed and redeveloped; and people assisted in their skills development. The Corporate Plan (2005-2008), which is consistent with the 2004 RES ‘Delivering Advantage’, details the high-level targets thatAWM is expected to deliver over the period 2005/06 to 2007/08. These core outputs are the ones whichAWM reports to BERR and which provide the starting point for evaluating AWM’s activity and impact.

AWM’s profile

In 2006/07, AWM had an annual budget of £313.8m and has spent £1,841.4m up to and including2006/07. Although this report draws on evaluations which cover AWM’s spending over the whole periodsince its establishment in 1999, its focus is on that spending for which AWM is formally accountable, overwhich it has had the greatest influence and where at least the early evidence of impact should beapparent. In practice, this means that it focuses on understanding the impact of AWM’s spending oninterventions in the ‘relevant period’ between 2002/03 to 2006/07: thus, it focuses less on thoseprogrammes and projects which AWM inherited from its predecessors

12and ten national programmes

where AWM has been responsible for delivery within parameters determined by central governmentdepartments

13.

12 The exception here is the SRB programme, a legacy programme, which has recently been evaluated to asses the impact of RDA

spending.13 Ten national programmes have been defined: the Coalfields Programme, the Regional Innovation Fund, the Manufacturing

Advisory Service, Regional Tourist Board Support, the Rural Development Programme for England and Sustainable Food and


Table 1 shows AWM’s spend by year and by the three categories of intervention identified in the IEF14

.The nature and design of AWM’s programmes means that for Regeneration Zones and the SingleRegeneration Budget it is not possible to categorise the programme expenditure uniquely by business,place or people. Where this is the case, we have categorised the intervention as other/hybridexpenditure.

In the ‘relevant period’ between 2002/03 and 2006/07, AWM spent £1,375.6m on interventions (ratherthan administration), of which £1,228.5m was spent directly on AWM’s own interventions

15and £147.1m

on national programmes which AWM delivered on behalf of central government departments. TheseAWM-directed interventions are the primary focus of this report (see shaded area in Table 1). Over theperiod from 2002/03 to 2006/07 AWM has spent broadly consistent amounts on business and placeinterventions. AWM has spent a lower proportion on its skills programme and the level of expenditurehas reduced from its peak in 2003/04, reflecting AWM’s prioritisation of higher level skills programmes.AWM’s expenditure on other other/hybrid programmes, which cut across business, place and people, hasremained consistent over the period 2002/03-2006/07.

Table 1: Analysis of AWM spend by year and by intervention category (1999/2000-2006/07)

Business

(£m)

Place (£m) People

(£m)

Other/hybrid

(£m)

National

programmes

(£m)

Admin16

(£m)

Total (£m)

1999/2000 - - - - - - 104.5

2000/2001 - - - - - - 109.9

2001/2002 - - - - - - 123.4

2002/2003 38.6 44.7 9.1 107.0 19.8 22.0 240.0

2003/2004 62.5 69.2 15.6 123.2 15.3 24.0 311.0

2004/2005 54.5 78.3 12.9 109.9 39.9 28.0 321.0

2005/2006 73.4 68.3 14.0 92.8 36.7 28.0 313.0

2006/2007 76.7 60.7 9.4 107.8 35.4 26.0 313.8

Total 305.7 321.1 61.0 540.7 147.1 128.0 1,841.4

Source: AWM programme expenditure data; PwC analysis

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

Farming, Market Town Initiative, Business Link, Regional Selective Assistance/Selective Finance for Investment, Grant for

Research & Development and Phoenix Fund.14 For expenditure over the period 1999/2000 to 2001/2002, given the available data, it has not been possible to classify by

intervention categories.15 Excludes national programme spend.16 This also includes budget items covering the cost of capital, bank interest, grants credited to reserves and policy development.


Table 2: Analysis of AWM relevant spend covered by IEF compliant evaluations

Total

Expenditure covered

by evaluations (£m)

% of spend (2002/03-

2006/07)

Number of

evaluations

Business 183.6 60 5

Place 261.4 81 1

People 47.1 77 1

Hybrid 498.2 92 2

Total 990.3 81 9

Source: PwC analysis based on AWM evaluation evidence

Key findings

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

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

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

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

Impact

AWM’s expenditure and the key gross and net outputs associated with its interventions are summarisedin Table 3. A distinction is drawn between outputs that have already been achieved and (where theyhave been estimated) those future potential outputs.

Table 3: Gross and net attributable AWM outputs (2002/03-2006/07)

Jobs created/

safeguarded

Businesses

created

Businesses

assisted

Brownfield

land (ha)

People

assisted in

skills

development

Business development and competitiveness

Gross outputs achieved 33,626 463 12,738 1 8,991

Net outputs achieved 17,078 213 2,778 0.6 1,937

Additionality (%) 51 46 22 64 22

Regeneration through physical infrastructure

Gross outputs achieved 5,937 20 185 219 440

Net outputs achieved 3,050 10 95 160 226


Future potential gross outputs 15,221 23 13 82 2,122

Future potential net outputs 7,818 12 7 60 1,090



Jobs created/

safeguarded

Businesses

created

Businesses

assisted

Brownfield

land (ha)

People

assisted in

skills

development

People and skills

Gross outputs achieved 2,351 - 4,454 - 33,600

Net outputs achieved 517 - 979 - 8,744

Additionality (%) 22 - 22 - 26

Other/hybrid

Gross outputs achieved 35,917 2,621 10,983 451 140,431

Net outputs achieved 16,294 1,178 4,683 230 69,979


Future potential gross outputs 1,200 24 16 30 560

Future potential net outputs 640 11 7 17 332


Total





Future potential net outputs 8,458 23 14 77 1,421



Over the period 2002/03 to 2006/07, AWM has created/safeguarded a significant number of jobs,assisted and created businesses across the region, remediated brownfield land and assisted people inskills development. In terms of employment, AWM has created/safeguarded nearly 37,000 net jobs. Thiscan be compared to the increase in employment in the West Midlands, over the same period, of 68,876

17.

From the available data, it is not possible to consistently distinguish between jobs created andsafeguarded, although we note that much of AWM’s work has been related to the safeguarding ofemployment, rather than the creation of new jobs. For example, 95% of the jobs created/safeguarded forthe Premium Automotive Research & Development and Rover and MG Rover Task Force programmeswere safeguarded jobs.

Looking across all of the evaluation evidence, the additionality of achieved outputs varies between 30%and 58% although there are some key differences within the themes. For jobs created/safeguardedadditionality is relatively consistent, with the exception of people and skills interventions (22%), which isnotably lower. For businesses created additionality is between 45% and 51% across the themes. Thereis wider variation in relation to the number of businesses assisted which varies from 22% to 51%.Additionality for brownfield land is highest across the themes ranging from 51% to 73%. For skills assiststhere is a larger variation in the level of additionality.

The levels of additionality can also be compared with the evidence emerging from the evaluation of otherRDAs’ activities. Looking across the intervention themes and by measure of output:

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

17 Annual Business Inquiry, National Statistics.


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

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

For AWM’s people and skills programme, the level of additionality is lower compared to nationalbenchmarks. Additionality for AWM’s people and skills programme is low, ranging from 22% for jobscreated/safeguarded to 26% for skills assists, whereas, across the RDAs the respective figures are48% and 62%.

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

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

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

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

18; and

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

Based on the available evaluation evidence, GVA has been calculated for the majority of AWM’s projectsand programmes. The exception is Mercia Spinner, where the evaluation did not calculate GVA(although it did estimate that the net turnover impact was £7.2m over the lifetime of the programme).

Table 4: GVA outcomes of AWM’s interventions (2002/03-2006/07)

Evaluation Expenditure

covered by

evaluations

(£m)

Achieved

GVA

(annual,

£m)

Persistence

assumption

(years)

Achieved

GVA

(cumulative,

£m)

Achieved &

future

potential

GVA

(cumulative,

£m)


High Technology Corridors 38.7 32.4 5.5 80.9 178.2

Rover and MG Rover Task Force

programme 36.2 217.5 - 217.5 217.5

Clusters 72.8 108.5 5 271.3 542.6

Premium Automotive Research and

Development (PARD) 32.7 133.0 - 133.0 133.0

18 Future benefits have not been discounted.



covered by

evaluations

(£m)

Achieved

GVA

(annual,

£m)

Persistence

assumption

(years)

Achieved

GVA

(cumulative,

£m)

Achieved &

future

potential

GVA

(cumulative,

£m)

Business total 180.4 491.4 N/R 703.6 1,071.3


Land & Property 261.4 103.7 10 1,036.9 3,695.1

People and skills

Skills 47.1 22.0 10 67.4 220.1

Hybrid

Regeneration Zones 280.2 253.0 3 -1019

1,441.0 1,441.0

SRB 218.0 370.0 2.5 925.0 925.0


Some care should be taken when considering the estimates of the impact on GVA as they include bothachieved and future potential impacts: the latter have yet to be realised and there is also significantuncertainty around the length of the persistence. The stream of impacts on GVA has not beendiscounted nor have constant prices been applied. It must also be stated that these impacts capturelargely economic outcomes, not the full range of social and environmental impacts which some AWMprojects have targeted. In addition, the evaluation methodologies used do not seek to capture the fullrange of economic impacts relating to regeneration schemes, for example the ‘halo effects’ around landand property interventions in deprived areas.

Strategic Added Value

Complementing and enhancing the impact of AWM’s project and programme spend, Strategic AddedValue is a key element of AWM’s impact.

AWM’s Strategic Added Value

Across the nine evaluations that we have reviewed, a wide range of SAV impacts have been reported,ranging from AWM’s strategic leadership on a particular subject to the general approach to policydevelopment the agency has advocated. The key themes of AWM’s SAV are summarised below:

Leadership – All of the evaluations we have reviewed have highlighted to some extent the leadershiprole of AWM. The clearest example of this role is the response of AWM to the collapse of MG Roverin 2005

20. Building on the work of the Rover Task Force 2000 (established to mitigate the impact of

BMW’s decision to dispose of MG Rover and help modernise and diversify the economy of the WestMidlands), in April 2005 following the announcement of the closure of the MG Rover plant inBirmingham with the loss of over 5,000 direct jobs the MG Rover Task Force (chaired by theChairman of Advantage West Midlands) was established in order to advise the Secretary of State onthe implementation of the emergency package of support for those effected by the closure.

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

21.

19 For the Regeneration Zones programme, three different assumptions regarding persistence have been applied to cover the range

of different outputs from the programme.20 Evaluation of the Rover Task Force 2000 and MG Rover Task Force 2005 Programmes, August 2008.21 An Evaluation of AWM’s Skills Interventions, August 2008.22 Advantage West Midlands: Independent Performance Assessment, NAO, 2007.


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

22

Source: AWM

Value for money

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

the GVA to cost ratio (as an indicator of the benefit:cost ratio) (Table 5); and, especially where this isnot available,

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

Table 5 summarises the GVA to cost ratio of AWM’s interventions. In assessing the value for money ofAWM’s interventions, we have sought to compare them with the evidence emerging from the evaluationof other RDAs’ activities and benchmarks arising from the evaluation of other similar programmes.

Table 5: Summary of AWM’s achieved and future potential GVA to cost ratios (2002/03-2006/07)


covered by

evaluations

(£m)

Achieved

GVA

(annual):cost

Persistence

assumption

(years)

Achieved

cumulative

GVA:cost

Achieved

& future

potential

cumulative

GVA:cost



Rover and MG Rover Task Force programme 36.2 6.0 - 6.0 6.0

Clusters 72.8 1.5 5 3.7 7.5

PARD 32.7 4.1 - 4.1 4.1

Total 180.4 2.7 N/R 3.9 5.9


Land & Property 261.4 0.4 10 4.0 14.1

People and skills

Skills 47.1 0.5 10 1.4 4.7

Other/hybrid

Regeneration Zones 280.2 0.9 3-10 5.1 5.1

SRB 218.0 1.7 2.5 4.2 4.2


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


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

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

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

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

23.

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

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

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

across RDAs.


Table 6: Achieved and future potential cost per net output for AWM’s interventions (2002/03-2006/07)

Achieved

cost per net

job (£)

Future

potential

cost per net

job (£)

Cost per

net

business

created

(£)

Achieved

cost per

net

business

assist (£)

Achieved

cost per

net skills

assist (£)


High Technology Corridors 9,244 - 58,292 27,513 -

Rover and MG Rover Task Force programme 5,000-8,000 - - - -

Clusters 18,184 - - - -

PARD 9,000 - - - -

Mercia Spinner 81,500 - 270,000 - -


Land and Property24

59,900-85,700 16,800-24,000 - - -

People and skills

Skills 46,943 - - 22,953 1,017

Other/hybrid

Regeneration Zones 14,500-19,400 - - - -


The cost per unit of output for AWM interventions are broadly consistent with the national benchmarksacross business, people and place. This suggests that the programmes have been effectively delivered.The cost per job estimates for business development and competitiveness interventions are in line withthose estimated at a national level, which range from £8,301 for individual enterprise support to £37,938for science, R&D and innovation infrastructure. The cost per net job at a national level for physicalregeneration interventions is £63,271, which is towards the bottom of the range of the estimate for AWM’sland and property programme. For people and skills interventions, the average national estimate of costper net job is £43,302, which is consistent with the estimate for AWM’s people and skills interventions.The cost per net skills assist for AWM’s people and skills programme is nearly half of the nationalbenchmark of £1,960. It is difficult to draw conclusions on the cost per business created/assisted, asthere are only four estimates for very different programmes, although these estimates are broadlyconsistent with the overall pattern at a national level.

25It should also be noted that the estimates of cost

per business assisted/created take no account of the nature of the businesses created (for example hightechnology businesses in the case of Mercia Spinner) or the intensity of the business support.


AWM, along with the other eight RDAs, has a series of gross output targets set for it by centralgovernment. Table 7 presents AWM’s performance against these targets in the period from 2002/03 to2006/07 based upon evidence provided by BERR. For all of the measures, taking the period as a whole,AWM has exceeded the targets set by DTI/BERR, particularly for businesses created and peopleassisted in skills development. Looking at performance by year, AWM has achieved all its targets withthe exception of two years when it missed its targets for jobs created/safeguarded and brownfield landremediated.

24 Cost per job estimates are presented for achieved and future potential jobs. We have also presented the figures as a range both

including and excluding write-downs on property assets to reflect the uncertainty around future property values.25 The cost per business created for individual enterprise support at a national level is £74,196 and for Science, R&D and innovation

infrastructure £1,564,603, which are higher than the AWM business programmes within these sub-themes. The cost per business

assist for individual enterprise support is £8,502, approximately a third of the estimates for AWM.


Table 7: Comparison of AWM performance against DTI/BERR targets (2002/03-2006/07)26

Jobs created/

safeguarded

Businesses

created

Brownfield

land (ha)

People

assisted in

skills

development

Funding

levered (£m)

Targets set by

DTI/BERR56,439 2,971 498 67,909 259

Achieved AWM gross

outputs reported to

DTI/BERR

65,701 4,934 570 101,580 479

Number of years when

targets met4 out of 5 5 out of 5 4 out of 5 5 out of 5 4 out of 4

Source: DTI/BERR and PwC analysis

Like all the RDAs (except the London Development Agency), in 2007 AWM was subject to the NationalAudit Office’s Independent Performance Assessment (IPA) which assessed how well AWM hasresponded to the common challenges facing RDAs, namely balancing the interests of the region withnational policy requirements, managing the conflicting demands of different regional stakeholders, lookingoutwards to promote the region while staying focused on what is happening inside and responding to newduties imposed by central government. This assessment sheds further light on how well the Agency hasbeen able to fulfil its role.

Overall, AWM was seen as ‘performing strongly’, particularly in terms of:

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

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

AWM was noted as having an excellent track record in financial control and a good record of achievingtargets. It was, however, noted that there were areas for improvement around communications withpartners, in particular around the approvals process and the communication of AWM’s achievements.

Table 8 sets out AWM’s performance against the objectives set for each of the individual interventionscovered by the evaluations though the available data only give a partial picture:

four evaluations did not assess performance against objectives: these evaluations are ‘programme’evaluations, where several projects and programmes have been evaluated together with nooverarching programme level objectives to assess performance against;

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

two smaller programmes have ‘largely met’ their objectives27

.

26 Based on information from AWM’s Annual Reports.27 Mercia Spinner and the Premium Automotive Research and Development programme.


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

Evaluations Spend covered by evaluationsPerformance against

objectivesNumber % (£m) %

Exceeded 0 0 0 0

Met 0 0 0 0

Largely met 2 22 35.9 3

Mixed 0 0 0 0

Limited performance 3 33 391.5 40

Not assessed 4 44 562.9 57

Total 9 100 990.3 100


Impact by intervention

We have structured our analysis of the impact of AWM’s spending, where possible, according to the threecategories of intervention defined within the IEF (i.e. business, place and people). We have alsoanalysed the impact of AWM’s other activities that span more than one of these categories as well as theavailable evidence of the impact of the ten national programmes where AWM has been responsible fordelivery within parameters determined by central government departments.

We have reported the impact of AWM’s interventions using a common structure which:

summarises AWM’s activities and expenditure on each programme;

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

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

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

AWM’s business development and competitiveness interventions

The West Midlands has a strong tradition in manufacturing, particularly the automotive sector where itaccounts for 28% of UK automotive employment. ‘Delivering Advantage’ set the strategic context forAWM’s business interventions by identifying the need to modernise and diversify the business base of theWest Midlands economy away from automotive manufacturing, in the light of the potential loss of theRover car plant in 2000. The Rover closure also highlighted the impact of the large-scale nature of theautomotive industry in the West Midlands, where large units predominate, with an average of 90employees per automotive business compared to 53 per automotive business in the UK. Thisdependence on larger business units created risks of potentially significant economic impacts in the eventof a failure of a large business. To address this dependence, AWM has focused on increasing thenumber of SMEs through developing an ‘enterprise culture’ and encouraging innovation, for example withsupport for start-up businesses, in an effort to modernise and diversify the business base in the WestMidlands.

This section covers five evaluations under the theme of business development and competitiveness. Theinterventions cover three main sub-themes and are summarised in Table 9.


Table 9: Summary of AWM’s business development and competitiveness interventions

Intervention theme/sub-theme Evaluation Expenditure

covered by

evaluations (£m)

Individual enterprise level support Rover and MG Rover Task Force28

High Technology Corridors (HTCs)29

36.2

38.7

Sector/cluster support Clusters30

72.8

Science, R&D & innovation infrastructure Premium Automotive Research and

Development (PARD) programme31

Mercia Spinner32

32.7

3.2

Total 183.6


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

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

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

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

– to build on the innovative potential of companies by exploiting and increasing research anddevelopment, promoting creative talent and developing all aspects of an innovative and market-led culture;

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

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

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

Rationale

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

28 Evaluation of the Rover Task Force 2000 and MG Rover Task Force 2005 Programmes, August 2008.29 Evaluation of the High/Higher Technology Corridors, August 2008.30 Evaluation of AWM’s clusters programme 2002/03 to 2007/08, August 2008.31 PARD: Third Interim Programme Report, August 2008.32 An independent evaluation of the Mercia Spinner Programme, January 2007.


address co-ordination and information failures between the between the private and higher educationsectors. The rationale for the clusters programme was to ensure greater connections between inter-related companies to share technology, skills and finance and to increase the level of economic activity.

The key gross and net outputs associated with each of these programmes are summarised in Table 10.The primary outputs arising from the business interventions have been: jobs created/safeguarded,businesses assisted, new businesses created and people assisted in skills development. None of theevaluations reported future potential outputs relating to business competitiveness and developmentinterventions.

Table 10: Outputs of AWM’s business development and competitiveness interventions (2002/03-2006/07)

Jobs

created/

safeguarded

Businesses

created

Businesses

assisted

Brownfield

land (ha)

People

assisted in

skills

development

People

assisted

into a

job

HTCs

Gross outputs achieved 4,383 220 1,318 1 1,481 -

Net outputs achieved 2,795 140 840 0.6 612 -

Additionality (%) 64 64 64 64 41 -

Rover

Gross outputs achieved 12,543 118 2,664 - 2,997 1,087

Net outputs achieved 6,396 60 1,898 - 1,325 470

Additionality (%) 51 51 71 - 44 43

Clusters


Net outputs achieved 4,154 - - - - -

Additionality (%) 36 - - - - -

Mercia Spinner

Gross outputs achieved 6 19 58 - - -

Net outputs achieved 4 13 39 - - -

Additionality (%) 68 68 68 - - -

PARD

Gross outputs achieved 5,217 - 518 - - -

Net outputs achieved 3,729 - - - - -

Additionality (%) 71 - - - - -

Business development and competitiveness total

Gross outputs achieved 33,626 463 12,738 1 8,991 2,134

Net outputs achieved 17,078 213 2,778 0.6 1,937 470

Additionality (%) 51 46 22 64 22 22



Several of AWM’s business development and competitiveness interventions have achieved similar levelsof additionality in relation to jobs created/safeguarded for RDAs as a whole (51% compared to 48%across the RDAs). Additionality is slightly higher for businesses created (46% compared to 40%nationally). At a sub-theme level, the additionality of AWM’s individual enterprise support interventions(MG Rover and HTCs) and Science, R&D and innovation infrastructure interventions (PARD and MerciaSpinner) are well above the levels recorded nationally. The additionality of AWM’s clusters programme isbelow the level estimated for sector/cluster support interventions across the RDAs (36% compared to67% nationally).

Impact

Table 11 summarises the impact on GVA (both achieved and future potential) of AWM’s interventions topromote business development and competitiveness, with the exception of Mercia Spinner where noestimate was calculated. In the majority of cases the evaluations estimated either cumulative or annualGVA. Where annual GVA was estimated for HTCs and Clusters an estimate of the persistence of theGVA impacts was included

33to allow estimation of the cumulative impacts of the intervention, split

between achieved and future potential. For Rover and PARD, no estimate of persistence was made, withthe impacts assumed to last a single year. Moreover, future potential impacts on GVA have not beendiscounted nor have constant prices been applied.

Table 11: Outcomes of AWM’s business development and competitiveness interventions (2002/03-2006/07)


covered by

evaluations

(£m)

Achieved

GVA

(annual,

£m)

Persistence

assumption

Achieved

GVA

(cumulative,

£m)

Achieved &

future

potential

(cumulative,

£m)


Rover and MG Rover Task Force programme 36.2 217.5 - 217.5 217.5

Clusters 72.8 108.5 5 271.3 542.6

PARD 32.7 133.0 - 133.0 133.0

Business total 180.4 491.4 N/R 703.6 1071.3


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

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

34;

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

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

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

33 The HTCs evaluation estimated persistence from a survey of over 300 beneficiaries. The clusters evaluation assumes that the

level of persistence is five years, applying an assumption from the Evaluation of Regional Selective Assistance in Scotland.34 Evaluation of the High/Higher Technology Corridors, August 2008.



Across AWM’s business development and competitiveness interventions, a range of different forms ofSAV have been noted.

Leadership and strategy: AWM’s leadership role is a frequently noted element of SAV for businessdevelopment and competitiveness interventions. The Clusters evaluation

35notes it is “perhaps the

strongest area of SAV… the cluster programme has been able to join up and successfully bringtogether key partners”. The PARD evaluation comments on the: “strategic role AWM has played inprogressing the widely agreed regional development need to upgrade the technological base of theregions automotive cluster”.

Partnership working: AWM’s work with partners is noted in the evaluation of the Rover and MG RoverTask Force programmes

36, which found evidence that linkages between various partners during the

course of the Task Force programme activity were strong and that AWM exhibited particularly strongleadership and influence at this time by fully encouraging joint working between partners andproviding a focus. The HTC evaluation notes the important role the A38/CTB corridor has played “incementing and increasing the role of QinetiQ in the region.”

37

Strategic co-ordination/influence: The clusters evaluation38

notes that the programme deliveredimproved co-ordination of activity and business engagement.

Source: AWM

Value for money

We have compared the impact of AWM’s business development and competitiveness interventions onGVA with the expenditure associated with the projects and programmes. Where the GVA to cost ratio isgreater than one, the economic benefits of the interventions attributable to AWM’s funding exceed theircosts. This is the case for all of AWM business development and competitiveness interventions whereGVA has been measured.

Table 12 sets out the achieved and future potential GVA to cost ratios of AWM’s business developmentand competitiveness interventions. Overall, AWM’s achieved returns from its business development andcompetitiveness interventions are consistent with the average returns across the RDAs (2.7 compared to2.8). However, the cumulative returns are higher across the RDAs with an achieved and future potentialreturn at a national level of 11.6 compared to 5.9 for AWM’s business development and competitivenessinterventions. This reflects the fact that there are only limited future potential impacts anticipated forAWM’s business development and competitiveness interventions and the different levels of persistenceassumed.

Table 12: Achieved and future potential GVA to cost ratios from AWM’s business developmentand competitiveness interventions (2002/03-2006/07)

Programme Expenditure

covered by

evaluations

(£m)

Achieved GVA

(annual):cost

Persistence

assumption

(years)

Achieved

cumulative

GVA:cost

Achieved &

future potential

GVA

(cumulative):cost

Individual enterprise support

HTCs 38.7 0.8 5.5 2.1 4.6

Rover 36.2 6.0 - 6.0 6.0

Sector/cluster support

Clusters 72.8 1.5 5 3.7 7.5

35 Evaluation of AWM’s clusters programme 2002/03 to 2007/08, August 2008.36 Evaluation of the Rover Task Force 2000 and MG Rover Task Force 2005 Programmes, August 2008.37 Evaluation of the High/Higher Technology Corridors, August 2008.38 Evaluation of AWM’s clusters programme 2002/03 to 2007/08, August 2008.



covered by

evaluations

(£m)

Achieved GVA

(annual):cost

Persistence

assumption

(years)

Achieved

cumulative

GVA:cost

Achieved &

future potential

GVA

(cumulative):cost

Science, R&D and innovation infrastructure

PARD 32.7 4.1 - 4.1 4.1

Business Development and competitiveness

Total 180.4 2.7 N/R 3.9 5.9


The GVA to cost ratios can also be compared to the national evidence at the sub-theme level. Forindividual enterprise support interventions, the overall returns of AWM interventions are below thenational average, where the average achieved cumulative GVA to cost ratio is 12.0 rising to 14.1 whenfuture potential impacts are included. The GVA to cost ratios for AWM’s Clusters programme is lowerthan the levels for sector/cluster support at a national level, where achieved returns are approximatelydouble AWM’s returns. The overall returns of AWM’s cluster programme are slightly lower that thenational average (7.5 compared to 8.7 across the RDAs). The achieved returns for the PARDprogramme are above then national estimates for Science, R&D and innovation infrastructure.

Table 13 sets out the achieved and future potential cost per net output of AWM’s business developmentand competitiveness interventions. No evaluations have estimated the cost per net future potential job orthe cost per net skills assists.

Table 13: Achieved and future potential cost per net output from AWM’s business developmentand competitiveness interventions (2002/03-2006/07)

Achieved cost per net job

(£)

Cost per net business

created (£)

Achieved cost per net

business assist (£)

HTCs 9,244 58,292 27,513

Rover 5,000-8,000 - -

Clusters 18,184 - -

PARD 9,000 - -

Mercia Spinner 81,500 270,000 -


Comparing these estimates to the evidence across the RDAs shows that AWM’s businesscompetitiveness and development interventions are broadly consistent with national benchmarks of costeffectiveness per unit of output. For individual enterprise support and sector/cluster supportinterventions, the national benchmarks are £8,301 and £12,135 per net job created/safeguarded, whichare both slightly lower than values estimated measure for AWM. For science, R&D and innovationinfrastructure interventions the cost per job at a national level is £37,938, which is more than four timesgreater than the estimate for the PARD programme. The cost per job for Mercia Spinner is approximatelydouble the national average, although the Mercia Spinner programme’s focus was on creating spin-outcompanies rather than creating employment.

The estimates of cost per net business created for both the HTCs programme (national benchmark of£74,196) and Mercia Spinner (national benchmark of £1,564,603) are both well below the nationalbenchmarks. The cost per net business assist for HTCs is more than three times higher than the nationalbenchmark (£8,502). It should also be noted that the estimates of cost per business assisted/createdtake no account of the nature of the businesses created (for example high technology businesses in thecase of Mercia Spinner) or the intensity of the business support.



Performance against objectives has been assessed for the majority of business development andcompetitiveness intervention and is summarised in Table 14. It shows mixed performance againstobjectives, with two programmes recording only limited performance against objectives and twoprogrammes largely meeting their objectives. It should be noted, however, that the assessment ofperformance against objectives of both Clusters and HTCs is partial and interim in nature, as theobjectives for the programmes were set for 2010 and the evaluation does not take into account all of theexpenditure and outputs associated with the programmes.

Table 14: Summary of AWM’s performance against objectives and outcomes of businessdevelopment and competitiveness interventions (2002/03-2006/07)

Expenditure

covered by

evaluations (£m)


Rover and MG Rover Task Force Programme 36.2 Not assessed

HTCs 38.7 Limited performance against objectives

Clusters 72.8 Limited performance against objectives

PARD 32.7 Largely met

Mercia Spinner 3.2 Largely met


AWM’s regeneration through physical infrastructure interventions

This section focuses on the impact of AWM’s wide ranging activities in land and property. It draws on asingle, programme level evaluation

39of 49 of the largest land and property projects by expenditure over

the period 2002/03 to 2006/07. AWM spent a total of £182.9m on physical infrastructure interventionsbetween 2002/03 and 2006/07. In addition, AWM incurred further costs of £78.5m in write-downs on itsassets reflecting changes in the value of the sites owned by AWM

40, giving a total programme spend of

£261.4m. Write-downs can occur for several reasons including:

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

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

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

The projects covered by the evaluation include some of AWM’s largest strategic site investments, such asAnsty Park, i54, the Fort and Stoneleigh Park. In addition, AWM’s other activities include the provision ofland for business parks, office buildings, entertainment and leisure facilities, the creation of public spaceand visitor attraction schemes. We note that the land and property activities of AWM are also enablinginterventions that deliver against AWM’s wider objectives including enterprise, innovation and economicinclusion: these impacts will largely be captured in the evidence presented below.

Rationale

The strategic rationale for land and property interventions was first outlined in ‘Creating Advantage’,where the importance of sites and premises as a facilitator of economic development was highlighted.The baseline conditions for land and property interventions were further outlined in ‘Delivering

39 Evaluation of major land and property investments, August 2008.40 Write downs result from changes in the value of sites purchased by AWM (when the open market value of the site on revaluation

is less than the aggregate expenditure, including land purchase and improvements). They are included in AWM’s spend because

HM Treasury resource accounting rules mean that AWM is required to write down site development activities to its current account.


Advantage’, which highlighted two key issues. Firstly, only 39% of the region’s land stock for futureemployment use was currently available to companies and there was limited availability of large sites inthe region. Secondly, half of the region’s employment land had remained undeveloped for more than fiveyears.

Against these baseline conditions, the common rationale for AWM’s physical infrastructure interventionswas market failure and, in particular, externalities, which include:

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

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

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

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

Impact

The net outputs generated by the intervention are shown in Table 15. A distinction is drawn betweenthose outputs which have already been achieved and those future potential outputs which are anticipatedin the future. The key outputs arising from AWM’s physical infrastructure are the jobs created andsafeguarded and the brownfield land remediated, with a significant proportion of these outputs still to beachieved.

Table 15: Gross and net attributable outputs of AWM’s physical infrastructure interventions(2002/03-2006/07)

Jobs created/

safeguarded

Businesses

created

Businesses

assisted

Brownfield

land (ha)

People

assisted in

skills

development

Gross outputs

achieved5,937 20 185 219 440

Net outputs achieved 3,050 10 95 160 226


Future potential gross

outputs15,221 23 13 82 2,122

Future potential net

outputs7,818 12 7 60 1,090



Additionality for regeneration through physical infrastructure is 51% across outputs types with theexception of brownfield land, where additionality is higher at 73%. These findings are broadly consistentwith the national evidence, where additionality for brownfield land remediated is 64% for physicalinfrastructure interventions. Levels of additionality for jobs created/safeguarded are higher for AWM’sphysical infrastructure interventions (51% compared to 45% across the RDAs).

In addition to the outputs considered above, the Agency has also levered in other regeneration funding(see Table 16). This additional funding largely relates to developer contributions to AWM’s projects. Asthe evaluation was not able to assess the commitment to future potential leverage, these figures shouldbe interpreted with caution.


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

Gross public sector leverage (£m) Gross private sector leverage (£m)

Achieved 36.7 23.4

Future potential 10.4 165.1


The GVA for AWM’s regeneration through physical infrastructure interventions are outlined in Table 17and are estimated on the basis of the net (achieved and future potential) jobs safeguarded/created.

Table 17: Outcomes of AWM’s regeneration through physical infrastructure interventions(2002/03-2006/07)

Expenditure

covered by

evaluations (£m)

Annual GVA

achieved

Persistence

assumption (years)

Achieved

cumulative GVA

Achieved & future

potential GVA

(cumulative)

261.4 103.7 10 1,036.9 3,695.1


AWM’s regeneration through physical infrastructure interventions have achieved an annual return of£103.7m and the impacts of this assumed to persist over ten years. In addition, future potential jobsestimated to arise, with further GVA impacts. The level of persistence for AWM’s physical infrastructureinterventions is based on the fact that AWM commonly takes a charge of 10 years

41over its

developments to ensure that they continue to be used for the intended purpose. The evaluation notesthat there is uncertainty around this assumption and that “These long term impact figures could be viewedas the upper end of an estimate.”

In addition to the outcomes highlighted above, which relate to AWM’s investment in regeneration throughphysical infrastructure, the evaluation

42also highlights the wider impacts of AWM interventions.


AWM’s SAV includes: AWM’s contribution to the Regional Spatial Strategy, its work on sustainability toensure the sites that it is involved with meet high standards of sustainability and contributing to issuessuch as housing and transport. The evaluation also describes four areas of AWM’s SAV:

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

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

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

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

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

41 The evaluation also considers a scenario of 15 years persistence.42 Evaluation of major land and property investments, August 2008.


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

Source: AWM

Value for money

Table 18 summarises the GVA to cost ratios of AWM’s regeneration through physical infrastructureinterventions. There is a large difference between the achieved impacts and those where future potentialimpacts are included. Annual returns are the lower, as the persistence effects have been omitted. Thisreflects that national picture, where the achieved annual GVA to cost ratio is 0.7, which reflects the long-run nature of capital based physical regeneration interventions. The significant number of future potentialjobs (7,818) associated with AWM’s physical infrastructure interventions and the persistence effects ofthese over ten years will increase the total GVA to cost ratio to over 14:1, which is greater than theaverage across the RDAs (8:1).

Table 18: Achieved and future potential GVA to cost ratios from AWM’s regeneration throughphysical infrastructure interventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Achieved GVA

(annual):cost

Persistence

assumption (years)

Achieved cumulative

GVA:cost

Achieved and

future potential

cumulative

GVA:cost

261.4 0.4 10 4.0 14.1


The evaluation of AWM’s physical infrastructure interventions estimates the cost per job of AWM’sphysical infrastructure interventions considering both the achieved and future potential jobscreated/safeguarded. Given the significant levels of economic uncertainty, it is not possible to robustlyassess the future position of write-downs to give a view on the final programme cost. This is noted in theevaluation: “Obviously what occurs to the UK economy during the next two to five years couldsignificantly alter both cost and capital receipt projections”. The evaluation, therefore, considers theimpact of different levels of write-down, presenting estimates of cost per job with and without write-downs.

Table 19: Achieved and future potential cost per net output from AWM’s regeneration throughphysical infrastructure interventions (2002/03-2006/07)

Spend

covered by

evaluation

(£m)

Achieved

cost per net

job (£)

Achieved and future potential

cost per net job (£)

Including write-downs 261.4 85,700 24,000

Excluding write-downs 182.9 59,900 16,800


The cost per net achieved job is in the range £59,900 to £85,700 depending on the extent to which write-downs will be recovered. Including future potential jobs decreases the cost per net job to £24,000-£16,800. These estimates can also be compared to the cost per net job across the RDAs for physicalregeneration interventions of £63,271. This suggests that the AWM programme has been effectivelydelivered.


It has not been possible to assess the performance of the land and property interventions against thevarious sets of objectives. This reflects the fact that the evaluation of AWM’s activities is a ‘programme’evaluations, where several projects and programmes have been evaluated together and there are no


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

AWM’s people and skills interventions

AWM spent £47.2m on its core skills programme43

in the period between 2002/03 and 2006/07 providingbasic skills training, expanding higher level skills and developing programmes to deliver leadership andmanagement skills.

Rationale

The importance of developing skills within the West Midlands economy was highlighted in the first RES‘Creating Advantage’ in 1999, which set out the need to promote a ‘learning and skilful region’ andhighlighted the history of low education achievement and skills levels in the West Midlands. In addition,AWM’s interventions have also been strongly influenced by the region’s dependence on manufacturingindustry and, in particular, the need to respond to the closure of MG Rover in 2005 which resulted in22,500 workers having their jobs put at risk and requiring new or improved skills to compete in a globaleconomy.

The strategic context for AWM’s skills initiatives was set out in a Framework for Regional Skills andEmployment (FRESA) published in 2001

44. The FRESA highlighted interventions that focused on

improving the supply side infrastructure, basic skills and employability. Subsequently, in December 2004,AWM proposed the development of a Regional Skills Partnership (RSP) to act on behalf of stakeholdersin the region. One of the first actions of the RSP was to develop a skills performance index

45, which

ranked the West Midlands as the worst performing English region in 2003, and reinforced the need foraction.

Over the period 2002/03 to 2004/05, AWM’s skills programme funded approximately £37m of activity.Following a review of AWM’s skills priorities in ‘Delivering Advantage’ and in an updated FRESA

46, it was

noted that many of the skills projects, especially those projects focusing on basic skills or those aged 16-19, were available from alternative sources, notably the Learning and Skills Council and Job Centre Plus.Following the review, AWM focused its investment almost exclusively on raising demand for skills throughaddressing management and leadership and higher level skills needed for high value added products andservices. It was also agreed that funding should be available to support the piloting of innovativedemand-led projects.

Impact

The outputs from AWM’s expenditure on people and skills are summarised in Table 2047

. In addition tothese outputs, other AWM funded programmes, notably the Single Regeneration Budget andRegeneration Zones programmes, have also contributed to people and skills development and theseoutputs are covered separately under those programme evaluations.

43 An Evaluation of AWM’s Skills Interventions, August 2008.44 Framework for Regional Skill and Employment (FRESA), Advantage West Midlands, October 2002.45 The skills performance index has been developed by the West Midlands Regional Observatory and the Institute for Employment

Research at Warwick University. The index combines indicators from individuals and employers and draws on data from the

National Employer Skills Survey and the Labour Force Survey and gives a composite measure of the performance of the region in

delivering skills improvements,46 Updated Framework for Regional Skill and Employment (FRESA), Advantage West Midlands, August 2004.47 There are no future potential outputs estimated to arise as a result of AWM’s spend on people and skills.


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

Jobs created/safeguarded Businesses assisted People assisted in skills

development

Gross outputs

achieved2,351 4,454 33,600

Net outputs

achieved517 979 8,744

Additionality (%) 22 22 26


The levels of additionality associated with AWM’s people and skills programme additionality is low andranges from 22% for jobs created/safeguard and business assisted to 26% for skills assists. Across theRDAs additionality for skills assists is higher at 62% and for jobs created/safeguarded at 48%. The lowlevels of additionality are due to the high levels of deadweight and displacement reported by theevaluation: for example, 57% of businesses reported that they would have still generated the benefits inthe absence of the intervention. The evaluation notes that similar levels of deadweight have beenrecorded elsewhere: for example, a study of Employer Funded Training Pilots found levels of deadweightof 85% to 90%

48.

The estimated impacts on GVA of AWM’s people and skills programme are summarised in Table 21.Annual achieved GVA impacts are limited at £22m, but are projected to increase if the impacts persistover the next ten years.

Table 21: Outcomes of AWM’s people and skills interventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Annual GVA achieved Persistence

assumption (years)

Achieved cumulative

GVA

Achieved & future

potential GVA

(cumulative)

47.1 22.0 10 67.4 220.1


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

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

Studies, 2005.



The evaluation of AWM’s skills activities49

notes a number of specific examples of SAV including:

Strategic leadership and influence: The evaluation notes that “strategic leadership and influence hasbeen a key area of added value”

50. In particular, AWM has setup the Regional Skills Partnership

(RSP) which brings together public and private partners to agree strategic priorities.

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

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

Source: AWM

Value for money

Table 22 presents the estimated GVA to cost ratios for AWM’s people and skills programme. To date, theimpact estimated: the cumulative achieved cumulative GVA to cost ratio of 1.4:1, is below the averageacross the RDAs of 2.5:1. The total returns estimated are considerably higher at approximately doublethe national average. This reflects the high levels of persistence (10 years) applied in the evaluation,although this estimate was derived from a survey of businesses and is linked to AWM’s support for higherlevel skills over recent years.

Table 22: Achieved and future potential GVA to cost ratios from AWM’s people and skillsinterventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Achieved GVA

(annual):cost

Persistence

assumption (years)

Achieved cumulative

GVA:cost

Achieved and

future potential

cumulative

GVA:cost

47.1 0.5 10 1.4 4.7


The evaluation of AWM’s people and skills activities has also estimated several measure of cost per netunit of output across the programme. The comparison of these measures with the available benchmarkssuggests a mixed performance in value for money terms.

Table 23: Achieved and future potential cost per net output from AWM’s people and skillsinterventions (2002/03-2006/07)

Achieved cost per net job (£) Achieved cost per net business

assist (£)

Achieved cost per net skills assist

(£)

46,943 22,953 1,017


The evaluation compares these measures to a ‘benchmark’51

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

49 An Evaluation of AWM’s Skills Interventions, August 2008.50 Ibid.51 ‘Identification of benchmarks’ report to AWM, SQW, 2003.


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

AWM’s other/hybrid interventions

This section summarises the available evidence with respect to the impact of two significant regenerationprogrammes that AWM has supported: the Regeneration Zones

52(RZs) and the Single Regeneration

Budget53

(SRB). Total spending on these programmes over the period 2002/03 to 2006/07 was £498m,with £280m being spent on RZs and £218m on SRB. Both programmes are similar in the sense that theyinvolved the delivery of a diverse range of interventions spanning business, physical regeneration andpeople and skills focused on specific geographical areas within the West Midlands.

Rationale

The strategic context and rationale for both initiatives was outlined in the first RES developed by AWM,‘Creating Advantage’, and then reaffirmed in ‘Delivering Advantage’. ‘Delivering Advantage’ identified arange of social and economic challenges facing the West Midlands, including high levels of deprivation,with a fifth of the population being amongst the most deprived 10% of the population in England

54.

The Regeneration Zones (RZ) programme was identified as one of AWM’s key delivery mechanisms forpromoting economic development. The aim of RZs was to connect need and opportunity in six Zoneswith relatively high levels of deprivation which, between them, included all of the 10% of most deprivedwards in the West Midlands and the majority of the 20% most deprived.

The SRB was launched in 1994 and AWM took over responsibility for the programme from theGovernment Office in 1999. The original aim of the SRB was to simplify and streamline theGovernment’s existing regeneration schemes, bringing some eighteen separate programmes into a singlepot. In addition, the SRB aimed to promote a new way of tackling the problems faced by disadvantagedcommunities.

Table 24 summarises the net outputs which have already arisen or will potentially arise from the RZ andSRB

55. For RZs and SRB, additionality is broadly consistent across the different outputs. The use of

national averages for the gross-to-net ratios for the SRB programmes means that the gross-to-net ratiosare consistent with those estimated for the national evaluation of the SRB.

Table 24: Gross and net attributable outputs from AWM's other/hybrid interventions (2002/03-2006/07)

Jobs created

/ safeguarded

Businesses

created

Businesses

assisted

Brownfield

land (ha)

People

assisted in

skills

development

RZs


Net outputs achieved 5,703 850 4,039 68 19,270





52 An Interim Evaluation of the Regeneration Zones Programme, April 2008.53 Evaluation of the Single Regeneration Budget in the West Midlands, April 2008.54 Based on the Index of multiple deprivation.55 It should be noted that no future potential outputs were estimated in the SRB evaluation.


Jobs created

/ safeguarded

Businesses

created

Businesses

assisted

Brownfield

land (ha)

People

assisted in

skills

development

SRB


Net outputs achieved 10,591 328 644 162 50,709


Other/hybrid total








The RZs have delivered a range of business related outputs including jobs created/safeguarded,businesses created and businesses assisted. In addition, there have also been outputs relating to landremediation and skills assistance. The majority of outputs have been achieved to date, although thereare further future potential outputs that are forecast to occur.

The SRB programme has delivered a significant number of jobs created/safeguarded: with more than halfof the net job creation over the period occurred in the Black Country. More than 50,000 people havebeen assisted in skills development, although the evaluation notes that these may “have been subject toa degree of subjective reporting”

56. Brownfield land has been remediated across the West Midlands, with

most the most significant effects being in the Black Country and North Staffordshire.

The SRB programme has also delivered a range of other outputs in six key themes: jobs, training andeducation, economic growth, housing, environmental improvements, community facilities,voluntary/community sector and childcare.

Both the RZs and SRB programmes have levered in significant amounts of funding:

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

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

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

jobs created/safeguarded through capital spend;

jobs created/safeguarded through revenue spend; and

people assisted through skills support.

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

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


Table 25: Outcomes of AWM’s other/hybrid interventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Annual GVA

achieved

Persistence

assumption

(years)

Achieved

cumulative

GVA

Achieved &

future

potential

GVA

(cumulative)

Regeneration Zones (by element)

Jobs – capital - 88.0 10 880.0 880.0

Jobs – revenue - 132.0 3 396.0 396.0

Skills - 33.0 5 165.0 165.0

Total 280.2 253.0 3-10 1,441.0 1,441.0

Single Regeneration Budget

218.0 370.0 2.5 925.0 925.0


The evaluation of the RZs estimated that the programme has achieved an annual GVA return of £253m,which is estimated to rise to £1,441m over time due to the persistence of the impacts. The evaluationnotes that “ten year levels of persistence are subject to considerable uncertainty; we do not know howsuccessful a development will be in continuing to deliver a constant flow of benefits.”

57The SRB

evaluation estimates an impact on GVA of £370m, rising to £925m if the benefits persist. For bothprogrammes, the estimate of impact on GVA based on jobs created/safeguarded will potentiallyunderestimate the impact as not all of the outcomes of the programme were economic.

In addition to these impacts the evaluation of the RZs58

notes a range of ways in which AWM hasachieved Strategic Added Value through the development and operation of the RZs.


Overall, the consensus among consultations undertaken for the evaluation is that “AWM should bepraised for developing an innovative and ambitious policy response to tackling regeneration issues”

59.

More specifically, the evaluation notes the following aspects of SAV:

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

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

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

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

Source: AWM

Value for money

Table 26 presents the GVA to cost ratios associated with the RZ and SRB programmes. Bothinterventions have achieved similar returns; with SRB delivering higher annual returns, due to thenumbers of jobs created/safeguarded and RZs delivering higher benefits over time, due to the higherassumed levels of persistence of these benefits.

57 An Interim Evaluation of the Regeneration Zones Programme - Revised net outputs and outcomes addendum, September 2008.58 An Interim Evaluation of the Regeneration Zones Programme, April 2008.59 An Interim Evaluation of the Regeneration Zones Programme, April 2008.


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


covered by

evaluations

(£m)

Achieved GVA

(annual):cost

Persistence

assumption

(years)

Achieved

cumulative

GVA:cost

Achieved and

future potential

cumulative

GVA:cost

RZ 280.2 0.9 3-10 5.1 5.1

SRB 218.0 1.7 2.5 4.2 4.2


The GVA to cost ratios for other/hybrid interventions can be compared with the national evidence. ForRZs it is challenging to find the appropriate benchmarks on the basis of the sub-themes analysed acrossthe RDAs, with the most appropriate being the other/hybrid area interventions category, which has anaverage cumulative (achieved and future) potential return of 2.5, which is approximately half the return ofAWM’s RZs programme. For SRB, the average GVA to cost ratio across the RDAs is 3.4 compared to4.2 for AWM’s SRB programme.

The RZs evaluation also estimates the cost per net job in the range £14,500-19,400. This can becompared to the benchmark across the RDAs of £41,775 for area based interventions. This suggeststhat the RZs programme has been effectively delivered. The SRB evaluation presents estimates of costper net unit of outputs, however we do not believe it is appropriate to assess the value for money of SRBon the basis of the net additional outputs per £ spent. The SRB schemes were set up to achieve avariety of objectives, some of which were economic but many of which were not. In order to undertake ameaningful assessment of value for money, it is important to recognise the diversity of outputs andimpacts and relate them to the relevant inputs.


The second RES, ‘Creating Advantage’, set out three key objectives for the RZs for the period 2004-2010:

to create 19,000 jobs;

to provide 55,000 learning opportunities; and

to remediate 600 hectares of brownfield land.

The evaluation shows limited progress to date towards achieving these objectives, with approximatelyhalf of jobs created and a quarter of the brownfield land remediated to date compared to the objectivesset out. It should, however, be recognised that not all the investments and outputs in the Zones will havebeen captured by the RZ evaluation. AWM has spent a further £443m in the RZs over the period2002/03 to 2006/07 and this spending would also be expected to contribute to these objectives.

The evaluation of the SRB programme did not assess performance against objectives due to a lack ofavailable data.

National programmes

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


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

National programme AWM spend (2002/03-2006/07

(£m))

Net jobs created

Business Link 42.4 3,662

Grants for R&D 15.1 359

Total 57.5 4,021



East of England DevelopmentAgency

Summary

Overview

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

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

We have reviewed 23 evaluations60

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

Impact

These evaluations show that EEDA has generated significant outputs already:

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

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

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

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

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

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

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

Value for money

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


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

60 Five of the 23 evaluations relate to EEDA’s Investing in Communities programme. In order to avoid double counting of spend,

outputs and outcomes, this annex focuses on the most recent evaluation, which is a comprehensive region-wide evaluation of

relevant spend on and outputs/ outcomes from this intervention. Therefore the expenditure, impact, value for money and

performance against targets reported in this regional annex is drawn from 19 evaluations.


73% of the 15 evaluations which did assess performance against objectives have largely met, met orexceeded their objectives. This 73% of evaluations represented 81% of the value of theseinterventions.

Context

Overview of the East of England

The East of England covers over 19,000 km2

across the six counties (Bedfordshire, Cambridgeshire,Essex, Hertfordshire, Norfolk and Suffolk)

61and four unitary authorities (Luton, Peterborough, Southend-

on-Sea and Thurrock). Although most of its population live in urban areas, a large part of the region’sgeography is rural with a long stretch of coastline, which creates issues in terms of the peripheral andremote nature of much of the East of England. In comparison to other English regions, it has no largecities, but instead is home to a network of medium sized towns and cities. However, the region’s closeproximity to London provides a number of strategic advantages, such as access to international gatewaysand transport corridors, leaving it well placed to take advantage of the increasing globalisation ofbusiness activity. The downside of this close proximity is that London creates waste management issuesfor the East of England. It also influences the labour market in much of the East (and South East) ofEngland: over 290,000 people commuted from the East of England to London in 2001 (i.e. 15% of theresident working age population).

The East of England’s residence-based gross value added (GVA) has risen from £77.8 billion in 1999 to£109.9 billion in 2006, which at 9.7% of UK output makes it the fourth largest regional economy in the UK.Regional GVA per head (calculated on a residence basis) has risen from £14,577 in 1999 to £19,599 in2006, making it one of only three regions with GVA per head above the UK average of £18,631, albeitonly marginally so. During the same period workplace GVA rose from £68.5 billion to £99.0 billion

62. The

region also boasts a high level of employment (77%)63

compared to the national average (of 74%)64

.

The region has a particularly strong service sector and is renowned for its high quality research anddevelopment activity, conducted by both private and public sector organisations.

The region has a growing population of around 5.5 million. 17% of the population is over 65. The East ofEngland is in the vanguard of responding to the Government’s house building and sustainablecommunities policies. Significant plans for growth are centred on the region’s larger urban areas. Thisincludes the provision of 508,000 net additions to the housing stock, over the period 2001 to 2021 on thebasis of projected population growth

65.

The region also faces a range of challenges, a number of which are long-term in nature. These include:

managing the consequences of rapid population growth66

;

a high proportion (25-30%)67

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

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

61 From 1st April 2009 Bedfordshire county will be split into two separate unitary authorities: Bedford; and Central Bedfordshire.62 National Statistics: see http://www.statistics.gov.uk/pdfdir/gva1207.pdf.63 Regional Economic Strategy for the East of England, Final Draft submitted to government, June 2008, p.19.64 National Statistics: see http://www.statistics.gov.uk/instantfigures.asp.65 EEDA (2008) Investing our future, Collective action for a sustainable economy. The regional economic strategy for the East of

England 2008-2031 evidence base.66 The East of England is the fastest growing region in England. The population increased 12.5% from 1981 to 2003 and is

projected to grow a further 14% from 2003 to 2023, (East of England Regional Assembly: see

http://www.eera.gov.uk/Documents/About EERA/Policy/Health/2006-05-31 Chapter 1 TS.pdf).67 DCSF: see: http://www.dcsf.gov.uk/rsgateway/DB/SFR/s000792/AF1-16FTed.pdf.


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

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

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

EEDA’s purpose and strategy

To date EEDA has developed, with partners, four Regional Economic Strategies (RESs) for the East ofEngland in 1999, 2001, 2004 and 2008. The focus of the evaluations covers 2002/03 to 2006/07 andthus the prime focus of this impact evaluation is in relation to the 2004 RES. The Strategies provide thecontext for economic development and regeneration in the East of England. The overarching visionoutlined in the 2004 RES was for the East of England to become a leading economy, founded on a world-class knowledge base and the creativity and enterprise of its people, in order to improve the quality of lifeof all who live and work in the East of England. The six themes for economic growth described in the2001 RES

68were developed into eight goals in the 2004 RES

69as follows:

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

growing competitiveness, productivity and entrepreneurship;

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

high quality places to live, work and visit;

social inclusion and broad participation in the regional economy;

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

a leading information society; and

an exemplar for the efficient use of resources.

EEDA’s new 2008-2011 RES was formally launched in September 2008. The main differences betweenthis and the 2004 RES are: an increased focus on environmental and sustainability issues; a strongeremphasis on place and spatial differences; and clearer and better monitoring frameworks with clear andquantified targets and a comprehensive and robust evidence base.

EEDA’s Corporate Plan identifies and prioritises the Agency’s interventions, which are designed to meetthe region’s objectives. EEDA has had four Corporate Plans over the period on which this report focuses:

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

70;

the 2003-2006 Corporate Plan which again linked its interventions to the six themes outlined in the2001 RES;

68 The six themes were: competitive businesses and organisations for a world-class region; creativity, innovation and enterprise;

‘invest in success’ wherever it is found; regeneration plus - supporting our people and our communities; a clear identity and

international profile; and leading-edge infrastructure and high-quality environment (East of England 2010 the regional economic

strategy, June 2001).69 A Shared Vision The regional economic strategy for the East of England, November 2004.70 Key partners include Local Economic Partnerships; Regional Supply Network; and East of England International.


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

the 2008-2011 Corporate Plan which was endorsed by BERR in July 200871

.

It should be noted that during the evaluation period EEDA employed various approaches to intervention,although it has not had programmes in the same sense of other regions; i.e. with the exception of theInvesting in Communities programme, it has not rolled out a suite of projects linked by a common theme,industry sector or delivery structure. Given the scale of EEDA's resources, the 2002-2004 CorporatePlan was constrained by significant commitments to legacy programmes. However, the 2005-2008Corporate Plan set out four core intervention products, each with distinct contributions to make to specificnational policies, RES goals and ambitions, and with different delivery structures (e.g. the RegionalRenaissance product was significantly targeted and delivered through local delivery vehicles). The 2008-2011 Corporate Plan has moved to a fully programme-based approach.

Key quantitative outputs arising from EEDA’s interventions cover: jobs created or safeguarded; peopleassisted to get a job; new businesses created and surviving 12 months; businesses assisted to improvetheir performance; businesses assisted via collaboration with the UK knowledge base; public and privateregeneration investment levered; hectares of brownfield land reclaimed and redeveloped; and skillsassists. The 2005-2008 Corporate Plan detailed the high-level targets that EEDA was expected to deliverover the period 2005/06 to 2007/08. These are in line with the objectives of the 2004 RES.

EEDA is increasingly seeking to deliver its objectives through working with a range of partners, includinglocal delivery vehicles at both regional and sub-regional levels. There are also important pan-regionallinks through the Milton Keynes and South Midlands Sub-Regional Strategy (MKSM) and ThamesGateway. In addition, some of its goals, for example in relation to innovation and the spatial economy,are addressed through multi-regional working across the Greater South East, specifically with the Londonand South East of England RDAs.

Besides the impact of its project and programme spend, EEDA also influences its partners’ andstakeholders’ behaviour and performance in other ways. This ‘Strategic Added Value’ (SAV) is seen as akey element of EEDA’s impact. Indeed, the policy framework that led to its establishment was designedto enable EEDA to harness national, regional and local institutions in order to exploit the region’sindigenous strengths and tackle particular weaknesses, and to provide the environment for businessesand communities to maximise their potential through reforms that strengthen the key drivers ofproductivity and growth.

EEDA’s profile

In 2006/07, EEDA had an annual budget of £138.9m and spent around £648.0m from 1999/00 up to andincluding 2006/07. Although this report draws on evaluations which cover EEDA’s spending over thewhole period since its establishment in 1999, its focus is on that spending for which EEDA was formallyaccountable, over which it has had the greatest influence and where at least the early evidence of impactshould be apparent. In practice, this means that it focuses on understanding the impact of EEDA’sspending on interventions in the ‘relevant period’ between 2002/03 to 2006/07: thus, it focuses less onthose programmes and projects which EEDA inherited from its predecessors

72and the national

programmes where EEDA has been responsible for delivery within parameters determined by centralgovernment departments

73.

71 This Corporate Plan is currently being redrafted to reflect the July 2008 reduction in budget which will affect delivery.72 The exception here is the SRB programme, a legacy programme, which has recently been evaluated to asses the impact of RDA

spending.73 Ten national programmes have been defined. They are the Coalfields Programme, the Regional Innovation Fund, the

Manufacturing Advisory Service, Regional Tourist Board Support, the Rural Development Programme for England and Sustainable

Food and Farming, Market Town Initiative, Business Link, Regional Selective Assistance/Selective Finance for Investment, Grant for

Research & Development and Phoenix Fund. However the Coalfields Programme was not delivered in the East of England.


Table 28 provides a breakdown of EEDA’s overall spend per annum from 1999/2000 to 2006/2007between the three broad intervention categories outlined in the IEF

74and on other EEDA interventions,

national programmes and administrative costs. This indicates a general decline in administrative costs asa percentage of EEDA’s spend on interventions from 22% in 1999/00 to 9% in 2006/07.

Table 28 shows, that more of EEDA’s expenditure has been devoted to place interventions than topeople, business or other interventions. It is also evident that EEDA’s spending priorities have changedsince its establishment, with increased amounts devoted to business and people interventions in the lateryears. However, it should be noted that the objectives and outputs/outcomes of EEDA’s interventionsoften span a number of intervention categories. For the purposes of analysis, however, eachintervention, and its associated expenditure, has been classified into the most appropriate interventioncategory.

Since its establishment, EEDA has spent £578.7m on interventions (excluding administration). Of this£404.9m was spent on EEDA (rather than national) interventions in the ‘relevant period’, which is theprimary focus of this report (see shaded area in Table 28).

Table 28: Analysis of EEDA spend by year and by category of expenditure (£m, 1999/00-2006/07)75

Business Place People Other National

programmes

Administrative

costs

Total

1999/2000 1.2 20.0 3.3 N/A N/A 5.5 30.0

2000/2001 3.3 25.6 4.4 N/A N/A 5.5 38.8

2001/2002 7.0 38.1 5.3 N/A N/A 7.2 57.6

2002/2003 8.4 27.0 7.1 30.1 3 8.8 84.4

2003/2004 9.1 18.4 12.7 23.0 6.6 8.8 78.7

2004/2005 12.5 25.4 11.0 16.5 3.6 10.2 79.2

2005/2006 28.8 41.6 18.1 14.0 26.5 11.4 140.4

2006/2007 27.2 37.8 30.0 6.2 25.9 11.9 138.9

Total 97.4 234.0 92.0 89.7 65.6 69.3 648.0

Source: EEDA and PwC analysis

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

74 These IEF intervention categories have been applied consistently across all RDAs and bear no relationship to how EEDA

organises itself.75 Spend on ‘other’ interventions and National programme has not been extracted separately for the legacy period of 1999/00 to

2001/02.


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

Expenditure

covered by

evaluations (£m)

% of spend Number of

evaluations

Business 37.3 43 7

Place 52.1 35 6

People 62.0 78 8

Other 89.7 100 2

Total 241.1 60 23

Source: PwC analysis based on EEDA evaluation evidence

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

Key findings

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

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

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

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

Impact

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

76.

76 It should be noted that the majority of excluded national programmes would account for a large proportion of the overall business

intervention outputs which EEDA reports to BERR: including 3,298 jobs created/ safeguarded, 4,273 businesses created, 11,085

businesses assisted and 374 skills assists resulting from the Regional Innovation Fund, Manufacturing Advisory Service, Regional

Tourist Board Support, Business Link, Regional Selective Assistance/Selective Finance for Investment and Grant for Research &

Development programmes (Source: EEDA PMS data).


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

77

Jobscreated/

safeguardedBusinesses

createdBusinesses

assistedBrownfieldland (ha) Skills assists

Business competitiveness & development

Gross outputs achieved 5,807 183 6,640 - 5,471

Net outputs achieved 1,014 43 2,651 - 1,596

Additionality %, achieved 17 23 40 - 29

Future potential gross outputs 246 44 339 - 251

Future potential net outputs 123 18 161 - 141

Additionality %, future potential 50 41 47 - 56


Gross outputs achieved 1,266 99 - 42 -

Net outputs achieved 678 65 - 42 -

Additionality %, achieved 54 66 - 100 -

Future potential gross outputs 2,301 18 - 23 117

Future potential net outputs 1,298 10 - 23 50

Additionality %, future potential 56 56 - 100 43

People and skills

Gross outputs achieved 1,649 181 3,939 - 31,023

Net outputs achieved 840 94 1,839 - 15,598

Additionality %, achieved 51 52 47 - 50

Future potential gross outputs - - - - 1,364

Future potential net outputs - - - - 402

Additionality %, future potential - - - - 29

Other

Gross outputs achieved 2,331 177 - 25 8,174

Net outputs achieved 983 79 - 14 4,575

Additionality %, achieved 42 45 - 56 56

Total



Additionality %, achieved 32 44 42 84 49


Future potential net outputs 1,421 28 161 23 593

Additionality %, future potential 56 45 47 100 37


77 The gross outputs from the Inspire East evaluation have been excluded from this table as there are no corresponding net outputs

in the evaluation evidence. Outputs from national programmes have also been excluded as these are not linked to EEDA’s relevant

spend.


EEDA’s spending has created/ safeguarded jobs, assisted and helped to create new businesses,assisted people in skills development and remediated brownfield land. A large proportion of theseoutputs have already been achieved. However, a number of outputs are potentially to be achieved in thefuture. These are predominantly related to jobs created by physical infrastructure investments (such ascapital investment in business premises and public realm and other infrastructure and revenue spend onFirstsite:newsite and EPIC), but also include business interventions (such as the Innovation Capital andRevenue projects) and people interventions (such as the University of Essex in Southend). All of thesefuture outputs are subject to varying degrees of uncertainty.

The additionality of EEDA’s evaluated business interventions varies across intervention and output type,but is relatively low for achieved net jobs created/ safeguarded, businesses created and skills assists(with ratios of 17%, 23% and 29% respectively) compared with its additionality ratios for physicalregeneration (of 54% for job creation and 66% for business creation - no skills assists have beenachieved for this theme), people and skills (of 51%, 52% and 50% respectively) and other interventions(of 42%, 45% and 56% respectively) . The additionality of business interventions increases in terms offuture potential outputs. Future potential, jobs created/ safeguarded and businesses created in particularshow a much greater level of additionality (50% and 41% respectively).

Comparison of the overall additionality of EEDA’s interventions with the national findings shows a mixedpicture. Whilst EEDA’s business competitiveness, people and skills and other interventions compare lesswell for achieved net outputs, its physical regeneration interventions have similar or higher average levelsof additionality across all of the national measures indicated

78.

Table 31 sets out the outcomes of EEDA’s interventions expressed in terms of achieved and futurepotential impact on GVA estimates. As the table shows, some interventions have either already achievedGVA which is greater than EEDA’s initial investment, or have the potential to do so in the future.

It was not appropriate to provide an aggregate figure for the impact on GVA (achieved and futurepotential) in relation to all of these interventions due to differences in the basis of measurement acrossindividual evaluations. Not all of the evaluations reviewed assessed the outcomes of the intervention interms of the impact on GVA. For those evaluations which did take GVA into consideration, the basis ofthese estimates is often inconsistent across interventions.

78 The average achieved additionality ratios across the RDAs varies by intervention type. For business interventions, the ratios

were: 48% for jobs created/ safeguarded; 40% for businesses created; and 35% for businesses assisted. For physical regeneration

interventions, the ratios were: 45% for jobs created/ safeguarded; 65% for businesses created; and 73% for land remediated.

Whilst future potential national additionality ratios for physical regeneration interventions were: 45% for jobs created/ safeguarded;

64% for businesses created; and 64% for land remediated. For people and skills interventions, the ratios were: 48% for jobs

created/ safeguarded; 82% for businesses created; and 62% for skills assists. For other interventions, the ratios were: 49% for jobs

created/ safeguarded; 51% for businesses created; 59% for land remediated; and 57% for skills assists.


Table 31: Outcomes of EEDA’s evaluated interventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Achieved

GVA

(annual,

£m)

Future

potential

GVA

(annual,

£m)

Achieved

GVA

(cumulative,

£m)

Future

potential

GVA

(cumulative,

£m)

Achieved

& future

potential

GVA

(cumulative,

£m)

Business competitiveness and development

Early Stage Business Support 2.9 - - - 379

3

Innovation Capital80

15.4 3-6 6-12 - - -

Innovation Revenue81

1.5 4-9 5-12 - - -

Attraction of Inward investment 10.6 14 - - - -

People and skills

Investing in Communities 36.4 23 - - - -

Workforce Development 4.1 - - 24 84 108


Finally, besides the impact of its project and programme spend, Strategic Added Value is a key elementof EEDA’s impact. Aspects of EEDA’s Strategic Added Value in relation to the evaluated interventionsare illustrated below. This is based on evidence from the evaluation reports as well as case studyevidence provided by EEDA.

EEDA’s Strategic Added Value

Besides the impact of its project and programme spend, EEDA also influences its partners’ andstakeholders’ behaviour and performance in other ways as demonstrated by the following examples:

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

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

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

Source: EEDA

79 This relates to two out of four projects only (Proof of Concept and Running the Gauntlet).80 The ranges depend on whether a top down or bottom up approach is used to estimate GVA. The top down approach scales the

estimated turnover per employee by the gross-to-net factor and gross jobs. The bottom up approach scales company turnover per

employee or business by individual benefit factor and further scaled by total gross jobs.81 The ranges depend on whether estimated GVA is scaled by employment at an individual company level or overall level.


Value for money

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

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

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

In assessing the value for money of EEDA’s interventions we have sought to compare them with theevidence emerging from the evaluation of other RDAs’ activities. Care should, however, be taken whencomparing the value for money of these interventions as these are set out in terms of both achieved andfuture potential (the latter being subject to uncertainty). Table 32 also sets out ratios of GVA to costbased on either cumulative GVA (including the persistence effects of the intervention) or annual GVAdepending on the available evidence. Where annual GVA only was estimated, the evaluations gave noindication of the number of years over which the impact was expected to persist. As such this annexpresents annual GVA as a ratio of total cost. Direct comparisons should not be made between theannual and cumulative GVA ratios. For the national report we have re-estimated the GVA impact using aconsistent approach (and set of assumptions) allowing such comparisons to be made.

Table 32: Summary of EEDA value for money from IEF compliant evaluations (2002/03-2006/07)82

Achieved

GVA:cost

ratio

Achieved &

future

potential

GVA:cost

ratio

Achieved

cost per

net job

(£’000)

Future

potential

cost per

net job

(£’000)

Achieved

cost per

net

business

assist (£)

Achieved

cost per net

skills assist

(£)


Rural Business Support - - 17 - 437-2,17783

1,569-

2,66584

Early Stage Business

Support

- 1.6

(cumulative)85

- - 9.974 -

Innovation Capital 0.2-0.4

(annual)

0.4-0.8

(annual)

21386

123 - -

Innovation Revenue 2.7-6.0

(annual)

3.4-7.8

(annual)

25 - - -

Attraction of Inward

Investment

1.4 (annual) 1.4 (annual) 13 - - -

Sustainable Consumption

and Production

- - - - 9,562 15,484


Trinity Lighthouse - - 8 - - -

Business Premises87

- - 185 179 - -

82 This table excludes interventions for which the evaluation did not contain any assessment of value for money, i.e. Innovative

Actions Programme, Inspire East, University of Essex in Southend, SRB and Ipswich.83 The achieved cost per business assisted for three of the four projects in this intervention ranged from £437 to £2,177.84 The achieved cost per business assisted for two of the four projects in this intervention ranged from £1,569 to £2,665.85 Cost per unit measures were only available for two out of the four projects evaluated (Proof of Concept & Running the Gauntlet).86 The achieved cost per net job of this intervention is skewed by the relative immaturity of this intervention and the capital nature of

EEDA’s investment.


Achieved

GVA:cost

ratio

Achieved &

future

potential

GVA:cost

ratio

Achieved

cost per

net job

(£’000)

Future

potential

cost per

net job

(£’000)

Achieved

cost per

net

business

assist (£)

Achieved

cost per net

skills assist

(£)

Capital Projects - - 41 15 - -

Firstsite:newsite - - - 92 - -

EPIC - - - 18 - -

People and skills

Investing in Communities 0.6 (annual) 0.6 (annual) 188

- 6,94689

1,58490

Workforce development 5.9

(cumulative)

26.3

(cumulative)

6 - - 2,200

Construction skills - - - - - 2,036-

31,15391


Table 32 shows that, for the evaluations which estimated GVA, there has been a significant range ofreturns from these interventions. Some interventions have already achieved GVA returns which exceedtheir costs, whilst others have achieved a more limited return including when taking into account futurepotential. It should be noted that some evaluations were interim in nature and, therefore, there may havebeen an insufficient time lag between spend and benefit realisation.

There is also a large variation in terms of cost per job, both achieved and future potential, within andacross intervention categories. The cost per net job created/ safeguarded for EEDA’s people and skillsinterventions are, however, relatively low when compared to its business and competitiveness andregeneration through physical infrastructure interventions. However, not all interventions had job creationas an explicit objective and therefore, in these instances, the cost per net job may not be the mostappropriate measure of value for money. As such we have sought to identify other cost per net outputmeasures within the individual intervention categories, where this is available in the evidence base.

EEDA’s evaluated business interventions can be compared to the following national averages:

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

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

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

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

87 There was significant variation in the cost per job of the four projects covered by this evaluation, i.e. from £16,896 per net job

achieved to £581,375 to £3,922,952. The fourth project has achieved no net jobs to date. Future potential cost per job was

similarly wide ranging, i.e. from £16,896 per net future potential job to £564,313 to £1,364,505 to £6.4m.88 This relates to cost per job created or person supported into employment.89 This relates to cost per business assisted or business created.90 This relates to cost per skills or qualification acquired.91 The achieved cost per person assisted in skills development for the three projects in this intervention ranged from £2,036 to

£4,011 to £31,153.


EEDA’s people and skills interventions, particularly Workforce Development, appear to perform wellagainst the national average (of 0.9:1 for achieved and 1.0:1 for achieved and future potential cumulativeGVA to cost ratio for this sub-theme). There is limited evaluation evidence of quantitative outcomes fromEEDA’s regeneration through physical infrastructure interventions. This is primarily due to the early stageof implementation of these interventions. A number of interventions have potential future returns which,by their nature, are uncertain. These interventions may also have had wider impacts in the areas inwhich they operate, for example raising confidence in the area, which will not be captured in theestimation of GVA.

Comparing EEDA with the national picture for unit cost measures, the cost per net output of EEDA’sbusiness interventions was mixed with some interventions e.g. the £17,000 per job for Rural BusinessSupport, above the national average cost per job for its sub-theme (of £8,301), whilst the £25,000 per jobfor Innovation Revenue is below the national average for its sub-theme (of £37,938). On the other hand,in terms of cost per business assisted, Rural Business Support performed well against the nationalaverage for its sub-theme (of £8,502).

Again comparing the cost per net job of EEDA’s regeneration interventions to the national averages givesmixed results. For instance, Capital Projects and Trinity Lighthouse in particular have costs per jobswhich are around a quarter of the national average for their sub-themes (of £118,945 and £42,101respectively). Business Premises on the other hand performed less well and was more than four timeshigher, in terms of cost per net job, than the national average for its sub-theme (of £42,101). This is dueto the relative immaturity of this intervention. Similarly, comparisons show mixed results in terms of thecost per unit output measures of EEDA’s people and skills interventions - Investing in Communities andWorkforce Development compare very well against the national average cost per job created/safeguarded for these sub-themes (of £49,215 and £105,268 respectively). Investing in Communitiesalso performs well in terms of the national average cost per skills assist for its sub-theme (of £2,570).However Workforce Development and Construction Skills perform less well in relation to the nationalaverage (of £1,242) for their sub-theme in this respect.


Table 33 presents EEDA’s performance against the Tasking Framework output targets set for it byDTI/BERR. For all of the measures, EEDA has achieved all bar one of the annual target set byDTI/BERR. EEDA has also exceeded its cumulative targets including for funding levered.

Table 33: Comparison of EEDA performance against targets (2002/03-2006/07)92

Jobs created/

safeguarded

Businesses

created

Brownfield

land (ha)

Skills assists Funding

levered (£m)93

Targets set by

DTI/BERR 12,888 4,335 139 60,983 136

Achieved EEDA gross

outputs reported to

DTI/BERR 16,232 6,016 177 102,239 216


targets met 5 out of 5 5 out of 5 5 out of 5 5 out of 5 3 out of 4


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

92 Where targets were expressed as ranges (i.e. for 2005/06 and 2006/07) the minimum value has been used.93 Funding levered targets and outputs were not available for 2002/03.


new duties imposed by central government. This assessment sheds further light on how well the Agencyhas been able to fulfil its role.

Overall, EEDA was seen as ‘performing well’, particularly in terms of:

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

achievements: it was noted that EEDA has achieved some significant success with its focus on fourcore products. EEDA’s Enterprise Hubs, regeneration activities and the development of asustainability toolkit were noted as particular strengths alongside the attraction of inward investmentby East of England International

94. EEDA also successfully tackled the transformation of the Business

Link operation and was viewed to have responded well to economic shocks such as the fire atBuncefield fuel depot.

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

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

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

The report also identified the need for: a greater emphasis on outcomes in EEDA’s reportingmechanisms; better management of large interventions to improve communication and decision making;a more consistent approach to partner relations and communication across the region; improvingsustainability through improved appraisal and evaluation mechanisms; and becoming an exemplar forsustainable development.

Table 34 sets out EEDA’s performance against the project/ programmes objectives for each of theindividual interventions covered by the evaluations. These objectives include the budgeted outputs forthe project/ programme as well as the intended contribution to the objectives outlined in the RES andCorporate Plan.

Table 34: Comparison of EEDA’s performance against objectives across the IEF compliantevaluations (2002/03-2006/07)

Exceeded Met Largely

met

Mixed Limited

performance

Not

assessed

Total

Business

Number of

evaluations

1 0 4 1 0 1 7

Expenditure

covered by

evaluations (£m)

2.8 0 21.0 2.9 0 10.6 37.3

Place

Number of

evaluations

0 0 1 3 0 2 6

Expenditure

covered by

evaluations (£m)

0 0 2.5 43.4 0 6.2 52.1

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



met

Mixed Limited

performance

Not

assessed

Total

People

Number of

evaluations

0 0 4 0 0 0 495

Expenditure

covered by

evaluations (£m)

0 0 62.0 0 0 0 62.0

Other

Number of

evaluations

0 1 0 0 0 1 2

Expenditure

covered by

evaluations (£m)

0 64.9 0 0 0 24.8 89.7

Total

Number of

evaluations

1 1 9 4 0 4 19

Expenditure

covered by

evaluations

(£m)

2.8 64.9 85.5 46.3 0 41.6 241.1


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


We have structured the analysis of the impact of EEDA’s spending, where possible, according to thethree categories of intervention defined within the IEF (i.e. business, place and people). We have alsoanalysed the impact of EEDA’s other activities that span more than one of these categories as well as theavailable evidence of the impact of the nine national programmes where EEDA has been responsible fordelivery within parameters determined by central government departments.

We have summarised the impact of EEDA’s interventions using a common structure in which:

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

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

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

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

95 Within this theme there are five evaluations relating to EEDA’s Investing in Communities programme, this annex has focused only

on the most recent evaluation, which is a comprehensive region-wide evaluation of relevant spend on and outputs/ outcomes from

this intervention.


Business development and competitiveness interventions

Rationale

The East of England has a number of regional strengths in this area on which EEDA’s interventions haveaimed to build including:

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

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

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

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

access to finance for early stage businesses;

low incidence of innovative activity amongst SMEs;

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

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

The primary justification for EEDA’s businesses and competitiveness interventions was to address marketfailures; for example, the under-provision of training and innovation activity and addressing issues ofasymmetric information (particularly to improve the flow of information on market and technologyopportunities, sources of financial support and mainstream business support services).

The evidence of the impact of EEDA’s business interventions comes from seven evaluations covering thefour main sub-themes summarised in Table 35.

Table 35: Summary of EEDA’s evaluated business development and competitivenessinterventions (2002/03-2006/07)


covered by

evaluations (£m)

Individual enterprise level support Rural Business Support

Early Stage Business Support

2.8

2.9

Science, R&D & innovation infrastructure Innovative Actions Programme

Innovation Capital

Innovation Revenue

1.7

15.4

1.5

Inward investment promotion Attraction of Inward Investment 10.6

Sustainable consumption and production Sustainable Consumption and Production (SCP) 2.4

Total 37.3



Business spend is dominated by investment in innovation (particularly ‘Enterprise Hubs’) and attractinginward investment

96. A number of projects have also been undertaken to support rural and early stage

businesses as well as sustainable consumption and production97

. These interventions contribute to anumber of goals outlined in the 2004 RES:

growing competitiveness, productivity and entrepreneurship;

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

high quality places to live, work and visit;

social inclusion and broad participation in the regional economy;

an exemplar for the efficient use of resources; and

contributing to ‘rural vitality’.

Impact

Table 36 summarises the expenditure and key gross outputs associated with six of the seven businessinterventions evaluated. The primary outputs have been jobs created/safeguarded, businesses createdand assisted, skills assists and employment support.

Table 36: Gross achieved outputs of EEDA’s evaluated business development andcompetitiveness interventions (2002/03-2006/07)

98

Expenditure

covered by

evaluations

(£m)

Gross jobs

created/

safeguarded

Gross

businesses

created

Gross

businesses

assisted

Gross skills

assists

Gross people

assisted into

employment

Rural Business

Support

2.8 0 - 3,724 4,245 -

Early Stage

Business

Support99

2.9 120 - 1,532 592 867

Innovation

Capital

15.4 151 21 151 188 -

Innovation

Revenue

1.5 241 51 630 21 24

Attraction of

Inward

Investment

10.6 5,274 108 - - -

Sustainable

Consumption

and Production

(SCP)100

2.4 21 3 603 425 -

96 As previously noted inward investment activity in the East of England is undertaken by East of England International (EEI) (a

sister organisation of EEDA). The £10.6m spent on attracting inward investment also includes EEI’s administrative costs. Care

should be taken in any cross regional comparisons as administrative costs will not be included in the inward investment costs for the

RDAs who do not have separate inward investment organisations.97 This relates to the sustainable use of resources and reduction of waste.98 The Innovative Actions Programme (and related spend) has been excluded from this table as the only outputs reported in the

evaluation were in terms of levels of engagement and network creation (30).99 Plus eight businesses assisted via collaboration with UK knowledge base.100 Plus 21 businesses assisted via collaboration with UK knowledge base.


Expenditure

covered by

evaluations

(£m)

Gross jobs

created/

safeguarded

Gross

businesses

created

Gross

businesses

assisted

Gross skills

assists

Gross people

assisted into

employment

Total 35.6 5,807 183 6,640 5,471 891


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

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

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

Table 37 summarises the expenditure and key net outputs associated with six of the seven businessinterventions evaluated.

Table 37: Net achieved outputs of EEDA’s evaluated business development and competitivenessinterventions (2002/03-2006/07)

101

Expenditure

covered by

evaluations

(£m)

Net jobs

created/

safeguarded

Net

businesses

created

Net

businesses

assisted

Net skills

assists

Net people

assisted

into

employment

Rural Business

Support2.8 - - 1,892 1,191 -


Support102 2.9 25 - 311 138 162

Innovation Capital 15.4 72 10 39 107 -

Innovation Revenue 1.5 60 13 158 5 6


Investment10.6 845 17 - - -

Sustainable

Consumption and

Production (SCP)103

2.4 12 3 251 155 -

Total 35.6 1,014 43 2,651 1,596 168


101 Again the Innovative Actions Programme (and related spend) has been excluded from this table as no net outputs were reported

in the evaluation.102 Plus six businesses assisted via collaboration with UK knowledge base.103 Plus 16 businesses assisted via collaboration with UK knowledge base.


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

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

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

The level of additionality resulting from EEDA’s business interventions varied across intervention andoutput type, but was generally relatively low compared with its physical regeneration and people andskills interventions.

Comparison of the additionality of EEDA’s business interventions with the national average shows thatthey compare less well for achieved outputs such as net jobs created/ safeguarded and businessescreated, than for net business assists, although this does vary by sub-theme

104. In terms of individual

enterprise support, EEDA’s Rural Business Support demonstrated relatively high levels of additionality(51% for business assists), whilst its Early Stage Business Support had lower levels of additionality (21%for jobs created/ safeguarded and 20% for business assists) compared to the national average for thissub-theme (of 41% for jobs created/ safeguarded and 32% for business assists). Similarly EEDA’sscience, R&D and innovation infrastructure interventions showed mixed results. The additionality ofEEDA’s Innovation Capital intervention was similar for jobs created/ safeguarded (of 48%) and higher forbusiness creation (of 48%), compared to the national averages (of 46% and 39% respectively) whereasthe Innovation Revenue intervention performed less well against these averages (both 25%). Neitherintervention achieved the national average additionality in terms of businesses assisted (of 67%).Compared to the national average additionality of jobs created/ safeguarded (of 43%), EEDA’s inwardinvestment activity performed less well (with an additionality of 16%), while its Sustainable Consumptionand Production activity achieved similar levels of additionality (i.e. 57%) to the national average for thissub-theme (of 55%).

Table 38 summarises the impact on GVA (both achieved and future potential) of the evaluated EEDAinterventions to promote business development and competitiveness. In the majority of cases theevaluations estimated either cumulative or annual GVA. Where annual GVA is presented in Table 38 noindication was given of the number of years over which the impact was expected (or assumed) to persist.Moreover, future potential impacts on GVA have not been discounted.

104 This means that EEDA’s overall additionality for evaluated business interventions was 17% for jobs created/ safeguarded, 23%

for businesses created and 40% for business assists compared to the national averages of 48%, 40% and 35% respectively.


Table 38: Outcomes of EEDA’s evaluated business development and competitivenessinterventions (2002/03-2006/07)

105

Expenditure

covered by

evaluations

(£m)

Achieved GVA

(annual, £m)

Achieved &

future

potential GVA

(annual, £m)

Achieved GVA

(cumulative,

£m)

Achieved

& future

potential GVA

(cumulative,

£m)


Support

2.9 - - - 3106

Innovation Capital107 15.4 3-6 6-12 - -

Innovation Revenue108 1.5 4-9 5-12 - -


Investment

10.6 14 - - -


Additional net outcomes recorded in the evaluation evidence include:

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

Early Stage Business Support109

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

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

As well as the impacts reported in this section, EEDA has delivered Strategic Added Value in relation tobusiness development and competitiveness interventions. It is based on evidence from evaluations andcase studies provided by EEDA.


EEDA’s interventions have also had strategic value. For example, within Rural Business Support, EEDAhas taken the lead in piloting new approaches, working with partners.

110EEDA was also instrumental in

stimulating the idea for particular Innovation Capital projects, sometimes catalysing the process andincreasing stakeholder confidence. For example, in one project, EEDA contributed around 20% of fundsbut its Enterprise Hub Concept and overall endorsement were considered critical in overcoming somechallenging hurdles for new businesses

111.

Source: EEDA

105 This table excludes interventions for which the evaluation did not contain any estimate of GVA, i.e. Rural Business Support,

Innovative Actions Programme and Sustainable Consumption and Production.106 This relates to two out of four projects only (Proof of Concept and Running the Gauntlet).107 The ranges depend on whether a top down or bottom up approach is used to estimate GVA. The top down approach scales the

estimated turnover per employee by the gross-to-net factor and gross jobs. The bottom up approach scales company turnover per

employee or business by individual benefit factor and further scaled by total gross jobs.108 The ranges depend on whether estimated GVA is scaled by employment at an individual company level or overall level.109 Again this relates to two out of four projects only, i.e. Proof of Concept and Running the Gauntlet110 Source: Rural Business Support evaluation report.111 Source: Early Stage Business Support evaluation report.


Value for money

Table 39 sets out the achieved and future potential GVA to cost ratios of EEDA’s business developmentand competitiveness interventions. The GVA to cost ratio compares GVA impacts to the cost of theintervention: where there is a GVA to cost ratio of greater than one, the economic benefits of theinterventions attributable to EEDA’s funding exceed their costs. This is the case for some, but not all ofthe interventions where GVA has been measured.

Compared to the national averages, there was a mixed performance in terms of the EEDA businessdevelopment and competitiveness interventions, for which GVA to cost ratios were available. OnlyInnovation Revenue exceeded the national average achieved annual GVA to cost ratio for its sub-theme(of 1.1:1). Early Stage Business Support, Innovation Capital and Attraction of Inward Investment areexpected to have rates of return which are lower than the relevant national average for their sub-themes(of 14.1:1, 1.1:1 and 3.7:1 respectively). Although in the case of Innovation Capital at least there isevidence that the realisation of future potential outcomes may bring its GVA to cost ratio in line with thenational average for its sub-theme.

Table 39: Achieved and future potential GVA to cost ratios of EEDA’s evaluated businessdevelopment and competitiveness interventions (2002/03-2006/07)

112

Expenditure

covered by

evaluations

(£m)

Achieved GVA

(annual):cost

ratio

Achieved &

future potential

GVA

(annual):cost

ratio

Achieved

(cumulative):cost

ratio

Achieved &

future potential

(cumulative):cost

ratio

Early Stage

Business Support

2.9 - - - 1.6113

Innovation Capital 15.4 0.2-0.4 0.4-0.8 - -

Innovation

Revenue

1.5 2.7-6.0 3.4-7.8 - -


Investment

10.6 1.4 1.4 - -


Note: The GVA to cost ratios for the Innovation Capital and Innovation Revenue interventions set out in Table 39 are

given as ranges based on the ranges of annual GVA set out in Table 38

As Table 39 shows some interventions such as Innovation Revenue and Attraction of Inward Investmenthave already achieved economic benefits which exceed their costs. The evaluation of Early StageBusiness Support indicates that its economic benefits are likely to exceed its costs if its future potentialoutcomes are realised.

Table 40 sets out the achieved and future potential cost per net output of EEDA’s business developmentand competitiveness interventions.

112 This table excludes interventions for which the evaluation did not contain any estimate of GVA, i.e. Rural Business Support,

Innovative Actions Programme and Sustainable Consumption and Production.113 The future potential GVA:cost ratio relates to two out of four projects only (Proof of Concept and Running the Gauntlet).


Table 40: Achieved and future potential cost per net output of EEDA’s evaluated businessdevelopment and competitiveness interventions (2002/03-2006/07)

114

Expenditure

covered by

evaluations

(£m)

Achieved cost

per net job

(£’000)

Future

potential cost

per net job

(£’000)

Achieved cost

per net

business

assisted (£)

Achieved cost

per net skills

assist (£)

Rural Business

Support

2.8 17115

- 437 - 2,177116 1,569-2,665117

Early Stage

Business Support

2.9 - - 9,974 -

Innovation Capital 15.4 213 123 - -

Innovation

Revenue

1.5 25 19 - -

Attraction

of Inward

Investment

10.6 13 - - -

Sustainable

Consumption and

Production (SCP)

2.4 - - 9,562 15,484


The cost per net job achieved from business and competiveness interventions ranged from £13,000 forAttraction of Inward Investment to £25,000 for Innovation Revenue. The £213,000 per net job achievedfor Innovation Capital is skewed by the relative immaturity of this intervention and the capital nature ofEEDA’s investment. The cost per net future potential job for this intervention is £123,000.

Comparing EEDA with the national average cost per net output of business interventions presents amixed picture. For example, Rural Business Support had a higher cost per net job than the nationalaverage for its sub-theme (of £8,301), but had a much lower cost per net business assisted than thenational average for its sub-theme (of £8,502). The cost per net business assisted for Early StageBusiness Support is similar to the national average for its sub-theme (of £8,502). EEDA’s Attraction ofInward Investment had a cost per net job which was higher than the national average cost per net job forinward investment (of £11,563). The cost per net job of EEDA’s science, R&D and innovationinfrastructure interventions represented a mixed performance. The £25,000 per job for InnovationRevenue is below this national average cost per job for this sub-theme (of £37,938), whilst the £213,000per job for Innovation Capital was more than five times this national average. Even taking future potentialjobs into consideration, the £123,000 cost per job of this intervention is more than three times the nationalaverage for this sub-theme (of £37,938).


Table 41 summarises the performance against project objectives of EEDA’s evaluated interventions topromote business development and competitiveness. The evaluations indicate that performance againstobjectives was largely met. Performance against objectives was assessed for the majority ofinterventions by the IEF compliant evaluations reviewed. The exceptions are for the Attraction of InwardInvestment performance (where the objectives were the same as the achieved outputs, suggesting that

114 Again the Innovative Actions Programme (and related spend) has been excluded from this table as no net outputs were reported

in the evaluation.115 The achieved cost per job for Rural Business Support is based on the increase in employment of 165 full time jobs resulting from

increased business turnover. A further 343 part time jobs were reported in the evaluation, but were not included in this cost per job

calculation.116 The achieved cost per business assisted for three of the four projects in this intervention ranged from £437 to £2,177.117 The achieved cost per business assisted for two of the four projects in this intervention ranged from £1,569 to £2,665.


they had been added retrospectively) and one project within Sustainable Consumption and Production(where no objectives were set).

