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Evaluation of Invest NI Sustainable Productivity

Programme

Final report

December 2014

Evaluation of Invest NI Sustainable Productivity Programme Final report

www.sqw.co.uk

Contents

Executive Summary .................................................................................................................. i

1. Introduction and methodology ........................................................................................... 1

2. Strategic context and rationale .......................................................................................... 2

3. Programme overview ......................................................................................................... 10

4. Performance ....................................................................................................................... 22

5. Business feedback and impact ........................................................................................ 43

6. Economic impact and value-for-money ........................................................................... 64

7. Comparator programmes .................................................................................................. 76

8. Conclusions and recommendations ................................................................................ 84

Annex A: Consultees ................................................................... Error! Bookmark not defined.

Annex B: Questionnaire .............................................................. Error! Bookmark not defined.

Annex C: Sampling approach ..................................................... Error! Bookmark not defined.

Annex D: Full business survey results ...................................... Error! Bookmark not defined.

Contact: John Nolan Tel: 0131 243 0727 email: [email protected]

Approved by: Richard Hindle Date: 4/12/14

Director


i

Executive Summary

1. In June 2014, SQW was commissioned by Invest Northern Ireland (Invest NI, or INI) to

undertake an evaluation of the Sustainable Productivity Programme (SPP) covering the

period 1st April 2012 to 31st March 2014. The evaluation involved: a desk review of

background documentation and monitoring data; structured discussions with 28

stakeholders; a business survey of 170 firms involved in SPP; and short interviews with 25

non-beneficiary firms.

Sustainable Productivity Programme (SPP)

2. The overarching aim of the programme is to improve the productivity, competitiveness and

sustainability of businesses in Northern Ireland through the identification and realisation of

cost saving opportunities in the use of materials, water and energy; and through the

promotion of business opportunities in sustainable energy supply chains.

3. The SPP sets out to increase regional productivity by:

helping business to implement resource efficiency projects that result in cost savings

(or increased sales) of £22.5 million equivalent to 0.08% of annual Northern Ireland

GVA per annum by 2015

helping sustainable energy businesses to achieve growth in turnover of £16.5

million over the period 2012-2015 and in doing so, contribute to the growth of the

Northern Ireland sustainable energy sector to 8.9% of NI GVA by 2015.

4. The SPP is delivered by the INI Sustainable Development team and two External Delivery

Organisations (EDOs), the Carbon Trust and International Synergies Limited. There is also a

framework of consultants who deliver support on behalf of INI. During the evaluation

period, the cost of the Programme has been just under £8m. This includes support from the

European Regional Development Fund (ERDF) of £260,000 to part-fund the Industrial

Symbiosis part of the Programme.

Rationale

5. SPP fits well with the aims and objectives of INI for improving business productivity and

competitiveness. Policy and strategies in NI, UK and across the EU are increasingly focusing

on the need to reduce the environmental impact of businesses at the same time as making

more efficient use of resources which thereby improves business performance. The rationale

for the Programme was based around market failures (e.g. externalities and imperfect

information) which prevent businesses from implementing energy and resource efficiency

projects and the barriers to developing the sustainable energy sector.

6. Based on the evaluation evidence, these market failures still exist and the rationale for SPP

remains valid. Although there is increasing awareness of the issues around energy and

resource efficiency (not least because high and increasing energy costs have a


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disproportionate effect on the Northern Ireland economy), businesses continue to require

support in identifying and implementing improvements.

Inputs and activities

7. SPP has been delivered through four Key Areas: an Energy Efficiency Loan Fund managed

by the Carbon Trust; a Resource Efficiency Capital Grant administered by INI; Industrial

Symbiosis support delivered by International Synergies Ltd; and Project Management

Support delivered by INI Technical Advisors with external consultants brought in to

undertake Resource Efficiency Audits and Technical Consultancy projects. The INI

Sustainable Development team which manages the programme also has a role in promoting

and developing the sustainable energy sector with a particular focus on the marine (up to

March 2014) and bioenergy sub-sectors.

8. The approved annual SPP budget over the last two years has been around £3.5m. The

programme expenditure over the two years has been around £1m above this budget.

However, this is because most of the SPP’s budgeted direct financial support to business was

allocated to the first two years of the three-year Programme. By the end of the three years,

SPP expenditure will be in line with the approved budget.

9. Overall, the evaluation has found the systems and processes in place for managing and

monitoring SPP to be robust, fit-for-purpose and effective. There are regular meetings

between internal and external delivery partners and ongoing reporting to INI management.

In addition, the mixed delivery model (in-house and external delivery) and programme

management has been working well. An advantage of the model has been the in-built

capacity for reflection at the centre on progress in delivery, and on what is being achieved in

each area.

Performance

10. The evidence from the monitoring data and stakeholder feedback indicates that the Energy

Efficiency Loan Fund has been an important part of SPP. It is helping businesses to take

forward energy efficiency projects and is proving to be very popular. It would appear that

the links between the loan scheme and other parts of the Programme are reasonably strong

and there have been referrals both ways between the Carbon Trust and INI.

11. The evidence also highlights that the availability of the Resource Efficiency Capital Grants

has proved to be an important and popular element of the Programme. Especially in the

context of tightening public sector resources and reduction in funding for business, the

availability of this grant was welcomed by INI client executives and other delivery

stakeholders and has been an important part of the programme.

12. According to the monitoring data, the Industrial Symbiosis support is generally

performing well. However, it would appear that many stakeholders do not fully understand

the role being played by this part of the Programme and as a result it is not fully integrated

with the rest of SPP. The circular economy is a growing policy area and the development of

these types of supply chain relationships should be a part of future resource efficiency


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support. However, there needs to be a rethink on the branding of the support and its fit with

the rest of the support package.

13. The Project Management Support provided by the INI Technical Advisors and the

consultancy support provided through the Resource Efficiency Audits and Technical

Consultancy projects has been successful in delivering support to a large number of NI

businesses (nearly 800 businesses in total, with this engagement ranging from one meeting

to five days’ consultancy support). The interaction between TAs and consultants has worked

well and a range of specialist expertise has been available to businesses.

14. The SPP and work of the Sustainable Development team has clearly contributed to growing

the sustainable energy sector (although measuring the contribution is challenging on the

information currently available). Direct support to businesses to develop and implement

resource and energy efficiency projects generates demand for NI suppliers. Information

from the Carbon Trust and the business survey, suggests that around 80-90% of the energy

efficiency loan funding is spent in Northern Ireland. The wider promotion of the sector will

also contribute and has been welcomed by stakeholders.

15. SPP has been successful in meeting its business impact targets with slightly lower costs than

anticipated in the original economic appraisal. Although SPP is managed as a ‘programme’,

the extent to which businesses are engaged in more than one Key Area is fairly low.

However, drawing and reflecting on the stakeholder interviews, it is clear that SPP is less of

an ‘escalator’ programme (in which businesses progress through a series of elements) than a

bundle of themed interventions. The logic for this bundle is about a common theme and

internal coherence for management; SPP is not promoted as such to the business

community.

16. As it addresses business issues around resource and energy efficiency, SPP has a distinctive

role within the INI portfolio. While other innovation-related INI projects also encourage the

development of new products and processes, SPP’s distinctive focus encourages businesses

to become more efficient and productive through cutting costs and making environmental

improvements, while leading into and linking with other business development areas such

as management skills, exporting and supply chain development. SPP is therefore additional

to, and complements, INI’s other products.

17. The Sustainable Development team works closely with other organisations to ensure INI

support is well aligned strategically with other initiatives in resource and energy efficiency.

Although other programmes operate in this field in Northern Ireland, considerable efforts

are made to coordinate and avoid overlap, and there is no evidence of confusion among

businesses.

Business and economic impact

18. The level of client satisfaction is very high, as evident in the business survey undertaken as

part of the evaluation. Across all four Key Areas, around 80% of businesses involved in the

Programme were found to be very or extremely satisfied. And 96% of all respondents stated

that they would recommend the support to others. Many firms were able to identify cost

reductions or positive impacts on sales, jobs or profits. Additional future impacts were


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anticipated; in some cases, the effects of the support provided will take another year or so to

come through.

19. The evidence from the business survey suggests a level of deadweight associated with SPP of

approximately 40%, which is reasonable for this type of intervention. Substitution for other

business development that would have taken place in participating firms was marginal, and

displacement and leakage were not significant at the level of the Programme.

20. Over the two years, 2012-2014, it is estimated that SPP will have generated the following net

impacts: £58.2m in cost savings for businesses; £211m in additional sales and £159.3m in

safeguarded sales; £41.3m in additional profits and £13.9m additional spending on salaries.

The additional profits and spending on salaries approximate to Gross Value Added, the main

measure of economic output, and the cumulative total net GVA generated by the Programme

is therefore £55.2m. These estimates of economic benefit are based on relatively

conservative assumptions, which follow relevant government guidance.

21. Over the period to end 2019/20, the return (economic impact ratio) on the c. £8m invested

in SPP over the two years, is estimated at 6.4:1. This type of return is reasonably high

especially considering the nature of the Programme (mainly focussed on cutting business

costs).

22. The main areas where the support has had a positive impact on businesses, both to date and

expected in the future, are in improving their understanding of resource

efficiency/sustainable development and improving their environmental performance.

Including future impacts, two-thirds of businesses supported by SPP expect that the support

will help them to make improvements benefiting the environment. Although not quantified

in this study, this is an important aspect of the Programme and one which differentiates it

from other INI products.

23. The wider effects of the Programme in growing the sustainable energy sector are harder to

assess; available evidence points to a rapid growth during the SPP delivery period, and the

focus on this area, and the specific resource provided by the Programme is likely to have

contributed. But other public involvement, including direct assistance under SFA, will also

have played a part, and the main factor may have been the broader, if patchy, recovery from

recession offering a range of new business opportunities.

Addressing the evaluation objectives

Extent to which the principal objectives and targets of the intervention have been met

24. In its first two years, SPP generated net cost savings of around £58m which is more than

double the target for the full three years of the Programme. The sustainable energy sector

has grown by £23m over one year, again well over the three-year target of £16m, although it

is not clear how much of this growth is attributable to the support provided by the

Sustainable Development team and how much is attributable to other factors. Based on the

available evidence, SPP is on target to exceed its headline objectives and targets.


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Does the intervention represent good Value for Money (VFM) and appropriate use of public funds?

25. Yes, with respect to each of the three elements to Value for Money. In terms of cost

(economy), some expenditure has been brought forward, but overall SPP has been delivered

for less than was originally anticipated. The Programme has been efficient and effective in its

use of public funds, is delivering well against targets, and generating a return of more than

6:1 in GVA for the Northern Ireland economy.

Value of moving from a suite of individual programmes to the current consolidated SPP

26. SPP has provided a more coordinated and strategic approach to delivering this type of

energy and resource efficiency support to businesses. Under the programme delivery model,

INI Technical Advisors take a holistic approach to assessing the support needs across all

areas of the Programme and broker the relevant support. This independent brokering role is

an important difference from the previous model of support, and we concur with many

stakeholders in seeing it as adding value.

Recommendations

27. The headline findings from the evaluation on SPP’s role and operations are strongly positive

and it is recommended that the Programme continues beyond March 2015. To help shape

thinking on future delivery, the following recommendations are suggested.

R1: Develop a more holistic approach to programme management - the Sustainable

Development team regularly meets with the EDOs bilaterally, but it is recommended that

there should be more events bringing together all partners and consultants to review the

performance of the Programme as a whole.

R2: Retain the existing team of Technical Advisors - assuming that a similar type of

Programme continues beyond the current approval up to March 2015, at least the same

level of staffing will be required in the future. If INI increases its external promotion of the

Programme (as per recommendation 4), then it is likely that either a more focused approach

will need to be applied or additional resource will be required. These issues should be

explored in the Economic Appraisal.

R3: Retain in-house capacity for strategic management and review, to ensure the potential

to respond quickly and flexibly to new emerging needs and opportunities within a fast-

moving UK and European policy context.

R4: Develop a more distinctive form of branding for increasing energy and resource

efficiency and continue to promote examples of SPP support through use of case studies –

although this Programme can only support a proportion of the NI business base, the

businesses taking forward energy and resource efficiency projects can act as role models

for other businesses. Linked to this, there should be more effective promotion of the

programme internally within INI and to external partners.

R5: Move the focus of the Programme towards supporting more larger companies. INI’s

strategic focus is on larger firms, the growth of which will drive productivity in the Northern


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Ireland economy. There is scope to involve more of INI’s account-managed companies in

the Programme. A new threshold of spending above £40-50k each year on energy and

materials could be introduced – in most cases this higher threshold will result in INI

supporting firms generating higher levels of turnover and GVA.

R6: Continue to provide an energy efficiency loan fund – this funding was found to be a core

part of the SPP. The demand is clearly there and it is enabling energy projects to be

implemented during a time when businesses are still finding it difficult to access business

finance.

R7: Continue to provide a resource efficiency grant - although some stakeholders

suggested that the loan scheme could be broadened (to cover both energy and resource

efficiency projects), it is recommended that there should continue to be a separate grant

element for resource efficiency projects, as there is a specific market failure in this area,

relating to a lack of funding models and limited availability of finance.

R8: Continue to include Industrial Symbiosis support in SPP but review the branding of the

support to promote wider participation and confirm its fit with the other parts of the support

package. Improving and clarifying the terminology would be an important start

R9: Combine Resource Efficiency Audits (if required by a company) with Technical

Consultancy projects in order to provide a more integrated service, and reduce the risk of a

company dealing with two different consultants at the entry stage.

R10: Continue with the consultancy framework model to help deliver Technical Consultancy

projects. Any future framework should be consciously designed to include a balance of

consultants with a wide range of expertise and those with more specialist skills – expanding

the current number of consultants to include additional expertise is recommended. The

pipeline of project briefs sent to the consultants on the framework should be managed to

ensure a good response to briefs, and to allocate consultants appropriately to projects.

R11: Alongside involving more account-managed companies, provide support where

needed to implement projects. The impact of the Programme depends on companies being

able to take forward projects.

R12: Explore how multiple assistances can be partly-funded rather than fully funded. This

will help to relieve some of the resource constraints for helping businesses to implement

projects and will be in line with the INI Technical Development Incentive (TDI) Scheme.

R13: Review the use of ongoing business surveys – although the NISRA surveys provide

the Sustainable Development team with important ongoing feedback on the anticipated

savings, it is not possible to capture the achieved impact of the projects.

R14: Put in place a SMART objective and linked performance measure for the growth of the

wider sustainable energy sector, so that the contribution of the Sustainable Development

team can be more accurately captured.

R15: Ensure companies are fully aware of the requirement to participate in future evaluation

studies, and that the central monitoring database has detailed information on the contacts

involved in different parts of the Programme.


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1. Introduction and methodology

The Sustainable Productivity Programme

1.1 In June 2014, SQW was commissioned by Invest Northern Ireland (Invest NI, or INI) to

undertake an evaluation of the Sustainable Productivity Programme (SPP) covering the

period 1st April 2012 to 31st March 2014.

1.2 The overarching aim of the programme is to improve the productivity, competitiveness and




1.3 The SPP sets out to increase regional productivity by:

helping business to implement resource efficiency projects that result in cost savings

(or increased sales) of £22.5 million equivalent to 0.08% of annual Northern Ireland

GVA per annum by 2015




1.4 The SPP is delivered by the INI Sustainable Development team and two External Delivery

Organisations (EDOs), the Carbon Trust and International Synergies Limited. There is also a

framework of consultants who deliver support on behalf of INI. During the evaluation

period, the cost of the Programme has been just under £8m. This includes support from the

European Regional Development Fund (ERDF) of £260,000 to part-fund the Industrial

Symbiosis part of the Programme.

1.5 The support provided through SPP can be categorised as follows:

Key Area A: Energy Efficiency Loan Fund – delivered by the Carbon Trust

Key Area B: Resource Efficiency Capital Grant – grants provided by the INI

Sustainable Development team

Key Area C: Industrial Symbiosis services – delivered by International Synergies Ltd

Key Area D: Project management support – provided by the INI Sustainable

Development team drawing in support from consultants to undertake Resource

Efficiency Audits and Technical Consultancy projects.

Study objectives

1.6 The study objectives as set out in the consultants’ brief were to:

determine the extent to which the principal objectives and targets of the

intervention have been met


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determine the extent to which the intervention represents good Value For Money

(VFM) and appropriate use of public funds

assess the value of any impact of moving from a suite of individual programmes to

the current consolidated SPP.

1.7 The timeframe for the evaluation was the two full years of the Programme, 2012/13 and

2013/14.

Approach

1.8 The logic chain we developed for SPP (see Figure 1-1 below) provides a framework for the

evaluation. We start by assessing the rationale and aims of the Programme before moving on

to reviewing the inputs (costs and resources) and activities which have taken place under

the four project areas. We then assess the performance of the SPP in terms of outputs,

outcomes and impacts and to what extent it has met its original objectives.

Methodology

1.9 The study was carried out between July and October 2014 and involved the following tasks:

Desk review of background documentation and programme monitoring data – this

included the various approval papers, economic appraisal, relevant strategies and

the monitoring data from the four areas of the Programme

Desk review of other similar initiatives – reviewing the available evidence on

policies and interventions in other countries to tease out findings that are relevant

to the SPP

Structured discussions with INI staff, delivery organisations and other stakeholders

– we consulted with 28 individuals from INI, the Carbon Trust, International

Synergies Ltd and other stakeholders; also with other framework consultants, and

the administration team. The list of consultees (included as Annex A) was agreed

with the client and we are grateful for the assistance provided to arrange these

consultations

Meetings with the INI Steering Group set up for this evaluation, including early

dialogue on project design, and an interim presentation of findings and discussion of

progress and implications

Telephone survey of business beneficiaries – our research partner Qa Research

carried out a survey of 170 Programme beneficiaries

Telephone survey of non-beneficiaries – Qa also undertook a short survey of 25 non-

beneficiaries – these were either businesses who had been unsuccessful in applying

for loan or grant funding within the Programme or were INI client companies who

had attended a briefing event on the SPP but had not received any support.


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Figure 1-1: SPP logic model

Rationale and context (Section 2)The context for the Programme is based on lower levels of productivity in NI compared to other parts of the UK, the need to support businesses to become more resource efficient, and the need to support the growth of the sustainable energy sector.The market failures for business resource efficiency are around:• Externalities - full negative impacts of carbon emissions are not experienced by businesses and

similarly all of the benefits of addressing carbon emissions will not accrue to businesses• Imperfect information – there is a lack of information, awareness and expertise about the potential

benefits and opportunities which hold back investment• Investment is also held back by competing priorities for investment within businesses and hidden

costs associated with implementing energy efficiencyIn terms of developing the sustainable energy sector, the market failures are around lack of capital, difficulty in securing finance and the small scale of the NI sustainable energy sector

Aims and objectives (Section 3)The SPP sets out to increase regional productivity by:• helping business to implement resource efficiency projects that result in cost savings (or increased

sales) of £22.5 million equivalent to 0.08% of annual Northern Ireland GVA per annum by 2015;• helping sustainable energy businesses to achieve growth in turnover of £16.5 million over the period

2012-2015 and in doing so, contribute to the growth of the Northern Ireland sustainable energy sector to 8.9% of NI GVA by 2015.

Inputs (Section 3)

• £3.65m 2012/13

• £4.3m 2013/14

• £260k ERDF• 14 core staff

Activities (Section 3)

• Key Area A: Energy Efficiency Loan Fund

• Key Area B: Resource Efficiency Capital Grant

• Key Area C: Industrial Symbiosis support

• Key Area D: Project management support

• Programme marketing• Performance monitoring

Outputs (Section 4)

• Number of loans committed• Number of companies supported• No. of audits completed• Identified cost savings (£)• Identified annual CO2 savings (tCO2e)• Identified annual energy savings

(KwH)• Leveraged co-funding

Outcomes (Section 4)

• Energy cost savings implemented (£m)

• Carbon savings (ktCO2 pa)• Jobs created/safeguarded• Additional sales

implemented • Lifetime implemented

savings (£m)• Lifetime implemented

carbon savings (MtCO2)

Impacts (Sections 5&6)

• Cost reductions £58m• Increased turnover

£211m• Safeguarded turnover

£159m• Increased profits £41m• Increased spending on

salaries £14m• GVA £55m


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Report structure and status

1.10 This evaluation report is structured as follows:

Strategic context and rationale – summarises the NI, UK and EU strategies which

provide the context for the Programme and discusses the extent to which the

rationale for intervention remains valid

Programme overview – sets out the Programme aims and provides costs compared

to the original budget. It also provides a summary overview of the different project

areas, the delivery model, the marketing and application process, and the risks

involved in the Programme

Performance – provides a description of the four project areas, summarising the key

monitoring data and feedback from stakeholder consultations. We also summarise

SPP’s fit with other business initiatives

Business feedback and impact – describes the feedback from the beneficiary survey

on motivations, satisfaction levels and effects of the support on their business. We

also summarise the main feedback from the non-beneficiary survey

Economic impact and value for money – uses the quantifiable impact from the

business survey to estimate the gross and net economic impact and Net Present

Value (NPV) of the Programme

Wider learning – provides learning from other similar types of interventions

Conclusions and recommendations – pulls together our main findings from the

evaluation study.

1.11 The following Annexes are also included:

Annex A – List of consultees

Annex B – Business questionnaire

Annex C – Sampling approach

Annex D – Full business survey results.


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2. Strategic context and rationale

2.1 In this section we examine the strategic context in which the SPP was developed and has

been delivered. We also discuss the rationale for the intervention and whether this remains

valid. Questions of where and how the Programme fits with – or overlaps – other business

support provided in Northern Ireland are considered as part of the Programme Overview, in

section 3, which follows.

Strategic context

2.2 The SPP has been delivered in the context of increasing focus and awareness among policy-

makers about the need to make businesses more productive (which includes reducing the

cost of inputs) and at the same time encouraging businesses to be more sustainable in terms

of how they use energy and other resources. The Programme’s fit with Northern Ireland

strategies is summarised in Table 2-1, below.

Table 2-1: SPP’s fits with other NI strategies

Strategy/policy document

SPP strategic fit and relevance

INI Corporate Plan 2011-15

The Plan focuses on the key drivers of economic growth as recognised in the Northern Ireland Executive’s Programme for Government. One of these is ‘Stimulating innovation and creativity’ and this includes encouraging business efficiency

Another driver is ‘Economic infrastructure which includes energy infrastructure – this is relevant in the context of developing the sustainable energy sector

The Plan also states that support will concentrate on building those sectors where Northern Ireland has existing capability…or has the potential to develop it, including the creative industries, renewable and sustainable development

DETI Corporate Plan 2011 -15

This highlights DETI’s goal “to promote the growth of a competitive and export-led economy”. Through rebalancing the economy towards higher-value added private sector activity and rebuilding to address the impact of the global downturn, the Plan’s aim is to improve the economic competitiveness of the Northern Ireland economy – since SPP was set up to help businesses to reduce energy and resource costs this will therefore contribute to improved competitiveness

Northern Ireland Economic Strategy 2012

The Strategy’s overarching goal is to improve the economic competitiveness of the Northern Ireland economy. It sets out the key drivers of economic growth with two being most relevant to SPP – ‘Stimulating innovation and creativity and ‘Economic infrastructure (as discussed above)

Northern Ireland Sustainable Development Strategy 2010

The Strategy’s first objective is ‘Building a dynamic, innovative economy that delivers the prosperity required to tackle disadvantage and lift communities out of poverty’. Under this objective, the aim is to increase the number of jobs in the low carbon economy; increase the energy efficiency and resource efficiency of businesses; and ensure the

provision of learning and skills responds to the needs of the low carbon economy.

Another relevant objective is ‘Ensuring reliable, affordable and sustainable energy provision and reducing our carbon footprint’ through reducing greenhouse gases and increasing the proportion of energy from renewable sources.


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Northern Ireland Waste Management Strategy - ‘Delivering Resource Efficiency’ 2013

This updated Strategy sets out the waste policy framework not just in terms of waste management but also prevention and highlights that there needs to be greater focus on resource efficiency through re-use and recycling.

