Agenda item

[Report of the Director for Housing, Regeneration and Planning. To be introduced by the Cabinet Member for Local Investments and Economic Growth.]

This report seeks approval for the proposed Opportunity Investment Fund expansion to cover the Wood Green regeneration area and industrial estates in the east of the borough.

The Cabinet Member for Local Investment and Economic Growth introduced this report which sought approval for the proposed Opportunity Investment Fund expansion to cover the Wood Green regeneration area and industrial estates in the east of the Borough.

The Cabinet Member highlighted page 127 of the report and noted that the Council was aware not all Small Businesses Loan Fund beneficiaries might succeed but this had been factored into the budget. However, that should not be used as an inhibitor to the Council seeking to assist small businesses through the small loan funds.

The Cabinet Member emphasised the need to support small businesses to grow and discussed the businesses along hermitage Road, such as Albion Knit, which had received a loan from the Council. It was noted that the Council would only support businesses it deemed to have a workable business plan that demonstrated how it would grow.

In response to questions from Councillor Connor, the following information was provided:

• Officers informed that the body which administered over the Small Loan Funds was primarily the Council’s Regeneration and Economic Department, however, finance and legal also provided input given this was a corporate decision-making process. External advisors were also used to assess the business plans.
• Regarding the size of the team involved directly, Officers confirmed there were two support officers, each responsible for either the Opportunity Investment Fund and the new Productive Valley Fund. The support officers engaged frequently with the businesses in receipt of loans to ensure they were functioning as they informed the Council they would be and also to ensure the health of the business.

Officers would confirm to Councillor Connor in writing how many of the number of apprenticeships referenced at ‘Objective 17b)’ on page 125 had started.

RESOLVED

1. To agree that the Opportunity Investment Fund is expanded to cover the Wood Green regeneration area and industrial estates in the east of the borough in addition to the existing coverage of the Tottenham regeneration area for the reasons outlined in sections 4-5, so that the balance of Opportunity Investment Fund (£1.26M to date) and future repayments will also be eligible to cover businesses in this expanded area going forward.

2. To note the achievements of the Opportunity Investment Fund to date and the soon to launch Upper Lee Valley Productive Valley Fund, as well as the management arrangements of both funds.

Reasons for decision

A recent business survey in Wood Green found that almost three-quarters of them had plans for expansion, although not all of these will need public sector support to realise those plans. By expanding, OIF would support businesses to remain and expand in Wood Green and Tottenham and reduce the number of those needing to relocate outside of the borough.

Wood Green is also the borough’s metropolitan town centre and a prime employment area with well-advanced Council and partner plans to enhance and improve the commercial space offer through a jobs-led programme of change which will bring forward a pipeline of commercial space over several years. Despite this, the demand for housing land, and values achievable through housing development, put existing commercial space, especially near major transport interchanges, under pressure and at risk of being converted to housing.

The town centre also neighbours areas of high socio-economic deprivation. Allowing OIF to expand to Wood Green would generate employment opportunities paid at London Living Wage (LLW) or above for local residents within close proximity of their homes.

By widening the scope of OIF to Wood Green and industrial estates outside Tottenham, the benefits of OIF will be accessible to many more businesses and cover the borough’s two growth areas and major employment areas (the other being Tottenham).

The new PVF loan fund, covering the industrial estates in the Upper Lee Valley, enables OIF to expand to Wood Green, given that further applications from industrial estates in Tottenham can now be covered by PVF. 11 out of the 20 OIF loans awarded to date have been provided to businesses located in Tottenham industrial estates.

Reporting to Cabinet on the OIF loan fund and forthcoming PVF loan fund is timely in order to reaffirm and align their objectives to the Borough Plan, the Economic Development Strategy and to embed Community Wealth Building principles. Appendix 1 outlines achievements to date against various objectives.

The Council is committed to growing and sustaining the borough’s business base and supporting local people to access employment opportunities created by the local economy – increasing jobs and commercial space. The loan funds enable businesses to access finance, where otherwise they may have been unable from conventional lenders, or to bring forward their expansion plans quicker. The loan agreements enable the Council to set targets for the business to deliver jobs (with LLW as a minimum), apprenticeships/traineeships, offer discounts and services to local residents and community groups, develop local supply chains with existing small businesses and create attractive, appealing destinations and services for people to enjoy and retain money in the local area. Businesses also sign up to deliver activities through the Tottenham Charter with local schools and colleges such as work experience, school visits and talks.

The recyclable nature of the funds mean that loan repayments are returned to the Council to loan out again to the next generation of applicants. It is a strong example of the Council ensuring that public pounds deliver the maximum public good.

The fund also helps to protect and enhance employment land in our town centres and industrial estates, modernising and intensifying our commercial areas and making our town centres more attractive and desirable to live, work and visit.

Alternative options considered

The following options were considered:

No change

OIF continues to be eligible only for businesses currently based or moving into Tottenham. This is not considered a desirable status quo.

Expand OIF over the whole borough

This is not considered the optimal solution as, despite its positive impact, the fund is relatively small in scale and will have a more intense impact focused on the larger areas of commercial activity in the borough (the major centres of Wood Green and Tottenham) and the larger industrial estates in the east of the borough. This would also put a strain on resources, expanding to cover such a large area. The current pot of OIF funding available to applicants stands at £1.26M as of now (which represents approximately 10-12 loans based on the average loan size awarded to date) and the anticipated return rate of 70% will mean the fund will see diminishing returns over subsequent years resulting in a maximum of 8-10 loans awarded over the next few years. The impact of this would therefore be diluted if spread over the borough as a whole.

Expand to cover Wood Green and Tottenham only

This option would allow the fund to focus on the borough’s major commercial centres. However, this would exclude several industrial areas under pressure from residential and mixed-use development in the east of the borough.

Expand to cover Wood Green, Tottenham and industrial estates in the east of the borough

This is considered the preferred option for the OIF fund, covering, for the reasons outlined above, the major commercial centres and key industrial areas at risk of seeing a diminished commercial/employment offer. This steady expansion would also not put a strain on resources. Launching the PVF loan fund will provide the opportunity to expand the OIF area for the next three years as a minimum. Industrial estate-based businesses have so far received around half of the OIF loan funding to date, allowing the Council to widen the area of coverage of OIF at least for this fixed period.

It is proposed that this expansion is reviewed after 12 months (October 2020) to assess whether the area has been widened too far (diluting the place-making and commercial-space protection aspects of the fund) or not enough (needing to be expanded into other areas seeing an equally pronounced pressure on conversion/loss of employment space). The take-up of PVF and OIF will be considered in this review.