Table 41: Performance against objectives of EEDA’s evaluated business development andcompetitiveness interventions (2002/03-2006/07)

Expenditure

covered by

evaluations (£m)


Rural Business Support 2.8 Exceeded

Innovative Actions Programme 1.7 Largely met

Innovation Capital 15.4 Largely met

Innovation Revenue 1.5 Largely met

Sustainable Consumption and Production (SCP) 2.4 Largely met

Early Stage Business Support 2.9 Mixed

Attraction of Inward Investment 10.6 Not assessed


Regeneration through physical infrastructure interventions

Rationale

The East of England is characterised by localised areas of deprivation alongside relatively affluent areas.Therefore, many of EEDA’s regeneration initiatives aim to stimulate economic activity within the mostdeprived areas of the region. This section relates to physical regeneration initiatives supported by EEDAin order to improve regional economic performance. EEDA’s capital investments were primarily linked togoal four of the 2004 RES - achieving high quality places to live, work and visit. The revenue projectshad more varied aims including:

growing competitiveness, productivity and entrepreneurship (goal two);

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

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

The main justification for EEDA’s regeneration through physical infrastructure interventions was toimprove the area’s image or built environment. Some interventions were also considered to provide apublic good through the development of new facilities or the redevelopment of derelict sites (i.e. CapitalProjects and Inspire East). For Business Premises the justification for EEDA’s intervention related toimproving the flow of information regarding the future returns of such an investment and overcomingbarriers to entry.

Evidence of the impact of EEDA’s regeneration initiatives is based on six evaluations covering the fourmain sub-themes summarised in Table 42.


Table 42: Summary of EEDA’s evaluated regeneration through physical infrastructureinterventions (2002/03-2006/07)


covered by

evaluations (£m)

Capital projects

Bringing land back into use – employment

sites

Trinity Lighthouse

Business premises

2.5

22.4

Public realm/other infrastructure Capital projects 19.8

Revenue projects

Image/events/ tourism Firstsite:newsite

EPIC

3.7

2.5

Other Inspire East 1.2

Total 52.1


This spend is dominated by capital investments in the Business Premises and Capital Projectsevaluations, with a number of smaller scale revenue based projects.

Impact

EEDA’s evaluated physical regeneration interventions include supporting:

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

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

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

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

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


Table 43: Gross outputs (achieved and future potential) of EEDA’s evaluated regeneration throughphysical infrastructure interventions (2002/03-2006/07)

Expenditurecovered byevaluations

(£m)

Achievedgross jobs

created/safeguarded

Futurepotential

gross jobscreated/

safeguarded

Achievedgross

brownfieldland

reclaimed/redeveloped

(ha)

Futurepotential

grossbrownfield

landreclaimed/

redeveloped(ha)

Achievedgross

commercialfloorspace

(m2)

Futurepotential

grosscommercialfloorspace

(m2)

Trinity

Lighthouse

2.5 188 - 1.4 - - -

Business

Premises

22.4 437 278 4.0 0.2 16,664 -

Capital Projects 19.8 636 1,721 36.6 22.7 47,858 5,359

Firstsite:newsite 3.7 5 139 - 0.2 - 3,059

EPIC 2.5 0 163 - - - 1,591

Inspire East118

1.2 2 - - - - -

Total 52.1 1,268 2,301 42 23 64,522 10,009


In addition to the gross outputs in Table 43, the Business Premises evaluation reported the creation of 20new businesses, with the potential to create a further six in the future. The Capital Projects evaluation isalso expected to lead to the creation of 91 achieved and future potential businesses whilst EEDA’ssupport of Firstsite:newsite from 2002/03 to 2006/07 is expected to result in an additional 19 futurepotential training places per annum. Similarly EPIC has the potential to result in 98 skills assists andInspire East has the potential to result in 1,190 skills assists in the future.

The resulting net outputs arising from the evaluations of regeneration interventions are set out in Table44.

In addition to the net outputs in Table 44, the expenditure covered by the Capital Projects evaluation isalso expected to lead to the creation of 75 achieved and future potential businesses whilst EEDA’ssupport of Firstsite:newsite from 2002/03 to 2006/07 is expected to result in an additional 19 futurepotential training places per annum. Similarly EPIC has the potential to result in 31 skills assists in thefuture.

When compared at a national level, EEDA’s physical regeneration interventions have similar or higherlevels of additionality across all of the national measures indicated

119. All of EEDA’s interventions were

considered to be wholly additional in terms of the remediation of brownfield land (100%) and the futurepotential commercial floorspace created (100%). Achieved commercial floorspace created was almostwholly additional (98%). This is above the overall national average additionality (which is 73% forachieved outputs and 64% for future potential outputs from regeneration interventions). Within the sub-theme of bringing land back into use EEDA’s performance is mixed in terms of jobs created/ safeguarded- Trinity Lighthouse has more than triple the level of additionality (of 165%) of the national average (of50%) for this sub-theme, whilst Business Premises resulted in lower levels of additionality (of 28%). Theadditionality of EEDA’s Capital Projects (of 39%) was similar to the national average for Public Realminterventions for achieved jobs created/ safeguarded (of 40%).

118 No corresponding net outputs were calculated for Inspire East.119 EEDA’s evaluated physical regeneration interventions have overall additionality ratios of 53% for achieved jobs created/

safeguarded and 66% for achieved businesses created, compared to the national averages of 45% and 65% respectively. For

future potential outputs EEDA’s evaluations estimated overall additionality ratios of 56% for achieved jobs created/ safeguarded and

56% for achieved businesses created through physical regeneration interventions, compared to the national averages of 45% and

50%.


Table 44: Regional net outputs (achieved and future potential) of EEDA’s evaluated regenerationthrough physical infrastructure interventions (2002/03-2006/07)

120

Expenditure

covered by

evaluations

(£m)

Achieved

net jobs

created/

safeguarded

Future

potential net

jobs

created/

safeguarded

Achieved

net

brownfield

land

reclaimed/

redeveloped

(ha)

Future

potential

net

brownfield

land

reclaimed/

redeveloped

(ha)

Achieved

net

commercial

floorspace

(m2)

Future

potential

net

commercial

floorspace

(m2)

Trinity

Lighthouse

2.5 310 - 1.4 - - -

Business

Premises

22.4 121 5 4.0 0.2 16,664 -

Capital

Projects

19.8 247 1,112 36.5 22.4 46,326 5,359

Firstsite:

newsite121

3.7 - 41 - 0.2 - 3,059

EPIC 2.5 - 140 - - - 1,591

Total 50.9 678 1,298 42 23 62,990 10,009


The Firstsite:newsite and EPIC interventions are still in the early stages of implementation. No nationalaverage future potential additionality ratio can be calculated for the sub-theme of image, events andtourism. However, comparing the future potential additionality of these projects in terms of jobs created/safeguarded to the national average achieved additionality in this sub-theme (of 34%) suggests that thefuture potential additionality of Firstsite:newsite (of 29%) is in line with the national average, whilst EPIChas the potential to achieve higher levels of additionality in the future (of 86%).

Due to the early stage of development of most of these projects the evaluations provided limited evidenceof future potential outcomes and no systematic analysis of the actual or potential impact on regional GVA.The evaluations did, however, note examples of Strategic Added Value (see below).

120 The Inspire East intervention (and related spend) has been excluded from this table as no net outputs were reported in the

evaluation.121 The net outputs presented in this regional annex are 67% of the net outputs recorded in the evaluation report, as EEDA spend

represented a 67% contribution to the project.



EEDA’s support for Trinity Lighthouse resulted in a highly visible, multimillion pound investment in aprominent waterfront location. Feedback from local agents and the Head of Regeneration at TendringDistrict Council indicated that this instilled confidence amongst potential investors and developers, andwill boost the town’s economic prospects in the medium to longer term. Strong communication betweenTrinity Lighthouse and the EEDA contract team helped the project progress effectively, and has led tofurther collaboration on other projects such as the Masterplan for the regeneration of Old Harwich. Theproject has enabled Trinity Lighthouse to develop a modern buoy maintenance facility and new officepremises, which has facilitated an improvement in the efficiency and the quality of its service. WithoutEEDA’s involvement and funding it was considered by stakeholders that this would not have beendelivered

122.

In the early stages of the Firstsite:newsite project, EEDA has added value to strategic partnership co-ordination and decision-making by transferring lessons on how to run capital projects. EEDA wasconsidered to be an essential partner in the realisation of the project. Many partners felt that, withoutEEDA’s contribution and involvement in Firstsite:newsite it, would not have been possible to deliver theproject at a sufficient scale and nature to achieve its key objective of creating a high-profile landmarkattraction

123.

Source: EEDA

Value for money

Table 45 summarises the value for money of EEDA’s interventions to promote regeneration throughphysical infrastructure. The majority of the regeneration evaluations reviewed value for money on thebasis of cost per job only (achieved and future potential), although for EPIC a future potential cost persquare metre of net commercial floorspace, of £1,545, was also noted. Table 45 shows considerablevariation in the value for money of these interventions. The cost per job (achieved and future potential) ofthe Business Premises intervention was particularly high due to the high set-up costs and limited outputsassociated with this intervention to date.

Again comparing the cost per net job of EEDA’s regeneration interventions to the national averagesgenerates mixed results. Trinity Lighthouse and Capital Projects had a cost per net job which was muchlower than the national average for their sub-themes (of £42,101 and £118,945 respectively). BusinessPremises on the other hand performed less well and was considerably higher in terms of cost per net jobfor its sub-theme (of £42,101). Although this intervention is still relatively immature and therefore cost pernet job may decrease overtime.

Table 45: Cost per net job (achieved and future potential) of EEDA’s evaluated regenerationthrough physical infrastructure interventions (2002/03-2006/07)

124

Expenditure covered byevaluations (£m)

Achieved cost per netregional job (£’000)

Future potential cost pernet regional job (£’000)

Trinity Lighthouse 2.5 8 -

Business Premises125

22.4 185 179

Capital Projects 19.8 41 15

Firstsite:newsite 3.7 - 92

EPIC 2.5 - 18


122 Source: Trinity Lighthouse evaluation report.123 Source: Firstsire:newsite evaluation report.124 The Inspire East intervention (and related spend) has been excluded from this table as no net outputs were reported in the

evaluation.125 There was significant variation in the cost per job of the four projects covered by this evaluation, i.e. from £16,896 per net job

achieved to £581,375 to £3,922,952. The fourth project has achieved no net jobs to date. Future potential cost per job was

similarly wide ranging, i.e. from £16,896 per net future potential job to £564,313 to £1,364,505 to £6.4m.


Table 45 sets out cost per job at a regional level. However, it should be noted that a number of theseinterventions aimed to tackle deprivation within specific and typically hard to reach target areas.Therefore, they often had a greater impact, in terms of job creation, at a local than at a regional level

126

and thus the cost per job of these interventions is lower at a local level. For example, the local cost perachieved and future potential job for the four Business Premises projects ranged from £15,044 to£189,568 with an overall local cost per job of £74,740. Similarly the local cost per achieved and futurepotential job for the four Capital Project interventions ranged from £6,000 to £24,000, with an overall localcost per job of £13,000. In the case of Trinity Lighthouse however, the intervention had a greater impacton jobs at a regional level and, therefore, the local cost per job achieved was higher at £32,667.


Table 46 summarises the performance against project objectives of the evaluated EEDA interventions topromote regeneration through physical infrastructure. It should be noted that a number of evaluations didnot assess performance against objectives. In the case of Firstsite:newsite and EPIC this is because ofthe timing of these evaluation, i.e. all outputs are future potential outputs and consequently no outputshave yet been achieved. For those evaluations which did assess performance against objectives onlyTrinity Lighthouse largely met its objectives. The other interventions represented a more mixedperformance.

Table 46: Performance against objectives of EEDA’s evaluated regeneration through physicalinfrastructure interventions (2002/03-2006/07)

Expenditure covered by

evaluations (£m,

2002/03-2006/07) Performance against objectives

Trinity Lighthouse 2.5 Largely met

Capital Projects 19.8 Mixed

Inspire East 1.2 Mixed

Business Premises 22.4 Mixed

Firstsite:newsite 3.7 Not assessed

EPIC 2.5 Not assessed


People and skills interventions

Rationale

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

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

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

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

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

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


development initiatives aimed to bridge the funding gap between businesses and other public partnerssuch as Jobcentre Plus and the Learning and Skills Council.

Evidence of the impact of EEDA’s people and skills interventions relates to four evaluations coveringthree sub-themes summarised in Table 47.

Table 47: Summary of EEDA’s evaluated people and skills interventions (2002/03-2006/07)


covered by

evaluations (£m)

Matching people to jobs Investing in Communities127

36.4

Skills/workforce development Workforce Development

Construction Skills

4.1

2.8

Educational infrastructure development University of Essex in Southend 18.7

Total 62.0


The Investing in Communities programme, which aims to tackle barriers to economic participation,accounts for the largest proportion of the spend in this intervention area. Investment in the developmentof the University of Essex in Southend was also significant (at 30%). Two smaller skills and workforcedevelopment projects were also evaluated: Workforce Development and Construction Skills.

Impact

Table 48 summarises the expenditure and key gross outputs achieved through the EEDA people andskills interventions, which have been evaluated. The primary outputs have been jobs created/safeguarded, people supported into employment, businesses created and assisted and skills assists.

Table 48: Gross achieved outputs of EEDA’s evaluated people and skills interventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Gross jobs

created/

safeguarded

Gross

people

assisted

into

employment

Gross

businesses

created

Gross

businesses

assisted

Gross

skills

assists

Investing in Communities 36.4 1,569 10.932 168 2,400 24,417

Workforce Development 4.1 0 - - 1,523 4,600

Construction Skills 2.8 0 - - - 1,870

University of Essex in

Southend18.7 80 - 13 16 136

Total 62.0 1,649 10,932 181 3,939 31,023


In addition to the gross outputs achieved in Table 48 it was estimated that the University of Essex inSouthend would result in 1,364 future potential skills assists (in gross terms). The Investing inCommunities programme was also considered to have resulted in significant Strategic Added Value.

The net outputs arising from the evaluated interventions are set out in Table 49.

127 There are five usable evaluations relating to EEDA’s Investing in Communities programme. This section focuses on the most

recent evaluation which is a comprehensive region-wide evaluation of relevant spend on this intervention.


Table 49: Net achieved outputs of EEDA’s evaluated people and skills interventions (2002/03 –2006/07

Expenditure

covered by

evaluations

(£m)

Net jobs

created/

safeguarded

Net people

assisted

into

employment

Net

businesses

created

Net

businesses

assisted

Net skills

assists

Investing in Communities 36.4 825 5,862 92 1,240 12,834

Workforce Development 4.1 - - - 596 1,800

Construction Skills 2.8 - - - - 924

University of Essex in

Southend

18.7 15 - 2 3 40

Total 62.0 840 5,862 94 1,839 15,598


In addition to the net outputs achieved in Table 49 it was estimated that the University of Essex inSouthend would result in 402 future potential skills assists. It should be noted that due to a contractualagreement between EEDA and the Higher Education Funding Council for England (HEFCE), all of theoutputs for this intervention relating to approximately 200 HEFCE funded students attending theUniversity during the evaluation period, have been attributed to HEFCE (i.e. the evaluation evidencerelates to non-HEFCE students only). As such the evidence may underestimate the full impact of EEDA’sinvolvement in this intervention. In addition, the wider regeneration objectives of this intervention werenot evaluated in the evidence base.

The additionality of EEDA’s people and skills interventions varied across output measure and interventionsub-theme. Investing in Communities had the highest level of additionality, across each output category(i.e. over 50%). This is considered particularly impressive given that this intervention sought to targethard to reach groups.

Comparisons to the national average show that overall EEDA’s evaluated interventions have a mixedperformance, achieving similar levels of additionality for jobs created/ safeguarded (of 51%) and peopleassisted into employment (of 54%), but lower levels for skills assists (of 50%) and business created (of52%) compared to the overall national averages for people and skills interventions (of 48%, 51%, 62%and 82% respectively). Investing in Communities resulted in higher than average levels of additionalityfor the sub-theme of matching people to jobs in terms of jobs created/ safeguarded (of 53% compared tothe national average of 47%)and similar levels of additionality for people assisted into employment (of54% compared to 59%) and businesses created (of 55% compared to 60%), but lower than averagelevels of additionality in terms of skills assists (of 53% compared to 61%). The relatively high levels ofadditionality for this intervention are all the more impressive given that the target group is typically hard toreach. Workforce Development and Construction Skills had lower levels of additionality (of 39% and 49%respectively) in terms of skills assists than the national average for skills and workforce developmentinterventions (of 70%). Similarly the University of Essex in Southend intervention resulted in lower levelsof additionality in terms of jobs created/ safeguarded (of 19%), businesses created (of 15%) and skillsassists (of 29%) compared to the national average for interventions which support the developmenteducational infrastructure (of 63%, 48% and 60% respectively).

Table 50 summarises the outcomes of EEDA’s evaluated people and skills interventions128

.

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

evidence.


Table 50: Achieved and future potential outcomes of EEDA’s evaluated people and skillsinterventions (2002/03-2006/07)

129

Expenditure

covered by

evaluations

(£m)

Achieved

GVA

(annual,

£m)

Achieved

GVA

(cumulative,

£m)

Achieved &

future

potential

GVA

(cumulative,

£m)

Achieved

increase in

employment

(Full time

equivalents)

Future

potential

increase in

employment

(Full time

equivalents)

Investing in

Communities

36.4 23 - - - -

Workforce

Development

4.1 - 24 108 665.5 20.0

University of

Essex in

Southend

18.7 - - - 2.0 1.3

Total 62.0 23 24 108 667.5 21.3


EEDA’s £62.0m investment in people and skills interventions has already achieved an additional £24m ofcumulative GVA. In addition the Workforce Development evaluation estimates a further future potentialcumulative GVA of £84m. Care should be taken in interpreting these estimates of GVA as it has involvedthe aggregation of estimates of outcomes across different evaluations. Moreover, future potentialimpacts on GVA have not been discounted.

The following additional outcomes were recorded in the evaluation evidence:

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

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

based on a ten-year total of 1,500 full time equivalent students130

, University of Essex Southend, wasexpected to increase subsistence spending by students in the local area by £13m, tuition fee incomefrom overseas students by £7m and (non-HEFCE) funding for student places by £6m. A futurepotential net uplift in student’s future incomes of £34m was also estimated.

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

129 This table excludes the Construction Skills intervention because the evaluation did not contain any estimate of GVA or increases

in employment.130 The University of Essex at Southend opened in autumn 2004 with 783 students; autumn 2007 student intake was 1,384 (a 75%

increase).



There is general agreement among stakeholders that EEDA should be complimented for developingInvesting in Communities. The decision making process has led to more local empowerment. Newpartnerships and networks have been formed around the Investing in Community mechanisms andprojects. By exercising both leadership and influence, EEDA gradually secured buy-in from sub-regionalpartnerships to the ethos of the programme and the coherent approach to community-based regenerationon which it was premised

131. In 50% of cases EEDA and the sub regional partners were said to have had

a positive influence on networking and partnership working with 35% of cases saying that this had beenvery successful

132.

The University of Essex is a central component of the regeneration plans for Southend, and forms a casestudy in the Thames Gateway Delivery Plan. While EEDA had a largely supporting role in the delivery ofthese projects, the project holders considered that EEDA had played a critical catalytic role in making theSouthend development happen in the first instance. In the view of HEFCE, EEDA was, therefore, anessential stakeholder to secure, giving a signal to other potential investors that this development was ofregional importance and aligned with regional priorities. The intervention by EEDA to develop aregionally agreed perspective on this expansion was recognised by stakeholders and funders as crucialin their decision to allocate funds to the region. The fact that EEDA had researched and presented acoherent case to HEFCE for the educational development of the East of England, was important insubsequent regional funding decisions and has had a significant impact on the provision of highereducation in the region

133. Furthermore, EEDA’s intervention into higher education provision was used as

an example of best practice in DIUS’s White Paper134

.

Source: EEDA

Value for money

While the majority of the evaluations reviewed provided some value for money assessment, theevaluation of the University of Essex in Southend concluded that it would be inappropriate to conduct avalue for money assessment as the evidence base does not take into account the wider regenerationobjectives and related impacts of this intervention.

Table 51 sets out the available GVA to cost ratios (including achieved and future potential) in relation tothe evaluated people and skills interventions. Whilst there is limited evidence, the return on investmentfor Investing in Communities and Workforce Development is positive and compares well against thenational averages for similar people and skills interventions. Investing in Communities in line with thenational average achieved annual GVA to cost ratio for this sub-theme (of 0.8:1), whilst WorkforceDevelopment has greatly exceeded the national average achieved and total achieved and future potentialcumulative GVA to cost ratios (of 0.9:1 and 1.0:1 respectively).

Table 51: Achieved and future potential GVA to cost ratios of EEDA’s evaluated people and skillsinterventions (2002/03-2006/07)

135

Expenditure

covered by

evaluations

(£m)

Achieved GVA

(annual):cost

ratio

Achieved GVA

(cumulative):cost

ratio

Achieved & future

potential GVA

(cumulative): cost

ratio

Investing in Communities 36.4 0.6 - -

Workforce Development 4.1 - 5.9 26.3


131 Source: EEDA Investing in Communities case study.132 Source: Investing in Communities evaluation report.133 Source: EEDA the expansion of higher education in the East of England, and the University of Essex at Southend case study.134 ‘A new ‘University Challenge’: unlocking Britain’s talent’, Department for Innovation, Universities and Skills, 2008.135 This table excludes the Construction Skills and University of Essex in Southend interventions because these evaluations did not

contain any estimate of GVA.


It is also estimated from the evaluated initiatives that this intervention category has generated anachieved and potential employment impact of 689 (in terms of full time equivalents).

Care should be taken in interpreting these estimates of GVA as it has involved the aggregation ofestimates of outcomes across different evaluations. Moreover, future potential impacts on GVA have notbeen discounted.

Tbale 52 sets out the cost per net achieved output in relation to the evaluated people and skillsinterventions.

Table 52: Cost per net achieved output of EEDA’s evaluated people and skills interventions(2002/03-2006/07)

136

Expenditure

covered by

evaluations

(£m)

Cost per net

job created/

safeguarded

(£’000)

Cost per net

business

assisted/

created (£)

Cost per net skills

assist (£)

Investing in Communities 36.4 1137

6,946 1,584

Workforce Development 4.1 6138

- 2,200

Construction Skills 2.8 - - 2,036-31,153139


The cost per net job created/ safeguarded for EEDA’s people and skills interventions are relatively low,when compared to its business and competitiveness and regeneration through physical infrastructureinterventions. The wide range of cost per skills assist for Construction Skills relates to an extreme outlier,Constructionarium, which has high priority national objectives, in addition to its regional objectives. Thisfactor in combination with the highly mobile nature of construction work, has resulted in a high degree ofleakage at a regional level and, therefore, a very high cost per skills assist when compared to EEDA’sother people and skills interventions.

Again national level comparisons show mixed results in terms of the cost per unit output measures ofEEDA’s evaluated people and skills interventions. Investing in Communities and Workforce Developmentcompare very well against the national average cost per job created/ safeguarded for these sub-themes(of £49,215 and £105,268). Investing in Communities also performs well against the national average interms of the cost per skills assist for its sub-theme (of £2,570). However Workforce Development andConstruction Skills perform less well in relation to the national average for their sub-theme (of £1,242) inthis respect.


Table 53 summarises the performance against project/ programme objectives of EEDA’s evaluatedpeople and skills interventions and shows that whilst none of the interventions achieved all of theirobjectives, they were all largely met.

136 This table excludes the University of Essex in Southend as the evaluators considered it would be inappropriate to assess the

cost per net output of this intervention.137 This figure relates to both jobs created and people assisted into employment.138 Although the evaluation reported no direct jobs created/ safeguarded from this intervention, the cost per net job for Workforce

Development is based on the net achieved increase in employment of 665.5 (in terms of full time equivalents).139 The achieved cost per net person assisted in skills development for each of the three projects in this intervention ranged from

£2,036 to £4,011 to £31,153.


Table 53: Performance against objectives of EEDA’s evaluated people and skills interventions(2002/03-2006/07)

Expenditure

covered by

evaluations (£m)

Performance against

objectives

Investing in Communities 36.4 Largely met

Workforce Development 4.1 Largely met

Construction Skills 2.8 Largely met

University of Essex in Southend 18.7 Largely met

Total 62.0


Other EEDA interventions

Rationale

The evidence of EEDA’s impact on other interventions covers £89.7m of spend from 2002/03 to 2006/07.These comprise the Single Regeneration Budget (SRB) programme, which aimed to tackle issuesaffecting the most deprived communities, and the interventions focused on the Ipswich area.

The East of England ran fewer SRB schemes than any other region in England. This is probably due tothe relatively low levels of deprivation in the region

140. The East of England is characterised by small

pockets of deprivation, surrounded by relatively affluent areas, with almost half of the most deprivedSOAs in the East of England in the Norfolk and Thames Gateway sub-regions.

EEDA has also undertaken a number of interventions in Ipswich. The evaluation evidence covers 26EEDA interventions in the Ipswich area between 2000 and 2007 covering: Ipswich Waterfront; AdastralPark; Ipswich Village; University Campus Suffolk; Regeneration; and other projects including localtransport.

These two interventions aimed to contribute to the following RES goals:

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

growing competitiveness, productivity and entrepreneurship (goal two);

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

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

The justification of EEDA’s intervention through the SRB programme was to address equity issues, whileEEDA’s interventions in the Ipswich area sought to address market failures such as the provision ofpublic goods and positive externalities through improvements to the built environment.

Impact

Key outputs arising from these other interventions have been jobs created/ safeguarded, skills assists,businesses created and land reclaimed/ redeveloped. Table 54 sets out the key gross outputs achievedin relation to these interventions.

In addition to the new businesses identified in, the SRB programme led to the start-up of 96 grosscommunity enterprises. The Ipswich interventions also led to the redevelopment of 15,212m

2of gross

commercial floorspace. The evaluations of these interventions did not report any future potential outputs.

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

England are in the Eastern Region.


Table 54: Gross achieved outputs of EEDA’s other interventions covered by IEF compliantevaluations (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Gross jobs

created/

safeguarded

Gross

skills

assists

Gross

businesses

created

Gross land

reclaimed/

redeveloped (ha)

SRB 64.9 2,247 8,100 165 21.0

Ipswich area141

24.8 84 74 12 4.4

Total 89.7 2,331 8,174 177 25


Table 55 sets out the key net outputs achieved in relation to these interventions.

Table 55: Net achieved outputs of EEDA’s other interventions covered by IEF compliantevaluations (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Net jobs

created/

safeguarded

Net skills

assists

Net

businesses

created

Net land

reclaimed/

redeveloped (ha)

SRB 64.9 933 4,536 72 10.0

Ipswich area 24.8 50 39 7 3.7

Total 89.7 983 4,575 79 13.7


Again in addition to the new businesses identified in Table 55, the SRB programme led to the start-up of75 net community enterprises. The Ipswich interventions also led to the redevelopment of 10,649m

2of

net commercial floorspace.

Both interventions showed high levels of additionality relative to the other EEDA interventions for whichwe have evaluation evidence. EEDA’s interventions in the Ipswich area resulted in relatively high levelsof additionality in terms of jobs created/ safeguarded (60%), businesses created (58%) and brownfieldland remediated (84%) when compared to additionality of other interventions at a national level (i.e. 49%,51% and 59%). Additionality in the SRB evaluation was calculated at a national level therefore there wasno reported regional variation in terms of the additionality of the SRB programme.

The quantitative evidence of outcomes and impacts in the individual evaluation reports which fed into theSRB Meta-evaluation was very limited. However, applying the 2006 workplace GVA per worker for theEast of England (of £41,643

142) to the 933 net jobs created (663) and safeguarded (270) gives an

estimated achieved annual impact on GVA of £38.9m.

The Ipswich evaluation did not provide quantitative outcomes. However, both evaluations providedevidence of EEDA’s Strategic Added Value in relations to these interventions.

141 It should be noted that while £4.0m of out of scope expenditure has been removed from the overall expenditure related to

EEDA’s interventions in the Ipswich area no attribution of the gross or net outputs has been made. Therefore, these outputs may

overstate the impact of EEDA’s interventions in the Ipswich area by circa 14%.142 National Statistics.



From EEDA’s perspective the SRB programme has demonstrated strategic leadership by providing awider demonstration of good partnership working and the benefits of joining up spend and activity. Thismodel is now more common, both within EEDA and at a national level. EEDA used the SRB programmeas a test-bed for developing and learning from new leadership approaches such as work on social capital,which was an emerging agenda in 2003

143.

EEDA’s investment in the Ipswich area generated SAV most significantly within the University CampusSuffolk (UCS) project, which is already influencing developments in the Peterborough area. The UCSmodel that has been developed by EEDA and its partners is innovative and may be applicable to otherregions

144.

Source: EEDA

Value for money

Due to the diverse range of outputs in the SRB programme and the difficulties in disaggregatingeconomic and non-economic data a value for money calculation was considered to be inappropriate.

The Ipswich evaluation did not provide quantitative value for money assessments.


The SRB programme represents a mixed performance against objectives. The region has exceeded itsobjectives in terms of the number of jobs safeguarded and the number of community enterprise start-ups,but not met its objectives in terms of the other four core outputs – relatively marginally in some cases(jobs created, qualifications obtained and land for development) and significantly in terms of number ofsupported new businesses surviving for one year. In terms of the over-performing outputs, this is a resultof a small number of schemes which have significantly exceeded their objectives. This level ofachievement may reflect a number of possible factors: an unexpectedly strong scheme performance, alack of understanding of the scheme’s potential or overly cautious objective setting. Unfortunately, themajority of evaluation reports do not comment on the reasons behind schemes’ performance against theirobjectives.

Evidence from the evaluation suggests that the key strengths of the SRB programme in the East ofEngland were the level of community engagement, efficient project management systems, effectivepartnership working, innovative delivery approaches, close links to other projects (i.e. URBAN II andObjective 2) and the development of individuals’ skills and capabilities. According to the evaluationevidence, this has led to increased self-esteem within communities.

The narrow geographical focus appears, however, to have been an inhibiting factor for EEDA, as theSRB programme in the East of England focused on relatively small areas. This was exacerbated byEEDA’s small proportion of overall SRB funding relative to the other regions, which limited the extent towhich EEDA could target the funding and resulted in a focus on smaller areas of deprivation. Theopportunities to impact on activities within those areas was necessarily limited by the physical orgeographical characteristics of those wards e.g. a heavily residential ward with no land free for businessdevelopment could not undertake any business development activities.

The performance against objectives of the Ipswich interventions was not assessed145

. Stakeholdersbelieved that it was too early to make robust assessments of bottom-line impacts but there was aconsensus that EEDA’s interventions in the Ipswich area had been appropriate and genuinely catalytic inshaping the future of the area’s economy in alignment with the objectives of the successive versions ofthe RES.

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


National programmes

Besides its own interventions, EEDA has been responsible for the management and delivery of nine ofthe ten national programmes which have been delivered within parameters closely defined by centralgovernment departments. Although the available evaluation evidence on national programmes does notdisaggregate gross outputs at a regional level, we have been able to estimate the impact of some ofthese programmes on the East of England. This has been done by dividing EEDA spend on theprogramme by the regional cost per job and then making allowances for displacement, leakage and Table56 summarises EEDA’s spend in the relevant period on each of the national programmes andsummarises the estimated impacts where these are available. As the Table shows, three programmeshave resulted in the achievement of 3,459 net jobs created/ safeguarded, with the potential to generate afurther 523 in the future.

Table 56: Estimated impact of EEDA’s spending on national programmes (2002/03-2006/07)

National programme EEDA spend (£m) Achieved net jobs

created/

safeguarded

Future potential

net jobs created/

safeguarded

Business Link 33.0 3,011 -

Manufacturing Advisory Service 3.6 448 -

Phoenix Fund 0.2 - -

Regional Innovation Fund 0.1 - -

Rural Development Programme for England

(& Sustainable Food and Farming Strategy)

0.3 - -

Selective Finance for Investment 9.7 - -

Regional Tourist Board Support 3.1 - -

Market Town Initiative 5.8 - -

Grant for Research & Development 9.6 - 523

Total 65.6 3,459 523



East Midlands DevelopmentAgency

Summary

Overview

The East Midlands Development Agency (EMDA) has spent around £1,124m over the period1999/2000 -2006/7 with approximately £537m being used to support directly a range of interventionsdesigned, individually or collectively, to stimulate business development and competitiveness,promote regeneration through physical infrastructure, enhance employability and skills and benefit theEast Midlands more widely. In addition, SRB is a substantive part of EMDA’s expenditure, accountingfor just under £201m.

EMDA has also spent £154m on national programmes.

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

Impact

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

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

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

Value for money

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

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


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

Context

Overview of the East Midlands

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


centres. There is a wide range of sub-regional economic circumstances with the core Three Cities regionaround Derby, Leicester and Nottingham, large rural areas especially in the east, southern areas closelylinked into the economy of the South East and other areas with closer links and similarities to Northerncities and towns, especially in the former mining areas.

The region has a population of 4.3m, 7% of the UK total, with the main population centres being the citiesof Derby, Nottingham, Leicester and Lincoln and the towns of Northampton and Mansfield. Populationdensity in the region varies from around 70 per square kilometre in parts of Lincolnshire to more than3,500 per square kilometre in Leicester and Nottingham.

The East Midlands economy covers a wide range of activities and circumstances. The East Midlands ishome to some of the UK’s most well-known large businesses (e.g. Rolls-Royce, Boots) but also has alarge and diverse small business sector. There are important manufacturing concentrations and servicecentres but also areas with more limited economic activity as a result of economic restructuring andreliance on agriculture.

The East Midlands’s workplace-based gross value added (GVA) in 2006 was £74 billion (6% of the UKtotal). The East Midlands’ GVA per head was 91% of the UK average in 2006

146. In mid-2008, the region

had an employment rate of 75.7%, above the UK average of 74.8% and the fourth-highest of the nineEnglish regions

147. In 2005, there were 125,170 VAT-registered businesses in the East Midlands, 6.9%

of the UK total. Over two-thirds of these businesses were in the service sector (68.6%) compared to72.5% across the UK as a whole. The manufacturing and construction sectors account for a greatershare of businesses than the UK average (10.9% and 12.3% compared to 8.4% and 11.3% respectively).

EMDA’s purpose and strategy

EMDA’s mission is to “use our influence and investment to deliver a measurable improvement in thesustainable economic performance of the East Midlands.”

148

Since its establishment, EMDA has produced a series of Regional Economic Strategies (RESs)developed jointly with a wide range of regional partners to provide the agreed regional context foreconomic development and regeneration policy and delivery in the East Midlands. The region’s vision, asset out in the most recent RES, is that by 2020 the East Midlands will be “… a flourishing region. Aregion made up of growing and innovative businesses. A region where skilled people are employed ingood quality jobs. A region where we all feel part of healthy, inclusive communities and live in thriving,attractive places.”

149

There have been three RESs in the East Midlands since EMDA’s inception. The first RES, ‘ProsperityThrough People’, published in 1999, set out the region’s vision to be one of Europe’s top 20 regions. In2003 the second RES, ‘Destination 2010’, consolidated the strategic objectives into three drivers:employment, learning and skills; enterprise and innovation; and a climate for investment. It alsoorganised EMDA’s activities and objectives into twelve thematic Strands (which were the basis for theapproach adopted by EMDA’s evaluation programme).

The third RES, ‘A Flourishing Region’, was published in 2006 and stretched targets and ambitionstowards 2020. The 2006 RES was the result of the widest consultation process EMDA had everundertaken and was underpinned by “the most comprehensive evidence base assembled on the EastMidlands, its economy and its strengths and its challenges

150”. Although the ambition to become a

leading region in Europe by 2010 is retained, the overall vision is that “By 2020, the East Midlands will bea flourishing region. Increasingly prosperous and productive, we will enjoy levels of sustainableeconomic well-being and a quality of life higher than the European average and comparable with the bestin the world

151”. The vision is underpinned by the themes of raising productivity, ensuring sustainability,

146Regional Trends 40 – 2008 Edition (Office of National Statistics).

147ONS (12 August 2008) Regional Labour Market Statistics.

148EMDA Corporate Plan 2008-2011, Consultation Draft (November 2007).

149A Flourishing Region, Regional Economic Strategy for the East Midlands 2006-2020.

150ibid

151ibid


and achieving equality. Within these three themes are ten strategic priorities around employment,learning and skills; enterprise and business support; innovation; transport and logistics; energy andresources; environmental protection; land and development; cohesive communities; economic renewal;and economic inclusion.

EMDA’s Corporate Plans identify and prioritise the specific interventions which EMDA and its relatedorganisations will undertake themselves. EMDA has created three Corporate Plans since its inception,covering the periods 2001-02, 2003-06 and 2005-08. The Corporate Plans set out the high-level targetsand activities that EMDA is expected to deliver over the relevant period and are consistent with the RESobjectives.

EMDA’s operations are structured around internal directorates and a number of related or ‘family’organisations that provide specific services, where EMDA is the sole or the primary funder. EMDA’sdelivery processes include a significant sub-regional dimension. A proportion of EMDA’s funding isdirected to Sub-regional Strategic Partnerships (SSPs), which were developed and established by EMDAas a mechanism for improving the organisation’s responsiveness to sub-regional needs andopportunities. SSPs have administered an increasing share of EMDA’s budget in recent years – morethan £45m (24%) in 2006/07

152.

To meet its goals, EMDA aims to deliver a series of core outputs and also to work closely with otherregional bodies to provide strategic direction and drive for the region. EMDA’s core outputs cover: jobscreated or safeguarded; people assisted to get a job; new businesses created and surviving 12 months;businesses assisted to improve their performance; businesses assisted via collaboration with the UKknowledge base; public and private regeneration investment levered; hectares of brownfield landreclaimed and redeveloped; and people assisted in their skills development.

In addition to its direct impacts from its programme expenditure, EMDA influences regional partners andnational bodies in other important ways. By helping to deliver better outcomes than would have beenachieved without EMDA’s involvement, the RDA is able to produce ‘Strategic Added Value’ (SAV) for theregion. A central tenet of the policy framework behind the establishment of EMDA was that it would beable to help direct and influence the plans, activities and investments of local, regional and nationalbodies to achieve opportunities and tackle particular weaknesses. As the key regional economicdevelopment body, EMDA has worked with others to improve the social and economic environment in theEast Midlands for the benefit of its population, benefits and the wider UK economy.

EMDA’s profile

EMDA spent £1,124m between 1999/2000 and 2006/2007 with the budget for 2006/2007 of £188m asshown in Table 57. Of the total expenditure, 66% was spent on EMDA’s programmes and 14% onnational programmes which EMDA delivered on behalf of central government departments. Of the EMDAprojects, the shares of expenditure based the IEF intervention categories were about half for businessand competitiveness, 40% for physical infrastructure interventions and just over 10% on people andskills

153. Business and competitiveness intervention expenditure has been increasing faster than the

others in recent years with physical infrastructure intervention expenditure being fairly consistent acrossthe expenditure period.

Uniquely among the RDAs, EMDA initiated in 2004 a comprehensive evaluation of the impact of itsspending before the IEF was developed. As a result, EMDA’s approach to evaluation informed thedevelopment of the IEF.

EMDA’s approach to evaluation has involved a series of programme level evaluations using a projectsampling approach which was designed to provide a reasonable cross-section in terms of expenditure,activities and outputs within different themes. Overall, 248 individual projects were reviewed whichcovered 28% of total EMDA expenditure from 1999/00 to 2006/07 and 7% of projects. The evaluationsurveyed over 1,000 beneficiaries of EMDA funding to understand additionality, plus a booster survey ofbeneficiaries of business support and property development projects.

152EMDA Annual Report and Accounts 2006-2007.

153 PwC analysis which was agreed with EMDA.


EMDA’s approach to the evaluation was consistent across twelve thematic Policy Strands (based on the2003 RES structure) and the underlying intervention types used to structure the analysis. For eachselected project, an assessment was undertaken to quantify the net impact on employment and, thereby,the GVA impact. The outputs from each project review were assigned to individual Strands andintervention types, based on their functionality which were then aggregated across the individual Strandsand intervention types. The programme generated individual Strand reports, which are consideredWorking Papers, and final outputs of an aggregate final report and a technical report setting out theallocations and calculations. The intervention types, not the Strand analysis, are the foundation for theevaluation analysis.

Table 57: Analysis of EMDA’s total expenditure by year (1999/2000-2006/07)

EMDA

programmes

and projects

Single

Regeneration

Budget

National

programmes

Administrative

costs

Total

1999/00 7.5 33.5 11.0 6.9 59.0

2000/01 26.9 35.2 10.1 11.8 83.9

2001/02 40.9 36.9 10.6 35.3 123.7

2002/03 56.5 31.2 18.6 7.6 114.0

2003/04 72.4 28.6 21.6 63.6 186.2

2004/05 85.7 18.2 16.5 32.8 153.2

2005/06 124.3 11.3 27.1 53.5 216.2

2006/07 122.5 6.1 38.4 21.2 188.2

Total 536.7 201.1 153.9 232.7 1,124.4

Source: PwC analysis based on EMDA evaluation evidence

The evaluations covered 95% of EMDA’s combined Single Programme and SRB expenditure as shownon Table 58.

Table 58: Analysis of EMDA’s evaluation coverage (1999/2000-2006/07)

Expenditure covered by evaluations (£m) % of EMDA expenditure covered by evaluation

Business 110.2 100%

Place 241.6 100%

People 22.4 100%

Other 329.8 89%

Total 703.9 95%


Key findings

This section reports the key findings from EMDA’s evaluation evidence base as a whole. The details ofthe impact by intervention type are reported in the subsequent sections. The analysis has beenundertaken with regard to two key objectives of our work: to summarise the available evidence of EMDA’simpact and to assess EMDA’s achievements against the objectives of both the RES and the CorporatePlan (which have changed over time) and the objectives of the underlying projects and programmes.

The key findings consider on three key questions in turn:

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

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


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

Impact

First, we summarise the evidence with respect to the impact of EMDA’s relevant spending in the periodfrom 1999/2000 to 2006/07.

Table 59 summarises the gross attributed core outputs reported by EMDA to central government since itsestablishment. The evaluation approach that EMDA undertook is focussed on employment and therelated economic output impacts. There was not therefore evaluation information available on the impactfrom EMDA interventions on other output areas.

Table 59: EMDA’s gross outputs achieved (1999/2000-2006/07)

Output Total

Number of jobs created or safeguarded154

53,145

Number of people assisted to get a job 10,046

Business creation 6,327

Businesses supported 28,891

Public and private regeneration expenditure levered £223m

Brownfield land remediated 1,367 ha

Number of people assisted with skills development 63,938

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

Table 60 highlights the gross and net jobs created and safeguarded – both the currently achieved andthose that could potentially arise from currently planned expenditure - as well as the additionality ratiosthat resulted from evaluation approach.

Table 60: EMDA’s gross and net attributable jobs created and safeguarded (1999/2000-2006/07)

Jobs created/safeguarded

Achieved Future potential


Gross outputs 27,074 3,727

Net outputs 12,807 1,888

Additionality (%) 47% 51%



Net outputs 2,776 905


People and skills

Gross outputs 5,113 -

Net outputs 2,378 -

154The numbers in this table do not fully correspond to the figures reported to BERR as they include FDI jobs created (which are

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

response to PwC query).


Jobs created/safeguarded

Achieved Future potential

Additionality (%) 47% -

Other

Gross outputs 25,627 -

Net outputs 10,364 -

Additionality (%) 40% -

Total


Net outputs 28,326 2,793



The additionality ratios from jobs created and safeguarded derived from the EMDA evaluations arecomparable to the averages for all intervention areas from across the RDA evaluation programme of allnine RDAs. The EMDA business development and competitiveness additionality ratios of 47% and 51%are similar to the 48% reported across evaluations across all the RDAs. The additionality ratio forphysical regeneration interventions is also similar at 44% and 55% than the national average of 45%.The additionality for people and skills interventions at 47% is closer to the national average additionalityfor these interventions of 48%.

The estimates of net jobs arising from EMDA’s spending have been used to estimate the impact onannual GVA in the East Midlands. With the exception of the projected impacts of the next five or tenyears on Table 62, all GVA impacts in this paper are calculated on an annual basis. Again, a distinctionis made between the net impact already achieved and the potential additional future impact. Manyinterventions undertaken by EMDA – such as physical infrastructure – are not expected to havesignificant immediate impacts though they are designed to support and prepare for longer-term economicimpacts in the future. Table 61 summarises the impact of EMDA’s spending expressed as additionalGVA per annum.

Table 61: EMDA’s net attributable GVA outcomes (1999/2000-2006/07)

Intervention type Achieved GVA

(annual, £m)

Future potential

GVA (annual,

£m)155

Achieved & future

potential GVA

(annual, £m)

Business development and competitiveness 558 81 639

Physical regeneration 115 38 153

People and skills 99 0 99

Single Regeneration Budget 394 0 394

Other 39 0 39

National programmes 267 80 347


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

155 This column highlights additional impacts which are expected to be delivered by expenditure that is already underway or

planned. Table shows the expected continued impacts from outputs which have already been achieved as well as future potential

outputs.


EMDA’s spending have been examined under two scenarios, with impacts assumed to persist for five andten years. The results of the analysis are in Table 62 below. These figures are based on EMDA’sallocation of spend to intervention types. They are slightly different to the ones used in this report whichhave been standardised across the RDAs.

Table 62: EMDA’s projected economic impacts (1999/2000-2006/2007)

GVA (cumulative, £m)

Persistence assumption 5 years 10 years

Business development and competitiveness 1,463 2,829

Physical regeneration 613 1,086

People and skills 435 870

Single Regeneration Budget 1,060 2,120

Other 387 774

National programmes 1,326 2,501

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

It should be noted that our remit for this work has been to look at the economic impacts of EMDA’sexpenditure and activities. We have not considered directly the social or environmental benefits whichthese activities may have been targeted towards or contributed to. These impacts are likely to have beensignificant drivers of policy design, delivery and funding in certain areas across the interventioncategories. Therefore, some of the economic impacts and value for money measures used in thisanalysis may understate the true additional wider value which these programmes have contributed to theEast Midlands.


As highlighted in the summary to this report, EMDA’s impact on economic performance and other impactsis more than simply the aggregate of the direct outputs and outcomes. A central tenet to EMDA’spurpose is to ensure that it delivers Strategic Added Value. SAV is generated where the activities andinvolvement of EMDA deliver outputs and outcomes which would not have occurred without theinvolvement of the RDA. As the key pan-regional body focused on economic development, EMDA needsto provide leadership and support to enable their own projects and those that others deliver to maximisebenefits associated with these programmes. It is important to note that SAV is the impact beyond thedirect impact of EMDA expenditure. Much of the impact is associated with ‘soft’ activities such asproviding leadership on particular issues and helping to align activities. There are wider benefits relatedto the development of strategies and aligning of delivery activities which can have wider impacts on theregion’s economic and social performance.

There are a number of different ways in which EMDA produces SAV. This has been assessed in theevaluation process by looking at six specific dimensions of SAV: engagement with other stakeholders;strategic leadership and catalyst; strategic influence; leverage; synergy; and innovation

156. The overall

assessment of EMDA’s SAV impact is that it has been successful in providing strategic leadership,engagement and influence to support its objectives through “decisive and proactive approach” andpursuing innovative initiatives which have influence beyond the East Midlands.

As examples of EMDA’s SAV impacts, the evaluations show impact through supporting and helpingothers to develop an agreed regional economic policy across a range of bodies, as has been seen withEMDA’s work on the development of the latest RES evidence base. This work programme providedregional partners with access to higher quality evidence to generate the plan and to agree their commonpurposes and goals. EMDA often brings together a wide range of bodies to work together on complexprojects, such as Nottingham BioCity and the Regional Skills Partnership, in a way which aligns andcoordinates activities. This should lead to clearer direction, more effective focus of resources and greater

156 Ecotec final report, Section 9.


efficiencies in expenditure by addressing linked benefits. Given its size, remit and long-term perspective,EMDA can undertake projects which other parties are not able to tackle even though there are widerbenefits to the society. Large regeneration and land reclamation projects, such the Avenue CokingWorks, require a commitment of funding for the long term to deliver outputs which other parties will beable to build on in the future. EMDA has leveraged into the region an additional £223 million in privateand public sector financing though evaluation evidence highlights variance in the leverage outcomesbetween projects.

EMDA has also provided support for innovative delivery options, such as the blueprint programme, whichenable the development of better ways of public sector bodies working together and leading to moreeffective and efficient outcomes.

Value for money

This section considers the value for money of EMDA’s interventions from two perspectives:

the GVA to cost ratio; and,

measures of cost per net attributable job created/safeguarded.

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

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

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

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

Table 63: Summary of value for money across EMDA’s interventions (achieved & future potentialoutputs) (1999/2000-2006/07)

Achieved

GVA:cost ratio

Achieved &

future potential

GVA:cost ratio

Achieved cost

per net job (£)

Achieved and

potential cost

per net job (£)

Business development and

competitiveness 5.1 5.8 8,605 7,500

Regeneration through physical

infrastructure157

0.5 0.6 87,881 72,505

People and skills 4.4 4.4 9,405 9,405

Single Regeneration Budget 2.0 2.0 21,224 21,224

Other projects 0.3 0.3 144,369 144,369

National programmes

Business Link 4.0 4.0 10,962 10,962

Coalfields Programme158

1.0 0.9 45,624 48,677

157 The potential benefits-to-cost and costs per net job ratios have been adjusted to include an additional £23.3m of expenditure

post-2006/2007.158 Includes adjustment for £79.5m of additional expenditure post 2006/2007.


Achieved

GVA:cost ratio

Achieved &

future potential

GVA:cost ratio

Achieved cost

per net job (£)

Achieved and

potential cost

per net job (£)

Manufacturing Advisory Service 4.9 4.9 8,465 8,465

Grants for Research and

Development n/a 3.5 n/a 11,900

Selective Finance for Investment 2.9 2.9 15,070 15,070

Total 1.7 1.9 24,902 21,944

excluding national programmes 1.7 1.9 24,851 22,621


In comparison to evaluation results for GVA to cost ratios reported across the RDAs in our programme,EMDA’s achieved results compare well to national averages when compared to the figures for the high-level IEF intervention categories. EMDA’s business development and competitiveness ratio of 5.0 isnoticeably higher than the level reported across the RDAs (2.8). The highest returns are in BusinessSupport (7.3) and in the longer term Inward Investment (8.3 including potential benefits). The achievedbusiness support benefits for business support are higher than the national average (of 4.9) for individualenterprise support. For physical development, EMDA’s 0.5 is comparable to the 0.7 achieved across thenetwork with the highest returns in areas such commercial and industrial site development which arehigher than the national averages for achieved results. Many physical infrastructure projects areundertaken in challenging environments where they also need to address social and environmentobjectives which may the primary reason for the policy and which add to the costs and complexity ofdelivering outcomes. EMDA’s people and skills GVA to cost return of 4.4 is considerably higher than thenational figure (of 0.9).

Performance against targets

EMDA has met and exceeded most of its government output performance targets, especially in recentyears. Across all measures, EMDA exceeded 68% (23 of 34) of its performance targets between 2002-2003 and 2006-2007, met 24% (8 of 34) and only fell short on three (none since 2003-2004). Table 64shows the targets and reported outputs for five key gross output measures.

Table 64: EMDA’s gross outputs reported to DTI/BERR (2002/2003-2006/2007)

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

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

Jobs created/

safeguarded

Businesses

created

Brownfield

land (ha)

People assisted

in skills

development

Funding

levered (£m)

Targets set by BERR 31,194 4,902 572 35,525 145

Achieved EMDA gross

outputs reported to

BERR

37,325 6,327 719 63,938 239


targets met (out of five)

4 out of 5 4 out of 5 5 out of 5 5 out of 5 3 out of 4


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

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

impressive delivery of regeneration initiatives across the region;

consistent achievement of financial and output objectives and targets; and

leverage of investment into the region.

No significant areas for development were identified.

EMDA’s evaluation programme assessed the performance of nearly 250 projects against their individualobjectives. This showed that 90% of projects were considered to have been effective or very effectivewith regard to outputs and expected outcomes. Tbale 65 shows the assessments across the differentStrands. The vast majority of evaluations showed good or reasonable value for money with mostassessed as ‘good’. Tourism and culture, enterprising communities, inward investment and internationaltrade, rural development and urban development strands were highlighted as having been particularlysuccessful in meeting their objectives. Failure to meet objectives was associated with specificinvestments failing to produce their expected outputs, poor take-up rates for some skills and businesssupport interventions and research studies which have not been followed up.

Table 65: EMDA’s strand level project evaluation (1999/2000-2006/07)

Strand Number of

evaluations

Generated long-

term benefits

(%)

Effective or very

effective (%)

Good /

reasonable

value for money

(%)

Economic Growth, Energy and

the Environment

23 65% 82% 30% / 43%

Employment, Learning and Skills 25 72% 88% 60% / 32%

Enterprise and Business support 43 74% 95% 53% / 35%

Enterprising Communities 21 100% 95% 71% / 19%

Information and Communications

Technology

7 43% 86% 43% / 43%

Innovation 15 80% 73% 67% / 20%

International Trade and Inward

Investment

8 100% 100% 38% / 25%

Rural Development 23 87% 91% 57% / 26%

Site Provision and Development 32 72% 81% 59% / 16%

Transport and Planning 17 0% 86% 29% / 43%

Tourism, Culture and Sport 7 94% 100% 41% / 26%

Urban Regeneration 22 68% 95% 64% / 23%

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


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


activities which do not fit readily into one of these three categories as well as the available evidence ofthe national programmes where EMDA has been responsible for delivery within parameters determinedby central government departments.

We have summarised the impact of EMDA’s interventions using a common structure:

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

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

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

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


Rationale

The East Midlands has a diversified economy with relatively higher level of enterprise activity relative toits population and economic base. EMDA’s policy focus has been to increase the value added by theregion’s businesses and so address the relative decline of manufacturing in the regional economy andimprove economic conditions and performance in the struggling areas. There are substantial differenceswithin the region with some former coalfields and rural areas struggling with developing more valueadded economic activity.

Over the period 1999/2000 to 2006/07, EMDA spent £110m on business development andcompetitiveness interventions which include business support, inward investment and trade promotion,tourism marketing and other interventions as shown on Table 66.

Table 66: EMDA’s expenditure covered by evaluations for business development andcompetitiveness sub-interventions (1999/2000-2006/07)

Expenditure covered by evaluations (£m)

Business Support 66.5

Inward investment and trade promotion 17.7

Tourism marketing 11.3

Other 14.7

Total 110.2

Source: Ecotec final report, Table 4.4

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

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

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

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

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


Impact

EMDA is estimated to have created or safeguarded 27,074 gross jobs through business development andcompetitiveness interventions since 1999/2000, as shown on Table 67. It also has the potential to add afurther 3,727 gross jobs through currently planned expenditure on inward investment interventions. Theother interventions have not calculated future potential impacts.

Table 67: EMDA’s business development and competitiveness interventions: gross outputs(1999/2000-2006/07)

Expenditure covered


Achieved gross jobs

created/ safeguarded

Future potential

gross jobs created/

safeguarded

Business Support 66.5 22,890 0

Inward Investment

and trade promotion 17.7 3,896 3,727

Tourism marketing159

11.3 21 0

Other 14.7 267 0

Total 110.2 27,074 3,727

Source: PwC analysis based on Ecotec final report (Table 4.4), technical report (Sections 3, 4 and 6.3) and Additional

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

Adjusting for additionality and wider economic impacts, the net impacts for EMDA’s businessdevelopment and competitiveness interventions have produced 12,807 net jobs created or safeguardedwith an additional 1,888 net jobs created or safeguarded in the future as shown on Table 68.

Table 68: EMDA’s business development and competitiveness interventions: net outputs(1999/2000-2006/07)

Expenditure covered


Net jobs created/

safeguarded

Net jobs created/

safeguarded

Business Support 66.5 11,130 0

Inward investment and trade promotion 17.7 1,544 1,888

Tourism marketing 11.3 10 0

Other 14.7 124 0

Total 110.2 12,807 1,888

Source: PwC analysis based on Ecotec final report (Table 4.4), technical report (Sections 3, 4 and 6.3) and Additional

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

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

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

below.


Table 69: EMDA’s business development and competitiveness interventions: net outcomes(1999/2000-2006/07)


evaluations (£m)

Achieved GVA

(annual, £m)

Future potential

GVA (annual, £m)160

Business Support 66.5 487 0

Inward investment and trade

promotion 17.7 66 81

Tourism marketing 11.3 0 0

Other 14.7 5 0

Total 110.2 558 81


EMDA’s tourism marketing interventions have also contributed a net 2,000 short-term jobs created to theregional economy. These have been evaluated separately from the other impacts as it was decided thata more conservative approach should be taken with these given the evidence that the impacts were likelyto be more temporary in nature compared to other programme impacts.


Alongside the direct impacts, EMDA has also provided Strategic Added Value which generates additionalimpact on the region by providing leadership, direction and encouraging collaboration among otheractivities. The text box below sets out the results from the evaluations around SAV related to businessdevelopment and competitiveness.

EMDA’s business development and competitiveness interventions have been supported by SAV activitiesto further boost the East Midlands’s businesses and economy. According to EMDA’s “Enterprise” Strandreport, EMDA have worked through these projects to build relationships, communicate the content of theirprogrammes to targeted groups and to influence policies and strategies to support their objectives.EMDA have worked with a wide range of both public and private to pursue business developmentpolicies. This has required EMDA to play a leadership role in certain cases to develop new interventionsand ways of working by coordinating activities towards particular objectives and influencing other parties.EMDA has used its own financial resources to leverage other funds to allow programmes and projects tobe undertaken that would not have been otherwise. Finally, EMDA has focussed on ensuring that itsactivities are able to align with the existing and new policies to develop and deliver interventions whichincrease business and economic performance and support wider objectives and impacts.

Source: EMDA

Value for money

In assessing value for money, we have used estimates of both cost per net additional jobcreated/safeguarded and a GVA:cost ratio.

The ratio between economic benefit as measured by annual GVA and the cost of EMDA’s businessdevelopment and competitiveness programmes is set out on Table 70. The highest returns for achievedoutputs are for business support though the longer-term impact of inward investment expenditures looklikely to be considerable based on the analysis of potential impacts. Many of these interventions aredesigned to provide long-term benefits and prepare local economic environments to benefit from otherinterventions and investments by EMDA, other public entities and/or the private sector.

160 This column highlights additional impacts which are expected to be delivered by expenditure that is already underway or

planned. Table shows the expected continued impacts from outputs which have already been achieved as well as future potential

outputs.


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


evaluations (£m)

Achieved GVA

(annual):cost

Achieved & future potential

GVA:cost

Business Support 66.5 7.3 7.3

Inward Investment

and trade promotion

17.7 3.7 8.3

Tourism marketing 11.3 0.0 0.0

Other 14.7 0.4 0.4

Total 110.2 5.1 5.8


In comparison to the national averages for achieved outcome to cost ratios, EMDA’s businessinterventions perform well. The overall impact of a 5.1 GVA to cost ratio is much higher than the nationalaverage (of 2.8). For specific sub-intervention groups, EMDA’s business support ratio of 7.3 is 60%higher than the national ratio (of 4.9). EMDA’s achieved inward investment return is in line with thenational figure (of 3.7). The other interventions are smaller in scale and do not have good nationalcomparisons.

Cost per net job created or safeguarded for EMDA’s business development and competitivenessprogrammes is set on Table 71. The lowest achieved cost per net job are for business supportinterventions, but inward investment interventions have lower cost per net job when potential futureimpacts are included.

Table 71: EMDA’s achieved and potential cost per net job created or safeguarded ratio forbusiness development and competitiveness interventions (1999/2000-2006/07)


evaluations (£m)

Achieved cost per net job Achieved & future potential

cost per net job

Business Support 66.5 5,977 5,977

Inward Investment

and trade promotion

17.7 11,476 5,162

Tourism marketing 11.3 1,162,903 1,162,903

Other 14.7 118,662 118,662

Total 110.2 8,605 7,500


EMDA’s cost per net job for business support, £5,977, is well below the average cost from the overallRDA assessment (of £14,221). EMDA’s cost per net job for inward investment, £11,476, is similar to theaverage across the RDAs (of £11,563). The impact for tourism marketing is based on permanent jobsand does not include 2,000 short term employment opportunities which are consider in the evaluation tohave been created by EMDA’s interventions.


As part of their evaluation programme, Ecotec assessed the performance of nearly 250 EMDA projectswas assessed against their objectives. This showed that 90% of projects were considered to have beeneffective or very effective with regard to outputs and expected outcomes. The majority of projects wereassessed as good value for money with many others assessed as reasonable. The assessments relatedto business development and competitiveness interventions are shown on Table 72. Tourism andculture, enterprising communities, inward investment and international trade and rural development wereparticularly successful in meeting their objectives. Failure to meet objectives was associated with


investment failing to meet their potential, poor rake-up rates for business support and research studieswhich have not been followed up.

Table 72: EMDA’s strand level project evaluations linked to business development andcompetitiveness interventions (1999/2000-2006/07)

Strand Number of

evaluations

Generated

long-term

benefits

Effective or

very effective

Good /

reasonable

value for

money

Economic Growth, Energy and the

Environment

23 65% 82% 30% / 43%

Enterprise and Business support 43 74% 95% 53% / 35%


Information and Communications

Technology

7 43% 86% 43% / 43%

Innovation 15 80% 73% 67% / 20%

International Trade and Inward

Investment

8 100% 100% 38% / 25%


Tourism, Culture and Sport 7 94% 100% 41% / 26%



Rationale

The physical and natural environment varies considerably across the East Midlands. The region’s citieshave seen significant growth in recent years as service industries and retail activity have grown alongsidethe existing manufacturing base. The southern part of the region is linked into the economy of theGreater South East while the northern area links with Greater Manchester, Yorkshire, Humberside andthe Sheffield City Region. The northern parts have large former coalfield areas with many areas of post-industrial brownfield land. The east is largely rural and often with relatively low population density.

These different conditions have required EMDA to undertake quite diverse investments in physicalinfrastructure to meet the different sub-regional needs. In the faster growing areas, it has involved landremediation and infrastructure development to support economic growth. In the more deprived or lessremote areas, activities have sought to address long-standing regeneration needs, to improve localeconomic performance and to increase the attractiveness of these areas for investors.

EMDA’s expenditure on physical infrastructure interventions addresses a number of market failurerationales as well as addressing wider equity, social and environmental objectives. Interventions thatbring brownfield land back into productive use – whether for business or housing – and improve theeconomic performance on existing sites address issues around negative externalities from a poor qualitybuilt and natural environment. They also co-ordinate activity which would be difficult for many privateactors to initiate. Public realm and infrastructure activities provide public goods and help to supportregional economic performance which provides benefits across society. Physical infrastructureinvestments can play an important role in improving the East Midlands image with business, investorsand the general public which can lead to increased investment confidence and economic activity as areasbecome easier and more attractive to access. Finally, many physical regeneration projects are in, orlinked to, areas with deprivation which is an important issue for the regeneration of the former coalfieldsareas and some of the urban centres in the East Midlands. Increasing economic, social and environmentperformance in these areas helps to address equity concerns and can improve social cohesion.


EMDA has invested £242m in physical infrastructure interventions between its establishment and2006/07 as shown on Table 73.

Table 73: EMDA’s expenditure on physical infrastructure by intervention type (1999/2000-2006/07)

Intervention type161

Expenditure covered by evaluations (£m)

Acquisition plus 7.4

Reclamation 8.4

Reclamation plus 8.1

Site development – commercial 33.3

Site development – industrial 16.4

Site development – mixed 4.5

Site development – housing 11.3

Site development – tourist attractions and cultural infrastructure 21.9

Site development – community, sports and training facilities 34.4

Site servicing 3.8

Acquisition 25.3

Centres of excellence 10.7

Disposal 12.4

Site development – crime reduction initiative 2.8

Site development – public realm improvement 23.0

Technology centre 13.7

Transport infrastructure 4.3

Total 241.6

Source: Ecotec final report (Table 4.4)

Impact

EMDA’s physical infrastructure interventions have created or safeguarded 6,329 gross jobs and areestimated to have the potential to create or safeguard a further 1,655 gross jobs in the future based onexpenditure that is already currently being planned as shown on Table 74.

Table 74: EMDA’s physical infrastructure gross outputs (1999/2000-2006/07)

Expenditure covered


Achieved gross jobs

created/safeguarded

Future potential

gross jobs

created/safeguarded

Acquisition plus 7.4 482 10

Reclamation 8.4 37 2

Reclamation plus 8.1 102 122

Site development – commercial 57.7 1,930 1,200

Site development – industrial 16.4 926 54

Site development – mixed 4.5 50 92

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

money analyses.


Expenditure covered


Achieved gross jobs

created/safeguarded

Future potential

gross jobs

created/safeguarded

Site development – housing 11.3 0 0

Site development – tourist attractions

and cultural infrastructure

21.9 1,190 0

Site development – community 34.4 475 4

Site servicing 3.8 82 71

Acquisition 25.3 0 0

Disposal 12.4 230 0

Site development - crime reduction 2.8 339 0

Site development - public realm 23.0 277 0

Transport infrastructure 4.3 209 0

Total 241.6 6,329 1,655

Source: PwC analysis based on Ecotec final report (Table 4.4), technical report (Section 2) and Additional Queries

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

EMDA’s physical infrastructure interventions have already created or safeguarded 2,749 net jobs andhave the potential to create or safeguard a further 905 net jobs as shown on Table 75.

Table 75: EMDA’s physical infrastructure net outputs (1999/2000-2006/07)

Expenditure covered


Net jobs created/

safeguarded

Net jobs created/

safeguarded


Reclamation 8.4 20 1


Site development – commercial 57.7 1,032 652





and cultural infrastructure

21.9 58 0

Site development - community 34.4 354 72

Site servicing 3.8 43 36


Disposal 12.4 106 0




Total 241.6 2,749 905

Source: PwC analysis based on Ecotec final report (Table 4.4), technical report (Section 2) and Additional Queries

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


EMDA’s physical infrastructure interventions has accounted for £115m in additional annual GVA in theEast Midlands economy. These interventions are expected to deliver an estimated future impact of £38mper annum to the regional economy.

Table 76: EMDA’s physical infrastructure interventions net outcomes (1999/2000-2006/07)

Expenditure covered


Achieved GVA

(annual, £m)

Future potential GVA

(annual, £m)


Reclamation 8.4 1 0


Site development – commercial 57.7 43 27





and cultural infrastructure 21.9 2 0

Site development - community 34.4 15 3

Site Servicing 3.8 2 1


Disposal 12.4 4 0




Total 241.6 114.4 37.6


EMDA’s physical infrastructure interventions have also generated short-term economic impacts throughincreased construction employment. The evaluation estimates that these activities have generated 3,384net construction-years with the potential for an additional 449 net construction-years from plannedexpenditure. These have been estimated to have added £165m to the regional economy with £22m inpotential impact linked to future planned expenditure.

Strategic Value Added

Alongside the direct impacts, EMDA has also provided Strategic Added Value which generates additionalimpact on the region through a range of activities. The text box below sets out the results from theevaluations around SAV related to physical infrastructure interventions.

EMDA’s physical infrastructure interventions require more than just expenditure and the direct impactfrom projects. EMDA regards its role as a regional intermediary and organiser of activity as a key area forits Strategic Added Value. To generate additional benefit for the region, EMDA undertakes wider SAVactivities to increase the benefits related to these activities. One key role which EMDA plays is in takingstrategic leadership on large physical infrastructure projects to provide both guidance and direction toother stakeholders. According to EMDA’s “Site Provision and Development” Strand report, thiscomponent has been strengthening though there remains the need to continually improve theengagement and consultation process with stakeholders. EMDA expenditure was often able to lever insignificant additional public sector funding though there has been less success with private sectorleverage according to the project evaluations. There was also feedback that EMDA’s activities were notas potentially innovative as they could have been in some cases.

Source: EMDA


Value for money

In assessing the value for money of EMDA’s physical regeneration interventions, we have used estimatesof both the GVA to cost ratio and the cost per net additional job created/safeguarded. As shown on Table77, he highest returns are in those areas where EMDA has supported development that leads directly intobusiness related activities, such as commercial and industrial developments.

Table 77: EMDA’s physical infrastructure GVA to cost ratio162

(1999/2000-2006/07)

Expenditure covered


Achieved GVA

(annual):cost

Achieved and

potential GVA:cost

Acquisition plus 7.4 1.5 1.5

Reclamation 8.4 0.1 0.1

Reclamation plus 8.1 0.3 0.3

Site development – commercial 57.7 0.7 1.0

Site development – industrial 16.4 1.1 1.1

Site development – mixed 4.5 0.2 0.7

Site development – housing 11.3 0.0 0.0


and cultural infrastructure 21.9 0.1 0.1

Site development - community 34.4 0.4 0.5

Site Servicing 3.8 0.5 0.9

Acquisition 25.3 0.0 0.0

Disposal 12.4 0.4 0.4

Site development - crime reduction 2.8 2.4 2.4

Site development - public realm 23.0 0.2 0.2

Transport infrastructure 4.3 0.9 0.9

Total 241.6 0.5 0.6


Compared to the national average generated in our review of the RDA evaluations, the EMDA achievedresult is marginally below the national achieved GVA to cost ratio of 0.7 but given the large scale of landreclamation sites in non-central areas related to the East Midland’s manufacturing and mining legacy thisis not unexpected. The lower benefit levels for public realm interventions are in-line with the nationalaverage of 0.3.

The cost per net job figures for physical infrastructure interventions are shown in Table 78.

162 The calculation of the GVA to cost ratio for potential benefits has been adjusted to include £23.3m of additional planned

expenditure post-2006/2007.


Table 78: EMDA’s physical infrastructure net cost per jobs163

(1999/2000-2006/07)

Expenditure covered


Achieved cost

per net job (£)

Achieved & future

potential


Acquisition plus 7.4 28,605 28,650

Reclamation 8.4 422,450 404,714

Reclamation plus 8.1 149,333 137,483

Site development – commercial 57.7 55,938 41,221

Site development – industrial 16.4 39,446 37,863

Site development – mixed 4.5 166,667 59,211

Site development – housing 11.3 n/a n/a


and cultural infrastructure 21.9 377,483 377,483

Site development - community 34.4 97,136 87,204

Site Servicing 3.8 89,209 48,557

Acquisition 25.3 n/a n/a

Disposal 12.4 116,746 116,746

Site development - crime reduction 2.8 17,571 17,571

Site development – public realm 23.0 179,031 179,031

Transport infrastructure 4.3 43,956 43,956

Total 241.6 87,881 72,505


The cost per net job of EMDA’s physical infrastructure interventions is higher than the overall RDA figurewhen only the achieved outputs are considered but when the potential impacts from the currently plannedexpenditure is included the cost per net job is very similar to the national average cost per job figure forphysical infrastructure interventions (of £63,271).


As part of their evaluation programme, Ecotec assessed the performance of nearly 250 EMDA projectswas assessed against their objectives. This showed that 90% of projects were considered to have beeneffective or very effective with regard to outputs and expected outcomes. The assessment for projectsrelated to project infrastructure interventions are shown on Table 79. Enterprising communities, ruraldevelopment and urban development strands were highlighted as having been particularly successful inmeeting their objectives. Failure to meet objectives was associated with investment failing to meet theirpotential and research studies which have not been followed up.

163 The calculation for cost per net jobs for potential benefits has been adjusted to include £23.3m of additional planned expenditure

post-2006/2007.


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

Strand Number of

evaluations

Generated

long-term

benefits

Effective or

very effective

Good /

reasonable

value for

money



Site Provision and Development 32 72% 81% 59% / 16%

Transport and Planning 17 0% 86% 29% / 43%

Urban Regeneration 22 68% 95% 64% / 23%



Rationale

Since its inception EMDA has sought to make the East Midlands one of Europe’s most economicallycompetitive regions. Ensuring employment in high value-added jobs is a key driver in achieving this. Allthree of the RESs refer specifically to the importance of the people and skills agenda in meeting EMDA’seconomic and social goals. They include initiatives to address both the demand and supply sides of thelabour market by promoting skills enhancements and by encouraging firms to increase the quality of thelabour that they hire and workers to pursue higher level qualifications. EMDA has also ensured that itsemployment, learning and skills activities are integrated into the wider national and regional skills andemployment strategies.

Taken together, the East Midlands has a relatively high employment rate but lower levels of skills thanother regions. This has led to EMDA supporting activities which look to address the region’s ‘low skillsequilibrium’ and to improve the match between skills demand and supply. The low skills equilibrium –where there is limited demand for higher skills and relatively high rates of employment for those withlower skills – is seen as a barrier for the region’s economic development.

Alongside the regional skills profile, there are specific geographical areas within the region which sufferfrom high levels of deprivation, much of which is linked to worklessness and low skills. Thesepredominate in the inner cities, the former coalfield areas and the more rural and coastal areas althoughpockets of such deprivation can be found across the region. To address these problems, EMDA hasundertaken a series of activities under the Enterprising Communities Strand which aimed to improve theeconomic performance of these areas and their inhabitants.

Impact

Since its creation, EMDA has spent £22.4m on its interventions focused on people and skills. As shownon Table 80, the people and skills interventions are estimated to have already created or safeguarded5,113 jobs, but there are no additional potential benefits for people and skills interventions as their impactis expected to be immediate.


Table 80: EMDA’s people and skills interventions gross outputs (1999/2000-2006/07)

Expenditure covered by evaluations (£m) Achieved gross jobs

created/safeguarded

Future potential gross jobs

created/safeguarded

People and skills 22.4 5,113 0

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

The people and skills interventions have contributed 2,378 net jobs created or safeguarded shown onTable 81.

Table 81: EMDA’s people and skills interventions net outputs (1999/2000-2006/07)

Expenditure covered by evaluations (£m) Net jobs created/

safeguarded

Net jobs created/

safeguarded

People and skills 22.4 2,378 0

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

The evaluation estimates that the impact of EMDA’s expenditure on employment, learning and skillsinterventions have added £99m annually to the East Midlands’ economy through the net additional jobscreated and safeguarded as shown on Table 82.

Table 82: EMDA’s people and skills interventions net outcomes (1999/2000-2006/07)

Expenditure covered by evaluations (£m) Achieved GVA

(annual, £m)


(annual, £m)

People and skills 22.4 99 0



Alongside the direct impacts of its expenditure, EMDA has also provided Strategic Added Value whichgenerates additional impact on the region through leadership, collaboration and other support. The textbox below sets out the results from the evaluations around SAV related to people and skills interventions.

People and skills interventions have required EMDA to go beyond the direct impact of its activities tocreate additional impact through SAV. According to EMDA’s “Employment, Learning and Skills” Strandreport, operating in constructive partnership with other organisations, such as the Employment, Skills andProductivity Partnership (the regional skills partnership), has been a key aspect of EMDA’s people andskills activities delivery. EMDA provided strategic direction for economic policy related to people andskills interventions though there are some issues around the effectiveness of the detailed elements ofthese strategies. EMDA were recognised in the evaluations in linking its projects with activities that otherparties were undertaking. There was more limited success in providing strategic influence, leverage andinnovation in the people and skills areas which may reflect a relatively low prioritisation of these activitiesas driving factors within RDA compared to business and physical infrastructure interventions.

Source: EMDA

Value for money

On a GVA to cost ratio, people and skills interventions deliver 4.4 times as much GVA as their cost asshown on Table 83. This is much higher than the national average of 1.2 for achieved GVA to cost.

Table 83: EMDA’s people and skills interventions GVA to cost ratios (1999/2000-2006/07)


evaluations (£m)

Achieved GVA

(annual):cost

Achieved & future potential

GVA:cost

People and skills 22.4 4.4 4.4



The evaluations estimate that the cost of each net additional job is £9,405 for people and skillsinterventions as shown on Table 84. This is considerably higher than the £43,302 per net job which havebeen observed across the evaluations of all the RDAs.

Table 84: EMDA’s people and skills interventions cost per net job (1999/2000-2006/07)

Expenditure covered by evaluations (£m) Achieved cost

per net job (£)

Achieved & future

potential cost

per net job (£)

People and skills 22.4 9,405 9,405



As part of their evaluation programme, Ecotec assessed the performance of nearly 250 EMDA projectswas assessed against their objectives. This showed that 90% of projects were considered to have beeneffective or very effective with regard to outputs and expected outcomes. The assessment for projectsrelated to people and skills interventions is shown on Table 85. Failure to meet objectives wasassociated with investment failing to meet their potential, poor take-up rates for skills and researchstudies which have not been followed up.

Table 85: EMDA’s strand level project evaluation linked to people and skills interventions(1999/2000-2006/07)

Strand Number of

evaluations

Generated long-

term benefits

Effective or very

effective

Good /

reasonable value

for money

Employment, Learning and Skills 25 72% 88% 60% / 32%


Other activities

There are two other streams of EMDA expenditure which have been covered by the evaluation but whichdo not readily fall into any of the intervention types considered in previous sections. These are the SingleRegeneration Budget (SRB) and a diverse range of EMDA programmes and projects identified by theevaluators as ‘other’.

Rationale

EMDA has spent £201m on the SRB programme which was a multi-faceted regeneration programme thatdelivered a diverse range of interventions spanning business, physical regeneration and people andskills. It sought to simplify and streamline regeneration funding and to promote a new way of tackling theproblems faced by disadvantaged communities. The overall aim of the SRB programme was “to enhancethe quality of life of local people in areas of need, by reducing the gap between deprived and other areas,and between different groups”

164. The rationale for SRB centred on the Government’s desire to tackle

social exclusion and promote equality of opportunity. The focus of support was on the most deprivedcommunities in England, with the aim of reducing the gap between these areas and the rest of England,and between different groups in society.

The aim of EMDA’s evaluation strategy was to provide comprehensive coverage of all its expenditure inthe period up to 2006/07. Inevitably, this has meant that some expenditure did not fit easily into theintervention types which were used for the project assessments. It also meant that some earlyexpenditure was difficult to assign to one of the intervention categories.

In total, £212m (19% of EMDA’s expenditure from 1999/00 to 2006/07) was categorised by the evaluationas ‘other projects’. We have allocated £16m of these interventions to the Business Development and

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

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


Competitiveness section and £67m to the Physical Infrastructure section. The remaining spend, £129m,is covered in the rest of this section as shown on Table 86. In some cases, these activities were linked toidentifiable economic outputs whereas in other cases they supported wider EMDA activities and had nodirect economic outputs associated with them.

Table 86: EMDA’s expenditure on ‘other interventions’ (1999/2000-2006/07)

Intervention type Expenditure covered by

evaluations (£m)

Administration, marketing and events 27.3

Capacity building 18.9

Initiatives to reduce energy consumption and minimise waste 1.7

Policy development initiatives and studies 44.6

Rural service delivery 3.3

Miscellaneous others 33.0

Total 128.8

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

Inevitably given their diversity of project goals, the rationale for the ‘other’ projects varies significantlybetween interventions. Economic activity generation and, in particular, employment creation were not theprimary motivations in most cases, e.g. policy research or marketing activities. The outputs from many ofthe projects underpin the overall performance of EMDA, support other projects or work towards meetingother social and environmental goals.

Some of the projects have contributed directly to delivering EMDA’s central role in the development anddelivery of economic policy in the East Midlands. For example, EMDA’s support and direction in thedevelopment of the regional economic strategy has pulled together a large number of different policyStrands together to provide a coordinated vision for the region shared by a wide range of stakeholdersand partners.

Impact

EMDA’s SRB and other activities have created or safeguarded 25,627 net jobs, mostly through SRB asshown on Table 87.

Table 87: EMDA’s SRB and other projects gross outputs (1999/2000-2006/07)

Expenditure covered


Achieved gross jobs

created/safeguarded


jobs

created/safeguarded

Single Regeneration Budget 201.1 23,701 0

Other interventions 128.7 1,926 0

Total 329.8 25,627 0

Sources: Ecotec, final report (Table 4.2), technical report (Section 8.6) and Additional Queries from PwC:

Expenditure, ‘other’ activity and response rates (Working Paper)

The net outputs were estimated using additionality coefficients for each output drawn from the nationalevaluation of SRB

165. In this way, the evaluation was able to derive an estimate of the net outputs which

would have arisen without SRB funding. For the other EMDA activities, they were calculated using the

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

University of Cambridge, 2003


average rates for the wider project evaluations. SRB and other projects have created or safeguardedover 10,000 net jobs, again mostly through SRB as shown on Table 88.

Table 88: EMDA’s SRB and other projects net outputs (1999/2000-2006/07)

Expenditure covered


Net jobs created/

safeguarded

Net jobs created/

safeguarded

Single Regeneration Budget 201.1 9,473 0

Other interventions 128.7 891 0

Total 329.8 10,364 0

Sources: PwC analysis based on Ecotec, final report (Table 4.2), technical report (Section 8.6) and Additional

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

Based on the net outputs, net economic outcomes of £433m per annum have been calculated for SRBand other projects as shown on Table 89.

Table 89: EMDA’s SRB and other projects net outcomes (1999/2000-2006/07)

Expenditure covered


Achieved GVA (annual,

£m)


(annual, £m)

Single Regeneration Budget 201.1 394 0

Other interventions 128.7 39 0

Total 329.8 433 0

Sources: PwC analysis based on EMDA evaluation evidence

Value for money

For EMDA’s other projects, we have calculated value for money calculations based on the cost per netjob created and safeguarded shown on Table 91 and for an annual GVA to cost ratio as shown on Table90. These figures should be treated with considerable care as much of the expenditure for these projectswas not designed to generate direct economic impact. They also reflect EMDA’s evaluation approachwhich was to cover all expenditure comprehensively, whether or not it was designed to generateeconomic activity directly. Therefore, these figures are not comparable with figures for the three IEFintervention types which are designed to deliver direct economic benefits.

Table 90: EMDA’s SRB and other projects GVA to cost ratio (1999/2000-2006/07)


evaluations (£m)

Achieved GVA

(annual):cost

Achieved & future

potential GVA:cost

Single Regeneration Budget 201.1 2.0 2.0

Other interventions 128.7 0.3 0.3

Total 329.8 1.3 1.3


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


Table 91: EMDA’s SRB and other projects net cost per job ratios (1999/2000-2006/07)

Expenditure covered



job (£)

Achieved & future

potential cost per net

job (£)

Single Regeneration Budget 201.1 21,224 21,224

Other interventions 128.7 144,369 144,369

Total 329.8 31,816 31,816


National programmes

Besides its own projects and programmes, EMDA has been responsible for national programmes which ithas delivered within parameters closely defined by central government departments. Table 92summarises EMDA’s spend since its establishment on the five national programmes covered by EMDA’sevaluations.

Table 92: EMDA’s expenditure on national programmes (1999/00-2006/07)

National programme Expenditure (£m)

Business Link 22.4

Coalfields Programme 104.0

Manufacturing Advisory Service 5.0

Grants for Research and Development 4.3

Selective Finance for Investment 18.2

Total 153.9

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

Impact

In the absence of regional-specific evaluations, the potential impact of EMDA’s spending on nationalprogrammes has been assessed using the results of the relevant national evaluations. As shown in Table93, national programmes have already created or safeguarded 6,122 jobs with the potential for anadditional 1,850 net jobs to be created or safeguarded.

Table 93: EMDA’s national programmes net outputs (1999/2000-2006/07)

Expenditure covered


Net jobs created/

safeguarded


jobs

created/safeguarded

Business Link 22.4 2,040 0

Coalfields Programme 104.0 2,280 1,491

Manufacturing Advisory Service 5.0 596 0


Development 4.3 0 359

Selective Finance for Investment 18.2 1,206 0

Total 153.9 6,122 1,850

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

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


Table 94: EMDA’s national programmes net outcomes (1999/2000-2006/07)


evaluations (£m)

Achieved GVA

(annual, £m)


(annual, £m)

Business Link 22.4 89 0

Coalfields Programme 104.0 100 65

Manufacturing Advisory Service 5.0 25 0


Development 4.3 0 15

Selective Finance for Investment 18.2 53 0

Total 153.9 267 80


EMDA’s Coalfields Programme have also generated short-term economic impacts through increasedconstruction employment. The evaluation of the Coalfields Programme estimates that these activitieshave generate 3,095 net construction-years with the potential for an additional 3,552 net construction-years from planned expenditure. These have been estimated to have added £150m to the regionaleconomy with £173m in potential economic impact.

Value for money

There are a variety of value for money measures for the national programmes that EMDA has delivered.

Returns in economic benefits to costs are shown on Table 95. The highest returns in GVA to cost ratiosare for Manufacturing Advisory Service, Business Link and Grants for Research and Development. Thelowest is for the Coalfields Programme. These are in-line with what would be expected in comparison tothe national averages for RDA interventions which show higher returns for business developmentinterventions as compared to those such as the Coalfields Programme which have a greater place focus.

Table 95: EMDA’s national programmes GVA to cost ratio (1999/2000-2006/07)


evaluations (£m)

Achieved GVA

(annual):cost

Achieved & future

potential GVA

(annual):cost

Business Link 22.4 4.0 4.0

Coalfields Programme 104.0 1.0 0.9166

Manufacturing Advisory Service 5.0 4.9 4.9


Development 4.3 n/a 3.5

Selective Finance for Investment 18.2 2.9 2.9

Total 153.9 1.7 2.3


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

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


Table 96: EMDA’s national programmes cost per net job (1999/2000-2006/07)

Expenditure covered


Achieved cost

per net job (£)

Achieved & future

potential cost

per net job (£)

Business Link 22.4 10,962 10,962

Coalfields Programme 104.0 45,624 48,677167

Manufacturing Advisory Service 5.0 8,465 8,465

Grants for Research and Development 4.3 n/a 11,900

Selective Finance for Investment 18.2 15,070 15,070

Total 153.9 25,135 19,302


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


London Development Agency

Summary

Overview

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

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

National programmes also account for £90 million.

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

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

Impact

The evaluations show that LDA has generated significant outputs already:

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

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

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

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

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

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

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

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

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

– providing a strategic focus (Wembley/Park Royal);

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

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

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

Value for money

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


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

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

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

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

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

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


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

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

Context

Overview of the London region

The administrative area of Greater London was created in 1965 and covers the City of London and 32London Boroughs. The same area now forms the London region, which covers 1,579 km² and had a2006 mid-year estimated population of 7,512,400

168, approximately 12% of the UK total.

London is one of the most important business cities in the world, with key industry sectors includingfinancial services, the creative industries, energy, environmental technologies, leisure, entertainment, lifesciences, professional services and retail. In 2006, workplace-based gross value added (GVA) in Londonwas £218 billion (19% of the total for the United Kingdom)

169and GVA per head was £29,000, 55% above

the UK average of £19,100170

.

However, London also has the highest unemployment rate in the UK as a whole, and the three highestunemployment rates at local authority level. Around a fifth of London's 4.6 million jobs are filled by peoplewho live outside the region. The economic interaction between London and its surrounding areas is animportant context to understand London’s socio-economic performance, where areas of great wealthcreation frequently sit alongside significant economic deprivation. In London itself, two out of five childrenlive in low-income households and almost a third of Londoners are from non-white British ethnic groups.

168 Regional Trends 40, National Statistics, May 2008




LDA’s purpose and strategy

The London Development Agency (LDA) was established in 2000 and is the RDA which covers GreaterLondon. Its purpose is to promote London's economy and to transform the region through sustainableeconomic development. In contrast to the eight other RDAs, the restoration of pan-London governance in2000 and the establishment of the role of the Mayor of London have meant that the LDA is a functionalbody of the Greater London Authority (GLA) Group, with regional accountability to the elected Mayor. Asa member of the GLA Group the LDA is one of four functional bodies accountable to the Mayor, alongsidethe Metropolitan Police Authority, the London Fire and Emergency Planning Authority and Transport forLondon.

The business of the LDA is overseen by its Board and Executive Committees. The business-led Boardgives strategic leadership to the Agency and is accountable to the Mayor for ensuring that the LDA meetsits performance targets. Its thirteen members are appointed by the Mayor and reflect a range of interestsacross the public and private sectors, as well as including four statutory elected members.

The LDA’s strategic direction and priorities are aligned with the Economic Development Strategy forLondon (EDS), which is one of eight that the Mayor is required to produce by law. The Mayor’s EDS isfor London, not just the LDA, and sets out the priority programmes to be delivered in London over thecoming three years. The 2001 EDS 'Success Through Diversity' was superseded in January 2005 by thecurrent EDS, ‘Sustaining Success’. The LDA also contributes to the delivery of many of the Mayor’sstrategies, including the London Plan, and its Corporate Plan is aligned with these responsibilities.

The LDA produces a Corporate Plan every year describing how it will deliver the Mayor’s priorities andobjectives, as set out in the EDS, in a three-year timeframe. The Plan also sets out how the LDA willmeet its output targets, as set by the Mayor and as agreed with central government. The currentCorporate Plan covers the period from 2007 to 2010. Delivery of the Corporate Plan is dependent on thepartnership and leverage that the LDA can gain from private, public and third sector partners and on itsrole as a broker or co-ordinator of economic development activity.

Both the Mayor’s EDS and the LDA’s Corporate Plan are structured around the themes of places andinfrastructure; people; enterprise; and marketing and promotion. In addition, the Mayor and the GLAGroup are required to have regard to the achievement of health, equality of opportunity and sustainabledevelopment in their activities. These are incorporated into both the EDS and Corporate Plan as cross-cutting themes.

The LDA’s core reported outputs cover: jobs created or safeguarded; people assisted to get a job; newbusinesses created and surviving 12 months; businesses assisted to improve their performance;businesses assisted via collaboration with the UK knowledge base; public and private regenerationinvestment levered; hectares of brownfield land reclaimed and redeveloped; and people assisted in theirskills development. The LDA has two additional mayorally-directed core outputs of childcare placesfacilitated and creation/refurbishment of houses/business units.

LDA’s profile

In 2006/07 LDA had an annual budget of £546.6 million171

and had spent around £2,858 million172

up toand including 2006/07.

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

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

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


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

Business Place People Hybrid/Other Marketing &

promotion

National

programmes

Total

1999/2000 0.0 61.4 0.0 136.4 0.0 0.0 197.8

2000/2001 0.5 37.3 5.9 191.1 0.0 1.3 236.1

2001/2002 2.8 54.6 6.5 236.0 2.0 6.0 307.9

2002/2003 8.5 76.9 0.5 208.0 5.5 6.8 306.2

2003/2004 23.3 124.0 7.8 158.9 26.5 18.8 359.3

2004/2005 37.2 213.6 9.0 125.2 31.2 2.6 418.8

2005/2006 43.4 213.0 12.2 116.2 31.4 28.6 444.8

2006/2007 52.0 365.3 36.2 70.3 37.2 25.9 586.9

Total 167.7 1,146.1 78.1 1,242.1 133.8 90.0 2,857.8

Source: PwC analysis of LDA programme expenditure data

The table shows that the majority of LDA spend has occurred in the Place and Hybrid/other categories.The spend in the Hybrid/other category relates to the Single Regeneration Budget (SRB), CorporateServices and Administration and expenditure on Strategic Activities, such as professional fees. Of this,the vast majority of expenditure (£1.1 billion) is attributed to SRB, although only £508 million of thatoccurred between 2002/03 and 2006/07.

