CD140 - Funding Strategy - Industrial Regeneration

Park Royal is London's largest industrial estate. It accommodates a wide range of businesses from small start-ups to large multi-national brands which operate across a range of sectors. The Mayor's London Plan set a target for additional 10,000 new jobs and 1,5000 new homes across Park Royal. OPDC's mission for the future of Park Royal rests on the three pillars of Protect, Strengthen, Intensify:

• Protect - the protection of retained industrial land for industrial uses
• Strengthen - supporting businesses and addressing the areas shortcomings to improve the operation and productivity of the industrial estate
• Intensify - meeting the Mayoral targets to create an additional 10,000 jobs by supporting existing businesses to grow as well as attracting new businesses and new sectors to the estate.

OPDC has developed a programme to support industrial regeneration over the next 10 years which seeks to address the most pressing issues and capitalise on opportunities. It has been developed in consultation with businesses and stakeholders and through work that forms the Park Royal evidence base.

The industrial Regeneration Programme is structured around four themes:

Innovation - setting the benchmark for the future of industry in London

• Clean Growth
• Energy Infrastructure
• 5G Testbeds
• Digital Connectivity

Infrastructure - Building capacity to support growth and creating a safer, healthier environment

• Transport

Business and People - supporting businesses, employees and residents to thrive

• Business Engagement
• Employment and Skills

Place - Create a more desirable place to live, work and visit

• Placemaking
• Promotion
• Resilient communities

Over the past three years we have sought funding for industrial regeneration projects by submitting applications to various funding pots with mixed success (as detailed below).

• Lottery Heritage Fund, Great Place Scheme - bid for and secured £1.5m
• Department for Digital, Culture, Media & Sport Local Full Fibre Network - bid for and secured up to £1m
• High Speed 2 (HS2) Business and Local Economy Fund - bid for £300,000, secured £255,000
• Greater London Authority (GLA) Good Growth Fund - bid for £1.6m (Harlesden and ORB), secured £850,000
• Transport for London (TfL) Liveable Neighbourhoods - bid for £8.7m, 2020 round delayed/cancelled due to Coronavirus (Covid-19)
• Ministry of Housing, Communities & Local Government Future High Streets Fund - bid for £8.9m, unsuccessful
• Ministry of Housing, Communities & Local Government Getting Building Fund - bid for £8.7m, unsuccessful
• London Economic Action Partnership Business Navigator programme - bid for £78,000, unsuccessful

OPDC has designed many of it potential programmes to suit external funders' criteria, often reducing the scope and scale of projects to meet funders parameters. As well as impacting project design this has also limited OPDC's ability to develop a strategic medium-to-long-term programme to support Park Royal and make longer term investment decisions about the improvements required.

OPDC will commission external consultants to develop a funding strategy which will help us identify a stable funding stream to deliver the Industrial Regeneration programme over the next ten years.

The objectives of this commission is to identify a stable funding stream over the next ten years which can be used to achieve the ambitions of the Industrial Regeneration Programme. The commission will:

1. Estimate funding requirements over the next ten years.

2. Complete detailed assessments for a range of funding options including:

• development-related funding sources (i.e... Community Investment Levy and s106);
• tax increment financing (i.e.. business rate retention and stamp duty land tax);
• transport taxations (i.e... workplace parking levy and Ultra Low Emission Zone charging);
• business contributions including through Business Improvement Districts;
• local, regional and central government contributions; and
• bespoke taxation models.

3. Assess appetite for match funding and collaboration with stakeholders

4. Make recommendation and create a ten-year funding plan with a range of options

Additional outputs:

5. Create detailed delivery plans for individual funding solutions i.e... Enterprise Zones. (The consultants will be asked to provide separate quotes for additional outputs and, as the commission progresses, we will decide whether these outputs are required or not. Approval to progress to this stage is covered by the funding being sought through this CD.)

This work will identify and qualify the long-term funding opportunities available to OPDC, its host Boroughs and the GLA. This will then allow OPDC to maker longer term investment decisions and design programmes that will be far more effective, timely and compatible with the needs of Park Royal.

The Royal Docks project assessed a range of funding options in this way before establishing a stable funding stream to deliver their regeneration projects by setting up an Enterprise Zone and securing a mix of Strategic Investment Funding, Housing Infrastructure Funding, current retained business rates and borrowing against future retained business rates.

There are no particular equalities implications directly arising but the project will have 'due regard' to the need to (i) eliminate unlawful discrimination, harassment and victimisation; (ii) advance equality of opportunity between people who share a relevant protected characteristic and those who do not; and (iii) foster good relations between people who share a relevant protected characteristic and those who do. Protected characteristics under section 149 of the Equality Act are age, disability, gender re-assignment, pregnancy and maternity, race, religion or belief, sex, sex orientation, and marriage or civil partnership status (all except the last being "relevant" protected characteristics).

Risks

Risk 1 - Conflicts with other strategies/studies that are being commissioned. The proposals being recommended within the strategy may conflict with other proposals from studies or strategies that are being developed concurrently.

Mitigation - Ensure that continued discussions take place during the development of all related strategies to ensure that they are aligned.

Risk 2 - External stakeholders may disagree with proposals being made within the Funding Strategy. Disagreements may arise from stakeholders, which could affect the timing of the completion of the project.

Mitigation - Include stakeholders within the development of the strategy. Senior management team will review and sign-off the strategy at key stages in its development.

Risk 3 - The scope and budget may creep up under during the project. During the project, additional inclusions may be identified which will result in a variation to the scope and an increase in budget.

Mitigation - Fortnightly review meetings with the consultants and client have been requested within the scope.

Risk 4 - The recommended funding strategy may not be deliverable.

Mitigation - The consultants will be required to assess the feasibility of funding options, assess appetite for collaboration and set out realistic delivery plans as part of the commission.

Stakeholders

The Funding Strategy will require external input and local stakeholders will be invited to join steering or working groups or contribute through workshops or consultation events. Local stakeholders will include:

• GLA
• London Borough of Brent
• London Borough of Ealing
• London Borough of Hammersmith and Fulham
• West London Alliance
• Park Royal Business Group
• Park Royal's residential communities
• Local businesses
• Developers / Landowners
• HS2
• TfL

OPDC has considered other options for resourcing this work, including using in-house staff. However, we have concluded that engaging a specialist external organisation (with access to greater expertise, resource and networks than OPDC or GLA) for a short period of time will provide better value for money than recruiting or seconding new staff members. OPDC will continue to work with expertise within the GLA group to ensure consultant input is focused where such resource is not available.

Expenditure of £90,000 to appoint consults to prepare a Funding Strategy will be funded from the 2020/21 Funding & BID Establishment budget which sits within the Delivery directorate.

Any changes to this proposal, including the requirement of additional funds will be subject to further approval via the Authority's decision-making process.

The report above indicates that the decision requested of the Chief Executive falls with the OPDC's objects of securing the regeneration of the Old Oak and Park Royal area and its powers to do anything it considers appropriate for the purpose of its objects or purposes incidental to those purposes, as set out in the Localism Act 2011.

In taking the decisions requested, the Chief Executive must have due regard to the Public Sector Equality Duty, namely the need to eliminate discrimination, harassment, victimisation and any other conduct prohibited by the Equality Act 2010, and to advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it and foster good relations between persons who share a relevant protected characteristic and persons who do not share it (section 149 of the Equality Act 2010).

The services required should be procured in accordance with the OPDC's Contracts and Funding Code by relevant procurement officers. Officers must ensure that an appropriate contract variation is put in place and executed by the consultant and OPDC before provision of the services.