CUMBRIA LEP INVESTMENT PANEL am Friday 14 th June 2013 Council Chamber, County Offices, Kendal

Transcription

1 CUMBRIA LEP INVESTMENT PANEL 9.00 am Friday 14 th June 2013 Council Chamber, County Offices, Kendal Present: Jackie Arnold (Chair) (JA) Chair (Deputy Chair of LEP) Suzanne Caldwell (SC) Deputy LEP Executive (Private Sector) Gillian Elliott (GE) LEP Executive (Public Sector) Alison Hatcher (AH) Senior Manager (CCC) Steven Brown (SBrown) Deputy for CCC 151 Officer (Accountable Body) Suzanne Cox (SCox) Senior Contract Officer (CCC) Leanne Beverley (LB) Project Manager (CCC) 1. APOLOGIES Graham Lamont (GL) David Southward (DS) Rob Johnston (RJ) Ruth Pugsley (RP) Tom Warburton (TW) Sam Bramwell (SB) LEP private sector representative LEP public sector representative LEP Executive (Private Sector) CLG Monitoring Officer HCA Head of Area for Cumbria and Lancashire Contract Manager (CCC) 2. NOTES FROM LAST MEETING Agreed, matters arising from the minutes to be dealt with under item 3. Action: SC to provide information in respect of the complaints received. Action: CCC to prepare a draft SLA for further consideration linked into a wider review of LEP governance arrangements. 3. MATTERS ARISING 3.1 Implications of CCA Action: LB to contact Enterprise Answers to investigate whether it would be suitable to outsource to them the making of the SBDL when loans are affected by the CCA. If not, it is agreed to avoid providing loans of less than 25,000 to partnerships. 3.2 Changes to Process Changes to the process for both and CIF (icl SBDL) were advised. Applications submitted to RST pre- sift by RST to check all information Pipeline projects spreadsheet updated and distributed to members of the IP with copies of application to gain a view as to which applications should go into appraisal. Appraisals to be QA d by one person. Action: GL to review LEP and CIF (incl SBDL) Guidance Note and Application Forms.

2 4. Matrix of projects for, CIF and SBDL Applications Ref Appraisal Recommendation Decision Post IP 005 Recommendation for up to 60,000 investment under the De Minimis Block Exemption, subject to the following conditions: Conditions to be cleared prior to the issue of a contract: A Delivery Plan is agreed with the applicant to include agreement for the final claim to be made immediately on project completion, to aid cashflow for the applicant. Pre-conditions to be included in the contract: Applicant to provide evidence of the bank loan approval prior to any grant being released. Ongoing Conditions to be included in the contract: Should the property be purchased for less than 175,000 the grant should be paid on a pro rata basis based on the grant rate of 34.29%. 4 FTE jobs to be created by March 2016 to allow 3 years of monitoring prior to the end of the programme. As per appraisers except for the condition re payment if on a pro rata basis. This was removed by the IP. 023 Recommendation for investment up to 25,000 under Article 15 of GBER at an intervention rate of 20% to create 17 FTEs, subject to the following conditions:- Jobs target revised to 8FTE and agreed with Chair of Panel on 05/07/13 Prior to offer letter being issued: Written consent from the landlord for the changes within their property. A completed project delivery plan.

3 Pre-conditions: Written evidence of 100,000 match funding. 024 Copies of 3 quotations for construction costs, fitting out, project management and equipment. Recommendation to refuse: Due to direct link between intervention and job creation being weak. The IP requested a further consideration of the application. Need for public sector intervention is unclear and there is no evidence that bank borrowing is unviable 025 Concerns regarding the vast growth of the business in terms of capital investment Recommendation to invest up to 61,400 to create 10 new FTE jobs and safeguard 4 FTEs at an intervention rate of 40% under De Minimis, subject to : Prior to offer letter being issued: Completed Project Delivery Plan Pre-conditions: Confirmation of match funding of 92,400 is in place The Project is located with the BEC area, it was suggested that contact be made with BEC and the applicant to confirm whether it would be appropriate for the project to be funded by the BEC Programme. The BEC programme would only be able to offer a grant at an intervention rate of 35% and for capital costs only. The LEP programme is able to pay for capital and revenue costs and can invest at an intervention rate of 40% under De Minimis. 039 Providing copies of three quotes Recommendation to invest up to 100,000 to create 24 FTEs at an intervention rate of 20% under Article 15 of GBER, subject to the following conditions: Prior to offer letter being issued: Agreed with BEC that LEP would invest 19/06/13 Enquiry raised by applicant regarding the availability of up to 48,000 to support training of staff to degree level. Completed Project Delivery Plan Pre-conditions: Confirmation of bank finance, including overdraft facility. Tender assessment of 3 contractors and to confirm contractor to be appointed who will complete the works within budget and before March 2014.