The spend in the Place category includes that related to the 2012 Olympic & Paralympic Games, which isout of scope for this report. The national programmes category includes spending on the RegionalInnovation Fund, Manufacturing Advisory Service, Regional Tourist Board Support, Business Link,Selective Finance for Investment, Grants for Research and Development and the Phoenix Fund.

This impact report focuses on LDA’s spending from 2002/03 to 2006/07. LDA’s relevant expenditure hasbeen calculated using total project expenditure figures for the period after deducting spend onadministration, non-cash costs and programmes that are deemed to be out of scope for this project.They consist of national programmes and, exceptionally, £518 million of expenditure in relation to the2012 Olympic & Paralympic Games, which was excluded with the agreement of the Steering Group onthe basis that it is too early to evaluate this expenditure and it will be evaluated as part of the broaderevaluation of the 2012 Games. These exclusions reduce the LDA’s total relevant expenditure to £1.106billion.

LDA’s evaluation evidence provides consistent coverage across all the key intervention categories forwhich the Agency has been responsible. As Table 98 illustrates, in September 2008 LDA had 40 usableevaluations covering 78% of relevant expenditure – a significant increase from the 1% coverage inFebruary 2008. We have assessed the vast majority of this evidence as being wholly or largely fit for ourpurpose of assessing LDA’s net impact. A full list of the evaluations used for this report is included atAnnex C.


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

% of spend Number of evaluations

Business 66.7 20

Place 64.6 6

People 92.6 11

Marketing and Promotion 42.1 1

Other/hybrid 92.1 1

National programmes n/a 1

Total 78.0 40

Source: PwC analysis based on LDA evaluation evidence

Note: In this report, the LDA’s one Marketing and Promotion evaluation (Visit London) has been included under the

Image, Events and Tourism sub-theme in Place.

Key findings

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

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

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

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

The ‘core’ gross and net outputs achieved by LDA interventions are summarised in Table 99.

Table 99: Gross and net attributable LDA outputs (2002/03-2006/07)

Jobs

created /

safeguarded

Businesses

created

Businesses

supported

Brownfield

land (ha)

Employment

support

People

assisted in

skills

development


Gross outputs

achieved 30,584 1,963 22,124 - - 11,901

Net outputs achieved 3,549 531 4,226 - - 3,177

Additionality %

achieved 12% 27% 19% - - 27%


outputs 414 - 220 - - 1,907


outputs 1,213 52 190 - - 2,455

Additionality % future

potential 293% - 86% - - 129%


Gross outputs

achieved 5,424 19 - 89.5 - 116


Jobs

created /

safeguarded

Businesses

created

Businesses

supported

Brownfield

land (ha)

Employment

support

People

assisted in

skills

development

Net outputs achieved 1,998 - - 76.5 - 116

Additionality %

achieved 37% - - 85% - 100%


outputs 20,314 - - 57 - 25


outputs 7,267 5 56 57 - 10


potential 36% - - 100% - 40%

People and skills

Gross outputs

achieved 207 - 3,965 - 33,006 59,316

Net outputs achieved 51 - 2,795 - 12,250 36,225

Additionality %

achieved 25% - 70% - 37% 61%


outputs - - - - - 577


outputs - - - - - 120


potential - - - - - 21%


Gross outputs

achieved 43,981 3,598 66,065 78 24,910 61,187

Net outputs achieved 18,333 1,583 28,408 38 15,444 34,265

Additionality %

achieved 42% 44% 43% 49% 62% 56%

Totals

Gross outputs

achieved 80,196 5,580 92,154 167.5 57,916 132,520

Net outputs achieved 23,931 2,114 35,429 114.5 27,694 73,783

Additionality %

achieved 30% 38% 38% 68% 48% 56%


outputs 20,728 - 220 57 - 2,509


outputs 8,480 57 246 57 - 2,585


potential 41% - 112% 100% - 103%


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


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

In net terms, LDA’s spending between 2002/03 and 2006/07 has created and safeguarded around 24,000jobs, assisted more than 35,000 businesses, helped to create over 2,000 new businesses, remediatedover 100 hectares of brownfield land, provided employment support to over 27,000 people and assistedalmost 75,000 people in their skills development. In addition, there are over 8,000 net jobs forecast to becreated or safeguarded in the future, mostly as a result of the LDA’s large area-related physicalinfrastructure investments. All these future outputs are subject to varying degrees of uncertainty.

The available gross and net output information varies across different outputs and themes, with the mostinformation on additionality available for jobs created and safeguarded. Across the LDA’s activities as awhole, 30% of the jobs created or safeguarded by the LDA’s activities have been additional. Theadditionality of both business creation and business support is 38%; the land that has been remediatedhas been 68% additional; employment support has been 48% additional and the additionality of skillsoutputs has been 56%.

There is a relatively low level of additionality for business interventions, compared with other types ofintervention. At 12%, the additionality of jobs created through business interventions is lower than forregeneration interventions (37%), the Single Regeneration Budget (SRB) programme (42%) or peopleand skills interventions (25%). It is also lower than the 48% additionality achieved for job creationthrough business interventions across the RDA network. However, this 12% figure is significantly skewedby two evaluations (Up & Running and the Sub-Regional Partners’ Business Retention (SRPBR)programme) that have reported unusually low levels of additionality. Without these two evaluations theadditionality of job creation in the LDA’s business interventions would be 43%, which is comparable toboth other LDA intervention types and to the RDA average, and the additionality of the LDA’s overall jobcreation would be 41% instead of 30%.

Beyond job creation, the additionality of LDA’s business interventions appears to be lower than for otherintervention types. The proportion of net businesses supported is lower for business interventions (19%)than for people and skills (70%) or SRB (43%), and the additionality of skills outputs is lower for businessinterventions (27%) than for people and skills (61%) or SRB (56%).

The additionality of jobs created through regeneration interventions (37%) is 8% lower than the averagefor job creation through regeneration activities across the RDA network (45%). At 85%, the additionalityof land remediation through regeneration activities is 21% higher than the RDA average (64%).

The additionality of jobs created through people and skills interventions (25%) is lower than the RDAaverage (48%); however, the numbers involved are very small and most evaluated LDA interventions inthis theme focus on assisting people into employment, rather than creating jobs. Assisting people intoemployment is a related but different measurement to job creation and the 28,000 net people assistedinto employment are not included in the jobs created figures. The additionality levels of employmentsupport (48%) and skills assists (61%) through people and skills interventions are broadly in line with theaverages across the RDA network (51% and 62% respectively).

Information about future potential outputs is somewhat limited, as not all evaluations will have assessedfuture gross and net potential outputs. The output category with most information available on futurepotential outputs is jobs created and safeguarded, mostly through physical regeneration interventions.The additionality of future potential jobs created is expected to be 41%.

Table 100 shows the estimated net outcomes associated with LDA’s investment. They are expressed interms of additional GVA and aggregated across programmes where such an estimate has beengenerated. The table distinguishes between achieved and future potential impacts on GVA, and betweencumulative and annual impacts.


Table 100: Outcomes from the evaluation of LDA interventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Achieved

GVA

(annual,

£m)

Future

potential

GVA

(annual,

£m)

Achieved

GVA

(cumulative,

£m)

Future

potential

GVA

(cumulative,

£m)

Achieved &

future

potential GVA

(cumulative,

£m)


Access to Finance 19.8 - - 105.4 - 105.4

Business London 1.8 14.4 26.1 - - -

Supply London 1.6 - - 4.8 2.4 7.2

London Value Chain 0.9 - - 1.4 0.7 2.0

Collage Arts 1.0 - - 0.1 0.1 0.2

Heathrow City

Enterprise Project0.7 - - 0.3 0.2 0.5

Centre for Fashion

Enterprise2.2 - - 0.2 - 0.2

BioLondon 24.4 - - 20.8 - 20.8

JumpStart 3.4 5.5 0.6 - - -

Pre-Commercial Fund 5.6 - 3.2 - - -

Secondment Into

Knowledge0.3 22.3 12.6 - - -

SME Innovation

Support1.3 1.0 2.0 - - -


London Riverside 77.4 - - 206.5 668.7 875.2

Wembley/Park Royal 85.8 - - - 674.1 674.1

Woolwich/North

Bexley23.3 - - 53.0 237.0 290.0

Laban Dance Centre 2.9 - - 3.0 34.0 37.0

People and skills

LDA/ESF Co-

financing Programme9.5 - - 6.7 - 6.7

ESF RSP Productivity 0.9 - - 1.1 - 1.1

Non-ESF RSP

Productivity2.3 - - 1.9 - 1.9

ESF RSP Inclusion 1.5 - - 4.2 - 4.2

Non-ESF RSP

Inclusion1.8 - - 1.8 - 1.8

LDA Opportunities

Fund Round 1 (ESF

and non-ESF)

12.9 - - 27.9 - 27.9

Refugee and Migrant

Qualifications0.3 - - 0.5 - 0.5


Expenditure

covered by

evaluations

(£m)

Achieved

GVA

(annual,

£m)

Future

potential

GVA

(annual,

£m)

Achieved

GVA

(cumulative,

£m)

Future

potential

GVA

(cumulative,

£m)

Achieved &

future

potential GVA

(cumulative,

£m)

On Your Marks 0.6 - - 1.0 - 1.0

Other interventions

Single Regeneration

Budget507.8 - - 1,004.9 - 1,004.9

National programmes

Manufacturing

Advisory Service6.8 - - 12.3 - 12.3


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

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

This analysis should be interpreted with caution, as:

GVA has not been measured consistently across these evaluations;

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

future potential impacts are subject to uncertainty;

assumptions about the persistence of benefits have been made inconsistently;

future potential GVA has not always been discounted; and

the estimates are not presented on a consistent price basis.

In addition to the impact of its project and programme spend, the LDA also influences its partners’ andstakeholders’ behaviour and performance in other ways, as demonstrated by the following StrategicAdded Value examples from the LDA’s evaluation evidence.


LDA’s Strategic Added Value

Co-ordinating activities to create synergies: in some instances, LDA is considered to have helpedincrease synergies and operational efficiencies in partner organisations. For example, the LDA’sBioLondon activities have included helping to merge four sub-regional NHS Intellectual Property Hubsinto one pan-London body – NHS Innovations London – which has improved the organisation ofhealth innovation activity and leading to improved financial and operational benefits. Without theLDA’s assistance, the BioLondon evaluation considers it unlikely that the Office of Science andTechnology or the Department of Health would have supported the venture, which has been runningsince 2004.

173The BioLondon evaluation also credits the LDA with playing a significant role in

helping to co-ordinate a previously fragmented life sciences sector.174

Providing a strategic focus: in some instances, LDA is considered to have helped provide astrategic focus. For example, the LDA’s activities in the Wembley/Park Royal area programme areconsidered by the programme’s evaluation to have provided a distinct (and welcome) focus on theWembley/Park Royal sub-regional economy, in contrast to the more rigid focus on geographicalboundaries held by some other public sector agencies in the area

175. The LDA’s approach is

considered to have helped to facilitate more joint working across organisational boundaries. Over thelifetime of the intervention, the Wembley/Park Royal area programme is expected to achieve apotential return on investment of 7.8 to 1.

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

176and the G2i

programme is estimated to have achieved a current return on investment of 12.5 to 1.

Source: LDA

Value for money

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

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

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

We have also sought to compare the value for money of LDA interventions with those across the RDAnetwork. We have derived RDA benchmarks for returns on investment and unit costs, using theevaluation evidence available across the RDA network.

When reviewing these value for money figures, it is important to remember that in this table the achievedGVA to cost ratio measures the impacts of current outputs, whereas the benefit-cost ratio (BCR)measures total costs and benefits over the lifetime of the project, including the expected persistent effectsof benefits. Although benefit-cost ratios are the LDA’s preferred value for money methodology, and willform the backbone of value for money judgements in the LDA’s future evaluation programme, we haveused GVA to cost ratios in this analysis as they are available more consistently across the RDA networkand have formed the basis of our RDA benchmarking work.

Table 101 shows the aggregated value for money calculations across the LDA’s interventions.

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

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

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

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


Table 101: Summary of LDA value for money from evaluated interventions (2002/03-2006/07)177

Achieved

GVA:cost

ratio

Benefit-

cost ratio

Cost per

net job (£)

Cost per net

business

assist (£)

Cost per

net

business

created (£)

Cost per net

skills assist

(£)


Access to Finance

Objective 2

Pan-London

G2i

CBA

3.8

25.0

12.5

33.0

3.5

20.5

15.0

32.0

- - - -

Up and Running n/a - 1,990 1,591 7,966 -

Business London 2.83 - 2,733 493 53,212 -

Supply London 1.08 2.6

28,554

(achieved);

12,804

(potential)

- - -

London Value Chain 0.93 1.8

10,360

(achieved);

9,797

(potential)

- - -

London Fashion

Forum- - 11,579 - - -

Collage Arts 0.05 0.2 - - - -

Heathrow City

Enterprise Project0.23 0.7 - - - -

Centre for Fashion

Enterprisen/a - 259,000 - 345,000 -

BioLondon - 1.9 - 2.3 - - - -

JumpStart 5.54 - 13,000 - - -

Pre-Commercial

Fund0.45 - 0.55 2.2 - 3.5 217,000 - - -

Secondment Into

Knowledge29 - 71,100 - - -

SME Innovation

Support0.44 1.1 - 7.2 106,200 - - -

Enhance 1.08 1.3 - 2.4 - - - -


London Riverside

1.6

(achieved);

6.3

(potential)

-

15,000

(Enterprise

support);

242,000

(Capital

projects);

3,900

(Enterprise

support);

10,600 (Capital

Projects)

99,000

(Enterprise

support)

1,100 -

18,000

(Enterprise

support);

900 - 4,000

(Matching

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


Achieved

GVA:cost

ratio

Benefit-

cost ratio

Cost per

net job (£)

Cost per net

business

assist (£)

Cost per

net

business

created (£)

Cost per net

skills assist

(£)

15,000

(Matching

people to

jobs)

people to jobs)

Wembley/Park Royal7.8

(potential)- 29,873 8,409 48,163 -

Woolwich/North

Bexley

3.6

(potential)-

37,900 -

39,40034,700 -

9,200

(Matching

people to jobs)

Laban Dance Centre - 3.6 37,000 - - -

People and skills178

Thames Gateway

Jobnet3.6 6.9 - - - 7,173

LDA/ESF Co-

financing

Programme

1.1 2.7 - - -18,403 -

31,412

ESF RSP

Productivity0.8 1.2 - - -

18,410 -

26,642

Non-ESF RSP

Productivity0.7 1.2 - - - 1,211 - 23,853

ESF RSP Inclusion 1.7 2.2 - - -13,803 -

36,602

Non-ESF RSP

Inclusion0.7 1.1 - - - 6,571 - 26,077

Opportunities Fund

Round 1 (ESF and

non-ESF)

ESF 1.0

Non-ESF

0.7

ESF 2.2

Non-ESF

1.8

- - -

ESF 8,186 -

42,853

Non-ESF

15,128 -

25,577

Refugee and Migrant

Qualifications1.5 2.2 - - -

49,614 -

793,832

On Your Marks 0.6 1.4 - - - 16,937

Other/hybrid interventions

Single Regeneration

Budget2.0 - - - - -

National programmes

Manufacturing

Advisory Service1.6 - - - - -


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

178 With the exception of Thames Gateway Jobnet, People and Skills unit costs are for gross basic and Level 2 skills assists, as net

unit cost information was not calculated


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

The cumulative achieved GVA return on investment of LDA’s evaluated interventions is 1.8 to 1 (basedon an estimated cumulative GVA impact of £1,458m from £797m of interventions that have assessedcumulative GVA impact). This is expected to rise to 3.9 to 1, including future potential outputs (based onan expected cumulative GVA impact of £3,075m).

The LDA’s business interventions have achieved the highest return on investment to date, at anestimated average of 2.1 to 1. Physical regeneration interventions have achieved an average return of1.4 to 1 and people and skills interventions have achieved an average return of 1.3 to 1. When the GVAimpacts of expected future potential outputs are included, physical regeneration interventions areexpected to achieve the highest average return on LDA investment, at 9.7 to 1. Business interventionsare expected to achieve an average 5.0 to 1 return in the future and people and skills interventions anaverage 1.7 to 1 return.

The estimated achieved and expected returns for the LDA’s business interventions are both below theRDA benchmarks of 2.8 to 1 and 11.6 to 1 respectively but the LDA’s performance in this theme is likelyto be understated, because interventions that have reported annual impact are not included in ouranalysis. The achieved and future potential returns from LDA physical regeneration interventions areboth above the RDA benchmarks of 0.7 to 1 and 8.0 to 1 respectively. The achieved returns for LDApeople and skills interventions are above the benchmark of 0.9 to 1 but expected returns are below thebenchmark of 2.5 to 1.

Our analysis shows that some programmes have already achieved GVA returns which exceed theirinvestment. Of the LDA’s evaluated business development and competitiveness interventions, access tofinance projects (under the enterprise support sub-theme) have generally achieved the highest returns todate. The evaluated sector and cluster support projects have produced a low return on investment. Theevaluated science, innovation and R&D projects have achieved mixed returns to date but are expected togenerate positive long-term returns, which is a reflection of the time lags between investment and returnsassociated with interventions in this area.

Evaluated enterprise support interventions achieved a mixed performance against the RDA benchmarkfor achieved GVA to cost returns of 4.9 to 1. Three projects generated returns above the benchmark butfour others all generated below-benchmark returns. The two evaluated sector/cluster support projectswith value for money information both generated GVA to cost returns below the benchmark of 3.2 to 1.The value for money performance of the evaluated science, innovation and R&D projects was mixed, withtwo achieving returns well above the RDA benchmark of 1.1 to 1 and two others achieving returns oninvestment below the benchmark.

For regeneration through physical infrastructure interventions, the LDA’s three evaluated areaprogrammes (London Riverside, Wembley/Park Royal and Woolwich/North Bexley) are all expected toachieve positive returns in the future. Given the long-term nature of these interventions and theirimpacts, a substantial proportion of the benefits of these programmes are still to be realised, and thenature of these potential GVA to cost returns will depend on whether the expected benefits are realised.

The area programmes are expected to generally perform well against value for money benchmarks overtime. The LDA’s two biggest evaluated area programmes (London Riverside and Wembley/Park Royal)are both expected to achieve returns consistent with the benchmark of GVA to cost (including futurepotential outputs) for regeneration interventions of 8.0 to 1.

The LDA’s people and skills projects have achieved mixed returns to date, with many current GVA to costratios near or below 1 to 1. All projects are expected by their evaluations to achieve returns above 1,once all benefits and their expected persistence are taken into account. The GVA to cost returnsachieved have generally been relatively similar to the RDA benchmark of 0.9 to 1, although three projectsachieved returns well above the benchmark.

From our calculations of Single Regeneration Budget GVA impacts, based on the net jobs totals reportedin the SRB meta-evaluation, we estimate the SRB programme generated a GVA to cost return of 2.0 to 1.Our calculations of the estimated GVA impact of national programmes also show positive returns.


A range of cost per unit of output measures have been calculated, with most information available for costper net job. Business development and competitiveness programmes have achieved the lowest cost pernet job compared to other intervention categories, although there is significant variation within thatintervention type. For example, enterprise support interventions have achieved the lowest cost per netjob, with science/innovation programmes significantly higher (although their focus is often wider thancreating and safeguarding jobs). The cost per output figures vary significantly within and between thethree area interventions, reflecting the diverse nature of those programmes; the unit costs of all areexpected to fall over time, as more of the potential benefits of the programmes are realised. For theLDA’s skills interventions only gross cost per job information is available; it shows a relative consistencyacross most of the programmes evaluated.

Of the four enterprise support interventions with unit cost information (Up and Running, Business London,Supply London and London Value Chain), two programmes performed strongly against all unit costbenchmarks (£8,301 per net job, £74,196 per net business created and £8,502 per net businessassisted); two others were above the cost per net job benchmark at the time of evaluation but wereanticipated to achieve near-benchmark value for money performance over time. Unit cost information isonly available for two sector/cluster support projects, with one above the RDA benchmark of £12,135 pernet job and one slightly below. Unit cost information is available for cost per job in four of the science,innovation and R&D evaluations. Again the performance is mixed, with one project below the cost per jobbenchmark of £37,938 but three above.

Unit cost information for regeneration through physical infrastructure interventions is generally positivetoo, with three of four programmes with unit cost information achieving a cost per net job below the RDAregeneration benchmark of £63,271.

The net unit cost information available for the LDA’s people and skills interventions is very limited, with nocost per net job information available and cost per net skills assist information only available for twointerventions (London Riverside and Thames Gateway Jobnet). The available information on skills unitcosts is mixed, with one intervention achieving a cost per skills assist below the people and skillsbenchmark of £1,960 and one above.

It is recognised that the tables above will not capture some of the wider impacts of these interventions,such as raising confidence in an area. It is also recognised that cost per net job is not a universally-appropriate indicator of unit costs for every project.


The LDA has been set a series of targets by the Mayor, to deliver outputs prescribed by DTI/BERR for allRDAs. All targets have been exceeded, particularly for jobs created and people assisted in skillsdevelopment, and across almost all years for which targets have been set. Table 102 presents LDA’sperformance against target information, based upon performance reported to DTIBERR.

Table 102: Comparison of LDA performance against output targets (2002/03-2006/07)179

Jobs created/

safeguarded

Businesses

created

Brownfield

land (ha)

People assisted

in skills

development

Funding

levered

(£m)

Targets set by Mayor 58,700 6,590 220 112,625 1,100

Achieved LDA gross

outputs reported to

DTI/BERR 88,433 8,993 323 163,291 1,360


targets met 5 5 5 5 4


179 Based on information from LDA Annual Reports


The LDA’s performance against the objectives for each of the individual intervention types covered by theevaluation evidence is set out in Table 103. It shows that 41 evaluations considered interventions’performance against objectives. Of those 41, around half were considered to have met or largely mettheir objectives – 12 out of 21 business interventions, 3 out of 6 place interventions and 5 out of 14people interventions.

Few evaluations considered interventions to have fully met or exceeded their objectives and severalreported a mixed performance. There are two main reasons for this:

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

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

Table 103: Comparison of performance against objectives across LDA evaluations (2002/03-2006/07)


met

Mixed Limited

performa

nce

Not

assessed

Total

Business

Evaluations 0 1 11 6 3 0 21

Spend (£m) 0 0.5 70.1 19.1 10.1 0 99.8

Place


Spend (£m) 0 0 90.9 67.9 0 45.8 204.6

People


Spend (£m) 0 3.6 23.3 21.2 0 2.8 50.9

Other


Spend (£m) 0 0 0 0 0 507.8 507.8

Total

Evaluations 0 2 18 18 3 3 44180

Spend (£m) 0 4.1 184.3 108.2 10.1 556.4 863.1


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

180 The total of evaluations shown in Table 7 is higher than the total number of evaluations recorded in Table 2, as the performance

of the area programmes has been assessed under more than one IEF theme.


that shorter-term objectives have been met more successfully than longer-term goals, with limitedadditional impact reported.

The evaluations of the LDA’s projects and programmes related to science, R&D and innovation aregenerally positive about performance, with most interventions considered to have largely met theirobjectives. The LDA’s life sciences programme is considered to have been an important contributor toemployment in the sector, and innovation projects are judged by their evaluators as having successfullyfacilitated engagement and collaboration between business and academia, with positive feedback fromuniversity and business beneficiaries.

The evidence available for inward investment interventions suggests that tourism-related interventionshave had more impact than business focused interventions. However, the LDA’s largest inwardinvestment project – Think London/London First – has not been evaluated as part of this process, whichmeans that the evidence available for this area is limited.

Evidence about sustainable consumption and production interventions is also limited, with just oneevaluation included in our analysis. Although considered by its evaluation to have been relativelysuccessful, the programme was on too small a scale to have had any significant impact or to draw widerconclusions about the LDA’s activity in this area.

The LDA’s evaluated area programmes are large, multi-faceted interventions, which have cut acrossinvestment themes but are predominantly focused on regeneration. All three are long-term programmes,taking place in relatively deprived areas of London. The evaluations of all three are broadly positive, withmany shorter-term objectives (such as remediating land and providing business/skills support) havingbeen met, providing a platform for future economic activity. There is also some evidence that all threeareas are becoming more sought after for housing and/or business space. However, the final impacts ofthese programmes are unlikely to be known for several years.

The evaluated building-specific capital projects appear to have had limited success so far but were allevaluated at an early stage in their lifecycle, which made it difficult for evaluators to assess impact.However, the evaluations refer to difficulties in project management and administration, including delaysand cost over-runs.

Many of the LDA’s people and skills projects have taken place in conjunction with the European SocialFund. Beneficiaries that have taken part in the projects have generally reported positive benefits frombeing involved, such as improved communication skills, new qualifications and access to new or betterjobs. However, many of the evaluations noted only limited progress on achieving longer-term objectivessuch as helping those at risk of exclusion from or disadvantaged within the labour market, meeting skillsshortages or increasing the management skills of small businesses.

The SRB programme was not subject to a detailed assessment of its performance against objectives. Interms of its performance against output targets, it is possible to say that SRB met its output targets forcreating jobs and businesses but fell short of targets for land remediation, skills development andcommunity enterprise creation.

In terms of overall organisational performance, the LDA, as part of the Greater London Authority,received an Initial Performance Assessment (IPA) in November 2004 from the Audit Commission. TheIPA was similar to a Comprehensive Performance Assessment of a local council and assessed theperformance of the GLA and its functional bodies in the delivery of their services (the other eight RDAswere subject to the National Audit Office’s Independent Performance Assessment).

The LDA was assessed in the 2004 IPA as a “good” organisation, which had recognised the need forimprovement to deliver its “complex and challenging” agenda over the long term. Its work wasconsidered to be based on a well-founded analysis of London’s economic and social circumstances, withan “acute assessment of where it can intervene and invest most effectively to secure its objectives”.

The IPA praised the LDA for the strength of its leadership, investment plans, stakeholder engagement,focus and for its contribution to major infrastructure developments. Against this, the LDA’s weaknesseswere considered to be its internal communication, partnership working, skills gaps and performance


management. The IPA was primarily concerned with the LDA’s organisational processes rather thanimpact, which is the focus of our work.

Wider economic performance

Our analysis shows that evaluated LDA spend of £841m has already resulted in an estimated impact onGVA of approximately £1,693m between 2002/03 and 2006/07, and is expected to contribute a further£1.6bn to the London economy in future years. This is in the context of a £44bn growth in the Londonregional economy between 2002 and 2006, from £174bn to £218bn

181.

The LDA’s investment is estimated to have created or safeguarded 28,400 net jobs over the period from2002/03 to 2006/07. Between 2002 and 2007 the number of jobs in the region increased by 190,000

182.

The LDA’s interventions make a comparatively small impact on the London economy. However, thatimpact is broadly commensurate with the LDA’s modest budget in comparison with the size of the Londoneconomy and with other flows of funds from the public sector.


We have structured the analysis of the impact of LDA’s spending, where possible, according to the threecategories of intervention defined within the IEF (i.e. business, place and people). We have alsoanalysed the impact of LDA’s other activities that span more than one of these categories, particularly theSingle Regeneration Budget, as well as the available evidence of the impact of the nine nationalprogrammes where LDA has been responsible for delivery within parameters determined by centralgovernment departments.

We have summarised the impact of LDA’s interventions using a common structure in which:

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

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

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



Rationale

London has a large and diverse business sector, which makes a significant contribution to the UK andglobal economies. London’s first EDS, Success Through Diversity (2001), aimed for economic growthwhile at the same time promoting inclusion and diversity, with central themes of economic growth;knowledge and learning; diversity, inclusion and renewal; and sustainable development. The most recentEDS, Sustaining Success (2005), looks to maintain the success of London’s economy, which isconsidered to be increasingly driven by “competitive, high-wage businesses that are more productivethan average UK businesses”

183. The four main enterprise-related objectives in the 2005 EDS are:

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

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

181 Regional GVA, National Statistics, 2006.

182 London Economic Outlook, Autumn 2008, Greater London Authority183 Sustaining Success (2005)


to improve the skills of the workforce; and

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

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

ensure a coherent approach to marketing and promoting London;

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

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

The EDSs have formed the backdrop for a variety of business-related interventions between 2002/03 and2006/07. This section covers 20 evaluations under the theme of business development andcompetitiveness.

Enterprise support initiatives sought to help businesses (typically small and medium-sized enterprises(SMEs)) to overcome information barriers about the type of support available to them and to provideadvice, skills, mentoring and support to help them meet their business needs. Interventions weredeveloped in response to circumstances such as SMEs struggling to access sufficient finance, lowbusiness survival rates, low numbers of SMEs winning public sector contracts and low levels of economicactivity and business start-up rates.

Sector/cluster support initiatives had a particular emphasis on the cultural and creative sectors, throughbusiness support, co-ordination and initiatives to expand markets. Interventions were developed torespond to information and co-ordination failures that were perceived to be preventing the targetbeneficiaries from operating with maximum effectiveness or, in one case, from maximising theopportunities from beneficiaries’ proximity to a major international airport.

Science, innovation and R&D interventions aimed to develop London’s innovation role in the UK andbeyond, by developing a life sciences cluster, increasing collaboration between business and academia,supporting pre-commercial product development and providing SMEs with support to bring their ideas tomarket. Interventions were developed to respond to the information and co-ordination failures that werepreventing effective collaboration between businesses and the knowledge base.

Inward investment activity aimed to boost the regional economy by retaining strategically significantcompanies in London’s sub-regions. Sustainable consumption and production activity aimed toovercome the information and financial barriers to SMEs’ successful operations in the re-use, recyclingand reprocessing sector.

The evidence of the impact of LDA’s business interventions comes from 20 evaluations in five sub-themes, as summarised in Table 104. Expenditure has been highest in the sub-themes of individualenterprise-level support and science, innovation and R&D. These sub-themes also have the highestvolume of evaluation evidence. The evaluated sector/cluster support interventions were small in scaleand only one evaluation has been assessed for the inward investment and sustainableconsumption/production sub-themes.


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

Intervention theme/sub-theme Project/programme Expenditure

covered by

evaluations (£m)

Individual enterprise level support Access to Finance:

– A2F Objective 2

– A2F Pan-London

– Gateway to Investment

– Creative Business Accelerator

Up and Running

Business London

Supply London

London Value Chain

London Riverside

Wembley / Park Royal

Woolwich / North Bexley

19.8

1.3

1.8

1.6

0.9

14.9

12.5

0.5

Sector/cluster support Theatre Audience Development

London Fashion Forum

Collage Arts

Heathrow City Enterprise Project

Centre for Fashion Enterprise

0.2

0.5

1.0

0.7

2.2

Science, R&D & innovation infrastructure BioLondon

British Library Business and IP Centre

JumpStart

Pre-Commercial Fund

Secondment Into Knowledge

SME Innovation Support

24.4

1.1

3.4

5.6

0.3

1.3

Inward investment promotion Sub-Regional Business Retention 2.3

Sustainable consumption/production Enhance 3.5

Total 99.8


Impact

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


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


covered by

evaluations

(£m)

Gross jobs

created /

safeguarded

Gross

businesses

created

Gross

businesses

supported

Gross people

assisted in

skills

development

Individual enterprise level support

Access to Finance:

A2F Objective 2

A2F Pan-London

Gateway to Investment

Creative Business Accelerator

19.8 373 - 3,758 -

Up and Running 1.3 11,008 - 4,229 -

Business London 1.8 397 - 2,614 967

Supply London 1.6 330 - 2,147 -

London Value Chain 0.9 394 321 246 -

London Riverside 14.9 119 15 313 1,330

Wembley/Park Royal 12.5 - 1,147 5,626 -

Woolwich/North Bexley 0.5 - 24 464 -


Theatre Audience Development 0.2 - - - -

London Fashion Forum 0.5 235 55 - -

Collage Arts 1.0 316 227 364 222

Heathrow City Enterprise Project 0.7 264 36 213 272

Centre for Fashion Enterprise 2.2 39 27 - -


BioLondon 24.4 411 49 1,000 8,818

British Library Business & IP

Centre1.1 1,170 - - -

JumpStart 3.4 176 - - -

Pre-Commercial Fund 5.6 87 22 - -

Secondment Into Knowledge 0.3 3 - 50 -

SME Innovation Support 1.3 103 2 243 -

Inward investment promotion

Sub-Regional Business Retention 2.3 14,914 - - -

Sustainable consumption/production

Enhance 3.5 272 38 857 292

Total 98.5 30,611 1,963 22,124 11,901


Notes: (i) All Access to Finance, Wembley/Park Royal and Woolwich/North Bexley output figures are to March 2008

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


(iii) The gross jobs created by the Wembley/Park Royal programme have been apportioned to the Place

theme

(iv) The impact of Up and Running should be considered against overall programme costs of £27.9m

(£21.9m from the public sector), rather than the £1.3m expenditure incurred by LDA

The net achieved outputs associated with the LDA’s business development and competitiveness projectsare presented in Table 106. The evidence suggests that the LDA’s interventions have created orsafeguarded, in net terms, up to 4,000 additional jobs and around 500 businesses, with an additional4,200 businesses supported and around 3,000 additional people assisted in their skills development.Around half of the jobs created or safeguarded were from individual enterprise level support programmes.Most of the businesses supported or created were also through these programmes. The importance ofthis sub-theme to the overall totals is perhaps to be expected, given its large number of evaluations.

Table 106: Summary of LDA net inputs and outputs for evaluated business development andcompetitiveness interventions (2002/03-2006/07)


covered by

evaluations

(£m)

Net jobs

created /

safeguarded

Net

businesses

created

Net

businesses

supported

Net people

assisted in

skills

development


Access to Finance:

A2F Objective 2

A2F Pan-London

Gateway to Investment

Creative Business Accelerator

19.8 213 - - -

Up and Running 1.3 906 - - -

Business London 1.8 314 - - -

Supply London 1.6 94 - 1,205 -

London Value Chain 0.9 246 200 154 -

London Riverside 14.9 35 6 97 1,058

Wembley/Park Royal 12.5 - 217 1,274 -

Woolwich/North Bexley 0.5 - 5 101 -


Theatre Audience Development 0.2 - - - -

London Fashion Forum 0.5 44 - - -

Collage Arts 1.0 57 41 66 40

Heathrow City Enterprise Project 0.7 20 8 48 61

Centre for Fashion Enterprise 2.2 8 16 10 -


BioLondon 24.4 279 - 371 23 - 32 429 - 571 1,468 - 1,984

British Library Business & IP

Centre1.1 200 - 667 - - -

JumpStart 3.4 11 - 148 - - -

Pre-Commercial Fund 5.6 0 - - -

Secondment Into Knowledge 0.3 3 - 20 - - -



covered by

evaluations

(£m)

Net jobs

created /

safeguarded

Net

businesses

created

Net

businesses

supported

Net people

assisted in

skills

development

SME Innovation Support 1.3 6 - 37 - - -


Sub-Regional Business Retention 2.3 650 - - -

Sustainable consumption/production

Enhance 3.5 136 10 771 292

Total 98.5 3,222 - 3,966 526 - 535 4,155 – 4,297 2,919 – 3,435



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

(iii) The net jobs created by the Wembley/Park Royal programme have been apportioned to the Place theme

(iv) The impact of Up and Running should be considered against overall programme costs of £27.9m


Net impact varied between and within different sub-themes and outputs. From assessing the gross andnet outputs in Tables 105 and 106, it appears that business creation and skills assists have higher levelsof additionality (as measured by net jobs as a proportion of gross) than job creation and business assists.

In addition to the gross and net outputs highlighted above, several of the evaluations listed gross andparticularly net future potential outputs. These were particularly prevalent in the area programmes and ininnovation interventions, which were long-term interventions assessed at an early stage in their overalldevelopment:

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

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

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

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

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

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

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

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


Table 107: Outcomes from LDA’s evaluated business development and competitivenessinterventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Achieved

GVA

(annual,

£m)

Future

potential

GVA

(annual,

£m)

Achieved

GVA

(cumulative,

£m)

Future

potential

GVA

(cumulative,

£m)

Achieved &

future

potential

GVA

(cumulative,

£m)


Access to Finance:

A2F Objective 2

A2F Pan-London

Gateway to

Investment

Creative Business

Accelerator

19.8 - - 105.4 - 105.4

Business London 1.8 14.4 26.1 - - -

Supply London 1.6 - - 4.8 2.4 7.2

London Value Chain 0.9 - - 1.35 0.65 2.0

London Riverside

(enterprise support

element)

14.9 - - 30.2 10.4 40.6

Wembley/Park Royal

(enterprise support

element)

12.5 - - - 211.0 211.0

Woolwich/North

Bexley (enterprise

support element)

0.5 - - - - -


Theatre Audience

Development0.2 - - - - -

London Fashion

Forum0.5 - - - - -

Collage Arts 1.0 - - 0.08 0.11 0.19

Heathrow City

Enterprise Project0.7 - - 0.25 0.23 0.48

Centre for Fashion

Enterprise2.2 - - 0.2 - 0.2

Science, innovation and R&D

BioLondon 24.4 - - 20.8 - 20.8

British Library

Business & IP Centre1.1 - - - - -

JumpStart 3.4 5.5 0.6 - - -

Pre-Commercial

Fund5.6 - 3.2 - - -

Secondment Into 0.3 22.3 12.6 - - -


Expenditure

covered by

evaluations

(£m)

Achieved

GVA

(annual,

£m)

Future

potential

GVA

(annual,

£m)

Achieved

GVA

(cumulative,

£m)

Future

potential

GVA

(cumulative,

£m)

Achieved &

future

potential

GVA

(cumulative,

£m)

Knowledge

SME Innovation

Support1.3 1.0 2.0 - - -


Sub-Regional

Business Retention2.3 - - - - -


Enhance 3.5 - - - - -

Total 98.5 43.2 44.5 163.1 224.8 387.9


Notes: (i) Overall London Riverside, Wembley/Park Royal and Woolwich/North Bexley GVA and value for money

figures are presented under Physical Regeneration

(ii) London Riverside achieved impacts are to 2007/08

(iii) The impact of Up and Running should be considered against overall programme costs of £27.9m


The evaluation evidence suggests that the LDA’s investment of £99m between 2002/03 and 2006/07 hasresulted in cumulative achieved GVA impacts of £163m, with the potential to rise to £388m. On top ofthat, there are achieved annual GVA impacts of £43m per annum, with the potential for those to rise to£88m per annum. The annual and cumulative GVA numbers are not calculated on a consistent basis andshould not be added together. We have not added the annual and cumulative GVA totals together in thisanalysis. The future potential impacts on GVA have been mostly estimated through expected outputs,although some evaluations have also estimated persistence.

In addition to the impact of its project and programme spend, the LDA has also influenced its partners’and stakeholders’ behaviour and performance in other ways, as demonstrated by the following StrategicAdded Value examples from the LDA’s business evaluation evidence.


LDA’s business development and competitiveness interventions have also had strategic added value.For example, in business support the LDA has supported the piloting of new approaches to servicedelivery. In the Business London programme a sub-regional consortium approach to providing businesssupport has been adopted. The programme’s evaluation believes the consortium approach offers a newmodel for delivery, encouraging collaboration in delivery and simplification to the user

184.

In the innovation sub-theme, the Secondment Into Knowledge programme has piloted an approach wheresecondees from businesses have been placed in academic institutions, instead of the traditionalapproach of seconding academics into a business environment

185. These two programmes are estimated

to have achieved GVA to cost returns of 2.83 to 1 and 29 to 1 respectively.

Source: LDA

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

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


Value for money

We have considered the value for money of the LDA’s interventions from three perspectives: the GVA tocost ratio; the benefit-cost ratio; and measures of cost per unit of net output. When reviewing the valuefor money figures in Table 108, it is important to remember that in this table the achieved GVA to costratio measures the impacts of current outputs, whereas the BCR measures total costs and benefits overthe lifetime of the project, including the expected persistent effects of benefits.

Table 108: Value for money of LDA’s evaluated business development and competitivenessinterventions (2002/03-2006/07)

186

Expenditure

covered by

evaluations

(£m)

GVA

to

cost

ratio

Benefit-

cost

ratio

Cost per net job (£) Cost per

net

business

assist (£)

Cost per

net

business

created

(£)


Access to

Finance:

Objective 2

Pan-London

G2i

CBA

19.8

3.9

25.0

12.5

33.0

3.5

20.5

15.0

32.0

- - -

Up and Running 1.3 n/a - 1,990 1,591 7,966

Business

London1.8 2.83 - 2,733 493 53,212

Supply London 1.6 1.08 2.6 28,554 (achieved); 12,804 (potential) - -

London Value

Chain0.9 0.93 1.8 10,360 (achieved); 9,797 (potential) - -

London

Riverside

(enterprise

support

element)

14.9 2.46 - 15,000 3,900 99,000


London Fashion

Forum0.5 - - 11,379 - -

Collage Arts 1.0 0.05 0.2 - - -

Heathrow City

Enterprise

Project

0.7 0.23 0.7 - - -

Centre for

Fashion

Enterprise

2.2 n/a - 259,000 - 345,000


BioLondon 24.4 - 1.9 - 2.3 - - -

JumpStart 3.4 5.54 - 13,000 - -

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


Expenditure

covered by

evaluations

(£m)

GVA

to

cost

ratio

Benefit-

cost

ratio

Cost per net job (£) Cost per

net

business

assist (£)

Cost per

net

business

created

(£)

Pre-Commercial

Fund5.6

0.45 -

0.552.2 - 3.5 217,000 - -

Secondment

Into Knowledge0.3 29 - 71,100 - -

SME Innovation

Support1.3 0.44 1.1 - 7.2 106,200 - -

Sustainable consumption and production

Enhance 3.5 1.08 1.3 - 2.4 - - -


The LDA’s evaluated business development and competitiveness interventions have achieved an overallGVA to cost return of 2.1 to 1 (based on an estimated cumulative GVA impact of £163m, from £78m ofinterventions where the evaluations have assessed GVA impacts). This is expected to rise to 5.0 to 1,including future potential outputs (based on an expected cumulative GVA impact of £388m). Both returnsare below the RDA GVA to cost benchmarks of an achieved 2.8 to 1 return and an expected 11.6 to 1return but the LDA’s performance is likely to be understated, because interventions that have reportedannual impact are not included in this analysis.

Returns on investment and unit cost figures vary significantly across the theme. Evaluated enterprisesupport interventions achieved mixed GVA to cost returns against the RDA benchmark of 4.9 to 1, withthree interventions achieving above average returns and four below. The evaluated sector/clustersupport projects generated returns below the sector GVA to cost benchmark of 3.2 to 1. The value formoney performance of the evaluated science, innovation and R&D projects was mixed, with two wellahead of the GVA to cost benchmark of 1.1 to 1 and two others below. The benefit-cost ratio informationindicates that most LDA business interventions are expected to achieve positive returns (above 1).

Enterprise support interventions achieved the lowest cost per net job. Of the four enterprise supportinterventions with unit cost information, two programmes performed strongly against the unit costbenchmarks for jobs created (£8,301), businesses created (£74,196) and businesses assisted (£8,502).Unit cost information is only available for two sector/cluster support projects, with one significantly abovethe RDA benchmark of £12,135 per net job and one slightly below. Unit cost information is available forcost per job in four of the science, innovation and R&D evaluations and performance is mixed, with oneproject significantly below the cost per job benchmark of £37,938 but three significantly above.


We have also reviewed how well interventions have performed against their specific objectives. Table109 summarises the performance against objectives of business development and competitivenessinterventions. Performance was generally positive, particularly for enterprise support and science,innovation and R&D interventions. Performance has generally been stronger at meeting short-termobjectives (particularly around engagement and awareness raising) than at achieving longer-term, moreambitious objectives such as establishing alternative models of service delivery.


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

Intervention Expenditure

covered by

evaluations (£m)


Woolwich/North Bexley (enterprise support element) 0.5 Met

Access to Finance 19.8 Largely met

Up and Running 1.3 Largely met

Supply London 1.6 Largely met

London Value Chain 0.9 Largely met

Wembley/Park Royal (enterprise support element) 12.5 Largely met

BioLondon 24.4 Largely met

British Library Business & IP Centre 1.1 Largely met

JumpStart 3.4 Largely met

Secondment Into Knowledge 0.3 Largely met

SME Innovation Support 1.3 Largely met

Enhance 3.5 Largely met

Business London 1.8 Mixed

London Riverside (enterprise support element) 14.9 Mixed

Collage Arts 1.0 Mixed

Heathrow City Enterprise Project 0.7 Mixed

Theatre Audience Development 0.2 Mixed

London Fashion Forum 0.5 Mixed

Sub-Regional Partners’ Business Retention 2.3 Limited performance

Pre-Commercial Fund 5.6 Limited performance

Centre for Fashion Enterprise 2.2 Limited performance



Rationale

The LDA’s regeneration interventions have fallen into three categories – large, multi-faceted area-basedinterventions, which have combined significant regeneration with elements of business and employmentsupport; smaller capital projects, which have focused on the regeneration or development of a singlebuilding; and tourism marketing activities through Visit London. The regeneration-related objectivesoutlined in the 2005 EDS are to:

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

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

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

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


ensure a coherent approach to marketing and promoting London;

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

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

These objectives have formed the backdrop for a variety of physical regeneration interventions between2002/03 and 2006/07. However, given the multi-faceted nature of the LDA’s area programmes, otherEDS objectives related to enterprise and people will also be relevant. This section covers sevenevaluations.

The three evaluated area interventions were all developed to address market failures such as thenegative externalities associated with vacant, contaminated or derelict land. These were oftenenvironmental (pollution), economic (underutilisation) or social (crime and vandalism) in nature. Theprogrammes sought to improve infrastructure, bring land back into economic use and increase levels ofeconomic activity.

The LDA’s other evaluated capital projects sought to re-develop a discrete building or location. All threeare related to culture and the creative industries. The interventions sought to increase the participation ofthe BAME community in cultural and creative industries and to use the regenerated buildings as acatalyst for wider economic regeneration, as all three interventions were located in areas of relativeeconomic inactivity. The three projects were evaluated at the instruction of the London Assembly,following an audit of these projects.

The rationale for co-ordinated tourism marketing relates to the benefits associated with tourism that arenot accounted for by individual organisations when planning their promotions (such as visitor spendingoutside London and visitor spending outside the tourism sector), and the failure of a fragmented tourismmarket to promote the totality of London’s tourism offer.

Table 110: Summary of LDA evaluated regeneration through physical infrastructure interventions(2002/03-2006/07)


covered by

evaluations (£m)

Capital projects – area interventions London Riverside area intervention

Wembley/Park Royal area intervention

Woolwich/North Bexley area intervention

58.8

37.1

22.8

Capital projects – building-specific

interventions

Bernie Grant Centre

Rich Mix Centre

Laban Dance Centre

3.3

5.8

2.9

Public realm/other infrastructure (e.g.

transport/community)

Wembley/Park Royal area intervention

Woolwich/North Bexley area intervention

28.1

1.0

Image, events and tourism Visit London 45.8

Total 204.6


As Table 110 shows, this spend is dominated by the large area programmes, with the LDA’s building-specific interventions being much smaller in nature.

Impact

Table 111 illustrates the key gross outputs arising from the LDA’s physical regeneration interventions.


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


covered by

evaluations

(£m)

Gross jobs

created /

safeguarded

(actual)

Gross jobs

created /

safeguarded

(potential)

Gross land

remediated

(ha)

Gross

housing

units

Area-based interventions

London Riverside 58.8 652 5,954 37.0 -

Wembley/Park Royal 65.2 3,484 12,809 10.0 -

Woolwich/North Bexley 22.8 688 1,551 41.0 1,248

Building-specific capital projects

Bernie Grant Centre 3.3 12 - 0.5 -

Rich Mix Centre 5.8 106 - - -

Laban Dance Centre 2.9 482 - 1.0 438

Image, events and tourism

Visit London 45.8 - - - -

Total 204.6 5,424 20,314 89.5 1,686


Notes: (i) Wembley/Park Royal and Woolwich/North Bexley output figures are to March 2008

(ii) All London Riverside, Wembley/Park Royal and Woolwich/North Bexley figures combine direct and

indirect outputs and are regional

(iii) All Potential outputs include Achieved outputs

(iv) Gross and net outputs from Wembley/Park Royal are not specifically broken down into IEF theme;

however, these are the overall outputs that most closely match those attributable to the Place theme.

Area interventions have provided the bulk of gross outputs, which is to be expected given that theyaccount for 72% of the evaluated expenditure in this theme. There are also a significant number ofpotential gross jobs identified in the evaluations, notably through the Wembley/Park Royal programme.

Table 112 illustrates the key net outputs arising from the LDA’s physical regeneration interventions.


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


covered by

evaluations

(£m)

Net jobs

created /

safeguarded

(actual)

Net jobs

created /

safeguarded

(potential)

Net land

remediated

(ha)

Net

housing

units


London Riverside 58.8 226 2,651 24.0 -

Wembley/Park Royal 65.2 1,396 3,985 10.0 -

Woolwich/North Bexley 22.8 333 631 41.0 1,248


Bernie Grant Centre 3.3 1 - 0.5 -

Rich Mix Centre 5.8 3 - - -

Laban Dance Centre 2.9 39 - 1.0 438


Visit London 45.8 - - - -

Total 204.6 1,998 7,267 76.5 1,686


Notes: (i) All London Riverside, Wembley/Park Royal and Woolwich/North Bexley output figures are to March 2008

and are regional

(ii) Wembley/Park Royal and Woolwich/North Bexley figures combine direct and indirect outputs

(iii) All Potential outputs include Achieved outputs

(iv) Gross and net outputs from Wembley/Park Royal are not specifically broken down into IEF theme;

however, these are the overall outputs that most closely match those attributable to the Place theme.

(v) Visit London was not set any tasking framework outputs, as they were not relevant to the activities they

deliver

As Table 112 illustrates, additionality has generally been much higher for the area programmes than forbuilding-specific interventions. All of the remediated land and new housing units are considered to beadditional. The disparity between net achieved and net potential jobs created is also noticeable; thisindicates that the area programmes were evaluated at an early stage of their development, with much oftheir impact still to be realised.

The evaluations of the area programmes listed additional gross and particularly net future potentialoutputs:

the regeneration elements of the London Riverside area programme are expected to create 5businesses, support 56 businesses, remediate 77 hectares of land, create 136,000 m

2of business

floorspace and create 10 skills outputs; and

the regeneration elements of the Woolwich/North Bexley area programme are expected to create44.84 gross and net hectares of remediated land and 3,565 gross and net housing units.

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


Table 113: Outcomes from LDA evaluated regeneration through physical infrastructureinterventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Achieved

GVA

(annual,

£m)

Future

potential

GVA

(annual,

£m)

Achieved

GVA

(cumulative,

£m)

Future

potential

GVA

(cumulative,

£m)

Achieved &

future

potential

GVA

(cumulative,

£m)




Woolwich/North

Bexley26.8 - - 53.0 237.0 290.0


Bernie Grant Centre 3.3 - - - - -

Rich Mix Centre 5.8 - - - - -

Laban Dance Centre 2.9 - - 3.0 34.0 37.0


Visit London 45.8 - - - - -

Total 248.1187

- - 262.5 1,613.8 1,876.3


Notes: (i) The London Riverside, Wembley/Park Royal and Woolwich/North Bexley spend and GVA figures listed in

the table are for the entire programme. The expenditure on the regeneration elements of the programme

was: London Riverside £58.8m, Wembley/Park Royal £62.2m, Woolwich/North Bexley £22.8m


(iii) Visit London estimates the “total economic benefit to London”, by multiplying the net number of

additional consumers who visited London or extended their stay due to VL activity by the total spend per

visit. These “incremental spend” figures are added together to produce a figure for total economic benefit of

£880m. The measurement of benefit is different to the GVA measures adopted in other evaluations and is

therefore not presented in the table. However, the methodology VL employed is used by all regional tourism

agencies and is approved by HM Treasury.

The evaluation evidence suggests that the LDA’s investment of £248m has resulted in achievedcumulative GVA impacts of £263m, with the potential to rise to a cumulative £1,876m if all potentialoutputs are achieved. The large disparity between achieved and future potential GVA for the areaprogrammes is a further indication that these interventions were evaluated at an early stage in theirdevelopment. This is also the reason why there are no GVA figures for two of the building-specificevaluations.

In addition to the impact of its project and programme spend, the LDA also influences its partners’ andstakeholders’ behaviour and performance in other ways, as demonstrated by the following StrategicAdded Value examples from the LDA’s physical regeneration evaluation evidence.


LDA’s regeneration through physical infrastructure interventions have also generated strategic addedvalue. For example, the LDA’s activities in the Wembley/Park Royal area programme were noted by theprogramme’s evaluation for providing a distinct sub-regional focus on the Wembley/Park Royal economy.

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


This was considered to have improved the public sector focus on the area and to have shifted theemphasis away from rigid geographical boundaries. As well as changing the geographical focus of otherpublic sector agencies working in the area, the LDA’s activities were also considered to have facilitatedmore and better joint working across organisational boundaries

188. The Wembley/Park Royal programme

is expected to achieve a future potential GVA to cost ratio of 7.8 to 1.

The Laban Dance Centre in Deptford is credited by its programme evaluation with helping to contribute tothe wider regeneration of a deprived area of London. This wider regeneration has resulted in positivemedia coverage and a series of wider developments in the area, some of which are directly related to theLaban Centre by its evaluation. The building itself won the Stirling Architecture Prize for RIBA

189Building

of the Year in October 2003 and has become a local landmark190

. The Laban project is expected toachieve a benefit-cost ratio of 3.6 over the lifetime of the intervention.

Source: LDA

Value for money

Table 114 considers the value for money of the LDA’s interventions from three perspectives: the GVA tocost ratio; the benefit-cost ratio (BCR); and measures of cost per unit of net output. When reviewingthese value for money figures, it is important to remember that in this table the achieved GVA to cost ratiomeasures the impacts of current outputs, whereas the BCR measures total costs and benefits over thelifetime of the project, including the expected persistent effects of benefits.

Table 114: Value for money of LDA’s evaluated regeneration through physical infrastructureinterventions (2002/03-2006/07)

2002/03-

2006/07

spend (£m)

Achieved

GVA:cost

ratio

Future

potential

GVA:cost

ratio

Cost per net

job (£)

Cost per

net

business

assist (£)

Cost per

net

business

created (£)

Area-based interventions191

London Riverside 77.7 1.6 6.3 242,000 - -

Wembley/Park Royal 85.8 - 7.8 29,873 8,409 48,163

Woolwich/NorthBexley

26.8 - 3.6 37,900 - 39,400 34,700 -


Bernie Grant Centre 3.3 - - - - -

Rich Mix Centre 5.8 - - - - -

Laban Dance Centre 2.9 - 3.6* 37,000 - -


Visit London 45.8 - - - - -

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

Notes: (i) The London Riverside, Wembley/Park Royal and Woolwich/North Bexley spend and GVA to cost figures

listed in the table are for the entire programme. The expenditure on the regeneration elements of the

programme was: London Riverside £58.8m, Wembley/Park Royal £62.2m, Woolwich/North Bexley £22.8m


(iii) Visit London measures a return on investment, calculated as the ratio of economic benefit to campaign

costs. Over the three years the figures suggest that the LDA has received a 26:1 return on its investment.


189 Royal Institute of British Architects

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

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


These results have been produced on a different basis to the GVA to cost figures in other evaluations and

are therefore not presented in the table. However, the methodology VL used for calculating economic

benefit is used by all regional tourism agencies and is approved by HM Treasury.

The LDA’s evaluated regeneration through physical infrastructure interventions have achieved acumulative GVA to cost return of 1.4 to 1 (based on an estimated cumulative GVA impact of £263m, from£193m of interventions where the evaluations have assessed cumulative GVA impacts). This is expectedto rise to 9.7 to 1 overall, including future potential outputs (based on a future potential cumulative GVAimpact of £1,876m). Achieved and expected returns are above the RDA GVA to cost benchmarks forregeneration interventions, of 0.7 to 1 and 8.0 to 1 respectively.

The three evaluated area programmes are all expected to achieve positive returns in the future.However, given the long-term nature of these interventions and their impacts, a substantial proportion ofthe benefits of these programmes are still to be realised, and the exact nature of these potential GVA tocost returns will depend on the accuracy of the number and persistence of expected future outputs.

The area programmes are expected to generally perform well against value for money benchmarks overtime. Unit cost information is generally positive, with three of the four programmes with available cost pernet job information beating the RDA benchmark of £63,271.


Table 115 summarises the performance against target of LDA’s interventions to promote regenerationthrough physical infrastructure. The evaluations of all three area programmes were broadly positive, withmany shorter-term objectives (such as remediating land and providing business/skills support) havingbeen met. However, all three were evaluated at an early stage in their lifecycle, where it was consideredto be too early to fully assess their performance against their long-term objectives. The final impacts ofthese programmes are unlikely to be known for several years.

The mixed performance against objectives of evaluations in this theme is a reflection of the early stage atwhich they were evaluated. Many of the evaluations found it too early to fully assess performanceagainst objectives at the time of evaluation.

Table 115: Performance against objectives for LDA’s evaluated regeneration through physicalinfrastructure interventions (2002/03-2006/07)


evaluations (£m)


Wembley/Park Royal 65.2 Largely met

Woolwich/North Bexley 22.8 Largely met

Laban Dance Centre 2.9 Largely met

London Riverside 58.8 Mixed

Bernie Grant Centre 3.3 Mixed

Rich Mix Centre 5.8 Mixed

Visit London 45.8 Not assessed




Rationale

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

tackle barriers to employment;

reduce disparities in labour market outcomes between groups; and to

address the impacts of concentrations of disadvantage.

The LDA’s people and skills interventions cover the work the LDA has done to provide basic skillstraining, develop workforce skills, expand higher level skills and develop programmes to deliverleadership and management skills. This section covers 11 discrete evaluations, along with elements ofthe three area evaluations. It also includes the three area interventions, which have all included anelement of skills and workforce development activity – aiming to tackle the market failures of low skills,low educational attainment and low economic activity.

There have been several programmes related to the Regional Skills Partnership (RSP) and the EuropeanSocial Fund (ESF). One of the primary drivers for these projects was to ensure greater opportunities forindividuals or groups that were perceived to be excluded or disengaged from the labour market, in orderto pursue equity and social inclusion objectives. The projects in this theme are summarised in Table 116,which shows that most expenditure took place under the skills/workforce development sub-theme.

Table 116: Summary of LDA evaluated people and skills interventions (2002/03-2006/07)


covered by

evaluations (£m)

Matching people to jobs London Riverside

Wembley/Park Royal

Woolwich/North Bexley

Thames Gateway Jobnet

3.7

8.1

2.4

1.3

Skills/workforce development Woolwich/North Bexley

LDA Opportunities Fund Round 1

ESF Co-Financing Programme

RSP Productivity Programme (non-ESF)

RSP Inclusion Programme (non-ESF)

Supporting Talent into Enterprise Project (STEP)

RSP Inclusion Programme (ESF)

RSP Productivity Programme (ESF)

On Your Marks

Migrants and Refugees Qualifications Project

Southwark Works (CRP Employment &

Enterprise)

1.2

12.9

9.5

2.3

1.8

1.6

1.5

0.9

0.6

0.3

2.8

Total 50.9



Note: (i) Woolwich/North Bexley spend is listed separately in the table but is considered jointly in theanalysis.

Impact

Table 117 summarises the achieved expenditure and key gross outputs achieved through LDA’s peopleand skills interventions. Over 33,000 gross employment support and almost 60,000 gross skillsdevelopment outputs were delivered by evaluated interventions. The majority of outputs have beencreated by skills/workforce development interventions.

Table 117: Summary of key gross outputs from LDA’s evaluated people and skills interventions(2002/03-2006/07)


covered by

evaluations (£m)

Gross jobs

created

Gross employment

support

Gross skills –

developed

Matching people to jobs

London Riverside 3.7 13 284 3,932

Wembley/Park Royal 8.1 - 3,059 -

Woolwich/North Bexley 2.4 194 576 893

Thames Gateway Jobnet 1.3 - 6,882 1,323

Skills/workforce development

Woolwich/North Bexley 1.2 - - -

LDA Opportunities Fund Round

1 (ESF and non-ESF)12.9 - 12,382 12,501

ESF Co-Financing Programme 9.5 - 3,569 4,151

RSP Productivity Programme

(non-ESF)2.3 - 73 19,774

RSP Inclusion Programme (non-

ESF)1.8 - 611 9,672

STEP 1.6 - 1,046 906

RSP Inclusion Programme

(ESF)1.5 - 3,281 3,923


(ESF)0.9 - 865 992

On Your Marks 0.6 - - 1,153

Migrants and Refugee

Qualifications0.3 - 378 96

Southwark Works (CRP

Employment & Enterprise)2.8 - - -

Total 50.9 207 33,006 59,316



(ii) Gross and net outputs from Wembley/Park Royal are not specifically broken down into IEF theme;

however, these are the overall outputs that most closely match those attributable to the People theme.

(iii) London Riverside, Wembley/Park Royal and Woolwich/North Bexley figures are regional

(iv) All London Riverside employment support outputs have been attributed to the People and Skills theme

(v) Skills outputs combine basic, general, Level 2 and Level 3 skills

(vi) Woolwich/North Bexley spend is listed separately in the table but is considered jointly in the analysis


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

Table 118 summarises the achieved expenditure and key net outputs achieved through LDA’s people andskills interventions. Over 36,000 net skills assists and 12,000 employment support outputs wererecorded. Employment support has been much more prominent in the evaluated interventions than jobcreation. Output totals and additionality levels (as measured by net outputs as a proportion of gross) arehighest for skills development.

Table 118: Summary of key net outputs from LDA’s evaluated people and skills interventions(2002/03-2006/07)


covered by

evaluations (£m)

Net jobs created Net employment

support

Net skills –

developed


London Riverside 3.7 7 146 2,058

Wembley/Park Royal 8.1 - 873 -

Woolwich/North Bexley 2.4 44 108 169

Thames Gateway Jobnet 1.3 - 783 151




1 (ESF and non-ESF)12.9 - 7,175 9,030

ESF Co-Financing Programme 9.5 - 1,090 1,380


(non-ESF)2.3 - 54 14,531


ESF)1.8 - 453 6,689

STEP 1.6 - - -


(ESF)1.5 - 1,047 1,356


(ESF)0.9 - 276 369

On Your Marks 0.6 - - 430

Migrants and Refugee

Qualifications0.3 - 245 62



Total 50.9 51 12,250 36,225



(ii) Gross and net outputs from Wembley/Park Royal are not specifically broken down into IEF theme;

however, these are the overall outputs that most closely match those attributable to the People theme.

(iii) London Riverside, Wembley/Park Royal and Woolwich/North Bexley figures are regional

(iv) Skills outputs combine basic, general, Level 2 and Level 3 skills

(v) Woolwich/North Bexley spend is listed separately in the table but is considered jointly in the analysis

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


LDA people and skills interventions delivered a range of other outputs, notably 3,965 gross and 2,795 netbusiness support outputs, of which most (3,130 gross and 2,322 net) came through the Non-ESFOpportunities Fund Round 1 programme.

The evaluations of two of the area programmes listed additional gross and net future potential outputs:

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

the people and skills elements of the Woolwich/North Bexley area programme are expected to create340 gross and 68 net general skills assists.

Table 119 summarises the outcomes of LDA’s people and skills interventions. The evaluation evidencesuggests that the LDA’s investment of £51m has resulted in cumulative GVA impacts of £56m, with thepotential to rise to £73m if all potential outputs are achieved. The additional future potential impact isexpected to occur in two of the LDA’s area programmes, which were evaluated at an early stage in theirdevelopment. The LDA Opportunities Fund has made the single biggest contribution to GVA.

Table 119: Outcomes from LDA evaluated people and skills interventions (2002/03-2006/07)


(£m)

AchievedGVA

(annual,£m)

Futurepotential

GVA(annual,

£m)

AchievedGVA

(cumulative,£m)

Futurepotential

GVA(cumulative,

£m)

Achieved &future

potentialGVA

(cumulative,£m)




Woolwich/NorthBexley

3.6 - - - - -

Thames GatewayJobnet

1.3 - - - 3.8 3.8


LDA/ESF Co-financing Programme

9.5 - - 6.7 - 6.7

ESF RSP Productivity 0.9 - - 1.1 - 1.1

Non-ESF RSPProductivity

2.3 - - 1.9 - 1.9

STEP 1.6 - - - - -

ESF RSP Inclusion 1.5 - - 4.2 - 4.2

Non-ESF RSPInclusion

1.8 - - 1.8 - 1.8

ESF OpportunitiesFund Round 1 (ESFand non-ESF)

12.9 - - 27.9 - 27.9

Refugee and MigrantQualifications

0.3 - - 0.5 - 0.5

On Your Marks 0.6 - - 1.0 - 1.0

Southwark Works(CRP Employment &Enterprise)

2.8 - - - - -

Total 50.9 - - 56.4 16.5 72.9



Note: Overall London Riverside, Wembley/Park Royal and Woolwich/North Bexley GVA figures are presented

under Physical Regeneration

In addition to the impact of its project and programme spend, the LDA also influences its partners’ andstakeholders’ behaviour and performance in other ways, as demonstrated by the following StrategicAdded Value examples from the LDA’s people and skills evaluation evidence.


The LDA’s people and skills interventions are also considered to have generated strategic added value.For example, the Wembley/Park Royal evaluation reports that the LDA’s funding had improved thelinkages and partnership working between the Wembley Stadium development and Brent Council’s Brentin2Work programme, which had stimulated activity in the area and helped local people to gainemployment at Wembley Stadium

192.

The Opportunities Fund programme has supported projects that have allowed mainstream deliveryorganisations to develop innovative approaches to tackling labour market skills and training issues.These organisations have aimed to address inequalities in local labour markets through supporting localand community-based organisations. The evaluation shows that the Fund has played a significant role indeveloping the capacity of local community organisations.

193

Source: LDA

Value for money

Table 120 considers the value for money of the LDA’s interventions from three perspectives: the GVA tocost ratio; the benefit-cost ratio; and measures of cost per unit of net output. When reviewing these valuefor money figures, it is important to remember that in this table the achieved GVA to cost ratio measuresthe impacts of current outputs, whereas the BCR measures total costs and benefits over the lifetime ofthe project, including the expected persistent effects of benefits.

Table 120: Summary of GVA outcomes from LDA evaluated people and skills interventions(2002/03-2006/07)


covered by

evaluations (£m)

Achieved

GVA:cost ratio

Benefit-cost

ratio

Cost per net skills

assist


London Riverside 3.7 - - 900 - 4,000

Wembley/Park Royal 8.1 - - -


Thames Gateway Jobnet 1.3 3.6 6.9 7,173

Skills/workforce development194

Woolwich/North Bexley 1.2 - -


1 (ESF and non-ESF)12.9

ESF 1.0

Non-ESF 0.7

ESF 2.2

Non-ESF 1.8

ESF

8,186 - 42,853

Non-ESF

15,128 - 25,577

ESF Co-Financing 9.5 1.1 2.7 18,403 - 31,412


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

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



covered by

evaluations (£m)

Achieved

GVA:cost ratio

Benefit-cost

ratio

Cost per net skills

assist


(non-ESF)2.3 0.7 1.2 1,211 - 23,853


ESF)1.8 0.7 1.1 6,571 - 26,077

STEP 1.6 - - -


(ESF)1.5 1.7 2.2 13,803 - 36,662


(ESF)0.9 0.8 1.2 18,410 - 26,642

On Your Marks 0.6 0.6 1.4 16,937

Refugees and Migrants

Qualifications0.3 1.5 2.2 49,614 - 793,832



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

Notes: (i) Overall London Riverside, Wembley/Park Royal and Woolwich/North Bexley GVA figures are presented

under Physical Regeneration

(ii) Potential figures for London Riverside and Wembley/Park Royal include achieved

(iii) No net unit cost information available

The LDA’s evaluated people and skills interventions have achieved a cumulative GVA to cost return of1.3 to 1 (based on an estimated cumulative GVA impact of £56m, from £43m of interventions where theevaluations have assessed cumulative GVA impacts). This is expected to rise to 1.7 to 1, including futurepotential outputs (based on an expected future potential cumulative GVA impact of £73m). The achievedreturn is above the RDA GVA to cost benchmark of 0.9 to 1 but the expected return is below the RDAbenchmark of 2.5 to 1.

The LDA’s people and skills projects have achieved mixed returns to date, with many current GVA to costratios near or below 1 to 1. As evidenced by the benefit-cost ratios, all projects are expected by theirevaluations to eventually achieve returns above 1 once all benefits and their expected persistence aretaken into account. The GVA to cost returns achieved have generally been relatively similar to the RDAGVA to cost benchmark for people and skills interventions of 0.9 to 1, although three projects achievedreturns well above the benchmark. Net unit cost information was only available for two interventions; theunit cost of net skills assists is below the RDA benchmark of £1,960 for the London Riverside programmebut is above it for the Thames Gateway Jobnet programme. In contrast, the gross unit cost figuresavailable for skills assists in other people and skills interventions do not compare well to the benchmark.


Table 121 summarises the performance against target of LDA’s people and skills interventions. Allassessed interventions were considered to have achieved a mixed performance. The three areaprogrammes were evaluated at an early stage in their lifecycle but the Woolwich/North Bexley areaprogramme’s efforts to match people to jobs were considered to have been successful.

Other programmes were considered to have successfully reached target beneficiaries but were still toachieve their overarching goals. Similarly, many other evaluations considered it to be too early to assessoverall progress, with initial objectives met but longer-term objectives still ahead.


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

Intervention Expenditure covered


Performance against

objectives

Woolwich/North Bexley (people and skills elements) 3.6 Met

ESF Co-Financing Programme 9.5 Largely met

LDA Opportunities Fund Round 1 (ESF and non-ESF) 12.9 Largely met

RSP Productivity Programme (ESF) 0.9 Largely met

London Riverside (people and skills elements) 3.7 Mixed

Wembley/Park Royal (people and skills elements) 8.1 Mixed

Thames Gateway Jobnet 1.3 Mixed

RSP Productivity Programme (non-ESF) 2.3 Mixed

RSP Inclusion Programme (non-ESF) 1.8 Mixed

STEP 1.6 Mixed

RSP Inclusion Programme (ESF) 1.5 Mixed

On Your Marks 0.6 Mixed

Migrants and Refugees Qualifications 0.3 Mixed

Southwark Works (CRP Employment & Enterprise) 2.8 Not assessed



The evidence of LDA’s impact on other interventions covers £507.8m of spend from 2002/03-2006/07 onthe Single Regeneration Budget (SRB) programme – 46% of LDA’s overall relevant spend. The SRBevaluation evidence comes from a meta-evaluation of the SRB programme, which focused on SRBRounds 3 to 6 on the basis that the RDAs were most effectively able to influence these later Rounds.

SRB was a multi-faceted regeneration programme that delivered a diverse range of business, physicalregeneration and people and skills interventions. It sought to simplify and streamline regenerationfunding and to promote a new way of tackling the problems faced by disadvantaged communities. SRBwas launched in 1994 and the LDA took over responsibility for the programme from the GovernmentOffice for London in 2000.

The overall aim of the SRB programme was “to enhance the quality of life of local people in areas ofneed, by reducing the gap between deprived and other areas, and between different groups”

195. Beneath

this, a core set of common objectives underpinned the SRB throughout its six Rounds:

improving the employment prospects of local people;

encouraging economic growth;

reducing crime;

improving housing; and

protecting and enhancing the environment.

195Department for Communities and Local Government’s SRB website – Background and Overview: see

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


The rationale for SRB centred on the Government’s desire to tackle social exclusion and promote equalityof opportunity. The focus of support was on the most deprived communities in England, with the aim ofreducing the gap between these areas and the rest of England, and between different groups in society.

Across the six Rounds of SRB 244 schemes were funded in London, of which 154 schemes were fundedin Rounds 3 to 6. The LDA’s funding patterns reflected the region’s levels of deprivation, as measured bythe Index of Multiple Deprivation. East London received the most funding across Rounds 3 to 6, followedby Central London. South London received the least amount of funding.

Impact

SRB schemes delivered a wide range of outputs, of which the key Tasking Framework-related gross andnet outputs are listed in Table 122. The table illustrates that the SRB programme delivered substantialnumbers of gross and net outputs, particularly in relation to job creation and skills development. Levels ofadditionality were relatively consistent across the output categories, with skills assists showing thehighest additionality.

Table 122: Achieved outputs from the London SRB programme (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Gross jobs

created/

safeguarded

Gross

skills

developed

Gross

businesses

created

Gross land

reclaimed/

redeveloped (ha)

Gross outputs 507.8 43,981 61,187 3,598 78

Net outputs 507.8 18,333 34,265 1,583 38


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

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

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

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

203,446 m2

gross and 91,551 m2

net of new business/commercial floorspace was created;

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

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

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

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

Neither the SRB meta-evaluation nor the individual scheme evaluations provide a quantitativeassessment of the interventions’ net impact on GVA. An indication of the potential scale of the impact onGVA can be gleaned by considering the contribution of the jobs created and safeguarded to GVA.Assuming that each job generated in London contributes the average GVA per worker (£54,812

196), then

this would imply that the SRB programme in London will have added £1,004.9 million to London’seconomy over its existence. Such an estimate, however, does not take into account the likelypersistence of each job (i.e. for how many years the job is sustained), nor does it take account of any

196Regional Trends 40, National Statistics


other impacts which may have contributed to the region’s economy. For example, if every job createdwas assumed to last for three years, the GVA impact of the programme would rise to £3,014.6 million.


One of the more tangible strategic added value impacts of SRB funding was the external moneyleveraged by SRB funds. Table 123 highlights the levels of private and public sector funding generatedby SRB, based on £283m of scheme evaluations reviewed in the meta-evaluation that contained leverageinformation. This spend of £283m leveraged £293m of private sector money and £449m of public sectormoney, at an overall leverage ratio of 2.62 to 1. Not all of this funding will have been additional; there isevidence that much of the public sector funding would have been spent anyway, although perhaps notalways within the same geographies or in tackling the same issues as SRB sought to address. It isdifficult to know the extent to which SRB skewed the geography of public sector intervention.

Table 123: SRB leverage (£m) from the London SRB programme (2002/03-2006/07)

SRB spend Private sector funding Other public sector

funding

Leverage ratio (SRB spend:

private sector and other public

sector funding)

282.9 293.0 449.2 1:2.62


Some scheme evaluations concluded that SRB funding played an important catalytic role in gettingpartners talking. For some schemes there was a genuine sense that the multi-faceted nature of theproblems meant that they could not have been addressed without the partnership approach funded bySRB. The London SRB programme contained a number of pan-London programmes which attempted todeliver more strategic interventions across the city.

Some schemes and projects became self-sustaining before the end of SRB funding, such as theFinspace development in Finsbury Park. As well as being home to the Finfuture partnership thatdeveloped out of the SRB programme, it provides meeting and office space which help to pay for itsongoing running costs. The Finspace centre is still running today.

Value for money

Neither the SRB meta-evaluation nor the underlying scheme evaluations provide an analysis of the valuefor money of the SRB programme. However, from our calculations of the SRB programme’s GVAimpacts, based on the net jobs totals reported in the SRB meta-evaluation, we estimate the SRBprogramme generated a GVA to cost return of 2.0 to 1 (based on a GVA return of £1,004.9 million fromprogramme costs of £507.8m).


Table 124 indicates how London’s SRB schemes performed against their “core” output targets. Twotargets were exceeded, one was virtually met and three were below target.


Table 124: Performance against targets for “core” LDA outputs in the SRB programme (2002/03-2006/07)

Output Regional performance (% of target achieved)

Number of jobs created 96

Number of jobs safeguarded 125

New businesses at 12 months 108

Brownfield land remediated (ha) 77

People assisted in skills development 70

Number of community enterprise start-ups 82


National programmes

Besides its own projects and programmes, the LDA has been responsible for the management anddelivery of seven national programmes which have been delivered by the LDA within parameters closelydefined by central government departments. Of these programmes, one, the London ManufacturingAdvisory Service (LMAS), has been evaluated. The results are set out in Table 125 below.

Table 125: Summary of findings from LDA evaluation of LMAS (July 2005 to June 2008)

Gross Impact Jobs created 346

Businesses retained and/or expanding 381

Businesses supported 1,950

Jobs safeguarded around 900

Cost savings £23m

6% of increase in manufacturing GVA attributed to LMAS

Value for money Cumulative achieved GVA: cost ratio is 1.6

Performance against

objectives

LMAS has delivered sustainable results: one-third of surveyed businesses expected to

benefit indefinitely and over half expected benefits to be sustained for up to 5 years

LMAS has addressed the key causes of market failure

93% of MAS users would recommend MAS services to others

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

their experiences with MAS



North West Development Agency

Summary

Overview

Since its establishment in 1999, NWDA has spent approximately £2.3bn between 1999/00 and2006/07 on a range of interventions designed, individually or combined, to stimulate businessdevelopment and competitiveness, promote regeneration through physical infrastructure, andenhance employability and skills.

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

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

Impact

The evaluations show that NWDA has generated significant outputs already:

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

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

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

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

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

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

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

Value for money

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

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


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


Context

Overview of the North West of England

The North West consists of the two metropolitan areas of Greater Manchester and Merseyside and thethree counties of Cheshire, Cumbria, and Lancashire. The region stretches 250km from the Scottishborder in the North to the Dee estuary and the Welsh border in the South and is bounded on the West bythe Irish Sea and on the East by the Pennine hills. Some 80% of the region is rural, agricultural or openwoodland, yet four-fifths of the population live in urban areas, with 60% living in Liverpool andManchester. In 2006 the North West had a population of 6.9 million, a decrease of 1.3% since 1981

197.

Population density was highest in Blackpool with 4,088 people per square kilometre in 2006. Liverpooland Manchester also had high population densities with 3,899 and 3,908 people per square kilometrerespectively.

The North West of England’s residence-based gross value added (GVA) has risen from £81.4m in 1999to £111.2m in 2006, which makes it the third largest regional economy in the UK. Regional GVA perhead (calculated on a residence basis) has risen from £12,018 in 1999 to £16,234 in 2006

198. In 2006,

the GVA per head in the North West stood at 87% of the UK average. Each sub-region differs in terms ofGVA performance, and thus gaps exist not only between the North West region and the UK as a whole,but also at a sub-regional level.

The region has a strong service sector, and is home to the largest media hub outside of London, whilstalso retaining a strong presence of manufacturing employment, with the largest concentration ofadvanced manufacturing and chemicals production in the UK

199. However difficulties exist in terms of

levels of innovation activity, as the North West is recorded as having one of the lowest levels ofinnovation activity amongst its enterprises in the UK, with only those in Yorkshire and Humber andScotland being at a lower level

200.

Recent labour market data covering the period March to May 2008 indicates that the employment rate ofworking age people in the region (72.5%) is slightly below the UK average (74.9%)

201. The structure of

employment is broadly similar to that of the UK with the largest sources of employment being the publicsector (28.2%), distribution, hotels and restaurants (23.4%) and banking, finance and insurance (20%).The unemployment rate was 5.3% at March 2007

202, which was slightly lower than the English average

(of 5.6%).

As in the rest of the UK the current North West population of 6.9 million is ageing. It is estimated that by2031, the population of the region will have grown to 7.7 million, with 22% of this group over 65 years old(4% will be over 85% years old)

203. Cultural diversity in the region is also increasing with a growing black

and ethnic minority population – it is expected that this group will grow from 7.2% of the total North Westpopulation in 2006 to 9.7% by 2032. However this varies on a sub-regional basis, with GreaterManchester being the most ethnically diverse and Cumbria the least diverse.

197 National Statistics (2005) online.

198 National Statistics (online) Regional Gross Value Added (GVA) accessed via

http://www.statistics.gov.uk/statbase/Product.asp?vlnk=14650

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

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

201 Economic and Labour Market Review

202 National Statistics (2007) Economic and Labour Market Review – March 2007 Edition [online]

http://www.statistics.gov.uk/elmr/03_07/2.asp

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


NWDA’s purpose and strategy

As a business-led organisation204

, NWDA provides a crucial link between the needs of business andGovernment policies. As such, it is responsible for helping to create an environment in which businessesin the region can flourish through offering business support, encouraging new start-ups, matching skillsprovision to employer needs and bringing business investment into the region.

To date NWDA has assisted in the development of three Regional Economic Strategies (RESs) for theNorth West of England in 2000, 2004 and 2006.

The prime focus of this impact evaluation is in relation to the 2006 RES. The overarching vision outlinedin the 2006 RES was for the North West of England to become: “a dynamic, sustainable internationaleconomy which competes on the basis of knowledge, advanced technology, and an excellent quality oflife for all”. The 2006 RES identified three major drivers to achieving the strategy’s vision which are to:

improve productivity and grow the market;

grow the size and capability of the workforce; and

create and maintain the conditions for sustainable growth.

From these three drivers, the RES identifies 45 transformational priorities to meet the opportunities andchallenges of the next ten years and to close the economic gap with the rest of England.

NWDA’s new RES is currently under development and will be published in 2010. This RES will be a newand clear strategic investment framework for the region which builds on the learning gained in theprocess of developing the RES 2006, the Regional Spatial Strategy and Partial Review and the RegionalHousing Strategy. The current plans for the 2010 RES will be to:

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

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

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

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

NWDA’s current Corporate Plan covers the period 2008/09 to 2010/11. It replaces the previousCorporate Plan covering the period 2005/06 to 2007/08. The Corporate Plan for 2005/06 to 2007/08 builtupon the RES through focussing on those elements in which the Agency can take the lead in terms ofinfluence, initiation and implementation. The Plan was also target driven, in that it is based around thedelivery of a set of Tasking Framework outputs from BERR. The new Plan for 2008/09 to 2010/11 setsout the next stage of NWDA’s development, enhancing its strategic and commissioning role anddelegating delivery and project decision making to sub-regional and local organisations as appropriate. Italso sets out how the Agency will continue to deliver the RES; contribute to delivery of the regionalgrowth objective and the Government’s Regional Economic Performance Public Service Agreement (REPPSA); and implement new responsibilities and duties arising from the Comprehensive Spending Reviewsettlement and Review of Sub-National Economic Development.

205

The new RDA Tasking Framework came into effect in April 2005. This framework was aimed at ensuringRDAs work on regional priorities in a way that serves national interests most effectively. The TaskingFramework required each RDA to show in its Corporate Plan for 2005-08 how, in support of its statutory

204 NWDA (2007) Delivering for the Region, pp1.

205 HM Treasury (2007) Review of Sub-National Economic Development and Regeneration.


role and responsibilities, it would address the priorities identified in the RES for its region and contributeto the delivery of Government’s relevant PSA Targets through the delivery of a series of ‘core outputs’.

Key outputs arising from NWDA’s interventions cover: jobs created or safeguarded; people assisted toget a job; new businesses created and surviving 12 months; businesses assisted to improve theirperformance; businesses assisted via collaboration with the UK knowledge base; public and privateregeneration investment levered; hectares of brownfield land reclaimed and redeveloped; and skillsassists. These core outputs help to shape investment decisions in the region, and projects are appraisedon their ability to deliver against these core output areas. Monitoring of these core outputs allows theAgency to assess the delivery of Corporate Plan and RES objectives.

NWDA is increasingly seeking to deliver its objectives through working with a range of partners, includinglocal delivery vehicles at both regional and sub-regional levels. In addition, some of its goals areaddressed through multi-regional working across the North of England through the Northern Way GrowthStrategy, specifically with the RDAs in the North East and Yorkshire and the Humber regions (ONE andYorkshire Forward).

Besides the impact of its project and programme spend, NWDA also influences its partners’ andstakeholders behaviour and performance in other ways. This ‘Strategic Added Value’ (SAV) is seen as akey element of NWDA’s impact. Indeed, the policy framework that led to its establishment was designedto enable NWDA to harness national, regional and local institutions in order to exploit the region’sindigenous strengths and tackle particular weaknesses, and to provide the environment for businessesand communities to maximise their potential through reforms that strengthen the key drivers ofproductivity and growth.

NWDA’s profile

The Agency’s total expenditure between its establishment and 2006/2007 was £2.3 billion. The reportfocuses on understanding the impact of NWDA’s spending on interventions in the ‘relevant period’between 2002/03 and 2006/07 which covered a total of £1.5 billion: thus, it focuses less on thoseprogrammes and projects which NWDA inherited from its predecessors

206. The Agency’s relevant

expenditure (i.e. the project and programme expenditure by NWDA in the period between 2002/2003 and2006/2007 other than on national programmes and administration which is the focus of recent evaluationactivities) can be analysed between four categories: the three IEF themes of business, place and peopleand an ‘other’ category that covers projects or programmes which span more than one theme.

Table 126 analyses the Agency’s total relevant expenditure. It shows that the Agency’s total expenditurehas increased in each of the past three years. Between 2002/03 and 2006/07, most of the Agency’sexpenditure falls within the theme of regeneration through physical infrastructure interventions,accounting for over 40% of total agency expenditure on programme interventions in the period from2002/03 to 2006/07. Expenditure within the business competitiveness theme and the “other” theme eachaccount for approximately a quarter of total expenditure, whilst spend in the people and skills themeaccounts for approximately 8% of total spend.

Table 126 also provides a breakdown of NWDA’s overall spend per annum from 1999/2000 to 2006/07between the three broad intervention categories outlined in the IEF and on national programmes.Administrative costs have not been included in this analysis, as this data was not available.

As Table 126 shows, more of NWDA’s expenditure has been devoted to place interventions than topeople or business interventions. It is also evident that NWDA’s spending priorities have changed sinceits establishment, with an overall trend of increasing expenditure devoted to people interventions in thelater years, and some increase in the amount devoted to business interventions (peaking in 2004/05).

Since its establishment, NWDA has spent £2.3bn on interventions (excluding administration), of which£1.5bn was spend on programmes which were established and developed by NWDA (rather than

206 The exception here is the SRB programme, a legacy programme, which has recently been evaluated to assess the impact of

RDA spending.


national programmes207

) in the ‘relevant period’ and is, thus, the primary focus of this report (see shadedarea in Table 126).

Table 126: Analysis of NWDA’s spend by year and by category of expenditure (£m)208


programmes

Admin Total209

1999/00 153.9 24.4 153.9

2000/01 162.8 20.1 162.8

2001/02 278.9 22.7 278.9

2002/03 21.9 113.1 0.5 47.7 7.0 11.9 183.2

2003/04 62.6 124.3 13.7 101.9 39.2 47.7 302.6

2004/05 106.2 74.9 24.0 70.5 51.6 47.7 275.6

2005/06 99.5 129.2 29.3 75.6 60.6 47.1 333.5

2006/07 66.6 198.7 55.8 53.9 69.8 47.9 374.9

Total

relevant

spend

(2002/03–

2006/07) 356.7 640.1 123.4 349.6 228.2 269.6 1,469.7

Source: PwC analysis based on NWDA evaluation evidence

Table 127 summarises NWDA’s spend covered by the usable evaluation evidence. The evidence for theimpact of NWDA’s spending, therefore, draws on 65 evaluations covering £933.2m of NWDA’sprogramme spend over the ‘relevant period’ which are consistent with the requirements of the IEF. Thisprovides a robust evidence base upon which NWDA’s impact can be assessed. Annex D provides a listof the evaluations used. The level of coverage varies across the intervention categories.

NWDA’s total spend has increased each year from 2002/03 to 2006/07 (with the exception of 2004/05,where expenditure was £27m less than in the previous year). Whilst spend on business interventionspeaked in 2004/05, spend on people and skills interventions has increased consistently since 2002/03through to 2006/07. Spending on place and other interventions has been more variable, with less havingbeen spent on place interventions in 2004/05 compared with other years, whilst most was spent on otherinterventions in 2003/04.

207 This figure rises to £1,471.8m when SRB programmes are included.

208 In some instances, figures shown may not add to total due to rounding.

209 Total spend excludes that on national programmes and administration spend.


Table 127: Analysis of NWDA’s expenditure covered by IEF compliant evaluations (2002/03-2006/07)

210


evaluations (£m)

% of spend Number of evaluations

Business 245.8 69% 29

Place 313.1 49% 21

People 29.5 24% 6

Other 344.8 99%211

9

Total 933.2 63.5% 65

Source: PwC analysis

For those interventions which have been categorised in the ‘Other/hybrid’ theme, it should be noted thatthe objectives and outputs / outcomes of these interventions span a number of themes and sub-themes.For the purposes of analysis and comparison, however, each intervention and its associated outputs /outcomes, have been classified into this category due to the multiplicity of their objectives, outputs andoutcomes, rather than repeating evaluation evidence within each of the business, place and peoplesections.

Key findings

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

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

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

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

Impact

The majority of NWDA’s evaluations covered in this report have estimated net outputs on the basis of thegross outputs. These have been presented as outputs achieved and future potential outputs. The ‘core’gross and net outputs are summarised in Table 128.

210 Table 2 shows the spend between 2002/03 and 2006/07 which was covered by evaluations. This can be compared with the data

in Table 1, which shows the total spend under each theme by NWDA. For example, NWDA spent a total of £358.7m on business

interventions in the relevant period, and of this amount, £203.8m has been covered by evaluations

211 The figure quoted for percentage of spend covered by evaluations under the theme of other is larger than the amount of spend.

This is because, for the purposes of comparison, a number of evaluations which span two or more themes or sub-themes have

been presented within this section. Therefore, some of the projects within this theme will have outputs and outcomes closely

aligned to those in the themes of business, place and people. Funding and consequent outputs and outcomes have only been

illustrated within the other theme to ensure that these are not double-counted.


Table 128: Gross and net attributable NWDA outputs (2002/03–2006/07)

Jobs

created/

safeguarded

Businesses

created

Businesses

assisted

Brownfield

land (ha)

Skills assists




Additionality %, achieved 53.4 51.1 46.8 100 17.6

Future potential gross outputs 1,759 - - - -

Future potential net outputs 1,759 - - - -

Additionality %, future potential 100% - - - -




Additionality %, achieved 33.5 28.1 42.1 65.9 64.6

People and skills

Gross outputs achieved 2,267 94 276 - 5,146

Net outputs achieved 1,647 65 195 - 3,239

Additionality %, achieved 72.7 69.1 70.7 - 62.9

Other

Gross outputs achieved 65,712 3,077 5,055 1,834.5 77,591

Net outputs achieved 26,706 1,310 2,135 803.4 40,717

Additionality %, achieved 40.6 42.6 42.2 43.8 52.5

Total

Gross outputs achieved 97,837 3,532 14,265 1,914.5 97,259

Net outputs achieved 40,794 1,530 6,466 868.4 48,229

Additionality %, achieved 41.7% 43.3% 45.3% 45.4% 49.6%





NWDA’s spending has created/safeguarded jobs, assisted and helped to create new businesses,assisted people in skills development and remediated brownfield land. A large proportion of theseoutputs have already been achieved. However, a number of outputs are potentially to be achieved in thefuture. These are predominantly related to jobs created by business interventions. All of these futureoutputs are subject to varying degrees of uncertainty and should, as such, be treated with caution.

