·
Harnessing the potential of growth in the Tourism
Sector by focusing on strategic interventions and devolving service delivery as
identified by the options stimulated by the Tourism Blue Paper.
·
Joining forces and assets with the South East England
Development Agency (SEEDA) to create a company which focuses on the practical
delivery of specific property development projects to secure the regeneration
of the Medina Valley under the banner of the Cowes Waterfront Initiative.
6.
The
Economic Partnership -The Partnership recently celebrated 10 years
of achievement for a wide range of projects, interventions and development of
the Island’s economy. This not for
Profit Company has helped to promote 2,896 jobs, through funding programmes,
secured £26million grant funding through various sources and worked tirelessly
with partners in the private sector to stimulate investment in the
economy. In addition 26 inward
investments have been secured. Over the last 5 years the island has outgrown
the South East Economy on a number of fronts, but there remains a lot of
catching up to do.
7.
The Partnership is funded by the Council, SEEDA
through the private sector and through acting as agent for a number of funding
streams, particularly SRB and the Area Investment Framework. The current annual contract and financial
support from the Council could impact on the delivery of long term
objectives. Given the maturity of the
Partnership it is now felt that a new 3 year contract which rolls forward
annually based on performance of activities commissioned by the Council would
be appropriate. The key areas are
·
Strategic Marketing of the Island
·
Proactive Inward Investment (The Red Carpet Service)
·
Development of key sectors of the economy including
Tourism
·
Development of the labour market.
8.
Tourism
Options - .The Experian study indicated that in the 5 year
period up until 2004 there had been a relative decline in economic growth in
tourism. In 2005 the Tourism
Development Plan identified that if a
quality agenda can be pursued by the tourism industry, growth throughout the
year (ie beyond the traditional season), has the greatest potential for
increasing wealth and wages than any other sector on the Island. Recent research shows a significant
increase in the volume of the holiday and leisure market and that a large proportion
of the visitors are discovering the Island for the first time. Marketing of the Island’s successful events
such as Cowes Week, the Music Festival, the Bestival and White Air has
transformed the perception of the Island and these and other events are ready
for further exploitation to secure inward investment.
9.
The Tourism Blue Paper provided a well-timed challenge
to the continuation of traditional tourism services and its preferred option
saw the externalisation of individual services and the retention of
strategy. Further research has
broadened the range of options under consideration and as a result the
opportunities to merge strategic resources with the newly shaped Partnership
presents the Council with the means of achieving the cost effective delivery of
tourism services in an externalised setting. A detailed report by Tourism
Enterprise and Management Team has carried out a detailed options analysis and
a summary of the options and financial appraisal is set out in Appendix 1.
10.
It is clear from the study that two options – Option 3
(the JV) and Option 5 (The Strategic Agency) - will provide the opportunity to
take a more commercial approach with the merger with the Partnership offering
the greatest potential in quantitative
and qualitative terms. Opportunities
may also exist to further externalise delivery.
11.
Tourism
Services - The nature of the changes anticipated do present
substantial issues that will need to be resolved. These will include legal,
financial, human resource, procurement issues and risk management issues
indicating that it is essential that the transition to a formal merger will
need to be adequately resourced by a project team. The timing of the transition will need to minimise the impact on
the extensive marketing and front line services currently offered to the
tourism industry and visitors to the Island.
Thus, to make early progress it may be beneficial to establish a Joint
Venture for Tourism during the transition period to more ably achieve the
eventual merger, particularly in view of the other developments in the
structure of the Partnership. The Joint
Venture would need to be specifically structured to deliver the requirements of
the Council. The Head of Tourism
Services has previously successfully managed a transition of this nature in
North Devon and, subject to the availability of sufficient support resources,
this is not beyond the capacity of the organisation to achieve.
12.
Local
Delivery Vehicle - The development of a Local Delivery Vehicle has
been a long standing ambition of the Council and in March the Cabinet approved
the establishment of a single company using the Partnership’s existing company
structure. Further detailed discussions
have been held with SEEDA as a primary investor and stakeholder of the company. To achieve SEEDA Board and DTI approvals it
will be necessary to establish a subsidiary company of the Partnership with a
working title of The Island Renewal Company (IRC) and this principle has now
been agreed as the best way forward.
13.
To ensure that the IRC takes its lead from the Islands
economic strategy and Island imperatives, its business plan will be a key
document and will be approved by the Board of the Partnership. An outline business case is currently in
preparation and it is anticipated that the project delivery programme of £54
million will deliver £250 million of private sector investment, two state of
the art Technology Parks and the regeneration of East Cowes. The importance of the Cowes Waterfront
Initiative to the success of the Islands economy is such that the Council will
have member and officer representation on the company at the highest level.
