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North Ayrshire Council · 23 August 2024
Back to Ayrshire Economic Partnership Board — 23 August 2024 and its agenda
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AYRSHIRE ECONOMIC PARTNERSHIP BOARD MEETING – 23 AUGUST 2024 REPORT BY HEAD OF ECONOMIC GROWTH EAST AYRSHIRE COUNCIL SUBJECT: AYRSHIRE GROWTH DEAL – AGD ECONOMIC MODELLING UPDATE PURPOSE OF REPORT 1. To advise the Economic Partnership Board Members on an update on the AGD Economic Modelling used by the PMO and the accessing an enhanced service from the Glasgow Intelligence Unit. RECOMMENDATIONS 2. Agree the content of the report and recommend approval to the Ayrshire Economic Joint Committee to note (i) the development of a Service Level Agreement with the Glasgow City Region Intelligence Hub (GCRIH) for an enhanced economic model to support the development and monitoring of projects for the AGD; and (ii) provide ‘in principle’ support to the PMO to complete negotiation for a SLA, subject to legal and procurement advice being met. BACKGROUND 3. The PMO as a core function as set out by the AGD Governance are required to host an economic model. Since 2019 the PMO have operated an AGD economic modelling tool that has helped inform a number of projects in the development of their business cases e.g. economic case. This is a simple model that is more effective where projects seek to develop new builds where the proposed land use will relate to one of the categories captured by the Use Class Orders. 4. Overtime the robustness of the model has been questioned and in response the PMO sought external body to review the model. This has been supported by the feedback received from the Governments when commenting upon the economic cases of business cases. In early 2024 the Glasgow City Region Intelligence Hub (GCRIH) were contacted to review the AGD economic model. They were approached on the grounds that they provide economic modelling advice to the Glasgow City Region Deal and beyond, and have supported the development of business cases and funding bids which have been accepted by the Governments.
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5. Their findings recommended that a number of significant changes would be needed to be undertaken in order for the model to be sufficiently robust and meaningful. In addition they highlighted the limitations of the model. Ultimately it was recognised that the best way forward would be to work with the Glasgow Intelligence Hub in aligning the AGD economic model with that used by the Glasgow City Region. In addition, ensure the updating of the AGD model, although hosted by the PMO, is shared and accessible to Partners in Ayrshire. MAIN REPORT THE OFFER – DRAFT SERVICE LEVEL AGREEMENT 6. The PMO has negotiated a Service Level Agreement (SLA) with the GCRIH that will overhaul the AGD economic model and align it with that used for the Glasgow City Region and other initiatives undertaken by the City Region. 7. The draft SLA has been developed with the support of EAC legal team and will be shared with the procurement team to ensure compliance with relevant requirements. Both teams will continue to be engaged in the completion of the SLA and its delivery. 8. In addition the SLA will also include the following conditions: • Maintenance undertaken by the Hub so ensuring all relevant underlying data is updated. This predominately includes national data from Government sources. • Programme of updates to be undertaken of all AGD projects information used to inform business cases. This will not replace existing modelling tools used for business cases already approved or are at an extensive stage of development, but provide a consistent tool in which to capture potential economic outputs and outcomes at a Programme level. • Training for the PMO and key AGD teams across Ayrshire so that the operation, maintenance and outputs of the model are understood and be effectively applied to AGD projects and other initiatives where the model can be used. • Initially a 3 year agreement with an opportunity to terminate or continue on a rolling year contract. 9. The cost of the SLA has been agreed at £25-30k for the updating the model and development of a revised version aligned with that used by the Hub for the Glasgow City Region. In addition there will be a £3k commitment per year for the lifetime of the contract to cover continued maintenance of the model. For over three years the total costs would be £39k (maximum) which split between the three Ayrshire Councils would equate to £13k, with the first year of the agreement requiring a contribution of £11k from each authority. Subsequent years would be £1k per year.