The Strategy recognises the role of WRAP1 and INI in building supply

chain confidence and working closely with companies to support the development of sustainable markets for recyclable materials. It also

profiles the SPP as one of the main mechanisms for addressing the issue of waste and resource efficiency.

Source: SQW desk review

2.3 In addition, the Programme contributes to the policy aims set out in various UK and EU

strategies. Some of the main strategies are listed below. In 2008, the UK passed the Climate

Change Act which aims to reduce the UK’s greenhouse gas emissions by at least 80% (from

the 1990 baseline) by 2050. The EU has also committed to cutting its emissions to 20%

below 1990 levels by 2020.

Table 2-2: SPP’s fits with UK/ EU strategies



‘Enabling the Transition to a Green Economy: Government and business working together’ 2011

This document sets out the UK Government’s commitment to developing the green economy and ensuring sustainable economic growth. The strategy highlights the challenges and opportunities for businesses. It highlights the market opportunities from improved energy- and resource-efficiency, delivering major cost savings and increased competitiveness. This will encourage businesses to innovate and develop new technologies, processes and business models across supply chains.

‘The Plan for Growth’ 2011

The Plan is based around four ambitions: to create the most competitive tax system in the G20; to make the UK one of the best places in Europe to start, finance and grow a business; to encourage investment and exports as a route to a more balanced economy; and to create a more educated workforce that is the most flexible in Europe.

One of the Growth Review measures is the low carbon economy. The Plan sets out the Government support for developing new markets in green goods and services such as the Green Deal, the Renewable Heat Incentive, and feed-in-tariffs for micro-generation.

‘The Energy Efficiency Strategy: The Energy Efficiency Opportunity in the UK’ 2013

The Strategy sets out the benefits of energy efficiency in terms of boosting growth and creating jobs in our economy; saving households and businesses money on fuel bills; creating a more sustainable and secure energy system; delivering cost effectively against our climate change goals; and reducing energy imports.

Focusing on the economic benefits, it is highlighted that installing energy efficiency measures often generates demand for local labour, encourages wider innovation, and overall can bolster productivity, increasing growth and reducing inflation.

‘Europe 2020: Europe’s Growth Strategy’

The Strategy has objectives on employment, innovation, education, social inclusion and climate/energy to be reached by 2020. The most relevant to SPP are; limiting greenhouse gas emissions by 20 % or even 30 % compared to 1990 levels, creating 20 % of our energy needs from renewables and increasing our energy efficiency by 20%

1 Waste and Resources Action Programme


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One of the flagship initiatives is ‘Resource-efficient Europe’ which aims to help decouple economic growth from the use of resources. It supports the shift towards a low-carbon economy, an increased use of renewable energy sources, the development of green technologies and a modernised transport sector, and promotes energy efficiency.

‘Roadmap to a Resource Efficient Europe’ 2011

This document sets out the potential to increase competitiveness, growth and jobs through cost savings from improved efficiency, commercialisation of innovations and better management of resources over their whole life cycle.

‘Energy Efficiency Plan’ 2011

The Plan details the Commission’s proposals to encourage energy efficiency measures across Member States. It highlights existing initiatives for the manufacturing sector (which accounts for 20% of the EU's primary energy consumption) such as the Emissions Trading Scheme and the Energy Taxation Directive.

For SMEs, the Commission encourages Member States to provide information (for e.g. legislative requirements, criteria for subsidies to upgrade machinery, availability of training on energy management and of energy experts) and to develop appropriate incentives (such as tax rebates, financing for energy efficiency investments, or funding for energy audits). This is directly relevant to what has been delivered through SPP by INI.

Source: SQW desk review

2.4 The SPP also directly addresses the aims not only in Northern Ireland but across the UK and

EU of improving the environmental performance of businesses and making the transition to

what is described as the ‘circular economy’. This is delivered through different parts of the

Programme but particularly through the Industrial Symbiosis support in Key Area C.

2.5 Traditionally, there has been a linear ‘take-make-dispose’ approach towards the use of raw

materials. The circular economy involves retaining materials in productive use as long as

possible. The policy context around, and understanding of, the concept is developing quickly.

For example, building on its ‘Resource-efficient Europe’ initiative, the EU recently published

its strategy for developing the circular economy2. Support programmes like the SPP are

needed to help businesses make the transition to this new approach to managing resources.

Key findings

The SPP remains central to the aims of DETI and INI in terms of improving the

competitiveness of Northern Ireland firms and growing the sustainable energy sector.

It also contributes to policy aims as set out in various UK and EU strategies and legislation

including the 2008 UK Climate Change Act and the EU’s commitment to cutting emissions

to 20% below 1990 levels by 2020.

SPP directly addresses the aims, not only in Northern Ireland but across the UK and EU, of

improving the environmental performance of businesses and making the transition to what

is described as the ‘circular economy’.

2 European Commission (2014), Towards a circular economy: A zero waste programme for Europe


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Rationale

2.6 An economic appraisal was undertaken in 2011 for the SPP and this provides the

background to the setting up of the Programme. The drivers and rationale for the SPP are

highlighted in the background documents and discussed below: these were also discussed in

our consultations with stakeholders. Although the Programme was expected to generate

both economic and environmental outcomes, INI’s remit is to support the economic

performance of NI businesses. In designing the SPP, INI drew on its experience of managing

similar schemes and designed a Programme it believed would address the issues around

business resource efficiency and the performance of the sustainable energy sector, whilst

delivering environmental outcomes. The main drivers were as follows.

Consolidating business support

2.7 At the time of setting up the Programme, INI was seeking to reduce the number of business

development initiatives, with the aim of developing a more strategic approach to helping

businesses and reducing any confusion amongst businesses about where to access support.

This was in response to the Independent Review of Economic Policy (IREP)3 carried out in

2008 which highlighted the need to reduce the number and complexity of programmes

offered to businesses in Northern Ireland. Around the same time as the IREP, a review by

Defra4, resulted in the consolidation of business support on resources efficiency in England

and Wales to a single body (WRAP), in tandem with similar changes in Scotland.

2.8 Prior to SPP, INI had funded other resource efficiency programmes since it was formed in

2002. Most recently, INI provided funding to the Envirowise Programme, National Industrial

Symbiosis Programme (NISP) and Carbon Trust. These programmes were complemented by

INI’s Sustainable Development team which provided advice and information directly to

businesses, arranged for external technical consultancy provision and delivered a wide

range of sustainable energy business development support. In addition to resource

efficiency support, the INI Energy Group and INI Renewables Sector Support initiatives

promoted business opportunities in sustainable energy markets. The list of previous

initiatives funded by INI is listed below.

Table 2-3: Previous resource efficiency/ sustainable energy business development support

Name of programme Lead organisation

National Industrial Symbiosis Programme (NISP) Funded by INI

Delivered by International Synergies Ltd

Envirowise Programme Funded by INI

Delivered by AEA Technology and Serco

Carbon Trust NI ‘Carbon Now Programme’ Funded by INI

Delivered by the Carbon Trust

Carbon Trust Loan Scheme Funded by INI


INI Direct Delivery Funded and delivered by Invest INI

3 DETI/ INI (2009), Independent Review of Economic Policy 4 Defra (2009) Resource Efficiency Delivery Landscape Review


6

Name of programme Lead organisation

INI SD Consultancy Framework Funded and delivered by Invest INI

INI Energy Group Funded and delivered by Invest INI

INI Renewables Sector Support Funded and delivered by Invest INI

Source: INI Board Casework

2.9 As discussed later in the report, the designation of SPP signalled a shift from the delivery

of a series of programmes (listed above) with related objectives to a single

programme, managed and coordinated by INI’s Sustainable Development team. Some

elements of the Programme have been delivered by the INI Sustainable Development team

and other parts have been sub-contracted to two External Delivery Organisations (EDOs),

the Carbon Trust and International Synergies Limited. There is also a framework of

consultants who deliver support on behalf of INI.

2.10 The prevalent view from stakeholders is that SPP provides a more coordinated and

strategic approach to delivering this type of energy and resource efficiency support to

businesses. Under the programme delivery model it is envisaged that businesses engage

initially with INI Technical Advisors who can then take a holistic approach to assessing the

support needs across all areas of the Programme and broker the relevant support. This

independent brokering role was seen as an important difference from the previous

model of support.

Barriers and market failures

2.11 The economic appraisal sets out the barriers and market failures relating to the two strands

of the SPP: supporting businesses to become more resource efficient; and helping to

grow the sustainable energy sector.

Helping businesses to become more resource efficient

2.12 In terms of the first strand, there are reported to be the following ‘market failures’5 which

causes businesses to underinvest in measures to become more resource efficient.

Externalities – the full negative impacts of carbon emissions and pollution are not

experienced by businesses, while all of the benefits of addressing carbon emissions

will not accrue to the business. Combined, these factors result in a sub-optimal level

of investment.

Imperfect information – a lack of information, awareness and expertise about the

potential benefits and opportunities holds back investment. This is compounded by

a lack of available capital driven by perceived risk and long payback periods. Issues

related to a lack of awareness or expertise are not unique to the resource efficiency

field, but may be particularly prevalent here due to the technical nature of resource

efficiency work, and the fact that businesses often do not have dedicated internal

resources to address these issues.

5 As stated in HM Treasury Green Book (2003), a ‘market failure refers to where the market has not and cannot of itself be expected to deliver an efficient outcome’


7

Investment is also held back by competing priorities for investment within

businesses and hidden costs associated with implementing energy efficiency. In

small and micro businesses which make up the vast majority of firms in NI, there is

limited capital available to address those areas where solutions may take some time

to reduce energy costs and produce identifiable benefits to business.

2.13 The issue of businesses struggling to address these hidden costs came through strongly in

the consultations. In some businesses, it was reported that technical staff find it difficult to

make the case to company managers for investing in resource efficiency projects, especially

when the payback period is relatively long. The economic climate over recent years has

also meant that many businesses have tended to focus on maintaining sales and other

elements of their business perceived as ‘short-term critical’. Another aspect of the

information deficiencies market failure is difficulties in keeping up-to-date and

understanding new environmental legislation.

Developing the sustainable energy market

2.14 The economic appraisal also identifies issues which constrain the growth of the sustainable

energy market in Northern Ireland.

Market power – lack of capital, difficulty in securing finance and the small scale of

the NI sustainable energy sector is holding back investment, and there is a lack of

critical mass in some sustainable energy sub-sectors.

Imperfect information – uncertainty related to planning permissions, technological

risks and availability of government grants/subsidies are also factors limiting

investment in sustainable energy markets.

Externalities – as discussed above, there are negative externalities associated with

fossil-fuel power, which are avoided in the case of renewable energy generation.

However, renewable energy is still generally more costly than fossil fuel generation,

and investors frequently do not factor such aspects into their investment decisions.

2.15 Although not detailed in the economic appraisal, constraints within Northern Ireland’s

energy infrastructure were also viewed by stakeholders as a barrier to developing the

sustainable energy sector. The national grid infrastructure requires upgrading to integrate

an increasing number of onshore and offshore renewable developments.

2.16 Stakeholders stated that although there have been some success stories in Northern

Ireland’s sustainable energy sector, growing the business base will continue to rely on

subsidies and wider public sector support (as is the case in other parts of the UK and

elsewhere).

Rising energy costs

2.17 The issue of energy costs was highlighted in most of the consultations with stakeholders as

an important reason for setting up the Programme (which in effect continued much of the

support which was already being delivered). Stakeholders noted that over time, Northern

Ireland has had higher energy costs than other parts of the UK and EU because of its


8

geographic location, higher energy transport costs, and the small size of energy market. The

latest figures produced by the Utility Regulator reinforce this argument showing that for

both small to medium and larger companies, the average cost of electricity (per kWh) is

close to being the highest in Western Europe (behind only Italy for larger companies).

Figure 2-1: Non Domestic electricity prices in NI compared to EU countries (Jul-Dec 2013)

Source: Utility Regulator (2014)

2.18 The evidence for high energy costs is reinforced by the perceptions and experience of

business. The most recent Northern Ireland Chamber of Commerce Quarterly Economic

Survey6 (2014, Quarter 2) reported that:

In comparison to business energy costs elsewhere in the UK, 77% of businesses

interviewed believed that costs in Northern Ireland were higher; 1% thought

they were lower and 7% that they were similar to elsewhere in the UK

Looking at business energy costs over the past year, 71% indicated their costs had

increased whilst 2% indicated their costs had decreased. Just over one quarter

(26%) stated their energy costs had remained the same

Asked if they had taken any actions in relation to business energy costs, just

under one fifth of respondents (19%) had reduced energy usage. Sixteen

percent had installed energy efficiency devices, 15% had changed energy provider,

11% had renegotiated energy tariffs, while 36% had taken no action.

6 NI Chamber of Commerce, Quarterly Economic Survey - available at http://northernirelandchamber.com/category/quarterly-economic-survey/

http://northernirelandchamber.com/category/quarterly-economic-survey/


9

2.19 The feedback from stakeholders suggests that since the SPP was launched energy costs have

continued to rise, presenting a significant challenge for Northern Ireland businesses to

improve productivity. Stakeholders agreed that whilst general awareness of the need to

address rising energy costs may have increased, there remains a gap in firms’ knowledge

about how to address these costs. It was also stated that the Northern Ireland economy

has a small number of major employers which need to be supported in terms of

managing their energy and resource efficiency. Examples were highlighted to us where

foreign owned plants were being continually pressured by their parent company to increase

efficiency in order to keep the plant sustainable.

2.20 Most consultees saw it as appropriate that SPP supports all sizes of businesses spending

more than £30,000 each year on energy and raw materials. While market failures may be

more prevalent in SMEs (as they are less likely to have internal expertise and resources), it

was argued that even Northern Ireland’s large employers need support in what is still an

emerging area for policy.

Key findings

The creation of SPP signalled a shift for INI from the delivery of a series of programmes with

related objectives to a single programme, managed and coordinated by INI’s Sustainable

Development team. This study has found that SPP is providing a more coordinated and

strategic approach to delivering this type of energy and resource efficiency support to

businesses.

Overall, the rationale and case for intervention remains largely the same as it was three

years ago when SPP was developed. Although there has been some shift in awareness of

the need to address energy and resource costs, energy cost data, business survey

feedback and views from stakeholders suggest that there is a continued need and demand

for this type of intervention.

Northern Ireland has traditionally had higher energy costs than other parts of the UK and

EU because of its geographic location, higher energy transport costs, and the small size of

energy market. This reinforces the need for this type of programme of support.


10

3. Programme overview

In this section we review the overarching objectives for the SPP, how the Programme is

structured and resourced and how tit is managed. This includes considering the delivery

model, application and appraisal processes, and the main risks relevant to this intervention.

We also consider the fit with other support provided to businesses in Northern Ireland.

Programme aims and objectives

3.1 The aims and objectives of the SPP are set out in the various approval papers7. The

overarching aim of the Programme is to improve the productivity, competitiveness and




3.2 The SPP set out to increase regional productivity by:

helping business to implement resources efficiency projects that result in cost

savings (or increased sales) of £22.5 million equivalent to 0.08% of annual Northern

Ireland GVA per annum by 2015;




Programme structure

3.3 SPP provides a portfolio of resource efficiency and supply chain activities aimed at assisting

the wider business community achieve operational savings in water, energy and materials

use, in addition to increasing turnover in sustainable energy supply chains.

3.4 The Programme is delivered by the INI Sustainable Development team and two External

Delivery Organisations (EDOs), the Carbon Trust and International Synergies Limited. There

is also a framework of consultants who deliver support on behalf of INI.

3.5 The four elements of the Sustainable Productivity Programme are summarised below.

Table 3-1: SPP Project Areas

Project Area Description Lead organisation

Key Area A: Energy Efficiency Loan Fund

Provides interest free loans of between £3k and £400k to businesses to support the installation of more energy efficient equipment.

Loans are available to businesses looking to invest in energy efficiency and low-carbon equipment. Incorporated businesses are required to have been trading for at least 12 months and non-incorporated businesses


7 INI (March 2012) Submission to INI Board – Sustainable Productivity Programme 2012/13 to 2014/15


11

Project Area Description Lead organisation

trading for at least 36 months.

Key Area B: Resource Efficiency Capital Grant

Provides grants of up to £50k (later revised to £40k) to businesses for the purchase and/or installation of new equipment which will reduce water/material costs.

Eligible costs are the capital costs associated with the third party design, purchase, installation and commissioning of material or water saving processes or equipment including equipment to recover, re-use or recycle waste materials that are generated on a company site. For small companies, there is an intervention rate of 55%, for medium sized firms 45%, and large companies 35%

Delivered by the INI Sustainable Development Team

Key Area C: Industrial Symbiosis Services

Generates commercial opportunities for the exchange of commodities including waste material. The concept of industrial symbiosis is defined as ‘a collective approach to competitive advantage through the physical exchange of materials, energy, water and/or by-products, or the shared use of assets, logistics and expertise’

Part-funded by ERDF and delivered by International Synergies Limited

Key Area D: Project management support

Technical Advisors in INI’s Sustainable Development provide businesses with initial support and guidance on energy and resource efficiency projects. They then refer clients onto another part of the Programme or organise consultancy support for a Resource Efficiency Audit or Technical Consultancy project.

Delivered by Technical Advisors drawing in consultancy support as appropriate

The Technical Advisors also have a broader role in raising awareness of renewable energy supply chain opportunities and promoting expertise in the sector

In terms of the wider sector role, this is delivered by the INI Sustainable Development Team in the areas of Marine renewables and bio-energy - from 1st April 2014 supply chain opportunities in Marine has transferred to the Sector and Cluster Development Team in INI

Source: INI background documentation

Programme costs

3.6 According to the programme approval papers8, it was forecast that annual expenditure

would be just over £4m, and therefore £8m for two years. The breakdown across the four

project areas is shown in Table 3-2, below.

8 INI (April 2012) Submission to DETI Board – Sustainable Productivity Programme 2012/13 to 2014/15


12

Table 3-2: Original business case programme costs

Project area Annual costs to INI 2 year costs


£1m new capital + £0.187m management costs = £1.187m

£2.374m

Key Area B: Capital Grant Scheme

£0.550m £1.100m

Key Area C: Industrial Symbiosis £0.252m £0.504m


£2.026m £4.052m

Total £4.015m £8.030m

Source: INI Submission to DETI Board – March 2012

3.7 In practice, the programme budgets actually approved by INI were somewhat lower9. The

approved annual SPP budget over the last two years has been around £3.5m10. This includes

the staffing and marketing costs for the INI Sustainable Development team. The team

employs 14 core staff including Technical Advisors and admin staff.

3.8 The programme expenditure over the two years has, however, been around £1m

above the approved budget. This is because most of the SPP’s budgeted direct

financial support to business was allocated to the first two years of the three-year

Programme. In 2013/14, an additional £700k was paid into the Carbon Trust Energy

Efficiency Loan Fund11 and all of the Resource Efficiency Capital Grant was paid out in the

first two years of the Programme.

Table 3-3: Programme costs vs approved budget 2012/13 and 2013/14

£m 2012/13 2013/14 2 year total

Budget Actual Budget Actual Budget Actual %

Key Area A:Energy Efficiency Loan Fund

1.000 1.000 0.700 1.400 1.700 2.400 141%

Key Area A: Revenue Costs

0.000 0.000 0.300 0.300 0.300 0.300 100%


0.550 0.799 0.700 0.665 1.250 1.464 117%


0.260 0.260 0.260 0.260 0.520 0.520 100%

Key Area D: Project Management Support

0.978 0.841 0.780 0.912 1.758 1.753 100%

INI SD staff costs12

0.756 0.756 0.770 0.770 1.526 1.526 100%

Total 3.544 3.656 3.510 4.307 7.054 7.963 113%

Source: INI

9 This was simply down to internal resourcing decisions at the time of approval 10 Although the original economic appraisal estimated annual staff costs of £4m, by the time of budget approval this had been revised down to £3.5m 11 At the end of Year 2 of the programme instead of the start of Year 3 12 In 2012/13, £726.6k was spent on staffing costs and £29.7k on marketing. In 2013/14, £748.1k was spent on salaries and £21.5k spent on marketing


13

ERDF support

3.9 The Industrial Symbiosis element of SPP is 50% match-funded by the European Regional

Development Fund; over the two years around £260k has been contributed by ERDF.

This funding has been managed by INI and quarterly claims are submitted to DETI as the

Managing Authority in Northern Ireland.

3.10 The basis for this is that, in 2009, INI secured an annual ERDF funding allocation for

Industrial Symbiosis support to NI businesses up to 2015 under Priority 1 of the EU

Sustainable Competitiveness Programme. Prior to the SPP, ISL was funded to deliver the

NISP in Northern Ireland; match-funding for the European contribution has been 50%

throughout.

3.11 There are two mechanisms for checking the expenditure and processes in ERDF funded

projects. Article 13 visits are annual spot checks undertaken by DETI to review the

ERDF projects being managed and delivered by INI. The Industrial Symbiosis ERDF

project has been one of the sampled projects: it passed the inspection and no issues

were highlighted. Article 16 inspections are also undertaken by DETI’s Audit Authority

each year. At the time of writing, the 2013 report which included the Industrial Symbiosis

project was expected to be finalised shortly.

Programme management

3.12 Most consultees believed that the Programme has been and is well managed by the INI

Sustainable Development team and its two External Delivery Organisations, the Carbon

Trust and International Synergies Ltd. Each month, INI meets with its delivery partners

(separately) to review progress against targets and any operational issues.

3.13 Monthly internal team meetings take place, involving all Technical Advisors and

administrative staff. These meetings provide an opportunity to review the performance of

the four elements of the Programme, in particular the management of the consultancy

projects, and overall progress against the SPP objectives.

3.14 The performance of the SPP is also reported to the monthly internal divisional meetings. The

figures reported by the INI Sustainable Development team in March 2013 and March 2014

are provided below. These provide an update on progress against the annual targets.


14

Table 3-4: Reporting against headline targets13

Performance indicator Annual target Progress reported at end March 2013

Progress reported at end March 2014

Identify resource savings Identify £15m savings £34.54m £20.95m

Achieve resource savings Achieve £7.5m savings

£8.19m £11.26m

Turnover increase in the sustainable energy sector

14

Turnover increased by £5.5m

£14.63m £56.28m - incl £6m Carbon Trust & £48.8m offshore and marine (excl bioenergy)

Source: INI

3.15 Overall, we found the systems and processes for managing and monitoring SPP to be robust,

fit-for-purpose and effective. There are regular meetings between internal and external

delivery partners and ongoing reporting to INI management. Although the Sustainable

Development team meets with the EDOs individually, there would, however, be value in

having more events that bring together all partners and consultants to discuss progress and

relevant issues at programme level.

Delivery model

3.16 As we will go on to discuss in detail in the next section, although the Programme is managed

by the INI Sustainable Development team, delivery of the support involves in-house

Technical Advisors, External Delivery Organisations (Carbon Trust for the Loan Fund and

International Synergies Ltd. for the Industrial Symbiosis support) and a framework of

external consultants.

3.17 The view across the stakeholders is that this delivery model has worked well. The central

role of INI is acknowledged in providing the initial advice and overview of support to

companies and then bringing in the external expertise as and when required. Consultees see

the internal resource as providing a good ‘checking system’ for programme operation and

delivery. It is recognised that to cope with current levels of demand, INI Technical Advisors

could not deliver the support by themselves; also that they need the specific technical

expertise of external consultants as well as additional capacity.

3.18 The general view was that the current team of Technical Advisors is working at capacity and

some stated that team members were being ‘stretched’ due to the continuing levels of

demand from businesses for this type of support. Assuming that a similar type of

Programme continues beyond the current approval up to March 2015, we believe that

an equivalent level of staffing will be required in the future (perhaps with some

refocusing of activity, providing more assistance to a lower volume of businesses).

