APPENDIX 2 March 2002

BEST VALUE REVIEW

OF ECONOMIC DEVELOPMENT SERVICES

SERVICE IMPROVEMENT

PLAN

ECONOMIC DEVELOPMENT BEST VALUE REVIEW

SERVICE IMPROVEMENT PLAN

1. Summary

1.1 This Improvement Plan sets out the actions which will be carried out to secure the improvements identified as a result of the Economic Development Best Value Review.

Note : 1) This Plan should be read in conjunction with the separate Best

     Value Review report.

            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.

2. Vision for the Service

2.1 Although part of the south east region, the Isle of Wight simply does not share in the economic prosperity more generally enjoyed by our mainland neighbours. Promoting economic development and regeneration is, therefore, a key priority for the Council as reflected in the vision and corporate objectives adopted by the authority.

2.2 In April 1999 the Council determined to deliver its economic development service through the Isle of Wight Economic Partnership (IWEP).

2.3 Following an extensive development process in 2000 involving all local and regional stakeholders, IWEP developed a new Island Regeneration Strategy which was formally adopted in March 2001. The vision set out therein for the Island 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.”

2.4 The Council and IWEP aim to achieve this strategic vision through a focus upon six strategic aims as set out in the Regeneration Strategy:

· Aim 1 – Building competitive businesses

· 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 and education

· Aim 5 – Regenerating our most deprived areas

· Aim 6 – Regenerating our rural communities.

3. Best Value Review

3.1. The BV review was conducted according to the guidelines specified by the Council Best Value Unit as well as relevant Audit Commission documents. Although the IWEP has been performing well since its establishment, the BV review identified a number of areas where action is required in order to ensure that the service continues to improve. These have been grouped into three main service improvement areas:

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

4. Delivery of the Improvement Plan

4.1. 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.

4.2. 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.

4.3. 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

4.4. 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.

5. Conclusion

5.1. 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.

5.2. 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.

SERVICE

IMPROVEMENT

PLAN

SERVICE IMPROVEMENT ISSUE 1 – ESTABLISHING A SUSTAINABLE DELIVERY STRUCTURE

Current Situation

Economic development is a core objective for the Council forming one of the 7 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. The IWEP brought together in a single agency all the key players in economic development on the Island forming a unique “one stop” approach to the service. The financial difficulties arising in 2001/02, together with Government changes in the delivery of training and business support, have required a restructuring of the service with a return to a “federal” delivery model and a separation at executive level of the delivery and strategic aspects of the service.

Whilst the service has been re-established on a sound financial basis, minimal budgetary flexibility exists. Despite the service being a corporate priority current Council expenditure is only half the average for England & Wales. The securing of additional funding for the service has, therefore, been identified as a priority.

Improvement Proposals

In order to establish the service on a sound and sustainable basis the following actions are required:

Implementation of the IWEP “Recovery Plan”

Securing additional funding for the IWEP.

Development of a Partnership Protocol to support effective multi-agency working under the new “federal” delivery model.

SERVICE IMPROVEMENT ISSUE 1 - ESTABLISHING A SUSTAINABLE DELIVERY STRUCTURE

Ref:	ACTION	TARGET DATE	LEAD	COST IMPLICATIONS
1 2 3 4	Fully implement IWEP Recovery Plan to establish the agency on a sound and stable financial footing. Central to this is a “federal” delivery model which establishes the IWEP as the delivery arm of the service and the Council as the body responsible for advising the Board on strategic and developmental issues. As part of the Recovery Plan, an audit of IWEP is to be undertaken by Ernst and Young Three year funding strategy to be developed for IWEP to access additional external resources Case to be developed for additional Council support for the service as part of the 2003/04 budget process. This will include investigation of the potential for additional funding and further staff secondments.	April 2002 May 2002 September 2000 September 2002	IWEP board & Management team Danny Fisher John Bentley Mike King Liz Wood John Bentley	Council cash contribution to IWEP increased by £54,000 to a total of £104,000 in 2002/03. Approved in Council Budget. Audit is funded by SEEDA Met within existing budget To be determined
Ref:	ACTION	TARGET DATE	LEAD	COST IMPLICATIONS
5 6 7	Area Investment Framework (AIF) to be developed for the Island. The AIF will be a diagnostic tool which matches needs to planned resource expenditure across the public, private and voluntary sectors. The resulting “gap analysis” will support bids for external funding to deliver the Island Regeneration Strategy. The AIF will provide the basis for development of a bidding strategy to secure the necessary external resources to deliver the Regeneration Strategy. “Funder-finder” service to be developed to maximise the levels of external funding secured. This will provide a co-ordinated information and support service for the public, voluntary and private sectors. To include provision of information, training programme, consultancy support and bid writing service. Partnership Protocol to be developed to ensure effective multi-agency working and liaison with the new Local Strategic Partnership.	July 2002 September 2002 June 2002	John Bentley Liz Wood John Bentley John Bentley	Estimated at £50,000 in consultancy fees funded by SEEDA through SRB6. Successful bids will generate additional funding for the service. Estimated £30,000 to establish Bidding Officer post. Met within existing budget

