Agenda item

(i)            Joint Report of the Director of Transformation and Partnerships and the Corporate Director of Regeneration and Local Services.

(ii)           Presentation by the Managing Director – Business Durham, Regeneration and Local Services.

The Chair welcomed the Managing Director Business Durham, Brian Archer who was in attendance to provide the Committee with an update presentation in relation to the work of Business Durham (for copy see file of minutes).

The Managing Director Business Durham thanked the Chair and Committee for the opportunity to provide an update on the performance of Business Durham.  He asked Members to note the €47million of EU projects that were underway, and the capital grant programme, with a minimal level of £100,000 based upon the number of jobs created.  He explained one project was the Durham City Incubator, working jointly with New College Durham, Durham University and Business Durham to provide high growth business start-ups with support.  The Managing Director Business Durham noted seven inward investments within the County and noted £8million worth of contracts won.  He added that the business occupancy rate for Council owned units was at 87 percent and that the rental income provided a £1million operating surplus which meant Business Durham was in effect self-funding and had the ability to provide some match funding.

The Managing Director Business Durham explained that there were a large number of businesses across the County and with a high number of start-ups.  He noted attractive points of the County included low labour costs and the relatively high skill levels across the working age population.

The Managing Director Business Durham explained the aim was to have Business Durham as a single point of contact, to remove the confusion often faced by businesses and to be different, with a culture that gains the trust of the business community and was clear and transparent.  He noted, that he felt this difference had helped Business Durham be successful.

He noted the business survival rates in County Durham and the growth of the stock of businesses in the County, both greater than regional values, with growth increasing and failures decreasing.

The Chair thanked the Managing Director Business Durham and asked the Committee for their comments and questions.

Councillor E Adam noted lower labour costs and asked if the 3,866 jobs created all equated to lower paid and lower skill jobs.  The Managing Director Business Durham noted that there was a challenge in terms of attracting the jobs to the County which looked for those higher-level skills, with work ongoing with the Further Education and Higher Education organisations to help build up those skills.  He added that the only sustainable competitive advantage came from skills and therefore it was important to be able to look to move people up the value curve in this regard.

Councillor E Adam noted mention of 40 multinationals investing in the County over the last three years and asked were they actively sought and were they companies offering low pay.  The Managing Director Business Durham noted there was a range and it was important to focus on the positives and advertise County Durham as a great place, not only in terms of skills, but also in terms of transport links, broadband and marketing.  He noted some of the larger companies, such as Amazon and other high-tech companies, as well as more traditional companies.  He added that working to create a “blended economy” was important, not simply relying upon low-paid, labour intensive jobs.  He noted the promotion of high-tech jobs such as those at the companies based at NETPark and noted many of the Physics and Mathematics graduates from Durham University were attracted to stay in the area as well and work was also undertaken to grow our own jobs within the County in addition.

Mrs R Morris noted looking on the Council’s website that the Skills Strategy was for the period 2014-2018 and asked for more information as regards any refresh.  The Managing Director Business Durham noted that while the skills strategy was outside the remit of Business Durham, he understood that there was an aim to raise skill levels, namely above Level 4 and also to look to increase the level of management skills.

Mrs R Morris asked as regards the Local Enterprise Partnership (LEP) and the Local Industrial Strategy (LIS) and asked now, a year later, if it was possible for us in the County to be more proactive in looking to tie-in with the LIS to assert the different needs of County Durham in comparison to Newcastle and Sunderland for example.  The Managing Director Business Durham agreed there were nuances associated with County Durham and that there was work through the County Durham Partnership (CDEP), in terms of feeding into the LEP and LIS.  He added as regards the research and evidence base being developed, with Durham University and New College Durham being involved.  He explained a challenge for the LIS was the high-level nature of the national Industrial Strategy (IS) and in linking with the Shared Prosperity Fund (SPF) by aligning to the IS in order to be able to access those funds.  He noted that it was therefore important to try and influence as regards the IS and those involved, such as Professor Brian Tanner, Chair of the CDEP and others such as the Federation of Small Businesses (FSB) and the North East Chamber of Commerce (NECC), were looking to influence on behalf of the County.

Mrs R Morris noted reference to the number of inward investments and asked for more information.  The Managing Director Business Durham noted the Annual Report contained a summary and that he could circulate the most up-to-date information to Members in due course.