The level of additionality resulting from NWDA’s business interventions varied by intervention and outputtype. Outputs in relation to jobs created/safeguarded had the highest level of additionality (53%), whilstpeople assisted with skills was the output with the lowest level of additionality within this theme (18%).For the Physical Regeneration interventions, the creation of new floorspace had the highest level ofadditionality (71%), whilst outputs in relation to jobs created/safeguarded displayed the lowest level ofadditionality (34%). For People and Skills interventions, three of the output areas had additionality levels


of above 70% - these were for jobs created/safeguarded (73%), people assisted into employment (72%)and businesses assisted (71%).

When comparing additionality achieved by NWDA, business interventions have higher levels ofadditionality than the national averages. For example, in NWDA, additionality for jobs within the Businesstheme was 53%, whilst at the national level was 48%. Similarly for businesses created, additionalitywithin NWDA stood at 51% (compared with 40% nationally) and for business supported was 47% withinNWDA (compared with 35% nationally). For regeneration through physical infrastructure interventions,levels of additionality within NWDA were slightly lower than the national average for jobs created (33% inNWDA compared with 45% nationally) and were also lower for brownfield land (66% within NWDA and73% nationally). For people and skills interventions, additionality within NWDA was higher for jobs73% within NWDA compared with 48% nationally) and for skills assists (63% within NWDA comparedwith 62% nationally), although additionality was lower for business creation (69% within NWDA comparedwith 82% nationally). Within the theme of other interventions, the additionality of interventions deliveredby NWDA was lower for both jobs (41% within NWDA compared with 49% nationally) and businessescreated (43% within NWDA compared with 51% nationally).

In Table 129 we set out those measures that have been produced in order to demonstrate the range ofoutcomes from those evaluations with GVA estimates.

Table 129: Outcomes from the evaluation of NWDA’s interventions (2002/03-2006/07)

Expenditure

covered by

evaluations (£m)

Achieved GVA

(annual, £m)

Future potential

GVA

(annual, £m)

Achieved &

future potential

GVA (annual,

£m)


East Manchester Economic

Programme2.2 11.2 15.6 26.8

FP6 Dissemination Module 2 1.0 27.2 - 27.2

Salford Start 2 Centre Managed

Workspaces0.6 0.3 - 0.3

Social Enterprise 5.2 4.2 24.4 28.6

Agenda for Change 9.8 42.5 - 42.5

Bio Core Technology Facility 10.9 5.5 - 5.5

Bio Investments 10.1 5.0 - 5.0

Clusters Programme 25.9 45.5 22.9 68.4

ICT Aimes Project 3.4 5.5 - 5.5

Infolab 21 10.0 7.2 - 7.2

Lancashire Digital Technology

Centre2.0 0 - 0

Liverpool Digital Project 16.2 10.2 - 10.2

National Biomanufacturing Centre 31.7 2.4 30.8 33.2

Regional Rural Programme 6.8 8.3 7.5 15.8

Broadband Investments 12.3 26.0 - 26.0

Daresbury Science and Innovation

Campus16.3 0.5 0.5 1.0

Higher Education Initiative Funds

(HEIF2)7.4 3.0 - 3.0


Expenditure

covered by

evaluations (£m)

Achieved GVA

(annual, £m)

Future potential

GVA

(annual, £m)

Achieved &

future potential

GVA (annual,

£m)

Supply of Defence Diversification

Agency Technology Diversification

Managers

(DDA TDMs)

1.7 17.8 - 17.8

Motivating Merseyside Business

to Innovate (MMBI)1.2 11.5 - 11.5

Liverpool Science Park 6.2 0.1 0.5 0.6

Project Access 16.8 38.2 - 38.2

The North West Science Fund 11.5 1.5 - 1.5

Infrastructure work at Arvato

Gravure Printing Site, Speke2.7 33.6 5.8 39.4

Quinn Glass, former Ince Power

Station4.9 68.0 - 68.0

BREW Programme 1.5 3.8 - 3.8

Green Business Park Project 0.8 0.9 - 0.9

ENWORKS NW Minimisation

Project1.0 0.2 - 0.2

NW Business Investment Funds 11.6 5.3 61.6 66.9

PowderJect Project 14.1 5.0 - 8.0 - 5.0 – 8.0

Sub-total (Business) 245.8 390.4-393.4 169.6 560.0 – 563.0


Ancoats Regeneration

Programme45.0 27.2 - 27.2

Barrow Call Centre 3.5 8.0 - 8.0

Futures Park, Bacup 3.1 1.5 - 1.5

George Street Quarter, St. Helens 1.3 - - -

Kingsway Project, Widnes 0.8 1.0 - 1.0

Liverpool Commercial District 7.4 48.5 - 48.5

The Regional Strategic Sites

Programme55.5 179.3 - 179.3

Whitemoss Business Park 3.9 7.5 - 3.9

Historic River Wall, Chester 0.8 - - -

Land Reclamation 17.3 1.6 - 1.6

LV Public Realm Interim 19.3 - - -

Liverpool Biennial International

Festival0.5 - - -

LV Waterfront Construction

Impacts38.0 - - -

Regional Marketing Programme 16.3 119.1 - 119.1


Expenditure

covered by

evaluations (£m)

Achieved GVA

(annual, £m)

Future potential

GVA

(annual, £m)

Achieved &

future potential

GVA (annual,

£m)

NML Into the Future 1.8 0.3 - 0.3

Tourism Interim 8.4 - - -

Visitor Interim 12.2 4.5 - 4.5

World of Glass 0.9 1.4 - 1.4

Central Park 15.0 8.7 - 8.7

Liverpool Land Development

Company SIA (LLDC SIA)30.3 16.2 - 16.2

West Lakes Renaissance 31.8 10.7 65.3-79.7 76.0 – 90.4

Sub-total (Regeneration) 313.1 435.5 65.3-79.7 500.8 – 515.2

People and skills

BESS Programme 0.9 5.3 - 5.3

Maximising opportunity in

Warrington0.7 0.6 - 0.6

Project Unity 20.0 46.7 - 46.7

URC NEM Whitworth Media

Technology Centre2.0 0.3 - 0.3

Lancaster University Leadership

Centre4.4 3.8 - 3.8

Eastserve project 1.5 0.3 - 0.3

Sub-total (People and Skills) 29.5 57.0 - 57.0

Other

SRB 321.9 808.7 - 808.7

Halton Focus for Change (Round

5)9.1 9.3 - 9.3

Hyndburn PACT (Round 6) 6.5 8.7 - 8.7

Beacons East Manchester (Round

5)19.2 13.0 - 13.0

Blackburn Town Centre

Renaissance (TCR) Programme5.4 9.2 - 9.2

Cheshire Rural Recovery

Programme6.5 6.3 - 6.3

Lancashire Rural Recovery

Programme7.0 7.4 - 7.4

Sefton Village Partnership 0.8 2.5 - 2.5

West Lancashire Investing in

Business Programme3.2 2.3 - 2.3

Sub-total (Other) 344.8 867.4 - 867.4



Finally, Strategic Added Value is a key element of NWDA’s impact, as illustrated in Box 1. Examplesshown here have been drawn from the evaluation evidence base, demonstrating the additional impactswhich have been delivered by NWDA, over and above the gross and net outputs and outcomes whichhave been quantified in this section.

NWDA’s Strategic Added Value

Besides the impact of its project and programme spend, NWDA also influences its partners’ andstakeholders’ behaviour and performance in other ways as demonstrated by the following examples:

The Quinn Glass project within the Business theme, which illustrated strategic leadership in attractingan international company to the North West region, and levering funding from other partners tosupport this intervention;

The Bio Core Technology Facility project within the Business theme, in which NWDA enabled thecreation of synergies by promoting the facility within the regional bioscience sector;

The Regional Strategic Sites Programme, in which NWDA levered substantial funds and other in-kindresources from other organisations to enable this project to move forward, whilst also engaging withstakeholders through the project team structure;

The URC NEM Whitworth Media Technology Centre project, whereby intervention by NWDA has hada catalytic effect in the remodelling of a campus nearby, whilst also raising the profile of the Centrethrough engagement with suppliers and local companies;

The West Lancashire Investing in Business Programme, where the strategic influence of NWDA hasensured that the project adopted a coherent approach, and that synergies were achieved throughinvolvement with other similar projects in the area; and

Blackburn Town Centre Renaissance project, whereby the strategic leadership of NWDA has stronglyinfluenced the development of the town centre, drawing in funding from other sources, and continuingthe existence of the Town Centre Partnership.

Source: NWDA

Value for money

Table 130 considers the value for money of NWDA’s interventions from two perspectives:

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


In assessing the value for money of NWDA’s interventions we have sought to compare them with theevidence emerging from the evaluation of other RDAs’ activities. Care should, however, be taken whencomparing the value for money of these interventions as these are set out in terms of both achieved andfuture potential (the latter being subject to uncertainty). Table 130 also sets out ratios of GVA to costbased on annual GVA estimates. Where annual GVA only was estimated, the evaluations gave noindication of the number of years over which the impact was expected to persist.


Table 130: Summary of NWDA’s value for money (2002/03–2006/07)

Achieved

GVA:cost

ratio212

Future

potential

GVA:cost

ratio

Achieved

cost per net

job (£‘000)

Future

potential

cost per net

job (£‘000)

Achieved

cost per net

business

assist (£)

Achieved

cost per net

skills assist

(£)


East Manchester

Economic

Programme

5.1 7.1 4.2 4.6 - -

FP6 Dissemination

Module 220.1-31.2 - 6.9-10.7 - - -

Salford Start 2 Centre

Managed

Workspaces

0.5 - 60 - - -

Social Enterprise 0.8 4.7:1 12 - 5,502 -

Agenda for Change 4.8 - 7 - - -

Bio Core Technology

Facility2.3 - 109 - - 641,176

Bio Investments 0.4 - 104 - - -

Clusters Programme 1.2-27.4 0.9 35-90 - - -

ICT Aimes Project 1.6 - 19 14 - -

Infolab 21 0.7 - 6 - - -

Lancashire Digital

Technology Centre- - - - - -

Liverpool Digital

Project0.6 - 100 14 - -

National

Biomanufacturing

Centre

0.1 1.0 674 63.4 - -

Regional Rural

Programme0.9-1.4 - 27,000 - 133,333 8,153

Broadband

Investments2.1 - - - 10,250 -

Daresbury Science

and Innovation

Campus

1.0 - 21 21 - -

Higher Education

Initiative Funds

(HEIF2)

0.6 - 75 - - 8,767

212 Note that all GVA:cost ratios are based on annual GVA estimates from each evaluation, compared with the overall cost to NWDA

of the project or programme.


Achieved

GVA:cost

ratio212

Future

potential

GVA:cost

ratio

Achieved

cost per net

job (£‘000)

Future

potential

cost per net

job (£‘000)

Achieved

cost per net

business

assist (£)

Achieved

cost per net

skills assist

(£)

Supply of Defence

Diversification Agency

Technology

Diversification

Managers

(DDA TDMs)

7.6-13.1 - 143-247 - - -

Motivating

Merseyside Business

to Innovate (MMBI)

7.3 - 16 - - -

Liverpool Science

Park0.01 - 61 14 - -

Project Access 2.3 - 8 - -

The North West

Science Fund0.1 - 205 259 - -

Infrastructure work at

Arvato Gravure

Printing Site, Speke

12.4 14.6 36 15 - -

Quinn Glass, former

Ince Power Station13.9 - 20 - - -

BREW Programme 2.5 - 13 - - -

Green Business Park

Project1.2 - 28 - - -

ENWORKS NW

Minimisation Project0.2 - 167 - - 4,524

NW Business

Investment Funds0.5 5.3 71 - -

PowderJect Project 0.4-0.6 - 17 - - -

Average (Business) 1.6 -- 37.6 - 60.5 117.3


Ancoats

Regeneration

Programme

0.5 - 53.7 - - -

Barrow Call Centre 2.3 - 12.6 10.6 - -

Futures Park, Bacup 0.5 - 4.8 - -

George Street

Quarter, St. Helens- - - - - -

Kingsway Project,

Widnes1.3 - 23.4 - - -

Liverpool Commercial

District6.6 - 3.7 - - -

The Regional

Strategic Sites

Programme

3.2 - 39.2 - - -


Achieved

GVA:cost

ratio212

Future

potential

GVA:cost

ratio

Achieved

cost per net

job (£‘000)

Future

potential

cost per net

job (£‘000)

Achieved

cost per net

business

assist (£)

Achieved

cost per net

skills assist

(£)

Whitemoss Business

Park1.9 - 8.0 4.8 - -

Historic River Wall,

Chester- - - - - -

Land Reclamation 0.1 - 346.0 - - -

LV Public Realm

Interim- - - - - -

Liverpool Biennial

International Festival- - - - - -

LV Waterfront

Construction Impacts- - - - - -

Regional Marketing

Programme14.0 - 0.6 – 3.1 - - -

NML Into the Future 0.2 - 180.0 - - -

Tourism Interim - - - - - -

Visitor Interim 0.4 - 90.1 - - -

World of Glass 1.6 - 25.7 - - -

Central Park 0.6 - 68 - 5,000,000 -

Liverpool Land

Development

Company SIA

(LLDC SIA)

3.3 - 96 - - -

West Lakes

Renaissance0.3 2.0-2.5:1 86 - 1,135,714 338,297

Average

(Regeneration)1.4 - 53.1 - - -

People and skills

BESS Programme 5.9 - 5.7 - 4,639 1,061

Maximising

opportunity in

Warrington

0.9 - 2.6 - - -

Project Unity 2.3 - 13.7 12.0 - -

URC NEM Whitworth

Media Technology

Centre

0.2 - 251 - 2,000,000 4,192

Lancaster University

Leadership Centre0.9 - 359 - - 5,307

Eastserve project 0.5 - 187 - - 1,382

Average

(People and Skills)1.9 - 17.9 - 453,846 8,684

Other


Achieved

GVA:cost

ratio212

Future

potential

GVA:cost

ratio

Achieved

cost per net

job (£‘000)

Future

potential

cost per net

job (£‘000)

Achieved

cost per net

business

assist (£)

Achieved

cost per net

skills assist

(£)

SRB 1.3 - 24.1 - - -

Halton Focus for

Change (Round 5)1.0 - 5.1 - 202,222 3,398

Hyndburn PACT

(Round 6)1.3 - 6.0 - 89,041 17,060

Beacons East

Manchester (Round

5)

0.7 - 46.9 - 2,133,333 -

Blackburn Town

Centre Renaissance

(TCR) Programme

1.7 - 105.6 - 1,800,000 -

Cheshire Rural

Recovery Programme1.0 - 77.2 - - -

Lancashire Rural

Recovery Programme1.1 - 50.9 - 24,561 -

Sefton Village

Partnership3.1 - 10.3 - - -

West Lancashire

Investing in Business

Programme

0.7 - 55.6 - 800,000 -

Average (Other) 2.5 -- 12.9 - - 8,468


When comparing GVA to cost ratios between NWDA and the national averages, NWDA performed aboveaverage for achieved annual GVA:cost for regeneration through physical infrastructure interventions, witha ratio of 1.4:1 in NWDA compared to 0.7:1 nationally, and for people and skills, with a ratio of 1.9:1achieved in NWDA compared with 0.9:1 nationally. However GVA:cost ratios for business interventionscompared slightly less favourably, with a ratio of 1.8:1 achieved in NWDA compared to 2.8:1 nationally.

In terms of unit costs, the picture is again mixed with NWDA comparing well against the national averagefor People and Skills, similar for Physical Regeneration but below average for business. For businessinterventions, average cost per net job created in NWDA was £34,400 across all sub-themes, whilstnationally averages for sub-themes ranged from £8,301 per net job (Individual Enterprise Level Support)up to £37,938 (Science, R&D and Innovation Infrastructure). Average cost per net business created andcost per net business assisted within business interventions in NWDA exceeded the maximum rangeacross all sub-theme nationally – cost per net business created was in excess of £3m in NWDA(compared with the maximum figure of £1.6m for the Science, R&D and Innovation Infrastructuresub-theme) and cost per net business assisted was £60,500 in NWDA (compared with the average figureof £9,705 for the Science, R&D and Innovation Infrastructure sub-theme nationally).

Within NWDA’s regeneration through physical infrastructure interventions, costs per net job created weremore comparable. The NWDA average within this theme was £53,100 per net job created, whilst thenational average was £63,271. For interventions within the theme of people and skills, cost per net jobfor NWDA was favourable at an average of £17,911 across all sub-themes compared with £43,302nationally. Nationally cost per net job in this theme ranged from £24,007 in the sub-theme of “HybridPeople and Skills interventions” up to £105,268 in the sub-theme of “Skills and Workforce Development”.



Table 131 presents NWDA’s performance against target information based upon evidence drawn fromthe Tasking Framework. For all of the measures, NWDA has exceeded the targets set by DTI/BERR,particularly for jobs created / safeguarded, businesses created and people assisted with skills.

Table 131: Comparison of NWDA’s gross outputs reported to DTI/BERR against targets (2002/03-2006/07)

213

Jobs created/

safeguarded

Businesses

created

Brownfield

land (ha)


levered

(£m)214

Targets set by

DTI/BERR54,520 5,147 1,655 72,887 917

Achieved NWDA gross

outputs reported to

DTI/BERR

76,825 8,509 1,793 118,386 1,115


targets met5 out of 5 5 out of 5 5 out of 5 5 out of 5 4 out of 4


Like all the RDAs (except the London Development Agency), in 2006 NWDA was subject to the NationalAudit Office’s Independent Performance Assessment (IPA) which assessed how well NWDA hasresponded to common challenges facing RDAs, namely balancing the interests of the region with nationalpolicy requirements, managing the conflicting demands of different regional stakeholders, lookingoutwards to promote the region while staying focused on what is happening inside and responding to newduties imposed by central government. This assessment sheds further light on how well the Agency hasbeen able to fulfil its role.

Overall, NWDA was seen as ‘performing strongly’, particularly in terms of its:

ambition: NWDA led on the review of the North West Regional Economic Strategy, which was basedon a strong consultation process which allowed partners to agree and recognise that the ambitionsare right for the region; and

prioritisation: the NWDA were seen as having made difficult decisions in order to identify priorities foraction within the Corporate Plan. There is now a clear business planning process within the Agency,which links priorities from the RES to the Corporate Plan and into detailed projects and activities.

Whilst there was an overall approval for NWDA’s work, and particularly in relation to the vision, ambitionand prioritisation which the organisation has displayed, it was noted that there were areas fordevelopment. These areas included:

capacity: the organisation was viewed as having been subject to constant and ongoing re-organisation, and a lack of clarity over the roles and responsibilities of Executive and Non-Executivemembers. The absence of a workforce skills audit was highlighted as a concern, and training wasfound not to clearly link to organisational priorities, or to the promotion of management and personaldevelopment.

performance management: the organisation was criticised for its process once project appraisals weresubmitted, and the processes around the Systems and Process Improvement Programme (SAPIP)

213 Based on information from NWDA Annual Reports. NWDA was not required to report funding levered in 2002/03, so this is not

included within the achieved gross outputs reported to BERR.

214 Funding levered targets and outputs were not available for 2002/03.


were also viewed as inadequate based on lack of communication and incomplete roll-out. Evaluationand benchmarking systems were also highlighted as issues in this area.

Since the Independent Performance Assessment was undertaken in 2006, NWDA has undertaken aseries of actions to address the areas which were identified as requiring development. One exampleincludes the 2008 Stakeholder Survey, which was carried out to measure improvement.

Table 132 sets out NWDA’s performance against the targets for each theme of interventions covered bythe evaluations.

Table 132: Comparison of NWDA’s performance against objectives across the evaluations(2002/03-2006/07)

Exceeded Met Largely met Mixed Limited performance Not assessed Total

Business

Evaluations 6 - 4 11 5 3 29

Spend (£m) 28.9 - 37.3 60.4 89.5 29.7 245.8

Place

Evaluations 1 - 4 3 4 9 21

Spend (£m) 45.0 - 48.9 62.1 63.4 93.7 313.1

People

Evaluations 3 - 1 1 1 - 6

Spend (£m) 26.3 - 0.9 0.7 1.5 - 29.5

Other

Evaluations - - 1 6 - 3 15

Spend (£m) - - 31.8 43.3 - 269.7 344.8

Total

Evaluations 10 - 10 21 10 15 65

Spend (£m) 100.2 - 118.9 166.5 154.4 393.1 933.2


Table 132 shows that for the interventions evaluated (by volume or value) where performance wasassessed, performance against target was found to vary. It should be noted however, that we have notassessed performance against qualitative objectives or wider outcome measures (including StrategicAdded Value), and the data analysed relates only to performance against output targets. In total,although 10 interventions exceeded the targets which were set and ten were largely met, a further 31were mixed or limited in terms of their performance. There were a large number of evaluations which didnot assess performance against objectives (15 in total accounting for £733.5m in value) and this has abearing on the spread of results. This variable performance contrasts with NWDA’s achievement of thetargets set by BERR in the Tasking Framework, which as shown in Table 130, was found to exceedtargets set.



We have structured the analysis of the impact of NWDA’s spending, where possible, according to thethree categories of intervention defined within the IEF (i.e. business, place and people). We have alsoanalysed the impact of NWDA’s other activities that span more than one of these categories as well asthe available evidence of the impact of the nine national programmes where NWDA has been responsiblefor delivery within parameters determined by central government departments.

We have summarised the impact of NWDA’s interventions using a common structure in which:

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

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

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



Rationale

Improving business performance in order to secure economic growth is a key priority for the NWDA andthe North West region as a whole. The North West RES (2006) states that manufacturing is highlyproductive, exceeding the English average, with advanced manufacturing being seen as crucial to theregion and its future success

215. The RES also highlights that the region tends to have less owner-

managed businesses relative to other regions in England, partly due to the historic dominance of largemanufacturing companies.

NWDA’s business interventions seek to address the challenges presented by the continued presence ofthe manufacturing sector within the region (such as R&D spend concentrated on a minority of areas andlower productivity when compared with similar businesses in other regions), but also to address otherpertinent issues in relation to business development and competitiveness, such as a lower number ofbusinesses per head than the English average, lower than average productivity and the challengespresented by the rural economy (such as a decreasing reliance on agriculture and growth in other areas).

Each of the projects and programmes delivered by NWDA seeks to contribute towards the RES byimproving productivity and growing the market. Within the North West RES (2006), it is stated that inorder to support businesses, the region needs to focus on seven key factors, namely:

developing new enterprise and growing existing companies;

developing higher added-value activity in regional sectors, such as biomedical, advanced engineeringand materials and the digital and creative industries sectors;

innovation to improve productivity in all companies and exploit the higher education base of theregion;

exploiting the science/research and development base of the region;

improving international competitiveness;

using ICT more effectively and efficiently; and

215 NWDA (2006) Northwest Regional Economic Strategy, pp 21.


focusing on sustainable consumption and production.

The evidence of the impact of NWDA’s business interventions comes from 29 evaluations covering thesix main sub-themes summarised in Table 133.

Table 133: Summary of NWDA’s business development and competitiveness interventions(2002/03-2006/07)


covered by

evaluations (£m)

Individual enterprise level support East Manchester Economic Programme

FP6 Dissemination Module 2

Salford Start 2 Centre Managed Workspaces

Social Enterprise

2.2

1.0

0.6

5.2

Sector or cluster support Agenda for Change

Bio Core Technology Facility

Bio Investments

Clusters Programme

ICT Aimes Project

Infolab 21

Lancashire Digital Technology Centre

Liverpool Digital Project

National Biomanufacturing Centre

Regional Rural Programme

9.8

10.9

10.1

25.9

3.4

10.0

2.0

16.2

31.7

6.8

Science, R&D & innovation infrastructure Broadband Investments

Daresbury Science and Innovation Campus

Higher Education Initiative Funds (HEIF2)

Supply of Defence Diversification Agency

Technology Diversification Managers

(DDA TDMs)

Motivating Merseyside Business to Innovate

(MMBI)

Liverpool Science Park

Project Access

The North West Science Fund

12.3

16.3

7.4

1.7

1.2

6.2

16.8

11.5

Inward investment promotion Infrastructure work at Arvato Gravure Printing

Site, Speke

Quinn Glass, former Ince Power Station

2.7

4.9

Sustainable consumption and production BREW Programme

Green Business Park Project

ENWORKS NW Minimisation Project

1.5

0.8

1.0

Other interventions NW Business Investment Funds

PowderJect Project

11.6

14.1

Total 245.8


These evaluations cover £245.8m of NWDA spend. This spend is dominated by projects within the sub-theme of sector or cluster support, a number of which are focused on the development of high-technology


and science sectors within the region. These interventions contribute to a number of key factors outlinedin the 2006 RES, namely:

developing new enterprise and growing existing companies;

developing higher added-value activity in Regional Sectors;

innovation to improve productivity in all companies and exploiting the Higher Education base of theregion;

exploiting the Science/Research and Development base of the region;

improving international competitiveness;

using ICT more effectively and efficiently; and

focusing on Sustainable Consumption and Production.

Impact

Table 134 summarises the expenditure and achieved key gross outputs associated with the 29 businessinterventions evaluated. The primary outputs have been jobs created / safeguarded (particularly in thesub-themes of Sector or Cluster support and Science, R&D and Innovation Infrastructure), businessescreated and assisted (particularly by Individual Enterprise Support and Science, R&D and InnovationInfrastructure) and people assisted with skills. In addition to these outputs two projects reported a total of36 gross hectares of brownfield land redeveloped / reclaimed

216, and a further three projects reported the

development of 4,987 gross square metres of floorspace developed217

.

Table 134 Gross achieved outputs from NWDA’s business development and competitivenessinterventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Gross jobs

created/

safeguarded

Gross

businesses

created

Gross

businesses

assisted

Gross skills

assists

Gross

people

assisted

into

employment

Individual Enterprise Level Support

East Manchester

Economic Programme2.2 571 - - - -

FP6 Dissemination

Module 21.0 91 - - - -


Managed Workspaces0.6 14 3 - 4,538 -

Social Enterprise 5.2 617 74 1,351 2,512 -

216 The evaluation of the Infrastructure Work at the Arvato Gravure Printing Site in Speke reported the reclamation/redevelopment of

20 ha of brownfield land and the evaluation of the Quinn Glass project reported the reclamation/redevelopment of 16 ha of

brownfield land.

217 The evaluation of the Salford Start 2 Centre Managed Workspaces reported the creation of 555 square metres of new floorspace

and the evaluation of the Lancashire Digital Technology Centre reported the creation of 1,782 square metres of new floorspace.

The evaluation of the Regional Rural Programme reported the creation of 2,650 square metres of new floorspace.


Expenditure

covered by

evaluations

(£m)

Gross jobs

created/

safeguarded

Gross

businesses

created

Gross

businesses

assisted

Gross skills

assists

Gross

people

assisted

into

employment

Sector or Cluster Support

Agenda for Change 9.8 2,834 - - - -

Bio Core Technology

Facility10.9 112 - - 18 -

Bio Investments 10.1 222 - - - -

Clusters Programme 25.9 1,723 - - - -

ICT Aimes Project 3.4 187 17 275 - -

Infolab 21 10.0 239 8 - - -

Lancashire Digital

Technology Centre2.0 22 2 - - -

Liverpool Digital

Project16.2 424 - - - -

National

Biomanufacturing

Centre

31.7 40 - - - -

Regional Rural

Programme6.8 631 118 5,137 2,059 -

Science, R&D and Innovation Infrastructure

Broadband

Investments12.3 - - 1,170 - -

Daresbury Science

and Innovation

Campus

16.3 25 - - - -

Higher Education

Initiative Funds

(HEIF2)

7.4 153 10 - 1,443 -

Supply of Defence


Technology

Diversification

Managers

(DDA TDMs)

1.7 21 - - - -

Motivating Merseyside

Business to Innovate

(MMBI)

1.2 53 - - - -

Liverpool Science

Park6.2 16 - - - -

Project Access 16.8 2,660 - - - -

The North West

Science Fund11.5 50 - - - -


Expenditure

covered by

evaluations

(£m)

Gross jobs

created/

safeguarded

Gross

businesses

created

Gross

businesses

assisted

Gross skills

assists

Gross

people

assisted

into

employment

Inward Investment Promotion


Arvato Gravure


2.7 109 - - - -

Quinn Glass, former

Ince Power Station4.9 - - - - -


BREW Programme 1.5 318 1 - - -

Green Business Park

Project0.8 73 - - - -

ENWORKS NW

Minimisation Project1.0 8 - - 301 -

Other interventions

NW Business

Investment Funds11.6 295 - - - -

PowderJect Project 14.1 740 - - - -

Total 245.8 12,248 233 7,933 10,871 -


In addition to the gross achieved outputs set out in Table 134, a number of evaluations highlighted thedelivery of additional gross outputs. Within the Business theme, three projects delivered a total of 4,987gross square metres of new floorspace

218and two projects delivered a total of 36 gross hectares of

reclaimed / redeveloped land219

. Five evaluations estimated future potential gross outputs220

. In eachinstance, the estimated future potential gross outputs were in relation to jobs created / safeguarded,totalling an additional 1,759 jobs. These were expected to be generated from the East ManchesterEconomic Programme (137 jobs), the ICT Aimes Project (888 jobs), the Lancashire Digital TechnologyCentre project (90 jobs), the Infrastructure Work at the Arvato Gravure Printing Site project (179 jobs) andthe Liverpool Digital Project (465 jobs).

Table 135 summarises the expenditure and key net outputs associated with the 29 business interventionsevaluated.

218 The Social Enterprise project delivered 555 square metres of floorspace, the Lancashire Digital Technology project delivered

1,782 square metres of floorspace (although no net outputs were recorded) and the Regional Rural Programme delivered 2,650

square metres of floorspace.

219 The Infrastructure Work at the Arvato Gravure Printing Site redeveloped 20 gross hectares of brownfield land and the Quinn

Glass project redeveloped 16 gross hectares of brownfield land.

220 The National Report has used all relevant evaluation evidence to estimate ranges of future potential gross and net outputs.


Table 135: Net achieved outputs from NWDA’s business development and competitivenessinterventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Net jobs

created/

safeguarded

Net

businesses

created

Net

businesses

assisted

Net skills

assists

Net people

assisted

into

employment


East Manchester

Economic Programme2.2 343 - - - -

FP6 Dissemination

Module 21.0 126 - - - -


Managed Workspaces0.6 10 3 - - -

Social Enterprise 5.2 432 52 945 - -


Agenda for Change 9.8 1,200 - - - -

Bio Core Technology

Facility10.9 104 - - 17 -

Bio Investments 10.1 138 - - - -

Clusters Programme 25.9 509 - - - -

ICT Aimes Project 3.4 169 - - - -

Infolab 21 10.0 214 7 - - -

Lancashire Digital

Technology Centre2.0 - - - - -

Liverpool Digital

Project16.2 315 - - - -

National

Biomanufacturing

Centre

31.7 47 - - - -

Regional Rural

Programme6.8 255 51 1,570 834 -

Science, R&D and Innovation Infrastructure

Broadband

Investments12.3 - - 1,200 - -

Daresbury Science

and Innovation

Campus

16.3 23 - - - -

Higher Education

Initiative Funds

(HEIF2)

7.4 92 5 - 844 -

Supply of Defence


Technology

Diversification

Managers (DDA

TDMs)

1.7 9 - - - -


Expenditure

covered by

evaluations

(£m)

Net jobs

created/

safeguarded

Net

businesses

created

Net

businesses

assisted

Net skills

assists

Net people

assisted

into

employment

Motivating Merseyside

Business to Innovate

(MMBI)

1.2 98 - - - -

Liverpool Science

Park6.2 4 - - - -

Project Access 16.8 1,128 - - - -

The North West

Science Fund11.5 47 - - - -



Arvato Gravure


2.7 75 - - - -

Quinn Glass, former

Ince Power Station4.9 - - - - -


BREW Programme 1.5 117 1 - - -

Green Business Park

Project0.8 29 - - - -

ENWORKS NW

Minimisation Project1.0 6 - - 221 -

Other interventions

NW Business

Investment Funds11.6 164 - - - -

PowderJect Project 14.1 888 - - - -

Total 245.8 6,542 119 3,715 1,916 -


Further to the outputs shown in Table 135, a number of evaluations highlighted the delivery of other netoutputs. Two projects delivered a total of 1,732 net square metres of new floorspace

221and two projects

delivered a total of 36 net hectares of reclaimed / redeveloped land222

. In addition to the achieved netoutputs set out in Table 135, three

223evaluations estimated future potential net outputs:

the East Manchester Economic Programme evaluation estimated additional future potential netoutputs of 480 jobs created/safeguarded;

the National Biomanufacturing Centre evaluation estimated additional future potential net outputs of500 jobs created/safeguarded; and

221 The Social Enterprise project delivered 555 net square metres of floorspace and the Regional Rural Programme delivered 1,177

net square metres of floorspace.

222 The Infrastructure Work at the Arvato Gravure Printing Site redeveloped 20 net hectares of brownfield land and the Quinn Glass

project redeveloped 16 net hectares of brownfield land.

223 The evaluation of the Quinn Glass project indicated that there would be no future potential jobs created/safeguarded.


the evaluation of the Infrastructure Work at the Arvato Gravure Printing Site in Speke estimatedadditional future potential net outputs of 179 jobs created/safeguarded.

The level of additionality resulting from NWDA’s interventions varied across intervention and output type.Outputs in relation to jobs created/safeguarded had the highest level of additionality (53%), whilst peopleassisted with skills was the output with the lowest level of additionality within this theme (18%).

When comparing levels of additionality within the theme of Business in NWDA with national averages,NWDA has higher levels of additionality in the three main areas where comparison is possible, as follows:

additionality for jobs was calculated to be 53% in NWDA, compared with 48% nationally;

additionality for businesses created was calculated to be 51% in NWDA, compared with40% nationally; and

additionality for businesses assisted was calculated to be 47% in NWDA, compared with35% nationally.

Table 136 summarises the impact on GVA (both achieved and future potential) of NWDA’s interventionsto promote business development and competitiveness. All evaluations estimated GVA on an annualbasis. Where an estimate of GVA had not been undertaken within the evaluation, we have provided anestimate of GVA based on the number of net jobs created/safeguarded. Where annual GVA wasestimated no indication was given of the number of years over which the impact was expected (orassumed) to persist. Moreover, future potential impacts on GVA have not been discounted nor haveconstant prices been applied.

Table 136: Outcomes from NWDA’s business development and competitiveness interventions(2002/03-2006/07)

Expenditure

covered by

evaluations (£m)

Net GVA achieved

(annual, £m)

Net GVA future

potential (annual,

£m)



Programme2.2 11.2 15.6

FP6 Dissemination Module 2 1.0 27.2 -


Workspaces0.6 0.3 -

Social Enterprise 5.2 4.2 24.4


Agenda for Change 9.8 42.5 -

Bio Core Technology Facility 10.9 5.5 -

Bio Investments 10.1 5.0 -

Clusters Programme 25.9 45.5 22.9

ICT Aimes Project 3.4 5.5 -

Infolab 21 10.0 7.2 -

Lancashire Digital Technology Centre 2.0 0 -

Liverpool Digital Project 16.2 10.2 -

National Biomanufacturing Centre 31.7 2.4 30.8

Regional Rural Programme 6.8 8.3 7.5


Expenditure

covered by

evaluations (£m)

Net GVA achieved

(annual, £m)

Net GVA future

potential (annual,

£m)


Broadband Investments 12.3 26.0 -


Campus16.3 0.5 0.5


(HEIF2)7.4 3.0 -



Managers (DDA TDMs)

1.7 17.8 -

Motivating Merseyside Business to

Innovate (MMBI)1.2 11.5 -

Liverpool Science Park 6.2 0.1 0.5

Project Access 16.8 38.2 -

The North West Science Fund 11.5 1.5 -


Infrastructure work at Arvato Gravure

Printing Site, Speke2.7 33.6 5.8


Station4.9 68.0 -


BREW Programme 1.5 3.8 -

Green Business Park Project 0.8 0.9 -

ENWORKS NW Minimisation Project 1.0 0.2 -

Other interventions

NW Business Investment Funds 11.6 5.3 61.6

PowderJect Project 14.1 5.0 – 8.0 -

Total 245.8 390.4-393 169.6


Additional net outcomes recorded in the evaluation evidence relate only to the ICT Aimes project whichreported a net achieved increase in turnover of £9.7m to date, and a net future potential increase inturnover of £51m. The PowderJect Project evaluation estimated a net future potential increase inturnover of £28.9m per annum and the Regional Rural Programme evaluation estimated a future potentialincrease in turnover of £6.5m per annum. For the BREW and ENWORKS projects within the sub-themeof sustainable consumption and production, additional savings were reported to be £26.9m

224, whilst the

ENWORKS project expected to generate a further £23.4m in savings up until February 2008.

Finally, besides the impact of its project and programme spend, Strategic Added Value is a key elementof NWDA’s impact, as illustrated in Box 2 below. The examples shown have been drawn from theevaluations of the Quinn Glass project and the Bio Core Technology Facility, which demonstrates thatadditional impacts have been delivered by NWDA, over and above the gross and net outputs andoutcomes which have been quantified in this annex.

224 The nature of these savings, and the basis to explain how this figure was calculated have not been outlined within the evaluation.



Quinn Glass

NWDA demonstrated many important elements of SAV when providing funding for Quinn Glass’s225

investment in the reclamation and infrastructure of the former Ince Power Station.

The NWDA demonstrated strategic leadership by playing a key role in attracting the Quinn Glassinvestment to the north-west when it became aware of Quinn’s interest. The NWDA brought together thekey partners (Chester City Council, Ellesmere Port and Neston Borough Council, Learning and SkillsCouncil and Job Centre Plus) as well as local and sub-regional partners to ensure that a suitable fundingpackage was presented to Quinn Glass to entice them to the North West region. The support providedrelated to site reclamation, site infrastructure, skills development and staff recruitment.

The NWDA levered funding support from RSA and LSC investment, and continuing managementparticularly from Chester City Council and Ellesmere Port and Neston Borough Council. Engagementwith the community and local environment was necessary with this project. To achieve this, a localliaison group, which include Chester City Council, Ellesmere Port and Neston Borough Council, QuinnGlass, and the local Parish Councils in Ince and Elton, was created. NWDA also engaged with regionalpartners to provide on-going support to Quinn Glass.

Bio-Core Technology Facility

NWDA has provided strategic leadership throughout the Core Technology Facility (CTF) programme226

.The Agency’s influence has ensured that RES objectives for encouraging growth in target sector andretaining key employers in the region were met. Manchester is increasingly recognised as a biotechcentre of excellence.

NWDA and UMIC have established strong working relationships and this has extended to other projectdeliverers. This collaborative approach has successfully created a facility that is the focus of activity of anumber of business development support and networking initiatives, which reach the wider biotechsector.

NWDA’s financial support has helped to lever further funding from the ERDF. In addition, funding wasreceived from the University, the Florida High Tech Corridor and the city of Orlando. This funding hasbeen used for construction and business support and the subsequent fit-out of specialist companyaccommodation.

NWDA has demonstrated synergy through this project: CTF is developing a key role as a hub forinteraction within the biotech community. The University, UMIC, UMIP, Bionow, BioStars, InnovationFunds and others are all using this space and the opportunities it brings to reach the biotech community.

Source: NWDA

Value for money

Table 137 sets out the achieved and future potential GVA to cost ratios of NWDA’s businessdevelopment and competitiveness interventions. The GVA to cost ratio compares GVA impacts to thecost of the intervention: where there is a GVA to cost ratio of greater than one, the economic benefits ofthe interventions attributable to NWDA’s funding exceed their costs. This is the case for some, but not allof the interventions where GVA has been measured.

225 NWDA (2008) Evaluation of the Quinn Glass Project, former Ince Power Station.

226 NWDA (2008) Evaluation of the Bio Core Technology Facility.


Table 137: Achieved and future potential GVA to cost ratios from NWDA’s business developmentand competitiveness interventions (2002/03-2006/07)


evaluations (£m)

Achieved GVA:cost

ratio (annual)

Future potential

GVA:cost ratio

(annual)



Programme2.2 5.1 7.1

FP6 Dissemination Module 2 1.0 20.1-31.2 -


Workspaces0.6 0.5 -

Social Enterprise 5.2 0.8 4.7


Agenda for Change 9.8 4.8 -

Bio Core Technology Facility 10.9 2.3 -

Bio Investments 10.1 0.4 -

Clusters Programme 25.9 1.2-27.4 0.9

ICT Aimes Project 3.4 1.6 -

Infolab 21 10.0 0.7 -


Centre2.0 - -

Liverpool Digital Project 16.2 0.6 -

National Biomanufacturing Centre 31.7 0.1 1.0

Regional Rural Programme 6.8 0.9-1.4 -


Broadband Investments 12.3 2.1 -


Campus16.3 1.0 -


(HEIF2)7.4 0.6 -



Managers (DDA TDMs)

1.7 7.6-13.1 -


Innovate (MMBI)1.2 7.3 -

Liverpool Science Park 6.2 0.1 -

Project Access 16.8 2.3 -

The North West Science Fund 11.5 0.1 -


Infrastructure work at Arvato

Gravure Printing Site, Speke2.7 12.4 14.6


Station4.9 13.9 -



evaluations (£m)

Achieved GVA:cost

ratio (annual)

Future potential

GVA:cost ratio

(annual)


BREW Programme 1.5 2.5 -

Green Business Park Project 0.8 1.2 -

ENWORKS NW Minimisation

Project1.0 0.2 -

Other interventions

NW Business Investment Funds 11.6 0.5 5.3

PowderJect Project 14.1 0.4-0.6 -

Total 245.8 1.6227

0.7


When GVA to cost ratios achieved in NWDA are compared across sub-themes, the highest ratios werefor Individual Enterprise Level Support (4.8:1) and Inward Investment Promotion (13.4:1). The ratioswere lower, within the sub-themes of Sector/Cluster Support and Science, R&D and InnovationInfrastructure, both at 1.3:1. The overall GVA to cost ratio for Business interventions in NWDA was 1.6:1,which was lower than the ratio for the People and Skills theme (1.9:1), but higher than the PhysicalRegeneration theme at 1.4:1.

When GVA to cost ratios achieved in NWDA are compared with the national averages for annual GVA,performance is mixed. Overall, NWDA business interventions achieved an average GVA:cost ratio of1.6:1, which was lower than the national average of 2.8:1 for interventions in this theme, driven by twosub-themes performed less well than the national average – these were for “Sector/Cluster support”(1.0:1 in NWDA compared to 3.2:1 nationally) and for other business interventions (0.4:1 in NWDAcompared to 1.7:1 nationally). However, when analysed at sub-theme level, three sub-themes had verysimilar or higher GVA:cost ratios than the national average – this was for “Individual Enterprise LevelSupport” (4.8:1 in NWDA compared to 4.9:1 nationally), “Science, R&D and Innovation Infrastructure”(1.3:1 in NWDA compared to 1.1:1 nationally) and “Inward Investment Promotion” (13.4:1 in NWDAcompared to 3.7:1 nationally).

As Table 137 shows, there are 15 interventions within this theme (of 29 interventions in total) which havealready achieved economic benefits which exceed their costs. Five of these interventions are expectedto deliver increased returns on the initial investment in the future, with each evaluation reporting higherfuture potential GVA to cost ratios than have been achieved to date. Both investments within the sub-theme of Inward Investment Promotion performed particularly well, with achieved GVA benefits much inexcess of cost.

Table 138 sets out the achieved and future potential cost per net output of NWDA’s businessdevelopment and competitiveness interventions.

227 Interventions in the theme of inward investment promotion have higher than average GVA to cost ratios, both within NWDA and

nationally, and thus these interventions tend to skew the average GVA: cost ratio within the business theme.


Table 138: Achieved and future potential cost per net output from NWDA’s business developmentand competitiveness interventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Achieved

cost per net

job (£‘000)

Future

potential

cost per

net job

(£‘000)

Achieved cost

per net business

supported (£)


skills assist (£)


East Manchester

Economic

Programme

2.2 4.2 4.6 - -

FP6 Dissemination

Module 21.0 6.9-10.7 - - -

Salford Start 2

Centre Managed

Workspaces

0.6 60 - - -

Social Enterprise 5.2 12 - 5,502 -


Agenda for Change 9.8 7 - - -

Bio Core Technology

Facility10.9 109 - - 641,176

Bio Investments 10.1 104 - - -

Clusters Programme 25.9 35-90 - - -

ICT Aimes Project 3.4 19 14 - -

Infolab 21 10.0 6 - - -

Lancashire Digital

Technology Centre2.0 - - - -

Liverpool Digital

Project16.2 100 14 - -

National

Biomanufacturing

Centre

31.7 647 63.4 - -

Regional Rural

Programme6.8 27 - 133,333 8,153


Broadband

Investments12.3 - - 10,250 -

Daresbury Science

and Innovation

Campus

16.3 21 21 - -

Higher Education

Initiative Funds

(HEIF2)

7.4 75 - - 8,767


Expenditure

covered by

evaluations

(£m)

Achieved

cost per net

job (£‘000)

Future

potential

cost per

net job

(£‘000)

Achieved cost

per net business

supported (£)


skills assist (£)

Supply of Defence

Diversification

Agency Technology

Diversification

Managers (DDA

TDMs)

1.7 143-247 - - -

Motivating

Merseyside Business

to Innovate (MMBI)

1.2 16 - - -

Liverpool Science

Park6.2 61 14 - -

Project Access 16.8 8 - -

The North West

Science Fund11.5 205 259 - -



Arvato Gravure


2.7 36 15 - -

Quinn Glass, former

Ince Power Station4.9 20 - - -


BREW Programme 1.5 13 - - -

Green Business Park

Project0.8 28 - - -

ENWORKS NW

Minimisation Project1.0 167 - - 4,524

Other interventions

NW Business

Investment Funds11.6 71 - - -

PowderJect Project 14.1 17 - - -

Average - Business

Business 245.8 37.6 - 60.5 117.3


The cost per net job achieved from business development and competitiveness interventions was veryvariable, ranging from £4,200 for the East Manchester Economic Programme to £674,000 for the NationalBiomanufacturing Centre. However the figure for the National Biomanufacturing Centre is skewed as alarge proportion of the expenditure to date has related to the fact that the intervention has been mainlycapital in nature, with further revenue and employment related effects expected in the future.

When comparing value for money achieved through business interventions delivered by NWDA with theRDA national average, the picture is also somewhat variable. Overall the average figure for cost per netjob created across all NWDA business interventions was £37,572, whilst the cost per net job at


sub-theme level nationally ranged from £8,301 (Individual Enterprise Level Support) up to £37,938(Science, R&D and Innovation Infrastructure). Analysis at sub-theme level revealed the following:

within the sub-theme of Individual Enterprise Level support, the national average cost per net job was£8,301. Two of NWDA’s interventions within this sub-theme had lower costs per net job (EastManchester Economic Programme and FP6 Dissemination Module 2), whilst two interventions had ahigher cost per net job figure (Salford Start 2 Centre Managed Workspaces and Social Enterprise);

within the sub-theme of Sector / Cluster support, the national average cost per net job was £12,135.Three of NWDA’s interventions within this sub-theme had lower costs per net job (Agenda for Change,ICT Aimes and InfoLab) whilst six interventions had a higher cost per net job figure (Bio CoreTechnology Facility, Bio Investments, Clusters, Liverpool Digital Project, the NationalBiomanufacturing Centre and the Regional Rural Programme);

within the sub-theme of Science, R&D and Innovation Infrastructure, the national average cost per netjob was £37,938. Three of NWDA’s interventions had a lower cost per net job figure (DaresburyScience and Innovation Centre, MMBI and Project Access) whilst four interventions had a higher costper net job figure (HEIF2, DDA TDM’s, Liverpool Science Park and NW Science Fund); and

within the sub-theme of Inward Investment Promotion, the national average cost per net job was£11,563. Both of NWDA’s interventions (Quinn Glass and Infrastructure Works at the Arvato GravurePrinting Site) within this category had higher costs per net job, at £20,000 and £36,000 respectively).

It was not possible to compare average cost per net business created by NWDA with the national picturedue to the small number of evaluations which recorded evidence of this output. For Businesses Assisted,three evaluations calculated net costs per assist. This was for the Social Enterprise Programme, whichhad a cost per net business assist of £5,502, which compared favourably with the national average of£8,502 for interventions in the sub-theme of Individual Enterprise Level Support. Similarly the evaluationof the Broadband Investments project had a cost per net business assist of £10,250 compared with thenational average of £24,640 for interventions in the sub-theme of Science, R&D and InnovationInfrastructure. The Regional Rural Programme had a cost per net business assist of £133,333, whichdid not compare well to the national average of £3,901 for interventions in the sub-theme ofSector/Cluster Support.


Table 139 summarises the performance against objectives of NWDA’s interventions to promote businessdevelopment and competitiveness. The evaluations indicate that performance against objectives was onthe whole mixed, although six interventions exceeded the objectives set and four interventions largelymet most of the objectives set. Considering the performance of the five highest value interventions

228

against objectives, it was found that performance was variable, with two interventions having limitedperformance (Clusters and Daresbury Science and Innovation Campus) and one largely meeting theobjectives set (Liverpool Digital Project). The remaining two interventions (Broadband Investments andProject Access) did not provide an assessment of performance against objectives.

228 The five highest value interventions within the business theme were the Clusters Programme, Liverpool Digital Project,

Broadband Investments, Daresbury Science and Innovation Campus and Project Access.


Table 139: Performance against objectives of NWDA’s business development andcompetitiveness interventions (2002/03-2006/07)

Expenditure

covered by

evaluations (£m)



FP6 Dissemination Module 2 1.0 Exceeded

Social Enterprise 5.2 Exceeded

East Manchester Economic Programme 2.2 Mixed


Workspaces0.6

Not assessed


Infolab 21 10.0 Largely met

Liverpool Digital Project 16.2 Largely met

Agenda for Change 9.8 Mixed

Bio Core Technology Facility 10.9 Mixed

Bio Investments 10.1 Mixed

ICT Aimes Project 3.4 Mixed

Lancashire Digital Technology Centre 2.0 Mixed

Clusters Programme 25.9 Limited performance

National Biomanufacturing Centre 31.7 Limited performance

Regional Rural Programme 6.8 Exceeded


Supply of Defence Diversification Agency

Technology Diversification Managers

(DDA TDMs)

1.7

Exceeded

The North West Science Fund 11.5 Exceeded

Liverpool Science Park 6.2 Largely met

Higher Education Initiative Funds (HEIF2) 7.4 Mixed

Motivating Merseyside Business to Innovate

(MMBI)1.2

Mixed

Daresbury Science and Innovation Campus 16.3 Limited performance

Broadband Investments 12.3 Not assessed

Project Access 16.8 Not assessed


Infrastructure work at Arvato Gravure

Printing Site, Speke2.7

Exceeded

Quinn Glass, former Ince Power Station 4.9 Largely met


Green Business Park Project 0.8 Mixed

ENWORKS NW Minimisation Project 1.0 Mixed


Expenditure

covered by

evaluations (£m)


BREW Programme 1.5 Limited performance

Other interventions

NW Business Investment Funds 11.6 Mixed

PowderJect Project 14.1 Limited performance



Rationale

Regeneration through physical infrastructure is a key priority for NWDA, identified under the theme of“Infrastructure” within the North West RES. The RES identifies the particular challenges facing the regionin terms of transport infrastructure, particularly due to the region featuring the highest trunk roadcongestion of any region outside London. Similar challenges exist in relation to redevelopment of vacantand derelict land, with the North West being home to 24% of the English total for this type of land. TheNorth West also hosts four of the nine Housing Market Renewal areas in England, and between 2000 and2006, the region received £2.1bn in EU Structural Funds, emphasising the need for interventions inrelation to regeneration through physical infrastructure developments.

Each of the projects and programmes delivered by NWDA seeks to contribute towards the vision set outin the RES. Within the North West RES (2006), it is stated that in order to achieve this vision, the regionneeds to focus on six key factors, namely:

developing our transport infrastructure to connect the region internally and with the rest of the worldand using it more effectively;

ensuring appropriate land use – both in terms of brownfield land and new employment sites;

developing housing to facilitate growth;

ensuring planning supports sustainable growth;

developing appropriate use and supply of energy; and

encouraging public and private investment.

Evidence of the impact of NWDA’s regeneration initiatives is based on 21 evaluations covering the threemain sub-themes summarised in Table 140.


Table 140: Summary of NWDA’s regeneration through physical infrastructure interventions(2002/03-2006/07)


covered by

evaluations (£m)

Capital projects

Bringing land back into use –

employment sites

Ancoats Regeneration Programme

Barrow Call Centre

Futures Park, Bacup

George Street Quarter, St. Helens

Kingsway Project, Widnes

Liverpool Commercial District

The Regional Strategic Sites Programme

Whitemoss Business Park

45.0

3.5

3.1

1.3

0.8

7.4

55.5

3.9

Public realm/other infrastructure Historic River Wall, Chester

Land Reclamation

LV Public Realm Interim

0.8

17.3

19.3

Revenue projects

Image/events/ tourism Liverpool Biennial International Festival

LV Waterfront Construction Impacts

Regional Marketing Programme

NML Into the Future

Tourism Interim

Visitor Interim

World of Glass

0.5

38.0

16.3

1.8

8.4

12.2

0.9

Cross Cutting Themes Central Park

LLDC SIA

West Lakes Renaissance

15.0

30.3

31.8

Total 313.1


This spend is dominated by capital investments under the sub-theme of ‘Bringing Land Back into Use forEmployment Sites’, with the Ancoats Regeneration Programme and the Regional Strategic SitesProgramme representing over £100m in expenditure. The revenue projects were more diverse in nature,with support ranging by sector and scope (geographically and financially).

Impact

Key gross outputs set out in Table 141 arising from the regeneration interventions have been newfloorspace developed and jobs created/safeguarded. Given the longer term nature of some of theseinterventions, and the fact that some are still in the implementation stages (such as the LV WaterfrontConstruction and the Regional Strategic Sites Programme), therefore, a distinction is drawn betweenachieved and future potential outputs

229.

229 Not all evaluations which were undertaken at an early or interim stage were able to quantify potential future outputs. Where such

potential future outputs have been quoted within evaluations, we have used these to inform our report.


Table 141: Gross outputs (achieved and future potential) of NWDA’s regeneration throughphysical infrastructure interventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Achieved

gross jobs

created/

safeguarded

Future

potential

gross jobs

created/

safeguarded

Achieved

gross

brownfield

land

reclaimed/

redeveloped

(ha)

Achieved

gross

commercial

floorspace

(m2)

Future

potential

gross

commercial

floorspace

(m2)

Bringing land back into use – employment sites

Ancoats

Regeneration

Programme

45.0 895230

- - 29,937 -

Barrow Call Centre 3.5 300 - 2 4,383 -

Futures Park,

Bacup3.1 298 - 4 2,090 -

George Street

Quarter, St. Helens1.3 - - - - -

Kingsway Project,

Widnes0.8 70 - - 2,094 -

Liverpool

Commercial District7.4 5,051 - - - -

The Regional

Strategic Sites

Programme

55.5 5,908 - - - -

Whitemoss

Business Park3.9 467 379 6 12,900 2,525

Public realm/other infrastructure

Historic River Wall,

Chester0.8 - 0 3 - -

Land Reclamation 17.3 28 - - - -

LV Public Realm

Interim19.3 - - 4 - -

Image/events/tourism

Liverpool Biennial

International

Festival

0.5 - 0 - - -

LV Waterfront

Construction

Impacts

38.0 - - 1 - -

Regional Marketing

Programme16.3 - - - - -

NML Into the

Future1.8 8 - - - -

230 These are defined as “opportunities for jobs” within the evaluation however are quoted as “jobs created” within the value for

money section of the Ancoats evaluation.


Expenditure

covered by

evaluations

(£m)

Achieved

gross jobs

created/

safeguarded

Future

potential

gross jobs

created/

safeguarded

Achieved

gross

brownfield

land

reclaimed/

redeveloped

(ha)

Achieved

gross

commercial

floorspace

(m2)

Future

potential

gross

commercial

floorspace

(m2)

Tourism Interim 8.4 - - - - -

Visitor Interim 12.2 399 - - - -

World of Glass 0.9 42 - - - -

Central Park 15.0 549 - 20 15,700 -

Cross Cutting Themes

LLDC SIA 30.3 2,670 - - - -

West Lakes

Renaissance31.8 925 2,041-2,489 4 5,799 -

Total 313.1 17,610 2,420-2,868 44 72,903 2,525


In addition to the gross outputs in Table 141, the evaluation of the Regional Marketing Programmehighlights that this programme will have a future potential impact of £100.2m annually on tourism revenuein the region. None of the evaluations highlighted any future potential impact in terms of gross brownfieldland reclaimed / redeveloped. However, the following gross outputs were also identified by projectswithin this theme:

128 gross new businesses were created (six were created by the Central Park project, 109 werecreated by the West Lakes Renaissance project and 13 were created by the Futures Park project);

1,001 gross businesses were assisted231

(38 by the Kingsway Project in Widnes, 97 by the CentralPark project and 866 by the Tourism project);

3,651 gross skills assists were delivered (145 by the Barrow Call Centre project, 1,500 by the FuturesPark project, 1,421 by the Kingsway Project in Widnes and 585 by the West Lakes Renaissanceproject); and

2,928 people were assisted to get a job (771 assists were generated by the West Lakes RenaissanceProject and a further 2,157 assists were delivered by the Tourism project).

The resulting net outputs arising from these regeneration interventions are set out in Table 142.

231 A further 2,367 gross business assists were delivered by the West Lakes Renaissance project, although no net outputs were

calculated.


Table 142: Regional net outputs (achieved and future potential) of NWDA’s regeneration throughphysical infrastructure interventions (2002/03- 2006/07)

Expenditure

covered by

evaluations

(£m)

Achieved

net jobs

created/

safeguarded

Future

potential net

jobs

created/

safeguarded

Achieved

net

brownfield

land

reclaimed/

redeveloped

(ha)

Achieved

net

commercial

floorspace

(m2)

Future

potential

net

commercial

floorspace

(m2)


Ancoats

Regeneration

Programme

45.0 838 - - 25,446 -

Barrow Call Centre 3.5 245 - 2 3,068 -

Futures Park, Bacup 3.1 47 - 4 794 -

George Street

Quarter, St. Helens1.3 0 - - - -

Kingsway Project,

Widnes0.8 32 - - 942 -

Liverpool

Commercial District7.4 1,493 - - - -

The Regional

Strategic Sites

Programme

55.5 1,586 - - - -

Whitemoss Business

Park3.9 231 - 4 6,376 0

Public realm/ other infrastructure

Historic River Wall,Chester 0.8 - 0 3 - -

Land Reclamation 17.3 50 - - - -

LV Public Realm

Interim19.3 - - - - -


Liverpool BiennialInternational Festival 0.5 - 0 - - -

LV WaterfrontConstruction Impacts 38.0 - - 1 - -

Regional MarketingProgramme 16.3 - - - - -

NML Into the Future 1.8 10 - - - -

Tourism Interim 8.4 - - - - -

Visitor Interim 12.2 139 - - - -


Expenditure

covered by

evaluations

(£m)

Achieved

net jobs

created/

safeguarded

Future

potential net

jobs

created/

safeguarded

Achieved

net

brownfield

land

reclaimed/

redeveloped

(ha)

Achieved

net

commercial

floorspace

(m2)

Future

potential

net

commercial

floorspace

(m2)

World of Glass 0.9 42 - - - -


Central Park 15.0 269 - 13 10,009 -

LLDC SIA 30.3 465 - - - -

West LakesRenaissance 31.8 452 - 2 5,219 -

Total 313.1 5,899 - 29 51,854 0


In addition to the net outputs shown in Table 142, various other net outputs were also recorded. As withthe gross outputs within this theme, none of the evaluations highlighted any future potential impact interms of gross brownfield land reclaimed / redeveloped.

36 net new businesses were created (five were created by the Futures Park project, three werecreated by the Central Park project and 28 were created by the West Lakes Renaissance project);

421 net businesses were assisted (17 were assisted by the Kingsway Project in Widnes, 41 wereassisted by the Central Park project and 363 were assisted by the Tourism Project);

2,357 net skills assists were delivered (52 assists were delivered by the Barrow Call Centre project,580 were delivered by the Futures Park project, 639 were delivered by the Kingsway Project inWidnes, 992 assists were delivered by the Tourism project and 94 assists were delivered by WestLakes Renaissance); and

193 net people were assisted to get a job (these were all delivered under the West LakesRenaissance project).

Overall, the creation of new floorspace had the highest level of additionality (71%), whilst outputs inrelation to jobs created/safeguarded displayed the lowest level of additionality (34%). Given that few netoutputs were reported within the sub-themes of Public Realm and Image, Events and Tourism, it isdifficult to provide an analysis of the variation in additionality between sub-themes.

When comparing levels of additionality within the theme of regeneration through physical infrastructure inNWDA with national averages, NWDA was found to have a lower level of additionality in relation to jobs(34% in NWDA compared with 45% nationally), whilst the level of additionality for brownfield land whichwas remediated or reclaimed was lower within NWDA (66%) when compared with the national average(73%).

Table 143 summarises the impact on GVA (both achieved and future potential) of NWDA’s interventionswithin the theme of regeneration through physical infrastructure. Each of the evaluations estimated GVAon an annual basis. Where an estimate of GVA had not been undertaken within the evaluation, we haveprovided an estimate of GVA based on the number of net jobs created/safeguarded. Where annual GVAwas estimated no indication was given of the number of years over which the impact was expected (orassumed) to persist. Moreover, future potential impacts on GVA have not been discounted nor haveconstant prices been applied.


Table 143: GVA (achieved and future potential) from NWDA’s regeneration through physicalinfrastructure (2002/03-2006/07)


evaluations (£m)

Net GVA achieved

(annual, £m)

Net GVA future

potential (annual,

£m)


Ancoats Regeneration Programme 45.0 27.2 -

Barrow Call Centre 3.5 8.0 -

Futures Park, Bacup 3.1 1.5 -

George Street Quarter, St. Helens 1.3 - -

Kingsway Project, Widnes 0.8 1.0 -

Liverpool Commercial District 7.4 48.5 -


Programme55.5 179.3 -

Whitemoss Business Park 3.9 7.5 -


Historic River Wall, Chester 0.8 - -

Land Reclamation 17.3 1.6 -

LV Public Realm Interim 19.3 - -



Festival0.5 - -

LV Waterfront Construction Impacts 38.0 - -

Regional Marketing Programme 16.3 119.1 -

NML Into the Future 1.8 0.3 -

Tourism Interim 8.4 - -

Visitor Interim 12.2 4.5 -

World of Glass 0.9 1.4 -


Central Park 15.0 8.7 -

LLDC SIA 30.3 16.2 -

West Lakes Renaissance 31.8 10.7 65.3-79.7

Total 313.1 435.5 65.3-79.7


Finally, besides the impact of its project and programme spend, Strategic Added Value is a key elementof NWDA’s impact within the regeneration through physical infrastructure theme, as illustrated in Box 3below. The example shown has been drawn from the evaluation of the Regional Strategic SitesProgramme, which demonstrates that additional impacts have been delivered by NWDA, over and abovethe gross and net outputs and outcomes which have been quantified in this section.



Regional Strategic Sites

In the evaluation of the strategic sites, the Agency was identified as the lead authority for implementationof this programme of work, and consultations demonstrated that the Agency provided strategic vision andleadership. Within the evaluation, it was also found that the NWDA instilled confidence in Local Authoritypartners.

The NWDA levered £122.1m of funding from the private sector, ERDF and other public sector sources.In addition to financial leverage, the NWDA secured leverage in the form of staff time, projectmanagement, provision of accommodation and bespoke reports.

The Agency also demonstrated synergy by ensuring that the regional partners amended theirprogrammes and policies to align with the Agencies position. In addition, LA partners had also putcomplementary business support packages in place to support businesses on the strategic sites.

Finally the NWDA demonstrated SAV by helping to create engagement with the stakeholders. One of theexamples where stakeholders engaged effectively is in the case of the Rochdale Kingsway and Baillrigg /Lancaster University. Here, dedicated project teams were established which included representativesfrom NWDA as well as other key stakeholders such as developer partners; masterplanners; consultantengineers; project managers and legal advisors.

Source: NWDA

Value for money

Table 144 sets out the achieved and future potential GVA to cost ratios of NWDA’s regeneration throughphysical infrastructure interventions. All GVA:cost ratios presented are based on annual estimate of GVAimpact. The GVA to cost ratio compares GVA impacts to the cost of the intervention where there is aGVA to cost ratio of greater than one, the economic benefits of the interventions attributable to NWDA’sfunding exceed their costs. This is the case for some, but not all of the interventions where GVA hasbeen measured. For example, the Ancoats Regeneration Programme has a ratio of 0.6:1, whilst theRegional Strategic Sites Programme estimates a ratio of 3.2:1.

Table 144: Achieved and future potential GVA to cost ratios from NWDA’s physical regenerationinterventions (2002/03-2006/07)


evaluations (£m)

Achieved GVA:cost ratio

(annual)

Future potential

GVA:cost ratio

(annual)



Barrow Call Centre 3.5 2.3 -

Futures Park, Bacup 3.1 0.5 -





Programme55.5 3.2 -

Whitemoss Business Park 3.9 1.9 -







evaluations (£m)


(annual)

Future potential

GVA:cost ratio

(annual)



Festival0.5 - -


Regional Marketing Programme 16.3 14.0 -







LLDC SIA 30.3 3.3 -

West Lakes Renaissance 31.8 0.3 2.0-2.5

Total 313.1 1.4 0.2


When annual GVA to cost ratios achieved in NWDA are compared with the national averages,performance was found to be largely favourable. Overall, NWDA regeneration through physicalinfrastructure interventions achieved an average GVA:cost ratio of 1.4:1, which was higher than thenational average of 0.7:1 for interventions in this theme. When analysed at sub-theme level, two sub-themes were found to have higher GVA:cost ratios than the national average – this was for “BringingLand Back into Use” (2.3:1 in NWDA compared to 1.0:1 nationally) and “Image, Events and Tourism”(1.6:1 in NWDA compared to 0.5:1 nationally). Only one sub-theme performed less well than the nationalaverage – this was for “Public Realm” (0.0:1 in NWDA compared to 0.3:1 nationally).

As Table 144 shows, some interventions such as the Liverpool Commercial District and the RegionalMarketing Programme have already achieved economic benefits which exceed their costs. Unfortunatelyas only one of the evaluations in this theme have quantified net future potential outputs, it is not possibleto assess the degree to which GVA to cost ratios are likely to change in the future.

Table 145 summarises one measure of the value for money of NWDA’s interventions to promoteregeneration through physical infrastructure, i.e. cost per achieved and future potential net jobs.

Table 145: Cost per net job (achieved and future potential) from NWDA’s regeneration throughphysical infrastructure (2002/03-2006/07)

Expenditure

covered by

evaluations (£m)

Achieved cost per

net regional job

(£’000)

Future potential cost per

net regional job (£’000)



Barrow Call Centre 4.6 12.6 10.6

Futures Park, Bacup 3.1 4.8




Expenditure

covered by

evaluations (£m)

Achieved cost per

net regional job

(£’000)

Future potential cost per

net regional job (£’000)



Programme62.3 39.2 -

Whitemoss Business Park 5.3 8.0 4.8







Festival0.5 - -


Regional Marketing Programme 16.3 0.6 – 3.1 -







LLDC SIA 30.3 96.0 -

West Lakes Renaissance 31.8 86.0 -

Regeneration through Physical Infrastructure - Average

Regeneration Theme 313.1 53.1 -


Table 145 shows considerable variation on this measure of the value for money of these interventions.The cost per job (achieved) figure for the Land Reclamation programme can be explained by the earlystage of this intervention, where most outputs have been physical in nature. The high cost per job(achieved) figure for the NML Into the Future project can also be explained as NWDA funding was usedto supplement funding which had been exhausted from a range of other sources, and thus job relatedoutputs were attributable to other funding sources, and did not include to any significant degree outputsattributable to NWDA.

When comparing value for money achieved by regeneration through physical infrastructure interventionsdelivered by NWDA, the picture is somewhat variable. Overall the average figure for cost per net jobcreated across all NWDA regeneration through physical infrastructure interventions was £53,077, whilstthe cost per net job at sub-theme level nationally ranged from £42,101 (Bringing Land Back into Use) upto £118,945 (Public Realm). Analysis at sub-theme level revealed the following:

within the sub-theme of Bringing Land Back into Use the national average cost per net job was£42,101. Six of NWDA’s interventions within this sub-theme had lower costs per net job, whilst onlyone intervention had a higher cost per net job figure (Ancoats Regeneration Programme);


Within the sub-theme of Public Realm, the national average cost per net job was £118,945. Only oneof NWDA’s interventions within this sub-theme calculated a figure for cost per job – this was theevaluation of the Land Reclamation programme. The cost per net job for this programme wasconsiderably higher than the national average, at £346,000; and

Within the sub-theme of Image, Events and Tourism, the national average cost per net job was£79,133. Two of NWDA’s interventions had a lower cost per net job figure (this was for the RegionalMarketing Programme and the World of Glass) whilst two interventions had a higher cost per net jobfigure (NML Into the Future and Visitor Attractions).

It was not possible to compare average cost per net business created, nor average cost per hectare ofland remediated by NWDA with the national picture due to the small number of evaluations whichrecorded evidence of this output.


Tabel 146 summarises the performance against objectives of NWDA’s interventions to promoteregeneration through physical infrastructure. Performance of interventions in this theme is more mixedoverall. It should be noted that nine of the evaluations within this theme did not assess performanceagainst objectives. For the remaining evaluations which did undertake an assessment of performanceagainst objectives, only the Ancoats Regeneration Programme has met (and exceeded) the objectiveswhich were set. A further four projects have largely met their objectives.

Table 146: Performance against objectives of NWDA’s regeneration through physicalinfrastructure (2002/03-2006/07)


evaluations (£m)



Ancoats Regeneration

Programme45.0

Exceeded

Barrow Call Centre 3.5 Mixed

Futures Park, Bacup 3.1 Mixed

George Street Quarter, St. Helens 1.3 Largely met

Kingsway Project, Widnes 0.8 Limited performance

Liverpool Commercial District 7.4 Largely met


Programme55.5 Mixed

Whitemoss Business Park 3.0 Not assessed


Historic River Wall, Chester 0.8 Not assessed

Land Reclamation 17.3 Limited performance

LV Public Realm Interim 19.3 Not assessed



Festival0.5

Not assessed

LV Waterfront Construction

Impacts38.0

Not assessed

Regional Marketing Programme 16.3 Not assessed

NML Into the Future 1.8 Not assessed



evaluations (£m)


Tourism Interim 8.4 Largely met

Visitor Interim 12.2 Not assessed

World of Glass 0.9 Not assessed


West Lakes Renaissance 31.8 Largely met

Central Park 15.0 Limited performance

LLDC SIA 30.3 Limited performance



Rationale

This section relates to NWDA’s people and skills interventions. These interventions fall under theheadings of “Skills and Education” and “People and Jobs” within the North West’s 2006 RES whichidentifies the skills base of the workforce as critical to the economic development of the region. It alsonotes that, whilst the region has a comparable proportion of people with Level 2 and 3 skills to other partsof England, a larger proportion of the population has no qualifications and that these people tend to beconcentrated in nine local authority districts.

Each of the projects and programmes delivered by NWDA seeks to contribute towards the vision ofcreating “a dynamic, sustainable international economy which competes on the basis of knowledge,advanced technology, and an excellent quality of life” as set out in the RES. Within the North West RES(2006) it is stated that in order to achieve this vision the region needs to focus on five key factors, namely:

tackling the lack of basic skills and qualifications to improve employability and reduce worklessness;

meeting the skills needs of sectors and growth opportunities;

investing in workforce development to drive productivity and economic growth;

developing leadership, management and enterprise skills to improve business survival, innovation andproductivity improvement; and

developing the educational infrastructure and skills of the future workforce.

Evidence of the impact of NWDA’s people and skills interventions relates to six evaluations coveringthree sub-themes summarised in Table 147.


Table 147: Summary of NWDA’s people and skills interventions (2002/03-2006/07)


covered by

evaluations (£m)

Matching people to jobs BESS Programme 0.9

Skills/workforce development Maximising opportunity in Warrington 0.7

Educational infrastructure development Whitworth Media Technology Centre

Project Unity

2.0

20.0

Leadership Lancaster University Leadership Centre 4.4

Other Eastserve project 1.5

Total 29.5


The evaluation evidence of NWDA’s impact on people and skills development covers £29.5m of spendfrom 2002/03 to 2006/07. Project Unity makes up the largest proportion of this spend, with £20.0m ofinvestment targeted at this project alone.

Impact

Table 148 summarises the expenditure and key gross outputs achieved through NWDA’s people andskills interventions. The primary outputs have been jobs created/ safeguarded, businesses assisted,people assisted with skills and people assisted into employment.

Table 148: Gross achieved outputs from NWDA’s people and skills interventions(2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Gross jobs

created/

safeguarded

Gross

people

assisted

into

employment

Gross

businesses

created

Gross

business

supported

Gross skills

assists

Skills and workforce development

BESS Programme 0.9 259 - 77 272 1,256


Maximising opportunity

in Warrington0.7 19 669 1 - -

Educational infrastructure development

URC NEM Whitworth

Media Technology

Centre

2.0 36 121 - 4 1,096

Project Unity 20.0 1,925 - 16 - -

Leadership


Leadership Centre4.4 20 - - - 1,348

Other

Eastserve project 1.5 8 - - - 1,446

Total 29.5 2,267 790 94 276 5,146



In addition to the gross outputs achieved in Table 148, the evaluation of the Maximising Opportunity inWarrington project recorded the creation of 1,074 square metres of new floorspace (gross). In addition tothis, the Whitworth Media Technology Centre project created 2,234 square metres of new floorspace(gross). The BESS programme also assisted 272 gross businesses in their skills needs. None of theevaluations highlighted any future potential impacts.

The net outputs arising from these interventions are set out in Table 149.

Table 149: Net achieved outputs from NWDA’s people and skills interventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Net jobs

created/

safeguarded

Net people

assisted

into

employment

Net

businesses

created

Net

business

supported

Net skills

assists


BESS Programme 0.9 163 - 52 194 848


Maximising opportunity in

Warrington0.7 19 493 1 - -


Project Unity 20.0 1,437 - 12 - -

URC NEM Whitworth

Media Technology Centre2.0 8 74 - 1 477

Leadership


Leadership Centre4.4 12 - - - 829

Other

Eastserve project 1.5 8 - - - 1,085

Total 29.5 1,647 567 65 195 3,239


Three of the output areas had additionality levels of above 70% - these were for jobscreated/safeguarded (73%), people assisted into employment (71.8%) and businesses supported (71%).Levels of additionality were slightly lower for businesses created (69%) and people assisted with skills(63%), although additionality levels across all five output areas had a relatively small range.The additionality levels for these interventions within NWDA were higher than those at the national level,where additionality for jobs created/safeguarded was 48%, for people assisted into employment was 51%and for skills assists was 62%. Only one group of outputs had a higher level of additionality at thenational level than within NWDA – this was for businesses created where the national level ofadditionality was 82%, but was only 69% within NWDA.

In addition to the net outputs achieved in Table 149 above, the evaluation of the Maximising Opportunityin Warrington project recorded the creation of 1,074 square metres of new floorspace (net). In addition tothis, the Whitworth Media Technology Centre project created 1,117 square metres of new floorspace(net). The BESS programme also assisted 194 net businesses in their skills needs.

Only the evaluation of Project Unity stated that any additional future potential outputs were likely to occur,as the evaluation has been conducted at an interim point of the intervention. However the effects whichcould be expected have not been quantified in terms of jobs or other output measures.

When comparing levels of additionality within the theme of people and skills in NWDA with nationalaverages, NWDA had a lower level of additionality in relation to businesses created (69% in NWDAcompared with 82% nationally), whilst the Agency demonstrated higher levels of additionality for jobs


(73% in NWDA compared with 48% nationally) and skills assists (63% in NWDA compared with61% nationally).

Tabel 150 summarises the outcomes of NWDA’s people and skills interventions.

Table 150: Outcomes (annual achieved and future potential) from NWDA’s people and skillsinterventions (2002/03-2006/07)


evaluations (£m)

Net GVA achieved

(annual, £m)


BESS Programme 0.9 5.3


Maximising opportunity in Warrington 0.7 0.6


URC NEM Whitworth Media Technology Centre 2.0 0.3

Project Unity 20.0 46.7

Leadership

Lancaster University Leadership Centre 4.4 3.8

Other

Eastserve project 1.5 0.3

Total 29.5 57


None of the evaluations highlighted any future potential impacts in terms of gross or net outputs,therefore no future potential impact in terms of GVA has been stated within the evaluations in this theme.

Finally, besides the impact of its project and programme spend, Strategic Added Value is a key elementof NWDA’s impact within the people and skills theme, as illustrated in Box 4 below. The example shownhas been drawn from the evaluation of the URC Whitworth Media Technology Centre project, whichdemonstrates that additional impacts have been delivered by NWDA, over and above the gross and netoutputs and outcomes which have been quantified in this section.


URC NEM Whitworth Media Technology Centre

The refurbishment of disused warehouse space on the Openshaw campus into a training centre –Whitworth has acted as a catalyst to the regeneration of East Manchester and more specifically, it hashad a positive catalytic effect in terms of the remodelling of the Openshaw campus.

NWDA contributed £2m towards the refurbishment which levered funding from public sector sources –including European funding, New East Manchester projects and from the college itself, through theLearning and Skills Council. The NWDA support also created leverage from the private sector (throughemployer engagement).

Through its links with local employers, the Whitworth Centre has managed to raise the profile of thebenefits of learning more generally. Engagement has improved as a result of the Centre; Whitworth isseen as a “hub” – i.e. a focal point for learning in East Manchester. This has helped to develop supplierlinkages and improve communications between local companies.

Source: NWDA


Value for money

Tabel 151 sets out the achieved and future potential GVA to cost ratios of NWDA’s people and skillsinterventions. The GVA to cost ratio compares GVA impacts to the cost of the intervention: where thereis a GVA to cost ratio of greater than one, the economic benefits of the interventions attributable toNWDA’s funding exceed their costs. This is the case for some, but not all of the interventions where GVAhas been measured. The highest value intervention within this theme (Project Unity which received £20mof NWDA funding) had a GVA:cost ratio of 2.3:1 which has impacted strongly on the overall GVA:costratio for this theme, as this project represents 68% of total expenditure within this theme.

Table 151: Achieved and future potential GVA to cost ratios from NWDA’s people and skillsinterventions (2002/03-2006/07)


evaluations (£m)

Achieved GVA:cost

ratio (annual)


BESS Programme 0.9 5.9


Maximising opportunity in Warrington 0.7 0.9


URC NEM Whitworth Media Technology Centre 2.0 0.2

Project Unity 20.0 2.3

Leadership

Lancaster University Leadership Centre 4.4 0.9

Other

Eastserve project 1.5 0.5

Total 29.5 1.9


As Table 151 shows, some interventions such as the BESS Programme and Project Unity have alreadyachieved economic benefits which exceed their costs. Unfortunately as none of the evaluations in thistheme have quantified net future potential outputs, it is not possible to assess the degree to which GVA tocost ratios are likely to change in the future.

When GVA to cost ratios achieved in NWDA are compared with the national averages, performance wasfound to be above average. Overall, NWDA people and skills interventions achieved an averageGVA:cost ratio of 1.9:1, which was higher than the national average of 0.9:1 for interventions in thistheme. When analysed at sub-theme level, two sub-themes were found to have higher GVA:cost ratiosthan the national average – this was for “Skills and Workforce Development” (5.9:1 in NWDA compared to0.4:1 nationally) and “Matching People to Jobs” (2.3:1 in NWDA compared to 0.8:1 nationally). Only onesub-theme performed less well than the national average – this was for “Supporting the Development ofEducational Infrastructure” (0.2:1 in NWDA compared to 1.1:1 nationally).

Table 152 sets out the achieved and future potential cost per net output of NWDA’s people and skillsinterventions.


Table 152: Cost per net job (achieved and future potential) from NWDA’s regeneration throughphysical infrastructure (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Achieved cost

per net

regional job (£)

Future

potential cost

per net regional

job (£)

Achieved cost

per net

business

supported (£)

Achieved cost

per net skills

assist (£)


BESS Programme 0.9 5,719 - 4,639 1,061


Maximising

opportunity in

Warrington

0.7 2,558 -

- -


URC NEM Whitworth

Media Technology

Centre

2.0 251,000 -

2,000,000232

4,192

Project Unity 20.0 13,663 12,039 - -

Leadership


Leadership Centre4.4 359,000 -

- 5,307

Other

Eastserve project 1.5 187,000 - - 1,382

Total 29.5 17,911 - 453,846 8,684


The cost per net job achieved from people and skills interventions ranged from £2,558 within theMaximising Opportunity in Warrington project to £359,000 for the Lancaster University Leadership Centreproject. However, it was also possible to calculate cost per net person assisted with skills. This measure,although not consistently available across all projects, was found to vary from £1,061 within the BESSProgramme, up to £5,307 for the Lancaster University Leadership Centre project.

When comparing value for money achieved by people and skills interventions delivered by NWDA withthe national RDA average, the picture is largely positive. Overall the average figure for cost per net jobcreated across all NWDA people and skills interventions was £17,911, whilst the cost per net job at sub-theme level nationally ranged from £24,007 (Hybrid People and Skills Interventions) up to £105,268(Skills and Workforce Development). Analysis at sub-theme level revealed the following:

within the sub-theme of Skills and Workforce Development the national average cost per net job was£105,268 and the national average cost per net skills assist was £1,242. The MaximisingOpportunities in Warrington project had a net cost per skills assist of £2,558 and Project Unity had anet cost per skills assist of £13,663. Therefore, both performed less well in terms of value for moneywhen compared to the national average;

Within the sub-theme of Matching People to Jobs, the national average cost per net job was £49,215and the national average cost per skills assist was £2,570. The BESS project performed better interms of value for money in both categories, with a net cost per job of £5,719 and a net cost per assistof £1,061; and

232 This project was at an early stage of its development at the time of the evaluation, thus only one business had been created to

date. The main objective of the project – a new capital build project at the Technology Centre was completed, thus the main output

and objective for the project was achieved.


Within the sub-theme of Educational Infrastructure Development, the national average cost per net jobwas £33,995 and the national average cost per skills assist was £6,454. Again the Whitworth MediaTechnology Centre performed better in terms of net cost per assist of £4,192, but performed less wellin terms of net cost per job, which was calculated to be £251,000.


Table 153 summarises the performance against objectives of NWDA’s people and skills interventions,where all evaluations provided an illustration of how the intervention had performed against objectives.Performance against objectives was found to vary within this theme, although it was found that three ofthe six interventions had exceeded in terms of performance against objectives, with one other projectlargely meeting the objectives which had been set. When considered in terms of overall expenditure,Project Unity represented 67.8% of expenditure within the theme, and this project exceeded theobjectives which had been set.

Table 153: Performance against objectives from NWDA’s people and skills interventions(2002/03-2006/07)

Expenditure

covered by

evaluations (£m)

Performance against

objectives


BESS Programme 0.9 Largely met

Maximising opportunity in Warrington 0.9 Mixed


URC NEM Whitworth Media Technology Centre 2.0 Exceeded

Project Unity 34.0 Exceeded

Leadership

Lancaster University Leadership Centre 4.3 Exceeded

Other

Eastserve project 1.5 Limited performance


Other NWDA interventions

Rationale

The evidence of NWDA’s impact on other interventions covers £344.8m of spend from 2002/03 to2006/07. These comprise the Single Regeneration Budget (SRB) programme, which aimed to tackleissues affecting the most deprived communities. Interventions were focused on deprived areasthroughout the North West, with a substantial amount of activity covering areas in the two metropolitanareas of Greater Manchester and Merseyside, along with Lancashire. Between them, GreaterManchester, Merseyside and Lancashire accounted for 92% of SRB spend across Rounds 3 to 6, splitapproximately into equal thirds. The largest single Round for a sub-region was Round 6 for Lancashire,which received £115 million.

The North West of England ran 151 of the 1,028 national SRB schemes, with nearly two thirds (64%) ofactivity taking place in Rounds 3 to 6. In each round, the North West received a fairly common proportionof national SRB funds, ranging from 15% in Round 3 to 21% in Round 5. Overall, the North Westreceived 19% of the national share of SRB funds, which compares quite favourably with its 21% share ofdeprivation. The Index of Multiple Deprivation Data from 2004 indicates that 21.3% of the 8,120 mostdeprived Super Output Areas (SOAs) in England are in the North West region. This is the highestproportion of any English region (by comparison, London is the next highest, accounting for 20.5% of themost deprived SOAs).


NWDA has also undertaken a number of other interventions throughout the North West which have beenevaluated, besides SRB programme activity. These include:

three individual SRB project evaluations commissioned by NWDA; and

five area based regeneration programmes (where each individual project covers multiple outputareas) initiated by the NWDA.

Impact

Key outputs arising from these other interventions have been jobs created/ safeguarded and skillsdeveloped, and to a lesser extent businesses created and land reclaimed/ redeveloped. Table 154 setsout the key gross outputs achieved in relation to these interventions.

Table 154: Gross achieved outputs from NWDA’s other interventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Gross jobs

created/

safeguarded

Gross

skills

assists

Gross

businesses

created

Gross land

reclaimed/

redeveloped (ha)

SRB Meta Evaluation

SRB 321.9 59,287 67,246 2,026 861

Other SRB projects

Halton Focus for Change

(Round 5)9.1 692 4,782 108 760

Hyndburn PACT (Round 6) 6.5 602 522 109 14

Beacons East Manchester

(Round 5)19.2 1,742 4,118 39 -

Area based regeneration programmes


Renaissance (TCR) Programme5.4 599 - 6 111


Programme6.5 1,154 - 155 -


Programme7.0 374 923 608 0.5

Sefton Village Partnership 0.8 94 - 14 -


Business Programme3.2 1,168 - 12 88

Total 344.8 65,712 77,591 3,077 1,834.5


In addition to the gross outputs identified in Tabel 154, the evaluations within the sub-theme of other SRBprojects contributed 760 gross people assisted to get a job, 2,538 gross businesses assisted and 4,591gross square metres of new floorspace. Within the sub-theme of area based regeneration programmes,the interventions also delivered 139 gross people assisted to get a job, 2,672 gross businesses assistedand 64,446 gross square metres of new floorspace. None of the evaluations highlighted any futurepotential gross outputs

233.

233 The evaluations of the Cheshire Rural Recovery Programme, the Lancashire Rural Recovery Programme and the Blackburn

Town Centre Renaissance Programme each highlighted that there would be zero impact in terms of gross future potential outputs

for jobs created/safeguarded.



Table 155: Net achieved outputs from NWDA’s other interventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Net jobs

created/

safeguarded

Net skills

assists

Net

businesses

created

Net land

reclaimed/

redeveloped (ha)

SRB Meta Evaluation

SRB 321.9 24,888 37,658 891 422

Other SRB projects

Halton Focus for Change

(Round 5)9.1 287 2,678 45 372

Hyndburn PACT (Round 6) 6.5 268 381 73 9

Beacons East Manchester

(Round 5)19.2 409 - 9 -



Renaissance (TCR) Programme5.4 283 - 3 -


Programme6.5 195 - - -


Programme7.0 228 - 285 0.4

Sefton Village Partnership 0.8 78 - - -


Business Programme3.2 70 - 4 -

Total 344.8 26,706 40,717 1,310 803.4


In addition to the net outputs identified in Tabel 155, the evaluations within the sub-theme of other SRBprojects contributed 471 net people assisted to get a job, 933 net businesses assisted and 1,973 netsquare metres of new floorspace. Within the sub-theme of area based regeneration programmes, theinterventions also delivered 111 net people assisted to get a job, 1,202 net businesses assisted and35,189 net square metres of new floorspace. None of the evaluations highlighted any future potential netoutputs

234.

In three of the four output areas assessed in Table 155, additionality was found to be under 50% - thisrelates to the outputs for jobs created/safeguarded (41%) and businesses created (43%). For the outputin relation to skills assists, additionality was slightly higher at 53%. It is difficult to assess additionalityoverall for hectares of brownfield land reclaimed/redeveloped as two evaluations provided net outputs inthis area, but did not quantify the gross outputs upon which these were based.

When comparing levels of additionality within the theme of other interventions in NWDA with nationalaverages, NWDA has a lower level of additionality in relation to jobs (41% in NWDA compared with 49%nationally) and also for businesses created (43% in NWDA compared with 51% nationally). Given thesignificance of the SRB project evaluation within this theme in terms of relevant spend covered, it is

234 The evaluations of the Cheshire Rural Recovery Programme, the Lancashire Rural Recovery Programme and the Blackburn

Town Centre Renaissance Programme each highlighted that there would be zero impact in terms of net future potential outputs for

jobs created/safeguarded.


important to consider the additionality generated by these schemes given the impact which it will have onthe overall averages. The levels of additionality ranged from 42% for jobs up to 56% for skills assists.

Table 156 summarises the outcomes of NWDA’s other interventions.

Table 156: Outcomes (annual achieved and future potential) from NWDA’s other interventions(2002/03-2006/07)


evaluations (£m)

Net GVA achieved

(annual, £m)

SRB Meta Evaluation

SRB 321.9 808.7

Other SRB projects

Halton Focus for Change (Round 5) 9.1 9.3

Hyndburn PACT (Round 6) 6.5 8.7

Beacons East Manchester (Round 5) 19.2 13.0


Blackburn Town Centre Renaissance (TCR) Programme 5.4 9.2

Cheshire Rural Recovery Programme 6.5 6.3

Lancashire Rural Recovery Programme 7.0 7.4

Sefton Village Partnership 0.8 2.5

West Lancashire Investing in Business Programme 3.2 2.3

Total 344.8 867.4


None of the evaluations within this theme highlighted any future potential gross or net outputs, thereforethere has been no evidence to suggest potential changes to GVA in the future.

The quantitative evidence of outcomes and impacts in the evaluation reports which fed into the SRBevaluation was very limited. However, applying the three year rolling average

235GVA per worker for the

North West of England (of £32,495) to the 24,888 net jobs created and safeguarded gives an estimatedGVA impact of £808.7m.

