APPENDIX 1

March 2002

BEST VALUE REVIEW

OF ECONOMIC DEVELOPMENT SERVICES

BEST VALUE REVIEW

- SUMMARY REPORT

Note : 1) This report should be read in conjunction with the

separate Service Improvement Plan.

2) Originally established in April 1999 as the Isle of Wight Partnership (IWP), in January 2002, the Partnership was renamed the Isle of Wight

Economic Partnership (IWEP); for consistency the term IWEP has been used throughout this review.

EXECUTIVE SUMMARY

This report presents a summary of the Best Value Review of the Council’s Economic Development service. In April 1999, the Council determined to deliver the service through a Service Level Agreement with the Isle of Wight Economic Partnership which brought together a number of agencies into a single organisation. As part of its contribution the Council seconded the staff of the Economic Development Unit together with a cash contribution to the Partnership’s activities.

However, financial difficulties arising from changes in Government policy in the delivery of training and business support services have required a reorganisation of the service during 2001/2. The Partnership has been re-focused upon two areas of operational activity – inward investment and area regeneration. A number of the Council secondees have returned to the authority taking on executive responsibility for strategic matters, research and bid development.

The Best Value Review involved extensive consultation with key stakeholders - key findings from that part of the process included :

· 70% of stakeholders are satisfied with the service provided by the IWEP

· 72% of the Citizens Panel regarded economic development as “very important” and a further 23% as “fairly important”.

· The top 4 regeneration priorities identified by the Citizens Panel were social issues, attracting new jobs, support for existing businesses and support for training and education.

Set against this, however, stakeholders did identify a number of areas where improvements were required – these ranged from improvements to working relationships with partners to the need for increased Council funding for the service.

The review also involved a comparison of the service with other similar areas. Key findings included :

· Council expenditure on economic development (for 1999/200) equates to £3.99 per head of population (49% below the average for England & Wales). These figures should, however, be treated with caution (see para. 8.1.)

· The cost per job created by the IWP is £121, the third lowest amongst the group of 9 authorities examined.

· SRB funding equivalent to £118.25 per head has been secured compared to the regional average of £47.

· ESF funding equivalent to £14.32 per head has been secured compared to the regional average of £4.75.

As part of the process for identifying the actions required to secure on-going improvements in service delivery, a SWOT assessment of the service was carried out. This was used to identify the need for action in 3 broad areas :

1. Establishing a sustainable organisational structure for service delivery

· Implementation of the IWEP “recovery plan”

· Securing additional funding for the service from the Council and other agencies

· Development of a Partnership Protocol to support service delivery under the new “federal” delivery model

2. Maintaining & Improving Performance

· Sharpening the strategic focus of the service

· Improved work programme management to ensure a better match between stakeholder expectations of the service and available resources

3. Establishing an effective monitoring & evaluation framework

· Revision of the Service Level Agreement between the IWEP and the Council

· Development of a Monitoring & Evaluation Strategy

· Development of an annual work programme

Notwithstanding the recent difficulties experienced by the IWEP, the service has continued to deliver over the past year. The Review has provided a welcome opportunity to step back from operational pressures and put in place a Service Improvement Plan which will secure continuous improvement in delivery and service outcomes.

1. BACKGROUND

1.1 The Economic Development review has been undertaken as part of the Year 2

programme of best value reviews.

1.2 In April 1999 the Council determined to deliver its economic development services through the Isle of Wight Partnership (IWP). The IWP is an independent company limited by guarantee whose activities are overseen by a non-executive Board of Directors drawn from the Council, business and the voluntary sector. Through the mechanism of a Service Level Agreement (SLA), the Council agreed to second the staff of its Economic Development Unit together with a cash contribution to the operational activities of the IWP.

1.3 However, during the process of undertaking this review, the IWP has undergone significant organisational changes necessitated by emerging financial difficulties. In particular, the abolition of Wight Training and Enterprise removed a key source of financial support for the IWP. Thus the shape of the Partnership at the start of 2002 is somewhat different to that which existed at the commencement of the best value review.

1.4 The principle changes introduced over the year are as follows:

· Wight Training and Enterprise (WTE) – following changes in Government policy, the network of Training and Enterprise Councils has been replaced by a new sub-regional network of Learning and Skills Councils. The responsibilities of WTE have transferred to the Hampshire and IOW Learning and Skills Council.