14.
The scale of the transformation and externalisation of
services is such that a phased approach is needed to achieve the transition at
least risk. The creation of the Island
Renewal Company and how it works effectively with the Partnership will draw
substantially on its capacity for change and will be the first imperative as it
is fundamental to the successful regeneration of Cowes Waterfront. In the mean time, the establishment of a
Joint Venture for Tourism can be twin-tracked and will help to achieve the
eventual merger more sustainability.
The key milestones envisaged are:-
IWEP
Contract and LDV
|
Approval by the
Cabinet
|
9 January 2007
|
|
Commissioning
of IWEP contract and agreement of Strategic functions
|
March
2007
|
|
Draft
legal agreement for IRC
|
March
2007
|
|
IRC
Partner Approvals
|
July
2007
|
|
IRC
Shadow Company
|
August
2007
|
|
Establish
IRC
|
October
2007
|
|
Merger
of IWEP and Tourism JV
|
December
2007
|
Tourism
JV
|
Approval by the
Cabinet
|
9 January 2007
|
|
Development
of JV proposals and stakeholder engagement
|
Jan –
Feb 2007
|
|
Draft
legal agreements/Memo and Articles/ SLA
|
March
2007
|
|
Tourism
Staff consultations concluded
|
April
2007
|
|
Recruitment
/Appointment of JV Board of Directors
|
April/May
2007
|
|
Launch
Tourism JV
|
June
2007
|
|
Merger
of IWEP and Tourism JV
|
December
2007
|
STRATEGIC CONTEXT
Tourism
Development Strategy
15.
In
the section entitled Working Smarter (p.64), the Tourism Development Plan makes
the following point:-
“The long term
success of the Tourism Development Plan will be dependent on having in place
the correct structure that will not only enable and encourage necessary change
but also optimise the effectiveness of current delivery in the public and
private sector.”
16.
The recommendation within this report is to enable cohesive marketing
and development strategies to be implemented that will attract investment to
create wealth, jobs and higher wages on the island.
Economic Development Strategy – in draft currently
17.
The Current
draft has followed the primary objectives from the Regional Economic Strategy
which are as follows:-
·
To increase
Global Competitiveness
·
To accelerate
Smart Growth
·
To ensure
Sustainable Prosperity
Corporate Objectives
18.
The vision is
“A Progressive island built on economic success, high standards and aspirations
and a better quality of life for all.” The purpose of this report is,
ultimately, to put in place a structure that will effectively deliver strategic
marketing and economic development for the Island.
The main key
objectives that are relevant to the report are :-
“Sustainable
regeneration and development of the island” and
“Being a High
Performing Cost Effective Council”
Community Strategy
19.
The Community
Strategy is the overall plan for the Island that draws on and influences plans
from all key local organizations, and summarises the long-term strategic vision
and aims of the ISP. The main objective that is relevant to the report is
“A Thriving Island –
to create an Island with a
first rate infrastructure where business can grow and where young and old alike
have the skills and qualifications to access well-paid sustainable job opportunities.”
CONSULTATION
20.
During the preparation of the Value for Money Tourism Blue Paper the
Commission consulted with or reviewed and received submissions from a number of
organizations and interest parties.
This included IWC Officers and Councillors, the Chamber of Commerce and
Tourism Industry (CCTI), isleofwight.com, Island Life Magazine, Tourism South
East, Weymouth & Portland Borough Council and the Isle of Man Tourism
Department
21.
Subsequently further consultation was undertaken by the Cabinet member
for Tourism and the Head of Tourism Services with a number of industry groups including Wightlink, Red
Funnel, CCTI, and Tourism South East.
22.
During the review of Options for Tourism Study in August/September 2006
TEAM Consultants met with CCTI,
Wightlink, Red Funnel, Managing Director of Vectis Ventures, College/CoVE, Economic
Partnership, Tourism South East.
FINANCIAL/BUDGET
IMPLICATIONS
23.
Currently, in 2006/7, the net cost to the Council of the Tourism
Services is £909,000 – it is likely that, as a retained in house service, this
would have been reduced by at least another £60,000 excluding inflation in the
2007/8 budget.
24.
The budget overview of
the proposed transition for the Tourism Service is that the current net costs
of £909,000 are likely to be reduced over the next 4 years. If the anticipated investment in the Strategic
Agency is taken into account the budget profile will be in the order of
£850,000 2007/8; £813,000 2008/9; £765,000 2009/10; £704,000 2010/11. These figures will be subject to the
development of successful partnerships with the private sector.
25.