Finally, besides the impact of its project and programme spend, Strategic Added Value is a key elementof NWDA’s impact within the ‘other’ theme, as illustrated below. The examples shown have been drawnfrom the evaluation of the West Lancashire Investing in Business Programme and also from theevaluation of the Blackburn Town Centre Renaissance programme, which demonstrates that additionalimpacts have been delivered by NWDA, over and above the gross and net outputs and outcomesquantified in this section.


West Lancashire Investing in Business Programme

NWDA encouraged West Lancashire Forum (superseded by the Local Strategic Partnership (LSP)), toimplement an economic regeneration programme for the district of West Lancashire (as opposed to justthe Skelmersdale area). The Agency’s influence, through the LSP has extended throughout the durationof the programme. This continued involvement has helped to ensure that NWDA requirements are metand that the programme has had a coherent approach throughout.

235 The rolling average was calculated using labour market data for the years 2004/05, 2005/06 and 2006/07.


In addition, NWDA’s commitment to the Investing in Business (IIB) Programme has helped to leverageother public funding (including WLDC and the LSP). It has also helped to ensure that the key partnersremained engaged and involved in IIB.

NWDA has contributed to the overall synergy of the IIB Programme through its involvement with otherregeneration programmes in West Lancashire such as the Ormskirk Town Centre. Although the projectshave been largely co-ordinated by WLDC, NWDA have retained an important oversight role.

Blackburn Town Centre Renaissance

The regeneration of Blackburn town centre was led by the Council, however this would not havehappened without the funding support and strategic leadership provided by NWDA. The RenaissanceProgramme has influenced the town centre in a variety of ways, for example, Blackburn College ispreparing to invest £80 million in the Knowledge Zone: This would not have occurred without the initialregeneration of the town centre.

To date, NWDA funds have enabled a leverage of 1:2.14 to be achieved.

The Agency, through the funding has ensured the continued existence of the Town Centre Partnershipand therefore the Agency has played a role in ensuring effective engagement amongst stakeholders.Strong links have been created in the Partnership, the fact that joint marketing and strategy decisionshave been made, is testament to the effective working relationships that have been established. Finally,the engagement that has been forged between the stakeholders on this partnership has had manybenefits, for instance, without the Partnership; the developments at the Cathedral Quarter may not havecome to fruition.

Source: NWDA

Value for money

Table 157 sets out the outcomes from NWDA’s other interventions.

Table 157: Achieved and future potential GVA to cost ratios from NWDA’s other interventions(2002/03-2006/07)


evaluations (£m)


(annual)

SRB Meta Evaluation

SRB 321.9 1.3

Other SRB projects

Halton Focus for Change (Round 5) 9.1 1.0

Hyndburn PACT (Round 6) 6.5 1.3

Beacons East Manchester (Round 5) 19.2 0.7


Blackburn Town Centre Renaissance (TCR)

Programme5.4 1.7

Cheshire Rural Recovery Programme 6.5 1.0

Lancashire Rural Recovery Programme 7.0 1.1

Sefton Village Partnership 0.8 3.1

West Lancashire Investing in Business Programme 3.2 0.7

Total 344.8 2.5


As Table 157 shows, some interventions such as the overall SRB programme and many of the areabased regeneration programmes have already achieved economic benefits which exceed their costs,


including the SRB evaluation which achieved a return of 1.3:1. As none of the evaluations in this themehave quantified net future potential outputs, it is not possible to assess the degree to which GVA to costratios are likely to change in the future.

Table 158 sets out the achieved and future potential cost per net output of NWDA’s other interventions.

Table 158: Cost per net job (achieved and future potential) from NWDA’s other interventions(2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Achieved cost

per net

regional job (£)

Achieved cost

per net

business

assisted (£)236

Achieved cost

per net skills

assist (£)

SRB Meta Evaluation

SRB 321.9 24,148 674,523 15,959

Other SRB projects

Halton Focus for Change (Round 5) 9.1 5,100 202,222 3,398

Hyndburn PACT (Round 6) 6.5 6,000 89,041 17,060

Beacons East Manchester (Round 5) 19.2 46,943 2,133,333 -

Area based regeneration programme

Blackburn Town Centre Renaissance

(TCR) Programme5.4 105,594

1,800,000 -

Cheshire Rural Recovery Programme 6.5 77,204 - -

Lancashire Rural Recovery Programme 7.0 50,945 24,561 -

Sefton Village Partnership 0.8 10,256 - -

West Lancashire Investing in Business

Programme3.2 55,557

800,000 -

Total 344.8 12,910 8,468


The cost per net job achieved from other interventions ranged from £5,100 within the Halton’s Focus forChange project to £105,594 within the Blackburn Town Centre Renaissance project. However, it wasalso possible to calculate cost per net person assisted with skills and cost per net business created. Interms of cost per net person assisted with skills, this measure, although not consistently available acrossall projects, was found to vary from £3,398 within the Halton’s Focus for Change project, up to £17,060for the Hyndburn PACT Project. The SRB project evaluation costs compared favourably across the threeoutput areas where effects were noted. The cost per net job figure of £24,148 was the third lowest figureof the 14 evaluations in this category, and the cost per net skills assist figure was the median figure forthis unit cost area, based on the three evaluations where cost per skills assist could be calculated.


Table 159 summarises the performance against objectives of NWDA’s other interventions and shows thatof the seven evaluations which assessed performance of the interventions, the majority (six) includingSRB found that performance was mixed. One intervention performed well – the Sefton VillagePartnership largely met the objectives set.

Table 159: Performance against objectives from NWDA’s other interventions (2002/03-2006/07)

236 The costs per net business created for the Beacons East Manchester project is considerably higher than others within this

theme. The Beacon’s project delivered a range of outputs, not just business creation.


Expenditure

covered by

evaluations (£m)

Performance against

objectives

SRB Meta Evaluation

SRB 321.9 Mixed

Other SRB projects

Halton Focus for Change (Round 5) 9.1 Mixed

Hyndburn PACT (Round 6) 6.5 Mixed

Beacons East Manchester (Round 5) 19.2 Mixed


Sefton Village Partnership 0.8 Largely met

Blackburn Town Centre Renaissance (TCR) Programme 5.4 Mixed

West Lancashire Investing in Business Programme 3.2 Mixed

Cheshire Rural Recovery Programme 6.5 Not assessed

Lancashire Rural Recovery Programme 7.0 Not assessed


National programmes

Besides its own interventions, NWDA has been responsible for the management and delivery of eight ofthe ten national programmes which have been delivered within parameters closely defined by centralgovernment departments. Although the available evaluation evidence on national programmes does notdisaggregate gross outputs at a regional level, we have been able to estimate the impact of two of theseprogrammes on the North West of England (this was undertaken from Business Link and the Grants forResearch and Development). This has been done by dividing NWDA spend on the programme by theregional cost per job and then making allowances for displacement, leakage and multiplier effects.

In addition, NWDA have also evaluated the impact of the Coalfields Programme and the Market TownInitiative within the North West, and the findings from these evaluations have also been used to assist inassessing the impact of national programmes.

Table 160 summarises NWDA’s spend in the relevant period on each of the national programmes andsummarises the estimated impacts where these are available. As the Table shows, four of the eightnational programmes delivered by NWDA have resulted in the achievement of 9,082.6 net jobscreated/safeguarded. The estimated impact on the regional economy is £336.5m per annum.


Table 160: Estimated impact of NWDA spending on national programmes between 2002/03 and2006/07 (£m)

National programme NWDA spend – 2002/03-

2006/07 (£m)

Net jobs created/

safeguarded


Manufacturing Advisory Service - -

Phoenix Fund - -

Regional Innovation Fund - -

Rural Development Programme for England (& Sustainable

Food and Farming Strategy)

1.9 -

Selective Finance for Investment 55.4 -

Coalfields Programme 16.3 104

Regional Tourist Board Support 17.2 -

Market Town Initiative 10.3 414.6

Grant for Research & Development 6.3 343

Total 197.5 9,082.6



One North East

Summary

Overview

Since its establishment One North East (ONE) has spent approximately £1,647m (excludingadministrative costs) on a range of interventions designed, individually or collectively, to stimulatebusiness development and competitiveness, promote regeneration through physical infrastructure andenhance employability and skills.

The total ONE ‘relevant spending’ for this report is £1,082m, that is spend from 2002/03 to 2006/07,excluding £419m legacy spend (from 1999/00 to 2001/02) and £146m spend on five nationalprogrammes. SRB was a substantive part of ONE’s expenditure, accounting for just under £205m outof total ONE ‘relevant spending’.

We have reviewed 12 evaluations covering ONE spend of £698m.

Impact

The evaluations show that ONE has generated significant outputs already:

– more than 43,600 jobs have been created and safeguarded, of which between 56% and 58% areestimated to be additional at the regional level;

– over 9,500 businesses have been assisted, of which 18% are estimated to be additional;

– over 1,900 businesses have been created, of which 60% are estimated to be additional;

– nearly 350 hectares (ha) of land has been remediated, of which 60% are estimated to beadditional;

– over 12,200 people have been assisted into employment, of which 52% are estimated to beadditional; and

– almost 158,600 skills assists have been delivered, of which 62% are estimated to be additional.

In addition to the impact of its project and programme spend, Strategic Added Value (SAV) is a keyelement of ONE’s impact, particularly in terms of influencing investments by private sector investorsand developers, developing and testing new approaches and developing regional and internationalnetworks.

Value for money

The highest achieved return in the evaluation evidence is as a result of a business intervention, withan achieved average return of 86 to 1

237. The lowest return is from a place intervention with an

achieved average GVA per annum return of between 0.04 and 0.24 to 1.


Only 14.5% of the evaluations (by value) assessed performance against objectives. It is therefore notpossible to draw comparisons on ONE’s overall performance from the limited evaluation evidence.

237 It is important to note that this evaluation has been excluded from the national report as an outlier due to the exceptionally high

GVA to cost ratio of 86 to 1 compared to the national average for this sub-theme of 3.5 to 1.


Context

Overview of the North East

The North East is one of the smallest of the nine English regions in terms of both area and population.Covering the 8,612 km

2which lie between the Scottish Borders to the north, Yorkshire & the Humber to

the south and the North-West Region to the west, the North East is home to 2.5 million people, most ofwhom live along the three rivers of the Tyne, the Wear and the Tees. The region is divided into the foursub-regions (or sub-regional partnerships) of County Durham, Northumberland, Tyne & Wear and theTees Valley.

The gross value added (GVA) of the North East was £38.8bn238

in 2006. The average GVA per capita inthe region was £15,177 compared to the UK level of £18,631 – representing 81.5% of the nationalaverage and an increase of 1.5% since ONE’s inception.

The State of the Region239

report highlights the dominant sectors within the North East includingmanufacturing, business services and the public sector. The region’s economy differs from the nationaleconomy in its sectoral composition with respect to:

manufacturing which accounts for a bigger proportion of the North East economy than it doesnationally (just under 21% in 2002 compared to just under 16% nationally);

the public sector, which accounted for 23% of the regional economy compared to 17% nationally; and

business services which accounted for 25% of the regional economy but 35% nationally.

Although the North East remains below the national average on certain social and economic indicatorsrecent years have seen the region start to close the gap with the UK in many of these areas. Forexample, whilst the region has relatively low levels of business stocks and start ups, both at around 60%of national rates, each of the past six years have seen the region’s business stock grow at a faster ratethan the national average. The employment gap is now approximately 50% less compared to the pastfive years at around 4% below the UK rate but worklessness remains a problem with 21.1% ofhouseholds in the region classed as workless in April-June 2008 compared with 16.1% for the UK.Finally, in 2007 13.8% of the region’s working age population had no qualification compared to 13.4%nationally – a significant narrowing of the gap in qualification levels over the past few years

ONE’s purpose and strategy

ONE is responsible for helping create and sustain jobs, prosperity and a higher quality of life within theNorth East. The vision of ONE is: “to be the best economic regeneration agency in the UK” to progressthe regional vision of driving sustainable economic growth and, in particular, to increase GVA per headfrom 80% to 90% of the UK average. In doing so the Agencies values are aspiration to be the best, prideand respect, openness and honesty and commitment and responsibility.

The priorities for ONE’s and the wider region’s investment in the North East’s economy are set out in aseries of Regional Economic Strategies (RES), the first of which was published in 1999. The RES hassince been updated, in 2002 and again in 2006. The prime focus of this impact evaluation is in relation tothe 2002 RES. The overarching vision outlined in the 2002 RES was for the North East to become avibrant, self reliant and outward looking region by raising the aspirations and profile of the region, therebymaking it more prosperous and inclusive.

The six main strategic priorities to deliver a vision of economic renewal for the region, described in the1999 RES and retained within the 2002 RES, are:

creating wealth by raising the productivity of all businesses;

establishing a new entrepreneurial culture;

238 Regional Gross Value Added, National Statistics, 2006.239 State of the Region, 2006.


creating a healthy labour market supported by a skilled workforce;

recognising universities and colleges at the heart of the region’s economy;

meeting 21st century transport, communication and property needs; and

realising the renaissance of rural and urban communities.

The latest RES: ’Leading the Way: Regional Economic Strategy, 2006 – 2016’, published in 2006, movesaway from the earlier structural focus to a more transformational agenda based around the three themesof business, people and place. The RES sits alongside the Regional Spatial Strategy

240and they inform

regional strategies, for example the Regional Housing Strategy241

, and are underpinned by the IntegratedRegional Framework

242.” It sets out the North East’s main economic development priorities in the next

decade and provides a framework within which regional and sub-regional organisations from the public,private and voluntary sectors will deliver actions for sustainable prosperity. It contains three key targetsfor the Agency:

increasing GVA per capita in the North East to 90% of the national average (from 80% currently);

creating between 18,500 and 22,000 net additional new businesses; and

providing employment for between 61,000 and 73,000 more people than current levels.

This, and earlier RESs, were supported by Corporate Plans243

which identify and prioritise the Agency’sinterventions and are designed to meet the region’s objectives. ONE has had five Corporate plans overthe period on which this report focuses:

2002-2005 Corporate Plan detailed Agency and associated regional activity over this period. ThePlan was the first opportunity to utilise the flexibilities and opportunities available under the RDA’sSingle Financial Framework and was prepared within the (then) new Government TargetFramework

244used to measure the economic performance of the Regions. It contained proposals to

develop the four Sub Regional Partnerships (SRPs) which became increasingly important andinfluential over the three year period as commitments from existing programmes came to an end;

2005-2008 Corporate Plan which set out the new strategic direction of the Agency in the lead up tothe development of ONE’s revised Regional Economic Strategy in 2005/06;

2006-2009 Corporate Plan which aligned to the themes outlined in the 2006 RES and represented thecontribution that the Agency would make over the next three years towards the delivery of the RES;and

2007-2012 Corporate Plan and Business Plan set out more specifically the region’s priorities,indicating what the Agency intends to deliver and detailing its expenditure proposals and targets overthe next five years. As identified in the RES Action Plan

245, the focus of the Agency is on:

“concentrating on the areas in which the North East has world class strengths and huge potential forfuture growth”. Beyond this, the Corporate Plan and Business Plan outline eight key programmes:

240 The North East England Regional Spatial Strategy, 2008.

241 Quality Places for a Dynamic Region: NE Regional Housing Strategy, 2007.

242 The Integrated Regional Framework for the North East of England, 2008.

243 These Corporate Plans covered the periods 2002-2005, 2005-2008, 2006-2009, 2007-2012 and finally, 2008-2013.

244 The framework identified four core generic ‘milestone’ target areas (jobs created/safeguarded; businesses created or attracted;

learning opportunities; and land reclaimed), common to all RDAs, that directly relate to one or more of the Tier 2 policy areas.

245 The RES Action Plan translates the RES priorities from the Corporate and Business Plans into a clear investment framework,

channelling partners’ spend into key areas in order to deliver more jobs and businesses


– Business Solutions;

– Enterprise;

– Innovation, Industry and Science;

– Leadership;

– Promoting the Region;

– Quality of Place;

– Skills; and

– Economic Inclusion;

The latest Corporate Plan covering the period from 2008 to 2013 builds on the 2007-2012 Plan bysetting out how ONE will contribute to the growth targets of the RES over the next five years, inaddition to reviewing the eight programmes that have been implemented to fit with the three strategicpriority themes of business, people and place. These programmes align closely with operationalarrangements within the Agency and have been re-categorised as:

– Business Investment;

– City Regional and Rural;

– Culture and Tourism;

– Economic Inclusion;

– Enterprise and Business Support;

– Innovation and Business Development;

– Promoting the Region; and

– Skills and Higher Education.

ONE’s core outputs cover: jobs created or safeguarded; people assisted to get a job; new businessescreated and surviving 12 months; businesses assisted to improve their performance; public and privateregeneration investment levered; hectares of brownfield land reclaimed and redeveloped; and peopleassisted in their skills development (skills assists). These core outputs, together with the programmestructure, form the context for evaluating ONE’s activity and impact

246.

Besides the impact of its project and programme spend, ONE also influences its partners’ andstakeholders’ behaviour and performance in other ways. This ‘Strategic Added Value’ (SAV) is seen as akey element of ONE’s impact. Indeed, the policy framework that led to its establishment was designed toenable ONE to harness national, regional and local institutions in order to exploit the region’s indigenousstrengths and tackle particular weaknesses, and to provide the environment for businesses andcommunities to maximise their potential through reforms that strengthen the key drivers of productivityand growth.

246 In addition to the core outputs described above the Corporate Plan also included businesses assisted via collaboration with the

UK knowledge base. This output is not consistent across all the RDA’s and as such has not been included within our impact

analysis.


ONE’s profile

In 2006/07, ONE had an annual budget of £283m and had spent around £1.8bn up to and including2006/07. Although this report draws on evaluations which cover ONE’s spending over the whole periodsince its establishment in 1999, its focus is on that spending for which ONE is formally accountable, overwhich it has had the greatest influence and where at least the early evidence of impact should beapparent. In practice, this means that this report focuses on understanding the impact of ONE’s spendingon interventions in the ‘relevant period’ between 2002/03 to 2006/07: consequently, it focuses less onthose programmes and projects which ONE inherited from its predecessors

247and the five national

programmes where ONE has been responsible for delivery within parameters determined by centralgovernment departments

248.

Table 161 provides a breakdown of ONE’s overall spend per annum from 1999/2000 to 2006/2007between the three broad intervention categories outlined in the IEF

249and on national programmes and

administrative costs.

As Table 161 shows, relatively more of ONE’s total expenditure between 1999/2000 to 2006/2007 hasbeen devoted to business interventions (27%) than to place (25%), people (20%) or other interventions(11%). It is also evident that ONE’s spending priorities have changed since its establishment, withincreased amounts devoted to business and place interventions in the later years covered by theevaluation evidence in this report.

Since its establishment, ONE has spent £1,647m on interventions (excluding administrative costs), ofwhich £1,082m was spent on ONE (rather than national) interventions in the ‘relevant period’ (2002/03 to2006/07). This subset of spend is the primary focus of this report (see shaded area in Table 161).

Table 161: Analysis of ONE spend by year and by category of expenditure (£m)250


programmes

Administrative

costs

Total

1999/2000 18.2 30.0 64.3 0 0 14.2 126.7

2000/2001 32.8 29.2 66.7 0 0 16 144.7

2001/2002 52.6 35.3 89.4 0 0 16.2 193.5

2002/2003 23.0 44.4 18.8 82 £45.4 18.6 232.2

2003/2004 64.2 66.2 23.2 59 £27 21.1 260.7

2004/2005 84.1 76.9 28.5 36 £27.1 21.8 274.4

2005/2006 88.8 90.5 37.2 22 £23.3 22.1 283.9

2006/2007 118.1 73.3 40.2 6 £22.8 22.7 283.1

Total 481.8 445.8 368.3 204.9 145.6 152.7 1,799

Source: PwC analysis based on ONE evaluation evidence

Table 162 summarises ONE’s spend covered by usable evaluation evidence. The evidence for theimpact of ONE’s spending draws on 12 programme level evaluations covering 65% (£698m) of ONE’s


spending

248 Ten national programmes have been defined. They are the Coalfields Programme, the Regional Innovation Fund, the



Research & Development and Phoenix Fund. However the Coalfields Programme was not delivered in the North East of England.249 These IEF intervention categories have been applied consistently across all RDAs and bear no relationship to how ONE

organises itself.250 Table 1 also includes the entire sub-regional partnership (SRP) monies spent by the Agency over this period.


programme spend over the ‘relevant period’ which are consistent with the requirements of the IEF. Thisprovides a robust evidence base upon which ONE’s impact can be assessed. Annex E provides a list ofthe evaluations used. The level of coverage varies across the intervention categories.

Table 162: Analysis of ONE’s spend covered by IEF compliant evaluations (2002/03-2006/07)

Total

Expenditure covered



evaluations

Business 204 54% 7

Place 193.4 55% 2

People 94.8 64% 2

Other 205 100% 1

Total 698 65% 12


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

Key findings

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

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

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

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

Impact

The majority of ONE’s programme level evaluations covered in this report have calculated net outputs onthe basis of the gross outputs. These have been presented as outputs achieved and future potentialoutputs. The ‘core’ gross and net outputs are summarised in Table 163.


Table 163: Gross and net attributable ONE outputs (2002/03-2006/07)

Jobs created/

safeguarded

Businesses

created

Businesses

supported

Brownfield

land (ha)

People

assisted

into

employment

Skills

assists


Gross outputs achieved 29,516 1,202 4,809 - - 46,017

Net outputs achieved 19,068 619 1,509 - - 18,152

Additionality %, achieved 65 51 31.3 - - 39

Future potential gross outputs 1,163 - - - - -

Future potential net outputs 786 - - - - -

Additionality %, future potential 67.5 - - - - -


Gross outputs achieved 3,748 1,041 12,456 216 - -

Net outputs achieved 767-1,726251

- - 108 - -

Additionality %, achieved 20.5-46 - - 50 - -

Future potential gross outputs - - - - - -

Future potential net outputs - - - - - -

Additionality %, future potential - - - - - -

People and skills


Net outputs achieved 734 436 174 - 6,306 71,344

Additionality %, achieved 56 97% 3.6 - 51.5 77




Other

Gross outputs achieved 9,081 1,525 - 133 - 19,889

Net outputs achieved 3,821 853 - 101 - 8,513

Additionality %, achieved 42 56 - 76 - 43




251 The range is reflective of the range of sub-themes with different employment effects within the Quality of Place evaluation.


Jobs created/

safeguarded

Businesses

created

Businesses

supported

Brownfield

land (ha)

People

assisted

into

employment

Skills

assists

Total

Gross outputs achieved 43,647 3,177252

9,581253

349 12,234 158,608

Net outputs achieved 24,390 - 25,349 1,908 1,683 209 6,306 98,009

Additionality %, achieved 56-58 60 18 60 51.5 62

Future potential gross outputs 1,163 - - - - -

Future potential net outputs 786 - - - - -

Additionality %, future potential 67.5 - - - - -


ONE’s spending has created/safeguarded jobs, assisted and helped to create new businesses, assistedpeople in skills development and employment and remediated brownfield land. A large proportion ofthese outputs have already been achieved. Only three evaluations provided an indication of outputs thatare potentially to be achieved in the future; these are predominantly related to jobs created by the EBusiness programme and Access to Finance. These future outputs are subject to varying degrees ofuncertainty and should, as such, be treated with caution.

Based on the sample of interventions evaluated in Table 3 the level of additionality resulting from ONE’sbusiness interventions varied across intervention and output type, but is generally relatively high (65%)compared with ONE’s regeneration (20.5% - 46%) and people and skills (56%) and other (42%)interventions for jobs created/safeguarded. The additionality of business interventions in terms ofachieved business creation (51%) is generally lower than that of people and skills (97%) and other (56%)interventions. Conversely the additionality of people assisted in skills development is much higher forONE’s people and skills interventions (77%) compared to business (39%) and other interventions (43%).

Comparison of the additionality of ONE’s interventions with the national findings (based on the averagesfrom the evaluations undertaken across the RDA network) shows a mixed picture. Whilst ONE’sbusiness interventions compare favourably for achieved net outputs in terms of jobs created andsafeguarded (65%) and businesses created (51%) compared to the national average (48% and 40%respectively), physical regeneration interventions have lower levels of additionality in terms of jobscreated and safeguarded (20-46%) and land remediated (50%) compared to 45% and 73% nationally.ONE’s people and skills interventions have higher levels of additionality across all output categories atthe national level.

In Table 164 we set out those measures that have been produced in order to demonstrate the range ofoutcomes from the evaluations with GVA estimates. As the table shows, eight evaluations have eitheralready achieved GVA which is greater than ONE’s initial investment, or have the potential to do so in thefuture.

252 It is important to note that this does not include the gross businesses created under ONE’s regeneration through physical

infrastructure interventions of 1,041 due to the lack of associated net output data.

253 As above this does not include the gross businesses supported under ONE’s regeneration through physical infrastructure

interventions of 12,456 due to the lack of associated net output data.


Table 164: Outcomes from the evaluation of ONE interventions (2002/03-2006/07)

Expenditure Achieved

GVA

(annual,

£m)

Future

potential

GVA

(annual,

£m)

Achieved

GVA

(cumulative,

£m)

Future

potential

GVA

(cumulative,

£m)

Achieved &

future

potential

GVA

(cumulative,

£m)


Access to Finance 0.6254

15.8 1.8 17.6 - -

Enterprise Support 9.4 24 - - - -

Sectors Programme 23.7 82.6 - - - -

E-Business Programme 13.7 7 23 30 - -

Innovation, Industry and

Science (IIS)150.6 48 -

-

-

-

Investment, Aftercare and

Overseas Function6.1 526 -

-

-

-

Midas 0.6 0.85 - - - -


Quality of Place 180.9 7 - 42.5 - - - -

Promoting the Region 12.5 15 - - - -

People and skills

Economic Inclusion 11.1 21 1.1 22.1 5.4 -

Skills and Higher Education 83.7 135 - - - -


As indicated previously only three evaluations (Access to Finance, E Business Programme and EconomicInclusion) provided an indication of future impacts (at a level of £26m annual GVA and £5.4m ofcumulative GVA for Economic Inclusion). This is not, therefore, representative of the likely level of futureGVA that might be generated by ONE’s interventions in general especially in the areas of physicalregeneration and people interventions.

Finally, as highlighted in the summary Strategic Added Value is a key element of ONE’s impact, as setout below.

ONE’s Strategic Added Value

Besides the impact of its project and programme spend, ONE also influences its partners’ andstakeholders’ behaviour and performance in other ways in terms of securing private sector investmentand leverage as demonstrated by the Evaluating the Impact of ONE

255report.

Based on consultations with partners and stakeholders the SAV scoring assessment of ONE was foundto be positive. Overall ONE is judged to have been successful in creating SAV that would not otherwisehave been created through its strategic/ coordinating, capacity building and performance enhancing roles.

254 The total gross amount of Access to Finance funding support until the end of 2007 was £32.4m. This however includes a

significant proportion of legacy funding. In calculating the contribution of ONE of £7.2m out of this £32.4m a legacy value of 91%

has been applied.

255 Evaluating the Impact of ONE, 2006.


The five SAV sub areas where ONE received most support for some or significant impact made were:

exerting strategic influence over partners and aligning their priorities with the RES;

creating a climate for regional growth;

encouraging economic development that might not otherwise have taken place;

scaling up beneficial economic development activity; and

creating confidence between partners in the prospects for regional growth.

Based on partner comments, ONE has made the most impact and created the most SAV in its place, asopposed to its people or business, programme areas. This is largely due to the regional image campaignand physical regeneration.

Specific examples of SAV generated by ONE can be found in the SAV sections for individual themes.

Source: ONE

Value for money

Table 165 considers the value for money of ONE’s interventions from two perspectives:

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

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

In assessing the value for money of ONE’s interventions we have sought to compare them with theevidence emerging from the evaluation of other RDAs’ activities. Care should be taken when comparingthe value for money of these interventions as these are set out in terms of both achieved and futurepotential where available (the latter being subject to uncertainty). Table 5 also sets out ratios of GVA tocost based on either cumulative GVA (including the persistence effects of the intervention) or annual GVAdepending on the available evidence. Where annual GVA only was estimated, the evaluations gave noindication of the number of years over which the impact was expected to persist and as such are likely tounder-estimate total GVA impact. As such this annex presents annual GVAs as a ratio of total cost.Direct comparisons should not be made between the annual and cumulative GVA ratios. For the nationalreport we have re-estimated the GVA impact using a consistent approach (and set of assumptions)allowing such comparisons to be made.'

Based on the available evaluation evidence, GVA to cost ratios and cost per net job could only becalculated for one of the national programmes undertaken by ONE (i.e. Business Link).


Table 165: Summary of ONE’s value for money (2002/03-2006/07)

Achieved

GVA:cost

ratio (annual)

Achieved &

future

potential

GVA:cost

ratio (annual)

Achieved

cost per net

job (£’000)

Future

potential

cost per

net job

(£’000)

Achieved

cost per

net

business

assist

(£’000)

Achieved

cost per net

skills assist

(£’000)


Access to Finance 25.4 28.3 1.2 10.7 3.6 -

Enterprise

Support2.6 - 15.3 - 7.2 0.52

Sectors

Programme3.5

-10.7 - - -

E-Business

Programme0.5 2.2 56 18.8 - -

Innovation,

Industry and

Science (IIS)

0.3 - 115.7 - - -

Investment,

Aftercare and

Overseas

Function

86 - 0.43 - - -

Midas 1.4 - - - - -


Quality of Place 0.04 – 0.24 - 157.9 – 972.5 - - -

Promoting the

Region 1.2

-21.5 - - -

People and skills

Economic

Inclusion1.9 2 103.8 - 64 1.25

Skills and Higher

Education1.6 - 133.5 - - 1.34

National programmes

Business Link 3.6 0.2 10.9 288.8 - -


Table 165 shows that, for the evaluations which estimated achieved GVA, there has been a significantrange of returns from these interventions. Some interventions have already achieved GVA returns whichexceed their costs, (particularly the Investment, Aftercare and Overseas programme with a GVA to costratio of 86:1) whilst others have achieved a more limited return. It should be noted that one evaluationwas interim in nature (Midas) and, therefore, did not allow for the time lag between spend and benefitrealisation. Similarly not all business interventions had job creation as an explicit objective.

There is also limited evidence of quantitative outcomes from the regeneration through physicalinfrastructure interventions. This is primarily due to the early stage of implementation of theseinterventions (and the consequent anticipation that such interventions are likely to generate futureimpacts).


Not all interventions had job creation as an objective. As such there is also a large variation betweeninterventions in terms of cost per job, both within and across intervention categories. The cost per net jobcreated/ safeguarded for ONE’s business interventions are, however, generally relatively low, whencompared to its people and skills interventions. However not all interventions had job creation as anexplicit objective and therefore, in these instances, the cost per net job may not be the most appropriatemeasure of value for money. As such we have sought to identify other cost per net output measures,where this is available in the evidence base.

When compared with other RDAs, business interventions appear to show a lower annual achieved GVAto cost ratio for Science, R&D (0.3:1 regionally compared to 1:1 nationally) and Enterprise Support (2.6:1regionally compared to 4.9:1 nationally) whilst the people interventions, appear to achieve a better thanaverage return (with an average of 1.6 :1 regionally compared to 0.9:1 nationally). At the sub-theme levelthe regeneration through physical infrastructure interventions performs below average in comparison tothe national picture for public realm interventions (0.04 – 0.24:1 regionally compared to 0.3:1 nationally)but above average for image and tourism interventions (1.2:1 regionally compared to 0.5:1 nationally).

Comparing ONE with the national picture for unit cost measures, the cost per net output of ONE’sbusiness interventions was mixed with some interventions e.g. the £115,700 per job for Innovation,Industry and Science above the national average cost per job for this sub-theme (of £37,938), whilst the£431 per job for Investment, Aftercare and Overseas Function was well below the national average (of11,563 for inward investment interventions). Again comparing the cost per net job of ONE’s regenerationinterventions to that at a national level gives mixed results. For instance, the Quality of Place programmehas costs per jobs which are much higher than the national average (of £118,945). Promoting the Regionon the other hand performed better and was considerably lower in terms of cost per net job (£21,500regionally compared to £79,133 nationally). Similarly, comparisons show mixed results in terms of thecost per unit output measures of ONE’s people and place interventions – both Economic Inclusion andSkills and Higher Education have higher cost per jobs against the national average cost per job created/safeguarded for these sub-themes (of £49,215 and £105,268 respectively). However they perform well interms of the national average cost per skills assist for its theme (of £1,960).


Table 166 presents ONE’s performance against target information based upon evidence drawn from theTasking Framework. For all of the measures, ONE has exceeded the targets set by BERR and across allyears for which targets have been set.

Table 166: Comparison of ONE’s performance against targets, (2002/03-2006/07)256

Jobs created/

safeguarded

Businesses

created

Brownfield

land (ha)


levered,

(£m)257


Achieved ONE gross

outputs reported to

BERR 68,433 9,795 584 267,745 619


targets met 5 out of 5 5 out of 5 5 out of 5 5 out of 5 4 out of 4


Like all the RDAs (except the London Development Agency), in 2006 ONE was subject to the NationalAudit Office’s Independent Performance Assessment (IPA) which assessed how well ONE hasresponded to the common challenges facing RDAs, namely balancing the interests of the region with

256 Where targets were expressed as ranges (i.e. for 2005/06 and 2006/07) the minimum value has been used.

257 Funding levered targets and outputs were not available for 2002/03


national policy requirements, managing the conflicting demands of different regional stakeholders, lookingoutwards to promote the region while staying focused on what is happening inside and responding to newduties imposed by central government. This assessment sheds further light on how well the Agency hasbeen able to fulfil its role.

Overall, ONE was seen as ‘performing strongly’ and was rated as the joint top-performing RDA in the IPAexercise, particularly in terms of its:

ambition: the Regional Economic Strategy has been informed by a significant review and consultationprocess and has set ambitious goals for the region with strong buy-in from regional partners andstakeholders. ONE has set up a RES Advisory Group which is made up of a range of keypartners/stakeholders from across the region. This group has been proactive in approach with apivotal role in delivery of the ambitions in the RES through the Action Plan. ONE is also leading on anumber of initiatives to focus on economic performance and productivity through both the RES andthe Corporate Plan (e.g. setting up Business Link North East and the Newcastle Science City Project);

performance management: ONE has a strong Planning and Reporting framework which is embeddedacross the Agency. This is integrated with strong financial controls and risk management processes.ONE has fully embedded evaluation as an overarching requirement for all its activities. The Agencysupports continuous learning throughout the business process and routinely evaluates allorganisational systems and procedures. ONE is leading on work to develop evaluation training withOffPAT and to disseminate the practice throughout its partners; and

achievements: it was noted that ONE has consistently achieved its financial and output targets set outin the 2003/12 RES. Specifically the Agency has demonstrated strong leadership on knowledgebased sciences and the centres of excellence have been instrumental in their successful delivery. Itwas also viewed to be a pioneer nationally in delivering broadband access and to have successfullyattracted significant private sector and foreign investment, raised awareness of the region anddelivered regeneration initiatives such as Newcastle/Gateshead Quayside.

Whilst there was significant approval for ONE’s strong vision and partnership working with strongleadership from the Chairman and Chief Executive, it was noted that there were areas for development,particularly communication and the regional evidence base including:

the intelligence base of the 2006 RES, which needs to be strengthened, analysed and disseminatedfurther;

the Agency needs to continue to explain the rationale behind its structure and how it operates; and

ensuring that the right balance is struck between the Agency’s strategic role and the management ofhigh quality implementation such as its tourism role.

ONE has been proactively monitoring these issues through its continuous improvement strategy. TheImprovement Plan is reviewed quarterly and a progress report provided to the Agency’s Board.

Table 167 sets out ONE’s performance against the targets for each of the individual interventions coveredby the evaluations.


Table 167: Comparison of performance against target across the evaluations


Business


Spend (£m) 0 0 6.1 0 0.6 198 204.7

Place


Spend (£m) 0 0 0 0 0 193.4 193.4

People


Spend (£m) 94.8 0 0 0 0 0 94.8

Other


Spend (£m) 0 0 0 0 0 205m 205

Total


Spend (£m) 94.8 0 6.1 0 0.6 596.4 698


Table 167 shows that for most of the interventions evaluated only 14.5% of the evaluations (by value)provided an assessment of performance against objectives. It is therefore not possible to drawcomparisons on ONE’s overall performance from the limited evaluation evidence.


We have structured the analysis of the impact of ONE’s spending, where possible, according to the threecategories of intervention defined within the IEF (i.e. business, place and people). We have alsoanalysed the impact of ONE’s other activities that span more than one of these categories as well as theavailable evidence of the impact of the nine national programmes where ONE has been responsible fordelivery within parameters determined by central government departments.

We have summarised the impact of ONE’s interventions using a common structure in which we:

summarise ONE’s activities and expenditure on each programme;

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

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

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



Rationale

The North East has relatively low levels of business stocks and start ups, both at around 60% of nationalrates; however recent years have seen an improving situation. Each of the past six years have seen theregion’s business stock grow at a faster rate than the national average. 2002 through to the start of 2008saw an increase of 7,300 in the NE business stock, an average percentage increase of around 2.5%However, to achieve the ambitious RES target of 20,000 additional businesses by 2016 then a furtherimprovement to around 3% p.a. will be required. At the same time existing businesses are generally lessproductive than the English average with lower levels of specialisation in high tech value added sectors.There is also pressure from global markets on the North East’s manufacturing sector, which whilstsuffering from employment decline and ongoing restructuring issues, continues to have relatively highproductivity levels compared with many other sectors and regions.

The 2006 RES also identified the “GDP gap” between the North East and the rest of England (latestfigures suggest that this currently stands at 18.5%)

258resulting from low productivity, low valued-added

and poor participation of its business base. Each of the projects and programmes delivered by ONE seekto contribute towards the RES by improving productivity and growing the market in high technologysectors.

The primary justification for ONE’s business and competitiveness interventions was to address marketfailures in relation to:

the provision of positive externalities arising from, for example, training provision and innovativeactivity and addressing issues of asymmetric information (i.e. to improve the flow of informationaround aspects such as market and technology opportunities, sources of financial support andmainstream business support services); and

collective action failure (whereby actions that are in the collective interests of the businesses in asector do not take place because businesses are unable to communicate their cumulative needs tosuppliers or the public sector).

The evidence of the impact of ONE’s business interventions comes from seven programme levelevaluations covering the five main sub-themes summarised in Table 168.

Table 168: Summary of business development and competitiveness interventions (2002/03-2006/07)

Intervention theme/sub-theme Evaluation Expenditurecovered by

evaluations (£m)

Individual enterprise level support Access to Finance

IEF Impact Evaluation of the Business

Theme – Enterprise Support

0.6

9.4

Sector/ cluster support (including business

networks)

Sectors Programme

E-Business Programme Evaluation

23.7

13.7

Science, R&D & innovation infrastructure ONE Innovation, Industry and Science (IIS)

Programme – Strategy for Success

150.6

Inward investment promotion Evaluation of ONE Investment, Aftercare

and Overseas Function

6.1

Sustainable consumption/ production Midas Project Evaluation 0.6

Total 204


258 Regional Gross Value Added, National Statistics, 2006.


These evaluations cover £204m of ONE spend. This spend is dominated by investment in innovation andto a lesser extent access to funding for small and medium businesses. A number of interventions havealso been undertaken to support ONE’s priority sectors, inward investment as well as sustainableconsumption and production

259. These interventions contribute to a number of goals outlined in the 2006

RES Action Plan:

growing new businesses by encouraging and supporting entrepreneurship;

support existing businesses through quality business support services;

building international competitiveness based on science, innovation and creativity;

integrating skills and employment services;

raising aspiration and attainment especially amongst young people;

attract and retain skilled people; and

promoting economic inclusion by addressing worklessness and promoting equality and diversity inskills and employment.

Impact

Table 169 summarises the expenditure and key current gross outputs associated with the seven businessinterventions evaluated. The primary outputs have been jobs created/safeguarded, businesses createdand assisted, people assisted with skills development and improved business performance in terms ofincreased turnover.

Table 169: Gross achieved outputs from ONE’s business development and competitivenessinterventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Gross jobs

created/

safeguarded

Gross

businesses

created

Gross

businesses

assisted

Gross skills

assists

Increase in

business

turnover

(£m)

Access to Finance 0.6 1,605 129 558 - 130.8

Enterprise Support 9.4 860 675 1,821 25,770 -

Sectors Programme 23.7 5,466 197 1,895 19,975 -

E-Business

Programme

Evaluation

13.7 244 14 - 272 12

ONE Innovation,

Industry and Science

(IIS) Programme –

Strategy for Success

150.6 5,096 187 - - 369

Evaluation of ONE

Investment, Aftercare

and Overseas

Function

6.1 16,245 - 48 - -

Midas Project

Evaluation0.6 N/R N/R 487 - -

Total 204 19,068 619 1,5094 18,152 181.9


259 This relates to the sustainable use of resources and reduction of waste.


In addition to the achieved gross outputs set out in Table 9, the Midas evaluation reported the gross costsavings to businesses of £1.4m whilst the E-Business evaluation also estimated future potential grossoutputs subsequent to the relevant period for this report (i.e. outputs achieved in 2007/08 as well asfuture potential outputs) of 973 jobs created/ safeguarded. The Access to Finance evaluation evidencealso suggested an additional 190 gross future potential jobs created/safeguarded are likely to begenerated post 2006/07.

Table 170 summarises the expenditure and key net outputs associated with the seven businessinterventions evaluated.

Table 170: Net achieved outputs from ONE’s business development and competitivenessinterventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Gross jobs

created/

safeguarded

Gross

businesses

created

Gross

businesses

assisted

Gross skills

assists

Increase in

business

turnover

(£m)

Access to Finance 0.6 500 40 173 - 30

Enterprise Support 9.4 652 519 1,294 25,770 -

Sectors Programme 23.7 2,222 - - 19,975 -

E-Business

Programme

Evaluation

13.7 244 - - 272 28

ONE Innovation,

Industry and Science

(IIS) Programme –


150.6 1,301 60 - - 124

Evaluation of ONE

Investment, Aftercare

and Overseas

Function

6.1 14,149 - 42 - -

Midas Project

Evaluation0.6 N/R N/R - - -

Total 204 19,068 619 1,509 18,152 182


In addition to the achieved outputs set out in Table 170, the Midas evaluation reported the net costsavings to businesses of £850,000 and the E-Business evaluation estimated additional future potentialnet outputs of 728 jobs created/ safeguarded. We have also estimated additional future potential netoutputs of 58 jobs created/safeguarded based on the evaluation evidence for Access to Finance.

The level of additionality resulting from ONE’s business interventions varied across intervention andoutput type, but was generally relatively high compared with ONE’s place and people interventions. TheE-Business evaluation had the highest level of additionality in terms of jobs created/ safeguarded (100%),whilst the Investment, Aftercare and Overseas Function had the greatest additionality in terms ofbusinesses supported (87.5%). Finally the Enterprise Support evaluation had the greatest additionality interms of people assisted in skills development (70%).

Across the entire theme ONE compares favourably to the national average with regard to additionality injobs created / safeguarded (65% compared to 48%) and recorded a higher level of additionality inbusiness creation (51% compared to 40%). However, performance does vary when analysed at subtheme level. Enterprise Support (76%) demonstrated high levels of additionality compared to the nationalaverage for its sub-theme (41%) in terms of jobs created and safeguarded. However, ONE’s otherindividual enterprise support programme (Access to Finance) demonstrated levels of additionality belowthe national average for its sub theme (of 31% regionally compared to 41% nationally) as did the Cluster /


sector support sub-theme (41% compared to 67% nationally). The inward investment promotionintervention compared favourably to the national average for its sub theme (87% compared to 43%nationally).

Table 171 summarises the impact on GVA (both achieved and future potential) of ONE’s interventions topromote business development and competitiveness. In the majority of cases the evaluations estimatedannual GVA. Where evaluations did not provide an analysis of GVA an annual average GVA peremployee of £37,200

260has been applied to the number of net jobs created and safeguarded. Where

annual GVA was estimated no indication was given of the number of years over which the impact wasexpected (or assumed) to persist. Moreover, future potential impacts on GVA have not been discountednor have constant prices been applied.

Table 171: Outcomes from ONE’s business development and competitiveness interventions(2002/03-2006/07)

Expenditure

covered by

evaluations (£m)

Achieved GVA

(annual, £m)

Future potential

GVA (annual,

£m)

Achieved &

future potential

GVA

(cumulative,

£m)

Access to Finance 0.6 15.8 1.8 17.6

Enterprise Support 9.4 24 - -

Sectors Programme 23.7 82.6 - -

E-Business Programme

Evaluation13.7 7 23

30

ONE Innovation, Industry

and Science (IIS)

Programme – Strategy for

Success

150.6 48 -

-

Evaluation of ONE

Investment, Aftercare and

Overseas Function

6.1 526 -

-

Midas Project Evaluation 0.6 0.85 - -


Additional net outcomes recorded in the evaluation evidence include:

Midas Project: providing advice and consultancy support for resource efficiency investment to 255organisations in the period 2005/06 to 2007/08 based on full service provision including subsidisedintensive assistance.

In addition to the direct impact evidence above ONE also delivered Strategic Added Value under itsbusiness interventions which are discussed in the box below.

260 Latest average GVA per head figure for the North East as per the Annual Business Inquiry, 2006.



ONE’s interventions have also had strategic value in terms of developing the North East’s financial andtraining infrastructure. For example, through Access to Finance ONE has contributed to the North East’sfinancial infrastructure, market intelligence and business capacity. By December 2007 fund managershad leveraged over £55m from the private sector into the area demonstrating the programme’s successin building the North East’s reputation for SME opportunity. The programme’s work with target industrieshas also led to the development of clusters of industry expertise within the region which are working tobuild capacity, knowledge, networks, product portfolios and the North East’s international reputation. Theproof of concept fund (operating as a convertible loan for early stage investment) was one of the first inthe country to invest (rather than grant fund). This has been successful in both identifying ideas but alsopreparing businesses for the next stage of investment. This unique and innovative approach to funddevelopment was driven by ONE creating the confidence for public sector investment and partnershipand changing the long term investment climate in the region..

ONE’s development of the North East Productivity Alliance (NEPA) project (part of ONE’s SectorsProgramme) has increased employer demand for, and investment in, skills by introducing companies tothe NVQ framework for learning with the enrolment of more than 5,000 people for NVQ2 qualifications inmanufacturing related subjects since the project was initiated. In addition, the project has been influentialon the supply side helping to develop the Level 5 NVQ in partnership with SEMTA.

The activities of ONE’s Investment, Aftercare and Overseas team has provided strategic leadership andbeen a catalyst through raising awareness of the region overseas as a location to invest and conductbusiness. In addition to influencing a company’s initial and further investment decisions and working inpartnership with the North of England Investment Agency.

Source: ONE

Value for money

Overall, AWM’s achieved returns from its business development and competitiveness interventions areconsistent with the average returns across the RDAs (2.7 compared to 2.8). However, the cumulativereturns are higher across the RDAs with an achieved and future potential return at a national level of 11.6compared to 5.9 for AWM’s business development and competitiveness interventions. This reflects thefact that there are only limited future potential impacts anticipated for AWM’s business development andcompetitiveness interventions and the different levels of persistence assumed.

Table 172 sets out the achieved and future potential GVA to cost ratios of ONE’s business developmentand competitiveness interventions. The GVA to cost ratio compares GVA impacts to the cost of theintervention: where there is a GVA to cost ratio of greater than one, the economic benefits of theinterventions attributable to ONE’s funding exceed their costs. This is the case for some, but not all of theinterventions where GVA has been measured.

For instance, interventions such as Access to Finance, Enterprise Support, the Sectors Programme,Investment, Aftercare and Overseas Function and Midas have already achieved economic benefits whichexceed their costs. However in value terms ONE’s GVA to cost ratios for business interventions is heavilyweighted to a negative return on cost due to the size (in value terms) of the Innovation, Industry andScience Programme. It is important to note that this is skewed by the fact that ONE’s investment in thisintervention was capital in nature with most of the outputs likely to be delivered in the future. Theevaluation of the E Business programme indicates that its economic benefits are likely to exceed its costsif its future potential outcomes are realised.

In general the ONE business development and competitiveness interventions, for which GVA to costratios were available, did not compare favourably against the national average for similar interventions.Only the Access to Finance, Sectors Programme and Inward Investment interventions exceeded thenational average achieved annual GVA to cost ratio for their sub-themes (4.9:1, 3.2:1, 3.7:1 respectively).


Table 172: Achieved and future potential GVA to cost ratios from ONE’s business developmentand competitiveness interventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Achieved GVA

(annual):cost ratio


(annual):cost ratio

Access to Finance 0.6 25.4 2.9

Enterprise Support 9.4 2.6 -

Sectors Programme 23.7 3.5 -

E-Business Programme Evaluation 13.7 0.5 1.7

ONE Innovation, Industry and Science

(IIS) Programme – Strategy for

Success

150.6 0.3 -

Evaluation of ONE Investment,

Aftercare and Overseas Function6.1 86 -

Midas Project Evaluation 0.6 1.4 -


Table 173 sets out the achieved and future potential cost per net output of ONE’s business developmentand competitiveness interventions.

Table 173: Achieved and future potential cost per net output from ONE’s business developmentand competitiveness interventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Achieved cost

per net job

(£’000)

Future potential

cost per net job

(£’000)

Achieved cost

per net

business

supported

(£’000)

Achieved cost

per net skills

assists (£’000)

Access to

Finance0.6 1,246 10.7 3.6 n/a

Enterprise

Support9.4 15.28 n/a 7.2 0.52

Sectors

Programme23.7 10.66 n/a n/a n/a

E-Business

Programme

Evaluation

13.7 56 18.8 n/a n/a

ONE Innovation,

Industry and

Science (IIS)

Programme –

Strategy for

Success

150.6 115.7 n/a n/a n/a

Evaluation of

ONE Investment,

Aftercare and

Overseas

Function

6.1 0.43 n/a n/a n/a


Expenditure

covered by

evaluations

(£m)

Achieved cost

per net job

(£’000)

Future potential

cost per net job

(£’000)

Achieved cost

per net

business

supported

(£’000)

Achieved cost

per net skills

assists (£’000)

Midas Project

Evaluation0.6 n/a n/a n/a n/a


The cost per net job achieved from business and competiveness interventions is wide, ranging from £431for Investment, Aftercare and Overseas Function to £115,700 for Innovation, Industry and Science. Thehigh cost per job ratios for Innovation, Industry and Science is skewed by the fact that ONE’s investmentin this intervention was capital investment with most of the outputs likely to be delivered in the future.

The cost per net job figures for ONE’s business interventions compare unfavourably to the nationalaverage with the exception of the Access to Finance, Sectors and Inward Investment interventions whichare considerably lower (£8,301, £12,135, 11,563 respectively nationally).


Table 174 summarises the performance against target of ONE’s interventions to promote businessdevelopment and competitiveness. Performance against target has not been assessed for the majority ofthe interventions by the IEF compliant evaluations reviewed. The exceptions are for the attraction ofinward investment performance and the Midas project (where limited progress against the target ofproviding advice to companies had been achieved).

Table 174: Performance against objectives from ONE’s business development andcompetitiveness interventions (2002/03-2006/07)


evaluations (£m)

Performance against

objectives

Evaluation of ONE Investment, Aftercare and

Overseas Function6.1

Largely met

Midas Project Evaluation 0.6 Limited performance

Access to Finance 0.6 Not assessed

Enterprise Support 9.4 Not assessed

Sectors Programme 23.7 Not assessed

E-Business Programme Evaluation 13.7 Not assessed

ONE Innovation, Industry and Science (IIS)

Programme – Strategy for Success150.6

Not assessed



Rationale

The North East is perceived as having a strong ‘quality of place’ with a distinctive regional identitycompared to the rest of the English regions and outstanding natural and heritage assets. However inorder to meet the challenge of sustained and successful economic growth there is a need to successfullyutilise and protect this natural competitive advantage, while strengthening the role of the North East’surban centres in terms of driving economic growth. Therefore, many of ONE’s regeneration initiatives aimto stimulate economic activity within the city regions.

ONE is also committed to raising awareness of the North East of England and increasing visitor numbersto the region thus: “promoting, protecting and improving our natural, cultural and heritage assets” is cited


as one of the key aims of the RES (2006-2016). This commitment is evident in ONE’s strategy ofsubstantial investment in the region’s visitor economy assets. The North East England Tourism Strategy(2005-2010) notes a commitment to increase the value of ONE investment in tourism from April 2005thereby increasing investment to approximately £20 million over a three-year period. The challenge is toensure that the North East gains the maximum benefit from this investment (economic, social andenvironmental).

This section relates to regeneration initiatives supported by ONE in order to improve regional economicperformance and raise awareness of the region. The evidence presented is primarily linked to thefollowing challenges outlined in the 2006 RES:

providing the physical infrastructure necessary to attract and support business;

attracting and retain highly skilled, creative individuals;

connecting labour markets with areas of opportunity; and

building on the region’s competitive advantage in terms of quality of place.

The main justification for ONE’s regeneration through physical infrastructure interventions was theunderpinning nature of physical regeneration investment and its links to ONE’s business and peopleinitiatives and the improvements to the area’s image or built environment. Some interventions were alsoconsidered to provide a public good through the development of new facilities or the redevelopment ofderelict sites (i.e. Quality of Place projects such as Mima and Sunniside Gardens). For employment siteinterventions (such as Newburn Riverside and Northumberland Business Park projects within Quality ofPlace) the justification for ONE’s intervention related to improving the flow of information regarding thefuture returns of such an investment and overcoming barriers to entry.

As indicated in Table 175 evidence of the impact of ONE’s regeneration initiatives is based on twoevaluations.

Table 175: Summary of ONE’s regeneration through physical infrastructure interventions(2002/03-2006/07)


covered by

evaluations (£m)

Capital projects

Public realm/other infrastructure A Programme-Level Evaluation of ONE's

Quality of Place activities

180.9

Revenue projects

Image/events/ tourism Regional Image and Tourism Marketing

(Promoting the Region)

12.5

Total 193.4


This spend is dominated by capital investments in the Quality of Place programme evaluation and onerevenue based image/tourism programme. The capital programme was primarily related to the areas ofstrategic transformational regeneration and delivering a portfolio of high quality business accommodation.The rationale behind the revenue projects was around promoting, enhancing and protecting the regionsnatural, heritage and cultural assets.


Impact

ONE’s regeneration interventions include the following key activities:

Quality of Place Programme, covering a range of physical place investments, transport infrastructureand investment in cultural, historical and natural assets undertaken to improve the region’s image andproductivity; and

Promoting the Region Programme, involving a series of marketing and promotional interventions toimprove the North East’s image as a ‘great place’ to live, work, invest, do business, study and visit.

Key gross outputs set out in Table 176 arising from these regeneration interventions have been jobscreated/ safeguarded, businesses created and attracted, businesses supported and brownfield landreclaimed or redeveloped. A number of these interventions are still in the early stages of implementationand, therefore, the achieved outputs provided may significantly under record the total potential impact ofthese interventions.

Table 176: Gross outputs (achieved) from ONE’s regeneration through physical infrastructureinterventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Gross jobs

created/

safeguarded

Gross

Businesses

created

Gross

Businesses

attracted

Gross

Businesses

supported

Gross

brownfield

land

reclaimed/

redeveloped

(ha)

Quality of

Place 180.9 3,748 1,041 21 12,456 216

Promoting

the Region 12.5 N/R261

- - - -

Total 193.4 3,748 1,041 21 12,456 216



Table 177: Regional net outputs (achieved) from ONE’s regeneration through physicalinfrastructure interventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Net jobs

created/

safeguarded

Net

Businesses

created

Net

Businesses

attracted

Net

Businesses

supported

Net

brownfield

land

reclaimed/

redeveloped

(ha)

Quality of

Place 180.9 186-1,145262

- - - 108

Promoting

the Region 12.5 581 - - - -

Total 193.4 767-1,726 - - - 108


261 The evaluation of Promoting the Region based its net employment figures on turnover per employee figures of £35,000 from net

visitor expenditure in the region and as such no gross employment figures were calculated.

262 A range of net outputs attributable to the Agency were calculated as the evaluation evidence covers a series of sub-themes

(public realm, business environment and culture and education) with differing levels of employment impacts.


In addition to the net outputs in Table 177, the Quality of Place evaluation also estimated future potentialgross employment effects for two case studies (the Newburn and Northumberland projects) of between23-76 jobs

263. The expenditure covered by the Promoting the Region evaluation is also estimated to have

led to an increase in business turnover of between £10,000 and £20,000 (across the sample ofbeneficiaries surveyed)

264and advertising value equivalent of £2m.

The evaluation of Promoting the Region based its net employment figures on turnover per employeefigures of £35,000 from visitor expenditure in the region hence no gross employment figures have beencalculated. The advertising value equivalent was generated from the marketing activities undertaken.

The Quality of Place evaluation additionality ranges from 20.5% to 46% for employment effects - the onlymeasure for which gross to net adjustments were undertaken and is the lowest level of additionality forjobs created and safeguarded across ONE’s business and people. When compared at a national level,the higher end of the range for Quality of Place is above the national average for public realminterventions of 45%. However the additionality of Quality of Place in terms of brownfield land remediated(50%) is below the national average at both the sub-theme (58%) and theme level (73%).

Table 178 summarises the outcomes of ONE’s evaluated place interventions. In both cases annual GVAhas been estimated. Where annual GVA was estimated no indication was given of the number of yearsover which the impact was expected (or assumed) to persist.

Table 178: Outcomes (achieved) from ONE’s regeneration through physical infrastructureinterventions (2002/03-2006/07)

265


evaluations (£m)

Achieved GVA (annual, £m)

Quality of Place 180.9 7-42.5

Promoting the Region 12.5 15

Source: PwC analysis and RDA evaluation evidenceThe evaluations did not provide evidence of future potential

outcomes and no systematic analysis of the potential impact on regional GVA although the evaluations noted

examples of Strategic Added Value as shown below.

263 The range of future potential jobs is reflective of the fact that the evaluation study undertook its impact analysis on two scenarios

the: base case and optimistic scenario.

264 The survey covered 177 branded businesses from a population of 1,084 businesses. Given the survey covered only one aspect

of the Regional Image component and only 20% of expenditure under the Tourism Marketing strand has been analysed in net

terms, the results of the evaluation should be interpreted with some caution.

265 This table excludes the Construction Skills intervention because the evaluation did not contain any estimate of GVA or increases

in employment.



ONE’s investments under the Quality of Place programme have demonstrated a number of SAVattributes primarily leverage, synergy and catalytic behaviour. For example it has generated leverage inthe way that an objective of improving places for investment has mobilised the development ofinvestment proposals and the generation of private and public sector match-funding to bring projects tofruition which otherwise would not have occurred or would have taken longer to be implemented.Evidence of synergy is provided by the involvement of ONE staff in delivery teams of large quality ofplace investments. The experience of project delivery has led to several models of engagement betweenONE, Sub-Regional Partnerships and project developers being developed.

Through the Promoting the Region programme the Agency has played the lead role in identifying andworking to address the informational asymmetry market failure facing the North East. 87% of externalstakeholders interviewed believe that the programme has had either ‘some’ or ‘a great influence’ on thestrategic direction of the way the region was portrayed and marketed and all external stakeholdersconsulted believed that the programme has had a substantial impact on aspirations and confidence withinthe region. The flexibility of the brand and the ease of use of the branding materials allowed for support tobe leveraged from businesses in promoting the region. Over 1,000 businesses adopted the brand andused it in their own literature, websites etc which increase the reach of the campaign.

Source: ONE

Value for money

Table 179 sets out the achieved and future potential GVA to cost ratios of ONE’s regeneration throughphysical infrastructure interventions. The return on investment for Promoting the Region is positive andcompares well against the national averages for similar place interventions (0.5:1), whilst the value formoney for Quality of Place performs poorly against the national average (0.3:1).

Table 179: Achieved GVA to cost ratios from ONE’s regeneration through physical infrastructureinterventions (2002/03-2006/07)

Expenditure covered


Achieved GVA (annual):cost ratio

Quality of Place 180.9 0.04 – 0.24:1

Promoting the Region 12.5 1.2:1


Table 180 summarises one measure of the value for money of ONE’s interventions to promoteregeneration through physical infrastructure, i.e. cost per achieved net job. Table 180 showsconsiderable variation in the value for money of these interventions. The cost per job (achieved) of theQuality of Place intervention was particularly high due to the high set-up costs and limited current netoutputs in this intervention. This is higher than the national average for public realm interventions (of£118,945). However the Promoting the Region programme outperforms the national picture with a muchlower than average cost per job (£79,133 nationally).

Table 180: Cost per net job (achieved) from ONE’s regeneration through physical infrastructure(2002/03-2006/07)


evaluations (£m)

Achieved cost per net regional job

(£’000)

Quality of Place266

180.9 157,900-972,500

Promoting the Region 12.5 21,500


266 We have not provided the future potential cost per net regional job for the Quality of Place evaluation as the future potential job

figures refers to one project level evaluation and is therefore likely to severely under-represent the potential future potential

employment impact at the programme level.


However, it should be noted that the key focus of these interventions was not aimed at job creation andas such this may under represent the full impact of these interventions within the region.


Neither of the evaluations assessed performance against target due to a lack of overarching programmelevel objectives.


Rationale

This section relates to ONE’s people and skills interventions. These interventions cover ONE’s support inrelation to programmes aimed at improving basic skills training, developing workforce skills, expandinghigher level skills, widening participation and delivering leadership and management skills.

The 2006 RES for the North East identifies two key challenges in this area, which are directly related tothe evidence presented in the remainder of this section:

developing the skills needed to succeed in a global economy by investing in higher level skills; and

utilising the skills of those people who are economically inactive by tackling worklessness andpromoting equality and diversity in the workforce.

There were a range of justifications for ONE’s people and skills interventions, including:

to stimulate the demand and supply for higher-level skills from businesses and employers, in order totackle the low-skills equilibrium;

to improve the information given to providers, employers and individuals to guide their investmentdecisions;

to promote greater social equity in labour market participation and outcomes;

tackling the link between poor health and worklessness; and

to address the prejudices and misconceptions that employers may hold about the potentialcontribution of particular groups of people.

Evidence of the impact of ONE’s people and skills interventions relates to two evaluations covering twosub-themes summarised in Table 181.

Table 181: Summary of ONE’s people and skills interventions (2002/03-2006/07)


covered by

evaluations (£m)

Matching people to jobs Economic Inclusion Programme Evaluation 11.1

Skills/workforce development Skills and Higher Education Programme

Impact Evaluation

83.7

Total 94.8


The evaluation evidence of ONE’s impact on people and skills development covers £94.8m of spend from2002/03 to 2006/07. The Skills and Higher Education programme, which incorporates ONE’s investmentsince 2002 in a range of regional skills development activities, accounts for the largest proportion of thisspend. The Economic Inclusion programme aimed to increase and widen participation in both skills


development and in employment. It also brought forward the three Northern Way Worklessness Pilots inthe region.

Impact

Table 182 summarises the expenditure and key gross outputs achieved through ONE’s people and skillsinterventions. The primary outputs have been jobs created/ safeguarded, employment support,businesses created and supported and skills developed.

Table 182: Gross achieved outputs from ONE’s people and skills interventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Gross jobs

created/

safeguarded

Gross

people

assisted

into

employment

Gross

businesses

created

Gross

business

supported

Gross

skills

assists

Economic Inclusion

Programme Evaluation

11.1398 7,056 7 418 10,964

Skills and Higher

Education Programme

Impact Evaluation

83.7

904 5,178 443 4,354 81,738

Total 94.8 1,302 12,234 450 4,772 92,702



Table 183: Net achieved outputs from ONE’s people and skills interventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Net jobs

created/

safeguarded

Net people

assisted

into

employment

Net

businesses

created

Net

business

supported

Net skills

assists

Economic Inclusion

Programme Evaluation

11.1107 6,068 7 174 8,880

Skills and Higher

Education Programme

Impact Evaluation

83.7

627 238 429 -267

62,464

Total 94.8 734 6,306 436 174 71,344


The Economic Inclusion programme had the highest level of additionality, across businesses created(100%), people assisted into employment (86%) and skills assists (81%), whilst the Skills and HigherEducation Programme had higher levels of additionality in terms of jobs created and safeguarded (70%).

National level comparisons show that ONE’s evaluated interventions have a good performance, achievinghigher levels of additionality for jobs created/safeguarded, skills assists and business created (of 56%,77% and 97% respectively) compared the overall national averages for people and skills interventions (of48%, 62% and 82% respectively).

Table 184 summarises the outcomes of ONE’s people and skills interventions in terms of achieved andfuture potential GVA.

267 The Skills and Higher Education evaluation did not undertake an analysis of net impact for businesses supported although gross

figures of 4,345 were provided as demonstrated in Table 22.


Table 184: Outcomes (achieved) from ONE’s people and skills interventions (2002/03-2006/07)

Expenditure

covered by

evaluations (£m)

Achieved GVA

(annual, £m)

Future potential

GVA (annual, £m)

Achieved

GVA

(cumulative,

£m)

Economic Inclusion

Programme Evaluation 11.1 21.0 1.1 22.1

Skills and Higher

Education Programme

Impact Evaluation 83.7 135.0 - -


As illustrated ONE’s £94.8m investment in people and skills interventions has led to an additional £157mof achieved and future GVA per annum. The evaluation evidence for Skills and Higher Education did notprovide an indication of the future potential impacts arising from this evaluation and as such the GVA datain Table 24 potentially under represents the Agency’s total impact. The cumulative GVA impact forEconomic Inclusion was estimated to be a total £26.5m (based on potential future cumulative GVA of£5.4m over 5 years).

In addition the evaluations provided evidence of ONE’s Strategic Added Value through its peopleinterventions which is provided in the following box.


ONE’s has also demonstrated SAV through its people interventions through strategic leadership,influence, engagement and synergy. For example, the Economic Inclusion programme demonstrated theAgency’s SAV role based on stakeholder consultations. It was found that the Agency has played a vitalrole in strengthening the evidence base for intervention and supporting development of appropriateinterventions including, most markedly, the creation of the Regional Employability Framework. ONE hasalso increased its influence in supporting partnership activity and capacity building across a number ofdimensions with investment, funding and resources across sub-regional activity and with major partnerssuch as DWP/JobCentre Plus and LSC being levered in. At a national level, stakeholders also identifiedthe influence that the programme has had as a pioneer of economic inclusion activity at the regionalscale. Finally Agency activity on, for example, the REF or Equality Forum reflected the strong co-ordination role played by the programme with support for intelligence sharing, partnership working andcollaboration from national through supra--regional (Northern Way) to sub-regional levels.

In terms of the Skills and Higher Education programme stakeholder responses overwhelmingly indicatedthat the Programme has been successful in generating Strategic Added Value initially, in facilitatingidentification of the regional problem and bringing partners together (such as JobCentre Plus, LSC, andthe Universities). This process has continued with greater expertise and influence continuing to beexerted across a broader set of partners, their strategies and priorities.

Source: ONE

Value for money

Table 185 sets out the achieved and future potential GVA to cost ratios in relation to people and skillsinterventions. The annual achieved return on investment for both the Economic Inclusion and Skills andHigher Education programmes compares well against the national averages of 0.8:1 and 0.4:1 achievedannual GVA to cost ratio for their respective sub-themes.


Table 185: Achieved GVA to cost ratios from ONE’s people and skills interventions (2002/03-2006/07)

Expenditure

covered by

evaluations (£m)

Achieved GVA

(annual):cost ratio

Future potential

GVA (annual):cost

ratio

Economic Inclusion Programme Evaluation 11.1 1.9:1 2:1

Skills and Higher Education Programme

Impact Evaluation 83.7 1.6:1 -


Table 186 sets out the cost per net achieved output in relation to people and skills interventions.

Table 186: Cost per net achieved output from ONE’s people and skills interventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Cost per net

job created/

safeguarded

(£’000)

Cost per net

business

supported (£)

Cost per net skills

assists (£)

Economic Inclusion Programme

Evaluation 11.1 103.8 £64,000 £1,250

Skills and Higher Education

Programme Impact Evaluation 83.7 133.5 n/a £1,340


The cost per net job created/ safeguarded for ONE’s people and skills interventions are relatively high,when compared to its business and competitiveness interventions (between £431 – £115,700) and alsoto the national average (£43,302). However the low cost per skills assisted is in line with the rationale forthese interventions to enhance the regions skills base and lower than the national average for theseinterventions (£1,960).


Table 187 summarises the performance against target of ONE’s people and skills interventions andshows that in both cases the interventions exceeded all of their targets.

Table 187: Performance against objectives from ONE’s people and skills interventions (2002/03-2006/07)

Expenditure

covered by

evaluations (£m)

Performance against

objectives

Economic Inclusion Programme Evaluation 11.1 Exceeded

Skills and Higher Education Programme Impact

Evaluation 83.7 Exceeded


Other ONE interventions

The evidence of ONE’s impact on other interventions covers £205m of spend from 2002/03 to 2006/07.This comprised the Single Regeneration Budget (SRB) programme, which aimed to tackle issuesaffecting the most deprived communities within the North East of England.

The North East received £650m of funding over the six rounds of SRB. This equated to 11% of thenational SRB spend, making the North East the fourth largest regional recipient of SRB funding. This


amount of funding was in keeping with levels of deprivation in the region – 11% of the most deprivedSuper Output Areas (SOAs) in England are located in the North East. SRB funding in the North East wasfocussed in the more urban sub-regions, especially in the early Rounds of SRB. In Rounds 1-3 of theprogramme, Tyne and Wear and Tees Valley received an average 86% of the available funding.However, by Rounds 5 and 6, this level had reduced to 66%, with County Durham and Northumberlanddeveloping sub-region-wide bids which attracted significant funds.

The SRB intervention aimed to contribute to four RES goals:

raising aspiration and attainment especially amongst young people;

attract and retain skilled people;

promoting economic inclusion by addressing worklessness and promoting equality and diversity inskills and employment; and

high quality places to live, work and visit.

The justification of ONE’s intervention through the SRB programme was to address equity issues.

Impact

Key outputs arising from the SRB intervention has been jobs created/ safeguarded, skills developed,businesses created and land reclaimed/ redeveloped. Table 188 sets out the key gross outputs achievedin relation to these interventions.

Table 188: Gross achieved outputs from ONE’s other interventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Gross jobs

created/

safeguarded

Gross

skills

assists

Gross

businesses

created

Gross land

reclaimed/

redeveloped (ha)

SRB 205 9,081 19,889 1,525 133

Total 205 9,081 19,889 1,525 133


In addition to the new businesses identified in Table 188, the SRB programme led to the start-up of 42gross community enterprises.


Table 189: Net achieved outputs from ONE’s other interventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Net jobs

created/

safeguarded

Net skills

assists

Net

businesses

created

Net land

reclaimed/

redeveloped (ha)

SRB 205 3,821 8,513 853 101

Total 205 3,821 8,513 853 101


Again in addition to the new businesses identified in Table 189, the SRB programme led to the start-up of33 net community enterprises.

The quantitative evidence of outcomes and impacts in the evaluation reports which fed into the SRBevaluation was limited across all RDAs. However, applying the 2006 GVA per worker for the North East


of England (of £39,244268

) to the 3,821 net jobs created and safeguarded gives an estimated per annumGVA of £150m.

The SRB evaluation study did not undertake an analysis of the Strategic Added Value; as such, this hasnot been included within our report.

Value for money



The evaluation of the SRB programme in the North East does not consider the performance of theprogramme against its targets or defined objectives. The evaluation study notes that “Gauging the extentto which SRB has made an impact is hard to judge. Given the limited documentary or data evidencedetailing SRB impact, much of the evidence of impact is anecdotal”. The evaluation study makes variousobservations on impact with reference to the North East:

SRB was successful where it ‘tipped the balance’ in favour of an area: for example, theGraingertown project in Newcastle. While SRB money only funded a small part of the project, it wasrecognised that the early up-front commitment made by SRB ensured the buy-in from key private andpubic sector agencies;

Overall impact of some estate based regeneration programmes was low: in some of the estatebased regeneration programmes, SRB had a minimal impact in improving the fortunes of areas. It isbelieved that SRB funds were not of the magnitude required to address systemic socio-economicproblems. The key findings were:

Socio-economic impacts may not be realised during the lifetime of a programme: the impacts ofsome interventions, especially softer skills interventions, may not be realised until after programmes arefinished. SRB did not use a post-programme monitoring approach, so these impacts were not captured;

Diversity can dilute impact: the magnitude of project level interventions funded through the SRBprogramme complicated programme management, incurred higher levels of deadweight and led to alack of overall programme focus;

Inter-project co-operation: where the programme made cross-project linkages the scope for scaleand synergy benefits was increased; and

Key impacts may not always be measurable: one significant outcome from the SRB programmehas been the increased capacity and confidence among local communities to not only contribute tolocal regeneration programmes but also to engage with wider mainstream stakeholders. However,these impacts are not effectively reflected in the quantitative performance measurement systems usedfor SRB (e.g. jobs and business output measures).

National programmes

Besides its own interventions, ONE has been responsible for the management and delivery of five of theten national programmes which have been delivered within parameters closely defined by centralgovernment departments. Although the available evaluation evidence on national programmes does notdisaggregate gross outputs at a regional level, it is possible to estimate the impact of some of theseprogrammes on the North East. This has been undertaken by dividing ONE spend on the programme bythe regional cost per job and then making allowances for displacement, leakage and multiplier effects.

Table 190 summarises ONE’s spend in the relevant period on each of the national programmes andsummarises the estimated impacts where these are available. As the Table shows, one programme has

268 Office of National Statistics, 2006 workplace GVA per worker for the North East of England.


resulted in the achievement of 3,759 net jobs created/ safeguarded, with the potential to generate afurther 180 jobs in the future.

Table 190: Estimated impact of ONE’s spending on national programmes between (2002/03 -2006/07)

National programme ONE spend (£m) Net jobs created/

safeguarded


Manufacturing Advisory Service - -

Phoenix Fund - -

Regional Innovation Fund 21.3 -



- -


Coalfields Programme - -

Regional Tourist Board Support 6.9 -

Market Town Initiative - -

Grant for Research & Development 3.3 -

Total 145.6 3,759



South East England DevelopmentAgency

Summary

Overview

SEEDA has spent approximately £1bn on a range of interventions designed, individually orcollectively, to stimulate business development and competitiveness, promote regeneration throughphysical infrastructure, and enhance employability and skills.

This study focuses on the impact of the £580m spent by SEEDA between 2002/03 and 2006/07. Thisincludes expenditure on SRB of £129m but excludes National programmes which account for anadditional £203m.

We have reviewed 25 evaluations covering spend of nearly £470m by SEEDA in the relevant period.

Impact

The evaluations show that SEEDA has generated significant outputs already:

– nearly 39,500 jobs have been created and safeguarded, of which 43% are estimated to beadditional at the regional level;

– almost 33,000 businesses have been assisted of which 59% are estimated to be additional;

– just over 2,500 businesses have been created of which 39% are estimated to be additional;

– over 216 ha of land has been remediated of which 56% are estimated to be additional;

– over 6,500 people have been assisted into employment of which 65% are estimated to beadditional;

– over 66,000 skills assists have been delivered of which 60% are estimated to be additional; and

– over 191,000 sqm of commercial floorspace has been built of which 80% is estimated to beadditional

Significant future potential outputs are also anticipated, particularly through business interventions, asschemes are completed although these estimates are more uncertain.

In addition to the impact of its project and programme spend, Strategic Added Value (SAV) is a keyelement of SEEDA’s impact, particularly in: influencing national decisions through an evidence base tosafeguard or create new economic activity, leading place based regeneration through the engagementand coordination of public and private sector partners/funders, and identifying synergies betweenpartners to develop creative solutions to pressing regional or national problems.

Value for money

The highest achieved return on investment relates to SEEDA’s business interventions: the three majorbusiness evaluations covering 81% of the evaluated spend in this category achieved a GVA to costratio of 6 to 1. The lowest return relates to people interventions: the Skills & Employability evaluation(the largest evaluation estimating GVA in this category) estimated a cumulative achieved GVA to costratio of 1.5 to 1.


The interim nature of many evaluations means that some have not fully assessed performance against


objectives. Of those which have made such an assessment, 28% have met or exceeded their objectives. Three

evaluations, which cover more than 60% of the evaluated spend were assessed as ‘mixed’ in achieving their

objectives by their evaluators.

Context

Overview of the South East of England

The South East region encompasses 19 county and unitary authorities and 55 districts stretching in anarc around London from Thanet in the south-east to the New Forest in the south-west and to AylesburyVale and Milton Keynes in the north-west. Whilst it is without a single dominant urban centre, the region ishome to two urban areas with populations of around 250,000 (Medway and Brighton and Hove) and fiveurban areas with populations of greater than 100,000. The population of the South East is 8.2 millionpeople and is expected to increase by more than 10% between 2005 and 2021

269.

The South East of England is regarded as one of the UK’s most successful regions:

The region’s gross value added (GVA) was around £177 billion in 2006, making it the second largestregional economy in the UK, and GVA per head was £21,514 compared with the English average of£19,082

270.

The South East has the largest number of businesses of any region in the UK. The private servicessector accounts for around 60%

271of the region’s total output and employment, with financial and

business services accounting for almost a third of output and a quarter of employment. As such, theSouth East is the 31st largest economy in the world and home to a high concentration of globalheadquarters for multinational businesses.

The South East has the highest employment participation rate of any region at around 82 per cent.Its employment rate has also been consistently above the national average in recent years.The proportion of working age people with no qualifications is also relatively low.

The region has a strong concentration of higher education institutions. This has led to a concentrationof highly skilled and specialist workers in a region that supports word class research and knowledgetransfer. In addition, the region is the principal hub for international travel to and from the UK.

The high average levels of GVA per head and employment, however, mask significant sub-regionaldisparities. In particular, parts of the coastal fringe perform significantly below both the regional andnational averages. In fact the South East has the widest variation in GVA per head of any region outsideLondon. While GVA per head in the Thames Valley is 60 per cent above the national average, the levelsin areas such as North Kent, East Sussex and the Isle of Wight are similar to those found in the NorthEast of England. These areas also suffer high levels of deprivation and one million people across theSouth East lack basic literacy and numeracy skills.

This complex picture highlights three distinct economic contours within the South East of England: arelatively wealthy core to the west and south of London; a rural land mass (80 per cent of the region) withhigh economic activity rates and business start-up rates, but with dispersed patterns of rural deprivation;and a coastal region of major environmental assets, but with an ageing population and substantialuntapped potential in terms of productivity, economic activity, skill levels and infrastructure. London andthe South East are inextricably interlinked in terms of workforces, incomes, services, markets, supplychains and migration patterns.

269 SEEDA (2007) The Regional Economic Strategy 2006-2016 Annual Monitoring Report Issue 1 October 2007

270 ONS (2007) Regional, sub-regional and local gross value added

271 HM Treasury, BERR, SEEDA (2008) South East England Economy: A joint response to changing economic circumstances


SEEDA’s purpose and strategy

SEEDA aims to “create a prosperous, dynamic and inspirational region by helping businesses competemore effectively, training a highly skilled workforce, supporting and enabling our communities, whilesafeguarding our natural resources and cherishing our rich cultural heritage”.

272

The South East is a relatively new administrative region. Prior to establishing the RDA there were noregional structures other than the Government Office, and the region’s constituent parts had no strongtradition of working together. Against this backdrop, SEEDA has worked to build a regional identity anddevelop a unifying vision and tackle distortions e.g. in transport provision, caused by the magnet effect ofa London on the surrounding, and separate, region which has lacked an equivalent counter-weight.

Since its establishment, SEEDA has set out how its statutory purposes could be met within the SouthEast through the development of three Regional Economic Strategies (RESs) for the South East whichhave been developed jointly with its partner organisations from all sectors. The Strategies provide thecontext for economic development and regeneration in the South East:

RES 2000–2001: focused on ‘Building a World Class Region’ which fully utilises its formidablebusiness, social, educational, cultural, heritage and environmental strengths to provide an enhancedquality of life for all;

RES 2002–2012: focused on sustainable development as its core theme which bound together fiveobjectives: competitive business; successful people; vibrant communities; effective infrastructure; andsustainable use of natural resources; and

RES 2006–2016: which is currently being implemented and is designed to realise the South East’svision to “be a world class region achieving sustainable prosperity” based on achieving three mainobjectives: increased GVA per capita; increased productivity; and a reduced ecological footprint of theregion.

The Agency’s approach to contributing towards the RES objectives is set out in its Corporate Plans:

SEEDA’s first Corporate Plan covered the period 2002-2004 and set out how it planned to exploit theflexibilities that the Single Pot, a single funding source for RDAs, offered within a set of principlesincluding:

– balancing investing in success with tackling deprivation;

– driving outcomes not programmes; and

– having either a specific spatial focus or addressing region-wide priorities.

The Plan also identified the primary dimensions of SEEDA’s activities as business competitiveness,learning, skills and workforce development, and community regeneration and physical development.

Relying on the same principles and spatial priorities as the previous Plan, the subsequent CorporatePlan (2003-2005) identified key linkages with other regional strategies and policy frameworks(beyond the RES). The Plan defined the Agency’s contributions under each of the five RES 2002-12objectives.

SEEDA’s Corporate Plan for 2005-2008 set out how SEEDA would continue to deliver the RES andsupport the delivery of national objectives. It focused the Agency’s resources on three objectiveswhere it could add the most value:

– Strategic Influence: identifying clear goals and actions to support the region’s economic future in arevised RES, working with other RDAs to influence strategic frameworks and policies in Whitehalland in Europe, whilst working with Partnerships across the region to join up the work of public,

272 SEEDA’s website: http://www.seeda.co.uk/work_in_the_region/ (accessed 13 August 2008)


private and voluntary sectors.

– Sustainable Economic Growth: helping drive up productivity as the basis for wealth creation,supporting innovation and enterprise.

– Sustainable Communities: helping build economic, social and environmental sustainability into allour communities, through creating quality places and area-focused regeneration.

The latest Corporate Plan covering the period from 2008 to 2011 is linked to the most recent RES2006-2016. By the end of the Corporate Plan period, SEEDA aims to have worked closely with localauthorities, local partners and stakeholders and be a strong and effective advocate for the region’sneeds. SEEDA aims to deliver against RES targets through its Global Competitiveness, Smart Growthand Sustainable Prosperity portfolios. In addition, its Enabling Infrastructure and Developmentdirectorate ensures that SEEDA’s investment in major regeneration sites and infrastructure prioritiesdelivers across all RES objectives. The Corporate Plan also describes how SEEDA will work witheach of the regional economic contours described above which is underpinned in the need for it toshow regional leadership in co-ordinating the aspirations and actions of numerous partnershiporganisations. An important part of SEEDA’s strategy is to collaborate with London and the East ofEngland to develop ‘breakthrough’ solutions in areas of global excellence, such as the Oxford toCambridge Arc Initiative.

SEEDA’s core outputs cover: jobs created or safeguarded; people assisted to get a job; new businessescreated and surviving 12 months; businesses assisted to improve their performance; businesses assistedvia collaboration with the UK knowledge base; public and private regeneration investment levered;hectares of brownfield land reclaimed and redeveloped; and people assisted in their skills development.These core outputs form the context for evaluating SEEDA’s activity and impact.

Besides the impact of its project and programme spend, SEEDA also influences its partners’ andstakeholders’ behaviour and performance in other ways. This ‘Strategic Added Value’ (SAV) is seen as akey element of SEEDA’s impact. Indeed, the policy framework that led to its establishment was designedto enable SEEDA to harness national, regional and local institutions in order to exploit the region’sindigenous strengths and tackle particular weaknesses, and to provide the environment for businessesand communities to maximise their potential through reforms that strengthen the key drivers ofproductivity and growth.

SEEDA’s profile

In 2006/07, SEEDA had an annual budget of £203m273

and spent around £1,130m up to and including2006/07 including programme spend and administrative costs. SEEDA has the second-lowest budgetoverall of the English Regional Development Agencies, and the lowest budget per head of population.

Although this report draws on evaluations which cover SEEDA’s spending over the whole period since itsestablishment in 1999, its focus is on that spending for which SEEDA is formally accountable, over whichit has had the greatest influence and where at least the early evidence of impact should be apparent. Inpractice, this means that it focuses on understanding the impact of SEEDA’s spending on interventions inthe ‘relevant period’ between 2002/03 to 2006/07: thus, it focuses less on those programmes and projectswhich SEEDA inherited from its predecessors and seven national programmes where SEEDA has beenresponsible for delivery within parameters determined by central government departments .

Table 191 provides a breakdown of SEEDA’s overall spend per annum from 1999/2000 to 2006/2007between the three broad intervention categories outlined in the IEF and on national programmes

274.

As Table 191 shows, more of SEEDA’s expenditure has been devoted to place interventions than topeople or business interventions. It is also evident that SEEDA’s spending priorities have changed since

273 South East England Development Agency

274SEEDA’s expenditure data already exclude administrative costs as it is based on total programme expenditure and capital

additions from SEEDA’s accounts.


its establishment. Expenditure has fallen in the other category, mainly due to the phasing out of SRB, andincreased at a faster rate in business interventions.

Since its establishment, SEEDA has spent £1,001m on interventions (excluding administration costs), ofwhich £577m (shaded area in Table 191) was spent on SEEDA (other than national) interventions in the‘relevant period’. This subset of spend is the primary focus of this report.

Table 191: Analysis of SEEDA spend by year and by intervention category (£m)


programmes

Administrative

costs

Total

1999/2000 0 17.9 4.6 36.8 2.0 6.8 68.1

2000/2001 1.7 8.9 5.7 50.4 5.3 8.9 80.9

2001/2002 3.5 22.8 5.0 63.8 1.9 10.5 107.5

2002/2003 7.9 40.4 9.9 42.8 5.4 15.2 121.6

2003/2004 14.1 46.5 13.7 49.6 5.2 19.4 148.5

2004/2005 16.8 44.8 11.9 33.6 58.0 21.1 186.3

2005/2006 22.7 54.6 8.4 32.9 72.7 22.3 213.6

2006/2007 28.5 57.5 10.5 29.7 52.9 24.3 203.4

Total 95.3 293.5 69.7 339.5 203.3 128.5 1,129.9

Source: PwC analysis based on data supplied by SEEDA

Table 192 summarises SEEDA’s spend covered by the usable evaluation evidence. The evidence for theimpact of SEEDA’s spending, therefore, draws on 25 evaluations covering 81% (£469m) of SEEDA’sprogramme spend over the ‘relevant period’ which are consistent with the requirements of the IEF. Thisprovides a robust evidence base upon which SEEDA’s impact can be assessed. Annex F provides a listof the evaluations used.

Table 192: Analysis of SEEDA relevant spend covered by IEF compliant evaluations

Expenditure covered



evaluations

Business 72.6 81 6275

Place 197.4 81 7276

People 38.6 71 10277

Other 160.3 85 2

Total 468.9 81 25

National programmes 28.0 14 2

Total (including national programmes) 496.9 64 27

Source: PwC analysis based on SEEDA evaluation evidence

275 The Innovation Infrastructure evaluation has been counted in the business category but the evidence linked to Managed

Workspaces has been discussed in the place section of this report. In addition, the Gosport Business Park evaluation which was

initially classified in business was transferred to place given its role mainly as managed workspace.

276 The Sea Space evaluation has been allocated to place. This is because all its evidence relates to regeneration through physical

infrastructure, including educational infrastructure and incubation sites, and also because it was decided that the evidence should

be kept together to demonstrate the holistic contribution to the regeneration of Hastings. However, spend has been distributed

across people, place and business categories accordingly.

277 The Chatham Drill Hall and Canteen (University of Medway) evaluation has also been re-allocated from the people category to

the place category to demonstrate linkages with the wider Chatham maritime interventions, but spend has been allocated to people

due to its classification as “development of educational infrastructure”.


These evaluations have been allocated to the intervention category most relevant to the project orprogramme being evaluated. However, as the Agency seeks to pursue multiple objectives from itsactivities, the impacts from one project / programme can achieve a range of outcomes, some of whichmay be more in line with the objectives of other intervention themes. The multiple impacts of interventionsare acknowledged where they have been identified in the evaluation evidence.

Key findings

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

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

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

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

Impact

The majority of SEEDA’s evaluations covered in this report have estimated net outputs on the basis of thegross outputs. These have been presented as outputs achieved and future potential outputs. The ‘core’gross and net outputs are summarised in Table 193.

Table 193: Gross and net attributable SEEDA outputs278

Jobs created/

safeguarded

Businesses

created

Businesses

assisted

Brownfield

land (ha)

Skills

assists


Gross outputs achieved 25,538 2,002 14,984 - 33

Net outputs achieved 8,018 601 8,566 - 38279

Additionality %, achieved 31% 30% 57% - 114%





Gross outputs achieved 6,776 36 132 29.0 427

Net outputs achieved 5,371 27 132 25.3 299

Additionality %, achieved 79% 75% 100% 87% 70%

Future potential gross outputs 5,191 - - 31.5 -

Future potential net outputs 2,427 - - 29.9 -

Additionality %, future potential 47% - - 95% -

278 The gross outputs from evaluations that did not estimate net outputs have been excluded from this Table.

279 Net outputs are higher than the gross outputs due to low levels of deadweight and the positive multiplier effects.


Jobs created/

safeguarded

Businesses

created

Businesses

assisted

Brownfield

land (ha)

Skills

assists

People and skills

Gross outputs achieved 328 - 3,786 - 13,395

Net outputs achieved 284 - 3,411 - 10,579

Additionality %, achieved 87% - 90% - 79%

Future potential gross outputs 51 - 1,008 - 2,280

Future potential net outputs 38 - 948 - 2,071

Additionality %, future potential 75% - 94% - 91%

Other




Future potential gross outputs - - - - -

Future potential net outputs - - - - -

Additionality %, future potential - - - - -

Total




Future potential gross outputs 150,212 - 1,008 31 2,280

Future potential net outputs 109,217 - 948 30 2,071

Additionality %, future potential 73% - 94% 95% 91%


SEEDA’s spending has created/safeguarded jobs, assisted and helped to create new businesses,assisted people in skills development and remediated brownfield land. A large proportion of these outputshave already been achieved. However, a significant number of outputs are expected to be achieved inthe future. These are predominantly related to jobs created by business interventions (such as sectorsupport, individual enterprise support and knowledge transfer / R&D projects). All of these future potentialoutputs are subject to varying degrees of uncertainty and should, as such, be treated with caution.