13 SPP data aggregated across the four Key Areas as reported by the INI SD team 14 As previously highlighted, the SD team have a role in helping to grow the sustainable energy sector and turnover growth has been used to measure progress in this area of activity. In Section 4 we discuss the use of this metric and how it can be linked to the work of the SD team


15

Programme marketing

3.19 The main areas of external SPP marketing are on the INI website, promotion at resource

efficiency events organised by INI or delivery partners, notably International Synergies Ltd.

Members of the INI Sustainable Development team also attend other business support

events and are members of stakeholder forums. The team also produces best practice guides

(discussed in the next section) which profile the support available through the Programme.

3.20 Internally, the INI Sustainable Development team promotes the Programme to sector teams

and client executives. Client executives are one of the main points of referral into the

Programme. If they feel their company would benefit from SPP support, they put the

company in contact with one of the INI Technical Advisors. The SPP also supports non-INI

clients and Technical Advisors promote the Programme to this wider audience of businesses.

There is an acknowledgement that this type of support needs to be broadened out to cover

all types of businesses.

3.21 In addition to the promotion of the overall Programme, each of the two External Delivery

Organisations, the Carbon Trust and International Synergies Ltd. (ISL), promotes its own

element of the Programme. In the case of the Carbon Trust, the marketing of the loan scheme

is broadly confined to information on its website and some partner websites. However, as

was highlighted by Carbon Trust this level of promotion is sufficient when there is already

high demand for the loans. ISL has a membership newsletter and runs events to promote its

support to businesses.

3.22 The project management support provided to businesses by Technical Advisers and external

consultants under Key Area D also promotes support available through the other parts of the

Programme (loans, grants and industrial symbiosis services).

3.23 Overall the main feedback from consultees was that although some marketing takes place,

and there is evident demand for the various elements, the Programme would

nevertheless benefit from more effective promotion internally and externally. Within

INI, there were some suggestions that the specific technical nature of the support (and

difficulties for some businesses in identifying the issues of energy and resource costs), mean

that the Programme is less well-integrated with other INI support than might be expected.

3.24 Those involved in delivering the Programme also stated that it is sometimes difficult to

know who the best person is in the business to contact regarding SPP. The obvious entry

point is through the technical staff responsible for energy and resource utilisation, but these

may not be the budget-holders, and it can be more difficult to engage and persuade business

managers of the potential benefits of investing to deliver the recommended improvements..

Consultants and Technical Advisors suggested there needs to be more implementation

support to ensure projects are taken forward, linked in to more generic business

development support.

3.25 More marketing would clearly have implications on the INI Sustainable

Development’s workload which is already stretched. However, this might involve a

more focused approach, targeting certain sectors or export orientated firms.


16

Application and appraisal processes

3.26 The application and appraisal processes for the four different parts of the Programme are

summarised in Table 3-5, below. As would be expected, the more detailed processes relate to

the two financial products. Based on the feedback received these processes have been

appropriate and effective. A couple of issues were highlighted.

First, some INI client executives suggested that there should be closer working

between the Carbon Trust and INI in deciding whether to approve a loan fund

application. However, care would need to be taken to ensure a closer relationship is

in line with INI’s External Delivery Organisation guidance.

It was also suggested that, initially, there was some confusion, or at least

uncertainty, within INI about the level of innovation required for eligibility for

Resource Efficiency Grants. The final call for projects introduced innovation as one

of the criteria owing to limited availability of funds, and a rise in demand as the

grant became better known among potential clients.

Table 3-5: Application and appraisal processes

Project area Application process Appraisal process


Online application requires information on the company’s energy performance, the project description and costs, technology being proposed and anticipated CO2 savings.

Application process judged to have been appropriate and effective

CT engineers assess the project and expected CO2 savings. There is also an independent assessment of credit worthiness/ trading history. CT make sure they keep a strict 1-1 relationship with the clients and would occasionally speak to the INI client executives for background information prior to approving an application.

Appraisal process judged to have worked well in light of relatively low default rate.


Relatively straightforward application form requesting project description and costs, anticipated cost savings and evidence of need/ additionality. In most cases the process worked well with client executives supporting the applications (only a small number of bids submitted ‘cold’)

Application process judged to have been appropriate and effective

Assessed by INI client executives and Technical Advisors. Changes in eligibility implemented after low response to first call for applications and these were implemented to ensure the limited grant funding would go where best needed according to the Invest NI intervention criteria This resulted in a significant increase in applications in the second round and the three year grant allocation was fully committed by halfway through the second year of the Programme. The Sustainable Development team felt this was appropriate given the level of demand for this type of support.

Although some changes made to appraisal process between calls, overall it is judged to have worked well.

Key Area C: Industrial Symbiosis support

No application process – ISL advisor visits the company and completes an Advisory Visit Report

No appraisal process – this is considered to be appropriate for this type of intervention


No formal application process – a Resource Efficiency Audit or Technical Consultancy project is agreed between the business and the Technical Advisor and a ‘de

Eligibility assessed up front – a company is eligible for support if they are spending more than £30k per annum on energy and materials - if too small they are referred to the smaller council programmes. There are no size or


17

Project area Application process Appraisal process

minimis’15

form is completed by the business to ensure eligibility

sector constraints but the support is focused on those businesses estimated by the Technical Advisor to have the potential to deliver cost savings.

Source: SQW consultations

Programme risks

3.27 According to consultees, the main risks of delivering this type of programme are as follows.

Promoting the Programme to reach the intended targets without over-

promising – there was general consensus that the Programme currently has a

relatively low profile. Whilst it is clearly important to raise awareness of the issues

and opportunities to cut costs, there is a limit to what can be done with the available

resource. The Carbon Trust Energy Efficiency Loan Fund had to introduce a queuing

system at certain times (awaiting repayments which were then reinvested as new

loans).Also, the team of INI Technical Advisors is already at capacity and would

struggle to support a higher volume of businesses.

Managing the quality of the consultants involved in delivering the SPP – whilst

Technical Advisors provide some of the support and advice to companies, Project

Area C (led by International Synergies Ltd) and much of Project Area D is delivered

by consultants. The Technical Advisors have had an important role in brokering the

support provided to businesses and ensuring it is of good quality (managing the

tendering of the relevant consultants and reviewing audits/ reports). Based on

feedback from both the Technical Advisors and the consultants, this relationship has

been managed effectively. It was also stated the use of a framework panel has

ensured a good range of specialisms and expertise.

Liability for poor advice – linked to the quality issue, there is a risk that following

on from SPP support a company decides to take forward a project which then has a

negative impact on the business. This risk is owned by the businesses themselves,

but managed by the consultants and the Carbon Trust when providing loans:

businesses are explicitly informed that there can be no repercussion for INI

following their acceptance of support.

Crowding out other private sector support – this is a risk with any support

programme. In this case, the risk is that SPP takes business away from engineering

consultancies which might provide this type of resource efficiency guidance and

support without public sector intervention. This risk is judged to be low as the

Programme is seeking to widen engagement, and to increase awareness and demand

for work in the area of resource efficiency, and it is expected to stimulate the market

in the longer term. Feedback from the consultants indicated some examples where

they had been retained by businesses for follow-on work.

15 De minimis aid is used to describe small amounts of state aid that do not require European Commission approval


18

Key findings

Over the first two years of SPP, the programme has cost just under £8m which has been

around £1m above the approved budget (but below what was set out in the Economic

Appraisal). This is because most of the SPP’s budgeted direct financial support to business

was allocated to the first two years of the three-year Programme.

The Industrial Symbiosis element of SPP is 50% match-funded by the European Regional

Development Fund; over the two years around £260k has been contributed by ERDF. This

project has been audited by DETI in an Article 13 check and no issues were highlighted.

The evaluation found the systems and processes for managing and monitoring SPP to be

robust, fit-for-purpose and effective. There are regular meetings between internal and

external delivery partners and ongoing reporting to INI management.

Based on the feedback of stakeholders it is clear that the delivery model (in-house and

external delivery) is working well but the team of Technical Advisors is becoming stretched

owing to levels of demand. The programme’s application and appraisal processes have also

proved to be appropriate and effective.

Recommendations



























19

Fit with other support to business in Northern Ireland

Invest NI products

3.28 Invest NI provides its client companies with a broad range of products to support skills

development, exporting, innovation, knowledge transfer and general business development.

More intensive support is provided to around 1,200 account-managed companies which are

regarded as most strategically important to NI economy (based on growth and export

potential).

3.29 Each account-managed company has its own client executive who acts as the key point of

contact for accessing all INI support. Client executives therefore have an important role,

along with the INI Sustainable Development team, in promoting SPP. Some of those

companies receiving support through SPP are account-managed but many are not (see para

4.11 for a breakdown).

3.30 The INI products which are most closely aligned to SPP are listed below in Table 3-6. These

products are delivered by INI’s Innovation and Technology Solutions (ITS) division and

Selective Financial Assistance is delivered by the Skills and Strategy division. As SPP aims to

improve firms’ understanding of resource efficiency and improve the competitiveness and

export potential of INI businesses, the Programme complements a range of INI products

delivered by other divisions such as Trade and Skills and Strategy. This was confirmed

by feedback from INI client executives.

Table 3-6: Closely aligned INI programmes

Project name Summary

Productivity Improvement and Supply Chain Improvement

Supply chain improvement is based around the provision of advice, guidance and support to companies wishing to deliver improvements to their supply chain to improve their competitive position. The team of experienced practitioners assists companies to deliver productivity improvement through the application & understanding of "Lean thinking and Lean principles".

Technical Advisory Services and TDI Grant Scheme

Technical Advisory Unit (TAU) provides advice to businesses on a range of technical issues and Intellectual Property (including IAM Audit, Integrated Management Systems Advice, Product Type Approval Advice, Workplace Health and Safety Advice). The TDI grant gives up to 50% support towards investigating new technologies or processes, product & process problem resolution, product approval/global technical compliance, process & quality management schemes, Intellectual Property and improved product design & performance.

Innovation Vouchers This scheme offers a £4000 voucher, which can be used to access specialist skills and expertise to solve a business issue. The voucher allows businesses to work with one of the 39 public sector Knowledge Providers across NI and the Republic of Ireland.

Selective Financial Assistance

SFA supports NI investment and job creation projects that involve setting up new businesses, expanding existing businesses and attracting inward investment.

Source: Background data from INI


20

Other NI programmes

3.31 Since the SPP was launched, INI has worked closely with other relevant organisations

to ensure there the support provided fits with other initiatives. For example the SPP

Technical Advisors sit on stakeholder forums (e.g. NI Waste Strategy) and also attend

meetings of the councils’ economic development teams to coordinate resource efficiency

support.

3.32 As part of the stakeholder consultations we spoke with two of the resource efficiency

programmes being delivered by local councils. In both cases, strong links were cited with the

INI Sustainable Development team and an agreement was in place that companies with

spending on resources of over £30k receive support through the SPP, with smaller scale and

less complex requirements met by the councils. This was regarded by SPP stakeholders as a

sensible threshold.

Table 3-7: Examples of other similar initiatives in NI

Initiative Project summary and links with SPP

Business Improvement through Environmental Solutions (BITES) Programme

Project has been running for around 10 years but current programme running from 2012-2015

Joint funded by INI (incl ERDF)

Project delivered across Belfast City, Carrickfergus, Newtownabbey and Lisburn council areas

Support provided by Mabbett consultants (also part of SPP)

Series of six workshops in Environmental Management Systems, resource efficiency leading to Institute of Environmental Management and Assessment (IEMA) Foundation Certificate

Up to three days’ one-to-one mentoring support starting with a mini audit on site

Small financial contribution of £250 required from the business

Target of supporting 105 businesses

Cookstown Resource Efficiency Programme

Project started March 2013

Close cooperation between the Council and INI in designing the programme and securing INI funding (incl ERDF)

Project managed by Cookstown District Council and delivered by South West College’s InnoTech Centre

Support involves: a Resource Efficiency Audit to identify where savings could be achieved; a Resource Efficiency Action Plan; and up to 5 days’ specialist support to implement the Action Plan’s recommendations

Target of supporting 40 companies over two years to generate cost savings, new jobs and safeguarded jobs

INI involved in screening applications and same consultants involved (Action Renewables, B9 Solutions)

Source: SQW consultations

3.33 In addition to these initiatives, a cross border STEM (Sustainable Together through

Energy Management) project brings together nine councils from Northern Ireland and

four from the Republic of Ireland. It is part-funded by the EU’s INTERREG IVA Cross Border

Programme and aims to support 220 businesses over two years. Businesses can receive up

to five days’ site specific support from an Environmental Officer and are helped to

implement an Environmental Management System (EMS). Again, we understand that there is


21

ongoing dialogue between the INI Sustainable Development team and this project to ensure

there is no overlap in support and that SPP is providing support to the larger companies.

3.34 Based on the consultations with stakeholders, the other main initiatives involved in similar

support are: the Rethink Waste Programme delivered by WRAP Northern Ireland on

behalf of the Department of the Environment; and the Smart Eco Hub Project which is an

EU INTERREG IVA Cross Border Programme funded cluster organisation for the sustainable

energy sector.

Key findings

As SPP aims to improve firms’ understanding of resource efficiency and improve the

competitiveness and export potential of INI businesses, the Programme complements a

range of INI products delivered by other divisions notably Trade, and Skills and Strategy.

Other innovation-related INI projects also encourage the development of new products and

processes, but SPP provides a distinctive focus on businesses becoming more efficient and

productive through cutting costs and making environmental improvements. This leads into

and links with other business development areas, including management skills, exporting

and supply chain development.

The Sustainable Development team works closely with other organisations to ensure INI

support is well aligned strategically with other initiatives in resource and energy efficiency.


22

4. Performance

4.1 We now move on to review the performance of SPP, in terms of how many businesses have

been supported, assessing in turn how each of the component parts of the Programme has

performed against initial targets.

4.2 This section draws on the monitoring data from each part of the SPP and feedback from

stakeholders. It complements what follows in Section 5, which summarises the qualitative

and quantitative feedback collected through our business survey.

4.3 The data on business impact in the two sections are not, however, comparable. For example,

where monitoring data is provided on the cost savings from energy efficiency loan funded

projects this is information collected by the Carbon Trust relating to anticipated cost savings

from its projects. The business survey data provides estimates of achieved and anticipated

cost savings generated by SPP as a whole.

4.4 It is also worth highlighting that most of the monitoring data presented in this section

relates to the delivery of the four Key Areas of SPP which link directly into the first strategic

objective of reducing businesses’ energy and resource costs. SPP and the work of the

Sustainable Development team also has a role in helping to grow the sustainable energy

sector in Northern Ireland. As we will discuss later in this section measuring the

Programme’s contribution towards this wider objective is more challenging.

Programme beneficiaries and overall demand

4.5 First we summarise the overall scale and coverage of the Programme. Based on the SPP

business database provided, SPP supported 1242 individual businesses in Northern

Ireland in 2012/13 and 2013/14.

4.6 Feedback from stakeholders indicated that overall demand for the Programme has

exceeded original expectations, with particularly strong demand encountered from the

food and drink, construction, engineering and hospitality sectors. The introduction of new

legislation in the UK and EU is considered to have been a major factor in driving

demand, along with Government incentives to encourage the adoption of new

renewable energy technologies (e.g. Renewables Obligation Certificates, Feed-In

Tariffs and Renewable Heat Incentives).

4.7 With regard to the extent of companies’ engagement with the Programme, 72% received

support from just one Key Area, with the remaining 28% involved in more than one Key

Area (mainly two). It should be noted that a company can receive multiple interventions,

within one Key Area or across Key Areas.

4.8 The fact that so many of the Programme beneficiaries have only been involved in only

one Key Area might raise a question about the extent to which SPP operates as a

coherent programme: businesses might be expected to be referred into and through

different types of support. As highlighted earlier, although the Technical Advisor support is

often the entry point into the Programme, some firms go directly to the Carbon Trust or ISL

for support. However, drawing and reflecting on the stakeholder interviews, we do not


23

see SPP as an escalator programme (with businesses progressing through the

different elements) but instead as a bundle of themed interventions that it makes

sense to manage collectively.

Table 4-1: Companies and interventions by number of Key Areas

One Key Area More than one Key Area

Total

Companies 896 72% 346 28% 1242

Interventions 1388 47% 1552 53% 2940

Source: SQW analysis of SPP Business Database

4.9 Table 4-2, below, shows the number of companies involved in one and multiple Key Areas.

This is based on the total population of 1242 businesses supported in 2012/13 and

2013/14.

Table 4-2: Companies by number of projects

One Key Area % More than one Key Area

% Total


183 75% 61 25% 244


8 17% 40 83% 48


236 72% 93 18% 329

Key Area D: Implementation Framework (5 day support)

33 12% 244 88% 277

Key Area D: Technical Support (incl. Resource Efficiency Audits and advisory meetings)

436 57% 332 43% 768

Source: SQW analysis of SPP Business Database

4.10 These 1242 companies have received 2940 interventions or engagements through SPP,

ranging from receiving a grant or loan to a half-day meeting. As noted above, a company may

receive multiple interventions within one Key Area (e.g. two loans under Key Area A, or four

advisory visits under Key Area D). The breakdown of interventions is provided below

(Table 4-3).

Table 4-3: No of companies and interventions16

No of companies No of interventions

Key Area A: Energy Efficiency Loan Fund 244 306

Key Area B: Resource Efficiency Capital Grant 48 63

Key Area C: Industrial Symbiosis Services 329 578

16 The monitoring figures in Table 4.3 and those reported in Tables 4.6, 4.8 and 4.9 are taken from different sources (INI and the EDOs) and do not correspond because of timing issues i.e. when a business is actually recorded as being assisted


24

No of companies No of interventions

Key Area D: Implementation Framework (5 day support) 277 445

Key Area D: Technical Support (incl. Resource Efficiency Audits and advisory meetings) 902 1548

Total 1242* 2940

Source: SQW analysis of SPP Business Database * note: companies can receive multiple intervention within and across Key Areas

Profile of beneficiaries

4.11 In the last section we summarised how the SPP fits with other INI support. Out of the 1242

businesses supported through SPP, 75 are account-managed companies which

represents 6% (Table 4-4). With INI supporting around 1200 account-managed companies,

it would appear that there is scope to do more work with these firms. The challenge will lie

in balancing this with work with other INI clients and non INI clients.

Table 4-4: Involvement of account managed companies in SPP

All businesses

INI account managed companies

All interventions

Interventions with INI account managed companies

Key Area A: Energy Efficiency Loan Fund 244 9 306 9

Key Area B: Resource Efficiency Capital Grant 48 10 63 15

Key Area C: Industrial Symbiosis 329 8 578 11

Key Area D: Implementation Framework 277 41 445 77

Key Area D: Technical support (incl. Resource Efficiency Audits and advisory meetings) 902 76 1548 161

All SPP projects 1242 75 2940 273

Source: SPP Business Database

4.12 Based on our survey of SPP supported businesses we can see that the Programme has

provided support across the broad range of sectors, although nearly half of the companies

involved were manufacturing firms. The majority of businesses in the ‘other’ category

were retail businesses; leisure and training were also represented. It should be noted that

some firms highlighted the sectors in which they work, rather than their own product or

service: e.g. some of those indicating that they are in the agriculture sector actually sell their

products or services primarily in to this sector.


25

Figure 4-1: Sector profile of SPP businesses

Source: SPP Business Survey

SPP contribution to Invest NI Equality Scheme

4.13 Invest NI complies with Section 75 of the Northern Ireland Act 1998 and has a commitment

to equality:

We are helping to create a successful economy in Northern Ireland which provides equal opportunities for all citizens. We strive to meet our responsibilities across the spectrum of government policy relating to equality, the Lifetime Opportunities - Anti-Poverty and Social Inclusion Strategy and human rights17

4.14 SPP has a broad remit and is aimed at improving the productivity and sustainability of all

types of businesses that spend more than £30k on energy and materials. As the support is

promoted and made available to all businesses that meet this criteria, it is clear that the SPP

is fully compliant with, and contributes to, Invest NI’s commitment to equality issues.

Key findings

SPP supported 1242 individual businesses in Northern Ireland in 2012/13 and 2013/14.

Overall demand for the Programme has exceeded original expectations.

Nearly three-quarters (72%) of businesses have received support from just one Key Area,

with the remaining 28% involved in more than one Key Area (mainly two). The fact that so

many of the Programme beneficiaries have only been involved in only one Key Area might

raise a question about the extent to which SPP operates as a coherent programme.

However, as highlighted in this study, SPP has acted more as a bundle of themed

17 INI website

26%

8%

4%

2%

5%

11%

8%

12%

47%

13%

7%

0% 10% 20% 30% 40% 50%

Other

Other services

Public admin, education, health

Financial and business services

Transport and communications

Tourism & hospitality

Distribution and wholesale

Construction

Manufacturing

Energy

Agriculture and fishing

% of SPP businesses


26

interventions rather than an escalator programme (in which businesses progress through

different elements).

Out of the 1242 businesses supported through SPP, 75 are account-managed companies.

With INI supporting around 1200 account-managed companies, it would appear as though

there is scope to do more work with these firms.

SPP has provided support across the broad range of sectors, although nearly half of the

companies involved were manufacturing firms. Since the support is promoted and made

available to all sectors, SPP is contributing to the delivery of Invest NI’s commitment to

equality issues.


4.15 The first element of the Programme we discuss is the Energy Efficiency Loan Fund managed

by the Carbon Trust. The Carbon Trust has a substantial track record in providing energy

efficiency loans to businesses in Northern Ireland. As outlined in its Business Plan for SPP18,

from 2003 to 2012 the organisation provided £20m in interest free loans to 420 businesses,

leveraging around £20m in private sector investment and estimated to result in over £100m

in lifetime energy cost savings.

4.16 Prior to SPP, the Carbon Trust was funded by INI to deliver both a loan scheme and an

energy efficiency support programme which involved site visits, training and delivering

events. There was therefore a strong relationship between INI and the Carbon Trust. The

credentials of the organisation in delivering this type of scheme were validated in reviews

undertaken by Ernst and Young19 in 2013 and KMPG20 in 2014.

4.17 Under SPP, it was agreed that the Carbon Trust would provide interest free loans of between

£3k-£400k to businesses using a carbon saving criteria of 1.5tCO2 per £1k lent. The Fund

has been managed by a Loan Scheme Manager and Loans Administrator in the Carbon

Trust’s Belfast office with financial and technical support brought in from other parts of the

organisation. The following outcomes from the Fund were agreed with INI in the funding

agreement. It was subsequently agreed21 that INI would provide £1.7m in 2013/14 and

£0.3m in 2014/15.

Table 4-5: Agreed budget and outcomes for the Energy Efficiency Loan Fund

2012/13 2013/14 2014/15 Total

Allocated budget (new capital £m) 1.00 1.00 1.00 3.00

Value of loans committed (£m) 3.96 4.30 4.64 12.90

Expected leveraged co-funding (£m) 7.93 8.60 9.27 25.79

No of loans committed 142 154 166 462

18 Carbon Trust (2012) Request for funding to deliver the energy efficiency interest free loan scheme over the period 2012-15 19 Ernst & Young (2013), Review of Carbon Trust Energy Efficiency Loan Fund 20 KPMG (2014), DETI External Delivering Organisation Inspection Visit – Carbon Trust 21 INI (2014), Amendment to Letter of Offer to the Carbon Trust


27

2012/13 2013/14 2014/15 Total

Energy cost savings implemented (£m) 2.64 2.86 3.09 8.6

Carbon savings (ktCO2 pa) 39.3 42.7 46.0 128.0

Lifetime implemented savings (£m) 31.7 34.4 37.1 103.1

Lifetime implemented carbon savings (MtCO2) 0.47 0.51 0.55 1.54

Source: CT Energy Efficiency Loan Fund Business Plan 2012-15

4.18 The interest free loans are available to businesses looking to invest in energy efficiency and

low-carbon equipment. Incorporated businesses are required to have been trading for at

least 12 months and non-incorporated businesses trading for at least 36 months. The pay-

back period is a maximum of four years, which reflects the length of time that new

technologies should start generating efficiencies. Loans have been used to fund building

technologies such as air conditioning, heating, insulation, heat recovery and lighting. There

have also been projects involving industrial process technologies such as materials handling

equipment, process controls and refrigeration.

