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ADVANTAGE WEST MIDLANDS

Minutes of the 126th Board meeting held on 27 July 2010 Present: Sir Roy McNulty Chairman Madeleine Atkins Dr David Brown Brendan Connor Cllr Roger Phillips Sue Prince Diane Rayner Cllr Ken Taylor Jonnie Turpie Executive: Michael Laverty Chief Executive John Doherty Corporate Director, Resources Mark Pearce Corporate Director, Economic Regeneration Karen Yeomans Corporate Director, Partnerships & Communications Apologies: Jas Bains Gerard Coyne John Crabtree Angela Maxwell Kumar Muthalagappan Cllr Mike Whitby Dr Richard Hutchins (Executive) Tim Gebbels (Executive) In attendance: Steve Kennett Government Office West Midlands Sue Marwa Board Support Executive Dylan Murphy Head of Board Support

ITEM DETAILS ACTION

1 Minutes of the last meeting - Confidential

1.1 The Board approved the minutes of the meeting held on 29th

June 2010 and the Chairman signed a copy.

2 Matters arising

2.1 There were no matters arising that were not otherwise dealt

with on the agenda.

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3 Confidential Item

4 Declarations of Interest

4.1 There were no declarations of interest.

5 Declarations of items of any other business

5.1 There were no additional items of formal business.

6 Chairman’s Report

6.1 The Chairman presented his report and the Board noted that

BIS had announced the extension of appointments for Board members whose terms ended in December 2010. The extensions were to run “until the RDA closes.”

7 Chief Executive’s Report

7.1 The Chief Executive presented his report and the Board noted

the following in particular:

7.2 European Regional Development Fund (ERDF) Programme The rules around use of ERDF were shifting but the Agency

was continuing to deliver the ERDF Programme where possible (i.e. in support of projects with private sector funding).

7.3 The revised rules would lead to a shift in emphasis in the

Programme and a mid-term update would be reported to a future Board meeting.

John Doherty (Board Support)

7.4 Spotlight Awards Individual Spotlight Awards for July were awarded to Mick

Laverty and Marilyn Harris.

7.5 Mick’s direct face-to-face communication with staff during a

difficult time had been greatly appreciated. This demonstrated how he valued the contribution made by staff and Works in Partnership with them.

7.6 Marilyn Harris was nominated for her commitment to the

Agency and for living the Agency values and for her professionalism, friendliness and sunny outlook, offering support and guidance to colleagues.

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7.7 A Team Award for July was awarded to the Rural

Regeneration Zone (RRZ) Secretariat - Ian Edwards, Matt Smith and Kate Powell. The Secretariat was recognised for its work in organising a successful RRZ Annual Conference and producing the Zone’s 2009-10 Annual Report against a backdrop of radical changes in government policy and with the impact of the Budget becoming evident just days before the Conference.

8 Confidential Item

9 Confidential Item

10 Project Review 2010

10.1 10.2 10.3 10.4 10.5

The Board considered the submitted report and noted that: The scope of the Project Review had changed. At the outset, the object of the exercise had been to deliver the in-year savings necessitated by the £40m budget cut. Following guidance on future years’ commitment levels (which, it could be anticipated, would be reflected in the Comprehensive Spending Review), the exercise had been broadened to reduce future years’ commitments. Partners had been informed of the Agency’s position. Phase 1 of the Review was complete. Phase 2 was underway and involved a series of meetings with partners. In order to achieve the required savings the Agency was having to make cuts to legal contracts. Partners had been constructive in discussion with the Agency and understood the position. Two applicants had threatened legal action however. The Board supported the position taken in these cases. At the start of the year, there was modest over-programming in 2010-11. Following the budget cut the Agency had to find in-year savings of £40m. For 2011-12, legal commitments amounted to 70 per cent of the original budget; following the initial budget cut it was 90 per cent and following the guidance from BIS on commitment caps, the Agency was 150 per cent committed. The required savings in 2010-11 had been identified but further work was required to deliver them. Savings of around £30m were yet to be identified for 2011-12. This figure was predicated on an anticipated budget 60 per cent of the reduced 2010-11 budget (every 10 per cent variance from that proportion equated to £15m). The Board noted that it would become increasingly difficult to achieve savings and projects that were nearing completion would have to be cut.