When comparing SEEDA’s additionality factors across intervention categories the following conclusionscan be drawn:

People and skills interventions achieved the highest levels of additionality for jobscreated/safeguarded;

Place and other interventions achieved the highest additionality levels for business creation;

Regeneration through physical infrastructure achieved the highest levels of additionality for businesscreation, businesses supported and brownfield land remediation. However, the evidence forbusinesses supported and created comes from one project evaluation;

Business interventions achieved the highest levels of additionality for achieved skills assists, althoughthe evidence has been sourced from the evaluation of just one programme;


For jobs created/safeguarded and skills assists, both people and place interventions achieved a highlevel of additionality in comparison with business interventions for which one in every three gross jobscreated/safeguarded were translated into net outputs; and

Regeneration through physical infrastructure and ‘other’ interventions generated evidence onbrownfield land remediated. Regeneration demonstrated a much higher level of additionality than‘other’ interventions.

When comparing SEEDA’s additionality factors for achieved outputs with the averages for RDAsnationally, the following conclusions can be drawn:

Businesses interventions additionality for achieved outputs is higher than the comparable nationalmeasures in terms of businesses assisted (35%) but lower in terms of jobs created/safeguarded(48%) and business creation (40%);

Regeneration interventions additionality for achieved outputs is higher than the comparable nationalmeasures for jobs created/safeguarded (45%), land remediation (73%) and businesses created(65%);

People and skills interventions additionality for achieved outputs is higher than the comparablenational measures in terms of skills assists (62%), employment assists (51%) and jobscreated/safeguarded (48%);

Other interventions achieved higher levels of additionality in comparison with national measures for alloutput types except for land remediated (59%) and skills assists (57%).

It has not been possible to provide a cumulative figure for the GVA (achieved and future potential) inrelation to all of these interventions due to differences across individual evaluations. Not all theevaluations reviewed assessed the outcomes of the intervention in terms of the impact on GVA. Forthose evaluations which did take GVA into consideration, the basis of these estimates is ofteninconsistent across interventions. There is, therefore, no aggregate assessment of net outcomes acrossinterventions.

However, in Table 194 we set out those measures that have been produced in order to demonstrate therange of outcomes from the evaluations with GVA estimates. Achieved and future potential impacts onGVA are distinguished as well as annual and cumulative (i.e. taking into account persistence effects overtime) impacts.

Table 194: Outcomes from the evaluation of SEEDA interventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Achieved

GVA

(annual, £m)

Future

potential

GVA (annual,

£m)

Achieved

GVA

(cumulative,

£m)280

Future

potential

GVA

(cumulative,

£m)

Achieved &

future

potential

GVA

(cumulative,

£m)

Business competitiveness & development281

Individual

Enterprise

Support282

18.2 43 - 50 - 58 - 66 782 - 901 840 - 967

280 Ranges relate to the margin of error from the beneficiary survey.

281 Six evaluations make up the evidence for this intervention category; however, the evaluation of Redundant Buildings Grant and

Farm Diversification Programmes did not quantify any outcomes.

282 To note that this evaluation covered Enterprise Hubs, Enterprise Gateways and ICT/Broadband Advice projects. The projects

have relatively different objectives but fall under the category of individual enterprise support.


Expenditure

covered by

evaluations

(£m)

Achieved

GVA

(annual, £m)

Future

potential

GVA (annual,

£m)

Achieved

GVA

(cumulative,

£m)280

Future

potential

GVA

(cumulative,

£m)

Achieved &

future

potential

GVA

(cumulative,

£m)

Business

Competitiveness

(Sector Support)

8.6 106 - 116 - 186 - 204 1,119 - 1,229 1,305 - 1,433

Emerging

Technologies -

Collaborative R&D

2.0 0.6283

- - 0.3 – 0.8284

0.3 – 0.8

Innovation

infrastructure

(Knowledge

Transfer and

R&D)

16.4 18-21 - 41 - 48 632 - 742 673 - 790

Business

Competitiveness

(Inward

Investment)285

4.8 17 - 21 - 37 - 45 92 - 112 129 - 157

Business

Competitiveness

(Trade)

2.5 18- 21 - 20 - 23 158 - 186 178 – 209

Sustainable Use

of Natural

Resources

5.8286

- - 5.8 - 5.8

Regeneration through physical infrastructure287

Physical

Regeneration

(residential led

schemes)

34.1 1.8 - 1.8 40.4 42.1

Physical

Regeneration

(employment led

schemes)

77.4 5.1 - 10.3 242.6 252.9

Innovation

Infrastructure13.9 - - 0.5 – 0.6 29 - 45 30 – 46

283 This was estimated on the basis of jobs created / safeguarded. The evaluation argues that this is low due to the fact that the aim

of ‘Emerging Technologies – Collaborative R&D’ was to promote collaborations between businesses and the knowledge base, and

not job creation. According to the programme evaluation, Emerging Technologies – Collaborative R&D has been successful in

promoting collaborations.

284 Estimated on the basis of expected profits only. Range reflects a sensitivity in expected profits by businesses.

285 It should be noted that the evidence available for SEEDA on Inward Investment has been sourced from a sampling evaluation

which assessed only one inward investment project “Locate in Kent”.

286 The GVA is associated to spend of only £1.7m although the evaluation covered £5.8m.

287 Seven evaluations make up the evidence for this intervention category; however, the evaluation of Gosport Business Centre,

Strategic Sites (Chatham Maritime), Chatham Maritime (University Buildings) and Oxford Castle and Prison did not quantify GVA

impacts. Other quantitative outcomes reported by evaluations include Oxford Castle & Prison attracting £3.7m (achieved,

cumulative) of additional expenditure to the local Oxford area for the first four years of the project.


Expenditure

covered by

evaluations

(£m)

Achieved

GVA

(annual, £m)

Future

potential

GVA (annual,

£m)

Achieved

GVA

(cumulative,

£m)280

Future

potential

GVA

(cumulative,

£m)

Achieved &

future

potential

GVA

(cumulative,

£m)

(Managed

workspaces)

Sea Space288

31.2 8.5 17.2 - - -

St Cross Business

Park5.5 - - 55

289- 55

Physical

Regeneration

(Public Realm)

15.1 - - - 27.8 27.8

People & skills interventions290

Skills &

Employability14.3 - - 17.1 27.4

29144.5

Area Programme 3.9 4.1 - - - -

Other RDA interventions

SRB 128.8 - - 70.0 - 70.0

Area Investment

Framework31.5 - - 109.2 - 109.2


This analysis needs to be interpreted with some caution since:

the analysis includes impacts already achieved and those expected to accrue in the future: the latterare inevitably less robust and subject to greater degrees of uncertainty;

in all cases where future potential cumulative impacts have been estimated, the results have beendiscounted with the exception of the Skills & Employability evaluation.

the estimates are not presented on a constant price basis.

Finally, besides the impact of its project and programme spend, Strategic Added Value is a key elementof SEEDA’s impact, as illustrated in the text box below.

SEEDA’s Strategic Added Value

Besides the impact of its project and programme spend, SEEDA also influences its partners’ andstakeholders’ behaviour and performance in other ways as demonstrated by the following examples:

Influencing national decisions in order to safeguard economic activity: Through its campaign tosafeguard the Portsmouth Naval Base, SEEDA, with its partners, influenced the eventual decision toretain and expand the base. SEEDA’s major contributions included: commissioning a socio-

288 GVA figures links to SEEDA plus other expenditure channelled through Sea Space; however the VfM estimations relate only to

SEEDA’s investment.

289 Based on GVA per worker in the SE being £55,230

290 Only the two evaluations in this section quantified GVA contributions.

291 Impacts relate to future potential GVA linked not only to the relevant spend period but also to 2007/08 – 2008/09 expenditure in

the programmes evaluated.


economic impact assessment of closing, minimising or expanding the Portsmouth Naval Base use thestudy results to increase Government awareness and stimulate a major debate; and using itsnetworks to engage the media and hold meetings with MPs and senior civil servants acrossGovernment. The campaign was able to safeguard 17,000 jobs at the base, 35,000 jobs and 750businesses in the wider supply chain, and contracts worth circa £680m. 292

Influencing the direction of regional and national policy: Since its inception the Insights Programme, aresearch programme established by SEEDA and the South East Business Link Providers (BLPs), hascompleted 10 waves of the Business Monitor, interviewing more than 15,000 businesses. It hasproduced 3 annual research reports and has generated more than 15 ‘hot topic’ papers which look atspecific issues that are of particular relevance to Business Link, SEEDA and to Government policyand strategy. Through the programme SEEDA has been able to influence stakeholders at the regionaland national levels. For instance, through the development of a paper looking into the currenteconomic climate from the perspective of South East businesses through a paper entitled; ‘CreditCrunch’, the Agency has been able to exert influence upon central Government to take action tosupport business as well as providing support to citizens. 293

Leading place regeneration and engaging public and private sector stakeholders: SEEDA has beensuccessful in remediating and undertaking land assembly of the Ropetackle site despite numerousprevious attempts by Adur District Council (ADC) to bring it to the market. The land had been derelict for35 years and faced a number of development constraints. SEEDA’s strategic role is well represented inthree ways. First, it played a catalytic role through its use of CPO legislation during the land assemblyprocess. This is particularly significant given that Ropetackle was the first example of an RDA issuingsuch an order. Second, SEEDA’s synergistic approach is demonstrated mainly by the quality of project’soutputs. The residential units were awarded BREEAM and ECO HOMES ratings of “excellent” and setnew sustainability standards for the time. Thirdly, SEEDA set up the mechanisms to engage the privatesector to share risks appropriately. It established a joint venture with Berkeley Homes. 294

Source: SEEDA

Value for money

Table 195 considers the value for money of SEEDA’s interventions from two perspectives:

the ratio of GVA to cost as an indicator of the benefit:cost ratio; and


In assessing the value for money of SEEDA’s interventions we have sought to compare them with theevidence emerging from the evaluation of other RDAs’ activities.

The GVA to cost ratio compares GVA impacts to the cost of the intervention: where there is a GVA to costratio of greater than one, the economic benefits of the interventions attributable to SEEDA’s fundingexceed their costs. Care should be taken when comparing the value for money of these interventions asthese are set out in terms of both achieved and future potential.

Table 195 also sets out ratios of GVA to cost based on either cumulative GVA or GVA per annumdepending on the available evidence.

292 SAV Case Study prepared by SEEDA


294 SAV Case Study prepared by SEEDA based on Physical Regeneration Evaluation.


Table 195: Summary of SEEDA value for money (2002/03-2006/07)

Achieved

GVA:cost

ratio

Future

potential

GVA:cost

ratio

Achieved &

future

potential

GVA:cost

ratio

Achieved

cost per net

job (£’000)

Future

potential

cost per

net job

(£’000)

Achieved

cost per

net

business

assist (£)

Achieved

cost per

net skills

assist (£)


Individual

Enterprise

Support

3

(cumulative)

38

(cumulative)- 9.5 0.7 1.2 -

Business

Competitiveness

(Sector Support)

23

(cumulative)

137295

(cumulative)- 3.2 0.2 1.3 -

Emerging

Technologies -

Collaborative

R&D296

0.2 (annual)0.1 – 0.3

(cumulative)- 329 - 482

297- - -

Innovation

infrastructure

(Knowledge

Transfer and

R&D)

3

(cumulative)

42

(cumulative)- 31.1 0.6 3.3 -

Business

Competitiveness

(Inward

Investment)

9

(cumulative)

22

(cumulative)- 6.8 1.2 14.4 -

Business

Competitiveness

(Trade)

9

(cumulative)

69

(cumulative)- 4 0.4 2.8 -

Sustainable Use

of Natural

Resources

3.5

(cumulative)- - - - - -


Physical

Regeneration298

(residential

led schemes)

0.1

(cumulative)-

3.4

(cumulative)158.3 37.3

299- -

295 This estimation should be interpreted with caution as it is based on optimist expectations for growth expressed by large and small

businesses about future growth.

296 This programme was not designed to create jobs but to facilitate collaborations between businesses and the knowledge base.

297 The range represents the cost per net job achieved by the nanotechnology (£482K) and transport (£329K) themes including jobs

created /safeguarded.

298 All Physical Regeneration VfM ratios have been estimated on the basis of net spend (i.e. taking account of realised land sale

receipts and recent book asset values).

299 Includes achieved and future potential


Achieved

GVA:cost

ratio

Future

potential

GVA:cost

ratio

Achieved &

future

potential

GVA:cost

ratio

Achieved

cost per net

job (£’000)

Future

potential

cost per

net job

(£’000)

Achieved

cost per

net

business

assist (£)

Achieved

cost per

net skills

assist (£)

Physical

Regeneration

(employment led

schemes)

2.4

(cumulative)-

60.1

(cumulative)17.4 2.6 - -

Innovation

Infrastructure

(Managed

workspaces)

0.04

(cumulative)

0.5

(cumulative)- 487.9 51.3 84.2 -

Sea Space 0.6 (annual) 0.6 (annual) - 34.5 – 159.0300

- - -

St Cross

Business Park

6.4

(cumulative)- - 6.5

301- - -

Physical

Regeneration

(Public Realm)

- -2.8

(cumulative)- 44.1 - -

People and skills

Skills &

Employability

(Skills/workforce

development)

42.3 - 1.9 0.7

Skills &

Employability

(Matching

people to jobs)

- - - 1.1

Skills &

Employability

(Educational

infrastructure

development)

1.5

(cumulative)

(refers to

entire Skills

&

Employability

evaluation)

4.1

(cumulative)

(refers to

entire Skills

&

Employability

evaluation)

-

- - 0.3 1.9

Area

Programme0.7 (annual) - - 35.8 - 17.3 2.0

Other

Area Investment

Framework

2.8

(cumulative)- 54.9 - - -

National programmes302

300 Range refers to the different cost per job estimates presented by the evaluation which includes: £34,549 per job for the ICH and

CMC which are employment-led development, £159,000 per job for the University Centre Hastings and £57,803 per job for all the

Early wins projects which includes all the projects mentioned.

301 PwC estimate taking total costs of £6.4m divided by total net jobs of 988

302 Based on the available evaluation evidence GVA to cost ratios and cost per net job could only be calculated for some of the

national programmes undertaken by SEEDA.


Achieved

GVA:cost

ratio

Future

potential

GVA:cost

ratio

Achieved &

future

potential

GVA:cost

ratio

Achieved

cost per net

job (£’000)

Future

potential

cost per

net job

(£’000)

Achieved

cost per

net

business

assist (£)

Achieved

cost per

net skills

assist (£)

East Kent

Coalfields4.3

3036.6 - 15.1 - - -

Business Link 4.2 - - 11.6 - - -

Manufacturing

Advisory

Service

- 5.4 - 8.5 - - -

Grants for

Research and

Development

- 2.5 - - 18.3 - -


Table 195 shows that, for the evaluations which estimated GVA, there has been a significant range in thereturn on investment figures relating to these interventions. Overall, a positive picture arises where mostinterventions have already achieved GVA return on investment which exceed their costs, although othershave achieved a more limited return to date (e.g. some evaluations were interim in nature and, therefore,recognised that there is a time lag between spend and benefit realisation). Also, a number ofinterventions are expected to generate potential future returns on investment which, by their nature, areuncertain. There is also a large variation between interventions in terms of cost per job figures (bothachieved and future potential). However, it is important to acknowledge that not all interventions weredesigned with job creation as an explicit objective e.g. Emerging Technologies - Collaborative R&D andprojects in the Innovation Infrastructure (Knowledge Transfer and R&D) evaluation.

Business development and competitiveness interventions have achieved the highest GVA returns to date,especially sector support, trade and inward investment initiatives. Future potential returns also provide apositive picture with individual enterprise support and knowledge transfer initiatives would be expected toachieve some of the highest returns for the intervention, while sector support and trade interventionscontinue to have a favourable position. These estimates are significant but need to be interpretedcarefully as they are based on business growth expectations expressed by beneficiaries which theevaluators considered to be optimistic.

Regeneration through physical infrastructure interventions, in particular employment-led schemes, havesignificant future potential GVA returns expected based on the investment made to date. This is primarilydue to the early stage of implementation of these interventions. These interventions are also associatedwith wider impacts, for example raising confidence in the area of impact, which will not be captured in theestimation of GVA.

A range of cost per unit of output measures have been calculated, with a focus on the cost per net job.The following can be noted:

Business development and competitiveness programmes have achieved lower cost per net job ratiosthan other intervention categories (although their focus is often wider than just creating/safeguardingjobs), closely followed by national programmes. The exception is Knowledge transfer and R&Dinitiatives that tend to present a higher cost than other business interventions which reflects that manyinitiatives require significant investment by SEEDA (e.g. grants) and are not focused on job creationbut on business development and profit making. However, when future potential impacts areconsidered, costs per net job tend to drop significantly (from £31K to £0.6K) which demonstrates thelong term nature of such initiatives.

303 According to the evaluator, in terms of SEEDA’s return in relation to GVA outcomes at the local level, SEEDA has achieved

426% return on its cost investment - after completion of all the schemes, this return is forecast to increase to 661%.


With the exception of inward investment, business interventions cost per net business assists tends tobe low in comparison with regeneration and at a similar level to people and skills interventions.However, very limited evidence was available for regeneration and the relatively high cost perbusiness assist demonstrated by Area Programmes may be related to its focus on skills andemployment assists.

In comparison with other interventions, regeneration through physical infrastructure initiatives tend tohave relatively high cost per job. The exceptions are more mature office workspace initiatives such asSt Cross Business Park and employment-led developments.

When comparing SEEDA’s GVA to cost ratios to national cross-RDA averages and to output unit costs,the following conclusions can be drawn:

Business interventions: Both sector/cluster support and trade304

intervention evaluations reportedhigher achieved GVA to cost ratios than the national averages, both annually (3.2:1 and 1.7:1respectively) and cumulatively (7.7:1 and 4.1:1 respectively). However, both individual enterprisesupport and science, R&D and innovation infrastructure intervention evaluations reported lowerachieved GVA to cost ratios than the national annual (4.9:1 and 1.1:1 respectively) and cumulative(12.0:1 and 3.4:1 respectively). Similarly, the area of sustainable consumption and production alsoreported a lower achieved GVA to cost ratio in comparison to the national average for other businessdevelopment and competitiveness interventions (4.1:1). In comparison with national averages,SEEDA tends to have a lower cost per net job and net business assist across all intervention sub-categories where averages are available, with the exception of Emerging Technologies - CollaborativeR&D and individual enterprise support which presents cost per net achieved job slightly higher thanthe national average.

Place interventions: Except for St Cross Business Park, which is a relatively mature intervention, otherSEEDA bringing back land into use interventions compare unfavourably to the national averageachieved cumulative GVA to cost ratio (5.1:1). However, achieved and future potential GVA to costratios for bringing back land into use employment-led schemes are higher than the national ratios(6.5:1). This is because SEEDA’s infrastructure projects are at a relatively immature stage ofdevelopment and are expected to accrue most benefits in the future. In comparison with the nationalachieved and future potential cumulative GVA to cost ratio for bringing land back into use (6.5:1) thePhysical Regeneration evaluation reported a lower ratio for residential-led schemes. The samerelationship applies to the public realm schemes in comparison to the respective national achievedand future potential cumulative GVA to cost ratio (8.7:1). In comparison with a national average of£42,101 per net job for bringing land back into use, SEEDA’s employment-led schemes achieve alower cost per net job, with the exceptions of managed workspaces and the residential-leddevelopments

People interventions: In comparison with the national ‘total’ achieved cumulative GVA to cost ratio(2.5:1) SEEDA’s Skills & Employability evaluation, which covers all sub-themes, reported a lowerratio. However, the future potential GVA to cost ratio is higher than the national ratio for achieved andfuture potential (2.5:1). In addition, the Area Programmes evaluation reported an achieved annualGVA to cost ratio almost equal to the matching people to jobs comparator (0.8:1). SEEDA’s Skills &Employability and Area Programme evaluations reported lower unit costs than respective nationalaverages across all output types and intervention categories, where measures were available.

Other interventions: The AIF evaluation estimated a GVA (cumulative) achieved: cost ratio of 2.8:1which is higher than the national average of 2.3:1, but a cost per job created/safeguarded of £54,900which is higher than the national average of £41,775.

304 No national average GVA to cost ratios have been developed for trade interventions, therefore SEEDA’s evidence on this area

has been compared to the national average for ‘other’ business development and competitiveness interventions as presented in the

national report.



Table 196 presents SEEDA’s performance against targets based upon evidence drawn from the TaskingFramework. For all of the measures, except hectares of brownfield land remediated, SEEDA hasexceeded the targets set by BERR, particularly for jobs created/safeguarded and people assisted in skillsdevelopment. This has happened across all years for which targets have been set with the exception ofbusinesses created which have exceeded targets in three occasions out of five.

Table 196: Comparison of SEEDA performance against targets (2002/03-2006/07)305

Jobs created/

safeguarded

Businesses

created

Brownfield

land (ha)

People assisted in

skills development

Funding

levered

(£m)


Achieved SEEDA

gross outputs

reported to BERR

21,918 5,965 303 126,695 535

Number of years

when targets met5 out of 5 3 out of 5 4 out of 5 5 out of 5 4 out of 4


Like all the RDAs (except the London Development Agency), in 2007 SEEDA was subject to the NationalAudit Office’s Independent Performance Assessment (IPA) which assessed how well SEEDA hasresponded to the common challenges facing RDAs, namely balancing the interests of the region withnational policy requirements, managing the conflicting demands of different regional stakeholders, lookingoutwards to promote the region while staying focused on what is happening inside and responding to newduties imposed by central government. This assessment sheds further light on how well the Agency hasbeen able to fulfil its role.

Overall, SEEDA was seen as ‘performing strongly’, particularly in terms of its:

ambition: a inclusive and consultative approach as well as a comprehensive intelligence base todeveloping the ambitions for the region in the new RES which presents goals that reflect the needs ofthe region;

achievement: SEEDA has demonstrated an impressive delivery of regeneration initiatives across theregion as well as a systematic approach to business support and the use of the skills agenda insupport of sustainable regeneration and innovation. This has been delivered through effectivepartnership working, rural delivery programmes and significant leverage of investment into the region.

The IPA concludes that SEEDA has been ‘performing well’ in terms of prioritisation, performancemanagement and capacity. In particular, it acknowledges that SEEDA has been positively targetingresources on the basis of impact with an emphasis on investing in success, clearly identifying PSAtargets in its Corporate Plan and implementing new project management systems and an evaluationframework. The IPA further suggests some development areas including: better linkage between the RESand the Corporate Plan, a process sitting between the Corporate Plan and Division Plans, greater claritywith partners over decision making process, and doing more to help the board consider likely futureperformance, including regular consideration of key strategic risks. SEEDA is already in the process ofaddressing some of these issues through the establishment of a programme office.

Table 197 sets out SEEDA’s performance against the objectives for each of the individual interventionscovered by the evaluations.

305 Based on information from SEEDA Annual Reports


Table 197: Comparison of performance against objectives across SEEDA evaluations (2002/03-2006/07)

306


Business


Spend (£m) 18.2 0 46.2 0 2.0 9.6 76.0

Place


Spend (£m) 31.2 5.5 13.2 126.6 0 25.8 202.3

People


Spend (£m) 4.8 14.3 0.2 3.1 0.2 7.8 30.4

Other


Spend (£m) 0 0 0 160.3 0 0 160.3

Total


Spend (£m) 54.2 19.8 59.6 290 2.2 43.2 469


Table 197 shows that eleven out of all the evaluations, covering about one third of the relevant spendevaluated, have achieved a positive assessment by evaluators by largely meeting, meeting or exceedingtheir objectives. One major regeneration evaluation has demonstrated mixed results; this is largely due tothe early stage of implementation of these interventions and the fact that the evaluation covered anumber of projects at the same time. A significant amount of spend covered by ‘other’ evaluations alsofall into the mixed performance category. This is mainly because they refer to major regional initiativeswith a wide range of objectives and targets and in some cases (e.g. SRB) incomplete evidence. Only tworelatively small initiatives achieved an assessment of limited performance and seven evaluations,particularly older ones covering less than 10% of spend evaluated, did not present an assessment ofperformance.

This variable performance contrasts with SEEDA’s achievement of the targets set by BERR in theTasking Framework. Only two relatively small interventions achieved limited performance. In one casethis is due to the fact that the programme is not completed (Emerging Technologies – Collaborative R&D)and in the other case there has been a lack of performance due to unexpected changes in the scope anddelivery of the project (GRIST).


We have structured the analysis of the impact of SEEDA’s spending, where possible, according to thethree categories of intervention defined within the IEF (i.e. business, place and people). We have alsoanalysed the impact of SEEDA’s other activities that span more than one of these categories as well asthe available evidence of the impact of the seven national programmes where SEEDA has beenresponsible for delivery within parameters determined by central government departments.

We have summarised the impact of SEEDA’s interventions using a common structure in which:

306 For a list of interim evaluations please see Annex F.


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

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

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



Rationale

The South East of England has a number of regional strengths in this area on which SEEDA’sinterventions have aimed to build including:

Competitiveness: In 2004 South East businesses accounted for £29 billion of exported goods, higherthan any other UK region.

Enterprise: 7% of the South East’s adult population was involved in entrepreneurial activity in 2004,second only to London among UK regions and well ahead of most European regions.

Innovation and creativity: the South East is second only to the East of England in the proportion ofregional GDP accounted for by R&D expenditure, and in terms of patents per million inhabitants. Inthe South East, creative businesses achieved double the national average growth between 1995 and2000.

There are, however, also a number of challenges facing businesses in the region including:

Competitiveness: Becoming more enterprising, innovative and skilled means exposing many more ofthe region’s businesses to the stimulus of global markets through interchanges of trade, investment,people and knowledge; building trading links with emerging economic powerhouses and collaboratingto innovate across regional, national and continental borders; and creating an entrepreneurial spiritacross all businesses in all sectors that seeks out new opportunities and new markets, rather thanrelying on existing products, processes and supply chains;

Enterprise: Raising the level of start-up activity in less prosperous parts of the South East, while in themore prosperous areas survival rates should be higher; and

Innovation and creativity: From 1997 to 2002 business expenditure on R&D grew by less than 1%annually and was only marginally ahead of the UK average. The South East must avoid the risk ofstagnation and find ways of matching the performance of its most successful internationalcompetitors.

The primary justification for SEEDA’s businesses development and competitiveness interventions was toaddress market failures in relation to asymmetric information (i.e. to improve the flow of information firareas such as sector related market and technology opportunities, sources of financial support, facilitiesfor investors, foreign market intelligence and mainstream business support services). Some interventionshave sought to tackle under-performance in areas which are lagging behind economically and aim tofoster a more equitable distribution of enterprise and business growth across the region by encouragingenterprise or technology access (e.g. broadband).

The evidence of the impact of SEEDA’s business interventions comes from six evaluations covering sixsub-themes summarised in Table 198. Note that the Business Competitiveness evaluation has beenmentioned three times below as it provides evidence for three intervention sub-themes.


Table 198: Summary of SEEDA’s business development and competitiveness interventions


covered by

evaluations (£m)

Individual enterprise level support307

Redundant Buildings Grant and Farm

Diversification Programmes

Individual Enterprise Support

3.8

18.2

Sector/cluster support Business Competitiveness (Sector Support) 8.6

Science, R&D & innovation infrastructure Emerging Technologies – Collaborative R&D

Innovation infrastructure (Knowledge

Transfer and R&D)

2.0

16.4

Inward investment promotion Business Competitiveness (Inward

Investment)

4.8

Internationalisation of indigenous business Business Competitiveness (Trade) 2.5

Sustainable Consumption & Production Sustainable Use of Natural Resources 5.8

Total 62.1308


These evaluations cover £62.1m of SEEDA spend. This spend is dominated by investment in knowledgetransfer and R&D projects as well as individual enterprise support including enterprise hubs, enterprisegateways and ICT support projects. A number of projects have also been undertaken to support sectordevelopment, inward investment, trade promotion as well as sustainable consumption and production.These interventions contribute to a number of targets outlined in the 2006 RES related to increases in thepercentage of businesses located in the South East operating internationally, the business stock, theproportion of businesses in the South East reporting R&D links with universities, and the percentage oftotal South East business turnover attributable to new products.

Impact

Table 199 summarises the expenditure and key gross outputs associated with the business interventionsevaluated. The primary outputs arising from the business interventions have been: jobscreated/safeguarded, businesses assisted, new businesses created and people assisted in their skillsdevelopment.

307 The Individual Enterprise Support, Business Competitiveness and Innovation Infrastructure evaluations were commissioned with

the same evaluator and have followed a consistent evaluation approach. Most of the evidence presented in this section has been

sourced from these evaluations as they cover £50m of relevant spend and 81% of the evidence presented in this section.

308 This is the total expenditure covered in this section. For the purpose of expenditure coverage purposes, a further (£10.6m) linking

to the evaluation of Sea Space has also been accounted for and presented in Table 2.


Table 199: Gross achieved outputs from SEEDA’s business development and competitivenessinterventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Gross jobs

created/

safeguarded

Gross

businesses

created

Gross

businesses

assisted

Gross

people

assisted in

skills

development

Gross

people

assisted

into

employment

Redundant Buildings

Grant and Farm

Diversification

Programmes

3.8 1,601 - - - -

Individual Enterprise

Support309 18.2 6,901 2,000 7,700 2,757 610

Business

Competitiveness

(Sector Support)

8.6 10,250 48 5,550 3,180 142

Emerging

Technologies –

Collaborative R&D310

2.0 34 2 18 33 1

Innovation

infrastructure

(Knowledge Transfer

and R&D)

16.4 3,095 50 1,500 278 84

Business

Competitiveness

(Inward Investment)

4.8 1,885 94 216 158 11

Business

Competitiveness

(Trade)

2.5 1,773 99 460 222 11

Total gross outputs 62.1 25,538 2,293 15,444 6,628 859

Total gross outputs

associated to net

outputs

62.1 25,538 2,002 14,984 33 1


Table 199 presents all gross outputs presented in business evaluations even if they have not generatedany net output findings. However as noted in the table, some evaluations identified gross outputs whichwere not assessed for additionality.

In addition to the achieved gross outputs set out in Table 199, the Individual Enterprise Support, BusinessCompetitiveness and Innovation Infrastructure evaluations estimated future potential gross jobs which arepresented in Table 200.

309 The gross output data associated with the Individual Enterprise Support, Business Competitiveness and Innovation Infrastructure

evaluations has been derived, in most cases, from beneficiary surveys and project reviews rather than from SEEDA’s PMS.

310 The results reported by this evaluation cover the period to 07/08.


Table 200: Gross future potential outputs from SEEDA’s business development andcompetitiveness interventions (2002/03-2006/07)


evaluations (£m)

Gross jobs created/

safeguarded

Individual Enterprise Support 18.2 37,908

Business Competitiveness (Sector Support) 8.6 61,018

Innovation infrastructure (Knowledge Transfer and R&D) 16.4 33,063

Business Competitiveness (Inward Investment) 4.8 6,045

Business Competitiveness (Trade) 2.5 6,936

Total 50.5 144,970


The business competitiveness evaluations suggest that the gross future potential jobs created andsafeguarded are very significant, almost six times those achieved. These output estimates have beenderived through a survey of beneficiaries, but are described by the evaluator as based on highlyoptimistic assumptions about the future impact of SEEDA interventions.

Table 201 summarises the expenditure and key net outputs associated with the six businessinterventions evaluated.

Table 201: Net achieved outputs from SEEDA’s business development and competitivenessinterventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Net jobs

created/

safeguarded

Net

businesses

created

Net

businesses

assisted

Net skills

assists

Net

employment

assists

Redundant Buildings

Grant and Farm

Diversification

Programmes

3.8 1,175 - - - -


Support18.2 2,245 600 4,700 - -

Business

Competitiveness

(Sector Support)

9 2,704 - 2,700 - -

Emerging

Technologies –


2 41 1 16 38 1

Innovation

infrastructure

(Knowledge Transfer

and R&D)

16 528 - 1,100 - -

Business

Competitiveness

(Inward Investment)

5 700 - 50 - -



Expenditure

covered by

evaluations

(£m)

Net jobs

created/

safeguarded

Net

businesses

created

Net

businesses

assisted

Net skills

assists

Net

employment

assists

Business

Competitiveness

(Trade)

3 627 - - - -

Total 62.1 8,018 601 8,566 38 1


In addition to the achieved net outputs set out in Table 201, the Individual Enterprise Support, BusinessCompetitiveness and Innovation Infrastructure evaluations estimated future potential net jobs which arepresented in Table 202.

Table 202: Net future potential outputs from SEEDA’s business development and competitivenessinterventions

Expenditure covered


Jobs created/ safeguarded

Individual Enterprise Support 18.2 29,487

Business Competitiveness (Sector Support) 8.6 42,232

Innovation infrastructure (Knowledge Transfer and R&D) 16.4 25,343

Business Competitiveness (Inward Investment) 4.8 3,866

Business Competitiveness (Trade) 2.5 5,824

Total 50.5 106,752


The level of additionality resulting from SEEDA’s interventions varied across intervention and outputtypes, but was relatively low compared with its regeneration and people and skills interventions. TheEmerging Technologies - Collaborative R&D evaluation reported the highest level of achievedadditionality across all output types, while the Innovation Infrastructure (knowledge transfer) programmeevaluation reported those high levels of achieved additionality only in terms of businesses assisted toimprove performance. The RBG & FDP demonstrated high levels of additionality in terms of net jobscreated/safeguarded.

Comparison of the additionality of SEEDA’s business interventions with the national findings shows that:

Overall, for business development and competitiveness, relevant evaluations reported that SEEDA’sadditionality was higher than the national measures for businesses assisted (35%) but lower for jobscreated/safeguarded (48%) and businesses created (40%).

For the individual enterprise support sub-theme, SEEDA’s additionality is higher than the nationalmeasure for businesses assisted (32%) but lower for business creation (39%). While the RedundantBuildings Grant and Farm Diversification Programmes evaluation reports higher levels of additionalitythan the national measures for jobs created/safeguarded (41%), the Individual Enterprise SupportEvaluation reports lower levels of additionality for this output type;

For the sector/cluster support sub-theme, SEEDA’s additionality is higher than the national measurefor businesses assisted (39%) but lower for jobs created/safeguarded (67%);

For the science, R&D and innovation infrastructure sub-theme, SEEDA’s additionality is higher thanthe national measure both for businesses assisted (67%) and for businesses created (39%). Whilethe Emerging Technologies – Collaborative R&D evaluation reports higher (74%) levels ofadditionality than the national measures for jobs created/safeguarded (46%), the Innovation


Infrastructure (knowledge transfer) evaluation reports lower levels of additionality (29 percentagepoints) for this output type; and

For the inward investment and other (i.e. internationalisation of indigenous businesses) sub-themes,SEEDA’s additionality is lower than the national measure for jobs created safeguarded (43% forinward investment and 55% for internationalisation of indigenous businesses).

Table 203 summarises the impact on GVA (both achieved and future potential) of SEEDA’s interventionsto promote business development and competitiveness. In all cases except one, the evaluators estimatedcumulative GVA. Future potential GVA has been discounted back to 2007.

Table 203: Outcomes from SEEDA’s business development and competitiveness interventions(2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Achieved

GVA

(annual,

£m)

Achieved GVA

(cumulative,

£m)312

Future

potential GVA

(cumulative,

£m)

Achieved &

future potential

GVA

(cumulative, £m)


Support18.2 43 - 50 58 - 66 782 - 901 840 - 967

Business

Competitiveness

(Sector Support)

8.6 106 - 116 186 - 204 1,119 - 1,229 1,305 - 1,433

Emerging

Technologies -


2.0 0.6314

- 0.3 – 0.8315

0.3 – 0.8

Innovation

infrastructure

(Knowledge Transfer

and R&D)

16.4 18-21 41 - 48 632 - 742 673 - 790

Business

Competitiveness

(Inward Investment)

4.8 17 - 21 37 - 45 92 - 112 129 - 157

Business

Competitiveness

(Trade)

2.5 18- 21 20 - 23 158 - 186 178 - 209

Sustainable Use of

Natural Resources5.8 - 5.8 - 5.8


Estimates of GVA have not been consistently calculated across the evaluations so it is not possible toprovide an aggregate estimate of GVA for SEEDA’s business interventions. However, the three sampling

312 For the Individual Enterprise Support, Business Competitiveness and Innovation Infrastructure evaluations, the assessment

takes into account the fact that supplementary financial impacts will have accrued to the company and region in the intervening

years between 2008 and the start date of the intervention. The future potential assessment is based on responses in the beneficiary

survey on business’ future expected growth in the next 5 years and the degree to which they would attribute these changes back to

the support received. The Future Impact Assessment is not cumulative due to the way in which the future impact questions were

asked.


314 Although GVA was estimated on the basis of jobs created / safeguarded., this programme was not designed to create jobs but

to facilitate collaborations between businesses and the knowledge base.

315 Estimated on the basis of expected profits only. Range reflects a sensitivity in expected profits by businesses.


based evaluations316

, which represent almost 81% of total evaluated expenditure in the businessintervention category, cumulative achieved GVA contribution of between £356m and £371m is estimated,and a future potential GVA contribution of £2.9 billion - £3 billion. It should be noted that the high returnon investment on all the Business Competitiveness, Individual Enterprise Support and InnovationInfrastructure evaluations should be treated with caution as these are based on the level of expressedbusiness optimism regarding the future potential impact of these interventions.

The text box below provides some examples of how SEEDA has created strategic added value throughbusiness development and competitiveness interventions.


Some of SEEDA’s initiatives have created strategic value for the region as well supported the creation ofvalue outside the region with public and private sector partners. For example, as lead RDA forInnovation, SEEDA co-manages the Strategic and Operational Advisory Groups that are co-ordinating thepartnership between RDAs and the Technology Strategy Board as recommended by the SainsburyReview

317. Through these fora, SEEDA is informing other RDAs of the regional benefits of sponsoring

collaborative R&D through which the Agency has already been able to support the development of keyplatform technologies which would not have been developed in such a short timescale, offering potentialto generate significant value to partners.

318

SEEDA has also played a strategic role in attracting inward investments to the South East. For example,since 1999, SEEDA has assisted 444 foreign companies to set up, retain or expand their operations inthe region. At the time of investment, these companies were forecast to create/safeguard 23,470 grossjobs over the forthcoming 3 years. To achieve this SEEDA has built up a network of public and privatesector organisations in the region which share the goal of attracting, expanding and retaining foreigninvestment. These organisations include local councils, economic partnerships, universities, lawyers,accountants, banks and property management firms.

319

Source: SEEDA

Value for money

Table 204 sets out the achieved and future potential GVA to cost ratios of SEEDA’s businessdevelopment and competitiveness interventions.

Table 204: Achieved and future potential GVA to cost ratios from SEEDA’s business developmentand competitiveness interventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Achieved GVA

(annual):cost ratio

Achieved GVA

(cumulative,

£m):cost

Future potential

GVA (cumulative,

£m):cost

Individual Enterprise Support 18.2 2 3 38

Business Competitiveness

(Sector Support)8.6 13 23 137

Emerging Technologies -

Collaborative R&D2.0 0.2 - 0.1 – 0.3

Innovation infrastructure

(Knowledge Transfer and

R&D)

16.4 1 3 42

316 Business Competitiveness, Innovation Infrastructure (Innovation and Knowledge Transfer) and Individual Enterprise Support

317 http://www.hm-treasury.gov.uk/d/sainsbury_review051007.pdf




Expenditure

covered by

evaluations

(£m)

Achieved GVA

(annual):cost ratio

Achieved GVA

(cumulative,

£m):cost

Future potential

GVA (cumulative,

£m):cost


(Inward Investment)4.8 4 9 22


(Trade)2.5 8 9 69

Sustainable Use of Natural

Resources5.8 - 3.5 -


As Table 204 shows all interventions have already achieved economic benefits which exceed their costs.Overall, all themes have demonstrated an achieved positive return on investment while sector supportactivities, inward investment and trade have demonstrated the highest returns. Knowledge transfer andR&D projects have demonstrated lower achieved returns in comparison with other themes; however, atleast the Innovation Infrastructure evaluation, forecasts higher future potential returns than individualenterprise support and inward investment activities. For a number of initiatives, in particular sectorsupport and trade investments, the significant although optimistic future potential outcomes imply highfuture potential GVA: cost ratios.

When comparing SEEDA’s achieved GVA to cost ratios with the national ratios, the following conclusionscan be drawn:

Both sector/cluster support and trade320

intervention evaluations reported higher GVA to cost ratiosthan the national averages, both annually (3.2:1 and 1.7:1 respectively) and cumulatively (7.7:1 and4.1:1 respectively);

Both individual enterprise support and science, R&D and innovation infrastructure interventionevaluations reported lower GVA to cost ratios than the national annual (4.9:1 and 1.1:1 respectively)and cumulative (12.0:1 and 3.4:1 respectively) averages; similarly, the area of sustainableconsumption and production also reported a lower GVA to cost ratio in comparison to the nationalratio for other business development and competitiveness interventions (4.1:1), and

The inward investment intervention evaluation reported a higher achieved GVA to cost ratio than thenational annual ratio (3.7:1) but lower than the national cumulative ratio (13.5:1).

If future potential GVA to cost ratios from evaluations are compared to joint national average achieved &future potential GVA to cost ratios, all sub-themes demonstrate higher value for money with the exceptionof inward investment

321. In addition, while the Innovation infrastructure (Knowledge Transfer and R&D)

evaluation reported a similar future potential GVA to cost ratio than the national achieved and futurepotential average, the Emerging Technologies - Collaborative R&D reported a lower than ratio lower thanone. It is relevant to note than the national GVA to cost ratios used in this comparison were: 27.8:1

322for

individual enterprise support, 23.0:1323

for sector/cluster support, 44.0:1324

for science, R&D and

320 No national average GVA to cost ratios have been developed for trade interventions, therefore SEEDA’s evidence on this area

has been compared to the national average for ‘other’ business development and competitiveness interventions as presented in the

national report.

321 It should be noted that the result of these comparison should be treated with caution as this is not comparing like for like and

given that significant impacts are expected in the future then GVA to cost ratios on the basis of future potential impacts could be

higher than achieved & future potential GVA to cost ratios.

322 This estimate includes 29,487 future potential jobs created/safeguarded estimated by SEEDA’s individual enterprise support

evaluation. The average included in the national report (14.1:1) excludes these numbers as it treats those figures as outliers.

323 This estimate includes 42,232 future potential jobs created/safeguarded estimated by SEEDA’s Business Competitiveness

(Sector support) evaluation. The average included in the national report (8.7:1) excludes these numbers as it treats them as


innovation infrastructure, 33.4:1325

for inward investment and 15.8:1 for other business development andcompetitiveness interventions.

Table 205 sets out the achieved and future potential cost per net output of SEEDA’s businessdevelopment and competitiveness interventions.

Table 205: Achieved and future potential cost per net output from SEEDA’s business developmentand competitiveness interventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Achieved cost

per net job

(£’000)

Future potential

cost per net job

(£’000)

Achieved cost

per net business

assisted (£’000)

Individual Enterprise Support 18.2 9.5 0.7 1.2


(Sector Support)8.6 3.2 0.2 1.3

Emerging Technologies -

Collaborative R&D2.0 329 - 482

326- -

Innovation infrastructure

(Knowledge Transfer and R&D)16.4 31.1 0.6 3.3


(Inward Investment)4.8 6.8 1.2 14.4


(Trade)2.5 4 0.4 2.8

Sustainable Use of Natural

Resources5.8 - - -


The cost per net job achieved from business and competiveness interventions ranged from £3,200 forsector support initiatives to £31,000 for knowledge transfer and R&D initiatives. The £329,000 - £482,000per net job achieved for Emerging Technologies - Collaborative R&D is affected by the fact that thisproject was not directed primarily at job creation

327and is still ongoing. The higher cost per output

presented in R&D and knowledge transfer projects can, to some extent, be explained by the fact thatthese projects usually take a longer period of time to deliver benefits (e.g. from product development tomarket) and are usually based on providing grants to academics and/or entrepreneurs which can berelatively expensive for SEEDA. As a result higher value jobs could be developed through theseinterventions. This may be reflected in the future potential impacts, which are estimated to be higher forR&D and knowledge transfer projects in comparison with most other business intervention sub-themes.

In comparison with national averages, SEEDA tends to have a lower cost per net job and net businessassist across all intervention sub-categories where averages are available, with the exception ofEmerging Technologies - Collaborative R&D and also individual enterprise support, the latter having acost per net achieved job higher than the national average (£8,301).

outliers.

324 This estimate includes 25,343 future potential jobs created/safeguarded from SEEDA’s Innovation infrastructure evaluation. The

average included in the national report (8.3:1) excludes these numbers as it treats them as outliers.

325 This estimate includes 3,866 future potential jobs created/safeguarded estimated by SEEDA’s inward investment evaluation.

The average included in the national report (20.5:1) excludes these numbers as it treats them as outliers.

326 The range represents the cost per net job achieved by the nanotechnology (£482K) and transport (£329K) themes including jobs

created /safeguarded.

327 This programme was not designed to create jobs but to facilitate collaborations between businesses and the knowledge base.



Table 206 summarises the performance against objectives of SEEDA’s interventions to promote businessdevelopment and competitiveness. Performance against objectives has been assessed for the majority ofinterventions by the IEF compliant evaluations reviewed. The evaluations indicate that performanceagainst objectives is mostly positive as three of the major programme evaluations covering a significantproportion of the evaluation spend have exceeded or largely met objectives. This demonstrates analignment and contribution to the RES objectives and Corporate Plan targets relevant to the interventionsas well as largely achieving or exceeding contracted output targets. The limited performance of theEmerging Technologies – Collaborative R&D refers mainly to it being an interim evaluation as well as lackof performance against some of its target outputs. Overall, projects have demonstrated better success inachieving business support targets compared with job and business creation targets.

Table 206: Performance against objectives from SEEDA’s business development andcompetitiveness interventions (2002/03-2006/07)


evaluations (£m)

Performance against

objectives

Individual Enterprise Support 18.2 Exceeded

Business Competitiveness 15.9 Largely met

Innovation infrastructure 30.3 Largely met328

Emerging Technologies - Collaborative R&D 2.0 Limited performance329

Redundant Buildings Grant and Farm

Diversification Programmes3.8 Not assessed

Sustainable Use of Natural Resources 5.8 Not assessed



Rationale

The South East of England is characterised by three broad economic contours: the inner South Eastwhich forms a generally wealthy core around London with some pockets of deprivation, the Rural SouthEast accounts for 80% of the region’s land mass, a third of its business base and a quarter of itspopulation; and Coastal South East which is characterised by unique environmental assets and a stringof distinctive coastal cities and towns, yet it is an area which has seen continued economic and socialdecline. Place based investments in infrastructure are critical to supporting productivity growth.

Physical development in the region is characterised by high demand and inelastic supply. Average houseprices in the region have risen by 70% since 1999 while average annual earnings have risen by 30%, andfirst time buyers accounted for just 18% of house purchases in 2003, compared with 48% in 1993. Withhousing comes the need for physical infrastructure, and for the cultural and social infrastructurenecessary for healthy and sustainable communities. Quality employment sites are also required acrossthe region to support business growth.

The strategic rationale for regeneration through physical infrastructure interventions was set out in theRegional Economic Strategy for South East England (2002-2012), which highlighted the need forintervention in a number of specific areas in order to stimulate and manage growth, whilst also tacklingdeprivation. The areas identified were:

Thames Gateway Kent – a national priority Growth Area incorporating the Medway Towns and Isleof Sheppey;

328 This assessment includes both the Knowledge Transfer as well as the Managed Workspaces elements of this evaluation. The

Managed Workspaces section is discussed in the regeneration through physical infrastructure section of this regional annex.

329 Evaluation is interim and the project is still ongoing.


Kent Coastal – a number of schemes along the Kent coast in areas of high deprivation includingisolated seaside towns, such as Hastings; and

South Hampshire and the Isle of Wight – an area of high untapped potential along the M27 corridorbetween the Portsmouth and Southampton conurbations.

The Regional Economic Strategy (RES) 2006-2016 reinforced the spatial priorities of the previous RESand identified the need for a range of physical infrastructure interventions, including the remediation ofcontaminated land to produce useable space, public realm investment to improve the economicperformance of urban areas, and strategic acquisition of multiple sites to accelerate and co-ordinate thedevelopment of employment or residential development. Moreover, the RES also identified a need for theprovision of specialist business premises in order to stimulate levels of enterprise and businesscompetitiveness in less prosperous parts of the region, particularly in relation to a number of specificsectors.

Land acquisition, remediation, flood protection and master planning with the aim of bringing forwarddevelopment to create or safeguard jobs is the focus of several current SEEDA initiatives. They typicallyinvolve strategic site assembly, acting alone or with public and private partners, remediation and thecreation of development platforms. The main rationale for intervention by SEEDA in land assemblyfocuses on:

Co-ordination: SEEDA acquires land that the private sector would not be prepared to do, givenpotential economic risk, uncertainty or unattractiveness.

Rent-seeking: where individual investors attempt to capture all the additional benefit despite offeringlimited economic value themselves

Positive externalities: There is often a mismatch between the aims of the private sector, and thedemands of the public sector in terms of job creation and wider community regeneration.

Evidence of the impact of SEEDA’s regeneration initiatives is based on eight evaluations covering thethree sub-themes summarised in Table 207 (note that the Physical Regeneration evaluation providesevidence on residential-led schemes, employment-led schemes and public realm). All evidence comesfrom capital rather than revenue projects.

Table 207: Summary of SEEDA’s regeneration through physical infrastructure interventions

Intervention sub-theme330

Evaluation Expenditure covered



housing led developments

Physical Regeneration (residential led schemes) 34.1


employment-led developments

Physical Regeneration (employment led schemes)

Strategic sites evaluation (Chatham Maritime)

Innovation Infrastructure (Managed workspaces)

Sea Space

Chatham Maritime University Buildings (Universities

at Medway)

St Cross Business Park

Gosport Business Centre

77.4

21.1

13.9

31.2

7.1

5.5

4.7

Public realm/other infrastructure

(e.g.: transport/community)

Physical Regeneration (Public Realm)

Oxford Castle & Prison

15.1

6.1

Total 216.2


330 No evaluation evidence was allocated to the image, events and tourism sub-theme


Impact

Table 208 summarises the expenditure and key gross outputs associated with the regeneration throughphysical infrastructure interventions. Key gross outputs arising from these regeneration interventionshave been jobs created/ safeguarded and brownfield land and commercial floorspace reclaimed orredeveloped. In addition, significant levels of public/private sector leverage have also been achieved. Anumber of these interventions are still in the early stages of implementation and, therefore, a distinction isdrawn between achieved and future potential outputs.

Table 208: Gross outputs (achieved and future potential) from SEEDA’s regeneration throughphysical infrastructure interventions (2002/03-2006/07)

Expendi-ture

covered byevaluations

(£m)

Achievedgrossjobs

created/safe-

guarded

Futuregross

potentialjobs

created/safe-

guarded

Achievedgross

brownfieldland

reclaimed/re-

developed(ha)

Futuregross

potentialbrownfield

landreclaimed/

re-developed

(ha)

Achievedgross

commer-cial

floorspace(m2)

Futuregross

potentialcommer-

cialfloorspace

(m2)

Grosspublic

andprivateinvest-ment

levered£m

Sea Space 31.2 297 456 1 2 3,757 8,588 4

Physical

Regeneration

(employment

led schemes)

77.4 567 2,996 9 27 9,809 106,019 25

Strategic sites

evaluation

(Chatham

Maritime)

21.1 4,173 - - - 168,400 - -

Innovation

Infrastructure

(Managed

workspaces)

13.9 65 571 - - - - -

St Cross

Business Park5.5 1,254 - - - - - -

Gosport

Business

Centre

4.7 65331

- - - - - -

Chatham

Maritime

university

buildings332

7.1 - - 1 - - - -

Physical

Regeneration

(residential

led schemes)

34.1 213 697 17 - 4,297 67,964 73

Physical

Regeneration

(Public

Realm)

15.1 10 471 - 2 - 6,897 5

331 This evaluation has not estimated net outputs and therefore is the only figure from evaluations that does not have associated netoutputs332 Given overlaps between this evaluation and the Strategic Sites (Chatham Maritime) evaluation, the only output that has beenconsidered was brownfield land remediated.


Expendi-ture

covered byevaluations

(£m)

Achievedgrossjobs

created/safe-

guarded

Futuregross

potentialjobs

created/safe-

guarded

Achievedgross

brownfieldland

reclaimed/re-

developed(ha)

Futuregross

potentialbrownfield

landreclaimed/

re-developed

(ha)

Achievedgross

commer-cial

floorspace(m2)

Futuregross

potentialcommer-

cialfloorspace

(m2)

Grosspublic


levered£m

Oxford Castle

& Prison6.1 198 - 1 - 4,820 - 38

Total 216.2 6,841 5,191 29 32 191,083 189,468 145

Total gross

outputs

associated to

net outputs

216.2 6,776 5,191 29 32 191,083 189,468 145


In addition to the gross outputs presented in Table 208, the Sea Space evaluation reported the creationof 29 businesses, 132 businesses assists and 427 people assisted in their skills development. In additionthe Gosport Business Centre evaluation reported the creation of 45 businesses and Oxford Castle andPrison reported 7 businesses created.


Table 209: Regional net outputs (achieved and future potential) from SEEDA’s regenerationthrough physical infrastructure interventions (2002/03-2006/07)


(£m)

Achievednet jobscreated/

safe-guarded

Future netpotential

jobscreated/

safe-guarded

Achievednet

brownfieldland

reclaimed/re-

developed(ha)

Future netpotential

brownfieldland

reclaimed/re-

developed(ha)

Achievednet

commer-cial

floorspace(m2)

Future netpotentialcommer-

cialfloorspace

(m2)

NetPublic


levered£m

Sea Space 31.2 268 342 0 2 3,757 8,588 4

Physical

Regeneration

(employment

led schemes) 77.4 234 1,332 7 26 7,254 85,834 21

Strategic

sites

evaluation

(Chatham

Maritime) 21.1 3,630 - - - 168,400 - -

Innovation

Infrastructure

(Managed

workspaces) 13.9 29 268 - - - - -

St Cross

Business

Park 5.5 988 - - - - - -

Chatham

Maritime

university

buildings 7.1 - - 1 - - - -



(£m)


safe-guarded

Future netpotential

jobscreated/

safe-guarded

Achievednet

brownfieldland

reclaimed/re-

developed(ha)

Future netpotential

brownfieldland

reclaimed/re-

developed(ha)

Achievednet

commer-cial

floorspace(m2)

Future netpotentialcommer-

cialfloorspace

(m2)

NetPublic


levered£m

Physical

Regeneration

(residential

led schemes) 34.1 88 290 16 - 4,297 52,707 73

Physical

Regeneration

(Public

Realm) 15.1 0 195 - 2 - 5,336 4

Oxford Castle

& Prison 6.1 134 - 1 - 4,820 - 38

Total 216.2 5,371 2,427 25 30 188,528 152,465 140


In addition to the net outputs in Table 209, the Sea Space evaluation reported the creation of 21 netbusinesses, 132 net businesses assists and 299 net people assisted in their skills development. Inaddition the Oxford Castle and Prison evaluation reported 6 net businesses created. Also, 4,902 netlearning opportunities have been created by these interventions.

In comparison with other SEEDA interventions, regeneration through physical infrastructure achieved thehighest levels of additionality for business creation, businesses supported and brownfield landremediation. However, the evidence for business assists and businesses created is drawn from just oneevaluation.

The Sea Space interventions demonstrated the highest levels of additionality in terms of jobscreated/safeguarded. Most interventions, with the exception of Physical Regeneration (employment ledschemes), achieved between 90-100% of additionality in terms of commercial floorspace developed andpublic/private investment levered.

Comparison of the additionality of SEEDA’s regeneration through physical infrastructure interventionswith the national findings shows that:

Overall, regeneration interventions additionality for achieved outputs is higher than the comparablenational measure for jobs created/safeguarded (measure is 45%), land remediation (measure is 73%)and businesses created (measure is 65%). The same happens when looking at future potentialadditionality measures. However, the picture becomes mixed when comparing interventionsubcategory evaluations to national cross-RDA measures.

For the bringing land back into use for employment or housing intervention sub-theme, the PhysicalRegeneration and the Innovation Infrastructure (Managed Workspaces) evaluations are below theadditionality measure (50%) for job creation while the rest are above. For future potential jobs created/ safeguarded all relevant evaluations reported additionality measures slightly below the nationalmeasure (52%) with the exception of Sea Space which reported a higher additionality measure. Interms of achieved land remediation outputs, all evaluations are above or slightly below the nationalmeasure (88%) except for Sea Space which reported lower additionality measures (60 percentagepoints below the national average). Future potential land remediation additionality measures are thesame or higher than the national measure (95%). In addition, Sea Space was the only evaluationwhich reported gross and net business creation outputs which had a level of additionality slightlybelow national measure (76%).

For the public realm intervention sub-theme, the Oxford Castle and Prison evaluation reported highermeasures of additionality for all output types in comparison with national measures (40% for jobs


created/safeguarded and 58% for land remediated). However, the Physical Regeneration (PublicRealm) evaluation reported no additionality for jobs created/safeguarded. The future potentialadditionality measures reported by the Physical Regeneration (Public Realm) for jobscreated/safeguarded were below national measures (66%) and for land remediation were slightlybelow (100%).

Table 210 summarises the impact on GVA (both achieved and future potential) of SEEDA’s interventionsto promote regeneration through physical infrastructure. In the majority of cases the evaluators estimatedcumulative GVA. Where future potential GVA has been estimated, in most cases this has beendiscounted back to 2007.

Table 210: Outcomes from SEEDA’s regeneration through physical infrastructure interventions(2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Achieved

GVA

(annual, £m)

Future

potential

GVA

(annual):cost

ratio

Achieved

GVA

(cumulative,

£m)

Future

potential

GVA

(cumulative,

£m)

Achieved &

future

potential

GVA

(cumulative,

£m)

Physical

Regeneration

(residential led

schemes)

34.1 1.8 - 1.8 40.4333

42.1

Physical

Regeneration

(employment led

schemes)

77.4 5.1 - 10.3 242.6 252.9

Innovation

Infrastructure

(Managed

workspaces)

13.9 - - 0.5 – 0.6 29 - 45 30 - 46

Sea Space 31.2 8.5 17.2 - - -

St Cross

Business Park5.5 - - 55

334- 55

Physical

Regeneration

(Public Realm)

15.1 - - - 27.8 27.8


Other quantitative outcomes reported by evaluations include Oxford Castle & Prison attracting £3.7m(achieved, cumulative) of additional expenditure to the local Oxford area for the first four years of theproject.

Estimates of GVA have not been consistently calculated across the evaluations so it is not possible toprovide an aggregate estimate of GVA for SEEDA’s regeneration through physical regenerationinterventions. However, the Physical Regeneration evaluation that covers 67% (£127m) of the totalevidence base suggests an estimated cumulative achieved GVA contribution of £12m; however, most ofthe projects covered by the evaluations are at a relatively early stage of development and only a few have

333 All estimates from the Physical Regeneration evaluation are based on actual + expected impacts.

334 Based on GVA per worker in the SE being £55,230


already generated jobs. Future potential GVA contribution of up to £311m335

is expected on the basis ofemployment growth forecasts.

The text box below provides some examples of how SEEDA has created strategic added value throughregeneration through physical infrastructure interventions.


Bringing together partner contributions to multiply a regeneration outcome. For example, following theclosure of the Chatham Dockyard by the Royal Navy with the loss of 7,000 jobs, SEEDA put forward acase for higher education to play an important part in securing the vibrant mixed use regeneration ofChatham Maritime and transforming the economy of the Medway. SEEDA encouraged the Universities ofGreenwich and Kent and Mid Kent College to work together and bring in other academic and non-academic partners to create a substantial multiversity (various universities) campus at Chatham, enablinguniversities to share resources and avoid duplication. SEEDA provided £8.6m of investment which helpedleverage a further £42m funding package from seven other partners. SEEDA’s involvement with thescheme has helped to promote the development of a major new university campus in the South East,which will have a long-term skills benefit for local employers, encouraging growth in local businesses. Atthe end of the academic year 2006/2007 264 gross new FTE Jobs have been created directly from theproject and 2,019 gross additional FTE students have registered at the new campus, with outputs aheadof forecast

336.337

Leading the strategic planning to regenerate an area. For example, the Hastings & Bexhill Task Force,formed in 2002 by SEEDA with a range of partners, created a 10-year programme to revitalise a failinglocal economy characterised by a historic lack of private sector investment and a strong reliance onpublic sector employment; low economic activity, wages, business survival rates and skills; and deep-rooted deprivation

338. First, SEEDA marshalled key politically disparate stakeholders behind a shared

vision: the Five Point Plan for regenerating the area through urban renaissance, business support,educational improvement, broadband and transport. SEEDA’s Chief Executive chairs a Steering Groupcomprising three councils, EP, Government Office for the South East and the two local MPs. Second,SEEDA has influenced partner organisations to take action at a regional and national level. It has led tomajor commitments from key national bodies: for example, the national Learning and Skills Council (LSC)decision to overhaul 16+ education in the area and build two new college campuses. Also, majorimprovements to the road infrastructure between Hastings and London have been prioritised by theRegional Transport Board and ministers at SEEDA’s request. “The achievements to date have comeabout through the direct involvement of SEEDA and would not have been deliverable by the localauthorities alone” – Chief Executive, Hastings Borough Council. Third, the Five Point Plan has acted as acatalyst for attracting public funding, including £112m from the LSC, £7m from Higher Education FundingCouncil for England (HEFCE), £9m from European Regional Development Fund, £15.1m from EP, £9mfrom Network Rail, £21.7m from local authorities and £21m from the Primary Care Trust. East SussexCounty Council is leading delivery of the £89m Hastings & Bexhill Link Road. Private sector funding isvital: £15m of bank finance is being spent with up to £120m committed.

339

Source: SEEDA

335 This figure is the sum of the three Future Expected GVA figures linked to the Physical Regeneration evaluation presented in

Table 20.

336 Annual Report 06/07 to SEEDA from University of Medway

337 SAV Case Study prepared by SEEDA based on Chatham Maritime University Buildings Evaluation (Drill Hall and Canteen)

338 Grant Thornton Report: “Sea Space: Evaluation of Early Wins and Phase Two Projects” Aug 2008



Value for money

Table 211 sets out the achieved and future potential GVA to cost ratios of SEEDA’s regeneration throughphysical infrastructure interventions.

Table 211: Achieved and future potential GVA to cost ratios from SEEDA’s regeneration throughphysical infrastructure interventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Achieved

GVA

(annual):cost

ratio

Achieved

GVA

(cumulative,

£m):cost

ratio

Future

potential GVA

(annual):cost

ratio

Future

potential

GVA

(cumulative,

£m):cost

ratio

Achieved &

Future

potential

GVA

(cumulative,

£m):cost

ratio

Physical

Regeneration

(residential

led schemes)

34.1 - 0.1 - - 3.4

Physical

Regeneration

(employment

led schemes)

77.4 - 2.4 - - 60.1

Innovation

Infrastructure

(Managed

workspaces)

13.9 - 0.04 - 0.5 -

Sea Space 12.4 0.6 - 0.6 - -

St Cross

Business Park5.5 - 6.4 - - -

Physical

Regeneration

(Public

Realm)

15.1 - - - - 2.8


As Table 211 shows some interventions have already achieved economic benefits which exceed theircosts. The highest achieved returns have been demonstrated by employment-led sites, i.e. PhysicalRegeneration (employment led schemes) and St Cross Business Park. The relatively low achievedreturns of Managed workspaces reflect the early stage of development of these interventions.Residential-led schemes have also showed lower returns mainly to the lack of jobs generated in thesedevelopments. In addition, all Physical Regeneration evaluation programmes are expected todemonstrate a positive return on investment in the future.

It is not possible to make full comparisons across evaluations, except for the different elements of thePhysical Regeneration evaluation, as different approaches have been used to estimate GVA impacts andvalue for money estimates.

Except for St Cross Business Park, which is a relatively mature intervention, other SEEDA bringing backland into use evaluations reported lower achieved cumulative GVA to cost ratios than the national ratio(5.1:1). However, achieved and future potential GVA per cost ratios for bringing back land into useemployment-led schemes are higher than the national ratios (6.5:1). This is because SEEDA’sinfrastructure projects are at a relatively immature stage of development and are expected to accrue mostbenefits in the future. In comparison with the national achieved and future potential cumulative GVA tocost ratio for bringing land back into use (6.5:1) the Physical Regeneration evaluation reported a lower


ratio for residential-led schemes. The same applies to the public realm schemes in comparison to therespective national achieved and future potential cumulative GVA to cost ratio (8.7:1).

Overall, regeneration through physical infrastructure interventions, in particular employment-led schemes,have significant future potential GVA returns expected based on the investment made to date. This isprimarily due to the early stage of implementation of these interventions. These interventions are alsoassociated with wider impacts, for example raising confidence in the area of impact, which will not becaptured in the estimation of GVA.

Table 212 sets out unit costs at a regional level for physical regeneration interventions.

Table 212: Cost per net job (achieved and future potential) from SEEDA’s regeneration throughphysical infrastructure (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Achieved

cost per

net hectare

of land

remediated

(£’000)

Future

potential

cost per

net hectare

of land

remediated

(£’000)

Achieved

and future

potential

cost per

net hectare

of land

remediated

(£’000)

Achieved

cost per

net

regional

job (£’000)

Future

potential

cost per

net

regional

job (£’000)

Achieved

and future

potential

cost per

net

regional

job (£’000)

Physical

Regeneration

(residential

led schemes)

34.1 2,129.3 - 2,129.3 158.3 - 37.3

Physical

Regeneration

(employment

led schemes)

77.4 11,345.3 2,991.7 2.367.4 17.4 - 2.6

Innovation

Infrastructure

(Managed

workspaces)

13.9 - - - 487.9 51.3 -

Sea Space 12.4 - - -34.5 -

159340 - -

St Cross

Business

Park

5.5 - - - 6.5341

- -

Physical

Regeneration

(Public

Realm)

15.1 - 7,836.9 7,836.9 - - 44.1


In comparison with a national average of £42,101 per job for bringing land back into use, employment-ledschemes, including St Cross Business Park and the incubation centres developed by Sea Space, as wellas the employment-led programmes assess through the Physical Regeneration evaluation, achieve alower cost per net job. The exceptions were the managed workspaces evaluated in the Innovation

340 Range refers to the different cost per job estimates presented by the evaluation which includes: £34,549 per job for the ICH and

CMC which are employment-led development, £159,000 per job for the University Centre Hastings and £57,803 per job for all the

Early wins projects which includes all the projects mentioned.

341 PwC estimate taking total costs of £6.4m divided by total net jobs of 988


Infrastructure evaluation and the housing-led developments in the physical Regeneration evaluationwhich reported a cost per net job which was more than ten times higher than the national average. Noachieved comparators have been produced in the South East for achieved cost per job linked to publicrealm projects. The national average cost per net hectare of land remediated (£4,748,326) is lower thanthe cost per net hectare of land remediated reported by the Physical Regeneration evaluation foremployment-led developments but higher than that reported by the same evaluation for residential-leddevelopments. This may be explained by the fact that for most of these initiatives most outputs areexpected in the future; in fact, as Table 212 suggests, the cost per net hectare of land remediatedreduces significantly when future potential outputs are considered (by 80% in the case of employment-leddevelopments according to the Physical Regeneration evaluation).


Table 213 summarises the performance against objectives of SEEDA’s interventions to promoteregeneration through physical infrastructure. Given that most of the evaluation evidence is derived fromprojects that have not yet been fully completed, the achievements to date are interim in nature. Only themore mature initiatives have achieved their objectives, although some of the evaluations have notperformed a detailed assessment against them. Overall, performance is mixed driven by the large spendattached to the Physical Regeneration evaluation. However, the important achievements of matureinitiatives such as St Cross Business Park and Chatham Maritime University Buildings, as well as theexceeded performance of Sea Space particularly on exceeded many of its ‘early wins’ objectives has tobe acknowledged.

Table 213: Performance against objectives from SEEDA’s regeneration through physicalinfrastructure (2002/03-2006/07)


evaluations (£m)


Sea Space 31.2 Exceeded342

St Cross Business Park 5.5 Met

Chatham Maritime university

buildings7.1 Largely met

Oxford Castle & Prison 6.1 Largely met

Physical Regeneration 126.6 Mixed

Strategic sites evaluation (Chatham

Maritime)21.1 Not assessed

Gosport Business Centre 4.7 Not assessed



Rationale

This section relates to SEEDA’s people and skills interventions. The South East enjoys high employmentrates and skill levels in comparison with other UK and European regions. However, it faces low economicactivity rates among certain groups (e.g. women) and geographies (e.g. most coastal districts), as well asskills gaps in the workplace. These three issues have been frames as part of the RES as priorities.

SEEDA’s interventions sought to address the skills needs in the region at all levels from Basic to HigherLevel skills. Main activities have included the delivery of training at NVQ level 3 and above, thedevelopment of new qualification programmes and the development of infrastructure to support newhigher level skills provision. There were a range of justifications for SEEDA’s people and skillsinterventions, the most common being promoting positive externalities through workplace training (e.g.NHS Skills for Life); addressing imperfect information in the labour market (e.g. Redundancy Support

342 Refers to completed projects only (I.e. Early wins)


Services), provision of public goods (e.g. university campuses), as well as supporting deprived areas (e.g.Area Programmes).

Evidence of the impact of SEEDA’s people and skills interventions relates to 10 evaluations coveringthree sub-themes summarised in Table 214. The Skills & Employability evaluation has covered evidencerelating to each of the intervention sub-themes presented below, therefore the spend attached to eachsub-theme has been presented as appropriate in Table 214.

Table 214: Summary of SEEDA’s people and skills evaluations


covered by

evaluations

(£m)

Skills/workforce development Skills and employability (skills)

Area Programmes

Basic skills

NHS Skills for Life Programme

Management Development

Great Ideas in Science and Technology (GRIST)

6.5

3.9

2.3

2.1

2.0

1.0

Matching people to jobs Skills and employability ((matching people to jobs)

Exodus

Redundancy Support Service

Skills Gateway

UP for Enterprise

0.1

3.5

0.9

0.2

0.2

Educational infrastructure

development

Skills and employability (educational infrastructure

development)

7.8

Total 30.5


The evaluation evidence of SEEDA’s impact on people and skills development covers £30.5m of spendfrom 2002/03 to 2006/07. The Skills & Employability evaluation, which covers a number of separateprogrammes, covers almost 50% of this expenditure.

Impact

Table 215 summarises the expenditure and key gross outputs achieved through SEEDA’s people andskills interventions. The primary outputs arising from these interventions have been: job, skills andbusinesses assists.

Table 215 shows an overall total and a total for the Skills & Employability and Area Programmeevaluations because these are the only evaluations with attached net outputs. Therefore, the total for theSkills & Employability and Area Programme evaluations is the one to use for comparison purposes withthe net outputs on Table 216.


Table 215: Gross achieved outputs from SEEDA’s people and skills interventions(2002/03-2006/07)

343

Expenditure

covered by

evaluations

(£m)

Gross jobs

created/

safeguarded

Gross

employment

assists

Gross

businesses

created

Gross

business

assists

Gross

skills

assists

Skills & Employability 14.3 157 26 - 3,261 8,699

Area Programmes 3.9344

171 1,604 - 525 4,696

Basic skills 2.3 - - - 600 12,000

NHS Skills for Life

Programme

2.1 - - - - 1,406

Management

Development

2.0 - - - - -

Great Ideas in Science

and Technology (GRIST)

1.0 46 - 12 29 31

Exodus 3.5 - - - - 23

Redundancy Support

Service

0.9 220 22,178 74 - -

Skills Gateway 0.2 37 - - 30 228

Up for Enterprise 0.2 - - - - -

Total (Skills &

Employability and Area

Programme evaluations)

18.2 328 1,630 - 3,786 13,395

Total 30.5 631 23,808 86 4,445 27,083


In addition to the gross outputs achieved in Table 48, the Skills & Employability evaluation estimated thefollowing future potential outputs: 51 jobs created, 170 employment assists, 2,280 people involved inskills development and 1,008 businesses assisted. The evaluation also reported of £9.8m from public andprivate sector funders. Similarly the Area Programmes evaluation reported gross public and privateinvestment levered £9.4m.

The net outputs arising from these interventions are set out in Table 216; only the Skills & Employabilityand Area Programmes evaluations estimated net outputs.

343 This table excludes Up for Enterprise and Management Development which had no outputs to report.

344 It should be noted that although the relevant spend is £3.9m, the outputs relate to spend of £6m which includes 2005-08.


Table 216: Net achieved outputs from SEEDA’s people and skills interventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Net jobs

created/

safeguarded

Net

employment

assists

Net business

assisted

Net skills

assists

Skills & Employability 14.3 117 20 3,066 7,568

Area Programmes 3.9 167 1,380 345 3,011

Total 18.2 284 1,400 3,411 10,579


In addition to the net outputs achieved in Table 216, the Skills & Employability evaluation estimated thefollowing future potential outputs: 38 jobs created, 128 employment assists, 2,071 people involved inskills development and 948 businesses assisted.

Overall, the evaluations that estimated net outputs reported high levels of additionality for all output types.The lowest being Area Programmes with 64% calculated additionality for skills assists, and the highestwas also reported by the same evaluation being 98% additionality for jobs created/safeguarded. All othercoefficients are between those two points. In addition, people and skills interventions achieved thehighest levels of additionality for jobs created/safeguarded across all intervention categories.

Comparison of the additionality of SEEDA’s people and skills interventions with the national findingsshows that:

Overall, SEEDA’s people and skills interventions evaluations reported higher additionality measuresthan the national cross-RDA measures across all outputs types, including a measure of 48% for jobscreated/safeguarded, 75% for future potential jobs created safeguarded, 51% for people assisted intoemployment and 62% for skills assists; and

On their own, both the Skills & Employability as well as the Area Programmes evaluations reportedhigher additionality measures than the cross-RDA additionality measures for all output types. TheSkills & Employability evaluation results were compared against each intervention sub-theme set ofnational additionality measures as well as the total given the fact that the evaluation assessed a mix ofprojects from different sub-themes. The Area Programmes evaluation results were compared againstthe matching people to jobs sub-theme national additionality measures.

Table 217 summarises the outcomes of SEEDA’s people and skills interventions.

Table 217: Outcomes (achieved and future potential) from SEEDA’s people and skillsinterventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Achieved

GVA (annual,

£m)

Achieved

GVA

(cumulative, £m)

Future potential

GVA

(cumulative, £m)

Achieved &

future potential

GVA

(cumulative, £m)

Skills &

Employability

14.3 - 17.1 27.4345

44.5

Area

Programmes

3.9 4.1 - -


345 Impacts relate to future potential GVA linked not only to the relevant spend period but also to 2007/08 – 2008/09 expenditure in

the programmes evaluated.


The approach to estimating GVA has not been consistent across the evidence base, and therefore it isnot possible to provide an aggregate GVA estimate of SEEDA’s people interventions. It should be notedthat future potential impacts on GVA have not been discounted nor have constant prices been applied.

The text box below provides some examples of how SEEDA has created strategic added value throughpeople and skills interventions.


SEEDA has developed and led partnerships to develop joint plans and address pressing regional issues:For example, SEEDA has led the development of the South East Regional Skills Partnership (the RSPA)since its inception in 2003. The RSPA brings together 20 partner organisations, including employerrepresentative organisations and providers of learning and skills provision to enable them to jointly planagainst shared objectives and closer align the supply and demand for skills. As part of this work andthrough the development with the LSC of Action for Business College programme, SEEDA has been ableto influence provision to meet the training needs of businesses and offer a quality standard. Evaluationevidence has concluded that the first 6 Action for Business Colleges over the period 2004-05 had thefollowing achievements: fee income from employers has increased by 35% to over £7 million, number ofemployer clients has increased by 26% to 6,676, number of employers receiving customised courses hasincreased by 51% to over 1000; and number of employees receiving training has increased by 18% to19,719. Furthermore, SEEDA levered in a further £300,000 from other partners. During 2007/08, 15LSPA-supported initiatives resulted in gross outputs of 385 people assisted towards getting a job, 779businesses assisted to improve their performance and 378 people assisted in terms of their skillsdevelopment.

346

SEEDA has influenced central government to support and roll-out elsewhere innovative solutions toregional and national problems. An example is Computer Clubs for Girls, an innovative and awardwinning programme which aimed to reduce ICT skills gaps in the South East by inspiring girls agedbetween 10 and 14 to become excited by ICT, raise their ICT skills and, ultimately, change theirpropensity to move into careers in the sector. As a result of the success of the pilot and the strength ofthe relationship established with e-skills, SEEDA worked to influence DTI and DfES policy, securing £8.8million to fund a four year National Roll-out, thus ensuring the sustainability of the programme. CC4G wassubsequently launched nationally in England in June 2005 and in Scotland the following year; in bothcases with great success. Pilots have since been run in both Wales and Northern Ireland. In addition, theprogramme has already received matched funding in kind to the value of £28 million from the privatesector, representing considerable leverage.

347

Source: SEEDA

Value for money

Table 218 presents the GVA to cost ratios (including achieved and future potential) in relation to peopleand skills interventions. The return on investment achieved to date in relation to the interventions coveredby the Skills & Employability evaluation is higher than the costs. However, the Skills & Employabilityevaluation suggests that higher returns on investment could arise from the future potential impacts ofthese interventions. No cumulative GVA to cost ratio has been developed for Area Programme, howeverthe annual GVA to cost ratio indicates that the programme could be achieving a positive return if benefitspersist for more than one year.




Table 218: Achieved and future potential GVA to cost ratios from SEEDA’s people & skillsinterventions (2002/03-2006/07)

Expenditure

covered by

evaluations (£m)

Achieved GVA

(annual):cost ratio

Achieved GVA

(cumulative, £m):

cost ratio

Future potential

GVA (cumulative,

£m): cost ratio

Skills &

Employability348 14.3 - 1.5 4.1

Area Programme 3.9 0.7 - -


In comparison with the national ‘total’ achieved cumulative GVA to cost ratio (2.5:1) SEEDA’s Skills &Employability evaluation, which covers all sub-themes, reported a lower ratio. However, the futurepotential GVA to cost ratio is higher than the national ratio for achieved and future potential (2.5:1).Overall, over 60% of GVA impacts are expected in the future which may relate in part to the long termnature of education led regeneration projects. In addition, the Area Programmes evaluation reported anachieved annual GVA to cost ratio almost equal to the matching people to jobs comparator (0.8:1).

Table 219 summarises the performance of SEEDA’s people and skills interventions in terms of their costeffectiveness. This analysis suggests that skills/workforce development initiatives tend to have the lowestunit cost per skills assist (the only measure common to all of the evaluations) in comparison with otherpeople & skills sub-themes. Overall, skills assists tend to have a relatively homogenous cost acrossintervention sub-themes, including Area Programmes which represents a hybrid intervention addressingjob and skills assists mainly. Cost per job created/safeguarded also seems to be at a similar level whencomparing intervention sub-themes. However, big differences when comparing cost per jobs assists (notthe main focus of skills/workforce development projects) and the cost per business assist which putseducational infrastructure development projects at a disadvantage. Although infrastructure projects,particularly capital ones, would be expected to be more expensive.

Table 219: Cost per net achieved output from SEEDA’s people and skills interventions(2002/03-2006/07)

349

Cost per

net job

(£’000)

Cost per net

skills assist

(£’000)

Cost per net person

assisted into

employment (£’000)

Cost per net

business assist

(£’000)

Skills & Employability -


42.3 0.7 200.1 1.9



- 1.1 - -


Educational infrastructure

development

- 1.9 - 280.0

Area Programmes350

35.8 2.0 4.3 17.3


SEEDA’s Skills & Employability and Area Programme evaluations reported lower unit costs thanrespective national averages across all output types and intervention categories, where measures were

348 Impacts presented in the table assume persistence effects. Future expected impacts VfM has been estimated using spend

planned for 2008/09.

349 PwC estimated mid points for the Skills and Employability cost per output ranges presented in the evaluation for comparison

purposes.

350 Unit costs for Area Programmes Evaluation have been estimated by PwC using £5.98m of expenditure and net outputs

presented in the evaluation.


available. The only exception was the costs per person assisted into employment reported by the Skills &Employability evaluation in respect to projects focused on skills/workforce development, which comparedunfavourably with the national unit cost average of £9,677. One possible reason for this performance isthe focus of the evaluated interventions on skills development rather than employment support.


Table 220 summarises the performance of SEEDA’s people and skills interventions against identifiedobjectives. Overall, the picture tends to be positive with about two thirds of the evaluation evidence(measured by spend) either largely meeting, meeting or exceeding objectives. Only 10% of the evidence,mainly related to older programme and project evaluations has demonstrated a mixed or limitedperformance.

Table 220: Performance against objectives from SEEDA’s people and skills interventions(2002/03-2006/07)


evaluations (£m)


Redundancy Support Service 0.9 Exceeded

Area Programme 3.9 Exceeded

Skills & Employability 14.3 Met351

Skills Gateway 0.2 Largely met

NHS Skills for Life Programme 2.1 Mixed

Great Ideas in Science and Technology

(GRIST)1.0 Mixed

UP for Enterprise 0.2 Limited performance

Exodus 3.5 Not assessed

Basic skills 2.3 Not assessed

Management Development 2.0 Not assessed


Other SEEDA interventions

Rationale

The evidence of SEEDA’s impact on other interventions covers £160m of spend from 2002/03 to2006/07. These comprise the Single Regeneration Budget (SRB) programme (£129m) and AreaInvestment Framework (£31m), both aimed at tackling issues affecting the most deprived communitiesthrough the delivery of a diverse range of interventions spanning business, physical regeneration andpeople and skills focused on specific geographical areas within the South East.

The rationale for SRB centred on the Government’s desire to tackle social exclusion and promote equalityof opportunity. The focus of support was on the most deprived communities in England, with the aim ofreducing the gap between these areas and the rest of England, and between different groups in society.The South East region received over £270 million between Rounds 3 and 6. Expenditure was dominatedby three sub-regions – Hampshire & Isle of Wight (£86.2 million), Sussex (£77.2 million) and Kent &Medway (£75.6 million). A very small proportion of the South East’s SRB spend was in the Surrey andBerkshire or MKOB

352sub-regions. These expenditure figures correspond fairly closely to the proportion

351 A full assessment of performance against targets was not performed but the evaluation concluded that the initiatives evaluated

had a significant contribution to the relevant RESs and Corporate Plans.

352 Milton Keynes, Oxfordshire, Bucks and Berks


of super output areas these sub-regions have in the lowest Index of Multiple Deprivation quartilenationally.

The overall aim of the SRB programme was “to enhance the quality of life of local people in areas ofneed, by reducing the gap between deprived and other areas, and between different groups”

353. Beneath

this, a core set of common objectives underpinned the SRB throughout its six Rounds:

improving the employment prospects of local people;

encouraging economic growth;

reducing crime;

improving housing; and

protecting and enhancing the environment.

The rationale for Area Investment Framework interventions was set out in SEEDA’s Regional EconomicStrategy in 1999. This intervention was focused in particular on the target to start bringing the residents inthe 119 wards in the South East that were in the bottom 20% of wards nationally (as indicated by theIndex of Multiple Deprivation) back into mainstream economic life (i.e. tackling social exclusion througheconomic development and inclusion). In summary, the most common activities supported within thisintervention were:

Improvement of skills and participation in learning.

Business support and enterprise growth.

Physical regeneration and community engagement.

Impact

Key outputs arising from these other interventions have been jobs created/ safeguarded, skills developed,businesses assisted and land reclaimed/ redeveloped. Table 221 sets out the key gross outputs achievedin relation to these interventions.

Table 221: Gross achieved outputs from other interventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Gross jobs

created/

safeguarded

Gross

skills

assists

Gross

employment

support

Gross

businesses

created

Gross

businesses

assisted

Gross land

reclaimed/

redeveloped

(ha)

SRB 128.8354

3,655 22,228 - 155 5,001 174

AIF 31.5 3,225 30,143 4,864 349 9,142 13

Total 160.3 6,880 52,371 4,864 504 14,143 187


In addition to the outputs identified in Table 221, the SRB programme levered more than £240m of publicand private sector funding. The Area Investment Framework levered approximately £65m of public andprivate sector funding. For SRB there are also 57 wider outputs relating to six key themes that are notcaptured in the key outputs as presented in the table above. The themes are: jobs, training and

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

http://www.communities.gov.uk/citiesandregions/regeneration/singleregenerationbudget/221229/354 It should be noted that SRB was not originally set up to deliver against the RDA tasking framework but it had a much wider remit.

Many of the evaluations used to inform the SRB meta-evaluation were carried out before the RDA Impact Evaluation Framework

was published.


education; economic growth; housing; environmental improvements; community facilities;voluntary/community sector; and childcare.


Table 222: Net achieved outputs from SEEDA’s other interventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Net jobs

created/

safeguarded

Net

skills

assists

Net

employment

support

Net

businesses

created

Net

businesses

assisted

Net land

reclaimed/

redeveloped

(ha)

SRB 128.8 1,526 12,448 - 68 2,150 86

AIF 31.5 1,991 16,277 2,845 302 5,348 10

Total 160.3 3,517 28,725 2,845 370 7,498 96


The SRB reported lower additionality measures in comparison with national ‘other area regenerationinterventions’ additionality measures for jobs created safeguarded (49%), businesses created (51%),businesses assisted (50%), land remediated (59%), skills assists (57%) and people assisted intoemployment (59%). The additionality measures reported in the Area Investment Framework evaluationwere higher than the national measures for all output types except for skills assists and employmentassists. Overall, SEEDA other interventions evaluated achieved higher levels of additionality incomparison with national measures for all output types except for land remediated and skills assists, anda similar level for employment assists.

The quantitative evidence of outcomes and impacts in the evaluation reports which fed into the SRBevaluation was very limited. However, applying the 2006 GVA per worker for the South East of England(of £45,884

355) to the 1,526 net jobs created (941) and safeguarded (585) gives an estimated cumulative

GVA of around £70m. The AIF evaluation reported an achieved cumulative contribution to GVA of£109.2m.

The text box below provides some examples of how SEEDA has created strategic added value throughits SRB and AIF interventions.

355 Office of National Statistics



Beyond the leverage of significant public and private sector funding, the strategic impact of the SRBprogramme in the South East consists of helping to increase levels of partnership working and createdvaluable networks. For instance, East Oxford Action Limited is a community-led social enterprise that tookover the running of East Oxford Action SRB in 2003. It is led by a partnership that would arguably nothave come together in the first place, were it not for the original SRB scheme. SRB has also been seen tohave brought forward the timing of activities. For example, it is considered that the redevelopment ofLittlehampton would have taken place without the Littlehampton 2000 SRB scheme, but that theredevelopment would have occurred over a significantly longer timescale. Some stakeholders alsocommented that areas such as Hastings and Slough benefited significantly from SRB and perhaps wouldhave gone into decline without it. SRB was considered by some stakeholders to be responsible for kick-starting the regeneration of those areas and for bringing the right people and organisations together.

356

SEEDA has made a difference in terms of partnership engagement, leadership, leverage andsustainability of deprived areas. For example, the AIFs have been instrumental in bringing peopletogether to take decisions on needs and priorities but also deliver projects. In some cases, this was thefirst time that local and sub-regional organisations, in particular Local Authorities came together. Theoverall structure of the programme indicates that in principle SEEDA’s devolved approach offered theopportunity for local engagement, decision making, responsibility and accountability in managing andimplementing AIFs.

357

Source: SEEDA

Value for money

Due to the diverse range of outputs in the SRB programme and the difficulties in disaggregatingeconomic and non-economic data, a value for money calculation was considered to be inappropriate.The AIF evaluation estimated a GVA (cumulative) achieved: cost ratio of 2.8:1 which is higher than thenational average of 2.3:1, but a cost per job created/safeguarded of £54,900 which is higher than thenational average of £41,775.


The SRB evaluation evidence suggests that the region has had a mixed performance in meeting coreoutput targets. Although ‘jobs created’ was 18% above its target, jobs safeguarded was 36% below. Thesurvival rate of supported businesses was also lower than expected, achieving two-thirds of target. Landreclamation and community enterprise start-ups both achieved roughly half of their targets. The bestperformance was for the number of people trained who obtained qualifications, which exceeded its targetby 20%. In terms of other economic outputs, the programme mostly performed well or very well, achievingclose to or above-target performance.

Overall, the AIF evaluator found challenges in assessing the extent to which the AIFs had achieved theirobjectives given the lack of a clear performance management framework established at the outset. It wasconcluded though that some AIF areas are improving more than others. Some areas supported by theprogramme continue to underperform across nearly all indicators whilst others present improvements onlyin some indicators.

National programmes delivered by SEEDA

Besides its own projects and programmes, SEEDA has been responsible for the management anddelivery of seven out of ten national programmes which have been delivered by SEEDA withinparameters closely defined by central government departments. Although the available nationalevaluation evidence on national programmes does not disaggregate gross outputs at a regional level, wehave been able to estimate the impact of some of these programmes on the South East of England

358.

356 Based on PwC (2008) Single Regeneration Budget Meta-evaluation

357 Based on DTZ (2008) Area Investment Framework Evaluation

358 This has been undertaken by dividing SEEDA spend on the programme by the regional cost per job and then making allowances


In addition, SEEDA has undertaken regional evaluations of East Kent Coalfields and Tourism South East.The gross outputs from these interventions are summarised in Table 223 and the net outputs in Table224.

Table 223: Gross national programme outputs in the South East (2002/03-2006/07)

National

programme

Expenditure

covered by

evaluations

(£m)

Gross Jobs

created/

safeguarded

Gross

skills

assists

Gross

business

creation

Gross

business

assists

Gross

regeneration

spend

leveraged

(£m)

Gross

brownfield

land (ha)

Gross

new

floorspace

(sq m)

Coalfields

Programme20.9 1,852 - 76 - - 152.6 52,954

Tourism

South East7.1 - 9,954 11,057 1.3 - -


In addition to the gross outputs above, the East Kent Coalfields evaluation states that future potentialoutputs are anticipated. These include a further £32.3m of private sector leverage, 924 further jobscreated and a further 32,017 sq m of floorspace. These forecasts have no comments on the likelihood oftheir achievement and should be treated with caution.

The net outputs from these interventions are summarised in Table 224.

Table 224: Net national programme outputs in the South East (2002/03-2006/07)

National

programme

Expenditure

covered by

evaluations

(£m)

Net Jobs

created/

safeguarded

Net

skills

assists

Net

business

creation

Net

business

assists

Net

regeneration

spend

leveraged

(£m)

Net

brownfield

land (ha)

Net new

floorspace

(sq m)

Coalfields

Programme20.9 1,117 - 64 - - 149.7 44,036

Tourism

South East7.1 - 4,354 - 5,299 0.8 - -


The East Kent Coalfields evaluation achieved good levels of additionality from 60% (jobscreated/safeguarded) to 98% (brownfield land reclaimed) of gross outputs. The jobscreation/safeguarded factor is lower that SEEDA’s regeneration through physical infrastructureadditionality factor (79%) and the brownfield land reclaimed is higher than regeneration through physicalinfrastructure additionality factors (87%).