Councillor E Scott thanked the Managing Director Business Durham for a succinct and informative presentation and noted her attendance at the “Durham: Powered by People” launch event and asked why such a high-profile brand was not mentioned with the report and presentation.  The Managing Director Business Durham noted that Business Durham promoted the County as a great place to work, live and make jobs and noted the branding was included on materials, posters and videos.  Councillor E Scott noted she felt it was something that should be promoted more within the Council itself.  The Managing Director Business Durham noted it was promoted internally, so in turn those departments could inform those businesses they dealt with.  The Principal Overview and Scrutiny Officer, Stephen Gwillym noted that the Powered by People brand had been promoted internally, with a footer on e-mails including the branding.

Councillor R Crute noted the uncertainty in terms of funding and the need to ensure when EU funding ceased that the SPF would look to be right for County Durham.  He noted the Secretary for State had stated a desire for “maximum continuity” and asked if there was any further information and would other funding streams be subsumed by the SPF.  The Managing Director Business Durham noted assurances had been sought in terms of the SPF being greater than or equal to EU funding, adding there was the potential for some areas, including County Durham to be hit hardest by the effects of Brexit and changes in funding.  He noted currently he was not confident that the SPF would be greater than or equal to EU funding, citing the loss of European Social Fund (ESF) in particular with its link to the skills agenda.

Councillor P Howell noted low-skilled jobs within the County and also the high-skill jobs, such as those described at NETPark.  He asked for further information as regards those occupying NETPark and the numbers of people those companies represented.  The Managing Director Business Durham noted that NETPark was growing very well, with £7 million of LEP funding to expand.  He added occupancy was over 90 percent and would be happy to liaise with Overview and Scrutiny Officers to arrange a tour for Members.  The Chair noted that dates in May/June 2020 would be confirmed for a number of site visits for the Committee, including NETPark.

Mrs R Morris asked as regards any links with the Centre for Process Innovation (CPI).  The Managing Director Business Durham noted there was links, in relation to the catapults within the County.

Councillor L Maddison noted schools visits to companies at NETPark would be valuable and asked what work was ongoing to identify key individuals in schools to take leadership on this to encourage interest in those higher skilled jobs at an early age.  The Managing Director Business Durham noted an additional 17 schools were taking part in the Future Business Magnates (FBM) competition which had schools working with businesses to encourage an enterprise culture and a “can-do” attitude. 

He added in many cases students would be taken into businesses, including those at NETPark and that this inclusivity was important in terms of economic growth.

Councillor L Maddison added she had recently experienced the fantastic work of students in woodworking classes and asked how those types of skills were encouraged.  The Managing Director Business Durham noted that there were “idea workshops” where students would work with mentors to test and validate an idea and noted the recent launch event at the Xcel Centre at Newton Aycliffe, hosted by BBC Radio Newcastle presenter Charlie Charlton.

Mrs R Morris noted the FBM competition having ran for 14 years and asked for any evidence of successes from former participants in terms of business start-ups or other successes.  The Managing Director Business Durham noted he would look to records and see if any further information could be brought back to Members.

Councillor J Clare noted that a recent letter from Government in relation to the SPF had noted a “distribution based upon need”, adding this was a point the Council had been very strong upon, campaigning against any distribution based upon competition.  He added that the Government definition of need based would have to be confirmed.

The Managing Director Business Durham informed the Committee that he was leaving the Authority and commented on the excellent work and expertise of colleagues in the County Council and in Business Durham.

The Chair noted he would like to thankManaging Director Business Durham on behalf of the Committee for all of the hard work he had undertaken since joining Business Durham and wished him well for the future.  The Managing Director Business Durham thanked the Chair and noted he was leaving to join the West Yorkshire Combined Authority and added it had been a privilege to work with the Business Durham Team and County Council Members.  He reiterated that the Business Durham Team was extraordinary and when looking at business support offered in other parts of the country it was clear to him the best offer was in County Durham and he felt very proud of the work of the Team and was grateful of the positive support offered by Members. 

Resolved:  

(i)      That the report and presentation be noted.

(ii)      That the Economy and Enterprise Overview and Scrutiny Committee, as part of the refresh of the Committee’s work programme for 2020/21, receives a further progress report on activity undertaken by Business Durham.