· Business Link – again, as part of changes in Government policy, the IOW Business Link agency has become part of the new Wessex Small Business Service for Dorset, Hampshire and the IOW.

· Chamber of Commerce – the Chamber has become an independent body no longer formally part of the IWP.

· Partnership Training – a subsidiary company responsible for delivery of the New Deal contract. Now sold to an independent training provider.

1.5 These changes necessitated the redundancy or transfer to successor bodies of some 50 IWP staff. The executive responsibilities remaining with the Partnership as at January 2002 are as follows:

i. Policy and Strategy

- policy development, bid development, research and information, European affairs. The Team is now based in County Hall and, from April 2002, will become the Council Economic Development Unit with responsibility for advising the IWEP Board on strategic economic development matters (para 10.5 provides further details).

ii. Area Regeneration

- delivery of the Single Regeneration Budget, Rural Development Programme, Healthy Living and Leader+ initiatives.

iii. Marketing and Inward Investment

- delivery of services to attract new investment to the Island and the Enterprise Hub facility.

2 COUNCIL CONTRIBUTION TO THE IWEP & ECONOMIC DEVELOPMENT

2.1 Under the SLA with the Partnership, the Council has seconded 9.8 fte staff together with a cash contribution of £104,000 p.a. An additional £20,000 is paid by the authority as a contribution to the costs of the Brussels Office which is shared with Hampshire and West Sussex.

2.2 The Board of the IWEP consists of 8 non-executive directors of whom 3 are drawn from the Council.

Chairman Danny Fisher (private sector)

Directors Paul Rudling (private sector)

David Longford (private sector)

Chris Bland (private sector)

Cllr. Shirley Smart (council)

Cllr. Harry Rees (council)

Alan Kaye (council)

Michael White (voluntary sector)

3 REVIEW METHODOLOGY

3.1 The review has been conducted according to the Best Value Review Guidelines specified by the Council’s Best Value Unit as well as relevant Audit Commission documents. Key stages in the process were as follows:

· Setting up the Project Team and development of Project Plan

· Challenge – organising of stakeholder “Challenge Day”

· Consult – seeking of stakeholder and public views through interviews, surveys, etc.

· Compare - seeking to establish comparative data to determine service performance.

· Compete – assessment of the service delivery options for the service.

4 DESCRIPTION OF THE SERVICE

4.1 As stated earlier, since April 1999 the Council has determined to deliver its economic development services through the IWEP. As set out in the Island Regeneration Strategy, the Partnership’s vision is :

“ To establish the Island as one of the fastest growing economies in the South East, creating sustainable new jobs and investment opportunities and ensuring that all our residents share in the benefits of improved prosperity.”

4.2 The IWEP aims to achieve its strategic vision through a focus upon 6 strategic aims:

· Aim 1 – Building competitive business

· Aim 2 – Creating a culture of innovation

· Aim 3 – Developing the Island as one of the UK's top tourist and leisure destinations.

· Aim 4 – Improving skills and education

· Aim 5 – Regenerating our most deprived areas

· Aim 6 – Regenerating our rural communities.

4.3 Delivery of the Strategy is co-ordinated through three executive teams:

1. Policy and Strategy (John Bentley)

2. Area Regeneration (Liz Wood)

3. Marketing and Inward Investment (Mike King)

4.4 The role of the IWP directly contributes to the Council’s overall mission and corporate objectives which include “To promote sustainable tourist, leisure, cultural and economic development.”

5 IWEP ACHIEVEMENTS

5.1 Since its establishment in April 1999, the IWEP has achieved much in addressing the social and economic challenges facing the Island:

· Over 1,000 jobs have been created or safeguarded.

· We have a purpose built Innovation Centre at the St. Cross Business Park.

· Over 1,000 people have benefited from training programmes

· Over 400 unemployed people have been helped into employment.

· Over £15 million in Government and EU funding has been secured for the Island.

· Over 200 community projects have received assistance through SRB/RDP grants.

5.2 The economic climate on the Island is relatively positive – unemployment has halved since 1996 and we have had a number of notable new investments setting up here. However, we must not be complacent about the future direction of the economic development service:

· Manufacturing continues to be vulnerable to changes in the global economy e.g. GKN redundancies.

· Social exclusion remains a reality for many people on the Island.

· Although falling, unemployment remains above both regional and national averages.

6 THE REVIEW

6.1 The review was undertaken on the basis of the “4Cs” required by the Audit Commission:

· Challenge – why and how a service is provided.