Tourism South East additionality ratios were lower; from 44% (skills development) to 62% (physicalregeneration spend levered). No appropriate national averages are available for comparison.

In respect of GVA, SEEDA’s interventions across the coalfields have achieved more than £127m GVAoutcome at the local level, which is forecast to rise to more than £205m after completion of all theschemes. At the regional level, SEEDA’s interventions have achieved a £265m GVA outcome, which isforecast to rise to £412m

359with completion of all the schemes. This implies a GVA to cost ratio of 6.6.

Future potential figures are based on forecast job figures mentioned above. According to the evaluation,in respect of net cost per net job, the four projects in total produce a cost of £15,156 per job. In terms of

for displacement, leakage and multiplier effects.

359 Includes £147m of cumulative future potential GVA.


net cost of net hectare of brownfield remediated, the cost of the four projects overall amounts to £175,786per hectare.

The regional evaluation of Tourism South East revealed that the SEEDA’s expenditure has levered afurther £93.2m of tourism expenditure through marketing campaigns. Evaluation estimates suggest thatTSE’s work over the period 2003-08 is worth £144.3 to £182.8m

360to regional achieved GVA from

2003-2008. No appropriate value for money comparators have been produced by the evaluator.

Overall, over the period 2002/03 to 2006/07 SEEDA has spent £101.7m on national programmes. Theestimated impact on the regional economy of these programmes is the creation of 6,295 jobs achievedwith a potential addition of 556 jobs in the future. In addition, it has generated £62.1m of annual GVA onthe basis of £54.7m of spend on Business Links and Manufacturing Advisory Service. Grants forResearch and Development has the potential to generate returns of £25.5m in the future. In addition, upto £595m of cumulative and future potential cumulative GVA is associated with the East Kent CoalfieldsProgramme and Tourism South East which account for total expenditure of £28m over the period 2002/03to 2006/07.

Table 225 summarises the estimated impacts where these are available.

Table 225: Estimated impact of SEEDA spending on national programmes between 2002/03 and2006/07 (£m)

National

programme

SEEDA

spend –

2002/03-

2006/07

(£m)

Net

additional

jobs

Achieved

GVA

(annual, £m)

Future

potential

GVA

(annual, £m)

Achieved

GVA

(cumulative,

£m)

Future

potential

GVA

(cumulative,

£m)

Business Link 48.0 4,380 201.0 - - -

Coalfields

Programme20.9 1,117 - -

265147

Manufacturing

Advisory Service6.7 789 - - 36.2 -

Selective Finance

for Investment7.3 - - - - -

Market Town

Initiative1.5 - - - - -

Tourism South East7.1 - - -

144.3 -

182.8361 -

Grants for Research

and Development10.2

556 (future

potential)-

25.5 (future

potential)- -

Total 101.7 6,295

(achieved)

556 (future

potential)

201.0 25.5 445.5 –

484.0

147.0


The annual GVA to cost ratio of Business Link in the South East of England was 4:1, which compareswell against the range of overall annual GVA to cost ratios for Business Link at a national level (i.e. 2.3:1to 2.5:1).

360 The evaluator applied a range to GVA estimations in order to account for a potential overall in GVA contributions from skills

/business assists and tourism expenditure.

361 Range represents a sensitivity for a potential overlap on GVA estimations identified by the evaluator.


South West Regional DevelopmentAgency

Summary

Overview

Since its establishment in 1999, SWRDA has spent approximately £942.9m on a range ofinterventions designed, individually or collectively, to stimulate business development andcompetitiveness, promote regeneration through physical infrastructure and enhance employability andskills. Of this total, £601m has been spent in the ‘relevant period’. This includes SRB, which is asubstantive part of SWRDA’s expenditure, accounting for £55.2m out of total RDA ‘relevant spending’.

We have reviewed 30 evaluations covering RDA spend of £456.2 million.

Impact

The evaluations show that SWRDA has generated significant outputs already:

– over 25,000 jobs have been created and safeguarded, of which 48% are estimated to be additionalat the regional level;


– over 800 businesses have been created, of which 51% are estimated to be additional;

– over 4,900 hectares (ha) of land has been remediated, of which 49% are estimated to beadditional; and

– nearly 78,000 skills assists have been delivered, of which 61% are estimated to be additional.

In addition to the impact of its project and programme spend, Strategic Added Value (SAV) is a keyelement of SWRDA’s impact, particularly engagement and support of priority sectors such asaerospace, reacting to shocks within the region, and undertaking co-ordinating and collaborative rolewith key stakeholders to articulate and drive forward regional policy and strategy.

Value for money

The highest achieved return is for people interventions, with an achieved average annual return of 2.3to 1, the lowest is for place interventions with a return of 0.8 to 1.

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


As 50% of the expenditure covered by evaluation evidence has been provided by multi-projectevaluations, it has not been possible to assess the extent to which these projects performed againstproject level objectives. All of the individual project evaluations, which represent approximately 23% ofrelevant expenditure, have exceeded, met or largely met objectives.


Context

Overview of the South West of England

The South West is the largest region in England, covering an area of 23,829 km2. It includes 15 county

and unitary authorities362

extending from Gloucestershire and Wiltshire to Cornwall and the Isles of Scilly.The South West is characterised by a largely rural landscape, 1,130 km of coastline, and numerous smallsettlements and relatively few major cities. It is an environmentally and historically rich area with twoNational Parks and four World Heritage Sites.

The population of the South West is around 5 million, and has grown significantly over the last 20 years,primarily from inward migration of which a large proportion has been older people. The region has thelowest population density in England, with a concentration of people within 5 – 10 km of the coast. Theageing population, pressure on infrastructure due to dispersed population, limited access to services forpeople living in the rural areas and pockets of deprivation are significant issues facing the region.

The South West economy is dominated by the service sector, which accounts for 75% of regional outputand employment. Although manufacturing output has remained fairly stable, its share of the overallregional economy has fallen steadily – 19% in 1998 to 14% of regional output in 2005.

The economic output of the region was around £89.5 billion in 2006, contributing around 8% to nationalgross value added (GVA). Between 2001 and 2006 the regional economy grew on average atapproximately 5.7% per annum, above the English average of 5.4%.

363Growth in employment has also

exceeded national averages: the number of jobs in the South West has grown by 19% from 2.1m in1993 to 2.5m in 2007. This compares to a 15% increase nationally (from 25.3m to 29.2 m over thesame period).

364

Productivity, as indicated by GVA per capita, was £17,467 in 2006, which is around 6% lower than theUK average

365making it the most productive English region outside London and the Greater South East.

Trends in GVA per hour366

indicate that there have been significant increases in productivity in the regioncompared to national trends. In 1996, the GVA per hour index was 91.9, (where the UK is 100), whichincreased to 96.7 in 2006

367.

The 'productivity gap' between the South West and England’s most productive regions, London and therest of the Greater South East

368, has been identified as a challenge for the region. Research has

attributed this gap to a number of reasons: relatively low levels of capital stock; differences in industrialsize and composition; higher levels of part time working; skills gaps; and the time/distance from some ofthe United Kingdom’s major markets.

369

The region is also characterised by wide intra-regional differences in terms of output, productivity and thedrivers of productivity – competitiveness, enterprise, innovation, investment and skills. The northern partof the region is the main economic engine for growth, with its urban areas consistently experiencingamongst the highest productivity levels in the United Kingdom in recent years. There are clearimbalances across the region, however, with some areas, particularly rural and peripheral areas,performing far less well than the rest of the country. For example, Swindon, the best performing sub-

362 County Councils of Cornwall, Devon, Dorset, Gloucestershire, Somerset, Wiltshire; Unitary Authorities of Bath and North East

Somerset, North Somerset Council, Plymouth City Council, South Gloucestershire Council, Swindon Borough Council, Torbay

Council; and Local Councils: Bristol City Council, Bournemouth Borough Council, Council for the Isles of Scilly, and Borough of

Pool.363 South West Observatory 2008, State of the South West 2008364 Office of National Statistics365 Office of National Statistics366 GVA per hour takes into account any variation in labour market structures across the regions, such as the proportions of full-time

and part-time workers or job share availability367 ONS Regional statistics.368 Including London, South East England and East of England369 South West Observatory 2008, State of the South West 2008


region, was 50% more productive than the English average in 2005, while Torbay, the poorest performingarea, was 38% below.

370

As a consequence the South West has been eligible for funding from the European Structural Fundsthrough Objectives One, Two and Three. This has generally been concentrated in Cornwall and the Islesof Scilly where the GVA per head of £11,510 is almost half the £20,300 GVA per head in Gloucestershire,Wiltshire and Northern Somerset.

371

SWRDA’s purpose and strategy

In response to the RDA’s five statutory purposes, SWRDA makes long-term investments in partnershipwith other public and private organisations that seek to address market failures, stimulate the economyand create the conditions to achieve sustainable growth.

Climate change, population growth and globalisation are key issues for the future of the economyidentified by SWRDA. As a consequence the core strategy, articulated by the Regional EconomicStrategy (RES) 2006 – 2015, is focused on:

creating the conditions for productivity-led growth;

developing a low-carbon economy; and

creating successful places – particularly those places identified as priorities.

To date three RESs have been developed for the South West in 2000, 2003 and 2006. The prime focusof this impact evaluation is in relation to the 2003 RES.

The overall goal of the 2003 to 2012 RES is for a more competitive and productive economy, which isidentified as an essential requirement for a sustainable region. The key areas of focus to achieve this are:

skills of employees and employers;

investment in capital equipment, property, infrastructure and research;

innovation and application of new technology in product and process development;

enterprise and the growth of new firms; and

competition, providing strong incentives for firms to innovate and adopt new technologies and workingpractices.

The RES identified the need to improve coherent partnerships in the South West, stressing theimportance of a consistent strategy to promote investment in the region and develop relevant andfocused policies. In comparison, the priorities of the first RES 2000 to 2010, articulated a focus onimproving the competitive position of the South West in both England and the EU through increasingprosperity and wealth creation.

The current 2006-2015 RES, builds on the focus on productivity to pursue “economic growth withinenvironmental limits.” The RES seeks to differentiate the region through its approach to sustainabledevelopment and reflects the rural and natural heritage of the area, which is a key attraction for touristsand people moving to the area.

SWRDA’s Corporate Plan specifically identifies how the Agency will contribute to delivering the objectivesof the RES. The 2003-2006 Corporate Plan, the first developed by SWRDA, covers the period mostrelevant to this study. The corporate plan mirrors the structure and format of the RES and sets out the

370 South West Observatory 2008, State of the South West 2008371 Office of National Statistics


strategic response and work programme to deliver the strategy over the three year period. The threestrategic objectives of the plan are to:

raise business productivity;

increase economic inclusion; and

improve regional communications and partnership.

SWRDA’s current Corporate Plan for 2008-11 shifts the focus toward productivity-led growth, developinga low-carbon economy and creating successful places by identifying and focusing resources in key areasin the South West.

It should be noted that, SWRDA has implemented individual projects to deliver its agenda to promotesustainable economic development. It has not designed its interventions as a programme in the samesense as other regions, i.e. it has not rolled out a suite of projects linked by a common theme, industrysector or delivery structure linked to programme objectives.

SWRDA’s core outputs as defined by the Tasking Framework cover: jobs created or safeguarded; peopleassisted to get a job; new businesses created and surviving 12 months; businesses assisted to improvetheir performance; businesses assisted via collaboration; public and private regeneration investmentlevered; hectares of brownfield land reclaimed and redeveloped; and people assisted in their skillsdevelopment (skills assists).

Besides the impact of its project and programme spend, SWRDA also influences its partners’ andstakeholders’ behaviour and performance in other ways. This ‘Strategic Added Value’ (SAV) is seen as akey element of SWRDA’s impact. Indeed, the policy framework that led to its establishment was designedto enable SWRDA to harness national, regional and local institutions in order to exploit the region’sindigenous strengths and tackle particular weaknesses, and to provide the environment for businessesand communities to maximise their potential through reforms that strengthen the key drivers ofproductivity and growth.

SWRDA’s profile

SWRDA’s total project expenditure (excluding administrative and overhead costs) since 1999 isapproximately £942.9m. Although this report draws on evaluations which cover SWRDA’s spending sinceits establishment, the focus is on spending for which SWRDA is formally accountable, over which it hashad the greatest influence and where at least the early evidence of impact should be apparent.Therefore, this study focuses on the ‘relevant period’ between 2002/03 to 2006/07, and so places lessemphasis on programmes and projects which SWRDA inherited from its predecessors

372and the national

programmes where SWRDA has been responsible for delivery within parameters determined by centralgovernment departments

373.

Table 226 shows SWRDA’s spend by year and breaks down this spend between programmes andprojects covering business, place and people categories. It also identifies spend on other projects, whichdo not fit into the other intervention categories, and national programmes. Since its establishment,SWRDA has spent £1,033.6m, of which £601.4m was spent directly on SWRDA’s own interventions inthe ‘relevant period’, in addition to £73.8m on national programmes which SWRDA delivered on behalf ofcentral government departments.

The largest proportion of spend has been on place interventions, which comprised almost 60% of totalproject spend, with relatively similar spend on business and people projects. This reflects the capital /


spending373 Ten national programmes have been defined. They are the Coalfields Programme, the Regional Innovation Fund, the



Research & Development and Phoenix Fund. However the Coalfields Programme was not delivered in the East of England.


revenue split of funding provided to the RDA, which requires SWRDA to invest a certain proportion oftheir expenditure in long-term capital assets (e.g. buildings or infrastructure) and non-capital or revenueprojects. Over time the proportion of expenditure on place interventions has decreased slightly while theproportion of expenditure of businesses interventions has increased from a relatively low base in2002/03. Other expenditure includes projects that can not be easily attributed to the other interventioncategories.

Table 226: Analysis of SWRDA spend by year and by category of expenditure (£m)374


programmes

Administrative

costs

Total

1999/00-

2001/02

- - - - - 32.4 267.7375

2002/2003 9.9 71.7 21.1 2.6 4.1 14.9 124.3

2003/2004 32.8 50.6 23.6 4.9 5.3 17.1 134.3

2004/2005 30.6 57.8 27.9 1.5 8.5 17.0 143.3

2005/2006 23.9 78.5 25.8 2.4 28.3 19.7 178.6

2006/2007 31.5 83.9 17.7 2.7 27.6 22.0 185.4

Total 128.7 342.5 116.1 14.1 73.8 90.7 1,033.6

Source: PwC analysis of SWRDA programme expenditure data

Table 227 summarises SWRDA’s spend covered by the usable evaluation evidence. The evidence for theimpact of SWRDA’s spending, therefore, draws on 30 evaluations which are compliant with the principlesof the IEF, and cover 75% (£452.6m) of SWRDA’s project spend over the ‘relevant period’. This providesa robust evidence base upon which SWRDA’s impact can be assessed. The level of coverage variesacross the intervention categories.

Around 50% of relevant expenditure is covered by four studies that measure the economic impact of anumber of projects. These studies, called Economic Impact Reviews draw together multiple projects andassess the impact of a sample of projects, the results of which are then extrapolated to the entirepopulation of projects to generate an estimate of total impact. The four intervention areas covered by theEIR’s are Business Support, Sites and Premises, Physical Regeneration, and Skills and Learning.

A full list of the evaluations used for this report is included at Annex G.

374 This analysis has taken financial information from published annual accounts and programme management system. This

analysis focuses on administration, project and national programme expenditure, and does not take account of non-cash costs (bad

debts, depreciation and stock write off), fixed asset additions, grants credited to reserves and asset disposal. As such the total

expenditure listed here differs from total expenditure in statutory accounts. Expenditure on SRB is included in the business, people

and place expenditure.

375 For expenditure over the period 1999/2000 to 2001/2002, given the available data, it has not been possible to classify by IEF

intervention categories. The programme spend during this period is approximately £235.3m.


Table 227: Analysis of SWRDA’s spend covered by IEF compliant evaluations (2002/03-2006/07)

Total

Spend covered % of spend Number of

evaluations

Business 101.2 79% 10

Place 252.6 73% 8

People 98.6 86% 7

Other 0.3 2% 3

National programmes 3.5 n/a 2

Total 456.2 75% 30

Source: PwC analysis based on SWRDA evaluation evidence

The calculation of coverage in Table 227 is based on classification of individual projects to each IEFintervention category. The evaluations have also been classified to the relevant IEF theme based on themain type of activity they evaluate, which means that they will contain projects and their associatedexpenditure that relate to other IEF themes. For example the majority of expenditure included in theRural Renaissance programme relates to place activities, however it also covers a variety of businessand people activities. The key implication of this is that the ‘project’ based coverage set out in Table 227differs from the ‘evaluation’ based coverage within each theme.

Key findings

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

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

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

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

Impact

Table 228 summarises the gross and net outputs of SWRDA’s interventions and provides an estimate ofthe additionality of ‘core’ outputs across the IEF intervention categories. Where a project has multiplefunding partners the impact presented here is SWRDA’s proportion of the total impact of the project orprogramme

376. It should be noted that Table 228 only includes results from evaluations that provide

estimates of both gross and net outputs. Total net impact results, including those from evaluations thatprovide only net estimates, are presented in Table 229.

376 The attribution of total project impact to the RDA is undertaken either through definition of the counterfactual that considers theproportion of gross outputs attributable to the RDA; or, where this is not the case, the impact of the total project is attributed basedon the RDA’s contribution to the funding of the project.


Table 228: Gross and net attributable SWRDA outputs (2002/03-2006/07)

Jobs

created/

safeguarded

Businesses

created

Businesses

assisted

Brownfield

land (ha)

Skills

assists

Funding

leveraged

(£m)


Gross outputs achieved 6,568 38 2,094 - 3,897 63.8

Net outputs achieved 3,139 14 2,108 - - -

Additionality (%), achieved 48 37 101377

- - -


Gross outputs achieved 5,814 132 7,153 115 11,992 781.5

Net outputs achieved 3,501 119 6,510 - 10,913 -

Additionality (%), achieved 60 90 91 n/a 91 n/a

People and skills

Gross outputs achieved 716 - 347 - 12,871 -

Net outputs achieved 274 - 159 - 6,909 -

Additionality (%), achieved 38 - 46 - 54 -

Other

Gross outputs achieved 12,071 650 12,937 4,855 49,039 -

Net outputs achieved 5,110 287 5,563 2,379 27,462 -

Additionality (%), achieved 42 44 43 49 56 -

Total

Gross outputs achieved 25,169 820 22,531 4,922 77,757 845.3

Net outputs achieved 12,024 420 14,340 2,379 45,259 -

Additionality (%), achieved 48 51 64 49378

61379

n/a


SWRDA’s spending has created/safeguarded jobs, assisted and helped to create new businesses,assisted people in skills development, remediated brownfield land and leveraged private and publicsector funding. Almost all of these outputs have already been achieved. However, a small number ofoutputs are potentially to be achieved in the future. These are related to jobs created by physicalinfrastructure investments (such as Sites and Premises workspace and incubation and science parkinitiatives). Estimates of future potential jobs provided by evaluations are summarised in the relevantsections below. An aggregate estimate can not be provided as future potential jobs were not consideredconsistently across the evidence base

377 The net businesses assisted for ICTaaEE project are slightly higher than the gross businesses assisted. This project seeks to

increase the capacity of partnership delivery bodies that promote the use of ICT in businesses. The evaluation found that the

proportion of businesses assists attributable to the ICTaaEE project is higher that recorded in formal monitoring data, which is why

gross output is higher than net.

378 The additionality calculation excludes 67 ha gross brown field land remediated by regeneration interventions as there is no net

estimate

379 The additionality calculation excludes the 3,897 gross skills assists achieved by business competitiveness interventions as there

is no net estimate.


SWRDA’s regeneration through physical infrastructure interventions have the highest averageadditionality for jobs created / safeguarded, followed by business support interventions. SWRDA’s placeinterventions have had strong additional impact, with 60% of gross jobs created / safeguarded areadditional, compared to the national RDA average of 45%. The additionality of the jobs created /safeguarded by business interventions is consistent with the RDA average for business interventions(48%), while additionality of people interventions is lower than the national RDA average (48%). Lookingat other outputs, the additionality of SWRDA’s businesses created by business interventions is slightlybelow the national RDA average of 40%, as is the additionality of skills assists delivered by peopleinterventions (61%) compared to 62% national RDA average.

Table 229 below summarises the total net outputs of SWRDA’s interventions. This includes net outputsexcluded from Table 228 above as they were from evaluations that do not provide estimates of bothgross and net outputs.

Table 229: Total net attributable SWRDA outputs (2002/03-2006/07)

Jobs created/

safeguarded

Businesses

created

Businesses

assisted

Brownfield

land (ha)

Skills

assists

Business competitiveness & development 3,916 14 2,108 - -

Regeneration through physical infrastructure 3,501 119 6,510 10,913

People and skills 1,861 - 159 - 6,909

Other 5,110 287 5,563 2,379 27,462

Total 14,388 420 14,340 2,379 45,284


The net achieved annual GVA of SWRDA’s interventions is summarised in Table 230, which provides abreak down of business, people and place. Place has generated the highest total GVA impact of£120.5m, followed by people and skills at £88.1m.

Table 230: Outcomes from SWRDA interventions (2002/03-2006/07)

Number of

evaluations

Expenditure covered


Achieved GVA

(annual, £m)

Business competitiveness &

development9 80.6 70.7


infrastructure7 253.4 120.5

People and skills 7 38.3 88.1

SRB 1 55.0 51.5


Estimates of cumulative GVA and future potential GVA are provided by some evaluations and aresummarised in the relevant sections below. As this has not been undertaken consistently across theevidence base it has not been possible to provide an aggregate estimate for each of the IEF themes. Theannual GVA figures above estimate the economic impact of the interventions in the year prior to theevaluation. Therefore these projects would have had economic impacts in the years other than the yearfor which impact was assessed, both before and after, that are not captured in this estimate.


Finally, Strategic Added Value is a key element of SWRDA’s impact, as illustrated below.

SWRDA’s Strategic Added Value

Besides the impact of its project and programme spend, SWRDA also influences its partners’ andstakeholders’ behaviour and performance in other ways as demonstrated by the following examples:

Strategic engagement and support for priority sector: SWRDA’s engagement with the Aerospacesector to develop more strategic and collaborative relationships between aerospace companies andtheir suppliers to increase R&D activity and to help retain it in the UK;

Response to economic shocks within the region: SWRDA’s rapid response to the needs of businessesin Gloucestershire in the aftermath of the summer 2007 floods ensured collaboration and mobilisationof other organisations; and

Improved quality of regeneration projects: SWRDA’s involvement in regeneration projects has helpedto improve the quality and mix of outputs achieved. The Agency’s involvement in regenerationprojects, such as Gloucester Docks and Temple Quay, has accelerated the development of a betterquality and blend of outputs to promote the economic development and place making of the area.

Source: SWRDA

Value for money

Table 231 considers the value for money of SWRDA’s interventions from two perspectives:

the ratio of GVA to cost as an indicator of the benefit-cost ratio; and, especially where this is notavailable,


In assessing the value for money of SWRDA’s interventions we have sought to compare them with theevidence emerging from the evaluation of other RDAs’ activities.

Table 231: Summary of SWRDA value for money (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Achieved

GVA

(annual):cost

ratio

Achieved &

future

potential

GVA:cost

ratio

Achieved

cost per

net job (£)

Achieved

cost per

net

business

created (£)

Achieved

cost per

net skills

assist (£)


Business Support EIR:

general support3.4 0.4

a 1.6380

cumulative3,810 - -

ICTaaEE 0.2 9.5a

- - - -

Gloucestershire Floods 2.0 0.9381

29,850


sector / cluster projects2.7 0.4

a- 2,340 - -

South West Food and

Drink5.7 3.1

a 3.2

annual3,800 - -

380 This future potential GVA impact of £21.8m is for all projects covered by Business Support EIR, not just Individual support

interventions, which is why it is lower than the cumulative GVA return of individual support.

381 The return on investment of Gloucestershire Floods project is based on the average increase in business turnover to grant per

business. As a total estimate of GVA is not provided, the return of Gloucestershire Floods has not been included in the aggregate

estimate.


Expenditure

covered by

evaluations

(£m)

Achieved

GVA

(annual):cost

ratio

Achieved &

future

potential

GVA:cost

ratio

Achieved

cost per

net job (£)

Achieved

cost per

net

business

created (£)

Achieved

cost per

net skills

assist (£)

Business EIR:

Technology and R&D8.7 0.04 - 42,770 - -

Sites & Premises EIR:

Incubation & science46.5 0.3

382 0.6

annual155,000 - -

Enterprise Pavilion 2.5 0.5 - 32,800 - -

Tamar Science Park 5.0 0.7 - - - -

Coral Reef 3.3 15.3 - 3,064 - -

Total – Business 78.0 1.5b

- - -


Sites and premises

EIR: Workspace59.6 0.3

1.0

annual141,000 1.27m

Sites and premises

EIR: Transport9.6 4.2

4.3

annual12,000 9.6m -

Sites and premises

EIR: Community5.5 0.02

0.02

annual- 5.2m -

National Maritime

Museum of Cornwall7.7 0.9

a- - - -

Sites and Premises –

Tourism / Cultural46.3 0.3

0.5

annual78,000 7.68m -

Eden Project 11.0 1.6 - 23,800 - -

Physical Regen. EIR 95.5 0.1 - 59,400 - -

Rural Renaissance 16.6 1.5a - 21,177 - -

Total – Place 251.8 0.8b

1.1 - - -

People and skills

Skills EIR: Skills

develop. for individuals2.0 2.3

-22,900

--383

AESP 2.9 0.2a

- 40,278a

- 1,226a

Skills EIR: Skills

development for firms11.0 4.8

-7,900

--

Skills EIR:

Infrastructure6.5 2.4

1.4

annual41,900

-1,595

a

Gloscat 1.1 3a

- 23,404a

- -

CUC 14.7 0.2a

- 94,839a

- 46,226a

Strength. Community

Foundations0.1 1.5

-19,500

-4,700

382 The GVA to cost ratio is calculated by the evaluation based on net expenditure of £13.7m which generated the economic impact.

The remaining expenditure was on projects that were in early development stage and had not yet generated impact.

383 Skills EIR does not provide net skills assists.


Expenditure

covered by

evaluations

(£m)

Achieved

GVA

(annual):cost

ratio

Achieved &

future

potential

GVA:cost

ratio

Achieved

cost per

net job (£)

Achieved

cost per

net

business

created (£)

Achieved

cost per

net skills

assist (£)

Total – People 38.3 2.3 - - - -

Other

SRB 55.0 0.9 - 36,407 - -


Notes: a) These unit costs have been calculated by PwC based on the expenditure and GVA results provided by

evaluations.

b) Aggregate GVA to cost ratios are calculated based on proportion of expenditure directly related to the outputs

generated, for Business support this is £45.8m, Place £159.6m. Total net expenditure is £298.9m.

People and skills have generated the highest annual return of 2.3:1, followed by business interventions1.5:1 and place interventions 0.8:1. In addition to the other unit costs presented below, SWRDA has apositive overall leverage funding ratio of 2.7:1384. Physical regeneration initiatives have generated thelowest returns to date, which is a result of the high capital costs and development lifecycle which isexpected to generate benefits over a longer time period compared to business support and peopleinterventions. A large proportion of SWRDA’s physical regeneration interventions evaluated by thePhysical Regeneration and Sites and Premises EIR were in the early stages of development and hencedo not capture the full potential impact, which is at least partly reflected by the forecast of future potentialannual returns which increases to 1.1:1.

SWRDA’s people and physical regeneration interventions exceed the national RDA averages forachieved annual GVA:cost of 0.9:1 and 0.7:1, respectively. The return on SWRDA’s people and skillsinterventions is notably higher in part reflecting the inclusion of productivity improvements in theevaluations of SWRDA’s interventions, which is not included in the national analysis. The return on SkillsEIR: Skills development for firms of 4.8 is six times higher than the national average of 0.8.

The return on SWRDA’s business competitiveness interventions of 1.5:1 is just over half of the nationalRDA average of 2.8:1. This reflects the socio-economic conditions of the South West, which has hadstructurally full employment over the past five years, which limits the potential for job creation andsafeguarding. Therefore, the focus for SWRDA has been on unlocking productivity through encouragingresearch and innovation. Around 75% of SWRDA’s expenditure during the relevant period has beenfocused on Science, R&D and innovation infrastructure interventions, which have long-term benefitprofiles and the lowest national RDA average annual GVA for business interventions of 1.1:1.

In interpreting these results it is important to note that these figures are annual, and as such represent aone year snapshot of the returns of the interventions evaluated. They do not present the cumulativereturn on these interventions to date. As noted above a number of these annual calculations have beendeveloped based on information presented in the evaluation to enable an aggregate estimate of GVA tobe developed. The risk with this approach is that for many of the projects the benefits and expenditureare concentrated in the latter years of the project following a period of build up. As a result dividing thecumulative GVA by the total number of years of the project could potentially underestimate the GVAimpact.

In general, the cost per job measure mirrors the returns on investment, with lowest cost per job figuresdemonstrated for the business and people interventions, albeit with significant variation. The relativelyhigher cost per job figures for the place based interventions reflects the core objective of theseinterventions to create the conditions that will attract private sector involvement in development andregeneration projects that aim to stimulate economic activity, and to create jobs through this process overthe longer term. The majority of SWRDA’s people interventions have delivered jobs lower than thenational RDA average.

384 Based on £845.3m of public and private sector leveraged funding against associated expenditure of £308.2m.



Table 232 presents SWRDA’s performance against target information based upon evidence drawn fromthe Tasking Framework. For all of the measures, SWRDA has exceeded all of the annual targets set byBERR, significantly so for funding levered.

Table 232: Comparison of SWRDA performance against targets (2002/03-2006/07)385

Jobs created/

safeguarded

Businesses

created

Brownfield

land (ha)

People

assisted in

skills

development

Funding

levered (£m)

Targets set by BERR 28,578 1228 595 34,400 325

Achieved SWRDA gross

outputs reported to

BERR

30,442 1,437 624 69,811 608


targets met (out of five)5 5 5 5 4

386


Like all the RDAs (except the London Development Agency), in 2007 SWRDA was subject to the NationalAudit Office’s Independent Performance Assessment (IPA) which assessed how well SWRDA hasresponded to the common challenges facing RDAs, namely balancing the interests of the region withnational policy requirements, managing the conflicting demands of different regional stakeholders, lookingoutwards to promote the region while staying focused on what is happening inside and responding to newduties imposed by central government. This assessment sheds further light on how well the Agency hasbeen able to fulfil its role.

Overall, SWRDA was seen as ‘performing well’, particularly in terms of its ambition, prioritisation,performance management and achievement. Key strengths within these themes identified by the NAOreview include:

RES: the current version is significantly more focused with a clearer delivery framework. It has beenbuilt upon an exemplary evidence base, and sets challenging sustainability ambitions. There are clearlinks between RES, Corporate Plan and Business Plans. Stakeholder consultation process has beennoted to be very extensive and strongly inclusive.

Delivery: The Agency was noted as having a strong record for delivering large urban regenerationschemes and acts successfully as a broker and has achieved partnership working. The Agency hasachieved successful engagement in the key aerospace sector, and has set up some key deliverybodies to build capacity in the region

Some key areas for development in relation to its economic impact were also identified by the review andinclude:

In common with other RDAs, SWRDA needs to improve its performance in respect of evaluation. Itnotes that while the Agency does use performance management information to inform policydevelopment and appraisal decisions and has established the mechanisms to determine the impact ofits activities, it is not yet at the stage of being able to do this consistently.

The Agency needs to raise the profile of its prioritisation and achievements in respect of skills,innovation and business support.

385 Based on information from SWRDA Annual Reports.

386 No funding leverage information available for 2002/03. Achieved 4/4 years targets.


Communication needs to be clearer and more proactive especially in terms of the BusinessCommunity.

Table 233 sets out SWRDA’s performance against the objectives for each of the individual interventionscovered by the evaluations.

Table 233: Comparison of SWRDA’s performance against objectives across the evaluations387


met

Mixed Limited

performance

Not

assessed

Total

Business


Spend (£m) 0 2 17.7 0 0 31.5 51.2

Place


Spend (£m) 11 28.7 0 0 0 265.6 305.3

People


Spend (£m) 0 1.1 18.9 0 0 20.0 40.0

Other


Spend (£m) 0 0.0 57.2 0 0 0 57.2

Total


Spend (£m) 11 31.8 93.7 0 0 317.1 453.7


Across all sub-themes, the majority of interventions, in terms of number, have met or largely metobjectives. These interventions only make up around 23% of relevant expenditure, the majority ofinterventions, by expenditure have not been assessed against objectives. This is because 50% ofexpenditure is covered by the multi-project Economic Impact Reviews which measure the economicimpact of a large number of relatively heterogeneous projects, which do not form part of a cohesiveprogramme, with associated programme wide objectives. It is not feasible to apply the performanceagainst objectives of the projects sampled for evaluation to the broader population of projects.


We have structured the analysis of the impact of SWRDA’s spending, where possible, according to thethree categories of intervention defined within the IEF (i.e. business, place and people). We have alsoanalysed the impact of SWRDA’s other interventions that span more than one of these categories and theimpact of the nine national programmes where SWRDA has been responsible for delivery withinparameters determined by central government departments.

We have summarised the impact of SWRDA’s interventions using a common structure in which we:

summarise SWRDA’s activities and expenditure on each programme;

387 The expenditure figures are based on expenditure of evaluations classified to the relevant IEF theme. A number of evaluations

include projects that relate to different IEF categories, therefore these expenditure figures differ from those Table 227 which are

based on the classification of individual projects to each IEF intervention category.


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

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

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


Rationale

The South West is a relatively productive and wealthy region that, in line with national trends, has beenthrough a period of sustained growth since the early 1990s. SWRDA interventions have been able tobuild on the strengths of the South West economy which has relatively high rates of business stock andinvestment and employment in Research & Development (R&D). In 2006, South West businesses spent£1.3 billion on R&D, which is the equivalent of 1.5% of GVA, slightly higher than the English average.

388

A number of key challenges to increasing economic output of businesses in the region include:389

low rate of business start ups: The South West had 437 VAT registered businesses per 10,000 adultsin 2006, compared to only 407 nationally. However, the region had the lowest rate of businessregistration and deregistration, an indicator of business start ups, of any region, 8.6% and 6.6%(of business stock), respectively;

modest international trade performance: In 2006, South West exports amounted to £11 billion.South West England exported just £4,978 per employee job in 2006, ranking bottom of all regions andmore than a third less than the English average; and

wide intra-regional differences in productivity: and the underlying drivers of productivitycompetitiveness, enterprise, innovation, investment and skills. The northern part of the region is themain economic engine for growth, while rural and peripheral areas perform less well.

In response to these challenges SWRDA’s business competitiveness interventions aim to increaseproductivity by supporting innovative and entrepreneurial activity, encouraging information exchange,promoting the development of key sectors. Key rationales for the business sub-theme interventionsinclude:

Individual enterprise level support: interventions generally seek to address barriers to businessstart-ups and expansion and the efficiency of existing businesses. Lack of access to information andguidance is a key market failure, which may result from high costs, lack of contacts or networks, orrelative geographic isolation. Insufficient information and collaboration with other business andgovernment stakeholders can lead to sub-optimal decision making, such as underinvestment in ICT.

Sector/cluster support: aims to promote embryonic growth sectors (digital, media, biotechnology) aswell as providing support to mature sectors (marine, food and drink, aerospace/advanced engineering,ICT and tourism). While the market failure issues are the same as those identified for individualenterprise support, these interventions seek to address the varying needs of specific sectors that arenot necessarily met through generic mainstream provision. It also seeks to generate greater efficiencyby bringing together related organisations including supply chains, research establishments andbusiness support organisations.

Promotion and development of science, R&D and innovation infrastructure: interventions todevelop incubators and science parks in order to exploit regional research activities. The provision of

388 South West Observatory 2008, State of the South West 2008.

389 South West Observatory 2008, State of the South West 2008.


facilities, access to services, expertise and collaboration with HE institutions helps to decrease riskand hence encourage investors. Innovative activity and incubation of new businesses has thepotential to provide benefits to other businesses and the community in general that would not befactored into private sector investment decisions.

Other strategic business interventions: The SWRDA also funds strategic and enabling projects,which do not intend to directly affect the behaviour or performance of individuals’ businesses chains,but rather to create an environment in which businesses can operate more effectively. Examplesinclude the development of networks, national policy initiatives and research activities.

There are eleven evaluations390

that provide evidence of the impact of SWRDA’s business interventions.These evaluations have been categorised according to the type of business intervention, as shown inTable 234. The evidence provided by the Business Support EIR has been split across the relevantbusiness sub-themes.

Table 234: Summary of SWRDA’s business development and competitiveness interventions


covered by

evaluations

(£m)

Individual enterprise level support Business EIR: General Business support

ICT as an Economic Enabler

Beacon South West

Gloucestershire Floods

3.4

0.17

1

2.0

Sector/cluster support Business EIR: Sector based support

South West Food and Drink

SWRDA Support for the Aerospace Industry

BioApproaches

2.7

5.7

13.6

0.74

Science, R&D & innovation

infrastructure

Business EIR: Technology and R&D

Sites and Premises: Incubation facilitates and science

parks

Coral Reef

Enterprise Pavilion

Tamar Science Park

8.7

46.5

3.3

2.5

5.0

Strategic business interventions Business EIR: Strategic and enabling projects 2.5

Total 97.8


Business interventions that have been evaluated are concentrated in science, R&D and innovationinfrastructure sub-theme and sector / cluster support initiatives. This addresses the following objectivesset by the 2003-2006 Corporate plan, which covers the majority of the interventions being assessed:

support key sectors: advanced engineering, food and drink, ICT, marine, tourism;

promote the development of regional and local supply chains;

develop incubators and science parks to support the exploitation of regional research;

undertake key activities to encourage innovation in business;

390 Business EIR provides four estimates of sub-theme impact, therefore as shown in Table there are a total of 14 estimates of

impact.


increase the rate of knowledge transfer between further education (FE) and higher education (HE)institutions, public sector research establishment and business; and

promote the renaissance of the regions largest urban areas as dynamic and international cities.

Impact

Table 235 summarises the expenditure and gross outputs generated by business interventions evaluated.The primary outputs have been jobs created/safeguarded, businesses created and assisted and peopleassisted with skills development.

Table 235: Gross achieved outputs from SWRDA’s business development and competitivenessinterventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Gross jobs

created/

safeguarded

Gross

businesses

created391

Gross

businesses

assisted

Gross skills

assist


Business EIR:

Individual

support392

3.4 2,480

ICTaaEE 0.2 - 2 2,094 -

Beacon South

West

1.0 - - 358 1,320

Gloucestershire

Floods

2.0 - - 542 -

Sector / cluster support

Business EIR:

Sector support

2.7 2,826 - - -

Food and Drink 5.7 - - 709 3,897


Business EIR:

Technology R&D

8.7 288 - - -

Sites EIR:

Incubation &

science park

46.5 95 8 - -

Enterprise

Pavilion

2.5 83 15 - -

Tamar Science

Park

5.0 249 15 - -

Coral Reef 3.3 547 - - -

Total 80.0 6,568 38 3,307 5,217


391 The Business Support EIR, which evaluates a large proportion of business competitiveness interventions, focused on the

creation of net jobs created and safeguarded as the key driver of economic impact. Moreover, business creation was an explicit

objective of only a small number (6) of the 55 projects in the sample frame.

392 The gross jobs created for Business Support EIR have been calculated by multiplying the Gross jobs created for the sample, by

the grossing up factor and the attribution factor.


In addition to the gross outputs listed in Table 235 above 5,244m2 of gross workspace393

has beencreated and £63.8m of private sector funding leveraged

394.

Table 236 summarises the expenditure and key net outputs generated by SWRDA’s businesscompetitiveness interventions. In total 3,916 net additional jobs have been created and safeguardedand14 net businesses created.

Table 236: Net achieved outputs from SWRDA’s business development and competitivenessinterventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Net jobs

created/

safeguarded

Future

potential net

jobs created /

safeguarded

Net

businesses

created

Net

businesses

assisted


Business EIR:

Individual support395

3.4 899 2,429396

ICTaaEE 0.2 - - - 2,108397

Gloucestershire Floods 2.0 67 -


Business EIR: Sector

support

2.7 979 - - -

South West Food and

Drink

5.7 710 1,900 - -


Business EIR:

Technology R&D

8.7 180 - - -

Sites EIR: Incubation &

science park

46.5 88 654 8 -

Enterprise Pavilion 2.5 75 - 4 -

Tamar Science Park 5.0 59 - 2 -

Coral Reef 3.3 859 - - -

Total 80.0 3,916 4,983 14 2,108


There is a wide variance in the additionality of the business support initiatives, which ranges from 24% forTamar Science Park to 157% for Coral Reef

398, with an overall average of 48%.

399Overall, the net

393 Enterprise Pavillion created 1,444m2 and Tamar Science Park created 3,800m2 of workspace

394 Sites and Premises EIR: Incubation and science park leveraged £6.5m, Tamar Science Park £1.3m and Coral Reef £56m.

395 The gross jobs created for Business Support EIR have been calculated by multiplying the Gross jobs created for the sample, by

the grossing up factor and the attribution factor.

396 This estimate is a cumulative estimate to 2010/11 including net jobs created / safeguarded to date is for all interventions covered

by the Business Support EIR (not just Individual support).

397The net businesses assisted for ICTaaEE project are slightly higher than the gross businesses assisted. This project seeks to

increase the capacity of partnership delivery bodies that promote the use of ICT in businesses. The evaluation found that the

proportion of businesses assists attributable to the ICTaaEE project is higher that recorded in formal monitoring data, which is why

gross output is higher than net.


additionality of SWRDA’s business competitiveness interventions is the same as the national RDAaverage of 48%.

Table 237 summarises the impact on GVA (both achieved and future potential) of SWRDA’s interventionsto promote business development and competitiveness. The total net annual achieved GVA contributionof the business interventions is £70.7m.

Table 237: Outcomes from SWRDA’s business development and competitiveness interventions(2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Achieved GVA

(annual, £m)

Achieved GVA

(cumulative, £m)

Future potential

GVA (£m)


Business Support EIR: Individual

support3.4 1.4

a7.0

21.8400

cumulative

ICTaaEE 0.2 2.0a

4.9 -


Business Support EIR: sector /

cluster2.7 1.0

a5.1

-

South West Food and Drink 5.7 17.5 -18.1

annual


Business EIR: Technology and

R&D8.7 0.3

a1.7

-

Sites & Premises EIR: Incubation

& science park46.5 3.5

- 26.2

annual

Enterprise Pavilion 2.5 1.2 3.7 -

Tamar Science Park 5.0 3.7 5.6 -

Coral Reef 3.3 40.1 - -

Total 78.0 70.7 28.0 -

Source: PwC analysis based on SWRDA evaluation evidenceNote: These estimates of annual GVA have been calculated by dividing the cumulative GVA estimate by the numberof years of the programme to provide an annual estimate.

In addition to the outcomes listed above, Gloucestershire Floods intervention helped business to return totrading on average 3.5 days faster, resulting in gross additional turnover of £4,330 per business, of which£2,120 is net.

Across its interventions, SWRDA seeks to achieve a range of outcomes not all of which can be capturedin the above estimates of GVA. One of the main qualitative outcomes outlined in evaluations of SWRDA’sinterventions is the increase in collaboration and networking between private and public stakeholders.

398 Additionality of net jobs created is higher than gross for Coral Reef evaluation due to low estimate of deadweight (4%) and

relatively high multiplier of 1.6 (SW regional accounts) being applied.

399 This is calculated on evaluations that provide estimates of both gross and net jobs created, which totals 6,658 gross net jobs and

3,139 net jobs.


interventions.


While difficult to quantify and potentially long-term in nature, such activities would inevitably lead to anincrease in the productivity of businesses. Key examples include the creation of 6 successful clusters ofover 3,000 businesses in the creative and media industries, and tenants at the science parks andincubation centres have reported increased engagement with HEIs to access knowledge andemployment of students and graduates.

SWRDA’s business interventions also provide additional strategic impact. Notable examples summarisedbelow relate to the Agency’s engagement with the aerospace industry and response to assist businessesin the aftermath of the summer 2007 floods.


Strategic engagement and support for priority sector: As noted by the NAO IPA, SWRDA haveeffectively engaged with the aerospace sector to develop more strategic and collaborativerelationships between the aerospace companies and their suppliers. With an estimated 27% of theindustry located in the South West, it is a priority sector for the RDA. SWRDA have worked throughthe West of England Aerospace Forum to deliver a variety of interventions that enhance thecompetitiveness of the supply chain and support strategic research and technology projects, such asthe innovative Airbus Composite Structures Development centre. The key aerospace companies havereported that SWRDA engagement with the industry has increased the scale of many of the R&Dprojects and helped to retain them in the UK.

Response to economic shocks within the region: Gloucestershire was one of the most severelyaffected counties in the 2007 floods. Within 48 hours SWRDA coordinated a partnership response andauthorised a £2m recovery fund that provided Business Recovery grants of up to £2,500 to floodedbusinesses and a Town Centre Recovery fund. In addition to the rapid response to crisis within theregion, SWRDA effectively collaborate and deliver assistance package with Gloucestershire First andBusiness Link, who also committed significant resources in terms of infrastructure and people.

Source: SWRDA

Value for money

Table 238 sets out the achieved GVA to cost ratios of SWRDA’s business development andcompetitiveness interventions.

The GVA to cost ratio compares GVA impacts to the cost of the interventions, to assess the return onRDA investment. The achieved cumulative GVA to cost ratio provides an estimate of the total return todate of the intervention, while the achieved annual GVA to cost ratio provides an estimate of the annualreturn to total project cost.


Table 238: Achieved GVA to cost ratios from SWRDA’s business development andcompetitiveness interventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Achieved GVA

(annual):cost ratio

Achieved GVA

(cumulative):cost

ratio

Future potential

GVA:cost ratio



general support3.4 0.4

a2

1.6401

cumulative

ICTaaEE 0.2 9.5a

30.9 -

Gloucestershire Floods 2.0 0.9402

- -


Business Support EIR: sector

/ cluster2.7 0.4

a2.2

-

South West Food and Drink 5.7 3.1a

- 3.2a


Business EIR: Technology

and R&D8.7 0.04 0.22

-

Sites & Premises EIR :

Incubation & science park46.5 0.3

403n/a

0.6

annual

Enterprise Pavilion 2.5 0.5a

1.5a

-

Tamar Science Park 5.0 0.7 1.1 -

Coral Reef 3.3 15.3 - -

Total 82.4 1.5b

- -


Notes: a) These estimates of GVA to cost have been calculated by dividing the annual GVA estimates by

expenditure as listed in Table 237.

b) Calculated based on net expenditure of £45.8m.

Where there is a GVA to cost ratio of greater than one, the economic benefits of the interventionsattributable to SWRDA’s funding exceed their costs. The overall annual GVA to cost ratio is 1.5:1, whichmeans that the annual return of these interventions cover the whole project costs within one year. Notablyhigh GVA impact has been generated by the Coral Reef and ICTaaEE projects, with GVA to cost ratios of15:3 and 9.5, respectively.

The return on SWRDA’s business competitiveness interventions of 1.5:1 is just over half of the nationalRDA average of 2.8:1. This is a result of the socio-economic conditions in the region and the types ofinterventions implemented and evaluated. As the South West has experienced full structural employmentover the past five years, job creation and safeguarding, which is one of the key drivers of GVA, is moredifficult and has been less of a priority for the RDA. Instead, the RDA has sought to unlock productivity


interventions, which is why it is lower than the cumulative GVA return of individual support.

402 The return on investment of Gloucestershire Floods project is based on the average increase in business turnover to grant per

business. As a total estimate of GVA is not provided, the return of Gloucestershire Floods has not been included in the aggregate

estimate.

403 The GVA to cost ratio is calculated by the evaluation based on net expenditure of £13.7m which generated the economic impact.

The remaining expenditure was on projects that were in early development stage and had not yet generated impact.


improvements in the region by encouraging innovation in business and develop incubators and scienceparks. In line with the objectives articulated in the Corporate Plan around 75% of SWRDA’s expenditureduring the relevant period, and a large proportion of evaluated expenditure, has been focused onScience, R&D and innovation infrastructure interventions. These interventions are long-term investmentsand have generated the lowest return on investment of all business competitiveness sub-themes, with thenational RDA average annual GVA of 1.1:1.

Table 239 sets out the achieved cost per net output of SWRDA’s business development andcompetitiveness interventions.

Table 239: Achieved cost per net output from SWRDA’s business development andcompetitiveness interventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Achieved cost per net job

created / safeguarded (£)

Achieved cost per business

created (£)


Business EIR: Individual

support3.4 3,810 -

Gloucestershire Floods 2.0 29,850 -



sector projects2.7 2,340 -

Food and Drink 5.7 3,800 -


Business EIR:

Technology and R&D8.7 42,770 -

Sites & Premises EIR:

Incubation & science park46.5 155,000 1.7m

404

Enterprise Pavilion 2.5 32,800 129,900

Tamar Science Park 5.0 - 2.5m405

Coral Reef 3.3 3,064 -


There is relatively wide variability in the cost per job figures presented in Table 239 above. The cost perjob figures of the sector / cluster support performed significantly better than the national RDA average of£12,135. The unit costs of science, R&D and innovation infrastructure is more mixed. The national RDAaverage is £37,938 for science, R&D and innovation interventions, therefore Enterprise Pavilion andCoral Reef have performed well compared to the average. The high cost per job of the Sites andPremises EIR: Incubation and science park reflects the capital intensive nature of the activities evaluated.

404 Calculated based on information from the evaluation £13.7m net cost of incubation and science park interventions and 8 net

businesses created.

405 Calculated based on total expenditure of £5.0m and 2 net businesses created.



Table 240 summarises the performance against objectives of SWRDA’s interventions to promotebusiness development and competitiveness. By number the majority of evaluations provide anassessment of performance against objectives and / or rationale for intervention. All of these interventionsthat provide an assessment have met or largely met their objectives.

However, on an expenditure basis, the majority of interventions have not assessed performance againstobjectives. The Business Support EIR assesses the economic impact of 55 relatively heterogeneousprojects. As these projects do not comprise a cohesive programme with common objectives, it was notpossible to assess the performance against objectives.

Table 240: Performance against objectives from SWRDA’s business development andcompetitiveness interventions (2002/03-2006/07)

Expenditure

covered by

evaluations (£m)


Gloucestershire Floods 2.0 Met

Beacon South West 1.0 Largely met

Tamar Science Park 5.0 Largely met

Coral Reef 3.3 Largely met

Enterprise Pavilion 2.5 Largely met

ICT as an Economic Enabler 0.2 Largely met

South West Food and Drink 5.7 Largely met

Business Support EIR 17.2 n/a

SWRDA Support for the Aerospace Industry 13.6 Not assessed

BioApproaches 0.7 Not assessed



Rationale

The South West region is the largest and has the most dispersed population of all English regions. Thismeans that the region has the highest number and percentage of people living in villages, hamlets orisolated dwellings (17%, compared to 8% in England) and the lowest percentage of people living in urbansettlements (67%, compared to 82% in England as a whole).

406

This settlement pattern creates significant challenge to the provision of, and access to, services andinfrastructure. This is further compounded by other socio-economic characteristics in the regionparticularly relevant to regeneration activities including:

a high level of intra-regional disparity with wide intra-regional variations in economic performance;

rapid increase in population over the past 10 years which has placed increasing pressure on theinfrastructure (transport and communications), created excess demand for utilities and basic services( e.g. health and education) and exacerbated skills gaps, particularly in higher level skills in someparts of the region;

significant economic change and declining services in rural communities; and

406 Census Output Area 2001, Census Population, DEFRA rural / urban definition


an imbalance of housing and workspace development leading to housing shortages and rising landvalues which have impacted on the land available for employment sites, thus compounding shortageissues in some areas

SWRDA works with a range of local and national public sector organisations, primarily local authoritiesand English Partnerships, to deliver regeneration projects across the region. Public sector interventionlooks to address market barriers to development faced by the private sector and seeks to create theconditions that will encourage increased involvement and investment in the region. The main rationalescited by evaluations are market failure and equity objectives, including:

public sector is better able to bear the long-term risks implicit in long-term capital projects, and areable to meet the higher costs of development (from contaminated land or fragmented ownership) inorder to induce private sector investment in target areas;

co-ordinating role for major regeneration projects where no other stakeholders have the economicincentive or resources to coordinate and deliver the investment. Activities may include the provisionand dissemination of information, for example master planning activities or regeneration frameworks,co-ordination of key stakeholders and provision of funding to assemble land;

broader economic, social or environmental benefits, or positive externalities, may be sought whichwould not be achieved by private sector investments, e.g. BREEAM

407compliant buildings, improved

streetscape, reclaiming derelict land to reducing the negative impact on the surrounding area; and

public and merit goods, which are goods that are judged by the public sector to have higher merit thanwould be delivered by the market based on the amount that consumers are willing to pay for suchgoods. Examples of such initiatives are projects that deliver community and tourism infrastructure andfacilities.

In addressing issues of intra-regional disparity, the rationale of a number of SWRDA place initiatives is toachieve equity objectives through economic regeneration in deprived areas. For example, a key objectiveof the Rural Renaissance project is to help rural communities to respond to, and influence, economicchange by supporting projects that generate employment, improve delivery and access to services andrealise the value of the environment as an economic asset.

The evidence of impact of SWRDA’s place based activities is covered by eight evaluations408

that coverspend of around £268.1m. The majority of this spend is covered by two Economic Impact Reviews(EIRs), Physical Regeneration and Sites and Premises.

407 BRE Environmental Assessment Method

408 Sites and Premises EIR provides three estimates of sub-theme impact, therefore as shown in

Table there are a total of ten estimates of impact.


Table 241: Summary of place evaluations


covered by

evaluations (£m)

Bringing land back into use Sites and Premises: Workspace

Temple Quay

59.6

1.9

Public realm / other infrastructure

(including transport and community)

Sites and Premises: Transport and Community

Infrastructure

15.1

Image, events and tourism Sites and Premises: Tourism and cultural projects

National Maritime Museum Cornwall

The Eden Project

46.3

7.7

11.0

Cross-cutting regeneration

interventions

Physical Regeneration EIR

Rural Renaissance

95.5

16.6

Co-ordination role (e.g. spatial

strategies / delivery mechanisms)

The Way Ahead

Creating Excellence

2.6

2.5

Total 258.8


These initiatives respond to the objectives of the 2003-2006 Corporate Plan to:

ensure regionally significant sites are bought forward, such as major strategic employment sites;

ensure there is a range of workspace to support the needs of developing companies;

improve the economic performance of deprived communities;

address changing needs of rural economies;

improve transport and communications (ICT) network;

promote the renaissance of the regions largest urban areas as dynamic international cities; and

encourage an integrated, partnership approach to economic development.

Impact

The evidence base has quantified a number of key gross and net outputs arising from these regenerationinterventions, with a focus on those that stimulate economic activity, which include jobs created andsafeguarded, businesses created. Table 242 below presents the gross outputs from SWRDA’sregeneration interventions.


Table 242: Gross outputs (achieved) from SWRDA’s regeneration through physical infrastructureinterventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Achieved gross

jobs created/

safeguarded

Achieved gross

businesses

created

Gross brownfield

land (ha)

reclaimed

Gross people

assisted in skills

development

Bringing land back into use

S&P:

Workspace

59.6 254 29

Public realm / other infrastructure (including transport and community

S&P:

Transport

9.6 551 1 - -

S&P:

Community

5.5 29 6 - -


S&P:

Tourism and

Cultural

projects

46.3 383 7 - -

Eden 11.0 887409

- 63 1,935

Cross-cutting regeneration interventions

Physical

Regeneration

EIR

95.5 2,880 - 50 -

Rural

Renaissance

16.6 830 89 2 11,992

Total 244.1 5,814 132 115 13,927


Table 243 presents the net outputs of SWRDA’s physical regeneration interventions, including privatesector leverage . A number of these interventions are still in the early stages of implementation andtherefore estimates of future potential jobs have been provided to give an indication of the future benefitstream of these interventions. As with any estimates of future impact, there is an implicit degree ofuncertainty that should be recognised when interpreting these figures.

409 The gross and net jobs created presented in the evaluation are not attributed to proportion of SWRDA expenditure. The total

gross jobs created by the project is 5,187 and net jobs 2,034 (p.61 of the evaluation). These figures have been attributed according

to SWRDA proportion of total public sector and Millennium Commission funding (17.1%).


Table 243: Net outputs (achieved and future potential) from SWRDA’s regeneration throughphysical infrastructure interventions (2002/03-2006/07)


(£m)

Achieved netjobs created/safeguarded

Future netpotential jobs

created

Achieved netbusinesses

created

Achieved privatesector fundingleveraged (£m)


S&P:Workspace

59.6 287 1,170 32 28.6


S&P: Transport 9.6 802 822 1 31.3

S&P:Community

5.5 6 6 1 1.2


S&P: Tourismand Culturalprojects

46.3 395 836 4 26.8

Eden 11.0 348410

- 86.9411


PhysicalRegenerationEIR

95.5 440 866412

- 582

RuralRenaissance

16.6 1,223 - 81 24.7

Total 244.1 3,501 3,700 119 781.5


In addition to the core gross and net outputs listed in the tables above Rural Renaissance also achievedthe following:

skills assists: gross 11,992, of which net 10,913;

people assisted into employment: gross 2063 of which net 1,879;

businesses assists: gross 7,153, of which 6,510 are net; and

workspace created: 18,763m2 of which 17,074 are net.

410 The gross and net jobs created presented in the evaluation are not attributed to proportion of SWRDA expenditure. The total

gross jobs created by the project is 5,187 and net jobs 2,034 (p.61 of the evaluation). These figures have been attributed according

to SWRDA proportion of total public sector and Millennium Commission funding (17.1%).

411 Includes public and Millennium Commission funding, excludes loans, donations and private sector funding.

412 The estimate of future potential jobs for Physical regeneration study is based on programme management data for the expected

lifetime outputs. As a result of this approach the results presented may lead to an underestimate of impact as some of these figures

have already been attributed between public sector funders, only includes direct jobs created, excluding indirect jobs created; and

includes high estimates of expenditure from other public and private sector.

In addition to this, in some instances, forecast outputs based on programme management data will already have been apportioned

according to SWRDA expenditure. Therefore, it is likely that the net forecast figures contained in this Regional Annex - displayed on

attributed basis - will represent a further underestimate for some projects.


Additional outputs have also been achieved by two interventions that focused on the regeneration of thelocal area. These evaluations measured the net economic impact on the sub-region, and as such havebeen excluded from the regional analysis above.

413As shown in Table 244 these two interventions have

almost generated 250 net additional jobs in Bristol and Cornwall. At a regional level the net additionalimpact is likely to be lower as displacement of employment and workers is considered at larger spatialscale, which would be partially offset by greater knock-on, or multiplier impacts.

Table 244: Gross and net outputs (achieved) from SWRDA’s sub-regional regeneration throughphysical infrastructure interventions (2002/03-2006/07)

Sub-region Gross jobs

created /

safeguarded

Net jobs created

/ safeguarded

Gross

businesses

created

Private sector

leveraged (£m)

Temple Quay Greater Bristol 6,200 135414

- 261

NMMC Cornwall 193 113415

1 22.6


The overall additionality of the jobs created and safeguarded from SWRDA’s place interventions is 60%,and net additionality of businesses created is 90%. Both of these figures exceed the national RDAaverage of 45% and 50%, respectively.

Table 245 summarises the impact on GVA (both achieved and future potential) of SWRDA’s physicalregeneration interventions. The total net achieved annual GVA contribution of physical regenerationinterventions is £120.5m. The total achieved and future potential annual GVA estimate is £140.3m. Aswith any forecasts, these estimates of future potential GVA are subject to some uncertainty, and not all ofthese estimates have been discounted, nor have constant prices been applied.

Table 245: Outcomes from SWRDA’s physical regeneration interventions (2002/03-2006/07)


(£m)

Achieved GVA(annual, £m)

Achieved GVA(cumulative, £m)

Achieved & futurepotential GVA (annual,

£m)

Capital projects – employment land and premises

Sites and premises EIR:Workspace

59.6 11.2 - 45.7


Sites and premises EIR:Transport

9.6 40.1 - 41.1

Sites and premises EIR:Community

5.5 0.1 - 0.1

Promoting impact / culture and tourism

Sites and Premises –Tourism / Cultural

46.3 8.9 - 18.5

Eden Project416

11.0 17.6 134.1 -


413 The leveraged funding has been retained in the regional level analysis as net adjustments for spatial level analysis have not

been applied.

414The net jobs created in Central Bristol is 815. These are total net impacts of the project, and have not be directly attributed to

SWRDA.

415 This is the net estimate for Cornwall, the net estimate for Falmouth is 203 net jobs created.

416 The GVA result is for the South West region. The GVA estimates in the evaluation are not attributed to SWRDA. Therefore,

attributed SWRDA figures have been calculated by multiplying GVA from total project by SWRDA proportion of public sector costs

(37%).



(£m)

Achieved GVA(annual, £m)

Achieved GVA(cumulative, £m)

Achieved & futurepotential GVA (annual,

£m)

Physical RegenerationEIR

95.5 3.4 - 34.9417

Rural Renaissance 16.6 39.2 - -

Total 244.1 120.5 - 140.3


In addition to the results presented in Table 245 above, NMMC generated an annual GVA impact of £7min Cornwall and the Physical Regeneration EIR also estimated net cumulative investment by businessesof £2.8m in the region.

SWRDA’s physical regeneration projects generate a number of additional qualitative outputs that are notalways captured in estimates of GVA. Regeneration projects that address issues of social exclusion andphysically depressed areas can result in increased community cohesion and confidence in the local area.Many also achieve improved environmental outcomes, for example remediation of Mineral Tramwaysturned former mine sites into recreational tracks, and the iconic Eden project has successfully promotededucation and awareness raising of environmental sustainability.

In addition, SWRDA role in these projects also generates strategic impact by collaborating and influencethe behaviour of key stakeholders, as outlined below. The NAO IPA specific noted SWRDA’s strong, welldeserved, reputation in respect of major capital funded regeneration and physical developmentprojects.

418


Leading development of regional strategy: SWRDA led the development of the South WestSustainable Communities plan, titled The Way Ahead, which articulates how the region will respond tothe national agenda on Sustainable Communities. A strategic and regional approach is necessary toaddress variety of socioeconomic issues that transcend local authority boundaries such as populationgrowth, housing affordability and supply, peripherality and strategic transport links. The evaluation ofThe Way Ahead found that SWRDA demonstrated strong regional lobbying capacity, and enabledstrong engagement between key central government infrastructure providers, private developerinterests and local authority planning and regeneration departments. This has helped to bring aboutmore debate and positive attitudes towards economic growth across the region and has led tosuccessful negotiations with Treasury and DfT to establish the UK’s first regional infrastructure fund.

Improved quality of regeneration projects: SWRDA’s involvement in regeneration projects has helpedto improve the quality and mix of outputs achieved. For example private developers initially planned todevelop leisure facilities at Gloucester Docks in pursuit of the potentially high returns. SWRDAstepped in to provide funding support and help overcome planning impasse which had delayed anyregeneration of the derelict Docks area. The Agency’s involvement in the project accelerated thedevelopment of a better quality and blend of outputs which is now a mixed use development includinghousing units and some ancillary retail. Without SWRDA involvement the ‘place’ making aspect of thisregeneration project would not have been achieved.

Source: SWRDA

Value for money

Table 246 summarises the GVA to cost ratio of SWRDA’s physical regeneration interventions.

417 This figure has been calculated based on estimate presented in evaluation of 866 future potential jobs, multiplied by the average

GVA per worker of £40,315.

418 National Audit Office 2006, Independent Performance Assessment: South West Regional Development Agency, p.4


Table 246: Achieved GVA to cost ratios from SWRDA’s regeneration through physicalinfrastructure interventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Achieved GVA

(annual):cost ratio

Achieved GVA

(cumulative):cost

ratio

Future achieved &

potential GVA

(annual):cost ratio

Brining land back into use

Sites and premises EIR:

Workspace59.6 0.3 - 1.1

Public realm / other infrastructure (including transport and community)


Transport9.6 4.2 - 4.3


Community5.5 0.02 - 0.02

Promoting image, events, tourism

National Maritime

Museum of Cornwall7.7 0.9

a- -

Sites and Premises –

Tourism / Cultural46.3 0.3 - 0.6

Eden Project 11.0 1.6 7.5:1 -


Physical Regeneration

EIR95.5 0.1 - -

Rural Renaissance 16.6 1.5 - -

Total 251.8 0.8419

- 1.1


Note: This figure is calculated based on the expenditure and annual GVA figures stated above.

The annual achieved GVA to cost ratio for SWRDA’s physical regeneration interventions is 0.8:1, whichindicates that on average, investment costs would be covered within two years. The GVA returns reflectthe long-term nature of regeneration and capital investments. At the time of evaluation many of theseinterventions were at the beginning of their lifecycle and are yet to reach the stage where economicimpacts will be generated. For the estimates of future potential GVA provided by the Sites and PremisesEIR, the GVA to cost ratio increases to 0.9:1. These are short to medium term forecasts and may notcapture the full lifetime impact of these interventions.

The overall annual achieved GVA to cost ratio of 0.8 for SWRDA’s place interventions, slightly higherthan the RDA average of 0.7:1. At a sub-theme level there are a number of interventions that exceed theRDA national average, including:

Transport: the returns of SWRDA’s Sites and premises EIR: Transport intervention is 14 times higherthan the RDA national average of 0.3, however the latter also includes public realm and communityinfrastructure projects;

Promoting image and tourism: The majority of SWRDA’s tourism interventions also exceed the nationalRDA average of 0.5:1, with the exception of the tourism projects evaluated by the Sites and premisesEIR.

419 Net expenditure figures stated in the evaluations are used to calculate the return on investment, which are Physical regeneration

£29.0m and Sites and Premises £99.7m.


Cross-cutting regeneration initiatives: the 1.5:1 annual GVA to cost ratio of Rural Renaissance exceedsthe RDA national average of 0.5. This is likely to reflect the inclusion of business and people interventionsin the Rural Renaissance intervention.

On the other hand, a number of interventions are lower than the national average, most notably PhysicalRegeneration and Sites and premises EIR: Workspace, which both make up a significant proportion ofexpenditure.

Table 247 summarises one measure of the value for money of SWRDA’s interventions to promoteregeneration through physical infrastructure, i.e. cost per achieved and future potential net job.

Table 247: Cost per net job (achieved and future potential) from SWRDA’s regeneration throughphysical infrastructure (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Achieved

cost per net

job (£)

Future

potential

cost per net

job (£’000)

Achieved cost per

net business

created (£)

Leverage ratio


S&P: Workspace 59.6 141,000 38,500 1.27 m 0.7

Public realm / other infrastructure (including transport and community)

S&P: Transport 9.6 12,000 11,700 9.6m 3.3

S&P: Community 5.5 - - 5.2m 0.2

Promoting image, events, tourism

S&P: Tourism /

Cultural

46.3 78,000 40,000 7.68m 0.9

Eden Project 11.0 23,800 - - 4.9420


Physical

regeneration

95.5 59,400 54,800 - -

Rural

Renaissance421

16.6 21,177 - - 1.5


In addition to the value for money indicators provided in the table above, the Physical Regeneration studyalso estimated private sector leverage ratio of 22.9:1 over the lifetime of interventions, which includesfuture potential leverage.

There is considerable variation in the value for money of these interventions, from £12,000 per netachieved job for transport interventions up to £141,000 for workspace interventions. Interventions havelower costs per job for public realm and other infrastructure (£118,945), promoting image, events andtourism (£79,133) and cross-cutting interventions (£79,514). However, bringing land back into useevaluation exceeds the national average of £42,101 reflecting the number of interventions evaluated thatwere at the beginning the development lifecycle.

420 The leverage ratio is calculated on £17.93m of SWRDA expenditure, which includes expenditure outside of the relevant period,

as a proportion of total public sector (£48.47m) and Millennium Commission (£56.37m) funding Private sector loans (£16.8m),

donations (£9.7m) and other private (£2.7) funding are not included.

421 Unit costs for Rural Renaissance have been calculated based on net expenditure of £25.9m, 1,223 net jobs created and £39.2m

of additional GVA.



Table 248 summarises the performance against objectives of SWRDA’s interventions to promoteregeneration through physical infrastructure. All of the evaluations of individual projects provide anassessment of performance against objectives and / or rationale for intervention. All of these interventionsthat provide an assessment, have met or largely met their objectives. The evaluation of the Eden projectnotes that it has exceeded initial targets for visitor numbers, and has achieved its core objectives ofbecoming a world class visitor destination and developing range of educational programmes.

In terms of expenditure, it has not been possible to assess the objectives of the majority of activitieswhich are covered by the Physical Regeneration and Sites and Premises Economic Impact Reviews. Asstated above these two studies cover multiple individual projects, and as such it is not possible to inferthe performance of sampled case studies to the total population of projects. The Way Ahead is an interimevaluation, which notes that the Sustainable Communities Plan and associated interventions have begunto make progress in achieving objectives, but is not able to provide definitive assessment againstobjectives.

Table 248: Performance against objectives from SWRDA’s regeneration through physicalinfrastructure (2002/03-2006/07)

Expenditure

covered by

evaluations (£m)


The Eden Project 11.0 Exceeded

Rural Renaissance 16.6 Met

Creating Excellence 2.5 Met

Temple Quay 1.9 Met

National Maritime Museum of Cornwall 7.7 Met

Sites and Premises 167.7 n/a

The Way Ahead 2.6 n/a

Physical Regeneration 95.5 n/a



Rationale

Over the past 10 years, the South West has achieved above national average rates of economic activityand employment, and has historically had the lowest unemployment rate of all the regions. Underneaththis overall economic activity, skill levels in the South West vary considerably across the region, withsome areas reporting relatively low levels of educational attainment. Spatially, this tends to correspondwith places where multiple deprivation is high. The key issues that the Agency has sought to addressinclude:

quality and level of employment;

under utilisation of graduate skills;

attracting and retaining higher levels of skills in the region; and

inter-regional disparity in skills levels.

In response to these challenges there is a strong rationale for the RDA to support the development of theskills and employability of the workforce to increase the region's productivity and help close the gap withthe national average. The key market failure issues identified by evaluations include:


individuals may have limited access to finance training, or may lack sufficient information about thepotential returns resulting in a sub-optimal level of investment in education and training;

firms may be reluctant to fund investment in skills and training due to the risk that the individuals mayleave, and that individuals may not want to meet the cost of workplace training if there is no demand,and hence return for these skills outside the firm.

One project evaluated sought to achieve equity objectives of increasing employment of older workers(over 45) by providing employment support and addressing employers’ perceptions and recruitmentpractices.

There are seven evaluations422

that provide evidence of the impact of SWRDA’s people and skillsactivities,

423as set out in Table 249 which cover £40.1m of expenditure. This represents around 40% of

SWRDA expenditure between 2002/03 and 2006/07 that has been classified as people and skills. Theremaining evaluated skills interventions are included in business, place and other expenditure. Skills andtraining interventions were implemented in the marine, advanced engineering, food and drink, andaerospace in order to promote the productivity of priority sectors.

Table 249: Summary of SWRDA’s people and skills interventions


covered by

evaluations

(£m)

Matching people to jobs (individual

skills development)

Skills EIR: Skills development for individuals

South West Opportunities for Older People (SWOOP)

2.0

0.6

Skills workforce development Skills EIR: Skills development for firms

Advanced Engineering Skills

11.0

2.9

Education infrastructure

development

Skills EIR: Infrastructure

Combined Universities in Cornwall

Genesis – Somerset Sustainable Construction Centre

Relocation of Gloucester FE College

6.5

14.7

1.2

1.1

Other Strengthening Community Foundations 0.1

Total 40.1


The people and skills interventions have been implemented in line with the 2003 - 2006 Corporate Planobjectives:

improve workplace skills and learning, deliver a coherent skills development framework;

raise individual’s aspirations and skills for work;

encourage more small business and social enterprise in disadvantaged areas; and

ensure there is equality of access to work, training and business advice.

422 Skills and Learning EIR provides three estimates of sub-theme impact, therefore as shown in Table there are a total of nine

estimates of impact.

423 This figure does not match the total shown in coverage analysis in

Table as some of the activities in these evaluations will cover business or place spend, and some of the evaluated people

expenditure is contained in business, people or other evaluations.


Impact

Table 250 summarises the relevant expenditure and key gross outputs achieved through SWRDA’speople and skills interventions. The main outputs are jobs created / safeguarded, skills assists, peopleassisted into employment and businesses assists.

Table 250: Gross achieved outputs from SWRDA’s people and skills interventions(2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Gross jobs

created/

safeguarded

Gross skills

assist

Gross people

assisted into

employment

Gross business

assists


Skills EIR:

Individual skills

support

2.0 - 1,944 - 638

SWOOP 0.6 - 137 416 368


Skills EIR:

Skills

development

for firms

11.0 - 22,653 52 4,862

AESP 2.9 116 4,296 - 45

Supporting the development of educational infrastructure

Skills EIR:

Infrastructure

6.5 - 8,146 - 302

Gloscat 1.1 427 - - -

Genesis 1.2 - 74 - -

CUC424

14.7 173 387 - -

Other people interventions

Strengthening

Community

Foundations

0.1 - 42 - -

Total 40.1 716 37,679 468 6,215


The net outputs of SWRDA’s people and skills interventions are summarised in Table 251 below.Evaluations have focused on quantified outputs that lead to increased economic activities, which include1,861 net additional jobs created/ safeguarded and 6,909 net additional skills assists.

424 The evaluation did not attribute the figures to SWRDA. Therefore, this has been calculated by multiplying the GVA analysis by

proportion of SWRDA expenditure 12%. The regional outputs for the total project are 1,442 gross jobs created / safeguarded of

which 1,291 net.


Table 251: Net achieved outputs from SWRDA’s people and skills interventions (2002/03-2006/07)

Expenditure

covered by

evaluations (£m)

Net jobs created/

safeguarded

Future

potential

jobs created

/safeguarded

Net skills

assist

Net business

assists


Skills EIR: Individual

skills support

2.0 86 - - -

SWOOP 0.6 - - - -


Skills EIR: Skills

development for firms

11.0 1,398 - - -

AESP 2.9 72 - 2,365 28

Supporting the development educational infrastructure

Skills EIR:

Infrastructure

6.5 89 99 4,201 131

Gloscat425

1.1 47 - - -

Genesis 1.2 8 - - -

CUC426

14.7 155 - 318 -


Strengthening

Community

Foundations

0.1 6 - 25 -

Total 40.1 1,861 99 6,909 159


The average additionality of jobs created and safeguarded for SWRDA’s people and skills interventions is38%, and the average additionality of skills assists is 54%.

427There is wide variance in the additionality of

jobs created / safeguarded generated by people and skills interventions, from 11% for relocation ofGloucestershire College to 90% for Combined Universities in Cornwall. There does not appear to be aclear trend between the additionality of interventions in different sub-themes, and the analysis ofadditionality is limited by the fact that the Skills EIR, which covers a large proportion of expenditure, doesnot provide gross employment figures. There is much less variability in the additionality of skills assists.

The average additionality of jobs and skills assists generated by SWRDA’s people and skills interventionsare both lower than the average national RDA result of 48% and 62%, respectively. Again there isvariability between SWRDA additionality of outputs compared to the national average, with no clearpattern within the sub-themes.

Table 252 summarises the outcomes of SWRDA’s people and skills interventions. The total annual GVAis £88.1m. Future potential impacts have been estimated for the infrastructure projects evaluated by the

425 These figures have not been attributed to SWRDA.

426 The evaluation did not attribute the figures to SWRDA. Therefore, this has been calculated by multiplying the outputs by

proportion of SWRDA expenditure (12%). The regional outputs for the total project are 1,442 gross jobs created / safeguarded of

which 1,291 net.

427 These average additionality ratios are calculated only on interventions that provide an estimate of both gross and net outputs.


Skills EIR. Future potential impacts have not been estimated for the revenue projects which wouldgenerally be expected to generate the majority of impacts within one to three years.

Table 252: Outcomes (achieved) from SWRDA’s people and skills interventions (2002/03-2006/07)

Expenditure covered


Achieved GVA

(annual, £m)

Achieved GVA

(cumulative, £m)

Future potential

GVA (annual,

£m)


Skills EIR: Skills development

for individuals2.0 4.8 -

-


AESP 2.9 0.5 3.1 -


for firms11.0 67.5 -

-

Supporting the development educational infrastructure

Skills EIR: Infrastructure 6.5 9.0 - 9.1

Gloscat428

1.1 3.3 - -

CUC429

14.7 2.8 18.5 -


Strengthening Community

Foundations0.1 0.15 0.4

430 -

Total 38.3 88.1 - 9.1


In addition to the estimates summarised in Table 252 the evaluation of Genesis also estimated grossGVA of £220,000. As net calculation has not been included, this estimate has not been included in theabove estimate.

In addition to the quantitative outcomes of SWRDA’s people and skills interventions, a number ofstrategic and qualitative impacts have been achieved, as noted below.


Support skills development in priority sectors: SWRDA have responded to the skills needs of themarine and maritime industry, a priority sector for the region, by developing three centres of marinetraining excellence which provide all marine businesses with appropriate short courses, events orapprentices. This initiative was developed in response to a report commissioned by SWRDA to reviewthe skill needs for the sector. The training network is based on the need of the a ‘prime’ contractor andtheir suppliers. The training network has been regarded by stakeholders as an example of nationalbest practice which has exceeded expectations. Since the development of the network there has beenan increase in the number of local marine engineering apprentices and growth in employment atSunseeker, which is one of the UK largest exporters.


429 The evaluation did not attribute the figures to SWRDA. Therefore, this has been calculated by multiplying the GVA analysis by

proportion of SWRDA expenditure 12%.

430 This cumulative figure incorporates the one off GVA estimate of £200,000

431 The current South West Skills Strategy covers 2006 – 2009, and follows the South West Framework for Regional Employment

and Skills Action (FRESA) which was the previous key skills strategy document for the region.


Strategic role in addressing skills needs of the region: SWRDA’s interventions in skills developmenthave sought to complement the activities of the Learning and Skills Council, which is the primarypublic agency delivering skills programmes in the region, particularly for individuals. The RDA hasfocused its relatively limited resources in providing gap funding particularly with respect to businessinvestment in skills development, and in undertaking a strategic role to influence and align theresources of other relevant skills organisations in the region. This latter objective is undertakenthrough SWRDA's key role in the Regional Skills Partnership and through funding and guidingresearch and analysis to inform reviews of the South West Skills Strategy.

431

Source: SWRDA

Value for money

Table 253 summarises the GVA to cost ratios from SWRDA’s people and skills interventions. Theaggregate annual GVA to cost ratio is 2.3:1.

Table 253: Achieved GVA to cost ratios from SWRDA’s people and skills interventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Achieved GVA

(annual):cost ratio

Achieved GVA

(cumulative):cost

ratio

Future potential

GVA (annual):cost

ratio



for individuals2.0 2.3 -

-


AESP 2.9 0.2a

1.7432

-


for firms11.0 4.8 -

-


Skills EIR: Infrastructure 6.5 2.4 - 1.4

Gloscat433

1.1 3a

- -

CUC 14.7 0.2a

1.2a

-


Strengthening Community

Foundations0.1 1.5 4

a -

Total 38.3 2.3 - -


Notes: a) These GVA:cost ratios have been calculated by PwC based on the information in Table 252 above.

SWRDA’s people and skills interventions have demonstrated high returns compared with the average forRDAs of 0.9. The skills and workforce development intervention generated the highest returns, which issix times more than the RDA national average annual GVA of 0.4:1. This is partly due to the inclusion ofestimates of the additional productivity generated by skills and learning initiatives in SWRDA evaluationevidence, which is not included in the national RDA analysis.

432 Cumulative GVA: cost ratio assumes that benefits are sustainable for three years from the end of the project, and have been

discounted at a rate of 3.5% in line with Treasury Guidance.



Table 254 summarises the unit costs of SWRDA’s people and skills interventions. These figures are fromevaluation evidence where available, and have been calculated based on expenditure and outputinformation where not provided.

Table 254: Achieved cost per net output from SWRDA’s people and skills interventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)


job (£)

Cost per net skills assist

(£)


Skills EIR: Individual skills support 2.0 22,900 -


AESP 2.9 40,278a

1,226a

Skills EIR: Skills development for firms 11.0 7,900 -


Skills EIR: Infrastructure 6.5 41,900 1,595a

Genesis 1.2 - -

Gloscat 1.1 23,404a

-

CUC 14.7 94,839a

46,226a


Strengthening Community Foundations 0.1 19,500 4,700

Total 38.3 - -


Note: These unit costs have been calculated by PwC based on the information in Table 252 above. All other cost

ratios are from evaluations.

There is relatively wide variability in the unit costs of people and skills interventions. The unit costs ofeducational infrastructure projects are generally higher than interventions to matching people to skills andskills development for firms, which reflects the long-term nature of the infrastructure projects.

Almost all of the jobs generated by SWRDA’s people and skills interventions were delivered at a lowercost compared to national RDA average of £43,302. Interventions in the majority of sub-themes are alsodelivered more cheaply than the national RDA averages, matching people to jobs (£49,215), skills andworkforce development (£105,268) and other people interventions (£33,995). The cost per job ofsupporting the development of educational infrastructure varies compared to the national RDA average of£33,995.


Table 255 summarises the performance against objectives of SWRDA’s interventions in relation to peopleand skills. The majority of individual project evaluations provide an assessment of performance againstobjectives and / or rationale for intervention. All of these interventions, that provide an assessment, havemet or largely met their objectives.

In terms of expenditure, around 50% has not been assessed against objectives. As with the other EIR’s, itwas not possible to assess the performance of the multiple projects in the Skills and Learning EIR. TheSouth West Opportunities for Older People is an interim evaluation, and is will assess performanceagainst objectives in the final report.


Table 255: Performance against objectives from SWRDA’s regeneration through people and skillsinterventions (2002/03-2006/07)

Expenditure covered



Relocation of Gloucester FE College 1.1 Met

Advanced Engineering Skills 2.9 Largely met

Strengthening Community Foundations 0.1 Largely met

Combined Universities in Cornwall 14.7 Largely met

Genesis 1.2 Largely met

South West Opportunities for Older People 0.6 n/a

Skills and Learning EIR 19.4 n/a


Other SWRDA interventions

This section contains information on activities that could not be classified as specific business, people orplace interventions. These include Single Regeneration Budget (SRB) and regional research andinformation services.

SWRDA invested £55.2m in the SRB programme over the period 2002/03 to 2006/07434

. SRB involvedthe delivery of a diverse range of interventions spanning business, physical regeneration and people andskills, focused on specific geographical areas within the South West.

The rationale for SRB centred on the Government’s desire to tackle social exclusion and promote equalityof opportunity. The focus of support was on the most deprived communities in England, with the aim ofreducing the gap between these areas and the rest of England, and between different groups in society.Within the South West, the SRB programme focused on deprived areas attempting to address thepockets of deprivation within the region through a focus on skills and business support initiatives.

Impact

Table 256 summarises the net achieved outputs from the SRB programme, which has primarily resultedin jobs created / safeguarded, new businesses created, people assisted in skills development andbrownfield land remediation.

Table 256: Gross and net SRB outputs in the South West (2002/03-2006/07)

Jobs

created

Jobs

safeguarded

New

businesses

at 12

months

Brownfield

land (ha)

People

assisted in

skills

development

Businesses

assisted

Gross outputs 4,031 8,040 650 4,855 49,039 12,937

Net outputs 1,653 3,457 287 2,379 27,462 5,563


SWRDA has also invested £2.0m in regionally based research and information services to provide areliable, accurate and timely analysis. The RDA investment in providing such services ensures greatercost efficiency and consistency, compared to each regional public agency developing their own evidencebase. These activities have improved the quality and analysis of regional trends, however, due to thelack of direct market activity from these projects, not direct quantified economic outputs were generated.

434 Evaluation of the Single Regeneration Budget programme in six English Regions, August 2008.


The region significantly exceeded targets for the number of people receiving training and obtainingqualifications, the amount of land improved or reclaimed for development and the number of businessessurviving for one year. The region performed to target in terms of jobs created and safeguarded butsignificantly under-performed in terms of community enterprise start-ups.

The SRB meta-evaluation did not provide a quantitative assessment of the interventions’ net impact onGVA. An indication of the potential scale of the impact on GVA can be gleaned by considering thecontribution of the jobs created and safeguarded to GVA. Assuming that each job generated in the SouthWest contributes the average GVA per worker (£40,315), then this would imply that the SRB programmein the region will have added £206.0m to the South West economy over its existence. If the total GVAcontribution is divided over the four years of the programme, the annual GVA contribution would be£51.5m.

The evidence base assessed by the evaluation does highlight some qualitative outcomes from theinterventions in the South West. These indicate that there has been a positive outcome in improvingaccess for disadvantage people, reducing crime, drug abuse and community safety. Outcomes in relationto employment, education and skills appear to be more mixed. The evaluation concludes that partnershipworking and community engagement are considered to have been noteworthy achievements of the SRBprogrammes delivered in the region. Stakeholders felt the programme had been successful at developingand strengthening community ties and is considered to have fostered closer working relationshipsbetween various agencies, bringing together key partners from the public, private and voluntary sector.

Table 257 presents the performance against objectives of SWRDA’s other interventions, of which all havemet or largely met their objectives.

Table 257: Performance against objectives from SWRDA’s other interventions (2002/03-2006/07)

Expenditure covered by evaluations

(£m)

Performance against

objectives

ONS Regional Presence -435

Met

SRB 96.1 Largely met

Business Economy Module and Skills

Learning Intelligence Module

2.0 Largely met


National programmes

Besides its own interventions, SWRDA has been responsible for the management and delivery of nine ofthe ten national programmes which have been delivered within parameters closely defined by centralgovernment departments. Although the available evaluation evidence on national programmes does notdisaggregate gross outputs at a regional level, we have been able to estimate the likely employmentimpact of two of these programmes on the South West (this was undertaken from Business Link andManufacturing Advisory Service436). This has been done by dividing SWRDA spend on the programme bythe regional cost per job437 and then making allowances for displacement, leakage and multiplier effects.

In addition, SWRDA have also evaluated the impact of the Grants for R&D and the findings from theseevaluations have also been used to assist in assessing the impact of national programmes.

Table 258 summarises SWRDA’s spend in the relevant period on each of the national programmes andsummarises the estimated impacts where these are available. Three programmes have resulted in 3,475

435 Funding for ONS Regional Service is provided centrally before funding is allocated to the RDA’s, and as such is not counted as

direct RDA expenditure.

436 The interim evaluation of SW Manufacturing Advisory Service undertaken in 2005 did not find any employment impact as a result

of the intervention, therefore the national evaluation has been used to estimate the likely employment impact of the programme.

437 Based on the Office of National Statistics 2006 workplace GVA per worker for the South West of £ 40,315.


net additional jobs created / safeguarded. It is estimated that 245 future potential jobs may be created bythe Grants for R&D interventions which reflects the long-term nature of investment in research anddevelopment activities.

The Grants for R&D evaluation has estimated that SWRDA’s investment in the programme has generatednet additional annual GVA of £806,300, which indicates an annual return on investment of 0.3.

Table 258: Estimated impact of SWRDA’s spending on national programmes (2002/03 and2006/07)

438

National programme SWRDA spend –

(£m)

Net additional jobs Potential additional

jobs

Business Link 30.6 2,792 -

Grants for R&D 2.4 20 245

Manufacturing Advisory Service 5.2 663 -

Phoenix Fund 0.7 - -

Rural Development Programme for

England (& Sustainable Food and

Farming Strategy)

3.0 - -

Selective Finance for Investment 21.9 - -

Coalfields Programme 1.5 - -

Regional Tourist Board Support 3.7 - -

Market Town Initiative 5.8 - -

Total 38.2 3,475 245


438 The outputs for Grants for R&D have been derived from an evaluation of the programme within the region. All other outputs have

been estimated by applying the estimates from the national evaluations to the expenditure in the South West.


Yorkshire Forward

Overview

Since its inception in 1999 YF has spent approximately £2bn on a range of interventions designed,individually or collectively, to stimulate business development and competitiveness, promoteregeneration through physical infrastructure and enhance employability and skills.

This study focuses on the impact of the £1.2bn spent by YF between 2002/03 and 2006/07. Thisincludes expenditure on SRB of £331m but excludes spending on national programmes of £445m.

We have reviewed 33 evaluations covering spend of nearly £750 million by YF between 2002/03 and2006/07 (or 62.5% of the relevant expenditure of £1.2 bn).

Impact

Those projects that have been evaluated show that YF has generated significant outputs already439

:

– over 40,000 jobs have been created and safeguarded, of which 57% are estimated to be additionalat the regional level;


– just over 330 businesses have been created, of which 38% are estimated to be additional;

– over 350 hectares (ha) of land has been remediated, of which 49% are estimated to be additional;and

– over 74,000 net skills assists have been delivered, of which 55% are estimated to be additional.

Significant future potential outputs are also anticipated across intervention themes as schemes arecompleted although these estimates are more uncertain.

In addition to the impact of its project and programme spend, SAV is a key element of YF’s impact,particularly in terms of providing a strategic focus and leadership (Holbeck Urban Village), influencingand providing synergy amongst its partners and stakeholders (Graduates Yorkshire), improvinglinkages and partnership working (Directions Finningley), leveraging private sector investment (E-Business Unlimited), and co-ordinating responses to the regions challenges (Flood Response).

Value for money

The highest achieved net GVA return in the evaluation evidence is as a result of a businessintervention, with an achieved average return of 7.6 to 1. The lowest return is also from a businessintervention with an achieved average return of 0.6 to 1

440.


The interim nature of many evaluations means that many have not assessed performance againstobjectives. Of those which have made such an assessment most have produced a mixedperformance against their objectives.

439 The outputs listed relate only to those YF interventions for which both gross and net outputs are available to provide an estimateof additionality. They will, therefore, under-represent the Agency’s total outputs.

440 There are, however, significant future potential benefits associated with this project (Broadband Gap & NYnet).


Context

Overview of Yorkshire & the Humber

Yorkshire and Humber is the fifth largest region in England in terms of land area covering 15,512 sq kmwith a population of over 5 million people. It contains a highly diverse geography and culture including arural area the size of Northern Ireland, three National Parks, and 22 Local Authority Districts in fourfunctional sub regions. The region includes the cities of Bradford, Hull, Leeds, Sheffield and York, awealth of sizeable towns, more remote rural communities, and coastal towns and resorts.