Monitoring performance

4.19 The data in Table 4-6, below, is derived from the monthly monitoring reports from March

2013 and March 2014 provided by the Carbon Trust to INI22. Over the two years, 348

loans were offered, against a target of 324. These had a loan value of £9.7m, which

again is higher than the target of £8.3m for the two years. The loans are expected to

result in nearly £5m in annual cost savings, again slightly above target. We note that there

are some significant variations between the annual targets in Table 4.5 and Table 4.6.

However, we have been assured that the targets and actuals set out below are the most

recent agreed figures between INI and the Carbon Trust.

Table 4-6: Energy Efficiency Loan Fund monitoring

Loan Fund Targets 2012-13 target

2012-13 offered

2013-14 target

2013-14 offered

2 year target

2 year actuals

New Capital £'000 1,000 1,000 1,000 1,70023

2,000 2,700

Value of loans offered/disbursed £'000

3,960 5,192 4,300 4,525 8,260 9,717

Expected/actual leverages co-funding £'000

1,228 1,610 1,333 1,403 2,561 3,013

Number of loans committed

142 167 182 181 324 348

Energy costs savings identified (£m pa)

2.0 2.60 2.2 2.26 4.20 4.86

Carbon savings identified (ktCO2 pa)

7.92 10.38 8.60 9.05 16.52 19.43

Lifetime implemented 12 15.58 13 13.57 25.00 29.15

22 We have used these months to review end of financial year figures 23 As highlighted earlier, some Year 3 expenditure including new capital for the Carbon Trust was brought forward slightly and therefore was allocated in Year 2 (2013/14)


28

Loan Fund Targets 2012-13 target

2012-13 offered

2013-14 target

2013-14 offered

2 year target

2 year actuals

savings (£m)

Lifetime implemented carbon savings (MtCO2)

0.05 0.06 0.05 0.05 0.10 0.11

Source: Carbon Trust monthly monitoring reports to INI – revised target figures provided by CT in Sept 2014 using revised conversion rates

4.20 The five largest loans are summarised below and provide examples of the types of projects

funded over the last two years.

Table 4-7: Largest energy efficiency loan projects offered in 2012-14

Project Loan value (£) Sector

Installation of a replacement gas fired melting furnace for the melting of aluminium. This will be used in the casting of aluminium cylinder heads for the automotive industry.

400k Manufacture of motor vehicles and parts

Setting up an anaerobic digester to supply renewable electricity for the aggregate recycling and concrete production.

390k Manufacture of glass, ceramics & cement

Installation of new energy saving equipment to improve efficiency in cereal production. The equipment consists of a vibronet cereal damping system, an infra-red micronizer with heat recovery system, and flaking mill with hydraulic roll tension.

250k Food processing

Various improvement to boiler system including: boiler plant replacement; upgrading building management systems; increasing levels of automation; installing energy efficient lighting and controls; and converting cooking appliances in the kitchen from electricity to natural gas supply

210k Hotels

Installation of a new 400kw biomass boiler to replace existing oil boilers.

200k Wholesale plant growers

Source: INI monitoring data

4.21 The loans element of SPP is regarded as an extremely important and successful part of

the Programme, enabling energy efficiency projects to actually be implemented. We

understand from speaking to the Carbon Trust that there have been high levels of demand

over the last two years; on two occasions, a queuing system was introduced whilst the Fund

awaited repayments. In these situations, applicants needed to wait until the new funds were

available24. Based on feedback from the Carbon Trust we understand that applicants have

been quite patient when these situations have occurred.

4.22 A high level of demand is perhaps not that surprising as it is interest-free money and, in

general, businesses continue to face difficulties in accessing finance. Those consulted across

SPP believe the loan scheme is well-managed. The loans are performing well, and a low

default rate of 5% is reported. There have been reasonably strong links with other parts of

SPP and 25% of all loan recipients have also received from at least one other Key Area of SPP

support (see Table 4-2).

4.23 Since this funding has been available since before 2012, stakeholders believe that there is

good general awareness of the loan scheme across businesses and other delivery

24 There is also prioritisation of sectors when the queuing system is in place


29

organisations. The Carbon Trust has not had to do any specific marketing (beyond the

information on CT and INI websites) as it is already meeting its targets in terms of the

number of businesses supported and loans issued.

4.24 The evidence from the monitoring data and stakeholder feedback indicates that the

Energy Efficiency Loan Fund has been an important part of SPP. It is helping businesses

to take forward energy efficiency projects and is proving to be very popular. It would appear

that the links between the loan scheme and other parts of the Programme are reasonably

strong and there have been referrals both ways between the Carbon Trust and INI. There are

three main reasons why we feel that, subject to resources being available, this element of the

Programme should continue: NI businesses continue to have difficulties in accessing

external finance especially for this type of business development activity; there are high

levels of demand (illustrated by the need to introduce queuing); and the availability of this

support is delivering results within companies, and likely to raise the profile of other related

energy and resource efficiency support.

Key findings

Over the two years, 348 loans were offered, against a target of 324. These had a loan value

of £9.7m, which again is higher than the target of £8.3m for the two years. The loans

element of SPP is regarded to be an extremely important and successful part of the

Programme, enabling energy efficiency projects to actually be implemented.

Recommendations




finance.


4.25 The aim of this funding was to encourage businesses to install equipment or implement new

processes that would result in water or material efficiencies beyond regulatory

requirements through provision of a capital grant of up to £50k. Beneficiaries already had to

be INI clients and the funding was provided directly by the INI Sustainable Development

team.

4.26 According to the original guidance to grant applicants25, ‘eligible costs are the capital costs

associated with the third party design, purchase, installation and commissioning of material

or water saving processes or equipment including equipment to recover, re-use or recycle

waste materials that are generated on a company site’.

4.27 We understand that the first call for applications resulted in a relatively low number of

projects coming forward. However, after some internal promotion with client executives and

some flexibility on the level of innovation required, there was significant demand in the

25 INI (2012), INI Resource Efficiency Capital Grants – Notes for applicants and application form


30

second call. In fact, demand was greater than expected, and instead of allocating the funding

over a three year period as originally envisaged, the funding was fully committed in the first

18 months of the Programme.


4.28 Table 4-8, below, shows that over the first two years of the SPP, nearly £1.8m in grants

was committed to 52 projects. Nearly all of this funding was committed in 2012/13. Some

firms were successful with multiple projects, and overall 39 businesses were

supported, of which ten were INI account-managed companies. There were different

levels of funding interventions depending on the size of the business (55% for small

companies, 45% for medium sized firms and 35% for large companies). The average grant

was £34k. This part of the SPP helped to lever in over £2m in private sector investment.

Table 4-8: Resource Efficiency Capital Grant outputs (2012-14)

Number/ value

Number of projects 52

Number of companies supported 39

Value of grants £1,780,531

Average grant per business £34,241

Private sector investment £2,035,853

Total investment £3,816,384

Average value of investment £73,392

Source: SQW analysis of approved RE capital grants

4.29 Similar to the loan scheme, the main strength of the grant funding was to allow the

actual implementation of projects, in this case on resource efficiency. In recent years,

following the recommendations of the Independent Review of Economic Policy in 2008,

there has been a significant decrease in the amount of grant funding provided by INI.

However, many smaller firms in Northern Ireland are reluctant to borrow, and many

that may be willing have struggled to access external finance because of the

contraction in bank lending. The grant funding has allowed firms to make improvements

to their equipment and machinery which would otherwise probably not have gone ahead, at

least in the short term.

4.30 Some consultees suggested companies should only be allowed one grant per company. It

was also stated that committing all of the funding so early in the Programme was perhaps a

mistake. There were clearly reasons for this (helping companies to make efficiencies in

difficult market conditions, and ensuring the full grant amount was allocated within the

three year timescale of the SPP) but the lack of funding to implement projects in the second

half of the Programme was highlighted as a potential weakness.26

26 This need to ensure the grant was allocated was reinforced by the Sustainable Development team and the fact that the final grant payment was paid in October 2014 would appear to justify the early allocation of funding


31

4.31 If the decision is taken to focus on loans as the main mechanism for funding businesses to

implement projects, it was stated that there would be a case for broadening the loans to

cover both energy and resource efficiency projects.

4.32 The evidence highlights that the availability of the Resource Efficiency Capital Grants

has proved to be an important and popular element of the Programme. Especially in

the context of tightening public sector resources and reduction in funding for business, the


stakeholders.

Key findings

Over the first two years of the SPP, nearly £1.8m in grants was committed to 52 projects.

Some firms were successful with multiple projects, and overall 39 businesses were

supported, of which ten were INI account-managed companies. The main strength of the

grant funding was to allow the actual implementation of resource efficiency projects.

Recommendations






Key Area C: Industrial Symbiosis

4.33 The organisation International Synergies Ltd (ISL) was contracted by INI to deliver the

industrial symbiosis element of the SPP. Between 2007 and 2012, ISL was funded by INI to

deliver the UK-wide National Industrial Symbiosis Programme (NISP) in Northern Ireland.

According to ISL’s Delivery Plan for 2012/1327, during this five year period ISL expanded its

regional membership to over 1200 member companies and has achieved 129,560t of landfill

diversion, 131,350t of CO2 reduction, diverted 2,189t of hazardous waste. The business

benefits have included additional sales of £6.83m, cost savings of £6.56m, private

investment of £1.76m, the creation of 32 jobs and the safeguarding of 39 jobs28.

4.34 The concept of industrial symbiosis describes ‘a collective approach to competitive

advantage through the physical exchange of materials, energy, water and/or by-products, or

the shared use of assets, logistics and expertise’.29 ISL uses a bespoke ‘Synergy Management

Software System’ – CRISP (Central Resource for Industrial Symbiosis Practitioners) that

stores resource information and data on business ‘haves’ and ‘wants’. This system allows ISL

to create potential resource matches and track synergies as they progress through to

completion.

27 ISL (2012), Industrial Symbiosis Delivery Plan Northern Ireland 2012-13 28 Note: these figures relate to delivery of the NISP in Northern Ireland 2007-12 29 WRAP website


32

4.35 The approach taken by ISL to support business in developing ‘synergies’ or relationships is

shown below. The time it takes to complete this process and generate the economic and

environmental outcomes can vary significantly. Sometimes this takes weeks but it can often

take months and in some cases years before a company is matched up and agreement is

finalised. As well as supporting the business partners in finalising their agreement, ISL also

provides guidance on any legislation related implications e.g. end-of-waste assessments. The

average timescale for the process is around four months.

Figure 4-2: Overview of industrial symbiosis process

Source: ISL 2012/13 Delivery Plan


4.36 The tables below summarise the activities and outputs reported in ISL’s annual reports to

INI. In term of the agreed activities over the two years, this part of the programme has

broadly met its targets. The only major exception has been the lower than expected

number of referrals to the INI Sustainable Development team. Over the two years, 427

businesses have been engaged which is also slightly lower than the original target of 450.

4.37 In addition to monitoring reports, ISL also provides INI with a copy of the Advisory Visit

reports which are produced; these summarise the advice given, areas for potential synergy

and the companies’ resources (‘haves’ and ‘wants’).


33

Table 4-9: ISL monitoring data – activities in 2012-14

Activities 12/13 target

12/13 achieved

13/14 target

13/14 achieved

2 year target

2 year actuals

Synergy Workshops

5 6 4 4 9 10

Exhibitions 2 2 2 2 4 4

Presentations at resource efficiency events

12 12 12 11 24 23

Case studies 12 12 12 12 24 24

Press Releases 8 7 8 8 16 15

Advisory Visits 350 350 280 280 630 630

Referrals to SDT 175 103 140 70 315 173

New businesses engaged

250 229 200 198 450 427

Source: SQW analysis of ISL Annual Reports

4.38 In terms of the two-year outputs, this part of the Programme has overachieved both in

the additional sales and cost savings generated. The monitoring data shows that

Industrial Symbiosis support has generated nearly £1.8m in additional sales compared to a

target of £1.3m. Similarly, cost savings of £1.7m are reported against a target of £1m.

Although the number of safeguarded jobs reported has been broadly in line with

expectations (13 compared to a target of 12), the support has helped to create just three

jobs against a two year target of 23. In its annual reporting, ISL explains that the relatively

low level of job creation as resulting from the adverse economic conditions.

Table 4-10: ISL monitoring data – outputs in 2012-14

12/13 target

12/13 achieved

13/14 target

13/14 achieved

2 year target

2 year actuals

Additional Sales

30

£650,000 £663,351 £650,000 £1,114,187 £1,300,000 £1,777,538

Cost Savings £500,000 £1,172,976 £500,000 £536,689 £1,000,000 £1,709,665

Private Investment

£750,000 £170,170 £750,000 £24,297 £1,500,000 £194,467

Jobs created 13 2 10 1 23 3

Jobs safeguarded

7 5 5 8 12 13

Landfill Diversion*

N/A 15,660 N/A 26,902 N/A 42,562

CO2 reduction* N/A 6,375 N/A 33,742 N/A 40,117

Hazardous Waste*

N/A 16 N/A 0 N/A 16

30 This refers to a company selling unwanted/ waste materials


34

12/13 target

12/13 achieved

13/14 target

13/14 achieved

2 year target

2 year actuals

Virgin Material saved*

N/A 2,074 N/A 20,456 N/A 22,530

Source: SQW analysis of ISL Annual Reports * No INI targets were set for the environmental indicators

4.39 Stakeholders acknowledged the importance of helping bring together companies to manage

resources more efficiently. As highlighted in the monitoring data, the Industrial Symbiosis

part of the Programme is delivering against its targets. The ISL annual reports also provide

case study examples of agreed synergies, particularly in the construction and manufacturing

sectors. We understand from Manufacturing NI that some of the case studies have

proved useful in promoting resource efficiency within the sector.

4.40 However, some stakeholders suggested that the original targets were perhaps too

focused on volume of activities, rather than providing more intensive ongoing support

to a smaller number of companies that have most potential to generate synergies. In

response to this point, the INI Sustainable Development team pointed to the 2014/15

contract for Year 3, in which SPP has a greater focus on completing matches rather than

activity around visits; this is proving beneficial for completing synergies.

4.41 Most stakeholders viewed the IS support as a part of SPP which could be better

integrated. This activity is seen as operating relatively separately from the other parts of

the Programme. Part of this is likely to be because the support is concerned with longer term

supply chain development. But some also felt that the concept and terminology of Industrial

Symbiosis was not easy to understand and communicate, and that this may be a weakness.

The success of this part of the Programme is partly dependent on generating referrals from

other elements of SPP. It was also noted that it is also quite difficult to sell this support to a

business, given that it could take months or years before a new supply chain relationship can

be found and put in place.

4.42 According to the monitoring data, the Industrial Symbiosis support is generally

performing well. However, it would appear that many stakeholders do not fully

understand the role being played by this part of the Programme and as a result is not

integrated with the rest of SPP. The circular economy is a growing policy area and the

development of these types of supply chain relationships should be a part of future resource

efficiency support. However, there needs to be a rethink on the branding of the support and

how it fits with other parts of the support package.

Key findings

The Industrial Symbiosis part of the Programme has overachieved both in the additional

sales and cost savings generated and overall has broadly met its targets. An exception has

been the lower than expected number of referrals to the INI Sustainable Development team.

The support has helped to create just three jobs against a two year target of 23 – according

to the delivery partner, this has been due to the wider economic conditions.

It was suggested by some stakeholders that the original targets were perhaps too focused

on volume of activities, rather than providing more intensive ongoing support to a smaller

number of companies that have most potential to generate synergies. The feedback also


35

suggested that the IS support as the one part of the SPP which could be better integrated.

Recommendations


support to promote wider participation and confirm its fit with the other parts of the support

package. Improving and clarifying the terminology would be an important start.


4.43 The Technical Advisors in the INI Sustainable Development team are expected to act as the

gateway into SPP support, providing businesses with initial support and guidance. They then

either refer the company to another part of the Programme (e.g. the Carbon Trust Loan Fund

or ISL’s Industrial Symbiosis support) or organise consultancy support for a Resource

Efficiency Audit or Technical Consultancy project. On occasion, a Technical Advisor will only

provide advice and support, and may not progress with any technical consultancy or audit

activity. However, each TA has specialist knowledge and technical ability, and can deliver

support to the businesses themselves without having to engage a consultant.

Resource Efficiency Audits

4.44 The aim of the audit is to help companies identify projects that will reduce the cost of their

energy, water, waste and raw materials. This is available to all companies with a total

resource spend of over £30,000 a year. The support involves a half-day visit from an

environmental consultant.

4.45 At the start of the SPP, a framework was tendered through INI’s Central Procurement

Directorate (CPD) to undertake the Resource Efficiency Audits. Following an open tender,

the three highest scoring consultants were appointed: Mabbett’s & Associates Ltd; Forge

Environmental Ltd; and WYG. Mabbett’s scored highest in the tendering exercise, and the

EU framework rules for call-offs allow INI to give Mabbett's first refusal, followed by WYG

(2nd highest) then Forge. – Mabbett’s undertook 153 out of the 186 Resource Efficiency

Audits carried out over the two years.

4.46 Consultants are normally given two weeks to organise a company visit: the expectation is

then that the audit report will be produced within four weeks. The report is then reviewed

by the Technical Advisor before being sent to the company.

4.47 As shown in the table below, audits completed over the first two years of the

Programme identified cost savings of over £19m (an average of over £100,000 per

business). However, it should be noted that a third of the audits have been done for large

energy users. The cost of implementing the projects is estimated to be £9.6m.

Table 4-11: Resource Efficiency Audits 2012-14

2012/13 2013/14 Total

No. of audits completed 138 48 186

No. of large energy users

46 15 61


36

2012/13 2013/14 Total

Cost of audits (excluding VAT) (£)

130,820 51,865 182,685

Identified cost savings (£)

17,020,135 2,143,518 19,163,653

Identified annual energy savings (KwH)

29,850,181 5,099,078 34,949,259

Identified annual CO2 savings (tCO2e)

26,649 60,129 86,778

Implementation costs (£)

8,122,849 1,497,232 9,620,081

Source: SQW analysis of INI monitoring data (annual figures based on date audit completed)

4.48 The audit report is delivered in the form of a template, summarising basic information on

current resource costs and potential cost and environmental savings. As can be seen in the

figures above, most of the audits were undertaken during the first year of the SPP. The INI

Technical Advisors concluded that while the reports were useful for some companies,

smaller firms required more flexibility in the form of Technical Consultancy projects.

4.49 Looking ahead there were suggestions that the Resource Efficiency Audits (if required by a

company) should be included as part of the Technical Consultancy projects in order to

provide a more integrated service, and reduce the risk of a company dealing with two

different consultants at the entry stage. This would also be our recommendation.

Technical Consultancy Projects

4.50 A framework was tendered through INI’s CPD to undertake the Technical Consultancy

projects and 13 consultants were appointed across eight categories31: Mabbett & Associates

Ltd; Forge Environmental Ltd; WYG; International Synergies Ltd; Action Renewables; Beers

Engineering Consultancy; B9 Energy; Renewable Building Technologies Ltd; Global Trust

UK; Element Consultants Ltd; RPS Consulting; CB Engineering Consultancy; and Intra

Consulting32. Some consultants are in all categories, more specialist consultants are only in

one or two categories.

4.51 If the Technical Advisor decides that the company would benefit from a Technical

Consultancy project, a technical specification is sent to the company for signing (including a

de minimis form) and is then tendered to the framework of consultants. During the first

couple of years of the Programme, the average timescale for the successful consultant to

complete the project and produce a report (usually envisaged as five days’ input) was

around 10 weeks. More recently, Technical Advisors have been asking consultants to

complete the project in four or five weeks (although there is some flexibility). Often the

biggest factor on the timescale is how quickly a visit to the company can be arranged.

4.52 Over the last two years 472 projects have been undertaken. These projects

anticipated cost savings of nearly £26m.

31 This was an open tender and the highest scoring consultants in each of the categories were appointed 32 One additional consultancy were awarded the framework but failed to agree with CPD the terms and conditions and therefore never officially part of the framework


37

Table 4-12: Technical consultancy projects 2012-14

2012/13 2013/14 2 year total

No. of projects completed 228 244 472

No. of large resource users 70 50 120

Consultancy costs (excluding VAT) (£)

476,883 546,975 1,023,858

Identified cost savings (£) 15,850,791 10,017,048 25,867,839

Identified CO2 savings (tCO2e) 123,540 109,810 233,350


4.53 Examples of project titles are listed below providing an overview of the range of activity.

Table 4-13: Examples of Technical Consultancy projects

Energy Survey

Reduction in Energy Usage

Biomass vs Natural Gas

Refrigeration Efficiency

Environmental Management

Biomass & Solar PV Assessment

Energy Efficiency

Borehole Feasibility Study

Reduction in Water and Energy Usage

Energy Management

Water Efficiency

Waste Management

Environmental Management Gap Analysis

Wind Turbine Project

Energy Efficient Heating System

Lighting Survey

Biomass Heating System

Support to Specify Energy Efficient Cooking Equipment

Absorption chilling feasibility, design & specification

Support for biomass heating system implementation

Solar PV System

Review of Alternative Tariff Options

Upgrade of A/C Controls


4.54 Most consultees stated that the expertise available through the consultancy panel for

Technical Consultancy projects is a strength of the Programme. There are reported to

be good links between the INI Technical Advisors and the consultants and the Advisors

providing an important check on the outputs of the Technical Consultancy projects.

Consultants welcomed the flexibility in terms of how the Technical Advisors manage the

Technical Consultancy projects – for example in terms of setting deadlines for reports.

4.55 From a process perspective, it was suggested that there could be better management of

the consultancy framework. There have been some occasions when project briefs have

had to be reissued by INI because of lack of responses. Consultants pointed to the fact that

if briefs are issued in quick succession there can be capacity issues. They would prefer

a more staged process33. Also, some projects are quite straightforward, others involve

complex business or technical issues: the norm of five days is not always appropriate. It was

suggested by some that there should be more consultants on the framework, not only

providing additional capacity but also potentially more specialist expertise34.

33 It could also be argued that it is the responsibility of the consultants to manage their capacity 34 We understand that that a number of changes in how the framework is managed have been introduced in year 3 of the programme with a view to addressing these issues


38

4.56 Additional monitoring of the support provided through Key Area D takes place through the

business surveys undertaken by Northern Ireland Statistics and Research Agency (NISRA)

on behalf of INI. NISRA attempts to interview all businesses in receipt of a company visit,

Resource Efficiency Audit and/or Technical Consultancy project under SPP. The surveys are

completed every six months for projects completed in the previous six-month period.

Although we appreciate the NISRA business surveys provide the Sustainable Development

team with important ongoing feedback on the anticipated savings, these surveys take place

soon after the support has been provided, and it is therefore not possible to capture the

achieved impact of the projects.

4.57 We found that the work of the INI Technical Advisors and the consultancy support

provided through the Resource Efficiency Audits and Technical Consultancy projects

has been successful in delivering support to a large number of NI businesses (nearly

800 businesses in total, although this engagement has ranged from one meeting to five days’

consultancy support). The interaction between TAs and consultants has worked well

and a range of specialist expertise has been available to businesses. After a period of

relatively light touch support in helping a large number of businesses to identify resource

efficiency projects, this type of support might in future focus more on helping businesses to

implement projects. This would again involve the Technical Advisors and a panel of suitably

qualified consultants. In developing any new framework, there are lessons from the SPP

experience in terms of managing tenders and organising specialisms within the framework.

Key findings

Resource Efficiency Audits completed over the first two years of the Programme identified

cost savings of over £19m (an average of over £100,000 per business). Over the last two

years 472 projects have been undertaken. These projects anticipated cost savings of nearly

£26m.

The research has highlighted that the expertise available through the consultancy panel for

Technical Consultancy projects is a strength of the Programme. The interaction between

TAs and consultants has worked well and a range of specialist expertise has been available

to businesses.