SERVICE IMPROVEMENT ISSUE 2 – MAINTAINING AND IMPROVING PERFORMANCE

Current Situation

Notwithstanding recent financial difficulties, the IWEP has continued to perform at a high level. However, to ensure a continuous improvement in service delivery action, is required to better manage stakeholder expectations of, and demands upon, the service and to improve the strategic focus of the Council and the IWEP elements of the service.

Improvement proposals

Addressing these issues will be essential to achieving service improvements. Securing additional staff and financial resources is an important part of this process – this was addressed under Service Improvement Issue 1. (Ref.3 & 4) Proposals in this section focus upon action to sharpen the strategic focus of the service and ensure a better match between stakeholder expectations and what can be realistically achieved.

SERVICE IMPROVEMENT ISSUE 2 – MAINTAINING AND IMPROVING PERFORMANCE

Ref:

ACTION

TARGET DATE

LEAD

COST IMPLICATIONS

Whole Service

Island Regeneration Strategy to be reviewed in light of new Community Plan

Marketing and Communications Strategy to be developed to improve public awareness of the service. Particular attention to the use of the Council and IWEP web sites and links with the Council’s Policy and Communications Officer

Personal Development Plans to be developed/agreed with all service staff on an annual basis

December 2002

Sept. 2002

June 2002

John Bentley

Mike King

John Bentley

Mike King

Liz Wood

Met within existing budget

Strategy development met within existing budget. Implementation costs to be determined – estimated at £10-20k.

Staff training budget included within existing budgets

Ref:

ACTION

TARGET DATE

LEAD

COST IMPLICATIONS

Review to be undertaken investigating scope for establishing a Central Research Unit (within the Council’s Economic Development Unit) to provide a “one stop” information and research service. This would support bid development activities and provide a resource to support policy and service development.

2 IWEP research staff have been transferred to the Council Economic Development Unit as part of the IWEP reorganisation. Funding for the posts is to be secured through research consultancy work to generate external income.

EU and Brussels Office strategy to be developed to clarify aims and means of achievement.

Dec. 2002

March 2003

July 2002

John Bentley

Whilst direct financial implications are minimal, any transfer of staff to a central unit would have a resource “cost” to the current host department.

£40k income required.

To be met within existing budget

Ref:

ACTION

TARGET DATE

LEAD

COST IMPLICATIONS

AIM 1: Building competitive businesses

Inward Investment and Marketing Strategy to be developed setting out the target sectors and means by which the IWEP will seek to market business opportunities on the Island.

Sites/Premises Strategy to be developed to ensure ability to meet anticipated business needs

Ambassador Scheme to be developed aimed at equipping key business and public figures with the skills/information to promote business opportunities on the Island.

Client Management Protocol to be developed to ensure consistent approach to the handling of potential investors by Council, IWEP and Business Link staff

Training programme to be developed for staff and councillors – planning training for IWEP staff, investor handling for planning officers, the development process for members.

September 2002

December 2002

September 2002

May 2002

June 2002

Mike King

Paul Airey

Mike King

Paul Airey

Mike King

Paul Airey

Strategy development to be met within existing budget. Implementation costs to be determined in liaison with SEEDA.