However, it should be noted the report does not cover any transitional
costs that may occur but there is a sum of £50,000 that could be drawn from
Tourism Reserves to assist with the Project Team and other costs. Hence, in the
financial year 2007/8 it is not expected that there would be any savings over
and above that which would have occurred anyway but it would enable investment
into a ‘strategic team’ in addition to the continuation of most of the current
Tourism Services functions.
LEGAL
IMPLICATIONS
26.
There will be a number
of areas where there will need to be a clear understanding of legal issues with
regard to ;-
·
The correct process and implications for the 38 Tourism Services staff
with regard to Transfer of Undertakings (Protection of Employment) Regulations
2006 (TUPE)
·
Legal arrangements in the setting up of the Joint Venture for Tourism
other than TUPE – Memorandum and Articles, transfer of assets, contractual
obligations, building leases,
·
Service Level Agreements between the Council and the Joint Venture for
Tourism and, ultimately, the new Strategic Agency
The proposed Project
Team will undertake a full evaluation of all areas including these.
OPTIONS
27.
The TEAM report
considers five Options – see Summary Comparison of Options Appendix 1.
These are;-
·
Option 1 - The proposals outlined in the Policy
Commission’s ‘Blue Paper’ published on 10th May, 2006 for a
Strategic Tourism Function, a franchise arrangement for the production of
brochures and the website and partnership arrangements for TICs
·
Option 2 -
A Strategic Tourism Function supported by a more cost effective in house
Service
·
Option 3 – A Strategic Tourism Function and an
externalised Joint Venture or Public Private Sector partnership
·
Option 4 – A proposal by the Chamber of Commerce,
Tourism and Industry to operate a not for profit company to deliver some of the
current services (this may also be a franchise as proposed in Option 1)
·
Option 5 – An externalised Strategic
‘Marketing/Development Agency’ combining Tourism, a refreshed Economic
Partnership and the Local Delivery Vehicle (LDV)
EVALUATION
28.
Although the TEAM report
identifies Option 5 as, ultimately, the “most advantageous of all options” the
nature of the changes anticipated do present substantial issues that will need
to be resolved. These will include legal, financial, human resource,
procurement issues and risk management issues.
The timing of the transition will
also need to minimise the impact on the extensive marketing and front line
services currently offered to the tourism industry and visitors to the Island.
29.
Thus, to make early
progress it may be beneficial to establish a Joint Venture for Tourism during
the transition period to more ably achieve the eventual merger, particularly in
view of the other developments in the structure of the Partnership. The Joint Venture would need to be
specifically structured to deliver the requirements of the Council.
30.
It is essential that the
transition to an initial Joint Venture and then the formal merger will need to
be adequately resourced by a project team.
RISK MANAGEMENT
31.
The Summary Comparison of Options in Appendix 1 identifies the
respective risks associated with each Option.
32.
However, the first task of the proposed Project Team will be to
undertake a Risk Workshop that will seek to identify all the potential risks
involved in the short, medium and long term.
33.
Undertaking option 3 and preparing to move to option 5 is assessed as
high using the positive opportunity matrix.
In the overall context of risk, the delivery of options 3 and 5
mitigates against the risk of doing nothing to transform this service.
|
RECOMMENDATIONS
Cabinet
is recommended to:
I.
Approve the
commissioning of a 3 year contract which rolls forward annually with the Isle
of Wight Economic Partnership for the activities outlined in the report.
II.
Nominate
the Cabinet member for Assets, Planning and Housing as an additional
representative of the Council on the Board of the Partnership.
III.
Authorise
officers to work on the necessary steps to achieve the merger of Isle of
Wight Tourism and the Partnership in consultation with the Cabinet Member for The Economy, The Customer,
Communications, Leisure & Tourism and to be approved by the Cabinet. In the initial stage this includes
establishing a Joint Venture for tourism.
IV.
Establish a
project team with the necessary skills to achieve the transition arrangements for the merger lead by
the Chief Executive.
V.
Authorise
officers to establish a separate Island Renewal Company in conjunction with
the Partnership and SEEDA under Articles of Association to be approved
by the Cabinet
VI.
Nominate
the Cabinet Member for Assets, Planning and Housing and the Chief Executive as the
Council’s representatives on the Board of the Island Renewal Company.
|
BACKGROUND PAPERS
·
Tourism
Blue Paper
·
Tourism
Development Plan
·
Team
Report (Part Confidential)
·
Island
Investment Company report to Cabinet 21 March 2006
APPENDICES
Appendix
1.
Contact Point : Nigel Smith, Head of Tourism Services,
825871, email: [email protected]
DEREK ROWELL
Director of
Regeneration and
Development
|
CLLR
TIM HUNTER-HENDERSON
Cabinet Member for The Economy,
The Customer, Communications,
Leisure &
Tourism.
|