· Compare – comparing performance with other authorities

· Compete – who is best placed to deliver the service

· Consult – what are the views of key stakeholders and the wider community.

6.2 Each of these has been addressed in the review.

7 STAKEHOLDER CONSULTATION

7.1 Through an extensive programme of interviews, opinion polls and the Challenge Day, it was possible to collate a significant amount of information about stakeholder and community views of the IWEP.

7.2 Key points to note are as follows:

· 70% of stakeholders are satisfied with the service provided by the IWEP

· 72% of the Citizens Panel regarded economic development as “very important” and a further 23% as “fairly important”.

· The top 4 regeneration priorities identified by the Citizens Panel were social issues, attracting new jobs, support for existing businesses and support for training and education.

7.3 In order of severity, the main areas of dissatisfaction raised by stakeholders were as follows:

· Inadequate monitoring and evaluation arrangements (56%)

· Insufficient Council spend on economic development (26%)

· Insufficient business involvement (22%)

· Insufficient promotional activity (21%)

· Insufficient support for accessing external funding (21%)

· Poor relationship and working methods with partner agencies (20%)

· Insufficient attention to social exclusion issues (20%)

8 SERVICE COMPARISON

8.1 Given the complete lack of any nationally agreed framework, the comparison of economic development services is a particularly difficult area. The Project Team were, however, able to establish a number of performance benchmarks:

· Expenditure on economic development (as at 1999/2000) equated to £3.99 per head of population (49% below the average for England & Wales). It should, however, be noted that since publication of these figures, the Council has almost doubled its expenditure on the service. In addition, the figures can be misleading – some authorities, for example, include expenditure on tourism within the economic development heading. The figures for the IoW, however, exclude the £1 million spent on Tourism Services.

· The cost per job created by the IWP is £121, the third lowest amongst the group of 9 authorities examined.

· SRB funding equivalent to £118.25 per head has been secured compared to the regional average of £47.

· ESF funding equivalent to £14.32 per head has been secured compared to the regional average of £4.75.

9. SERVICE EVALUATION

9.1. SWOT Assessment

As part of the process for identifying the actions required to secure on-going improvements, a SWOT assessment of the service was carried out. This was based upon a distillation of the views of stakeholders and service comparison data. In summary, the principal findings from this process were as follows:

1. Strengths/Opportunities

· An established and capable staff team with a track record of service delivery.

· High level of stakeholder satisfaction and support.

· Established partnership between key stakeholder agencies

· New funding opportunities.

2. Weaknesses/Threats

· Insufficient financial and staff resources to sustain IWEP and meet stakeholder expectations.

· No established monitoring and evaluation framework except for current grant-funded programmes

· Tendency to be project-led rather than strategy-led due to demands on service

· Need to improve communications & information dissemination with stakeholders

· Need to broaden involvement of business and voluntary sector.

9.2. From the SWOT exercise the following conclusions were reached:

1. Growing demands upon the service have highlighted the need for action on two fronts – improved work prioritisation procedures and a review of the level of financial support for the service.

2. The service is operating within an established policy framework (Island Regeneration Strategy) and is meeting both its own objectives and supporting the Council’s corporate vision. The Strategy is based upon a strategic vision for the Island which is shared with all key stakeholders.

3. The strategic aims of the service are founded upon sound socio-economic analysis and research which also directly links local action to the Regional Economic Strategy for the South East.

4. The service has good links with the newly established Local Strategic Partnership on the Island. Bringing executive responsibility for the policy and development aspects of the service back in-house will serve to strengthen this link and the over-arching strategic role of the LSP.

5. The service has a high user-satisfaction rating from users and stakeholder agencies that reflects the skill and commitment of staff and the support of key partner agencies.

6. Despite having to deal with the financial difficulties emerging in 2001/02, the IWEP has continued to deliver a high-quality service that is well regarded by stakeholders.

7. The lack of a national PI framework for the service limited the nature of the comparative assessment exercise. However, from the information gathered the service is performing well, particularly as regards job creation, area regeneration and external income generation.

8. The Island Regeneration Strategy was approved by the IWEP Board in March 2001. The Strategy provides a clear set of targets which can be developed into a P1 framework which will monitor performance over time and allow comparison with other authorities.

9. Development of a clear monitoring and evaluation framework is a key priority for service improvement. As the national programme of BV reviews rolls-out, it is anticipated that there will be improvements in the quality of comparative benchmark data. Particular attention will be directed towards development of a benchmark club.

