Agenda item

Report of the Corporate Director of Regeneration and Economic Development.

The Chairman thanked the Managing Director, Business Durham, Dr Simon Goon who was in attendance to give an update in relation Business Durham (BD) (for copy see file of minutes).

The Managing Director, BD referred to the press articles mentioned in the previous item, noting these as signs of increased confidence of business in the County.  It was also noted that there had been increases in enquires and more discussions about growth in the economy.  It was explained that the challenge for County Durham was to manage limited resources and to be ready to react to opportunities as they appear.

The Committee were reminded that the aims of BD were to deliver the environment for business and economic growth and to increase the size of the private sector to rebalance the County’s economy by:

·       Increasing rates of business survival

·       Increasing rates of business start-up

·       Increasing numbers of businesses attracted

·       Increasing numbers of jobs safeguarded/created

Councillors learned that the work of BD was underpinned by the ambition of raising the economic aspirations of its client groups with three priorities for BD being to:

·       Deliver a financial sustainable service

·       Be more proactive in engaging with business and sector development

·       Operate more effective, efficient and influencing networks within and out of the County

The Managing Director, BD explained that since reporting at the Committee in October 2013, in respect of forming a strong evidence base to measure the impact of activity on the economy of the County, good progress was being made with data sets and data quality, now having agreed a GVA per employee values for the County.  It was explained that this in turn allowed the impact of the activities of BD to be estimated allowing understanding of which areas and sectors had the most economic impact.  Members were referred to Table 1 within the report which set out the GVA contribution per job by sector and noted the percentage of the labour market they represented. 

Councillors noted that BD had an Advisory Board supported by Members, chaired by Councillor S Henig, with private sector board members in addition who were available to provide advice, information and support the operation of BD.  It was explained that BD had three teams including the “Business Space Team” which had responsibility for the letting, management and development of the Business Durham property portfolio across the County.  It was explained that the other two teams were the “Business Development Team” and “Innovation and Growth Team”, with the former including work to promote enterprise and increase the number and quality of businesses starting up.  Members noted the Innovation and Growth Team had responsibility for inward investment; the innovation agenda; sector development; site-specific propositions; and NETPark.

The Committee were informed of the new key performance indicators (KPI) that had been developed for BD and performance levels at 30 September 2014, noting the high level of business occupancy, 77%. 

The Managing Director, BD noted that in relation to “Enterprise, Engagement and Outreach”, the Future Business Magnates (FBM) enterprise competition was celebrating its 10^th Anniversary.  Members were reminded that FBM pairs up schools with local businesses, engaging with over 200 young people per year.  It was explained that the theme of the 2013-14 competition was “Tomorrow’s Technology Solving Today’s Problems” and this theme encouraged the use of science, technology, engineering and mathematics (STEM) skills in order to develop a new business idea.  It was noted that the winning school/business from 24 participating teams was by Belmont Community School and Watersons Limited with an “anti-cyberbullying app” for smartphones, with the idea being so impressive to the judges and businesses that the idea was being looked at to be taken forward as a real product.  It was added that a pilot of “FBM Plus”, operating the competition in Further Education (FE) establishments, would be further expanded in 2015.

Members noted a number of initiatives BD had been involved with, including: “Putting Women on the Map”, a celebration of women’s enterprise to coincide with International Women’s Day; supporting Durham University’s student Blueprint Enterprise competition; Kickstart Weekend organised by Durham University’s student led enterprise society, “Entrepreneurs Durham”; enterprise-themed talks given to a total of 385 people around the County; and leading on the development of European Regional Development Fund (ERDF) 2014 work streams on behalf of the County Durham Economic Partnership (CDEP) for innovation and enterprise and business support.

The Managing Director, BD explained to Members that by utilising DCC, CDEP and ERDF monies, a programme of support for people starting creative businesses had been commissioned.  Members noted a self-employment support option for those affected by Welfare Reform (WR), with 20 people having been supported and 1 client having started up a business.  It was added that around 600 businesses had been engaged with during 2013/14 and also a number of Business Park Communities had been established based around key industrial estate locations.  The Committee were informed that the Durham Social Value Taskforce, chaired by Councillor N Foster, had helped Small and Medium sized Enterprises (SMEs) to access procurement opportunities utilising aspects of the Social Value Act where applicable.  Councillors noted that 20 businesses had been helped to secure a total of £8.1 Million from the Regional Growth Fund, under the “Let’s Grow” grant scheme.        

Members were reminded of the success of the Hitachi Rail development and noted the “topping out” ceremony that had recently taken place.  It was explained that South West Durham Training (SWDT) were to receive a “training train” so that the Japanese methodology could be explained to trainees, with an ability for the train to be stripped and rebuilt by Hitachi employees.  It was noted that a number of design jobs would also be created by Hitachi and that Newton Aycliffe will include a design department as well as assembly plant

Councillors noted several inward investment successes including: Bristol Labs taking on the former Reckitt Benckiser plant at Peterlee with 347 jobs created from January 2014, looking to double that number over a 5 year period; TSC Simulation setting up an office at Aycliffe Business Park; Atom Bank looking to set up its headquarters at Aykley Heads with upto 500 jobs over the next few years.  Members noted the continued success of NETPark, now in its 10^th year, and the work of Durham University and the Centre for Process Innovation (CPI) in developing the innovation theme of the European Structural Funds Investment Plan and to develop NETPark as the global hub of materials integration capabilities.

Members noted that BD had influenced the NELEP’s Smart Specialisation Strategy (S3) and also led a regional consortium to secure a regional Centre of Excellence status for NETPark for the “Satellite Applications Catapult”, making NETPark the only site that had two “catapults”. 

The Managing Director, BD explained that in relation to business properties, occupancy and collection rates had continued to improve and a new development at Consett, “ViewPoint” opened on 4 March 2014 by the late Councillor Pauline Charlton, the then Chairman of Durham County Council.  Members also noted the growth and improvement at the Durham Dales Centre at Stanhope.

The Chairman thanked the Managing Director, BD and asked Members for their questions on the update.

Councillors asked questions in relation to: investment in other industries other than Hitachi at Newton Aycliffe; the status of the development at Hawthorn in the east of the County; and income generated from properties, and whether targets relating to income and occupancy would be achieved.

The Managing Director, BD noted that work was ongoing to open up more land at Newton Aycliffe for development and noted the activities in relation to the “Durham Oktoberfest” event involving 140 businesses.  It was added that while there was a focus on the Hitachi site, there were several other excellent businesses in the Newton Aycliffe area such as EBac, Gestamp Tallent, Tekmar and Sabre Rail.  The Managing Director, BD explained that the Hawthorn development had been a victim of the recession, however, there had been a recent enquiry as regards the site, a possible “seed” that would help to take the development forward.  Members noted that DCC properties were being let in a competitive market and, in order to be competitive some properties are offered with rent-free periods to encourage new businesses to establish and grow.  It was explained that there was a degree of lag between occupancy rates increasing and the corresponding increase in income, due to this incentive period.  The Managing Director, BD noted that he was confident that targets relating to occupancy and income would be met by the year end.

The Managing Director, BD noted a “working group” had been set up by BD, looking at the better connecting businesses and educationalists (secondary schools), looking at how schools and employers can work together.  It was suggested that an update on the development of this group could be provided to Members at a future meeting of the Economy and Enterprise Overview and Scrutiny Committee.

Resolved:

(i)       That the Economy and Enterprise Overview and Scrutiny Committee note the           update report.

(ii)      That the Economy and Enterprise Overview and Scrutiny Committee receive a        further update report on the work of Business Durham at future meeting of the     Committee.