Recommendations




R10: Continue with the consultancy framework model to help deliver Technical Consultancy

projects. Any future framework should be consciously designed to include a balance of

consultants with a wide range of expertise and those with more specialist skills – expanding

the current number of consultants to include additional expertise is recommended. The

pipeline of project briefs sent to the consultants on the framework should be managed to

ensure a good response to briefs, and to allocate consultants appropriately to projects.





39







Supporting the sustainable energy sector

4.58 The INI Sustainable Development team is responsible for helping to promote and develop

the sustainable energy sector and this is one of the two overarching objectives for the SPP.

At the time of the economic appraisal in 2011, the INI Sustainable Development team took

the lead in supporting all the main sub-sectors such as onshore/offshore wind, marine and

bioenergy. However, prior to the launch of the SPP there was a significant internal INI

restructure which saw a large amount of support in this area transfer from the Sustainable

Development team to the Sector and Cluster Development team within INI. The only areas

within this sector which remained were Marine (until March 2014), and Bio-energy

(ongoing). The areas that moved to Sector and Cluster Development team were

Onshore/Offshore Wind and other sustainable energy business activities in this area. This

wider support role for the sustainable energy sector is part of Key Area D of the programme,

as set out in Table 3-1.

4.59 This support for the sector includes developing case studies and organising/ supporting

events focused on the sustainable energy sector. These events include:

SustainEx 2013 and 2014 – an annual event held in Belfast for companies involved

in the energy efficiency management, renewable energy and waste sectors. INI and

consultants involved in delivering SPP promoted the benefits of resource efficiency,

the support available through SPP and the work being done to help the existing

supplier base in Northern Ireland.

European Bioenergy Expo & Conference (EBEC) 2012 – the INI Sustainable

Development team took 13 bioenergy firms to the UK’s largest event promoting the

sector. It covers the biomass, biogas, biofuels and energy from waste sectors and

showcases new technology options and encourages supply chain networking.

Other events delivered by the team have included training workshops on

Environmental Management Systems (e.g. BS8555) and resource efficiency

seminars.

4.60 The views of delivery stakeholders on the events were mixed: most felt they offered relevant

content, but some pointed to disappointing levels of business attendance, and believed that

direct approaches or referrals were more appropriate now the Programme is well-

established.


40

4.61 The INI Sustainable Development team also produce Best Practice Guides which summarise

the best tools and techniques available to help companies become more efficient, save

money and also consider new technologies. Guides have been produced on:

Biomass

Heat pumps

Packaging optimisation – food and drink

Resource efficiency – hotel sector

Solar photovoltaics

Waste minimisation

Water efficiency.

4.62 There was positive feedback from the client executives on these guides. A Technical Advisor

noted that although the Sustainable Development team had produced these types of

publications in the past, the most recent versions provide technical advice and guidance in a

more readable and understandable form.

4.63 Additional activity undertaken by the Sustainable Development team specific to the

development of the bioenergy sector has included:

Development and implementation of a bioenergy strategy

Production and circulation of promotional case studies and DVD profiling NI

business and research expertise and INI sector support

Production of a supply chain capability register containing details of more than 150

NI companies involved in the bioenergy sector.

Growth in the sector

4.64 Since the performance of the sustainable energy sector is one of the Programme objectives

and INI as an organisation has continued to provide support, it was appropriate to try to

measure the performance businesses in this sector as part of the evaluation. In some cases

the Sustainable Development team will have provided direct support (e.g. to firms in the

marine and bioenergy sectors). In other cases the team’s involvement has been more

indirect, for example through:

generating demand for sustainable energy products and services through the SPP

(the Carbon Trust estimates that around 90% of the energy efficiency loan fund is

spent on NI suppliers)35

producing sustainability guides, helping to organise events and generally promoting

the sector in Northern Ireland.

35 Our survey of businesses which received the loan funding found a similar result as described in Section 5


41

4.65 Table 4-14, below, summarises the growth in sales amongst firms involved in the

sustainable energy sector which have been supported by INI over the last two years. The

turnover figures provided by INI for companies they have been working with indicate that in

2012/13 the total turnover was £84.3m. This figure increased to £107.8m, an increase of

£23.5m. In one year, the turnover increase of £23.5m has already surpassed the three

year target of growing sales by £16.5m in the Northern Ireland sustainable energy

sector. It should be noted, however, that all of this output may not relate to the sustainable

energy sector (for example, if a firm is also involved in the oil and gas sector). Furthermore,

it is not currently possible to assess the contribution being made by SPP and Sustainable

Development team towards this growth.

Table 4-14: Growth in sustainable energy sector

Value of sales

Combined turnover in 2012/13 £84.33m

Combined turnover in 2013/14 £107.81m

Change in turnover (one year) £23.47m

Source: SQW analysis of INI monitoring data

4.66 As highlighted above, the Sustainable Development team continues to take a lead in the

bioenergy subsector. In 2012, the sector lead was set a target of helping to grow sales in

bioenergy sector by £1m over the three year period of the SPP. In 2012, there were around

12 bioenergy firms known to INI. Two years on, INI has a supply chain directory of 150

firms. Although there has been some level of engagement with all of these firms, 12 firms

have received more intensive INI support and guidance. Once again it should be noted that

this support has come from different parts of INI including trade support, R&D grants,

Selective Financial Assistance and employment grants. Drawing on turnover figures

available for ten of these firms, there has been growth of over £3.1m in sales over a 12

month period.

4.67 The SPP and work of the Sustainable Development team has clearly contributed to

growing the sustainable energy sector. Direct support to businesses to develop and

implement resource and energy efficiency projects generates demand for NI suppliers. The

wider promotion of the sector will also contribute and has been welcomed by stakeholders.

The difficulty is measuring the contribution. At the moment the Sustainable Development

team monitors the performance of businesses in the sector. However, the data do not

identify how much of the change is attributable to INI support and then how much of

this is down to the support provided by the Sustainable Development team. This is an

issue that should be reviewed and in the future any Programme objectives should be SMART

tested so that they can be linked directly to the support provided.

Key findings

The INI Sustainable Development team is responsible for helping to promote and develop

the sustainable energy sector and this is one of the two overarching objectives for the SPP.

In some cases the team will have provided direct support (e.g. to firms in the marine and

bioenergy sectors). In other cases the team’s involvement has been more indirect, for

example through generating demand for sustainable energy products and services through


42

the SPP and producing sustainability guides and organising events.

In one year, the turnover of firms being supported by INI increased by £23.5m meaning the

SPP has already surpassed the three year target of growing sales by £16.5m in the

Northern Ireland sustainable energy sector. However the data do not identify how much of

the change is attributable to INI support and then how much of this is down to the support

provided by the Sustainable Development team.

Recommendations




Overall perspectives on performance

4.68 To conclude this section on performance, we summarise the main areas of strengths and

weaknesses or areas for improvement.

Table 4-15: Summary of SPP performance

Strengths Weaknesses

Providing much needed independent advice in an emerging policy area – new to many businesses

A flexible programme which can assist all types of business (from large corporates down to micro enterprises) – in some cases providing a route in to non INI clients

More of a one-stop-shop than previous similar initiatives – allowing a more strategic approach to addressing energy, water, waste

The SD team is well regarded internally with good technical knowledge (providing advice,

organising events & producing practical best practice guides)

SPP is well managed and monitored both by INI Sustainable Development team and the two EDOs

Good technical expertise is also available through the consultancy frameworks

Attractive financial support to help implement improvements

The Programme is performing well against activity and output targets

SPP is helping to raise awareness and raise the bar in energy & resource efficiency across all sectors

Can be slightly disjointed between different parts of the programme – links and referrals between INI and ISL could be stronger

Relatively low profile compared to other business support programmes

Stretched resources and therefore risk of over-promising if trying to support more firms

Difficulty in knowing who to promote SPP elements to (MD, Finance Director, Technical officer or Production Manager etc) – energy and resource efficiency is typically seen as an internal cost-cutting exercise, rather than a strategic priority for business development.

Conceptual challenges around IS support

IS support seems to operate rather separately from the rest of the Programme – IS can also be a slow burner

Sometimes, capacity issues with the consultants

Calls to increase number of consultants, including more specialist expertise

Limited finance available – e.g. grants all committed early on and, at times, queuing system for the loans

Some questions on value of the REAs (by

themselves) to business – may be better handled as part of consultancy project

Source: SQW stakeholder consultations


43

5. Business feedback and impact

5.1 During August and September 2014, SQW’s market research partner Qa Research carried

out telephone interviews with 170 businesses that were involved in SPP. Contact details

were provided by INI from its CMS database and warm-up emails were sent out in advance

of the survey. The questionnaire used can be found at Annex B.

5.2 Considerable effort was made to ensure a representative sample, taking into account i)

differences in levels of engagement with the respective programme elements, and ii) the

proportion of businesses involved in one project and multiple projects. The sampling

approach used is attached as Annex C. It should be noted that there were 138 businesses in

the database (out of a total of 1242) whose representative either stated they had not been

involved in the Programme or could not recall their involvement.

5.3 Owing to the difficulties associated with isolating impacts attributable to different strands of

a business support programme, it was agreed with the client that questions in the business

survey would focus on the overall economic impact of the Programme.

Business profile

5.4 Table 5-1 provides a breakdown on the sample in terms of their involvement in different

parts of the SPP.

Table 5-1: Survey sample by SPP Key Area

No. of respondents (total = 170) %

More than one project, across multiple interventions 61 36%

Only involved in Key Area A: Energy Efficiency Loan Fund36

38 22%

Only involved in Key Area B: Resource Efficiency Capital Grant 2 1%

Only involved in Key Area C: Industrial Symbiosis 21 12%

Only involved in Key Area D: Improvement Framework 6 4%

Only involved in Key Area D: Resource Efficiency 17 10%

Only involved in Key Area D: Technical Support 25 15%

Base: 170

5.5 Table 5-2 shows the final sample sizes when businesses involved in one Key Area and those

involved in more than one Key Area are combined. Overall, the confidence interval37 for the

sample of 170 companies based on a population of 1,242 is +/-7%.

36 For those companies only involved in one Key Area, they may have been supported on more than one occasion e.g. two loans 37 Based on 95% confidence intervals and 50% response rates


44

Table 5-2: Businesses by SPP Key Area

No. of respondents

% of survey sample

No of businesses supported

38

% in the sample


51 30% 244 21%


8 5% 48 17%


30 18% 329 9%

Key Area D: Technical Consultancy & Resource Efficiency Audits

102 60% 768 13%

Base: 170

5.6 As highlighted in the previous section, nearly half (47%) of the businesses in the sample

were manufacturing firms. The sample also included relatively high numbers of energy

(13%), construction (12%) and tourism and hospitality (11%) firms. Retail also figured

quite highly in the ‘other’ sector category. The vast majority (97%) of businesses

interviewed were established businesses (over 18 months old).


5.7 Over half (53%) of beneficiaries of the Energy Efficiency Loan Fund stated that they

became aware of the support through a recommendation from a supplier or other

business contact. A further 31% reported that they became aware of the scheme

through INI (18% through INI marketing, 6% were referred from the Sustainable

Development team and 6% by their client executive). Just under one in 10 (8%) had an

existing relationship with the Carbon Trust and the remainder learned of the Fund through

an online search or word of mouth.

38 These figures exceed the total number of businesses supported by SPP (1242) since some businesses will have been involved in more than one Key Area


45

Figure 5-1: How did you become aware of the Energy Efficiency Loan Fund?

Base: 51

5.8 As shown in Figure 5-2, the main motivations for applying for a loan were to cut costs (98%

stated this was either very or extremely relevant) and to improve energy efficiency (94%

giving a similar ranking). More than three-quarters (76%) reported environmental

considerations were either very or extremely important. Just under four out of 10 stated that

identifying or developing relationships with suppliers was not relevant.

Figure 5-2: What were your main motivations in applying for an Energy Efficiency Loan?

Base: 51

5.9 A third of the businesses stated that they had been referred to the loan scheme by INI

Technical Advisors or consultancy support organised by INI. Levels of satisfaction with the

support provided by the Fund were high: 86% stated that, overall, they were either very

or extremely satisfied with the support (a 4 or 5 out of 5). Most of the feedback categories

show a similarly high rating (i.e. with 70-80% scoring 4 or 5). The two categories were the

score was lower were ‘ease of application’ (with 60% scoring this 4 or 5) and the

provision of follow-up advice and guidance (53% scoring this 4 or 5).

53%

31%

8% 8%

0%

10%

20%

30%

40%

50%

60%

Recommended(supplier/business

contact)

Invest NI Carbon Trust Online search/word ofmouth

% o

f re

sp

on

de

nts

2% 2%

39%

8%0

25%

6%

4%

25%

10%16%

12%

6%

41%

78%86%

5%

35%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Improving energyefficiency

Cutting Costs Identifying or developingrelationships with new

suppliers

Environmental

% o

f re

sp

on

de

nts

1= no relevance 2 3 4 5 = extremely relevant


46

Figure 5-3: How satisfied were you with the service CT provided, with regard to the following?

Base: 51

5.10 Businesses were then asked whether they had applied to other public or private sources of

finance. A relatively small number (12% or 6 businesses) stated that they had tried other

sources39. Out of the six businesses, three were turned down, one withdrew from the

application, another secured some of the finance and the remaining firm had actually

received all it applied for.

5.11 Nearly all (98%) of the businesses which had received Carbon Trust loans used

Northern Ireland based firms to provide the goods and services needed to implement

their energy efficiency loan projects. On average, around 80% of the value of the loans is

estimated to have been spent through Northern Irish firms. Over the last two years around

£9.7m has been offered by the Carbon Trust in loans. This would therefore represent

around £7.8m in sales for local firms (perhaps half of this amount would ‘stick’ in the local

economy for installation services with the remainder purchasing equipment, at least some of

which may have been locally produced).

39 This is perhaps not surprising given the fact that it is 0% interest. As stated in the earlier section on rationale, the feedback from SPP stakeholders highlighted that without this attractive funding firms would not invest in energy efficiency measures to the same scale or timing

2%

2%

2%

4%

4%

4%

4%

2%

4%

0

6%

2%

2%

12%

0

2%

0

0

14%

27%

22%

18%

20%

8%

12%

6%

10%

33%

27%

41%

41%

33%

31%

41%

29%

33%

45%

33%

31%

33%

20%

49%

39%

59%

53%

2%

2%

0

0

2%

4%

0

2%

0

4%

2%

2%

2%

10%

4%

2%

2%

0

0% 20% 40% 60% 80% 100%

Ease of finding out about the Fund /access toinformation

Ease of application

Speed of response to application

Communication during the course of the application

Provision of follow-up support, guidance, andsignposting

Professionalism of advisor

Understanding your needs

Repayment T&Cs

Overall satisfaction

% of respondents

1= very dissatisfied 2 3 4 5= extremely satisfied Don't know N/A


47

Figure 5-4: Did you use any Northern Ireland based companies to undertake the work funded through the CT Loan/s? And if so, what proportion of the total investment was spent on Northern Ireland based firms?

Base: 51 & 50

5.12 Finally, businesses were asked to what extent they believed their firm was now more energy

efficient following the support from the loan scheme. On a scale of one to five (where this

meant they were more energy efficient), over half (53%) of firms scored this with a five and

another 27% scored this with a four. This is a similar level to the response to the earlier

question on overall satisfaction.

Figure 5-5: To what extent would you say your firm is now more energy efficient as a result of the project (funded by the CT Loan/s)?

Base: 51

Key Area B: Resource Efficiency Capital Grants

5.13 As set out in Table 4-2, a relatively small number of companies received support from this

part of programme. The relatively small number of grant recipient companies surveyed,

together with a low question response rate to some survey questions should be borne in

2% 2%

10%

27%

53%

6%

0%

10%

20%

30%

40%

50%

60%

1= lessenergyefficient

2 3 4 5= moreenergyefficient

Don't knowor N/A

% o

f re

sp

on

de

nts


48

mind when interpreting these findings. The key findings from feedback from grant recipients

are as follows:

The biggest motivation for applying for a Resource Efficiency Capital Grant was to

improve waste management. Cutting costs was the next most common motivation.

All but one the business were signposted to the grant by INI advisors.

None of the interviewed businesses applied for finance for this or a similar project

from any public or private source prior to approaching Invest NI for the Resource

Efficiency Grant.

Five of the eight businesses used a Northern Ireland company to undertake the

work funded through their grant.

Nearly all (7 out of the 8) firms receiving Resource Efficiency grants recipients

were either very or extremely satisfied with the support provided (scoring 4

or 5 out of 5)


5.14 The most popular routes reported by businesses for finding out about Industrial Symbiosis,

as shown in Figure 5-6, were referrals from INI and recommendations from business

contacts (both at 30%)40. Just over a fifth found out about Industrial Symbiosis through INI

marketing. Further routes included recommendations by the local council (7%); the ‘other’

category includes trade shows and workspace development.

Figure 5-6: How did you find out about the Industrial Symbiosis visits?

Base: 30

40 This relates to referrals from INI to ISL rather than referrals going the opposite way which is one of ISL’s activity metrics and reviewed in Section 4

23%

30% 30%

7%

10%

0%

5%

10%

15%

20%

25%

30%

35%

Through Invest NImarketing

Referred by InvestNI

Recommended byanother business

contact

Recommended bymy local Council

Other

% o

f re

sp

on

de

nts


49

5.15 Businesses were then asked their motivations for getting involved in Industrial Symbiosis.

The three main motivations reported by businesses were ‘improved handling efficiency/find

new markets for waste’ (61% rating this very or extremely relevant), ‘improve process

efficiency and reduce costs more widely’ (60% rating this very or extremely relevant), and

‘improved energy efficiency’ (57% rating this very or extremely relevant). The motivations

of least relevance reported by businesses were ‘improving efficiency in handling and

sourcing raw materials’, ‘improving water efficiency’, and ‘identifying or developing

customer relationships’. See Figure 5-7 for more detail.

Figure 5-7: How relevant were the following motivations for getting involved in the Industrial Symbiosis project?

Base: 30

5.16 The majority of businesses (60%) reported that they were signposted to the Industrial

Symbiosis visits through INI Technical Advisors or consultancy support organised by INI.

5.17 Overall satisfaction with the Industrial Symbiosis service was high with 83% of

businesses ranking satisfaction at 4 (very satisfied) or 5 (extremely satisfied). Aspects of

the Industrial Symbiosis service that ranked very highly were ‘understanding of needs’ and

‘professionalism of the IS adviser/consultant’ with 87% and 86% respectively ranking these

at 4 (very satisfied) or 5 (extremely satisfied). The two aspects of the Industrial Symbiosis

service that businesses were less satisfied with were ‘ease of finding out about the initiative’

and the ‘provision of follow-up advice, support, guidance, and signposting’.

13%

37%

17%

17%

23%

23%

33%

13%

13%

10%

17%

23%

7%

13%

13%

20%

13%

17%

13%

13%

20%

28%

13%

17%

23%

20%

20%

17%

33%

17%

43%

27%

20%

37%

17%

0% 20% 40% 60% 80% 100%

Improve handling efficiency/ findnew markets for waste

Improve efficiency in sourcing/handling raw materials

Improve process efficiency andreduce costs more widely

Identify or develop relationshipswith suppliers

Identify or develop relationshipswith customers

Improve energy efficiency

Improve water efficiency

% of respondents



50

Figure 5-8: How satisfied were you with the service provided with regard to the following?

Base: 30

5.18 Figure 5-9 shows that businesses’ views were somewhat more mixed, but still generally

positive, as to the extent to which they had achieved their objectives at the outset of the

Industrial Symbiosis process. Just under half of the businesses (47%) scored this at 4 or 5,

while a further third felt their objectives had been at least partially met. Only 6% of

businesses reported no or very little result in meeting their objectives.

Figure 5-9: To what extent would you say you have achieved the objectives you had at the outset for the Industrial Symbiosis Visits?

Base: 30

5.19 The main reasons given by those businesses giving a low rating on the meeting of objectives

was that the plans for implementation had not yet been actioned, or actions were only

0%

0%

3%

7%

0%

3%

3%

7%

0%

0%

7%

0%

0%

0%

27%

13%

7%

17%

4%

0%

7%

27%

17%

17%

20%

23%

27%

30%

33%

63%

67%

37%

63%

60%

53%

6%

7%

6%

13%

10%

10%

7%

0% 20% 40% 60% 80% 100%

Ease of finding out about theinitiative

Ease of organising the visit

Communication during the process

Provision of follow up advice,support, guidance and signposting

Professionalism of the IS adviser orconsultant

Understanding of your needs


% of respondents

1= very dissatisfied 2 3 4 5= extremely satisfied Don't know or N/A

3% 3%

33%

30%

17%

14%

0%

5%

10%

15%

20%

25%

30%

35%

1= not metobjectives

2 3 4 5 = fully metobjectives

Don't know orN/A

% o

f re

sp

on

de

nts


51

partially complete. For the 47% of businesses that reported positively on achieving their

objectives, the reasons were closely related to increased energy efficiency and cost

reductions, and to better linkages with other companies in their industry.

5.20 The majority of interviewed businesses (77%) reported implementing business

changes as a result of IS support. The main changes were in the areas of introducing new

processes and partnerships (57%) and investment in new equipment and/or machinery

(47%). Other changes to date included the development of case studies and awareness

building with customers around energy efficiency programmes. Looking to the future, 60%

of the interviewed businesses anticipated changes as a result of IS support. Again these

anticipated changes were primarily around introducing new processes and partnerships

(47%) and investment in new equipment and/or machinery (47%). The ‘other’ category in

Table 5-3 includes actual or anticipated changes around profile raising and customer

relations.

Table 5-3: What has your company done differently - or what is it planning to do differently - as a result of the IS support?

To date Planned/under consideration

Introduced new processes and partnerships 57% 47%

Invested in new equipment and/or machinery 47% 47%

Other 20% 23%

No changes 23% 40%

Base: 30 (businesses could choose more than one option)

Key Area D: Technical Consultancy and Resource Efficiency Audits

5.21 Just under half the businesses (48%) stated that they became aware of the Technical

Consultancy and Resource Efficiency Audits through referrals from the INI client executive

(Figure 5-10, below). A further 22% of interviewed business became aware through INI

marketing. Other less significant routes to the Technical Consultancy and Resource

Efficiency Audits were recommendations by business contacts (10%) and referrals by the

INI Sustainable Development team (8%).


52

Figure 5-10: How did you find out about the Technical Consultancy and Resource Efficiency Audits?

Base: 102

5.22 The two main motivations for businesses taking up the Technical Consultancy and Resource

Efficiency Audits support were ‘cutting costs’ and ‘improving energy efficiency’, as

illustrated in Figure 5-11, with 77% and 74% respectively rating these motivations very or

extremely relevant. Motivations of lesser relevance for engaging with the support included

‘identifying or developing new relationships with customers’ (58% no or minimal

relevance), ‘identifying or developing new relationships with suppliers’ (53% no or minimal

relevance), and ‘improving water efficiency’ (52% no or minimal relevance).

Figure 5-11: How relevant were the following motivations for taking up this support?

Base: 102

5.23 Overall satisfaction with the Technical Consultancy and/or Resource Efficiency Audits was

high with 82% of businesses stating they were very or extremely satisfied (rank 4 or 5),

48%

22%

10%8%

4% 4% 4%

0%

10%

20%

30%

40%

50%

60%

Referred byInvest NI client

executive

Through InvestNI marketing

Recommendedby anotherbusinesscontact

Referred bythe Invest NISustainable

Developmentteam

Through thecarbon trust

loan

Other Don't know orN/A

% o

f re

sp

on

den

ts

11%

36%

9%

28%

22%

39%

49%

3%

16%

3%

6%

14%

14%

9%

13%

15%

12%

19%

17%

22%

10%

24%

8%

23%

26%

21%

12%

12%

50%

25%

54%

21%

27%

14%

21%

0% 20% 40% 60% 80% 100%

Improving energy efficiency

Improving water efficiency

Cutting costs

Better use of raw materials

Better waste management

Identifying or developingrelationships with new suppliers

Identifying or developingrelationships with new customers



53

as shown in Figure 5-12. Aspects of the support that businesses were particularly satisfied

with were the professionalism of the INI Technical Adviser, professionalism of the

consultant, communication during the process, and ease of organising a visit. The area of

support where the level of satisfaction was lowest was follow-up advice, support,

guidance, and signposting.