4 003 Recommendation to Refuse: Represents poor value for money, the actual number of new jobs is limited to 2 FTEs = 65,600 / job. Concern over deliverability - planning permission is outstanding and the land has yet to be purchased. 195,000 (48.5%) of the match funding is to be provided by the bank and is only agreed in principle Recommendation to refuse: Poor Value for Money with forecast unit costs of 27,979 / job and 1.57 private sector investment / 1 In addition to the VFM concerns, there is a concern regarding the sustainability of job creation due to their continuing dependence upon grant intervention. The applicant has received three public sector grants in the last 3 years totalling almost 70,000 for business expansion and has yet to report any job creation. Missing supporting documentation including cash flow, adequate confirmation of match funding and evidence of procurement. Recommendation by appraiser to undertake a full appraisal. Project is deliverable within 4 months. Programme Manager s Comments Despite this being a worthy and deliverable project AH recommended that it is rejected at this stage due to poor value for money and the low number of job outputs. Recommendation to Refuse: The products produced by this project are free range eggs which are the result of primary agricultural production. This is ineligible activity for this Programme. Recommendation to Refuse: The project does not demonstrate a correlation between investment in this equipment and growth of the business. Recommendation to Refuse: The project does not demonstrate a correlation between investment in this equipment and growth of the business. Recommendation to Refuse: The project does not demonstrate a correlation between As per Programme Manager s Comments.

5 017 investment in this equipment and growth of the business. Recommendation to Refuse: Phase 1: No premises identified. Supporting documentation i.e. Profit and Loss accounts (November 12 October 13) would suggest that there is no need for the grant other than to assist with cash flow. The appraiser believes that this phase of the project does not demonstrate the incentive effect. IP agreed to give further consideration to the application to see if the project could be split into appropriate deliverable phases. If a full appraisal will be undertaken. Agreed to do full appraisal. Phase 2: No premises Identified. Poor value for money cost per job 46,735 FTE per post. 028 Lack of supporting evidence of demand for the service in Cumbria. Recommendation to Refuse: The application or business plan does not link to the job creation outputs. The scale of the project is larger than the total annual turnover ( 125k per yr 11/12) concern that this scale of project for the size of the company is high risk. IP agreed to give further consideration to the application. A full appraisal to be undertaken. 034 Previous business went into voluntary liquidation in 2010 and two of their directors are now the managing director and business manager of this company. This gives another element of increased risk to the delivery of this project and the future sustainability of the company as a whole. Recommendation to Refuse: The Profit and Loss Account history shows that this is a profitable company (net profit for the last two years equates to 730,642) which makes it difficult to establish the need for grant intervention. 035 Poor value for money cost per job = 99,886/ 1FTE Recommendation to Refuse: The appraiser recommends that this project is rejected due to insufficient information being supplied and lack of additionality benefit. The IP recognised that the project would happen quicker and to a better quality should intervention be provided. IP agreed to invest 120,000 to create 8FTEs using under Article 15 of

6 GBER at an intervention rate of 15% to create 8 FTEs, subject to the following conditions:- Conditions to be cleared prior to the issue of a contract: A Delivery Plan is agreed with the applicant. CIF - SBDL Applications Ref Appraisal Recommendation Decision Post IP CIF Recommendation to Refuse: the project in 024 its current form appears to be poor value for money due to only 0.5 jobs to be created at a CIF 038 value of 75,000 per job. Recommendation to Approve 28,275 to create 6FTE: subject to written confirmation of match funding. Further to the discussion Growth Hub Advisers are referring West Cumbrian businesses to the BEC programme when it is in the best interest of the business. It was also noted that there are some projects within the BEC programme that are also seeking funding via the LEP s Small Business Development Loan. In these instances, the SBDL appraiser will liaise with BEC to ensure a co-ordinated approach to project investment. 5) Potential Projects Pipeline projects The following are applications that have been submitted. Agreement from the IP was sought on how to progress. Project Ref 008 Project Cost and Intervention 400,000 RST Checks Incomplete Application Return to applicant IP Review AH to contact applicants ,000 2,266,000 Eligible and complete Proceed to appraisal

7 543, ,600 7,840 Eligible and complete The IP concluded that as the proposed project would deliver limited employment benefits and growth within the local economy it could not support it. It was noted that applications for Rosehill and Clawthorpe Hall have been received and were to be appraised. 6). Any Other Business A letter from Access to Finance has been received highlighting that if further funding cannot be found the service will cease within Cumbria. A requested a financial contribution of 46,000 from the LEP. GE clarified that the service provides specialist financial advice, but only to ERDF eligible businesses. Action: GE to discuss in weekly telecon and draft a holding response. 7). Next Meeting Next Meeting 16 July County Offices, Kendal