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10.6 10.7 10.8 10.9 10.10 10.11 10.12

The scale of the required cuts was such that there was no discretion in what should be cut - if it was not legally committed it had to be stopped. The Agency had however made a special case to BIS to allow a number of non-legal projects to go ahead. These projects were i54/Moog, Worcester Technology Park and Stoke on Trent University Quarter. The most pressing of these was i54. The Agency had also made the case for continued activity to ensure appropriate successor arrangements were put in place to secure the future of the Climate KIC. BIS’s decision was awaited. It was possible that BIS could allow the projects to go ahead, provided the Agency found the funding to support them. The Agency would then be required to find additional savings from elsewhere to accommodate these projects (adding to the scale of the task). It was also noted that the Agency had to fund staff redundancies from its own budget (further increasing the size of the required savings). A case had also been made to BIS to allow the early transfer of assets to Birmingham City Council to help fund the Birmingham International Airport runway extension. It was hoped that this asset transfer could serve as a model for the future transfer of assets to LEPs. The Board agreed: The approach to non-legal projects and possible legal challenge (as outlined in Sections 5 and 6 of the submitted report). That a report on the outcome of the Project Review be submitted to the September Board meeting. This report should consider the implications of the cessation of activity but also the benefits of ongoing activity. That a report on the Agency’s assets/liabilities be submitted to the October Board meeting.

(Tim Gebbels) / Board Support John Doherty / Board Support

11 Confidential Item

12 Proposals for Future Board Meeting Agendas

12.1 The Board considered the submitted report and approved the

recommendation that the pre-Board Briefing / Discussion sessions be discontinued and future meetings feature a split formal agenda with transition / wind-down issues followed by other business.

Board Support

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13 Independent Supplementary Review

13.1

The Board considered the submitted report and noted that:

13.2 BIS had now published the National Audit Office (NAO)

Independent Supplementary Review (ISR) report.

13.3 AWM was the strongest performing RDA, alongside emda,

with a maximum three “Strong” ratings (equivalent to 9 out of 9 points).

13.4 The Good Practice report had not yet been produced. This

would be circulated to the Board when available. Karen Yeomans

13.5 The result would be valuable to individuals in enhancing their

marketability.

13.6 The report would provide a benchmark for LEP performance. 13.7 The Board congratulated the executive team on the excellent

result achieved and approved the plans to publicise the positive outcome.

14 Midlands Excellence Awards 2010

14.1 The Board considered the submitted report and noted: 14.2 The Agency had achieved year-on-year score increases of

around ten per cent since entering the Awards in 2007. The aim was to win the award in 2010.

14.3 The systematic approach encouraged by Midlands Excellence

had been greatly beneficial in driving continuous improvement.

14.4 The Midlands Excellence progress and ISR results were

valuable external validation which rebalanced the public record (following some inaccurate criticism) on RDA performance. This would be beneficial to individuals as they looked for employment on leaving the Agency.

14.5 There were three areas where significant improvements had

been made since the 2009 submission: process mapping (beyond project processes), stakeholder and customer management and the implementation of the Investment and Performance Framework (learning the lessons of evaluation). The submission itself was also an improvement on previous years’.

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14.6 The current draft submission was circulated and it was agreed

that the final version would be circulated to the Board when available.

Karen Yeomans

14.7 The Agency’s situation had changed significantly in the last

month of the period covered by the submission. The site visit on 8 October 2010 was likely to focus on the Agency’s management of change.

14.8 The Board noted the rest of the timetable leading to the

Awards ceremony on 3 February 2011.

15 Confidential Item

16 Confidential Item

17 Confidential Item

18 Any Other Business

18.1 There was no other business.