10. The activities of the IWEP generally reflect public and stakeholder views and priorities. Some stakeholders did, however, raise concerns about the need to improve lines of communication and information dissemination. Consultation and community engagement linked to the development of funding bids and subsequent programme delivery was, however, regarded as excellent.

11. Demands upon, and expectations of the service are growing and can become excessive reflecting both the public profile of IWEP and its success in developing and delivering sustainable economic development services.

12. There is a tendency to pursue a project-led rather than a strategy-led approach to the service. For the service to become more focused it is desirable to shift the emphasis towards the latter strategic style of working.

13. Success in securing significant external funding for economic development has particularly led to growing demands from different Island communities and interest groups for assistance in meeting their needs.

14. Key stakeholder agencies and IWEP Board directors also have growing expectations about what the Partnership can deliver.

9.3. Comparison with top 25% of authorities

As discussed earlier, the lack of an established national framework of comparative PIs has meant that it was not possible to compare Island performance with the best performing authorities.

9.4. The BV Project Team were anxious, however, to do what they could to establish some baseline measure of performance. Essentially the Project Team sought to identify areas with similar socio-economic characteristics as the basis for developing an on-going PI framework.

9.5. Unlike many public services no external inspection regime exists for economic development which further limits the framework for comparative assessment of the service.

9.6. Whilst the comparison process has obvious in-built limitations due to the absence of an established national framework, the information that was gathered showed the IWEP to be performing well.

9.7. Development of a formal Monitoring and Evaluation Strategy is one of the key priorities for the service improvement plan. Development of this Plan will particularly seek to build upon the guidance contained in the Audit Commission report “A Life’s Work.”

9.8. Stakeholder Views

In the course of the review extensive consultation took place with all stakeholders. The economic development service provided by the IWEP has a high public profile, particularly as regards the development and delivery of specific regeneration programmes and projects (SRB, RDP, etc). From the consultation process and challenge day it can be concluded that stakeholders:

· rated the service highly

· were satisfied with the IWEP delivery model

· deemed the service to be a high priority for the Island and for the Council to support.

9.9. Where stakeholders identified areas of concern, these have been addressed in

the service improvement plan.

10. SERVICE DELIVERY OPTIONS

10.1. In April 1999 the Council determined to deliver its economic development service through the IWEP which was established to provide a single- agency approach to the service.

10.2. It should be noted that the “competition” aspect of best value for economic development is a somewhat ambiguous concept. In addition to the duty upon local authorities to provide a service in the most efficient and effective manner, many authorities also directly compete against one another in delivering the economic development service eg. they compete for regeneration funds, they compete for inward investment clients, etc.

10.3. As part of the “challenge” process this BV review sought the opinions of stakeholders as to the appropriateness of the delivery model for economic development services on the Island. Prior to the creation of the IWEP the service had been delivered through a “federal” model ie. partner agencies working together but remaining independent :

· The Council Economic Development Unit had responsibility for strategic policy, inward investment and European matters

· The Island Regeneration Partnership had responsibility for SRB programmes

· The then Wight Training & Enterprise Council had responsibility for training activities

· The then IoW Business Link agency had responsibility for business support

· The Chamber of Commerce had responsibility for representing business interests and the provision of a number of specialist services

10.4. With the creation of the IWEP in April 1999, these different agencies were brought together into a single delivery body to offer a “one stop” economic development and regeneration service. The benefits of this model were considered to be :

· Greater synergy and co-ordination of services under a single management structure

· Added value for the Council ie. more could be achieved through combining resources with other partners

· Greater clarity for clients as to where to go for advice and support

· Financial savings in overheads and management costs

· Creation of an independent agency not bound to the interests of any single stakeholder body

10.5. The organisational model has been demonstrably effective as illustrated by the many operational successes of the IWEP; this is further confirmed by the 60% stakeholder satisfaction score for the delivery model. In general terms the benefits driving the original establishment of the IWEP were fully realised as evidenced by the many activities and achievements of the Partnership. However, in 2000 the Government announced a major change in the delivery of training and business support services – the previous network of Training & Enterprise Councils (TECs) and Business Link agencies were to be replaced by a new sub-regional network of Local Learning & Skills Councils and Small Business Service agencies. In the case of the IWEP, the financial surplus generated through the training activities of Wight Training & Enterprise (the local TEC), had been utilised to cover the general overheads and corporate costs of the Partnership. The loss of this income from April 2001 necessitated a major organisational review of the IWEP – in order to create a financially stable and sustainable agency a “new look” partnership had to be created driven more by financial imperatives than organisational and stakeholder wishes.