Figure 5-12: How satisfied were you with the service provided with regard to the following?

Base: 102

5.24 Four in five businesses reported changes to date as a result of the Technical

Consultancy and/or Resource Efficiency Audit support (see Table 5-4, below). And a

similar proportion (82%) anticipated changes in the future. The main change reported, to

date and anticipated, was in the introduction of new processes.

Other significant areas of changes to date included: new partnership/s with

supplier/s and/or customer/s (25%), investment realised in new equipment and/or

machinery through CT Energy Efficiency Loan (22%), and new investment realised

through other means (24%).

Other areas planned or under consideration for the future included: investment in

new equipment and/or machinery through CT Energy Efficiency Loan (31%), new

investment through other means (36%), and seeking other new partnership/s with

supplier/s and/or customer/s (29%).

5.25 These responses from businesses indicate therefore that many of the changes from the

Technical Consultancy and/or Resource Efficiency Audit support are still under

consideration, but nevertheless the firms are able to specify what they expect to result in the

future.

1%

0

0

1%

0

1%

2%

2%

4%

2%

3%

6%

1%

1%

0

1%

22%

7%

8%

21%

4%

9%

13%

10%

30%

41%

41%

30%

27%

19%

37%

45%

38%

43%

44%

37%

63%

64%

42%

37%

5%

7%

4%

5%

5%

7%

6%

5%

0% 20% 40% 60% 80% 100%

Ease of finding out about the support

Ease of organising the visit

Communication with you during the process

Provision of follow up advice, support, guidance andsignposting

Professionalism of the INI Technical Adviser

Professionalism of the consultant

Understanding of your needs


% of respondents

1= very dissatisfied 2 3 4 5= extremely satisfied Don't know or N/A


54

Table 5-4: What has your company done differently - or what is it planning to do differently - as a result of the Technical Consultancy and/or Resource Efficiency Audit?

To date Planned/under consideration

Realised investment in new equipment and/or machinery through CT Energy Efficiency Loan

22% 31%

Realised new investment through the Resource Efficiency Capital Grant

13% 24%

Realised new investment through other means 24% 36%

Pursued new opportunities through Industrial Symbiosis 14% 19%

Sought other new partnership/s with supplier/s and/or customer/s 25% 29%

Introduced new processes 42% 43%

Other changes 20% 22%

At least one impact 80% 82%

No change resulted/anticipated 20% 18%

Refused 7% 6%

Base: 102

5.26 Businesses were then asked to expand on the changes identified in Table 5-4 and any other

effects and the benefits to their business. The most common effects identified by businesses

were: ‘energy efficiency is considered more frequently’ (28%); ‘implementing new

equipment or technology’ (18%); ‘knowledge or introduction of new products and

processes’ (16%). Very few businesses specifically identified benefits in terms of financial

gain (9%) or increasing interactions with customers/suppliers (7%).

Key findings

As would be expected for the two Key Areas delivered by INI (the grant and technical

consultancy support), most businesses were referred through INI (client executives, the

website or the Sustainable Development team). For loan recipients, just under a third

became aware of the support through INI and for the Industrial Symbiosis support, just over

half found the support through INI.

There were high levels of satisfaction across all four Key Areas with 80-90% of businesses

stating that they were either very or extremely satisfied with the support provided. Nearly all

(98%) of the businesses which had received Carbon Trust loans used Northern Ireland

based firms to provide the goods and services used in implementing their energy efficiency

loan projects. Over the last two years around £9.7m has been offered by the Carbon Trust

in loans. This represents around £7.8m in sales for local firms.

Four in five businesses of loan recipients stated they are now more energy efficient and a

similar level reported changes to date as a result of both the Industrial Symbiosis and

Technical Consultancy and/or Resource Efficiency Audit support. However, just under half

of IS businesses reported that they had achieved their original objectives, reflecting the

longer timescale to generate impact.


55

Effects of all support provided

5.27 Figure 5-13 shows that, across all forms of SPP support, much of the identifiable impact is

expected to come in the future. To date, the main areas where the support has had a

positive impact on businesses have been in improved understanding of resource

efficiency/sustainable development (56%) and improved environmental

performance (51%). Areas where the support has had a more minor impact on businesses

to date include staff management and skills (23%) and R&D activity (28%).

5.28 Businesses anticipated that the greatest impact of the support in the future will be

around improved understanding of resource efficiency/sustainable development

(70%), improved environmental performance (67%), and efficiency in equipment and

processes (66%). A significant impact on staff management and skills and R&D activity

would also be expected by more firms in the future but, at 37% for each, still for relatively

small proportions of the total.

Figure 5-13: Overall, in which areas will the support have an identifiable impact on your business in the future? – Those responding ‘5’ = significant positive impact and ‘4’ = positive impact.

Base: 170 to date /160 future

5.29 Businesses were asked to identify how the SPP support had impacted on their business

performance to date. Approximately four in five businesses identified an impact to date

( see Table 5-5) – the primary areas of impact on business performance were cost reductions

(59%), increased profits (46%), and jobs safeguarded (32%).

5.30 Looking ahead 89% of interviewed businesses expected future impacts on their

business performance. Businesses expected the main areas of impact on performance

would be cost reductions (67%), increased profits (59%), increased turnover (41%),

and safeguarded turnover (33%).

Table 5-5: What are/will be the impacts on your business performance?

To date Expected to achieve

43%

23%

36%

56%

28%

33%

51%

66%

37%

42%

70%

37%

46%

67%

0% 20% 40% 60% 80%

More efficient equipment,machinery and/or processes

Improved staff and managementskills

Better links with suppliers orcustomers

Better understanding ofenergy/resource efficiency and

sustainable development

Increased R&D activity

Improved productivity levels

Improved environmentalperformance

% of respondents

Future To date


56

To date Expected to achieve

Cost reductions £ 59% 67%

Increased turnover £ 26% 41%

Safeguarded turnover £ 29% 33%

Increase in jobs - FT 19% 30%

Increase in jobs - PT 6% 14%

Safeguarded jobs - FT 32% 26%

Safeguarded jobs - PT 15% 14%

Decrease in jobs 1% 1%

Increased profits 46% 59%

Increased spending on salaries £ 21% 25%

None of the above 21% 11%

Don’t know 8% 8%

Base: 170(businesses could choose more than one)

5.31 Table 5-6 shows impact on business performance to date by extent of involvement in the

Programme, i.e. comparing those involved in just one SPP project, with those involved in

more than one project. Overall, as might be expected, the results suggest that more impact

is identified by those businesses involved in more than one SPP project. The

differences are for the most part a matter of degree, but they are (proportionately) more

marked with regard to the effect on jobs.

Table 5-6: Impact on business performance to date by business involvement with SPP – involved in only one project or involved in more than one project

One project More than one project

Cost reductions 61% 57%

Increased turnover 24% 31%

Safeguarded turnover 25% 36%

Increase in jobs - FT 16% 25%

Increase in jobs - PT 7% 5%

Safeguarded jobs - FT 26% 44%

Safeguarded jobs - PT 16% 15%

Decrease in jobs 0% 2%

Increased profits 45% 49%

Increased spending on salaries 15% 33%

None of the above 21% 20%

Don’t know 6% 11%

Base: One project 109 & more than one project 61


57

5.32 Almost two-thirds (63%) of those interviewed expected the overall business benefits to last

five or more years (see Table 5-77) indicating strong persistence impacts were anticipated

from this support. Only 15% thought the effects would be felt for at most three years.

Table 5-7: How long do you expect the overall business benefits to last?

No. of respondents %

1 year 2 1%

2-3 years 23 14%

4-5 years 18 11%

5+ years 107 63%

Don’t know 20 12%

Base: 170

5.33 Businesses were asked questions which allowed us to assess the additionality related

to SPP support (see Figure 5-14). Over a quarter of businesses (26%) believed they

would not have undertaken the activity without the support. Just under a fifth of

businesses (17%) stated that they would have undertaken the activity anyway,

regardless of the support. The majority, 57%, of businesses thought they would have

undertaken some similar activity, but that it would have been at a reduced scale

and/or a later date.

Figure 5-14: In the absence of receiving this support, which one of the following statements best describes the likelihood that your company would have engaged in similar activities ?

Base: 170

5.34 The businesses that reported attributable impact on a reduced scale were asked to identify

what proportion of the impact would have occurred without the support. Just under half,

48%, believed a relatively small amount (1%-33%) of the impact on their business would

have occurred without the support. A similar proportion of businesses (47%) felt that

approximately half the impact would have occurred without SPP. Only 5% of businesses

stated that most of the impact (67%-99%) would have occurred without the support.

26%

16%

20%21%

17%

0%

5%

10%

15%

20%

25%

30%

Would not haveundertaken the

activity

Would haveundertaken theactivity, but on areduced scale

Would haveundertaken theactivity, but at a

later date

Would haveundertaken theactivity, but on areduced scaleand at a later

date

Would haveundertaken theactivity anyway

% o

f re

sp

on

de

nts


58

5.35 Those businesses that reported that the activity would have been delayed (see Figure 5-14),

were then asked to estimate by how much. Forty-three percent of businesses stated 1-24

months later and 57% of businesses reported 2-5 years later. The main reasons identified by

these businesses for a delay in taking action were:

Lack of finances or resources (48%)

Lacking awareness of knowledge of support and processes (21%).

5.36 Businesses were then asked to summarise the project/s overall effects on business

development activities. Approximately two-thirds of businesses believed that there was

synergy between projects and other activities, resulting in either substantial or minor

additional benefits (see Table 5-8). A fifth of businesses believed that the benefits brought

were largely different and unrelated; just 3% of interviewed businesses believed that the

projects had detracted from other activities.

Table 5-8: How would you summarise the project/s overall effects on your business development activities?

No. of respondents %

There was real synergy between these projects and other activities, resulting in substantial additional benefits to the business

53 31%

There was some synergy between these projects and other activities, resulting in minor additional benefits to the business

62 36%

These projects and other activities took place in parallel; they brought different, largely unrelated, benefits

34 20%

These projects and other activities detracted at the margin from other activities; total benefits were slightly lowered

2 1%

These projects and other activities detracted substantially from other activities; total benefits were reduced accordingly

4 2%

Don’t know 15 9%

Base: 170

Wider effects

5.37 Businesses were divided in their views of the impact of the support from SPP on their

competiveness. Just under two-fifths were of the opinion the support had improved their

competitive position, both in Northern Ireland (39%) and in wider markets (38%).

However, a similar proportion of respondents stated that the support had not improved

their competitive position (perhaps in part because the benefits of the support have still to

be realised).

5.38 Table 5-9 shows that the majority of businesses believed that the support had positive wider

effects, leading to more efficient productivity and a more sustainable energy sector in

Northern Ireland.


59

Table 5-9: How far would you agree with the following statements?

1 = strongly disagree

2 3 4 5 = strongly

agree

Don't know

The support provided has contributed more widely to more efficient/higher productivity working in your industry in Northern Ireland

13% 8% 21% 25% 23% 11%

The support provided has contributed to a more efficient and competitive sustainable energy sector in Northern Ireland

11% 4% 15% 36% 25% 8%

Base: 170

Areas for improvement

5.39 Businesses were asked to provide suggestions on how SPP support might be improved. The

vast majority of businesses did not identify any areas for change, which is consistent with

the high satisfaction levels with the process and the support highlighted earlier. Those areas

where a minority suggested improvements were:

more promotion activity, such as advertising and awareness events

more localised advice

increased direct contact with businesses.

5.40 Nearly all the interviewed businesses (96%) would recommend the programme to other

businesses. The main motivations for recommending the programme were the financial

benefits (30%), advice/support beneficial to the business (22%), and improved

environmental efficiency (21%).

Key findings

To date, the main areas where the support has had a positive impact on businesses have

been in improved understanding of resource efficiency/sustainable development (56%) and

improved environmental performance (51%).

Businesses anticipated that the greatest impact of the support in the future will be around

improved understanding of resource efficiency/sustainable development (70%), improved

environmental performance (67%), and efficiency in equipment and processes (66%).

Including future impacts, two thirds of businesses supported by SPP expected that the

support will help them to make environmental improvements. Although not quantified in this

study, this is an important aspect of the programme and one which differentiates it from

many other INI products.

In terms of quantifiable business impact, approximately four in five businesses identified an

impact to date primarily around cost reductions (59%), increased profits (46%), and jobs

safeguarded (32%). Looking ahead 89% of interviewed businesses expected future impacts

on their business performance.

Regarding the additionality of the support, over a quarter of businesses (26%) believed they


60

would not have undertaken the activity without the support. Just under a fifth of businesses

(17%) stated that they would have undertaken the activity anyway, regardless of the

support. The majority, 57%, of businesses thought they would have undertaken some

similar activity, but that it would have been at a reduced scale and/or a later date.

Businesses were divided in their views of the impact of the support from SPP on their

competiveness. Just under two-fifths were of the opinion the support had improved their

competitive position, both in Northern Ireland (39%) and in wider markets (38%). The

majority of businesses believed that the support had positive wider effects, leading to more

efficient productivity and a more sustainable energy sector in Northern Ireland.

Survey of non-beneficiaries

5.41 As part of the study, short interviews were carried out with a group of non-beneficiaries. The

sample was formed from companies that were either i) INI clients which had expressed an

interest in the SPP but not yet followed up on this, or ii) unsuccessful applicants or

withdrawals from the Energy Efficiency Loan Fund or Resource Efficiency Capital Grant,

which had not received support from another part of the Programme. This additional survey

was to provide qualitative feedback on what companies had done to address the issues

targeted under SPP, without accessing support from the Programme.

Table 5-10: Non-beneficiaries

No. of businesses

Event attendees and INI clients 17

Unsuccessful Loan Applicants 6

Unsuccessful Grant Applicants 2

Total 25

Source: SPP Survey of Non-Beneficiaries

Experience of applying for finance

5.42 For the unsuccessful loan and grant applicants (eight non-beneficiaries), the main reasons

for applying for the finance were to install new lighting or purchase more efficient

equipment. Most of the six loan applicants indicated that they pulled out of the application

because of the process taking too long and requiring too much paperwork – one of the

loan applicants stated that their application was declined. The two grant applicants

were also declined.

5.43 Out of the eight unsuccessful applicants for loan or grant funding, two businesses stated that

they managed to source the finance from elsewhere and five businesses reported that

although the project stalled it is still likely to happen at some point soon (Table 5-11).


61

Table 5-11: Impact of not receiving finance

Loan Grant Total

Limited impact as I managed to source finance from elsewhere 2 0 2

The project has stalled but will still happen in the next year or so 3 2 5

The project has not proceeded and is unlikely to do so in the short term

1 0 1


5.44 The unsuccessful applicants were asked to score different parts of the application process

and the results are shown below. Across all three aspects, the feedback was that too much

information required and not enough guidance was provided. It should be noted that

this feedback is based on a small number of companies, relative to those that were

supported and reported a very positive experience. The suggested improvements were

around better communication and more timely feedback.

Table 5-12: Feedback on application process

1 = very unclear and slow

2 3 4 5 = extremely straightforward and timely

Application process 2 3 2 - 1

Speed of response 3 2 2 1 3

Clarity of the response 3 1 3 - 1


Energy and resource efficiency projects

5.45 Three out of the 25 non-beneficiaries had received support from an organisation outside SPP

over the last two years. Just under a third (seven firms) stated that they had invested in

energy or resource efficiency projects, typically around £20k-£30k. Table 5-13 shows the

different types of projects implemented (one firm’s project involved both solar panels and

rain water harvesting).

5.46 Two of these companies also reported they had received some additional finance through

the NI Rural Development Programme and Power NI through NISEP (NI Sustainable Energy

Programme) administrated by the Energy Savings Trust (EST).

Table 5-13: Energy/ resource efficiency projects

Project No of companies

Installed LED lighting 3

Installed solar panels 3

Installed wind turbine 1

Installed rain water harvesting 1


Business performance

5.47 Overall turnover has increased in these non-beneficiary firms by over £700k (an increase of

3%). Out of the 20 businesses providing figures, 12 increased their turnover and the


62

remainder were around the same level as two years ago. There has also been a 20% increase

in jobs across these businesses. This is perhaps an unexpectedly positive result, at a time

when the economy has been relatively weak. The main message in the context of the

evaluation is the need to factor in growth that occurs in businesses anyway

(deadweight); as, however, many of these firms are INI clients it is likely that they will

have received other forms of support.

5.48 Energy costs for those businesses responding to this question had decreased slightly, but

this overall effect was mainly down to one company. Of the seven firms that had

implemented energy/resource efficiency projects, five were able to provide figures for their

energy costs. Two had reduced their energy costs, while for three firms costs had increased

during the period.

Table 5-14: Business performance over the last 2 years

Responses Now 2 years ago

Turnover 20 28,220,000 27,495,030

Employment (FTE) 25 297.5 250

Energy costs 11 155,000 162,900


Future interest in energy or resource efficiency projects

5.49 Looking ahead, four out of five of the non-beneficiaries stated that they would be

interested in future energy and resource efficiency projects. Out of those firms that

were not interested, four stated that they now have the required expertise or facilities; one

did not think there was the need for support since electricity costs were ‘not that high’.

5.50 Table 5-15 (below), shows that the non-beneficiary businesses saw the financial support as

being most useful for these types of projects in the future (19 out of the 20 scoring this as

extremely or very useful) followed by technical consultancy support (12 scoring this as

extremely or very useful).

Table 5-15: Prioritising future support

1 = not useful 2 3 4

5 = extrem

ely useful

N/A or Don’t know

Loan or grant funding 1 - - 4 15

Support to identify new customer/ suppliers for unused resources 3 1 2 4 6 4

Technical consultancy support 3 1 1 5 7 3

Resource Efficiency Audits 3 4 3 5 2 3


5.51 Full results from the survey are included at Annex D.


63

Key findings

As part of the study, short interviews were carried out with a group of 25 non-beneficiaries.

The sample was formed from companies that were either i) INI clients which had expressed

an interest in the SPP but not yet followed up on this, or ii) unsuccessful applicants to the

Energy Efficiency Loan Fund or Resource Efficiency Capital Grant.

Unsuccessful applicants were asked to score different parts of the application process in

terms of application process, and speed and clarity of response, and the feedback was that

there was too much information required and not enough guidance. However, it should be

noted that this feedback is based on a very small number of companies, relative to those

that were supported and reported a very positive experience.

Three out of the 25 non-beneficiaries had received support from an organisation outside

SPP over the last two years. Just under a third (seven firms) stated that they had invested

in energy or resource efficiency projects. Out of the 20 businesses providing figures, 12

increased their turnover and the remainder were around the same level as two years ago.

The main message in the context of the evaluation is the need to factor in growth that

occurs in businesses anyway (deadweight); as, however, many of these firms are INI clients

it is likely that they will have received other forms of support.

Looking ahead, four out of five of the non-beneficiaries stated that they would be interested

in future energy and resource efficiency projects, once again illustrating the demand for this

type of programme.


64

6. Economic impact and value-for-money

Economic impact model

6.1 As part of the evaluation of the SPP Programme an economic impact model was developed to

measure the impacts of the Programme’s funded activities. Inputs to the model include

participant survey responses, specifically those relating to quantifiable impacts,

additionality and displacement. This section sets out the economic impacts associated with

the SPP based on the model developed. This model only includes the economic impacts on

the businesses involved and does not include wider environmental impacts41.

6.2 The model is based on the survey responses to questions regarding impact to date, future

impact, and additionality, together with certain other assumptions derived from survey

responses and secondary sources. In the model, year 0 is 2012/13 and year 7 is 2019/20.

This timescale is based on how long businesses estimate the impacts of the Programme will

last.

Deadweight

6.3 Deadweight refers to the extent to which outcomes would have been achieved by a business,

even if they had not received support through SPP. Therefore discounting the impacts of

deadweight (what would happen anyway) from the overall impact of a programme gives the

additionality attributable to an intervention The deadweight adjustment factors based on

survey responses are set out in the table below along with the number of respondents from

the survey42. The average deadweight adjustment across all firms is 41% and this has

been applied to all firms in the Programme to calculate net impacts43.

Table 6-1: Deadweight adjustment factors

Responses regarding deadweight Adjustment factor No. of respondents in

the survey sample

Would not have undertaken the activity 0% 34

Would have undertaken the activity but at a later date 50% 29

Would have undertaken the activity but on a reduced scale and at a later date 50%

35

Most of the impact would have occurred anyway (67-99%) 75%

2

Approx. half the impact would have occurred anyway (34-66%) 50%

15

A relatively small amount of the impact would have occurred anyway (1-33%) 25%

10

Would have undertaken the activity anyway 100% 45

41 The wider environmental impacts are highlighted in Section 5 – e.g. see Figure 5-13 42 These are assumptions used in the impact model and are different to the survey results in para 5.31 which state the proportion of businesses stating different types of deadweight 43 We understand from INI that average deadweight of 41% is broadly similar to what has been estimated in other evaluations of INI business development programmes


65

Source: SQW

Substitution and displacement

6.4 The concept of substitution requires an assessment of whether a company’s involvement in

SPP detracted from its other business development activity. The substitution assumptions

based on the number of survey respondents are set out in the table below. The average

substitution adjustment across all firms in the sample is 2% and this has been applied

to all firms to calculate net impacts44.

Table 6-2: Substitution assumptions

Responses regarding substitution Adjustment

factor No. of respondents in

the survey sample

There was real synergy between these projects and other activities, resulting in substantial additional benefits to the business 0% 53

There was some synergy between these projects and other activities, resulting in minor additional benefits to the business 0% 62

These projects and other activities took place in parallel; they brought different, largely unrelated, benefits 0% 34

These projects and other activities detracted at the margin from other activities; total benefits were slightly lowered 33% 2

These projects and other activities detracted substantially from other activities; total benefits were reduced accordingly 66% 4

Don't know 0% 15

Source: SQW

6.5 Given the nature of SPP, with its focus on reducing businesses’ energy and resource

costs, it has been assumed that there will have been no measurable displacement

(positive impacts in beneficiaries causing negative impacts for non-beneficiaries). It

may perhaps be argued that supporting businesses to generate more local energy off-grid

could have a detrimental impact on energy prices for other firms. However, bearing in mind

the scale of projects being funded and the fact most firms will still be reliant to some extent

on the grid, we believe that these effects will be marginal45. Similarly, no examples were

cited to us of businesses moving out of Northern Ireland following support, and it has been

assumed that there is no leakage.

Persistence effects

6.6 In the business survey, we asked companies how long they expected the benefits from

the support to last. The average response was 4-5 years. This has therefore been

applied to both achieved and anticipated benefits. However, the impact of the support will

44 As an example, if there are 10 firms and 9 state 0% but one states 50% then the average across the 10 firms is 5% 45 There are also a range of other more significant factors influencing energy prices


66

inevitably diminish over time and to factor this in we have discounted the persistence effect

by 25% each year.46

Optimism bias

6.7 Our model applies adjustments for optimism bias to respondents’ estimates of future

impacts. Optimism bias refers to a tendency for businesses to be optimistic when describing

future benefits. Based on DCLG guidance47 an optimism bias factor of 40% has been applied

to the projected benefits of SPP.

Scaling up to the wider population

6.8 After analysing the initial database of business contacts provided by the INI Sustainable

Development team, a sampling approach was undertaken to ensure the survey sample of

170 businesses was broadly similar to the wider population of 1242 businesses48. This

approach is described in Annex C. As noted in paragraph 5.2, those contacted for the survey

included 138 businesses whose representative either stated they had not been

involved in the Programme, or who could not recall their involvement. In scaling up,

these companies have been excluded from the base, giving a revised population figure of

1104, and a scaling up factor of 6.5.