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BENEFITS 10. The benefits of using the Hubs model has already been demonstrated through the development of the business cases for the AGD AMIC and Moorfield projects, where EAC officers worked closely with the Hub’s team. The details generated have resulted in a robust economic case that is currently being considered by the Governments. 11. Other benefits the new model will provide include: • A Programme level economic model that could be applied to all AGD projects, and hence provide an updated and robust evidence base on the potential economic benefits from the Programme. • The potential to consider unique environmental and social impacts, due to the ongoing development of the Hub’s model, which is seeking to investigate effective ways of capturing the economic consequences upon environmental and social issues. An approach which the AGD, if aligned, could learn from and incorporate moving forward. • A tool that can be applied beyond AGD projects but also for other initiatives where a business case aligned to the HM Treasury Green Book is required e.g. LUF, and potential new regional/local economic development Government sponsored initiatives. • Provide a tool that can support for the implementation of relevant actions of the Ayrshire Regional Economic Strategy, by providing economic evidence at a local and regional level. • An opportunity to build resilience in the PMO and AGD teams on knowledge, experience and skills in economic modelling. In time this will lead to the AGD model being supported solely by Ayrshire staff, which could result in the reduction of costs and dependencies on external consultants. IMPLICATIONS 12. Eight implications have been considered in the preparation of this report. Implications Yes No Paragraph number in report 1. Policy/Strategic Planning Yes Para 13-14 2.Governance/Legal Yes Para 16 3. Human Resources Yes Para 18 4. Equality and Fairer Scotland Duty Yes Para 19 5. Financial Yes Para 15 6. Risk Yes Para 19 7. Community Wealth Building No 8. Net Zero No
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ALIGNMENT WITH SUSTAINABLE, INCLUSIVE GROWTH AMBITIONS 13. Inclusion is a key driver for the AGD. Deal business cases for projects demonstrate how they will reduce inequalities and tackle the inclusion challenges specific to Ayrshire. 14. Ensuring a robust economic modeling tool is available for the AGD is a key requirement of the PMO’s function in supporting the delivery of sustainable development and inclusive economic growth across Ayrshire and in line with the Deal objectives. FINANCIAL IMPLICATIONS 15. The principal financial implications relate to costs associated with appointing the GCRIH to deliver the SLA. It is recognised that there will be initial costs but as set out in the above report the benefits derived from the investment outweigh these costs. LEGAL IMPLICATIONS 16. The legal implications arising from this report are covered through the Agreement between the three Ayrshire’s Councils and the recently revised Governance Document which was approved at the Joint Committee meeting on 8 December 2023. RISK IMPLICATIONS 17. The management of Risks will be undertaken through the managing and monitoring of the SLA and will be led by the PMO, with updates on progression provided to Senior Responsibility Officers for each Ayrshire Council. HUMAN RESOURCES IMPLICATIONS 18. There are no immediate human resource implications arising from this report. All named key AGD projects are resourced to develop and deliver the AGD programme. EQUALITY IMPACT ASSESSMENT 19. There is no direct equalities impact relating to this report. Inclusion is a key driver for the AGD. Project leads will be required to complete an Equality Impact Assessment for their project and append to the associated business case. Project leads have received Equality Impact Assessment training organised by the Scottish Government. Project Leads are being encouraged by the PMO to link up as soon as possible with their Equalities Officer within their authority who will be able to assist with this matter. APPENDICES
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None Background Papers: Heads of Terms, signed by both the UK and Scottish Governments and Ayrshire’s Councils on 8 March 2019 Deal Document, signed by both the UK and Scottish Governments and Ayrshire’s Councils on 19 November 2020 Members requiring further information should contact: Graham Saunders, Ayrshire Growth Deal – Strategic Manager Graham.saunders@east-ayrshire.gov.uk Implementation Officer: Graham Saunders, Ayrshire Growth Deal – Strategic Manager Graham.saunders@east-ayrshire.gov.uk
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