10.6. In principle it was considered desirable to maintain the core “one stop” principle which lay behind creation of the IWEP. However, two factors highlighted the need for a fundamental review of the service delivery model :

· the loss of income via Wight Training & Enterprise meant that the IWEP could not sustain the organisation in its original form

· the need to implement the Service Improvement Plan arising from the BV review required an assessment of the most appropriate delivery model

10.7. Accordingly, a number of service delivery options were considered:

· Option 1 : cessation of the service

· Option 2 : continued delivery through IWEP (the “no change” option)

· Option 3 : transfer of the service to another external provider

· Option 4 : bringing the service back in-house

· Option 5 : joint Council / IWEP delivery of the service.

10.8. Each of these delivery options was assessed against the following criteria:

· Potential to maintain and improve performance

· Potential to develop an effective monitoring and evaluation framework.

· Feasibility in terms of resources available

· Acceptability to stakeholders

· Political acceptability

· Legality

· Potential to support sustainable service delivery

· Potential to secure additional resources and resolve current over-demand on service

10.9. Key conclusions from the appraisal are as follows:

1. Cessation of the service is not an option. Public and stakeholder support for the service is high and the case for intervention strong on socio-economic grounds.

2. Stakeholder support for service delivery through the IWEP is also high although some Council members have expressed concerns about perceived deficiencies in the authorities scrutiny role.

3. Transfer of the service to another external provider was not considered to be feasible or desirable. In a small “closed” community alternative providers are virtually non-existent and the IWEP has an established and recognised presence and track-record.

4. Bringing the service back in-house was also not considered to be desirable. Delivery through an arms-length agency was considered to offer a range of benefits to both stakeholders and service users. The independent partnership model is also the preferred Government approach for delivery of grant-funded programmes.

5. It was, however, concluded that there were benefits in a functional separation at an executive level of the delivery and strategic elements of the service. Thus whilst the IWEP Board will have overall responsibility for both strategy and operational matters, the Council’s Economic Development Unit will take on the executive responsibility for advising the Board on strategic issues.

10.10. Future Delivery Model

As summarised above, following an appraisal of the available delivery models for economic development it was concluded that Option 5 was the preferred model. Whilst it was considered that the original IWEP model remained essentially valid, it was recognised that there were benefits to be gained in separating out at an executive level the delivery and strategic service functions. The following organisational changes have, therefore, been implemented:

1. IWEP

· To become the delivery arm of the economic development service with specific responsibility for Area Regeneration and Inward Investment and Marketing.

· The 2 staff teams currently responsible for these areas within the IWEP to remain in place.

· The IWEP Board will also continue to be responsible for the determining of strategic matters with the executive responsibility for this function resting with the Council’s Economic Development Unit.

2. IW Council

· To assume executive responsibility for advising the IWEP Board on strategic matters with specific responsibility for policy development, securing external funding and research activities.

· The Policy and Strategy Team of IWEP to return to the Council and assume this role. Team to be known as the Economic Development Unit.

· Unit will also independently advise the Council on economic development matters and scrutiny of IWEP activities

10.11. The rationale for these changes is as follows:

· Executive separation of the delivery and strategic functions facilitates a clear operational focus for the IWEP supported by an independent policy support function provided by the Council.

· Given the lead role of the Council in co-ordinating development of the Local Strategic Partnership for the Island, there is a logic in the strategic economic development function being based within the authority.

· Creation of a separate Council-based strategic function will support independent scrutiny of the IWEP and its activities. This will enable the Council to exercise closer democratic scrutiny of the Partnership, ensuring value for money, close member involvement and facilitating an “early warning” mechanism for any financial or operational difficulties.

11. SUSTAINABILITY/SOCIAL EXCLUSION

11.1. The Project Team considered issues of sustainability and social exclusion throughout the BV process. Having considered the issues the Project Team reached the following conclusions:

1. Sustainability is a key driving force behind the IWEP. It is embedded in the Island Regeneration Strategy which is committed to “pursuing an approach to economic development and regeneration which is fully in tune with the long-term economic, environmental and social interests of the Island”.

2. The staff of the IWEP already promote good practice in terms of environmental sustainability e.g. paper use limitation, recycling, appropriate travel arrangements etc. The scope for introducing further measures to reduce the environmental impact of staff actions was considered to be limited.