£14k - included in current Council contribution to IWEP.

To be met within existing budget.

Programme development to be met within existing budget. Training delivery to be undertaken by IWEP and Council staff.

Ref:

ACTION

TARGET DATE

LEAD

COST IMPLICATIONS

Cowes Development Strategy to be prepared utilising the international status of the town brand and realising development potential.

July 2002

Mike King

Strategy development to be met within existing budget. Implementation costs to be determined in liaison with SEEDA.

Ref:

ACTION

TARGET DATE

LEAD

COST IMPLICATIONS

AIM 2: Creating a culture of innovation

Marketing Strategy for the Enterprise Hub will be developed as part of the proposed Inward Investment Strategy (Ref. 14).

Proposals to be developed for a satellite Enterprise Hub facility to provide further high tech incubator space.

Composites Development Plan to be drafted as a policy framework for development of this key sector.

September 2002

May 2002

Mike King

To be met within existing budget. Strategy implementation costs to be determined.

To be determined as part of development process.

£100k – funded by SEEDA.

Ref:

ACTION

TARGET DATE

LEAD

COST IMPLICATIONS

AIM 3: Developing the tourist industry

Tourism Strategy to be developed with a focus upon:

· Action to raise the Island profile as a distinctive destination.

· Action to broaden the market base and lengthen the season

· Action to enhance the status of tourism on the Island

· Action to improve the range and quality of accommodation

· Action to improve the quality of the visitor experience.

· Action to improve employment prospects within the industry

· Action to improve our key resorts

The Strategy will also examine the staff and resource requirements to deliver it including an investigation of the need for organisational changes within the Council.

September 2002

Tim Addison

Strategy development to be met within existing budget. Implementation costs to be determined in liaison with Tourism Services, SEEDA and other key partners.

Ref:

ACTION

TARGET DATE

LEAD

COST IMPLICATIONS

AIM 4: Improving Skills and Education

The Council will assume the “host agency” role for the IOW Learning Partnership, with the Manager reporting to the Assistant Director for Education. This will support an all-age approach to the learning agenda.

The Council and IWEP will continue to actively support the Learning Partnership. Priorities include delivery of the Basic Skills Action Plan, Learner Feedback projects and EoP issues.

The Council and IWEP will seek to agree a compact with the Learning and Skills Council to ensure that the LSC Strategic Plan meets the needs of the Island and provides the basis for a joint approach to improving skills and education.

The Council and IWEP will actively support implementation of the IW College Recovery Plan.

January 2002

On-going

September 2002

On-going

David Pettitt

John Bentley

Liz Wood

John Bentley

Janet Stevens

John Bentley

Mike King

Liz Wood

Nil – the Learning Partnership is 100% grant funded by GOSE.

To be met within existing budgets.

Ref:

ACTION

TARGET DATE

LEAD

COST IMPLICATIONS

The Council and IWEP will complete delivery of the EU Territorial Employment Pact project which seeks to establish a partnership approach to employment and labour market planning.

Proposals for a customised investor training package will be developed as part of the Inward Investment Strategy (Ref 14)

As part of the proposed Area Investment Framework (Ref. 5) and Funder-Finder (Ref 6) service, proposals will be developed to maximise the levels of ESF funding secured to support training initiatives.

July 2002

September 2002

John Bentley

Mike King

John Bentley

Income of £170k to be secured by end June 2002.

To be determined as part of the overall Inward Investment Strategy.

To be met within existing budgets. Successful funding bids will generate additional resources for the service.

Ref:

ACTION

TARGET DATE

LEAD

COST IMPLICATIONS

AIM 5: Regenerating our deprived

neighbourhoods

The IWEP will continue to deliver the SRB programmes on the Island. Performance in this area is excellent and fully complies with the management and audit requirements of SEEDA.

The IWEP will continue to develop sustainable mechanisms to support on-going community regeneration. The setting up of community development trusts is the preferred model.

The Council and IWEP will actively support delivery of the Island Social Exclusion Strategy through delivery of SRB, RDP, Healthy Living and Leader+ programmes.

On-going

Liz Wood

John Bentley

Costs to met within existing SRB budget.