This diversity is now beginning to be matched in the region’s economic structure. Over the last decade,the Yorkshire and Humber region has made significant economic progress. From a largely traditionalindustrial base comprised of coal, steel and textile industries, the region has restructured into a dynamicdiversified economy comprising over 300,000 businesses and an estimated 2,620,000 employees acrossa variety of industrial sectors. Between 2002 and 2007, regional GVA increased by 21%, to £82.1bn,marginally above the UK’s trend growth over the same period. The region’s infrastructure is pivotal to thiseconomic growth and includes 3,700 km of motorways and major roads, five ports, high speed railwaysand easy access to six airports.

Over the 5 year period from 2001 to 2006, the region’s employment grew by 5.5%, above the Englishaverage of 3%. The main catalyst for this expansion has been growth in financial and business servicesand public services. In 2006, these sectors employed approximately 36% of the region’s workforce. Thishas been augmented by the emergence of new growth sectors in creative and digital technologies,environmental goods and services, and advanced engineering whilst the region’s construction sector,underpinned by the UK property boom, has enjoyed strong growth. Though manufacturing industry is indecline, it continues to be a significant employer accounting for 14% of the region’s workforce. The sectoris increasingly characterised by companies producing high value-added products for domestic and globalmarkets. Specialist steel companies in Sheffield exemplify the potential that exists within the region tocommercialise knowledge.

However, this regional prosperity masks the entrenched problems facing the region. GVA per employeein 2008 stands at approximately £32,100 compared to a UK average of £35,900 . Looking forward overthe next 5 years, without significant intervention, this labour productivity gap is unlikely to close asregional forecasts anticipate baseline GVA per employee growth at 1.9% below the UK average. Skilllevels too continue to fall behind the English average. In 2007, the proportion of the region’s working-agepopulation qualified to NVQ level 4+ was 4.5% below the English average, whilst the percentage of theregion’s working-age population with no qualifications was 14.5%, 1.6% above the number recorded inEngland. Yorkshire and Humber’s productivity and employment potential is also inhibited by theenterprise and innovation gaps that exist between the regional and UK averages. In 2006 the VATregistration rate per 10,000 residents was 31 compared to a UK average of 37, whilst as a proportion ofGVA, investment in business research continues to fall short of the English average.

The region exhibits marked contrasts in the economic fortunes of its sub-regions and diverse localities.The decline of traditional industry has left a legacy of uneven development, which continues to definesocial and economic outcomes within our communities. The Index of Deprivation 2007 shows that 17% ofYorkshire Humber’s Super Output Areas were in the 10% most deprived in England and 28% are in the20% most deprived. Deprivation, low skills and enterprise levels, and high levels of worklessness andincapacity benefit claimants are concentrated within parts of South Yorkshire such as Rotherham andBarnsley and the inner-city suburbs of the region’s large cities such as Leeds and Sheffield.

Most recently, the impacts of the credit crunch and economic slowdown are a major cause for concern. Asignificant proportion of the region’s economic strengths lie in the financial services, manufacturing andproperty sectors, all of which have been greatly affected by the recession. ILO unemployment hasrecently increased and in September 2008 stood at 6.8%, an increase of 1.5% on the previous year. Asthe economic slowdown deepens, the regional challenge over the short term will be to focus support onbusiness to foster economic resilience and competitiveness and assist individuals through the downturn.Yorkshire Forward’s Purpose and strategy.


YF’s purpose and strategy

As the Regional Development Agency, Yorkshire Forward is tasked with working with partners across theregion to meet these challenges, improve the economy and respond to economic shocks. The Agencyhas produced the Regional Economic Strategy (RES), a ten year blueprint that outlines the region’sshared vision to “be a great place to live, work and do business, that fully benefits from a prosperous andsustainable economy”.

YF has led the development of three Regional Economic Strategies (RESs). The first RES, ’AdvancingTogether towards a World Class Economy’, set out a vision for the region: ‘to create a world-class,prosperous sustainable economy’, for the period 2000 to 2010. In meeting this vision, three key aimswere identified:

releasing and enhancing the potential of all Yorkshire and Humber’s people to achieve a healthy,learning region and social inclusion;

growing existing and new businesses to achieve high and stable levels of economic growth and jobs;and

utilising the full potential of Yorkshire and Humber’s physical and cultural assets and conserving andenhancing its environment to achieve a balanced, sustainable economy.

In addition, to fulfil these aims the first RES had six key strategic objectives:

grow the region’s businesses in key economic sectors to create a radical improvement in theircompetitiveness and contribution to the region’s wealth;

achieve higher business birth and survival rates to create a radical improvement in new, competitivebusinesses that last;

attract and retain more investment by providing the right product for investors and more effectivemarketing of the region;

radically improve the development and application of education, learning and skills, particularly highquality vocational skills;

implement targeted community-based regeneration programmes to improve the living standards of theregions most deprived, ethnic, young and excluded communities in urban and rural areas includingthe former coalfields; and

get the best out of the region’s physical assets and conserve and enhance its environmental assets.

The second RES set out the direction for the period from 2003 to 2012. It retained the strategic aims andobjectives set out in the first RES but provided greater focus on linking rationale with action andemphasised that the strategy is for the region (not just the Agency). The most fundamental change in thesecond RES was the recognition that sustainability was an overarching concept and a cross-cuttingtheme for all future actions.

The most recent RES, which covers the period from 2006 to 2015, is based on three core aims: to realisethe potential of all the region’s people; grow existing and new businesses; and protect, enhance andutilise the region’s environment. Six key objectives translate these aims into action on the ground:

more businesses that last;

competitive businesses;

skilled people - benefiting business;

connecting people to good jobs;


enhanced transport, infrastructure and the environment; and

stronger cities, towns and rural communities.

Yorkshire Forward receives Government and EU funds to help deliver key elements of the RES, aligningits interventions to meet the RES strategic objectives. As a business-led, non-political, objectiveorganisation with a long-term Regional Economic Strategy, Yorkshire Forward is able to provide strategicleadership that galvanises the public and private sector to invest around a set of clear and distincteconomic priorities tailored to the different needs of the region. The Agency is geared up to respondswiftly and effectively to economic shocks that cross administrative and policy boundaries and that have adifferential impact across the country.

Yorkshire Forward’s Corporate Plan sets out how the organisation will undertake this role and contributeto the region’s economic goals as set out in the RES. The current Corporate Plan covers the three yearperiod 2008-2011 and adopts a stronger programme approach to delivery. It sets out five CorporateObjectives to help deliver the RES:

championing RES delivery;

helping people to access good jobs, skills and transport;

helping businesses to start-up, grow and compete through innovation;

regenerating cities, towns and rural communities; and

improving Yorkshire Forward’s capacity.

In order to deliver the corporate plan, a series of 11 Policy Products Ranges (PPRs) have beendeveloped to provide the rationale and basis for commissioning all of Yorkshire Forward’s policy priorities:skills, transport, economic inclusion, competitiveness, enterprise/access to finance, internationalbusiness, urban renaissance, rural renaissance, lower carbon economy, property, marketing the regionthrough tourism and major events.

The PPRs are delivered through Geographic Programmes which are being developed with each of theregion’s local authorities and will set out how and where the 11 PPRs will be delivered ensuring that thereis full integration with other investments. In total, 15 Geographic Programmes will be developed eachunderpinned by strong economic analysis in the form of an agreed economic masterplan. EachGeographic Programme will comprise three main elements:

the Policy Product Ranges that are to be delivered through a Local Authority contract;

those Policy Product Ranges that will be delivered regionally, but will have a local impact; and

investment within a locality that does not require any single-pot investment. The initial GeographicProgrammes will cover the period 2009/10 to 2013/14 with five-year rolling targets and annualisedallocations. The contractual relationship with Local Authorities will be primarily in the areas of Urbanand Rural Renaissance, Property and more limited Skills and Inclusion Policy Product Ranges. Allother Policy Product Ranges will be contracted regionally.

YF’s core outputs within the current corporate plan cover: jobs created or safeguarded; people assisted toget a job; new businesses created and surviving 12 months; businesses assisted to improve theirperformance; businesses assisted via collaboration with the UK knowledge base; public and privateregeneration investment levered; hectares of brownfield land reclaimed and redeveloped; and peopleassisted in their skills development (skills assists). These core outputs, together with the organisation ofwork, form the context for evaluating YF’s activity and impact.

YF’s profile

Table 259 provides an analysis of YF’s overall spending since its establishment. This expenditure isbroken down into various categories namely programme/project expenditure by year, administrative


spend and expenditure on ten national programmes. Programme/project spend is also broken downacross the three themes of business, place, people. In addition, other denotes an intervention where it isnot possible to categorise the programme expenditure uniquely by business, place or people, or wherethe intervention cuts across two or more of these categories

The Agency’s relevant expenditure for this report (i.e. the project and programme expenditure by YF inthe period between 2002/2003 and 2006/2007 other than on national programmes and administrationspend) is highlighted in Table 259 below. It is interesting to note the change in the distribution ofexpenditure over the relevant period. Business interventions account for an increasing proportion of totalspend over the relevant period, while other interventions have accounted for a decreasing proportion. Theproportion of spend accounted for by place and people interventions has fluctuated quite significantlyfrom year to year over the relevant period.

Since its establishment, YF has spent £1,982.3m on interventions (rather than administration), of which£1,171.2m was spent on YF (rather than national) interventions in the ‘relevant period’ and is, thus, theprimary focus of this report (see shaded area in Table 259).

Table 259: Analysis of YF spend by year and by category of expenditure (£m)


programmes

Admin Total

1999/2000 - - 3.5 100.0 38.7 11.9 154.1

2000/2001 - - 5.1 111.7 33.9 14.2 164.9

2001/2002 0.5 11.7 7.0 126.7 69.9 14.6 230.4

2002/2003 21.6 65.1 28.2 116.2 44.5 16.3 291.9

2003/2004 45.2 38.9 36.2 94.4 53.3 19.1 287.1

2004/2005 66.7 69.7 62.8 64.2 56.8 17.1 337.3

2005/2006 61.0 85.9 41.4 38.6 70.2 19.3 316.4

2006/2007 77.8 76.1 52.6 28.6 77.6 18.6 331.3

Total 272.8 347.4 236.8 680.4 444.9 131.1 2,113.4

Source: PwC analysis of Yorkshire Forward data

Overall, YF has usable evaluation evidence covering 64% (£747.1m) of its relevant expenditure based on33 evaluations. As Table 260 below indicates, the YF evaluation evidence provided greater than 60%coverage across the business, place, people and other intervention categories, therefore providing arobust evidence base upon which YF’s impact can be assessed.

Table 260: Analysis of YF relevant spend covered by IEF compliant evaluations (2002/03-2006/07)

Total

Spend covered by

evaluations £m)

% of spend covered by

evaluations

(£m)

Number of IEF

compliant evaluations

Business 148.8 55 12

Place 231.5 67 11

People 31 13 7

Other 335.9 49 3

Total 747.1 64 33

Source: PwC analysis based on YF evaluation evidence

It should be noted that the objectives and outputs/outcomes of YF’s interventions often span a number ofintervention categories and sub-themes. For the purposes of analysis, however, each intervention, andits associated outputs/outcomes, has been classified into the most appropriate intervention category and


sub-theme on the basis of its objectives and/or the proportion of overall spend allocated to a particularsub-theme

Key findings

Before setting out details of the impact of YF’s spending on each type of intervention, this section drawstogether the key findings from the evaluation evidence base for YF as a whole in relation to two keyobjectives of this study, namely to summarise the available evidence of the impact of spending by YF, atboth regional and national level, and to assess YF’s achievements against the objectives of both the RESand its Corporate Plan (which have changed over time) and each specific programme and project.Consequently, consideration is given to three key questions:

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

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

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

Impact

The majority of YF’s evaluations covered in this report have estimated net outputs on the basis of grossoutputs. These have been presented as outputs achieved and future potential outputs. However, itshould be noted that Table 261 includes outputs where both gross and net output estimates have beenprovided from the evaluation evidence over the period 2002/03-2006/07. The ‘core’ gross and net outputsare summarised in Table 261.

Table 261: Gross and net attributable YF outputs441

(2002/03-2006/07)

Jobs created/

safeguarded

Businesses

created

Businesses

supported

Brownfield

land (ha)

Skills assist


Gross outputs achieved 13,747 297 - - -

Net outputs achieved 11,686 104 - - -

Additionality % achieved 85442

35 - - -

Future potential gross outputs 9,513 225 - - -

Future potential net outputs 6,617 77 - - -

Additionality % future potential 70 34 - - -


Gross outputs achieved 1,473 36 - - -

Net outputs achieved 839 23 - - -

Additionality % achieved 57 65 - - -

Future potential gross outputs 20,418 9 - - -

Future potential net outputs 11,285 6 - - -

Additionality % future potential 55 64 - - -

441 The dashes in this Table and in all subsequent Tables relate to instances where outputs have either not been estimates or where

it has not been relevant to estimate outputs.

442 This is largely attributable to the clusters initiative which accounted for almost 85% of net attributable jobs created / safeguarded

for business interventions


Jobs created/

safeguarded

Businesses

created

Businesses

supported

Brownfield

land (ha)

Skills assist

People and skills

Gross outputs achieved 24 3 1,414 - 2,745

Net outputs achieved 9 1 375 - 733

Additionality % achieved 39 42 27 - 27

Future potential gross outputs 68 2 283 - 1,197

Future potential net outputs 5 1 75 - 245

Additionality % future potential 7 42 27 - 20

Other

Gross outputs achieved 24,847 - 712 353 71,600

Net outputs achieved 10,356 - 313 173 40,096

Additionality % achieved 42 - 44 49 56

Future potential gross outputs - - - - -

Future potential net outputs - - - - -

Additionality % future potential - - - - -

Total



Additionality % achieved 57 38 32 49 55

Future potential gross outputs 29,999 236 283 - 1,197

Future potential net outputs 17,907 83 75 - 245

Additionality % future potential 60 35 27 - 20


YF’s spending has created/safeguarded jobs, assisted and helped to create new businesses, assistedpeople in skills development and remediated brownfield land. A large proportion of these outputs havealready been achieved. However, a number of outputs are potentially to be achieved in the future.These are predominantly related to jobs created by physical infrastructure investments

443, but also

include business interventions444

and people interventions445

. All of these future outputs are subject tovarying degrees of uncertainty and should, as such, be treated with caution.

The level of additionality resulting from YF’s business and regeneration interventions varies acrossintervention and output type, but is generally relatively high compared with YF’s people and skillsinterventions for jobs created/safeguarded. The additionality of business interventions in terms ofachieved business creation is also generally lower than that of regeneration and people and skillsinterventions and is similar to the additionality showed for the future potential businesses created.

Comparison of the additionality of YF’s interventions with the national findings for achieved outputs showsa mixed picture. Regeneration interventions compare favourably with regard to jobs created /safeguarded (57% compared to 45%) and was the same with regard to business created (65%).

443 For example, Bradford Centre Regeneration and Holbeck Urban Village

444 For example, E-Business Unlimited, South Yorkshire Design Works and Investment in Cluster Initiatives

445 For example, Graduates Yorkshire and Directions Finningley


Business interventions also compared favourably with regard to jobs created / safeguarded (85%compared to 48%), while the additionality recorded for business creation was slightly lower than thenational average (35% compared to 40%). People and skills interventions compared less favourably tothe national average with regard to jobs created / safeguarded (39% compared to 48%), businesscreation (42% compared to 82%) and skills assists (27% compared to 62%).

It has not been possible to provide a cumulative figure for the GVA (achieved and future potential) inrelation to all of these interventions due to differences across individual evaluations. Not all theevaluations reviewed assessed the outcomes of the intervention in terms of the impact on GVA. Forthose evaluations which did take GVA into consideration, the basis of these estimates is ofteninconsistent across interventions. There is, therefore, no aggregate assessment of net outcomes.

However, in Table 262 we set out those measures that have been produced in order to demonstrate therange of outcomes from the limited number of evaluations with GVA estimates.

Table 262: Attributable outcomes from the evaluation of YF interventions (2002/03-2006/07)

Expenditure AchievedGVA

(annual,£m)

Futurepotential

GVA(annual,

£m)

AchievedGVA

(cumulative,£m)

Futurepotential

GVA(cumulative,

£m)

Achieved& futurepotential

GVA(cumulative,

£m)

Business competitiveness & development446

E-Business Unlimited 6.0 - - 16.7 - 16.7

South YorkshireDesign Works

1.0 - - 7.6 - 7.6

South YorkshireGeneric andIntermediate Start UpProgramme

3.9 - - 15.3 - 15.3

York and NorthYorkshire BusinessSupport andEnterpriseProgramme

3.9 - - 12.0 - 12.0

Sector / Clustersupport

92.4 - - 498.0 - 498.0

Broadband Gap &NYnet

6.7 - - 3.2 14.4 - 89.7 17.6 - 92.9

Centres of IndustrialCollaboration

9.1 - - 13.7 - 13.7

Inward InvestmentPromotion

12.4 - - 20.5 - 20.5

SustainableConsumption /Production

3.8 - - 9.3 - 9.3

Regeneration through physical infrastructure447

Bradford CentreRegeneration

17.8 - 48.0 - - -

Holbeck UrbanVillage

26.2 - 152.9 - - -

446 The E-Business Unlimited, industrial Research and Development Award, Science City York and Targeted Export Support

Scheme Programmes did not report GVA outcomes

447 The Sheffield One Urban Regeneration, Stainborough Park, Hull Quays, Renaissance South Yorkshire, Renaissance Market

Towns, Modernising Rural Delivery and Hull city Bid Programmes did not report GVA outcomes


Expenditure AchievedGVA

(annual,£m)

Futurepotential

GVA(annual,

£m)

AchievedGVA

(cumulative,£m)

Futurepotential

GVA(cumulative,

£m)

Achieved& futurepotential

GVA(cumulative,

£m)

Renaissance Townsand Cities

96.8 - 188.8 - - -

Rail Rolling Stock 5.9 7.5 7.5 - - -

People & skills448

Graduates Yorkshire 1.5 2.4 2.4 - - -

Directions Finningley 5.7 - - - 4.6 - 5.3 4.6 - 5.3

University CentreBarnsley

2.0 - 1.0 0.5 - -


Finally, besides the impact of its project and programme spend, Strategic Added Value is a key elementof YF’s impact, as illustrated in Box 1.

YF’s Strategic Added Value

Besides the impact of its project and programme spend, YF also influences its partners’ andstakeholders’ behaviour and performance in other ways including strategic influence, leverage andsynergy. This is demonstrated by the following examples :

Yorkshire Forward showed strategic leadership and influence; playing a major role in shaping theaims and direction of the E-business Unlimited project. Again, they provided the vision in the HolbeckUrban Village project which meant that the project developed coherently

In it’s flood response, Yorkshire Forward used its leadership and understanding of the economy andbusiness agenda to influence others to act. Yorkshire Forward’s flexible use of the Agency’sresources sent a clear message of commitment to the business community. The effectiveness of theexternal communication was key to success and is good practice that will be applied in future rapidresponse situations.

Yorkshire Forward established the Renaissance Towns and Cities (RTC) programme in 2001 as anew way to deliver urban regeneration; capture economic growth; create quality sustainable placeswhere people want to live and work and where businesses want to invest. The visionary approachadopted within renaissance is firmly based on longer-term economic goals. Whilst the majority ofprojects are at an early stage in terms of economic benefits, the programme has delivered significantSAV; particularly in terms of engagement, clear leadership and influence. Yorkshire Forward createdsynergy in the Clusters programme – there was much evidence of organisations working together tooptimise support delivery and to ensure effective knowledge and technology transfer.

In the Holbeck Urban Village Programme, Yorkshire Forward was instrumental in ensuring that therewas community involvement and there was community engagement.

Source: YF

Value for money

Table 263 considers the value for money of YF’s interventions from two perspectives:

the ratio of GVA to cost as an indicator of the benefit: cost ratio; and, especially where this is notavailable,


448 The Train to Gain, South Yorkshire Social Infrastructure and South Yorkshire Skills Programme


In assessing the value for money of YF’s interventions we have sought to compare them with theevidence emerging from the evaluation of other RDAs’ activities and benchmarks arising from theevaluation of other similar programmes.

Care should be taken when comparing the GVA: cost ratios of these interventions as these are set out interms of both achieved and future potential (the latter being subject to uncertainty). Table 263 sets outratios of GVA to cost based on either cumulative GVA or GVA per annum (p.a.) depending on theavailable evidence. Where only annual GVA is cited this is primarily because the relevant evaluationgave no indication of the number of years over which impacts were expected to persist. Table 263 alsosets out value for money measures for achieved outputs in the form of cost per unit of output measures.

Table 263: Summary of YF value for money449

(2002/03-2006/07)

Achieved

GVA:cost

ratio450

Future

potential

GVA:cost

ratio451

Cost per

net job

(achieved)

(£)

Cost per

net

business

assist

(achieved)

(£)

Cost

per net

business

created

(achieved)

(£)

Cost per

net skills

assist

(achieved)

(£)


E-Business Unlimited 2.8 - 22,599 - - -

South Yorkshire Design Works 7.6 - 5,650 - - -

South Yorkshire Generic and

Intermediate Start Up

Programme

3.9 - 12,037 - - -

York and North Yorkshire

Business Support and Enterprise

Programme

3.1 - 23,136 - 40,000 -

Investment in Cluster initiatives 5.4 - 9,331 - - -

Broadband Gap & NYnet 0.6 2.1 – 13.4 - - - -

Centres of Industrial

Collaboration

1.5 - 102,477 - 1.4m -

South Yorkshire Inward

Investment Grant

1.7 - 22,403 - - -

Targeted Export Support

Scheme

- - - - - -

Investment in Resource

Efficiency

2.4 - 18,357 - - -


Bradford Centre Regeneration - 2.7

(Annual)

- - - -

Holbeck Urban Village - 7.9

(Annual)

292,411 - 1.1m -

Renaissance Market Towns - - - - - -

Renaissance Towns and Cities - 2.7

(Annual)

- - - -

449 Figures in brackets refer to project level evaluations that have been rolled up into subsequent programme evaluations to avoid

double counting.

450 Values refer to cumulative GVA unless otherwise stated

451 Values refer to cumulative GVA unless otherwise stated


Achieved

GVA:cost

ratio450

Future

potential

GVA:cost

ratio451

Cost per

net job

(achieved)

(£)

Cost per

net

business

assist

(achieved)

(£)

Cost

per net

business

created

(achieved)

(£)

Cost per

net skills

assist

(achieved)

(£)

Stainborough Park - - 3.2m - - -

Hull Quays - - 0.9m - - -

Rail Rolling Stock 1.3

(Annual)

- - - - -

Renaissance South Yorkshire - - - 3.7m452

- -

Hull City Build - - 22,497 - - -

People & skills

Graduates Yorkshire 1.6:

(Annual)

2.3

(Annual)

- 4,000 - 12,0000

South Yorkshire transitional

Labour Market

- - - - - 34,167

Directions Finningley - 1.3 – 1.5

(Annual)

602,113 - - 12,935

University Centre Barnsley 0.3

(Cumulative)

0.5

(Annual)

- - - -


The analysis above shows that all but two programmes, where measured, have already achieved GVAreturns which exceed investment. Businesses development and competitiveness along with people andskills interventions have achieved the highest GVA returns to date. Three evaluations withinregeneration, two evaluations within people and skills and one evaluation within business estimated thatfuture potential GVA returns will exceed investment.

There is also limited evidence of quantitative outcomes from the regeneration through physicalinfrastructure interventions. This is primarily due to the early stage of implementation of theseinterventions. A number of interventions

453have potential future returns which, by their nature, are

uncertain. These interventions may also have had wider impacts in the areas in which they operate, forexample raising confidence in the area, which will not be captured in the estimation of GVA.

A range of cost per unit of output measures has been calculated, with a focus on the cost per net job.Business development programmes have generally achieved higher returns overall compared toregeneration through physical infrastructure interventions. Regeneration projects have a higher cost pernet job but it is important to recognise that more benefits might be generated by these projects in thefuture.

When compared with other RDAs, place interventions, with the exception of Holbeck Urban Village,appear to have a lower GVA: cost ratio for future outcomes compared to other RDA’s, with a nationalaverage across RDAs of 8.0. With the exception of South Yorkshire Design Works business interventionsappear to show a lower GVA: cost ratio relative to other RDAs for achieved outcomes, with a nationalaverage of 7.3. YF’s people interventions display a mixed performance against the national average. Theachieved annual GVA: cost ratio for Graduates Yorkshire is larger than the national average for similarinterventions (0.9) whereas University Centre Barnsley is lower.

452 This has been calculated as per the total YF contribution of £3.7m to the Renaissance South Yorkshire Project.

453 For example Bradford Centre Regeneration, Holbeck Urban Village and Renaissance Town’s and Cities


When comparing YF with the National picture for unit cost measures, the cost per net output achievedwas mixed. The Centre for Industrial Collaboration

454, York and North Yorkshire Business support

455,

South Yorkshire Inward Investment Programme456

, E-Business Unlimited and Investment in ResourceEfficiency had a cost per net job achieved higher than the national average for business interventions(£14,221). The South Yorkshire Design Works, South Yorkshire Generic and Intermediate Start-upProgramme and Investment in Cluster Initiatives compared favourably to this benchmark. Forregeneration interventions YF have a cost per net job achieved in excess of the national average(£63,271) in all programmes evaluated with the exception of Hull City Build. For people and skillsinterventions YF did not compare favourably against national benchmarks, in the three evaluations whereinformation was available YF programmes had a greater cost per net person assisted with their skillsdevelopment than the national average (£1,960).


Table 264 shows the gross outputs attributable to YF’s expenditure as reported to BERR over the period2002/03 to 2006/07

457and compares them with the aggregated gross attributable outputs across the 33

evaluations covered in this report. It should be noted that these outputs represent the ‘core’ outputs thathave been reported over time and across the evaluations. In addition to these outputs a wide range ofother outputs will also have been reported for different programmes.

Table 264: Comparison of YF gross reported outputs to parliament with evaluation outputs(2002/03-2006/07)

Jobs

created/

Safeguarded

Businesses

created

Brownfield

Land (ha)

Skills

assists

Funding

levered

(£m)


Achieved YF gross outputs reported to BERR 100,808 4,809 564 256,721 540

Number of years when targets met 5 5 5 5 4458


Table 264 shows that YF has made progress against the target range set by BERR in all of the fiveoutput areas highlighted, particularly in terms of assisting people with their skills development andbrownfield land.

Like all the RDAs (except the London Development Agency), in 2007 YF was subject to the NationalAudit Office’s Independent Performance Assessment (IPA) which assessed how well YF has respondedto the common challenges facing RDAs, namely balancing the interests of the region with national policyrequirements, managing the conflicting demands of different regional stakeholders, looking outwards topromote the region while staying focused on what is happening inside and responding to new dutiesimposed by central government. This assessment sheds further light on how well the Agency has beenable to fulfil its role.

Overall, YF was seen as performing ‘strongly’, particularly in terms of its:

454 This intervention has had wider benefits than jobs alone. The intervention had substantial SAV benefits and national /

international benefits

455 This intervention has had wider benefits than jobs alone. The intervention has included a substantial proportion of activity with

‘lifestyle’ business and in rural areas

456 The South Yorkshire inward investment programme had substantial potential future benefits that have not been assessed

457 Changes to the outputs reported by YF over time mean that the businesses supported target and outputs reported to BERR are

only available from 2005/06 to 2006/07.458 No data available for 2002/03


Ambition: the Regional Economic Strategy clearly outlines the key issues in the region and is derivedfrom a robust evidence base. It sets out how these are to be tackled and allocates actions amongstpartner organisations;

Capacity: The chair and chief executive form an effective partnership and are highly visible across theregion. The Board has a wide range of expertise and are thoroughly engaged, including in sub-regions; and

Achievement: Yorkshire Forward has performed well in championing the region. The cutting edgeRenaissance programme, which has been one of Yorkshire Forward’s major successes, has beencentral in this and is delivering real results. Renaissance projects have helped to turn around the localeconomy, lever in investment in both rural and urban settings and raise aspirations. YorkshireForward has also done well on responding swiftly and decisively to economic shocks to the region.

The IPA also identified some areas for development:

Communication – Promotional activity was seen to be very effective, but simpler and clearercommunication would help stakeholders more effectively engage with Yorkshire Forward; and

Decision making – the performance Management Framework is relatively streamlined but problemscan arise in the process which can make decision making slow.

Table 265 sets out YF’s performance against objectives for each of the individual interventions coveredby the evaluations.

Table 265: Comparison of performance against objectives across the evaluations (2002/03-2006/07) 459


met

Mixed Limited

performance

Not

assessed

Total

Business

Evaluations - 1 4 7 - - 12

Spend (£m) - 5.2 20.2 123.6 - - 148.8

Place

Evaluations 1 - 1 2 - 7 11

Spend (£m) 5.9 - 37.6 114.6 - 73.4 231.5

People

Evaluations 1 - 1 - - 5 7

Spend (£m) 1.5 - 5.7 - - 23.7 30.9

Other

Evaluations - - - - - 3 3

Spend (£m) - - - - - 335.9 335.9

Total

Evaluations 2 1 6 9 - 15 33

Spend (£m) 7.4 6.7 63.5 238.2 - 433.0 748.6


459 The interventions listed in the Table are at differing stages in their lifecycle. Therefore, some interventions will be at early stages

in their development and will not have made significant progress against their objectives.


Table 265 shows that for most of the interventions evaluated (by volume or value) where performancewas assessed against the objectives the results were mixed. There was some variation across theintervention themes with most place interventions, in volume terms, not being assessed in these terms(which may again be due to the early stage of implementation of these interventions). However, in valueterms around half of place interventions were mixed.


The analysis of the impact of YF’s spending, where possible, is structured according to the threecategories of intervention defined within the IEF i.e. business, place and people. We have also analysedthe impact of YF’s other activities that span more than one of these categories as well as the availableevidence of the impact of the nine national programmes where YF has been responsible for deliverywithin parameters determined by central government departments.

The impact of YF’s interventions is summarised using a common structure which:

summarises YF’s activities and expenditure on each programme;

reports the estimated net outputs arising from this expenditure i.e. the additional outputs that are as aresult of the intervention; and

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

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


Rationale

The 2006-2015 RES for Yorkshire and Humber identifies a number of regional strengths in this area onwhich YF’s interventions can build including:

Increase in the number of businesses – Since 2001 the region has gained around 1,000 businesses.

Innovation – 7% of businesses are now involved in R&D activity with regional higher educationproviders, a 13% improvement since 2001.

There are, however, also a number of challenges facing businesses in the region including:

Low business start-up rate – Business start-up rates are notably lower than the UK average: 32business starts per year compared to 39 in the UK, and lower still in deprived areas.

Attracting inward investment – The picture on new business and investment coming into the region ismixed. Foreign investment has fluctuated in recent years, with a decrease in numbers of newbusinesses from abroad.

The primary justification for YF’s businesses and competitiveness interventions were to address marketfailures in relation to the provision of positive externalities arising from, for example, addressing issues ofasymmetric information which may prevent people from setting up a business or implementing newbusiness practices (i.e. to improve the flow of information around aspects such as market and technologyopportunities, sources of financial support and mainstream business support services).

The evidence of the impact of YF’s business interventions relates to twelve evaluations covering the sixmain sub-themes as summarised in Table 266.


Table 266: Summary of business development and competitiveness interventions


covered by

evaluations

(£m)

Individual enterprise level support E-Business Unlimited

South Yorkshire Design Works

South Yorkshire’s Generic and Intermediate Business

Start-Up Programme

York and North Yorkshire Business Support and

Enterprise Programme

6.0

1.0

3.9

3.9

Sector/Cluster Support

(including business networks)

Investment in Cluster Initiative 92.4

Science, R&D & innovation infrastructure Broadband Gap and NYnet

Centres of Industrial Collaboration

Industrial Research and Development Award

Science City York

5.2

9.1

7.4

0.8

Inward investment promotion South Yorkshire Inward Investment scheme 12.4

Internationalisation of indigenous business Targeted Export support scheme (TESS) 2.9

Sustainable consumption and production Investment in Resource Efficiency 3.8

Total 148.8


Over the period 2002/03 to 2006/07, on evaluated interventions YF spent £148.8 million on businessdevelopment and competitiveness interventions. To grow both existing and new businesses to achievesustainable economic growth and jobs is one of the three key strategic aims set out in YF’s RES . Theregion needs its existing businesses to grow in addition to encouraging new business creation andattracting investment if it to continue to prosper and become even more successful. Within the RES it isstated that the region will focus on a number of key actions:

encourage more people to start a business;

improve support to help new businesses start-up;

increase, retain and embed business investment in the region;

foster innovation to develop new markets and products; including good links between business andhigher education institutions;

grow business and employment in knowledge based regional clusters;

boost key sectors of regional significance;

improve business support to support growth and cut red tape;

apply best practice for business success and to help recruit and retain good staff; and

help businesses to win and expand markets through supply chains, trade and procurement


Impact

Table 267 summarises the expenditure and key gross outputs associated with the twelve businessinterventions evaluated. The primary outputs have been jobs created/ safeguarded, businesses createdand businesses assisted.

Table 267: Gross attributable achieved outputs from YF’s business development andcompetitiveness interventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Gross jobs

created/

safeguarded

Gross

businesses

created

Gross

businesses

assisted

Gross increase

in business

performance

(turnover, £m)

E-Business Unlimited 6.0 1084 539 144.7

SY Design Works 1.0 270 - - 2.1

SY Generic & Intermediate

Start-up Programme

3.9 1,256 900 - 26.0

York & North Yorkshire

Business Support

3.9 502 290 384 34.7

Investment in Cluster

initiatives

92.4 13,170 - - 55.9

Broadband Gap & NYnet 5.2 0 9 240 18.4


Collaboration

9.1 470 7 0 21.4

Industrial R&D Award 7.4 743 - - -

Science City York 0.8 181 33 61 -


Investment Grant Scheme

12.4 1,080 - - 299.8


Scheme

2.9 317 - 482 51.5


Efficiency

3.8 459 - - 16.1

148.8 19,532 1,239 1,706 669.8


Table 268 summarises the expenditure and key net outputs associated with the twelve businessinterventions evaluated, taking into consideration the outputs which would not have occurred without YF’ssupport.


Table 268: Net attributable achieved outputs from YF’s business development andcompetitiveness interventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Net jobs

created/

safeguarded

Net new

businesses

created

Net

businesses

assisted

Net increase in

business

turnover (£m)

E-Business Unlimited 6 266 - - 41.2

SY Design Works 1 177 - - 0.8

SY Generic &

Intermediate Start-up

Programme

3.9 324 - - 5.7


Business Support

3.9 169 98 - 11.6


Initiatives

92.4 14,853 - - 997.0

Broadband Gap & NYnet 5.2 - - - 4 - 18


Collaboration

9.1 89 6 - 10.4

Industrial R&D Award 7.4 - - - -

Science City York 0.8 - - - -


Investment Grant

12.4 554 - - -


Scheme

2.9 - - - 23.5


Efficiency

3.8 207 - - 7.5

Total 148.8 16,639 104 - 1,097.7


The level of additionality resulting from YF’s interventions varied across intervention and output type.Investment in Cluster Initiatives (113%) and South Yorkshire Design Works (66%) had the highest level ofadditionality in terms of jobs created/ safeguarded and the Centres of Industrial Collaboration (89%) hadthe highest level of additionality with regard to new business created.

Across the entire theme YF compares favourably to the national average with regard to additionality injobs created / safeguarded (85% compared to 48%) and recorded a similar level of additionality inbusiness creation (38% compared to 40%). However, performance does vary when analysed at subtheme level. South Yorkshire Design Works (66%) demonstrated high levels of additionality compared tothe national average for its sub-theme (41%). However, YF’s other three individual enterprise supportprogrammes all demonstrated levels of additionality below the national average for their sub theme.Investment in Cluster Initiatives (113% compared to 67%) and the South Yorkshire Inward InvestmentGrant both compared favourably to the national average for their sub themes. The Centre of IndustrialCollaboration recorded a level of additionality well below the national average for its sub-theme (19%compared to 46%).

Table 269 summarises the impact on GVA (both achieved and future potential) of YF’s interventions topromote business development and competitiveness. In all cases where GVA has been estimated, theevaluation estimated the GVA impact in cumulative terms. It is important to note that future potentialimpacts on GVA have not been discounted nor have constant prices been applied.


Table 269: Attributable outcomes from YF’s business development and competitivenessinterventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Achieved GVA

(cumulative, £m)

Future

potential GVA –

(cumulative, £m)

Achieved

& future

potential GVA

(cumulative, £m)

E-Business Unlimited 6 16.7 - 16.7

SY Design Works 1 7.6 - 7.6

SY Generic &


Programme

3.9

15.3 - 15.3


Business Support3.9

12.0 - 12.0


Initiatives 92.4 498.0 - 498.0

Broadband Gap & NYnet 5.2 3.2 14.4 - 89.7 17.6 – 92.9


Collaboration9.1

13.7 - 13.7

Industrial R&D Award 7.4 - - -

Science City York 0.8 - - -


Investment Grant12.4

20.5 - 20.5


Scheme2.9

- - -


Efficiency3.8

9.3 - 9.3


Additional outcomes recorded in the evaluation evidence include:

Industrial R&D award: An increase of 1,486 gross jobs created/safeguarded. The future potentialbenefits associated with this intervention are substantial;

460

Science City York: A total of 271 gross jobs created, 49 gross businesses created and 92 grossbusinesses assisted; and

Targeted Export Support Scheme: an net attributable increase in business turnover of £23.5machieved.

YF’s Strategic added Value

Yorkshire Forward has shown evidence of elements of SAV through strategic influence, creating synergyand attracting leverage. This is demonstrated by the following example :

E-business Unlimited. For example, Yorkshire Forward has played a strategic influencing role andhas shaped the aims and approaches adopted for the programme. They have also exercised theirinfluence when they have been called upon to make the final decision on issues that have emerged.

460 The evaluation of the programme noted that the IRD scheme had succeeded in creating the potential for significant future

economic growth by supporting research into innovative projects which otherwise would not have been undertaken, and by

stimulating a proactive and self-sustaining culture of innovation.


There has been evidence of leverage – some recipients ‘up-rated’ their project plans following thereceipt of funding from the Agency. Finally, this programme has increased the links between thebusiness community and it is likely that this engagement will increase in the future.

Yorkshire Forward launched the innovative £11.6m Centres of Industrial Collaboration (CIC)programme in 2003 to provide high profile business access to the world-class research facilities andscientific expertise contained within the region’s universities. Yorkshire Forward’s catalytic investmentin this programme has generated significant SAV. Stakeholders gave a very strong view that CICswere correcting an important failure and that they are a strategic intervention in addressing theinnovation agenda. From a university perspective, Yorkshire Forward’s role is seen to be crucial.Without its “intervention and support, very little of the valuable collaborative work would have takenplace”.

461

Source: YF

Value for money

Table 270 sets out the achieved and future potential GVA to cost ratios of YF’s business developmentand competitiveness interventions. The GVA to cost ratio compares GVA impacts to the cost of theintervention: where there is a GVA to cost ratio of greater than one, the economic benefits of theinterventions attributable to YF’s funding exceed their costs. This is the case for some, but not all of theinterventions where GVA has been measured.

Table 270 shows that all interventions, where information is available, have already achieved economicbenefits which exceed their costs, with the exception of the Broadband Gap and NYnet programme whichhad only started by the end of 2006/07. However, it is estimated that its economic benefits are likely toexceed its costs if its future potential outcomes are realised.

Table 270: Achieved and future potential attributable GVA to cost ratios from YF’s businessdevelopment and competitiveness interventions (2002/03-2006/07)

462

Spend

covered by

evaluations

2002/03-

2006/07 (£m)

Achieved

GVA

(cumulative,

£m)

Future

potential

GVA

(cumulative,

£m)

Achieved GVA

(cumulative):cost

Future potential

GVA

(cumulative):cost

E-Business Unlimited 6 16.7 - 2.8 -

SY Design Works 1 7.6 - 7.6 -

SY Generic &


Programme

3.9 15.3 - 3.9 -


Business Support3.9 12.0 - 3.1 -


Initiatives92.4 498.0 - 5.4 -

Broadband Gap & NYnet 5.2 3.2 14.4 - 89.7 0.6 2.1 – 13.4


Collaboration9.1 13.7 - 1.5 -



461 (Taken from Evaluation of CICs by GHK

462 Most of the programmes listed in Table 12 are expected to have future benefits, however these have not been quantified in all

evaluations


Spend

covered by

evaluations

2002/03-

2006/07 (£m)

Achieved

GVA

(cumulative,

£m)

Future

potential

GVA

(cumulative,

£m)

Achieved GVA

(cumulative):cost

Future potential

GVA

(cumulative):cost


Investment Grant12.4 20.5 - 1.7 -


Scheme2.9 - - - -


Efficiency3.8 9.3 - 2.4 -


Table 270 demonstrates that variation was also found in terms of performance across the business andcompetitiveness theme when the current GVA: cost ratios were considered.

The highest performing projects relative to others with regard to achieved outputs were found to be the:

South Yorkshire Design Work’s Programme with a ratio of 7.6:1; and

Investment in Cluster Initiatives463

with a ratio of 5.4:1. It is important to highlight that this interventionaccounts for over 61% of business spend evaluated.

The lowest performing projects relative to others within the theme of business development andcompetitiveness interventions in terms of achieved GVA: cost ratio (where evidence of some impact hadbeen demonstrated) were found to be:

Broadband Gap and NYnet with a ratio of 0.6:1, however the future potential GVA: Cost ratio for thisproject are estimated at between 2.1:1 and 13.4:1; and

the Centres of Industrial Collaboration and the South Yorkshire Inward Investment Grant with ratios of1.5:1 and 1.7:1.

In general the YF business development and competitiveness interventions, for which GVA to cost ratioswere available, compare less favourably against the national average for similar interventions. E-Business Unlimited, South Yorkshire Generic and Intermediate Start-up programme and the York andNorth Yorkshire Business Support Programmes all recorded a GVA: cost ratio below the national averageof achieved cumulative GVA for their sub theme (12.0). However, the South Yorkshire Design Work’sProgramme recorded an average in excess of this benchmark. The Broadband Gap and NYnet andCentre for Industrial Collaboration programmes also recorded a GVA: cost ratio below that of the nationalaverage for their sub-theme (3.4). The South Yorkshire Inward Investment Grant also recorded a GVA:cost ratio below that of the national average for its sub-theme (13.5). Investment in Cluster Initiativesrecorded a GVA: cost ratio below the national average for its sub-theme (7.7).

Table 271 sets out the achieved and future potential cost per net output of YF’s business developmentand competitiveness interventions.

463 The performance of the Investment in Clusters Initiatives is likely to be understated as the figures in the table exclude the

chemicals cluster (which accounts for nearly 40% of expenditure on clusters initiatives).


Table 271: (achieved and future potential) cost per net output from YF’s business developmentand competitiveness interventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Achieved

cost per net

job (£’000)

Future

potential

cost per

net job

(£’000)

Achieved cost

per net

business

created(£)

Future

potential cost

per skills

assist (£)

E-Business Unlimited 6.0 22,599 15,819 - -

SY Design Works 1.0 5,650 - - -

SY Generic & Intermediate Start-

up Programme 3.9 12,037 3,383 - -

York & North Yorkshire Business

Support 3.9 23,136 2,506 40,000 4,333

Investment in Cluster Initiatives 92.4 9,331 6,233 - -

Broadband Gap & NYnet 5.2 - - - -


Collaboration 9.1 102,477 49,550 1,421,875 687,500




Investment Grant 12.4 22,403 11,563 - -


Scheme 2.9 - - - -


Efficiency 3.8 18,357 - - -


The cost per net job achieved from business and competiveness interventions ranged from £102,477 forthe Centres of Industrial Collaboration Programme

464to £5,650 for the South Yorkshire Design Works

programme. As the sector/cluster support programme accounts for 61% of business spend it is had a costper achieved job of £9,331 and a cost per future potential job of £6,233.

Comparing YF with the national picture the cost per net output achieved for YF’s business interventionswas mixed. For example, Investment in Cluster Initiatives performed well against national costs per netjob created / safeguarded for its sub-theme (£9,331 compared to £12,135). Similarly South YorkshireDesign Works performed well against national costs per net job created / safeguarded for its sub-theme(£5,650 compared to £8,301). The E-Business unlimited (£22,599), South Yorkshire Generic andIntermediate Start-up Programme (£12,037) and York and North Yorkshire Business Support (23,136) didnot compare favourably to the national average for their sub theme (£8,301). The £22,403 cost per netjob achieved for the South Yorkshire Inward Investment Grant Scheme fell below the national average forits sub-theme (£11,563). The cost per net job achieved for the Centres of Industrial Collaboration(102,477) was above the national average for its sub theme (£37,938).


Table 272 summarises the performance against objectives of YF’s interventions to promote businessdevelopment and competitiveness. Performance against objectives has been assessed for the majorityof interventions by the IEF compliant evaluations reviewed. The evaluations indicate that performance

464 It should be noted that the CICs have had substantial benefits beyond the region which ranged beyond jobs alone. This would

partly explain the relatively high cost per job figure.


against output targets is mixed, particularly as sector/cluster support is mixed which accounts for 61% oftotal business spend.

Table 272: Performance against objectives from YF’s business development and competitivenessinterventions (2002/03-2006/07)465

Expenditure

covered by

evaluations (£m)


E-Business Unlimited 6.0 Largely met

York and North Yorkshire Business Support

and Enterprise Programme3.9

Largely met

Industrial Research and Development Award 7.4 Largely met

Targeted Export Support Scheme 2.9 Largely met

Broadband Gap & NYnet 5.2 Met

South Yorkshire Design Works 1.0 Mixed

South Yorkshire Generic and Intermediate

Start Up Programme3.9

Mixed

Investment in Cluster Initiatives 92.4 Mixed

Centres of Industrial Collaboration 9.1 Mixed

Science City York 0.8 Mixed

South Yorkshire Inward Investment Grant 12.4 Mixed

Investment in Resource Efficiency 4.0 Mixed



Rationale

Yorkshire and Humber is characterised by localised areas of deprivation alongside relatively affluentareas. Therefore, many of YF’s regeneration initiatives aim to stimulate economic activity within the mostdeprived areas of the region. This section relates to regeneration initiatives supported by YF in order toimprove regional economic performance. The evidence presented is primarily linked to two key 2006-12RES objective, namely:

The region will deliver high quality physical development that supports urban and rural renaissance, helpsYF’s environmental goals, and builds on the distinctive assets of the regions cities and towns throughattracting new private investment; and

Promoting diversity and renewal to fully utilise the talents of all people in all communities to improveeconomic opportunities, particularly in disadvantaged areas.

The main justification for YF’s regeneration through physical infrastructure interventions was theimprovements to a specific area’s image or built environment. Some interventions were also consideredto provide a public good through the development of new facilities or the redevelopment of derelict sites(i.e. Bradford Centre Regeneration, Holbeck Urban Village, Renaissance Towns and Cities and SheffieldOne).

Evidence of the impact of YF’s regeneration initiatives is based on eleven evaluations covering the three


in their development and can not be expected to have made significant progress against their objectives.


main sub-themes summarised in Table 273.

Table 273: Summary of YF’s regeneration through physical infrastructure interventions (2002/03-2006/07)


covered by

evaluations (£m)

Capital projects

Bringing land back into use – employment sites Bradford Centre Regeneration

Holbeck Urban Village

Renaissance Market Towns

Renaissance Towns & Cities

Sheffield One Urban Regeneration

Wentworth Castle & Stainborough Park

Hull Quays

Hull City Build

17.8

26.2

9.7

96.8

37.6

1.5

14.5

16.4

Public Realm/other infrastructure

(e.g. transport/community)


Revenue projects

Co-ordination role

(e.g. spatial strategies/delivery mechanisms)

Renaissance South Yorkshire

Modernising Rural Delivery

3.7

1.4

Total 231.5


This spend is dominated by capital investments, in particular the Renaissance Towns and Cities,Sheffield One Urban Regeneration and Holbeck Urban Village programmes account for 69% of totalexpenditure within this theme.. The capital and revenue projects were primarily related to Objective’s 5 –Transport, Infrastructure and Environment - and Objective 6 – Stronger Cities, Town’s and Communities -of YF’s 2006-2015 RES.

Impact

Given the variety of projects supported within this sub-theme, activities delivered using the funding varieddepending on the individual project objectives. However, in summary the most common activitiessupported within the projects were:

city centre regeneration (Hull Quays, Bradford Centre Regeneration, Holbeck Urban Village, SheffieldOne, Renaissance Towns and Cities);

revitalisation of rural towns (Renaissance Market Towns)

redevelopment of waterfront areas (Hull Quays);

restoration of historic buildings and heritage sites (Stainborough Park);

increased synergy and linkages between business investments (Renaissance South Yorkshire); and

delivering physical improvements through partnerships (Bradford Centre Regeneration).

Key gross outputs set out in Table 274 arising from these regeneration interventions have been jobscreated/ safeguarded, businesses created and brownfield land reclaimed or redeveloped. A number ofthese interventions are still in the early stages of implementation and therefore a distinction is drawnbetween achieved and future potential outputs.


Table 274: Gross attributable outputs (achieved and future potential) from YF’s regenerationthrough physical infrastructure interventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Achieved

gross jobs

created/

safe-

guarded

Future

potential

gross jobs

created/

safe-

guarded

Achieved

gross

brownfield

land

reclaimed/

redevelope

d (ha)

Future

potential

gross

brownfield

land

reclaimed/

redevelope

d (ha)

Achieved

gross

businesse

s created

Future

potential

gross

businesse

s created

Bradford

Centre

Regeneration

17.8 - 2,637 - - - -

Holbeck

Urban Village26.2 138 6,421 - - 35 9

Renaissance

Mkt Towns9.7 - 791 - - - -

Renaissance

Towns &

Cities

96.8 38 9,484 8 10 16 22

Sheffield

One Urban

Regeneration

37.6 143 - - - - -

Wentworth

Castle &

Stainborough

Park

1.5 15 5 - - 1 -

Hull Quays 14.5 51 135 - - - -

Rail Rolling

Stock5.9 - - - - - -

Renaissance

South

Yorkshire

3.7 7,017 6,626 174 - - -

Modernising

Rural

Delivery

1.4 15 15 - - 8 8

Hull City

Build16.4 1,268 945 - - - -

Total 231.5 8,686 27,059 183 10 60 38


In addition to the gross outputs in Tble 274, the Renaissance Towns and cities evaluation reported that108 businesses had been assisted, with the potential to assist a further 144 in the future. TheModernising Rural Delivery evaluation reported that 100 businesses had been assisted, with the potentialto assist a further 100 in the future. The Renaissance South Yorkshire evaluation reported that 188businesses had been assisted.

The Renaissance Towns and Cities evaluation also reported that 300 people had been assisted with theirskills development, with the potential to assist a further 400 in the future. The Modernising Rural Deliveryevaluation also reported that 148 people had been assisted with their skills development, with thepotential to assist a further 148 in the future.



Table 275: Regional net outputs (achieved and future potential) from YF’s regeneration throughphysical infrastructure interventions (2002/03-2006/07)

Expenditure covered

byevaluations

(£m)


safeguarded

Futurepotentialnet jobscreated/

safeguarded

Achievednet

brownfieldland

reclaimed/redevelope

d (ha)

Futurepotential

netbrownfield

landreclaimed/redevelope

d (ha)

Achievednet

businesses created

Futurepotential

netbusinesses created

Bradford

Centre

Regeneration

17.8 - 1,599 - - - -

Holbeck

Urban Village26.2 90 3,640 - - 23 6

Renaissance

Mkt Towns9.7 - 995 - - - -

Renaissance

Towns &

Cities

96.8 - 4,463 - - - -

Sheffield One

Urban

Regeneration

37.6 - - - - - -

Wentworth

Castle &

Stainborough

Park

1.5 5 2 - - - -

Hull Quays 14.5 15 74 - - - -

Rail Rolling

Stock5.9 - - - - - -

Renaissance

South

Yorkshire

3.7 - - - - - -

Modernising

Rural

Delivery

1.4 - - - - - -

Hull City

Build16.4 729 512 - - - -

Total 231.5 839 11,285 - - 23 6


The evaluations of Sheffield One Urban Regeneration, Renaissance South Yorkshire and ModernisingRural delivery do not make any gross to net adjustments in terms of jobs created/safeguarded. As aresult of this no net outputs have been recorded with regard to brownfield land reclaimed / redeveloped.

Holbeck Urban Village had the greatest additionality with regard to jobs created / safeguarded (65%),followed by Wentworth Castle & Stainborough Park (32%) and Hull Quays (30%). When future impactsare considered Renaissance Market Town’s were considered have the greatest additionality with regardto jobs created (126%).


A comparison of the additionality of the achieved outputs of YF’s business interventions highlights amixed performance against national averages for RDAs. While Holbeck Urban Village (65%) and Hull CityBuild (57%) have recorded levels of additionality above the national average for their sub-theme ofbringing land back into use (50%) in terms of jobs created / safeguarded, while Wentworth Castle &Stainborough Park (32%) and Hull Quays (30%) recorded levels of additionality below this level.

Due to the early stage of development of many of these projects there is limited evidence of futurepotential outcomes and no systematic analysis of the actual or potential impact on regional GVA.

Table 276 summarises the impact on GVA (both achieved and future potential) of YF’s interventions topromote regeneration through physical infrastructure. In three of the four evaluations where GVA hasbeen estimated, the evaluators have only focussed on future potential GVA. This is due to the early stagein development of these programmes, where only limited outcomes have been achieved to date. Whereannual GVA was estimated no indication was given of the number of years over which the impact wasexpected (or assumed) to persist. Moreover, future potential impacts on GVA have not been discountednor have constant prices been applied. This has been assessed in GVA terms (for a single year)

466

across four of the eleven programmes.

Table 276: Attributable outcomes from YF’s regeneration through physical infrastructureinterventions (2002/03-2006/07)

467

Expenditure

covered by

evaluations (£m)

Achieved GVA

(annual, £m)

Achieved GVA

(cumulative, £m)

Future potential

GVA (annual, £m)

Bradford Centre

Regeneration

17.8 - - 48.0

Holbeck Urban Village 26.2 - - 152.9

Renaissance Towns & Cities 96.8 - - 188.8

Rail Rolling Stock 5.9 7.5 - 7.5


YF’s Strategic Added Value

Yorkshire Forward has shown evidence of elements of SAV through strategic influence, providingleadership and developing synergy. The Holbeck Urban Village programme

468is an example which

demonstrates how YF fulfils these functions. The programme has allowed YF to deliver SAV in thefollowing ways:

The Development Framework and Vision has acted to stimulate interest and provide focus for the type ofdevelopment envisaged for the HUV. The evaluation of the programme noted that without this leadershipby Yorkshire Forward, it is unlikely that the focus on design would have been maintained.

Yorkshire Forward has shown strategic influence by providing a strategic vision for the HUV. This hasmeant that the development work has been focused and has not fragmented as has happened previouslyelsewhere in the City. Yorkshire Forward has worked closely with Leeds City Council in the developmentof the HUV and has had a major influence in the degree of community engagement undertaken, a resultof the Agency’s interpretation of the importance of community involvement in the renaissance approach.

Yorkshire Forward has successfully aligned its investments with those of the City Council to maximise

466 It is important to note that in all cases no GVA calculations have been made of cumulative GVA impact therefore there is likely to

be under-recording of GVA impact. Specifically in those instances where a significant proportion of outputs have been generated

early in the programme and the intervention has been running for at least 2-3 years.



468 Example has been extracted from the evaluation of the Holbeck Urban Village programme


impact. The partnership has developed its approach to take account of the SNR, and there are clearareas of responsibility, reducing duplication and encouraging synergy and collaboration across key areasof intervention.

Another example of SAV is through the Renaissance Towns and Cities Programme. Yorkshire Forwardestablished the Renaissance Towns and Cities (RTC) programme in 2001 as a new way to deliver urbanregeneration; capture economic growth; and create quality sustainable places where people want to liveand work and where businesses want to invest. The visionary approach adopted within renaissance isfirmly based on longer-term economic goals. The effect of this SAV has been:

Development of an integrated programme to secure the revival of our towns and cities, therebymaximising their economic contribution and building sustainable communities

Engaging the private sector and giving the confidence to invest

Bringing diverse groups together to agree the long term priorities and vision for their town

Creating a long term framework for aligning investment behind a set of shared goals

Engaging citizens, raising aspirations and engendering civic pride

Improving perceptions and profile of the region’s urban areas

Emphasising the importance of quality design in modernising urban areas

Source: YF

Value for money

Table 277 sets out the achieved and future potential GVA to cost ratios of YF’s regeneration throughphysical infrastructure interventions. The GVA to cost ratio compares GVA impacts to the cost of theintervention: where there is a GVA to cost ratio of greater than one, the economic benefits of theinterventions attributable to YF’s funding exceed their costs. This is the case for some, but not all of theinterventions where GVA has been measured.

Table 277: Achieved and future potential attributable GVA to cost ratios from YF’s regenerationthrough physical infrastructure interventions (2002/03-2006/07)

469

Expenditure

covered by

evaluations

(£m)

Achieved GVA

(annual, £m)

Future

potential GVA

(annual, £m)

Achieved GVA

(annual):cost

Future

potential GVA

(annual):cost

Bradford Centre

Regeneration17.8 -

48.0 - 2.7

Holbeck Urban Village 26.2 - 152.9 - 7.9

Renaissance

Towns & Cities96.8 -

188.8 - 2.7

Rail Rolling Stock 5.9 7.5 7.5 1.3 1.3


Table 277 demonstrates that only one programme had estimated impacts on GVA to date, namely theRolling Rail Stock Programme with a ratio of 1.3:1. Table 277 also shows that the Rail Rolling Stockprogramme has already achieved economic benefits which exceed their costs. The Rail Rolling Stockprogramme compares favourably against the national average for achieved outputs for its sub theme ofpublic realm (0.3).




The future economic impact has been estimated for four evaluations, in each one it is anticipated that itseconomic benefits are likely to exceed its costs if its future potential outcomes are realised. A comparisonagainst the national average highlights a mixed picture. Holbeck Urban Village has a future potentialGVA: cost ratio in excess of the national average for its sub-theme (6.5), while Bradford CentreRegeneration and Renaissance Towns and Cities have a future potential benefit cost ratio below thisbenchmark.

Table 278 sets out the achieved and future potential cost per net output of YF’s business developmentand competitiveness interventions.

Table 278: Achieved and future potential cost per net attributable output from YF’s regenerationthrough physical infrastructure interventions (2002/03-2006/07)

Expenditure covered


Achieved cost

per net job (£)

Future potential


Bradford Centre Regeneration 17.8 - 11,132

Holbeck Urban Village 26.2 292,411 5,289

Renaissance Mkt Towns 9.7 - 31,860

Renaissance Towns & Cities 96.8 - 15,725

Wentworth Castle & Stainborough Park 1.5 317,460 -

Hull Quays 14.5 939,815 32,973

Hull City Build 16.4 22,497 -


The cost per achieved net job achieved from regeneration through physical infrastructure interventionsranged from £317,460 for Wentworth Castle and Stainborough Park to £22,497 for the Hull City Buildprogramme.

Only Hull City Build compares favourably to the national average for its sub theme (£42,101) with regardto cost per achieved net job, Holbeck Urban Village. Wentworth Castle and Stainborough Park and HullQuays all have a cost per net achieved job above this benchmark. However, all five of the programmesfor which future job estimates are available are expected to have a cost per job below this benchmark ifpotential future net job outputs are achieved.


Table 279 summarises the performance against objectives of YF’s interventions to promote regenerationthrough physical infrastructure. It should be noted, however, that a number of evaluations did not assessperformance against objectives. For those evaluations which did assess performance against objectivesonly Rail Rolling stock met its targets in full, although the Sheffield One Urban Regeneration programmehas largely met its objectives. The other interventions represented a more mixed performance, with someobjectives exceeded and others not met.


Table 279: Performance against objectives from YF’s regeneration through physical infrastructure(2002/03-2006/07)470


evaluations (£m)

Performance

against objectives

Rail Rolling Stock 5.9 Exceeded

Sheffield One Urban Regeneration 37.6 Largely met

Renaissance Towns & Cities 96.8 Mixed

Bradford Centre Regeneration 17.8 Mixed

Holbeck Urban Village 26.2 Not assessed

Renaissance Mkt Towns 9.7 Not assessed

Wentworth Castle & Stainborough Park 1.5 Not assessed

Hull Quays 14.5 Not assessed

Renaissance South Yorkshire 3.7 Not assessed

Modernising Rural Delivery 1.4 Not assessed

Hull City Build 16.4 Not assessed



Rationale

This section relates to YF’s people and skills interventions. The 2006-12 RES for the Yorkshire andHumber identifies a number of objectives in this area, including the following which are directly related tothe evidence presented in the remainder of this section:

raising attainment in the region’s educational infrastructure;

improving the skills of the working age population who have few or no qualifications; and

matching the skills available in the region to the needs of local employers.

There were a range of justifications for YF’s people and skills interventions, the most common being toimprove the flow of information (i.e. Graduates Yorkshire, Train to Gain). The South YorkshireTransitional Labour Market and West Yorkshire Skills Programme also sought to address equity issues inthe area and provide positive externalities through the provision of skills and workforce development.

Evidence of the impact of YF’s people and skills interventions relates to seven evaluations covering threesub-themes summarised in Table 280.

Table 280: Summary of YF’s people and skills interventions (2002/03-2006/07)


covered by

evaluations (£m)

Matching people to jobs Graduates Yorkshire

SY Transitional Labour Market Evaluation

1.5

5.7

Skills/workforce development Directions Finningley 5.7





covered by

evaluations (£m)

Train to Gain

South Yorkshire (SY) Social Infrastructure

Programme

West Yorkshire Skills Programme471

7.8

6.8

1.4

Educational Infrastructure University Centre Barnsley 2.0

Total 31.0


The evaluation evidence of YF’s impact on people and skills development covers £31.0m of spend from2002/03 to 2006/07. The Train to Gain programme and South Yorkshire (SY) Social InfrastructureProgramme, which fall within the Skill/workforce development sub-theme, accounts for the largestproportion of this spend. Investment in the South Yorkshire Transitional Labour Market and DirectionsFinningley programmes were also significant.

Impact

Table 281 summarises the expenditure and key gross outputs achieved through YF’s people and skillsinterventions. The primary outputs have been jobs created/ safeguarded, employment support,businesses assisted and supported and skills developed.

Table 281: Gross attributable achieved outputs from YF’s people and skills interventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Gross jobs

created/

safeguarded

Gross

people

assisted

into

employment

Gross

businesses

created

Gross

business

assisted

Gross

skills

assists

Graduates Yorkshire 1.5 - 1,696 - 1,414 156

SY Transitional Labour

Market

5.7 - 718 - - 258

Directions Finningley 5.7 24 635 3 - 2,332

Train to Gain 7.8 - - - 633 3,646

South Yorkshire (SY)

Social Infrastructure

Programme

6.8 127 309 - 554 7,291

West Yorkshire

Skills Programme

1.4 - - - - -

University Centre

Barnsley

2.0 - - - - -

Total 31.0 102 3,357 3 2,601 13,682


In addition to the net outputs achieved in Table 281 it was estimated that the South Yorkshire SocialInfrastructure Programme would result in a potential 56 gross additional jobs created / safeguarded and861 gross additional businesses assisted.

471 There have been outputs for this programme, however all initial outputs have been attributed to ESF



Table 282: Net attributable achieved outputs from YF’s people and skills interventions(2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Net jobs

created/

safeguarded

Net people

assisted

into

employment

Net

businesses

created

Net

business

assisted

Net skills

assists

Graduates Yorkshire 1.5 - 679 - 375 125

SY Transitional Labour

Market

5.7 - 216 - - 168

Directions Finningley 5.7 9 266 1 - 441

Train to Gain 7.8 - - - - -

South Yorkshire (SY)

Social Infrastructure

Programme

6.8 - - - - -

West Yorkshire Skills

Programme

1.4 - - - - -

University Centre

Barnsley

2.0 - - - - -

Total 31.0 9 1,161 1 375 733


The evaluations of Train to Gain, South Yorkshire Social Infrastructure Programme, West Yorkshire SkillsProgramme and University Centre Barnsley did not make any gross to net adjustments for the measuresused in the Table above.

Directions Finningley had the highest level of additionality with regard to assisting people intoemployment (42%), followed by Graduates Yorkshire (40%). The Graduates Yorkshire (80%) and theSouth Yorkshire Transitional Labour Market (65%) programmes had the highest level of additionality withregard to assisting people with their skills development.

Comparison of the additionality of YF’s people and skills interventions with the national average showsthat they compare quite favourably for achieved net outputs. In terms of net skill assists achieved,Graduates Yorkshire and the South Yorkshire Transitional Labour Market programme both recordedlevels of additionality above the national average for their sub theme (61%). The additionality forDirections Finningley was reported as below the national average for its sub-theme (70%) with regard tonet skill assists.

Table 283 summarises the outcomes of YF’s people and skills interventions.


Table 283: Attributable outcomes (achieved and future potential) from YF’s people and skillsinterventions (2002/03-2006/07)

472

Expenditure

covered by

evaluations

(£m)

Achieved

GVA

(annual,

£m)

Future

potential

GVA

(annual,

£m)

Achieved

GVA

(cumulative,

£m)

Future

potential

GVA

(cumulative,

£m)

Achieved

& future

potential

GVA

(cumulative,

£m)

Graduates Yorkshire 1.5 2.4473

2.4 - - -

Directions Finningley 5.7 - - - 4.6 - 5.3 4.6 - 5.3

University Centre

Barnsley2.0 - 1.0 0.5 - -

Total 9.2 2.4 3.4 0.5 4.6 - 5.3 4.6 – 5.3


YF’s £14.9m474

investment in people and skills interventions has led to an additional £0.5m of achievedcumulative GVA and £2.4m of achieved GVA per annum. In addition the Directions Finningley evaluationestimates a further future potential GVA of between £4.6m to £5.3m. The evaluation of University CentreBarnsley estimates future benefits of £1.0m per annum, and the evaluation of Graduates Yorkshireestimates future benefits of £2.4m per annum. Care should be taken in interpreting these estimates ofGVA as they involve the aggregation of estimates of outcomes across different evaluations. Moreover,future potential impacts on GVA have not been discounted nor have constant prices been applied.

In addition to the outputs and outcomes discussed above, Strategic Added Value has also been one ofYF’s key impacts, some examples are given in the box below:

Examples of Strategic Added Value

YF also plays a key role in developing synergy and providing strategic influence. This is demonstrated bythe following examples:

On the Graduates Yorkshire programme, there has been good regional learning and developmentfrom leaving a solid legacy for the future. This was due to the synergy that was created by YorkshireForward.

In the Directions Finningley programme, Yorkshire Forward contributed to SAV by operating as acatalyst and facilitator, leading on new developments such as Hangar 3 (and the National AviationAcademy) and Hangar 2. Finally, Yorkshire Forward demonstrated strategic influence by leading amulti agency coordinated approach to employment and training at Meteor House.

Source: YF

Value for money

Table 284 sets out the GVA to cost ratios (including achieved and future potential) in relation to peopleand skills interventions. Whilst there is limited evidence, the return on investment for Graduates Yorkshireis positive. In other words, it exceeds spend.

472 The evaluations of Train to Gain, South Yorkshire Infrastructure Programme and the West Yorkshire Skills Programme did not

report GVA outcomes

473 Outputs and Outcomes occurred over six years

474 Figure refers only to People and Skills interventions where GVA estimates are available


Table 284: Achieved and future potential attributable GVA to cost ratios from YF’s people andskills interventions (2002/03-2006/07)

475

Spend

covered by

evaluations

2002/03-

2006/07 (£m)

Achieved

GVA

(annual):

cost ratio

Future

potential

GVA

(annual,

£m): cost

ratio

Achieved

GVA

(cumulative,

£m): cost

ratio

Future

potential

GVA

(cumulative):

cost ratio

Graduates Yorkshire 1.5 1.6 2.3 - -

Directions Finningley 5.7 - - - 1.3 - 1.5

University Centre Barnsley 2.0 - 0.5 0.3 -


The Graduates Yorkshire programme recorded an achieved annual GVA: cost ratio higher than thenational average (0.8). Directions Finningley recorded a future potential cumulative GVA: cost ratio abovethe national average (1.0) whereas the University Centre Barnsley recorded an achieved annual GVA:cost ratio lower than the national average (1.1).

Table 285 sets out the cost per net achieved output in relation to people and skills interventions.

Table 285: Cost per net attributable achieved output from YF’s people and skills interventions(2002/03-2006/07)

476

Expenditure

covered by

evaluations

(£m)

Cost per net

job created/

safeguarded

(£’000)

Cost per net

person

assisted into

employment (£)

Cost per net

skills assist (£)

Graduates Yorkshire 1.5 - £2,209 £12,000

SY Transitional Labour Market

Mid Term Evaluation 5.7 - £26,566 £34,167

Directions Finningley 5.7 £602,113 £21,429 £12,935


The cost per net person assisted into employment was £2,209 for Graduates Yorkshire, £21,429 forDirections Finningley

477and £26,566 for the South Yorkshire Transitional Labour Market Programme

478.

The cost per net person assisted in their skills development was £12,000 for Graduates Yorkshire,£12,935 for Directions Finningley and £34,167 for the South Yorkshire Transitional Labour MarketProgramme. In all three of these evaluations the cost per net skills assist was above the national averagefor people and skills interventions at £1,960.


Table 286 summarises the performance against objectives of YF’s people and skills interventions andshows that only two of the programmes were assessed against their objectives, the graduates Yorkshire

475 The evaluations of Train to Gain, South Yorkshire Social Infrastructure programme and the West Yorkshire Skills Programme did

not make estimates of GVA outcomes

476 The evaluations of Train to Gain, South Yorkshire Social Infrastructure programme and the West Yorkshire Skills Programme did

not make estimates of net outputs

477 This intervention included a significant amount of capital spend, which has contributed to the high cost per job figure.

478 This programme was an intensive intervention targeted at hard to reach beneficiaries, which has contributed to the high cost per

job figure.


evaluation exceeded its objectives while the South Yorkshire Transitional Labour Market programme hadlargely met its objectives.

Table 286: Performance against objectives from YF’s people and skills interventions (2002/03-2006/07)

479

Expenditure covered


Performance

against targets

Graduates Yorkshire 1.5 Exceeded

SY Transitional Labour Market Mid Term Evaluation 5.7 Largely met

Directions Finningley 5.7 Not assessed

Train to Gain 7.8 Not assessed

South Yorkshire (SY) Social Infrastructure Programme 6.8 Not assessed

West Yorkshire Skills Programme 1.4 Not assessed

University Centre Barnsley 2.0 Not assessed

Total 31.0


Other YF interventions

Rationale

YF has also dedicated its resources to one significant regeneration programme: the SRB480

Programme,with a total spend of £331m over the period 2002/03 to 2006/07. The programme has involved thedelivery of a diverse range of interventions spanning business, physical regeneration and people andskills focused on specific geographical areas within the Yorkshire and Humber.

Over the six rounds of SRB funding, Yorkshire and Humber received £880.5 million481

to implement 100schemes. The rationale for SRB centred on the Government’s desire to tackle social exclusion andpromote equality of opportunity. The focus of support was on the most deprived communities in England,with the aim of reducing the gap between these areas and the rest of England and between differentgroups in society. Within Yorkshire, the SRB programme focused on deprived areas within the regioncontaining 14.1% of the 8,120 most deprived (national) Super Output Areas (SOAs)

482.

In addition, two other programmes (both involving expenditure of £2.2 million by Yorkshire Forward) havebeen evaluated under this category namely:

Yorkshire Futures a Regional Intelligence Network (or observatory) for Yorkshire and Humber,providing information and intelligence (across and between public sector and other stakeholders)about the region to improve decision making and forecasting; and

the Churches Regional Commission that aimed to ensure that faith groups made an effectivecontribution to regional policy and programme development with a particular emphasis uponsupporting the delivery of regeneration activity.



480 Evaluation of the Single Regeneration Budget Programme in Yorkshire and Humber, May 2008.481 Representing 15% of the national total.

482 Index of Multiple Deprivation Data, 2004.


Impact

Key outputs arising from these other interventions have been jobs created/ safeguarded, skills developed,businesses assisted, land reclaimed/ redeveloped and skill assists. Table 287 summarises the netoutputs which have arisen from the SRB programme. The SRB programme has had a focus on creatingand safeguarding jobs and reducing the skills deficit in the areas it has supported.

Table 287: Gross attributable outputs from YF’s other Interventions (2002/03 and 2006/07)

Expenditure

covered by

evaluations

(£m)

Jobs

created/

safeguarded

Businesses

assisted

Brownfield

land

remediated

(ha)

Skills

assists

SRB 331.5 24,831 712 353 71600

Yorkshire Futures study 2.2 - - - -

Churches Regional Commission 2.2 16 - - 618

Total 335.9 24,847 712 353 72,218

Source: An Evaluation of the SRB Programme in the Yorkshire and Humber, May 2008.


Table 288: Net attributable achieved outputs from YF’s other interventions (2002/03-2006/07)

Expenditure

covered by

evaluations

(£m)

Jobs

created/

safeguarded

Businesses

assisted

Brownfield

land

remediated

(ha)

Skills

assists

SRB 331.5 10356 313 173 40096

Yorkshire Futures study 2.2m - - - -

Churches Regional Commission 2.2 - - - -

Total 335.9 10,356 313 173 40,096


The SRB programme showed high levels of additionality, particularly with regard to people assisted withtheir skills development (56%). Additionality in the SRB evaluation was calculated at the national level,therefore there is no regional variation in terms of additionality.

The quantitative evidence of outcomes and impacts in the evaluation reports which fed into the SRBevaluation was very limited. However, applying the 2006 GVA per worker for Yorkshire and Humber(33,863) to the 10,356 jobs created and safeguarded gives an estimated GVA of £350.7m.

In addition to the outputs and outcomes discussed above, Strategic Added Value has been one of YF’skey impacts. This is discussed further in the box below.

Examples of Strategic Added Value

Yorkshire Forward played a strategic catalyst role in the co-ordination of activities, to create synergiesand operational efficiencies. For example:

Yorkshire Forward played a strategic catalyst role in the Yorkshire Futures which helped to achievedevelopments in information collection, sharing, and dissemination at the regional level. Specificallyorganisations operating in the region are now more willing to share data, research and informationthan previously. Yorkshire Forward also played a catalytic role by encouraging developments andimprovements in sub-regional research functions and in the establishment of the Public Health andCultural observatories. Engagement between organisations in the region has improved as a result of


Yorkshire Forward’s involvement.

With minor exceptions, partnership development, community development, governance andprogramme management were considered by evaluators and stakeholders to have been effective.Whilst the views regarding the sustainability of SRB schemes were more mixed SRB investmentacted as a catalyst for a wide range of post-SRB activity (particularly in regard to regeneration relatedactivities in areas such as Bradford.

Source: YF

Value for money



The evaluation of the SRB programme did not assess performance against objectives due to a lack ofavailable data. The general consensus of evaluators was that all of the YF schemes reviewed wereeither partially or largely successful. This view stems from the achievement, and in some cases,substantial overachievement of gross RDA core, other economic and other non-economic outputs (withunderperformance only recorded for six out of the total of sixty-two SRB output categories).

South Yorkshire, and to a lesser extent, West Yorkshire were the main beneficiaries of SRB activity in theregion. This suggests that funding was effectively targeted at the sub-regions with the highest number ofmost deprived Super Output Areas (SOAs). When leverage is factored in there were eight schemes thatinvested over £40 million each within the region. Two of the largest schemes - Regen 2000 in Bradfordand Aire Valley in Leeds - received just under a quarter of a billion pounds support. In short a substantialnumber of outputs were delivered by a relatively small number of large schemes.

National programmes

Besides its own projects and programmes YF has been responsible for the management and delivery ofvarious national programmes (with delivery within parameters closely defined by central governmentdepartments). For a variety of reasons, not all the programmes have been evaluated

483and not all

national programmes are relevant to every region.

Table 289 summarises the estimated impacts where these are available. As the Table shows, theseprogrammes have resulted in the achievement of 10,121 net jobs created / safeguarded. The estimatedimpact on the regional economy is £262.7m in cumulative terms

484.

483 No national evaluations have yet been completed of the Market Towns Initiative, Support for Regional Tourist Boards and Grant

for R&D, although the latter is underway.

484 Based on the Office of National Statistics 2006 GVA per worker for Yorkshire and Humber


Table 289: Estimated impact of YF spending on national programmes between2002/03 and 2006/07 (£m)

National programme YF spend (£m) Net jobs created / safeguarded


Manufacturing Advisory Service 3.7 3,078

Coalfields Programme 136.8 -

Phoenix Fund 0.5 -

Regional Innovation Fund 11.6 -



1.5 -


Total 244.9 5,587


The GVA to cost ratio of the Business Link in Yorkshire and Humber was 3.1: 1, which compares wellagainst the range of overall GVA to cost ratios for Business Link at the National level (i.e. 2.3: 1 to 2.5: 1).


Annex A: List of AWM evaluations

Annex A provides a list of all those evaluations undertaken by AWM which are regarded as at leastcapable of use which have been used to underpin the report.

Intervention category Evaluation title AWM spend covered

by evaluation (£m)

Evaluation of the High/Higher Technology Corridors 38.7

Evaluation of the Rover Task Force 2000 and MG Rover Task

Force 2005 Programmes

36.2

Evaluation of AWM’s clusters programme 2002/03 to 2007/08 72.8

PARD: Third Interim Programme Report 32.7

Business development

and competitiveness

An independent evaluation of the Mercia Spinner Programme 3.2

Regeneration through

physical infrastructure

Evaluation of major land and property investments 261.5

People and skills An evaluation of AWM’s skills interventions 47.1

Evaluation of the Single Regeneration Budget in the West

Midlands

218.0Other/hybrid

interventions

An Interim Evaluation of the Regeneration Zones Programme 280.2


Annex B: List of EEDA evaluations

Annex B provides a list of all those evaluations undertaken by the EEDA which are regarded as at leastcapable of use which have been used to underpin the report.

Intervention category Evaluation title Expenditure covered by

evaluations (£m)

Rural Business Support 2.8

Early Stage Business Support 2.9

Innovative Actions Programme 1.7

Innovation Capital 15.4

Innovation Revenue 1.5

Attraction of Inward Investment 10.6


competitiveness

Sustainable Consumption and

Production

2.4

Trinity Lighthouse 2.5

Business Premises 22.4

Capital Project 19.8

Firstsite:newsite 3.7

EPIC 2.5


infrastructure

Inspire East 1.2

Investing in Communities485

36.4

Workforce development 4.1

Construction skills 2.8

People and skills

University of Essex in Southend 18.7

Meta-evaluation of SRB 64.9Other interventions

An area-based evaluation of EEDA’s

impact - Ipswich

24.8

National programmes Intermediate Evaluation of the

Manufacturing Advisory Service

(MAS) - East

2.2

485 There are five useable evaluations relating to EEDA’s Investing in Communities programme. This annex has focused on the

most recent evaluation, which is a comprehensive region-wide evaluation of relevant spend on and outputs/ outcomes from this

intervention.


Annex C: List of LDA evaluations

Annex C lists of all those evaluations undertaken by LDA which are regarded as at least capable of useand which have been used to underpin this report.

Intervention category Evaluation title LDA spend covered

(£m)

Impact evaluation of four Access to Finance projects 19.8

Final Evaluation of the Up and Running programme

Up and Running Evaluation – Remedial Work1.3

Interim Impact Evaluation of Business London 1.8

Supply London/London Value Chain Interim Evaluation 2.4

Evaluation of the Theatre Audience Development Project 0.2

Evaluation of the London Fashion Forum 0.5

Collage Arts: Economic Impact Evaluation 1.0

Impact Evaluation of Heathrow City Enterprise Project 0.7

Centre for Fashion Enterprise 2.2

BioLondon: London’s Life Sciences Strategy and Action Plan

– interim economic impact evaluation24.4

British Library Business & IP Centre: A capital resource for

enterprise and innovation

British Library Business & IP Centre – Additional Survey

Analysis

1.1

JumpStart Evaluation

Economic Impacts of the JumpStart Programme3.4

Impact Evaluation of the London Pre-Commercial Fund 5.6

Impact Evaluation of the Secondment Into Knowledge project 0.3

Impact Evaluation of the SME Innovation Support project 1.3

Economic Impact Evaluation of the Sub-Regional Partners’

Business Retention Programme2.3


and competitiveness

Enhance Programme Impact Evaluation 3.5

Area Evaluation: London Riverside 77.4

Area Evaluation: Park Royal/Wembley 85.8

Woolwich/North Bexley Area Evaluation 26.8

Evaluation of the Bernie Grant Centre 3.3

Evaluation of the Rich Mix Centre 5.8

Evaluation of Laban Dance Centre 2.9



Visit London 45.8


Intervention category Evaluation title LDA spend covered

(£m)

Thames Gateway Jobnet Interim Impact Evaluation 1.3

Impact Evaluation of ESF Opportunities Fund Round 1

Impact Evaluation of Non-ESF Opportunities Fund Round 112.9

Impact Evaluation of LDA Objective 3 ESF Co-Financing

Programme 2005-20079.5

Impact Evaluation of Non-ESF RSP Productivity Programme 2.3

Impact Evaluation of Non-ESF RSP Inclusion Programme 1.8

The Supporting Talent into Enterprise Programme (STEP)

2006-2008

1.6

Impact Evaluation of ESF RSP Inclusion Programme 1.5

Impact Evaluation of ESF RSP Productivity Programme 0.9

Impact Evaluation of On Your Marks Programme 0.6

Impact Evaluation of Migrants and Refugee Qualifications

Programme

0.3

People and skills

Evaluation of Southwark Works 2.8

Other An evaluation of the Single Regeneration Budget programme

in six English regions507.8

National Evaluation of London MAS 6.8


Annex D: List of NWDAevaluations

Annex D provides a list of all those evaluations undertaken by the NWDA which are regarded as at leastcapable of use which have been used to underpin the report.

Intervention category Evaluation title NWDA spend covered (£ million)

Agenda for Change Programme 9.8

Bio Core Technology Facility 10.9

Bio Investments 10.1

BREW Programme 1.5

Broadband Investments 12.3

Clusters Programme 25.9


Centre

16.3


Programme

2.2

ENWORKS NW Minimisation Project 1.0

FP6 Dissemination Module 2 1.0

Green Business Park 0.8

Higher Education Innovation Funds

Round 2 (HEIF2)

7.4

ICT Aimes Programme 3.4

InfoLab21 Programme 10.0

Infrastructure Work at Arvato

Gravure Printing Site, Speke

2.7


Centre

2.0

Liverpool Digital Project 16.2

Liverpool Science Park 6.2


Innovate (MMBI)

1.2

National Biomanufacturing Centre 31.7

North West Business Investment

Fund

11.6

PowderJect Project 14.1

Project Access 16.8


competitiveness

Quinn Glass 4.9



Regional Rural Programme 6.8


Workspaces

0.6

Social Enterprise 5.2



Managers (DDA TDMs)

1.7

The North West Science Fund 11.5

Ancoats Regeneration Programme 45.0

Barrow Call Centre 3.5

Central Park 15.0

Futures Park, Bacup 3.1

George Street Quarter, St Helens 1.3

Historic River Wall, Chester 0.8

Kingsway Project, Widnes 0.8

Land Reclamation 17.3


Festival

0.5

Liverpool Commercial District 7.4

LLDC SIA 30.3

LV Public Realm Interim 19.3

LV Waterfront Construction Impacts 38.0

Marketing Interim 16.3

NML Into the Future 1.8

Regional Strategic Sites Programme 55.5

Tourism Interim 8.4

Visitor Interim 12.2

Whitemoss Business Park 3.9

West Lakes Renaissance 31.8


infrastructure

World of Glass 0.9

BESS Programme 0.9

Eastserve Programme 1.5

Lancaster University Leadership

Centre

4.4

Maximising Opportunity in

Warrington

0.7

Project Unity 20.0

People and skills

URC NEM Whitworth Media

Technology Centre

2.0

Other Beacons East Manchester (Round 5) 19.2



Blackburn Town Centre Renaissance 5.4


Programme

6.5

Halton Focus for Change (Round 5) 9.1

Hyndburn PACT (Round 6) 6.5


Programme

7.0

Sefton Village Partnership 0.8

Single Regeneration Budget (SRB)

Meta Evaluation

286.2


Business Programme

3.2

Coalfields Evaluation Programme 3.2National programmes

Evaluation of the Market Towns

Initiative

9.5


Annex E: List of ONE evaluations

Annex E provides a list of all those evaluations undertaken by the ONE which are regarded as at leastcapable of use which have been used to underpin the report.

Intervention category Evaluation title ONE Expenditure

covered by evaluations

(£m)

Access to Finance 0.6

IEF Impact Evaluation of the Business Theme – Enterprise

Support

9.4

A Review of the ONE Sectors Programme 23.7

E-Business Programme Evaluation 13.7

ONE Innovation, Industry and Science (IIS) Programme –


150.6

Evaluation of ONE Investment, Aftercare and Overseas

Function

6.1


and competitiveness

Midas Project Evaluation 0.6

A Programme-Level Evaluation of ONE's Quality of Place

activities

180.9Regeneration through


Regional Image and Tourism Marketing (Promoting the

Region)

12.5

ONE Economic Inclusion Programme Evaluation 11.1People and skills

ONE Skills and Higher Education Programme Impact

Evaluation

83.7

Other interventions An Evaluation of the SRB Programme in the North East 205


Annex F: List of SEEDAevaluations

Annex F will provide a list of all those evaluations undertaken by the SEEDA which are regarded as atleast capable of use which have been used to underpin the report.

Intervention category Evaluation title SEEDA spend covered (£m)


competitiveness / Regeneration

through physical infrastructure

Innovation infrastructure Evaluation*486

30.3

Individual enterprise Support

Evaluation*

18.2


Evaluation*

15.8

Interim Evaluation of the Redundant

Buildings Grant and Farm

Diversification Programmes*

3.8

End point evaluation of SEEDA’s

Emerging Technologies Programme

– Part I*

2.0


competitiveness

Evaluation of the Projects and

Partnerships Supported By SEEDA

to Achieve Sustainable Use of

Natural Resources

5.8

Physical Regeneration Evaluation* 126.6

Sea Space Evaluation487

31.2

Strategic sites evaluation – Chatham

Maritime

21.1

Evaluation of the Oxford Castle and

Prison Project

6.1

St Cross Business Park, Isle of

Wight: Ex Post Evaluation

5.5

Evaluation of Gosport Business

Centre

4.7


infrastructure

Chatham Maritime University

Buildings Evaluation (Drill Hall and

Canteen)

7.1

People and skills Skills and Employability Evaluation* 14.3

486 Evidence was divided between two categories

487 Expenditure covered by this evaluation has been allocated across intervention categories


Intervention category Evaluation title SEEDA spend covered (£m)

MKOBB Sub-region Area

Programmes End of Programme

Evaluation

3.9

Evaluation of Exodus 3.5

Evaluation of the SEEDA

Basic Skills Programme

2.3

NHS Skills for Life Programme-

Evaluation

2.1

Management Development

Evaluation

2.0

Evaluation of Great Ideas in Science

and Technology (GRIST)

1.0

Redundancy Support Service

Evaluation

0.9

Skills Gateway Interim Evaluation

Report*

0.2

UP for Enterprise -Phase One Roll-

Out: Project Evaluation*

0.2

Single Regeneration Budget Meta-

evaluation

128.8Other interventions

Evaluation of the Area Investment

Frameworks in the South East

31.5

Tourism South East Evaluation 7.1National programmes

East Kent Coalfields Evaluation 20.9

*Evaluations are interim. Sampling evaluations have also been marked as interim as they includeprojects at all stages of their lifecycle.


Annex G: List of SWRDAevaluations

The table below lists of all those evaluations undertaken by SWRDA that are compliant with the principlesof the IEF and have been used to inform this report.

Intervention category Evaluation title SWRDA spend

covered (£m)

Business Support Economic Impact Review 17.2

ICT as an Economic Enabler 0.2

Beacon South West 1.0

South West Food and Drink 5.7

SWRDA Support for the Aerospace Industry 13.6

BioApproaches 0.7

Coral Reef 3.3

Enterprise Pavilion 2.5

Tamar Science Park 5.0


competitiveness

Gloucestershire Floods 2.0

Physical Regeneration Economic Impact Review 95.5

Sites and Premises Economic Impact Review 167.5

Rural Renaissance 16.6

Temple Quay I 1.9

National Maritime Museum Cornwall 7.7

The Eden Project 11.0

The Way Ahead 2.6


infrastructure

Creating Excellence 2.5

Skills and Learning Economic Impact Review 19.5

South West Opportunities for Older People 0.6

Advanced Engineering Skills 2.9

Combined Universities in Cornwall 14.7

Genesis – Somerset Sustainable Construction Centre 1.2

Relocation of Gloucester FE College 1.1

People and skills

Strengthening Community Foundations 0.1


Intervention category Evaluation title SWRDA spend

covered (£m)

Single Regeneration Budget 55.2

Business Economy Module and Skills Learning

Intelligence Module

2.0

Other interventions

Office of National Statistics Regional Presence -

Grants for R&D 2.4National programmes

South West Manufacturing Advisory Service (interim) 1.05


Annex H: List of YF evaluations

Annex H provides a list of all those evaluations undertaken by YF which are regarded as at least capableof use which have been used to underpin the report.

Intervention category Evaluation title YF spend covered by

evaluations 2002/03-

2006/07(£m)

E-Business Unlimited 6.0

South Yorkshire Design Works 1.0

South Yorkshire Generic and Intermediate

Start Up Programme3.9

York and North Yorkshire Business Support and

Enterprise Programme3.9

Investment in Cluster Initiatives 92.4

Broadband Gap & NYnet 5.2

Centres of Industrial Collaboration 9.1

Industrial Research and Development Award 7.4

Science City York 0.8

South Yorkshire Inward Investment Grant Scheme 12.4

Targeted Export Support Scheme 2.9


and competitiveness

Investment in Resource Efficiency 3.8

Bradford Centre Regeneration 17.8

Holbeck Urban Village 26.2

Renaissance Market Towns 9.7

Renaissance Towns and Cities 96.8

Sheffield One Urban Regeneration 37.6

Stainborough Park 1.5

Hull Quays 14.5


Modernising Rural Delivery 1.4

Renaissance South Yorkshire 3.7



Hull City Build 16.4


Intervention category Evaluation title YF spend covered by

evaluations 2002/03-

2006/07(£m)

Graduates Yorkshire 1.5

South Yorkshire Transitional Labour Market 5.7

Directions Finningley 5.7

Train to Gain 7.8

South Yorkshire Social infrastructure Programme 6.8

West Yorkshire Skills Programme 1.4

People and skills

University Centre Barnsley 2.0

Other interventions SRB Programme Evaluation 331.5

Yorkshire Futures 2.2

Churches Regional Commission 2.2

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