Table 6-3: Scaling up

Steps involved in scaling up

Number of companies in the sample 170

Total number of companies supported 1242

Total number of companies stating non-involvement or could not recall 138

Adjusted population figure 1104

Scaling up factor 6.5

Source: SQW

Employment impacts

Additional employment

6.9 Businesses were asked whether the SPP support has helped to create additional jobs (and

whether these were full-time or part-time jobs). In addition, they were also asked about

future jobs that are likely to be created as a result of the support. These results are already

included in a previous section on business effects in Table 5-5. However in order to quantify

the employment impact further analysis of the data was required. As set out in the table

below there were a number of steps taken to establish the total number of gross new jobs for

the sample based on those reporting an increase in employment.

46 As shown later in the Value for Money analysis, the first year of costs relate to 2012/13 and this is treated as Year 0 in the economic model. Achieved benefits start from 2013/14 and anticipated benefits start in 2014/15. Applying persistence effects for an average of 4.5 years to anticipated benefits generates impact to 2019/20 (Year 7) 47 DCLG (2007), Adjusting for Optimism Bias in Regeneration Projects and Programmes 48 This scaling up of results to the wider population is standard for evaluations. However, there needs to be a degree of confidence that the sample surveyed is representative of the population – we set quotas at the start of the process.


67

Some companies could provide either an actual figure or a percentage change. If they

provided a baseline employment figure (before they received the support) then this

percentage could be applied.

A mean percentage increase was then established from all of those respondents

where quantification was possible. This value was then applied to other firms

reporting an increase in jobs but which were not able to quantify the effect

In terms of achieved impact, this resulted in a figure of 195 new jobs with a further

200 anticipated in the future.

Table 6-4: Calculating additional employment impacts

Increase in jobs (FT)

Increase in jobs (PT)

Total increase in jobs (FTE)

Achieved impact

No of companies reporting jobs increase 32 11

No of companies where quantification is possible 19 5

Total number of jobs (based on the companies in the row above) (Sub-total 1) 113 18 122

Median49

% jobs increase 23% 34%

No of figures used for the Median 19 4 21

Additional companies where median can be applied 7 3

No of additional jobs (based on the companies in the row above) 72 3 73

Value of outlier 0 0

No of additional jobs minus outlier (Sub-total 2) 72 3 73

Total no of jobs increase for the sample (Adding the two sub-totals)

50 184 21 195

Anticipated impact

No of companies reporting jobs increase 51 23

No of companies where quantification is possible 30 10

Total number of jobs (based on the companies in the row above) (Sub-total 1) 77 19 86

Median % jobs increase 17% 29%

No of figures used for the Median 30 6

Additional companies where median can be applied 10 6

No of additional jobs (based on the companies in the row above) 90 49 114

Value of outlier 0 0

49 The Median was used here in order to minimise the impact of any businesses reporting very large increases in employment in the calculations 50 May not sum due to rounding


68

Increase in jobs (FT)

Increase in jobs (PT)

Total increase in jobs (FTE)

No of additional jobs minus outlier (Sub-total 2) 90 49 114

Total no of jobs increase for the sample (Adding the two sub-totals) 166 68 200

Source: SPP Economic Impact Model

6.10 The table below sets out the gross and net figures for additional employment generated by

the Programme both for the survey sample and at the Programme level. With a scaling up

factor of 6.5, it is estimated that 1,265 gross additional jobs have been generated in

firms involved in the Programme. There are also estimated to be a further 1,302 gross

additional jobs in the future.

Table 6-5: Gross additional jobs (FTE)

Indicator Number

Additional jobs achieved - sample 195

Additional jobs achieved - population 1265

Additional jobs anticipated - sample 200

Additional jobs anticipated - population 1302


6.11 After taking into account additionality and applying the optimism bias factor to future jobs,

we calculate the net additional jobs generated by SPP at 728, with a further 449 net

additional jobs in the future.

Table 6-6: Net additional jobs (FTE)

Indicator Number

Additional jobs achieved - sample 112

Additional jobs achieved - population 728

Additional jobs anticipated - sample 69

Additional jobs anticipated - population 449


6.12 The gross and net additional jobs per annum are shown below. These figures combine

achieved and anticipated additional jobs, and with the impacts lasting until 2019/20. As

noted above, the impacts will diminish over time, and we have applied a decay effect of 25%

each year. To illustrate this, in 2013/14 only the net additional jobs achieved (728) appear,

while in the following year, the figure of 995 jobs comprises the 2013/14 figure achieved

discounted by 25% (546 jobs) plus 449 further anticipated jobs.

Table 6-7: Additional employment (FTE) per annum

12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20

Gross increase in jobs (FTE) 0 1265 2251 1688 1266 950 562 154

Net increase in jobs (FTE) 0 728 995 747 560 420 229 53



69

Safeguarded employment

6.13 In order to calculate safeguarded employment, the approach described in Table 6-4 was

used again. The table below sets out the gross and net figures for safeguarded employment

generated by the Programme both for the survey sample and at the Programme level. As

highlighted above a scaling up factor of 6.5 has been used. It is estimated that the SPP has so

far safeguarded 4977 gross jobs in firms involved in the Programme. There is also estimated

to be a further 4765 gross safeguarded jobs in the future.

Table 6-8: Gross safeguarded jobs (FTE)

Indicator Number

Safeguarded jobs achieved - sample 766

Safeguarded jobs achieved - population 4977

Safeguarded jobs anticipated - sample 734

Safeguarded jobs anticipated - population 4765


6.14 After taking into account additionality and optimism bias for future jobs we can

calculate the net safeguarded jobs. It is estimated that the SPP has so far safeguarded

2864 net jobs in firms involved in the Programme with a further 1645 net

safeguarded jobs in the future.

Table 6-9: Net safeguarded jobs (FTE)

Indicator Number

Safeguarded jobs achieved - sample 441

Safeguarded jobs achieved - population 2864

Safeguarded jobs anticipated - sample 253

Safeguarded jobs anticipated - population 1645


6.15 The gross and net safeguarded jobs per annum are shown below. These figures combine

achieved and anticipated safeguarded jobs with the impacts lasting until 2019/20. As noted

in paragraph 6.5, above, the impacts will diminish over time, and we have applied a decay

effect of 25% each year.

Table 6-10: Safeguarded employment (FTE) per annum

12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20

Gross safeguarded jobs (FTE) 0 4977 8498 6374 4780 3585 2098 565

Net safeguarded jobs (FTE) 0 2864 3793 2845 2134 1600 860 195



70

Business impacts

6.16 Similar to the process described above for quantifying employment impact, the analysis

identified firms that could quantify the various types of business impact and then applied

mean percentage changes to other firms that reported business impacts but that were not

able to quantify these. Outlier values were excluded from this estimation of business

impacts.

6.17 Table 6-11, below, sets out the business impacts – cost reductions, increased and

safeguarded turnover, increased profits and increased spending on salaries – achieved to

date and anticipated, again using a scaling up factor of 6.5.

6.18 The following estimated gross impacts have been achieved by firms to date:

£18.5m in cost savings

£64.9m in additional sales and £83.6m in safeguarded sales

£15m in additional profits and £4m additional spending on salaries

Table 6-11: Gross annual business impacts

Indicator Value (£m)

Cost reductions - achieved 18.51

Cost reductions - anticipated 22.30

Increased turnover - achieved 64.90

Increased turnover - anticipated 84.67

Safeguarded turnover - achieved 83.64

Safeguarded turnover - anticipated 6.23

Increased profits - achieved 15.04

Increased profits - anticipated 12.66

Increased spending on salaries - achieved 4.00

Increased spending on salaries - anticipated 6.05


6.19 After taking into account additionality and optimism bias, we calculate the net business

impacts to date as:


£37.3m in additional sales and £48.1m in safeguarded sales

£8.6m in additional profits and £2.3m additional spending on salaries.

Table 6-12: Net annual impacts


Cost reductions - achieved 10.65

Cost reductions - anticipated 7.70


71


Increased turnover - achieved 37.34

Increased turnover - anticipated 29.23

Safeguarded turnover - achieved 48.12

Safeguarded turnover - anticipated 2.15

Increased profits - achieved 8.65

Increased profits - anticipated 4.37

Increased spending on salaries - achieved 2.30

Increased spending on salaries - anticipated 2.09


6.20 The gross impacts per annum are shown below in Table 6-13. These figures combine

achieved and anticipated impacts lasting until 2019/20. Again, we have applied a decay

effect of 25% each year.

Table 6-13: Gross business impacts per annum (£m)

12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20 Total

Cost reductions 0.0 18.5 36.2 27.1 20.4 15.3 9.3 2.6 129.3

Increased turnover

0.0 64.9 133.3 100.0 75.0 56.3 34.5 10.0 474.0

Safeguarded turnover

0.0 83.6 69.0 51.7 38.8 29.1 11.9 0.7 284.8

Increased profits 0.0 15.0 23.9 18.0 13.5 10.1 5.8 1.5 87.8

Increased spending on salaries

0.0 4.0 9.0 6.8 5.1 3.8 2.4 0.7 31.8

Gross Value Added

0.0 19.0 33.0 24.7 18.6 13.9 8.2 2.2 119.6


6.21 Table 6-14 presents the net business impacts, achieved and anticipated impacts. Over

the appraisal period, it is estimated that the SPP will have generated the following

impacts for businesses:


£211m in additional sales and £159.3m in safeguarded sales

£41.3m in additional profits and £13.9m additional spending on salaries.

6.22 Taken together, additional profits and spending on salaries approximate to Gross Value

Added, the main measure of economic output. The cumulative total net GVA generated by

SPP, 2012-2020, is therefore estimated at £55.2m. It is also possible to take cost reductions

as being approximately equivalent to a positive change in GVA; reassuringly, this is a similar

figure, at £58.2m.

6.23 Another approach to calculating GVA would be to apply an average turnover to GVA ratio

from the Northern Ireland Annual Business Inquiry (ABI). The latest figures for 2012 report


72

that total turnover generated by Northern Ireland businesses was £61,945 million and GVA

was £18,399 million, representing 29.7% of turnover. Using the actual figures from our

model shows GVA growth representing 26.1% of turnover growth. Since this approach uses

impact figures specific to SPP, it is more appropriate to use the actual GVA figure built up

from the survey feedback, but the ABI figures provide a useful check on the overall

magnitude.

Table 6-14: Net business impacts per annum (£m)

12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20 Total

Cost reductions 0.0 10.6 15.7 11.8 8.8 6.6 3.7 0.9 58.2

Increased turnover

0.0 37.3 57.2 42.9 32.2 24.1 13.7 3.5 211.0

Safeguarded turnover

0.0 48.1 38.2 28.7 21.5 16.1 6.4 0.3 159.3

Increased profits 0.0 8.7 10.9 8.1 6.1 4.6 2.4 0.5 41.3


0.0 2.3 3.8 2.9 2.1 1.6 0.9 0.2 13.9

Gross Value Added (GVA)

0.0 11.0 14.7 11.0 8.3 6.2 3.3 0.8 55.2


6.24 The trajectory of net business impacts over time is illustrated in Figure 6-1 below.


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Figure 6-1: Net economic impact of SPP


Value for money

6.25 We have assessed the value for money of the programme, assuming total costs over the two

year period of £8 million, as shown in Table 6-15, below. This includes all delivery costs,

payments to External Delivery Organisations and the core INI staffing and marketing costs.

Table 6-15: Total programme costs (£m)

12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20 Total

Delivery costs 2.90 3.54 0.00 0.00 0.00 0.00 0.00 0.00 6.44

Core INI costs 0.76 0.77 0.00 0.00 0.00 0.00 0.00 0.00 1.53

Total costs 3.66 4.31 0.00 0.00 0.00 0.00 0.00 0.00 7.96

Source: INI

6.26 Discounting both the costs and the net GVA benefits at 3.5%, over the period 2012/13 to

2019/20, gives a Net Present Value51 for SPP of £42.11m and an economic impact ratio of

6.4:1. (Table 6-16, below). It should be noted that the benefits combine achieved and

anticipated impact.

Table 6-16: NPV analysis

Up to 2019/20

PV of total net GVA benefits (£m) 49.93

51 The Net Present Value (NPV) is HM Treasury Green Book approved approach in appraisal and evaluation for identifying monetary costs and benefits of an intervention over a suitable time period adjusted for inflation

-20.00

-10.00

0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20

£ m

illi

on

s

Cost reductions Increased turnover

Safeguarded turnover Increased profits



74

Up to 2019/20

PV of total costs (£m) 7.82

Net Present Value (£m) 42.11

Economic Impact Ratio 6.39


6.27 Table 6-17 shows the discounted costs and anticipated GVA benefits per annum, together

with the cumulative (annual) economic impact ratio. By 2014/15, it is estimated that there is

an economic impact ratio of 3.1:1, increasing to 6.4:1 by 2019/20.

Table 6-17: Economic impact ratio per annum

12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20

Discounted GVA 0.00 10.58 13.70 9.93 7.19 5.21 2.72 0.60

Cumulative discounted GVA 0.00 10.58 24.28 34.21 41.40 46.61 49.33 49.93

Discounted costs 3.66 4.16 0.00 0.00 0.00 0.00 0.00 0.00

Cumulative discounted costs 3.66 7.82 7.82 7.82 7.82 7.82 7.82 7.82

Economic impact ratio (cumulative) 0.00 1.35 3.11 4.38 5.30 5.96 6.31 6.39


Key findings

An economic impact model was developed to measure the quantifiable impact of SPP

based on feedback from the businesses involved. The analysis has taken feedback on

gross employment and business impacts and factored in deadweight, substitution and

displacement to calculate the net impacts – achieved and anticipated.

In the model, the average deadweight adjustment across all firms is 41%, substitution is

estimated to be 2% and displacement is assumed to be 0%. The model also factors in

persistence effects and optimism bias (taking into account the tendency of businesses to be

overly optimistic about future impacts).

The sample of 170 businesses have been scaled up to the wider population of 1242, but

excluding businesses which were contacted in the survey but could not recall being part of

the programme.

The net impacts of the programme are estimated to be:

728 net additional jobs so far with a further 449 net additional jobs in the future

2864 net safeguarded jobs in firms involved in the Programme with a further 1645 net

safeguarded jobs in the future


£211m in additional sales and £159.3m in safeguarded sales

£41.3m in additional profits and £13.9m additional spending on salaries

Cumulative total net GVA generated by SPP, 2012-2020, is therefore estimated at


75

£55.2m.

The total costs over the two year period have been around £8 million. Discounting both the

costs and the net GVA benefits at 3.5%, over the period 2012/13 to 2019/20, gives a Net

Present Value for SPP of £42.11m and an economic impact ratio of 6.4:1. It should be

noted that the benefits combine achieved and anticipated impact.

Recommendations





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7. Comparator programmes

7.1 In this penultimate section, we provide an overview of some comparator programmes in the

UK, Republic of Ireland, first setting this in a wider European context. Where possible, we

have provided quantitative benchmarks, and identified potential relevant factors and

pointers or lessons for SPP.

The European context

7.2 Anticipating the need for countries to respond to the Europe 2020 Resource Efficiency

Flagship Initiative and in view of the European Commission's interest in expanding the

knowledge base on this topic, the European Environment Agency (EEA) initiated a survey of

resource efficiency policies and instruments with its member and cooperating countries

network in 2011: in total 31 countries provided information including 25 Member

States of the EU‑27.

7.3 Here we present the relevant learning52 from this research in the context of the SPP.

Countries were applying a very broad spectrum of policy approaches to support

resource efficiency. These included: strategy/action plans (23 cited); regulations (17

citied); economic instruments53 (60 citied); sector policies (18 cited); research

programmes (9 citied); information based instruments (47 citied); and

environmental funds (11 citied). The examples of resource-efficiency-related

policy instruments and initiatives reported by countries indicated that

information-based instruments and economic instruments were widespread

and countries saw the most potential for impact within these areas.

However, EEA review found that very few countries reflected on the

effectiveness of the resource efficiency policy instruments and initiatives that

they reported as good practice. The report stated that this ‘indicates a potential

area for capacity-building, particularly since many countries identified policy

evaluation as a knowledge gap’.

Most countries identify resource efficiency as a priority in economy-wide strategies

but policy measures to increase resource efficiency are primarily located in

environmental or sectoral policies. The research highlighted that this mismatch

raises a question about where to focus policy intervention – the economy as a

whole, selected sectors, or priority resources.

Consumption appears to be a priority area for strengthening policy if

resource efficiency is to improve significantly. Very few countries presented

examples of policies and instruments addressing consumption. Those that

did mainly referred to information instruments (e.g. various labels), or

52 European Environment Agency (2012) Resource efficiency in Europe, available at http://www.eea.europa.eu/themes/economy/resource-efficiency 53 Economic instruments are fiscal and other economic incentives and disincentives (e.g. taxes and charges) to take into account environmental costs and benefits

http://www.eea.europa.eu/themes/economy/resource-efficiency


77

focused on technical efficiency improvements rather than on managing

demand.

Using economic instruments (e.g. taxes or charges) to change consumption

behaviour could be particularly important. To date, national policies to address

consumption have been limited for the most part to information-based instruments.

Another topic of interest – important although raised by only a few countries – could

be how to address the rebound effect, and steer consumption towards low impact

products or services.

Republic of Ireland

National Waste Prevention Programme (NWPP) – Republic of Ireland

7.4 The main aim of NWPP is resource efficiency. The activities under NWPP fit within a national

set of programme activities designed to promote a more sustainable society and economy.

The main elements of NWPP include:

Green Hospitality Programme – this offers a step-by-step approach to

environmental management within the hospitality and catering sectors with awards

given at Eco-label, Silver, Gold and Platinum levels. It not only offers the Green

Hospitality Award and the Green Hospitality Eco-label, but also provides workshops,

training, conferences, reviews, network opportunities, etc. The programme is run on

behalf of the EPA by the Clean Technology Centre (Cork) and Hospitality Solutions

Consulting.

Green Business Initiative – this is a free and confidential resource efficiency

service for all types of SMEs. Businesses can request a free Resource Efficiency

Assessment. These are tailored to suit individual business activities, matching size

and complexity of operation with potential outcomes. Businesses can access up to 5

days’ consultant support, including write up of reports. The initiative also includes

an extensive online information portal, workshops, training and cross-links with

other resource efficiency initiatives. The programme is run on behalf of the EPA by

the Clean Technology Centre (Cork).

Green Healthcare Project – once again run by the Clean Technology Centre, the

main focus of the programme is to assist participating healthcare facilities in

implementing recommendations and changes that will prevent and reduce waste.

Interest in the programme has been expressed from abroad including Portugal and

Scotland (Zero Waste).

SMILE – this resource exchange is a free service for business that encourages the

exchanging of resources between its members in order to save them money, reduce

waste going to landfill and to develop new business opportunities. Potential

exchanges are identified through networking events, an online exchange facility and

a support team to assist throughout. The project is managed by Macroom E on behalf

of the EPA, Cork County Council and Cork City Council.


78

7.5 A recent review54 of NWPP demonstrated notable returns on investment for its projects in

2012 - despite a reduction in budget (see Table 7-1). These savings and activities can all be

implemented at zero- or low-cost to operators. The review stated the “measured success

demonstrates good value for money for the state and a significant commercial gain for

participant organisations”.

Table 7-1: Summary data for a selection of NWPP Resource Efficiency programmes

Initiative NWPP investment (2012)

Resource efficiency Actual and potential savings in 2012

Return on Investment

Green Hospitality Programme

€0.366M 7,000t waste prevented

41,800,000 KWh energy saved

380,000 litres water saved

260 members

150 properties certified

€6M 16:1

Green Business Initiative

€0.34M Water, energy, & waste savings

700 active members

40 Resource Efficiency Assessments

Typical savings of €70k p.a. per company assessed

€3M 9:1

Green Healthcare Project

€0.148M €210k savings in food in two acute hospitals, 42% reduction in food waste at each

€5.3M 35:1

SMILE €0.15M 787 members of scheme

387 waste-matches made

139 waste-matches in progress

6,687t waste diverted

Numerous services & logistics traded

€0.675M 4:1

Source: SQW analysis of National Waste Prevention Programme Annual Report, 2013 Note: Figures are gross

Enterprise Ireland Sustainable Business Support

7.6 Enterprise Ireland offer a range of initiatives to encourage businesses to become more

sustainable. These schemes include55:

GreenStart - provides an introduction to environmental best practice and helps in

the preparation of a formalised environmental management structure leading to

greater resource efficiency (energy/water/waste costs). Grant support is available

for hiring an environmental consultant to help firms to develop environmental

improvement projects. Assignments will typically be carried out over 8 to 10 weeks

and companies can receive support for a maximum of 7 consultancy days to a limit

of €5,000

54 Environmental Protection Agency (2013) National Waste Prevention Programme Annual Report, available at http://www.epa.ie/pubs/reports/waste/prevention/NWPP%202012_web.pdf 55 Summarised from Enterprise Ireland website:

http://www.epa.ie/pubs/reports/waste/prevention/NWPP%202012_web.pdf


79

GreenPlus Business Process Improvement Grant – financial support to drive

company environmental efficiencies and achieve improved sustainability. The grant

is available to Enterprise Ireland clients who have been trading for at least 5 years

and who are engaged in manufacturing or eligible internationally traded services.

The maximum level of grant support is up to 50% of eligible costs incurred to a

maximum grant of €35,000. A similar level of funding is also made available through

the Technical Feasibility Grant.

Scotland

Business Efficiency Support – Scotland

7.7 An evaluation56 of Business Efficiency (BE) support measures delivered to companies in

Scotland over the period 2007/08 to 2009/10 was published in 2012. The main elements of

support covered in the review were:

Lean Management Thinking (LMT) – this consists of five LEAN modules delivered

to businesses and up to two days’ support provided by approved Lean practitioners,

facilitating access to LEAN audits, identifying potential LEAN projects, identifying

the need for further tailored support and producing an action plan detailing next

steps.

Business Improvement Products

Workshops – these focus on achieving productivity gains, sustainability and

business opportunities relating to a low carbon economy. They take the

form of presentations, case studies, group working, networking and one-to-

one surgeries, followed by action plan development. Topics include ICT,

waste reduction, diversification and business process re-engineering.

Expert Support – this includes up to two hours’ diagnostic surgery with a

specialist in business improvement to explore and review options; then, if

appropriate, up to two days of ‘hands-on’ time from an expert adviser in

business improvement. The focus is on achieving cost savings/CO2

reduction or other business benefits.

Project Support - for companies undertaking feasibility studies and business

case preparation, prior to investment in a business improvement

(efficiency/productivity gains) project in order to reduce risk of failure.

Energy Generation/Co-Generation, Energy Efficiency, Waste Reduction,

Waste Recycling and Diversification projects are included.

Scottish Manufacturing Advisory Service (SMAS) support: this can include a

review of a company’s manufacturing operations, carried out by a Practitioner from

SMAS. Or support is available for a Manufacturing Improvement Project (MIP) with

56 EKOS for Scottish Enterprise (2012) Strategic Evaluation of SE Efficiency Support (including the Scottish Manufacturing Advisory Service)


80

the aim of implementing the ‘future desired state’ of the company’s manufacturing

operations. SMAS is the equivalent of INI’s Technical Advisory Unit (TAU).

7.8 The points of learning which may be relevant to SPP were as follows.

The products, especially SMAS, were felt to give real tangible and immediate benefits

to companies in terms of bottom line gain and productivity improvement.

Some questions were raised over the efficacy of events. Information was widely

available from a range of sources, and events were therefore less essential for

companies.

There was also concern about the number of repeat customers, as this raised the

question of whether the learning passed onto the companies through the projects

was being embedded in their internal processes.

A recommendation that more emphasis should be placed on supply chains,

especially in areas of potential growth where there was scope to work with a large

anchor company.

7.9 The total costs were reported as £12.4m (undiscounted) over the three-year Programme.

Overall, the measures were forecast to generate cumulative net PV GVA of £174m over a ten-

year period. If this is set against the discounted costs of £12.9m, the BE Programme

generates a return on investment of 14:1.