3. Potential environmental conflict can, however, arise from IWEP job creation and physical regeneration programmes. An estimated 70% of the Island landmass is covered by UK or European landscape designations reflecting the quality of the natural environment. The IWEP is, therefore, mindful of the need to minimise detrimental environmental impact.

4. Whilst mindful of the potential impact of some activities there is rarely any tension between the need for development and regeneration and its environmental impact. Sufficient allocated employment land is available within the adopted Unitary Development Plan which minimises the pressure on greenfield sites. Where tensions do arise the IWEP works within the established planning system and regulatory framework to evaluate and minimise any negative impact.

5. The service also follows Council policies regarding equality, social inclusion and community involvement. The IWEP has a central role in promoting greater equality and social inclusion on the Island and has been actively involved in the development of the Island Social Inclusion Strategy. Sustainability on the Island is primarily threatened by the failure of the local economy to provide Island residents with sufficient opportunities for rewarding and well-paid employment. As a consequence many thousands of residents are either unemployed, low waged or benefit dependent with consequent implications for the quality of their lives.

6. The lack of economic opportunities particularly results in significant inequality and exclusion for certain sections of the community. To redress this imbalance the IWEP has social inclusion at the heart of the strategic vision for the Island through a commitment to “ensuing that all our residents share in the benefits of improved prosperity”. (Island Regeneration Strategy, vision statement).

7. The regeneration programmes of the IWEP particularly seek to support and facilitate social inclusion. Through its SRB, RDP and European programmes the Partnership has developed many initiatives to assist excluded groups in the community – the long term unemployed, single parents, disaffected young people, etc..

8. Given the short-term nature of the funding regimes which support IWEP regeneration activities, attention has also been directed towards putting in place sustainable community partnership mechanisms. The IWEP is particularly seeking to develop a network of development trusts to provide an on-going vehicle for area regeneration.

12. SERVICE IMPROVEMENT PLAN

12.1. The detailed Service Improvement Plan is attached as a SEPARATE report. It has been developed by the by BV Project Team in response to the service evaluation exercise. The review team identified 3 broad themes under which a detailed series of improvement actions have been developed in order to ensure a continuous improvement in service delivery :

1) Establishing a sustainable organisational structure for service delivery

Economic development is a core objective for the Council forming one of the 7 specific aims in the authorities vision statement. Supporting establishment of the IWEP in April 1999 was viewed as a significant step towards achievement of the Council’s objectives in this respect. A case for further funding will, therefore, be developed and submitted as part of the Council budget planning process for 2003/04. In addition, a 3 year Funding Strategy for IWEP is to be developed as a means to secure additional income from other external sources. However, the abolition of Wight Training and Enterprise as of April 2001, has led to the need for a re-structuring exercise to take place in response to the significant reduction in financial support available to the Partnership. That re-structuring has now been implemented – essentially, there has been a return to a “federal” delivery model for economic development with a range of agencies taking responsibility for the delivery of appropriate aspects of the Island Regeneration Strategy.

Whilst the IWEP has been re-established on a sound basis, minimal budgetary flexibility exists. Accordingly, stakeholder concern remains about the levels of financial support currently forthcoming from the Council and other external agencies. Despite the corporate importance of the service, as at 1999/2000, Council expenditure on economic development was only half the average for England and Wales, accounting for only 0.3% of the authorities total annual budget. These figures are, though somewhat misleading since they exclude expenditure upon tourism and do not reflect the fact that Council expenditure on economic development has almost doubled since publication of the figures. It should also be pointed out that direct support from SEEDA is also minimal. The securing of additional funding for the Partnership has therefore been identified as a priority. A case for further Council funding will, therefore, be developed and submitted as part of the Council budget planning process for 2003/04. A 3 year Funding Strategy for IWEP is also to be developed as a means to secure additional income from other external sources; this will involve, inter alia, a cross-cutting review of Council spend on economic development and related service areas. These actions are considered to be essential in creating a sustainable service delivery structure.

The separately attached Service Improvement Plan sets out a number of actions to secure the additional resources required.

2) Maintaining and improving performance in service delivery

Notwithstanding the recent financial difficulties experienced by the IWEP and the subsequent re-structuring exercise that has been required, the Partnership has continued to perform at a high level. Stakeholder expectations of the service are high, reflecting its importance to both the Council and other key partners. This leads to a situation where executive staff are under considerable pressure to achieve results.