Costs to be determined as SRB exit strategies are developed. Pump-priming funds to be met from existing SRB funding.

Costs to be met within existing area regeneration budgets.

Ref:

ACTION

TARGET DATE

LEAD

COST IMPLICATIONS

As part of the proposed Area Investment Framework (Ref 5) and Funder-Finder (Ref 6) service, proposals will be developed to maximise the levels of funding secured to support area regeneration projects.

July 2002

John Bentley

To be met within existing budgets. Successful funding bids will generate additional resources for the service.

Ref:

ACTION

TARGET DATE

LEAD

COST IMPLICATIONS

AIM 6: Regenerating our rural

Communities

Review to be undertaken of the executive support arrangements for the IWEP Rural Issues Group.

The IWEP will continue to deliver the Rural Development Programme for the Island. Performance in this area is excellent and fully complies with the management and audit requirements of SEEDA.

Arrangements will be put in place for the IWEP to deliver the recently secured funding under the EU Leader+ programme aimed at rural regeneration.

The IWEP will support delivery of the recently secured funding under SEEDA’s Market Towns programme.

As part of the proposed Area Investment Framework (Ref 5) and Funder-Finder (Ref 6) service, proposals will be developed to maximise the levels of Countryside Agency funded secured to support rural regeneration.

Sept. 2002

On-going

April 2002

On-going

July 2002

Liz Wood

John Bentley

Liz Wood

John Bentley

Costs to be met within existing budget

Costs to be met within existing RDP and Council budgets.

Costs to be met from approved grant funding

Costs to be met within existing budget

To be met within existing budgets. Successful funding bids will generate additional resources for the service.

SERVICE IMPROVEMENT ISSUE 3 – ESTABLISHING AN EFFECTIVE MONITORING AND EVALUATION FRAMEWORK

Current Situation

As a relatively small but successful agency the IWEP has tended to focus upon service delivery and less upon evaluating the impact of its activities. Thus whilst considerable output information is collected less attention has been directed to outcome data and assessment of the impact of service activities.

A related issue concerns the view of elected members that there is a need for closer scrutiny of the activities of the IWEP.

Finally, given the high profile of the service and the correspondingly high expectations, there is a need to better manage the resources available to the IWEP and Council.

Improvement Proposals

In order to address these issues the following actions are required:

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

Development of a Monitoring and Evaluation Strategy.

Development of an annual Work Programme for the service.

SERVICE IMPROVEMENT ISSUE 3 – ESTABLISHING AN EFFECTIVE MONITORING AND EVALUATION FRAMEWORK

Ref:

ACTION

TARGET DATE

LEAD

COST IMPLICATIONS

Whole Service

Revised Service Level Agreement (SLA) between Council and IWEP to be drafted. The SLA will set out the nature/extent of the Council’s contribution to the IWEP (staff and finance) and the authority’s requirements in terms of service delivery and working practices. Particular attention will be placed upon:

Establishing a Council/IWEP Protocol for reporting back to the Council and sharing information.
The requirement for the IWEP to actively support implementation of the BV Improvement Plan.
Financial monitoring arrangements.
Establishing a Code of Conduct for IWEP staff and Board directors.

May 2002

John Bentley

To be met within existing budgets. SLA will set out the terms of the Council’s contribution to IWEP for delivery of the service.

Ref:

ACTION

TARGET DATE

LEAD

COST IMPLICATIONS

Monitoring and Evaluation Strategy to be drafted to support assessment of both outputs and outcomes. Key elements of the Strategy to include:

· Clear standards/targets to be set for IWEP activities.

· Development of Benchmarking Club to facilitate on-going comparative assessment.

· Monitoring emerging best practice in use of Performance Indicators.

· Identification of rolling programme of service activity reviews including the carrying out of SRB evaluation

Economic Development service to be fully incorporated into BVPP for 2003/04.

Annual Work Programme to be prepared for the Council and IWEP elements of the service setting out details of activities and standards/targets to be achieved. This will assist in achieving a better balance between stakeholder expectations and resource availability.

September 2002

December 2002

April 2002

John Bentley

Mike King

Liz Wood

To be met within existing budgets.

To be met within existing budgets