Table 7-2: Business Efficiency Support Scotland – Return on Investment

Overall BE Programme

SMAS Other BE initiatives

Total cumulative discounted net impact

£174m £45m £162m

ROI (Yr 4) 6:1 4:1 10:1

ROI (Yr 10) 14:1 10:1 19:1

Source: SQW review of BE evaluation

England (Northwest)

ENWORKS Project: “Embedding Resource Efficiency in Key Sectors” 2009‐2013

7.10 The ENWORKS Project started in 2009 and was managed by the Northwest Regional

Development Agency (NWDA) and the Department for Business, Innovation and Skills (BIS).

It was designed to:

improve the competitiveness and productivity of Northwest companies, focusing on

priority sectors, high growth and high environmental impact companies, by reducing

their exposure to environmental risk and improving their resource efficiency

reduce the CO2 emissions, energy, water and material usage of Northwest

companies and divert commercial and Industrial waste from landfill


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create a single, regional, resource efficiency and environmental risk business

support offer that is accessible by all NW companies and is fully compliant with the

government’s Business Support Simplification Programme (BSSP).

7.11 The primary ENWORKS activities were:

tailored on-site reviews to identify ways to improve energy and resource efficiency

and environmental risk management

ongoing technical support with implementing improvements, on and off-site

bespoke software to quantify and prioritise improvements and report on savings

environmental information services (including 24 tailored e-bulletins per year)

knowledge and skills transfer, through training and networking events.

7.12 A long-term evaluation of ENWORKS was carried out over the period 2009-13 by GHK57.

Here we present the main learning from this evaluation. The project expenditure from

October 2009 to January 2013 was £8.4m, an additional £15.6m of capital spend was

leveraged in by beneficiary firms to implement identified opportunities. The project was

highly effective in engaging firms across the region, assisting far more firms than funder

output targets. Table 7-3 provides an overviews of the economic benefits related to

ENWORKS.

Table 7-3: ENWORKS - economic benefits (Oct 09-Jan 13)

Businesses assisted 1,113

Average business cost savings £18,000

Gross GVA £58.8m

Net direct impact £36.6m

Total economic benefits (Direct + indirect + environmental)

£47.8m

Source: SQW analysis of 1 GHK (2013), Evaluation of the ENWORKS Project: “Embedding Resource Efficiency in Key Sectors” 2009‐2013

7.13 The evaluation found the delivery of the project through a network of providers was an

effective model of delivering support based on the requirements of firms across the region.

Expert local providers were undoubtedly a key strength of the programme. The evaluation

recommended that funders should utilise the expertise of the ENWORKS Central

Management Team in creating and managing complex yet effective delivery networks for a

range of policy/funding regimes in any future opportunities. Support through a central

management structure provides significant added value (and reduced administrative burden

on delivery teams and funders) and it is recommended that this is included as an essential

element of any future project.

57 GHK (2013), Evaluation of the ENWORKS Project: “Embedding Resource Efficiency in Key Sectors” 2009‐2013


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Summary

7.14 Finding relevant comparators to benchmark against SPP was not straightforward: the

availability of evaluation evidence in this area is more limited than anticipated. As noted at

the start of this section, the EEA review58 found that very few countries had reflected on

the effectiveness of resource efficiency policy instruments, noting that this ‘indicates a

potential area for capacity-building, particularly since many countries identified policy

evaluation as a knowledge gap’.

7.15 Table 7-4 provides an overview of SPP, against the programmes outlined above. It is,

however, difficult to draw like-for-like comparisons as the context set by the economic

environment and links to other, related, delivery mechanisms are inevitably different, and

the cost base and methods used to estimate economic benefits may also differ.

Table 7-4: Comparison overview

SPP - NI NWPP - RoI BES - Scot ENWORKS - Eng

Focus Achieve operational savings in water, energy and materials use and also identify new opportunities within the high growth renewable energy market.

Resource efficiency focused on reducing environmental impact and cutting costs. NWPP provide businesses, households and the public sector with guidance & supports to be more efficient.

Focus on achieving productivity gains, sustainability and business opportunities relating to a low carbon economy

Improve competitiveness and productivity by focusing on reducing exposure to environmental risk and improving resource efficiency

Model Internal management and external delivery

Internal management and delivery but a range of external partner organisations

Internal management and internal/external delivery

Internal management and external delivery

Scale of intervention

£7m, over 2 years n/a, as NWPP part of wider suite of programmes

£12.4m total cost, over 3 years

£8.4m project expenditure, over 4 years

Economic benefits

Over the period April 2012 – March 2014

£58.2m in cost savings £211m in additional sales

£159.3m in safeguarded sales

£41.3m in additional profits

£13.9m additional spending on salaries

Jan – Dec 2012

€15m in actual and potential savings

Typical savings of €70k p.a. per company assessed

2007/08 to 2009/10

Net PV GVA of £174m over 10 years

RoI 14:1, over 10 years

Oct 09-Jan 13

Typical cost savings of €£18k per firm

Net GVA £36.6m

Total economic benefits (Direct + indirect + environmental

58 EEA, Resource efficiency in Europe, 2012, available at http://www.eea.europa.eu/themes/economy/resource-efficiency




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SPP - NI NWPP - RoI BES - Scot ENWORKS - Eng

Net GVA £55.2m

RoI 6.4:1 over 7 years

) £47.8m

Key features, possible learning points for INI

Approach embedded in other business support; limited timespan covered in project evaluation

High rate of return, GVA contribution

Similar scale, but over longer delivery period, and producing lower level of benefit

Source: SQW

Key findings

This assessment of other business support programmes with energy-saving and

environmental objectives, and possible learning from elsewhere, does not lead to any clear,

unambiguous, policy conclusions for SPP. But it does provide some pointers – including

continuity of offer, range of support mechanisms/products, and effectiveness in combining

internal and external expertise – which can be seen as reinforcing the approach already

adopted in Northern Ireland. In broad terms, the review of comparator programmes shows

the importance of considering performance, apparent successes and limitations, as part of a

rounded policy context with both local and wider dimensions.


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8. Conclusions and recommendations

8.1 This final section contains a summary of our findings, set out against the objectives for the

study, and the headline conclusions we draw from the evaluation, including areas for

improvement. We also set out a series of conclusions and issues for further debate relating

to the possible development of a successor programme to SPP.

Study objectives

Extent to which the principal objectives and targets of the intervention have been met

In its first two years, SPP generated net cost savings of around £58m which is more than

double the target for the full three years of the Programme. The sustainable energy sector

has grown by £23m over one year, again well over the three-year target of £16m, although it

is not clear how much of this growth is attributable to the support provided by the

Sustainable Development team and how much of this down to other factors59. Based on the

available evidence, the SPP is on target to exceed its headline objectives and targets.

Does the intervention represent good Value for Money (VFM) and appropriate

use of public funds?

Yes, with respect to each of the three elements to Value for Money. In terms of cost

(economy), some expenditure has been brought forward, but overall SPP has been delivered

for less than was originally anticipated. The Programme has been efficient and effective in its

use of public funds, is delivering well against targets, and generating a return of more than

6:1 in GVA for the Northern Ireland economy.

Value of moving from a suite of individual programmes to the current

consolidated SPP

SPP has provided a more coordinated and strategic approach to delivering this type of

energy and resource efficiency support to businesses. Under the programme delivery model,

INI Technical Advisors take a holistic approach to assessing the support needs across all

areas of the Programme and broker the relevant support. This independent brokering role is

an important difference to the previous model of support, and we concur with many

stakeholders in seeing it as adding value.

Summary of findings

Rationale for the programme intervention

8.2 SPP fits well with the aims and objectives of INI for improving business productivity and

competitiveness. Policy and strategies in NI, UK and across the EU are increasingly focusing

59 This could include support from other organisations outside INI and general economic conditions


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on the need to reduce the environmental impact of businesses at the same time as making

more efficient use of resources which thereby improves business performance.

8.3 The rationale for the Programme was well defined in the original economic appraisal, in

terms of helping businesses identify and implement measures to improve resource

efficiency and promoting the wider sustainable energy sector in Northern Ireland. Based on

the evaluation evidence this rationale for SPP remains valid. Although there is

increasing awareness of the issues around energy and resource efficiency (not least because

high and increasing energy costs have a disproportionate effect on the Northern Ireland

economy), business continue to require support in identifying and implementing

improvements. There is an information gap here as well as awareness: those active in

the market are, understandably, focused on selling specific solutions; these

technologies may or may not be the most appropriate for businesses – SMEs in

particular lack knowledge of alternatives and the wider context.

8.4 Over time, Northern Ireland has had higher energy costs than other parts of the UK and EU

because of its geographic location, higher energy transport costs, and the small size of its

energy market. This reinforces the need for this type of support.

Programme overview and delivery model

8.5 SPP has been delivered through four Key Areas: an Energy Efficiency Loan Fund managed by

the Carbon Trust; a Resource Efficiency Capital Grant administered by INI; Industrial

Symbiosis support delivered by International Synergies Ltd; and project management

support delivered by INI Technical Advisors with external consultants brought in to

undertake Resource Efficiency Audits and Technical Consultancy projects. The INI

Sustainable Development team which manages the programme also has a role in promoting

and developing the sustainable energy sector with a particular focus on the marine (up to

March 2014) and bioenergy sub-sectors.

8.6 The approved annual SPP budget over the last two years has been around £3.5m. The

programme expenditure over the two years has been around £1m above this budget.

However, this is because most of the SPP’s budgeted direct financial support to business was

allocated to the first two years of the three- year Programme. By the end of the three

years, SPP expenditure will be in line with the approved budget.

8.7 Overall, the evaluation has found the systems and processes in place for managing and

monitoring SPP to be robust, fit-for-purpose and effective. There are regular meetings

between internal and external delivery partners and ongoing reporting to INI management.

8.8 The evaluation feedback indicates that the mixed delivery model (in-house and external

delivery) is working well: a core INI Programme management, with an internal team of

Technical Advisors, specific programme elements sub-contracted to EDOs, and a panel of

external consultants to deliver Technical Consultancy projects. An advantage of the model

has been the in-built capacity for reflection at the centre on progress in delivery, and what is

being achieved in each area.

8.9 The evidence indicates that the current team of Technical Advisors are working at capacity

and some stated that the team is ‘stretched’ as a result of the continuing high level of


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demand from businesses for this type of support. Assuming that a similar type of

Programme continues beyond the current approval up to March 2015, at least the same level

of staffing will be required in the future. A refocusing of the programme in terms of working

more intensively with fewer businesses would also help to address resource constraints.

8.10 SPP has been successful in meeting its business impact targets with slightly lower

costs than anticipated at the outset. Considering SPP is managed as a ‘programme’, the

engagement levels between businesses and more than one Key Area have been relatively

low. However, drawing and reflecting on the stakeholder interviews, we do not see SPP as an

escalator programme (with businesses progressing through the different elements) but

instead as a basket of themed interventions that it makes sense to manage collectively.

Fit with other programmes

8.11 As it addresses business issues around resource and energy efficiency, SPP has a distinctive

role within the INI portfolio. While other innovation-related INI projects also encourage the

development of new products and processes, SPP’s distinctive focus encourages businesses

to become more efficient and productive through cutting costs and making environmental

improvements. The Programme leads into and links with other business development areas

such as management skills, exporting and supply chain development. Overall, SPP

complements INI’s other products.

8.12 The Sustainable Development team also works closely with other organisations to ensure

INI support is well aligned strategically with other initiatives in resource and energy

efficiency. Although other programmes operate in this field in Northern Ireland,

considerable efforts are made to coordinate and avoid overlap and there is no evidence of

confusion among businesses.

Performance

8.13 The evidence from the monitoring data and stakeholder feedback indicates that the Energy

Efficiency Loan Fund has been an important part of SPP. It is helping businesses to take

forward energy efficiency projects and is proving to be very popular. It would appear that

the links between the loan scheme and other parts of the Programme are reasonably strong

and there have been referrals both ways between the Carbon Trust and INI.

8.14 The evidence also highlights that the availability of the Resource Efficiency Capital Grants

has proved to be an important and popular element of the Programme. Especially in the

context of tightening public sector resources and reduction in funding for business, the


stakeholders and has been an important part of the programme.

8.15 According to the monitoring data, the Industrial Symbiosis support is generally

performing well. However, it would appear that many stakeholders do not fully understand

the role being played by this part of the Programme and as a result it is not fully integrated

with the rest of SPP. The circular economy is a growing policy area and the development of

these types of supply chain relationships should be a part of future resource efficiency

support. There needs to be a rethink on the branding of this support and its fit with the other

elements of SPP.


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8.16 The Project Management Support provided by the INI Technical Advisors and the

consultancy support provided through the Resource Efficiency Audits and Technical

Consultancy projects has been successful in delivering support to a large number of NI

businesses (nearly 800 businesses in total, although this engagement has ranged from one

meeting to five days’ consultancy support). The interaction between TAs and consultants has

worked well and a range of specialist expertise has been available to businesses.

8.17 The SPP and work of the Sustainable Development team has clearly contributed to growing

the sustainable energy sector (however, as stated previously actually measuring the

contribution is currently challenging). Direct support to businesses to develop and

implement resource and energy efficiency projects generates demand for NI suppliers. For

example, based on information from the Carbon Trust and the business survey, around 80-

90% of the energy efficiency loan funding is spent in Northern Ireland. The wider promotion

of the sector will also contribute and has been welcomed by stakeholders.

Business impacts and economic benefit

8.18 The level of client satisfaction is very high, as evident in the business survey undertaken as

part of the evaluation. Across all four Key Areas, around 80% of businesses involved in the

Programme were found to be very or extremely satisfied. And 96% of all respondents

stated that they would recommend the Programme to others.

8.19 Many firms were able to identify cost reductions or positive impacts on sales, jobs or profits.

Additional future impacts were anticipated; in some cases, the effects of the support

provided will take another year or so to come through.

8.20 The evidence from the business survey suggests a level of deadweight associated with

SPP of approximately 40%, which is reasonable for this type of intervention. We found

that any substitution for other business development that would have taken place in

participating firms was marginal, and that displacement and leakage were not significant at

the level of the Programme.

8.21 Over the two years, 2012-2014, it is estimated that SPP will have generated the

following net impacts: £58.2m in cost savings for businesses; £211m in additional

sales and £159.3m in safeguarded sales; £41.3m in additional profits and £13.9m

additional spending on salaries. The additional profits and spending on salaries

approximate to Gross Value Added, the main measure of economic output, and the

cumulative total net GVA generated by the Programme is therefore £55.2m. These

estimates of economic benefit are based on relatively conservative assumptions, which

follow relevant government guidance.

8.22 Over the period to end 2019/20, the return (economic impact ratio) on the c. £8m

invested in SPP over the two years, is estimated at 6.4:1. This type of return is

reasonably high especially considering the nature of the Programme (mainly focussed on

cutting business costs).

8.23 Important areas where the support has had a positive impact on businesses to date and

expected in the future are in terms of improving their understanding of resource

efficiency/sustainable development and improving their environmental performance.


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Including future impacts, two thirds of businesses supported by SPP expect that the support

will help them to make environmental improvements. Although not quantified in this study,

this is an important aspect of the programme and one which differentiates it from many

other INI products.

8.24 The wider effects of the Programme in growing the sustainable energy sector are harder to

assess; available evidence points to a rapid growth during the SPP delivery period, and the

focus on this area, and the specific resource, provided by the Programme, is likely to have

contributed. But other public involvement, including direct assistance under SFA, will also

have played a part, and the dominant influence may have been the broader, if patchy,

recovery from recession offering a range of new business opportunities.

Managing risks

8.25 The key risks identified for SPP were: promoting and realising an effective flow of demand,

and realistic expectations within businesses; controlling and maintaining the quality of

support; more broadly, replacing and crowding out private sector suppliers. The evaluation

found that SPP has been designed and managed in full awareness of these risks.

8.26 As outlined below, one area for improvement is around reaching and delivering to the target

market. Growing profile is apparently leading to increasing demand, there are some

potential risks in being able to resource the Programme especially within the team of

Technical Advisors who are already at capacity. These staff are all technical specialists and

central to the success of SPP. There is a case for some refocusing of the support (e.g.

targeting more export-orientated firms). . If the decision is taken to maintain the Programme

in its current form, we believe that an increase in staff resources is likely to be needed to

meet demand.

8.27 The Programme is focused first and foremost on building understanding within businesses

of appropriate solutions in energy-saving and resource efficiency, and positioning these

businesses to implement beneficial changes. A key task has been to build awareness; the

help available to support implementation has at times been restricted. Both the energy

efficiency loans and resource efficiency capital grants proved attractive financial products,

reflected in their respective (high) levels of demand. The consequence has been occasional

queuing for the loans, and the grants fully committed halfway through the three-year

programme.

8.28 While Technical Consultancy has helped with feasibility studies and action plans, some

stakeholders have questioned how far and how quickly these identified projects are realised.

The NISRA business surveys provide the Sustainable Development team with important

ongoing feedback from businesses on the support provided through Key Area D and the

anticipated savings from the resource efficiency projects. However, since these surveys take

place immediately after the support it is not possible to capture the achieved impact of the

projects. The evaluation evidence indicates that there is a danger of some projects not

actually being taken forward.


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Areas of qualification – and for possible improvement

8.29 SPP is structured to deliver a series of interventions to business which are delivered by

different parties; it is managed as such, with review and learning built into internal INI

processes, but it is not marketed as a Programme in its own right. This programme

structure, and the distinctive focus within INI on achieving better business performance

through cost savings achieved by a potentially wide range of improvements in energy and

resource efficiency, inevitably means that SPP has some built-in complexities.

8.30 This was evident in a range of findings from the evaluation, which do not necessarily

demand immediate action, but which should be considered in thinking about the results

obtained to date, and as pointers to possible improvements in a successor programme. In

summary, the evaluation found that:

SPP, or more correctly the elements of SPP, is relatively low profile; nevertheless,

the specifics of the offer mean that there is risk of over-promising, at least in some

areas: as noted above, with limited finance available on an advantageous basis (e.g.

grants and zero interest loans), the grant element was fully committed early (half-

way through the Programme) and, at times, there has been some queuing for loans.

With a multi-faceted offer, the promotion of the offer and the entry point to the

business is not always clear: should the initial contact be made with the

Managing Director, Finance Director, Technical Lead, or Production Manager?

This matters not only for clarity, but because it appears that some direct clients

have struggled to gain support from within their business for implementing

SPP recommendations.

At times, there has been some perceived disjoint between different parts of

the Programme, specifically between the IS support and the rest of the Programme.

There are also relatively few businesses (25%) that have progressed from one part

of the Programme to another. However, as already highlighted this Programme has

acted more as a bundle of themed interventions.

IS support operates relatively separately from the rest of the programme,

which appears to partly connected to the concept itself, and because ISL operates on

the basis of a specialist industrial database which goes well beyond Northern

Ireland; it may also be because the lag between advice and implementation is

particularly pronounced in this field. The concept of Industrial Symbiosis requires

some explanation to business: the name itself may not provide the best starting-

point for this. For client executives promoting different elements of SPP to their

businesses, they will need to have a good understanding of what the IS support

entails.

While the consultants’ framework has in general operated effectively, there have at

times been capacity issues. This points to the need periodically to refresh the

framework, partly to compensate for withdrawals, and partly to ensure there

is adequate specialist expertise. We understand that action has already been

taken on this. But this issue may also point to the inflexibility of the standard ‘five

days’ assistance: while it is recognised by SPP managers that this model cannot fit all


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cases, it appears that consultants’ concerns over possible liability/professional

indemnity have at times led to ‘no bids’.

Towards a new programme

8.31 As noted at the start of this section, the headline finding from the evaluation on SPP’s role

and operations is strongly positive. We understand that INI is already actively considering

continuing with a similar type of programme after March 2015, when the current SPP comes

to an end.

Areas for consideration and recommendations

8.32 Using as a start point the findings set out above, we suggest that the discussion around the

form a new programme (and the extent to which it is ‘SPP2’ or something different) should

be structured around: i) demand - the market going forward; ii) the possible refocusing of

the programme, to take a more selective and results-oriented approach; iii) changes to the

delivery model. In this final part of the report, we make a series of initial recommendations

under these three headings. A number of questions are also posed for further consideration

by INI based on our findings.

Demand – the potential market going forward

8.33 SPP has set out to stimulate awareness, and then respond to a wide range of needs and

demand through its portfolio of activities. The premise, demonstrably true to date, has been

that there is a latent market as well as evident demand, often from the same businesses, and

including some of Northern Ireland’s largest firms.

8.34 There is no sign that this demand is drying up: new business entrants, changes in business

organisation and changing market and regulatory demands all point to there being on-going

potential for this type of intervention. While firms are becoming more aware of need to

address energy/resource costs, there continues to be a continuing need both for

independent technical information and for dedicated financial support in this area.

8.35 However, success in achieving the present targets has depended to a considerable extent on

repeat business with larger firms, which in some cases has been characterised as ‘low-

hanging fruit’.

Will this type of demand be as evident in coming years? - and if it is,

Should it be met through this type of public programme in the future?

8.36 If the answer to either question is no, there are likely to be implications for the level of

targets set for a new programme, as well as for the structure of the programme – the skills

required and its overall scale. The latter issues are addressed under the next two headings,

below.

A shift towards refocusing the programme

8.37 Related to the questions on overall strategy and market, are others on focus. As currently

configured, SPP can support any business that spends at least £30k on resources. Some have


91

already suggested that this threshold might be raised, as Council-led programmes in some

areas can (and do) pick up the smaller firms with less complex needs.

8.38 In our view, a more selective approach from INI would be a better use of relatively expensive

resource. Raising the limit of involvement to a £40k or £50k business resource spend would

enable INI to focus on support for medium and large employers. For INI account-managed

firms, the development and implementation of resource efficiency projects should be

identified in their Account Development Plans (ADPs). There is potential for more account

managed firms to be supported through this type of programme.

8.39 This would also be more in line with INI’s overall remit, and its other activities:

“We principally support those businesses that can make the greatest contribution to growing our economy. These are businesses that have ability to grow and drive productivity in the economy and are keen to export their goods and services outside Northern Ireland.”60

8.40 We have noted the credibility advantages SPP gained through the Technical Advisors’ sector-

specific as well as technical expertise. We recommend that, within the overall requirements

of the new programme, efforts be made to maintain these specialisms; we do not

recommend focusing exclusively on a narrow shortlist of sectors.

8.41 We do, however, recommend that consideration be given to shifting resource under a new

programme towards a greater focus on follow-up and implementation. This would in turn

allow the programme to move toward tracking actual savings, rather than those identified as

being achievable. More on-going support for projects would also provide more detailed

information on results from the interventions, reducing the need for NISRA’s six monthly

surveys for businesses supported by Key Area D.

8.42 We realise that in the current economic climate it will be difficult to make the case for more

resources for this type of intervention. If, as we suggest, there should be a greater focus on

implementation and working with INI clients, we recognise that that the corollary is likely to

be support for fewer businesses.

Possible changes to the delivery model

8.43 As reported in section 3 and earlier in this section, the evaluation found that the ‘mixed’

(internal-external) delivery model, has proved fit-for-purpose. If a new programme is

designed to meet similar needs, it is recommended that this remains the principle

guiding the overall structure. However, some modifications might be considered,

depending on the outcome of the discussions on demand and purpose and resolution of the

questions set out above. The issue of available resources and other competing demands, at a

time when public finances are expected to remain under severe and on-going constraint, will

of course also be relevant for INI.

60 INI website


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8.44 To help shape thinking on future delivery, the following recommendations are suggested.





























finance.







support to promote wider participation and confirm its fit with the other parts of the support.

Improving and clarifying the terminology would be an important start.





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R10: Continue with the consultancy framework model to help deliver consultancy projects.

Any future framework should be consciously designed to include a balance of consultants

with a wide range of expertise and those with more specialist skills – expanding the current

number of consultants to include additional expertise is recommended. The pipeline of

project briefs sent to the consultants on the framework should be managed to ensure a

good response to briefs, and to allocate consultants appropriately to projects.
















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