However, the relatively limited number of executive staff supporting the service is insufficient to support the realisation of all stakeholder expectations. It is therefore necessary to facilitate a more targeted approach to the use of existing resources and to adopt a more strategic approach to achievement of both Council and IWEP objectives.

The separately attached Service Improvement Plan sets out a number of actions to achieve this aim. In addition to “whole service” actions, the Improvement Plan details a series of proposals linked to each of the strategic objectives set out in the Island Regeneration Strategy.

3) Establishing effective monitoring & evaluation arrangements

The final theme in the Improvement Plan relates to the need for action to improve the monitoring and evaluation of service activities. The need to improve action in this sphere was highlighted by 56% of stakeholders – the highest score of any topic where improvement was considered to be required. In many respects this reflects the operational pressure upon executive staff of the IWEP to “get the job done” ie. attention has tended to focus upon service delivery with correspondingly less attention being directed to evaluation of the impact of economic development activities. Thus whilst considerable output information is collected, particularly in relation to job creation and the delivery of SRB programmes, relatively less attention has been routinely directed to outcomes and the assessment of the impact of activities. It should also be noted that impact assessment is an activity that is best carried out some years after project delivery and completion – given that the IWEP has only been in operation since April 1999, it would not have been appropriate to undertake significant work in this field.

A related issue concerns the view of Council members that there should be a more rigorous scrutiny process in place to oversee IWEP activities and working procedures. Attention also needs to be addressed to the responsibilities of individual Board members to report back to their respective constituencies. A revised Service Level Agreement will address these issues.

The separately attached Service Improvement Plan sets out a number of actions to put in place an effective monitoring and evaluation process.

13. DELIVERY OF THE IMPROVEMENT PLAN

13.1. The Service Improvement Plan developed by the BV Project Team aims to build upon the strengths of the current service and to secure the improvements sought though a comprehensive and linked set of actions designed to address the identified weaknesses and ensure achievement of the strategic objectives for the service.

13.2. Implementation of the Service Improvement Plan will be a regular item on the agenda for the IWEP Board meetings and those of the Council’s Executive Committee and Economic Development Select Committee. Executive responsibility for implementation of the Improvement Plan will rest with the Council’s Head of Economic Development who will work in close liaison with the senior managers of the IWEP. Delivery of the Plan will be subject to formal quarterly review.

13.3. A risk assessment has also been carried out to determine the principle risks impacting upon delivery of the Improvement Plan. This examined the following issues. In the case of the following points no significant risks were identified :

· Failure to secure cross-service co-operation

· Failure to secure staff support

· Failure to secure stakeholder support

13.3. However, in two further areas potential risks were identified :

1) Insufficient funding to maintain IWEP

Although it is considered that the IWEP has been re-established on a sound financial footing, the margin of budgetary flexibility is narrow. Minimising the risk of further financial difficulties will require the securing of further financial support and also involve close and regular scrutiny of the Partnership.

2) Excessive service demands

The consistently high demands placed upon service staff also pose a potential risk to delivery of the Improvement Plan. Careful and regular scrutiny will be required to ensure the Plan is achieved. As referred to above, formal quarterly progress reviews will be conducted to ensure delivery remains on track; delivery of the Improvement Plan will also be a regular item on the agenda’s for IWEP Board meetings and appropriate Council committees.

14. DISTRICT AUDIT PARTNERSHIPS REVIEW

14.1. Towards the end of the Best Value review process, the District Audit office have also undertaken separate reviews of both the Isle of Wight Economic Partnership and the Tourism Partnership. The draft report is currently the subject of discussions with the Council.

14.2. This review has not, however, examined service performance issues – rather the emphasis was upon the partnership arrangements ie. is the Council achieving its objectives through the partnerships, how are they managed, is the Council a “good” partner, etc. A number of the recommendations do, though, overlap with the findings emerging from the BV review. The final BV report and Service Improvement Plan is currently being amended to incorporate the findings from the District Audit report.

15. CONCLUSION

15.1. The Economic Development service is delivered by a highly motivated and skilled team operating under considerable pressure to achieve results in a complex, politicised and multi-agency environment.

15.2. The review has provided a much-valued opportunity to step back from this pressured environment and take a considered look at the service. Whilst the service performs at a high level a number of improvement areas have been identified. The proposals in the Improvement Plan provide a sound basis for ensuring continuous improvements in service delivery.