committee(s): policy and resources date(s): subject...

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Committee(s): Policy and Resources

Date(s):

07 June 2012

Subject: Report of Economic Development Activity

March to May 2012 and progress against Business Plan

- January to March 2012

Public

Report of:

Director of Economic Development

For Information

1. The last report to the Policy and Resources Committee covered activity from

December 2011 to February 2012 and progress against the Business Plan to

December 2011. This report covers activity between March to May 2012, and a

summary of progress against Business Plan objectives for Quarter 4 - January to

March 2012.

Highlights – March to May 2012

A. Key Achievements

European

2. A number of City practitioners attended a meeting with Paris Europlace and its

members on 15th May in Paris. Discussions included consideration of the

outcome of the French Presidential election, key financial issues including

Capital Requirements Directive IV and shadow banking and crisis

management, together with the extension of the engagement to include

Germany.

3. Bank of Tokyo Mitsubishi UFJ, Citi, KPMG, Lloyds Banking Group all joined

the International Regulatory Strategy Group (IRSG) Council meeting in

March. The Council approved a proposal to extend the IRSG dialogue across

the EU Member States, something which has also been endorsed by the UK

government.

4. The Wholesale Financial Markets initiative has been undertaken jointly with

the CBI. This involved the production of a series of papers to highlight the role

of financial services in the wider economy. The papers were published in mid-

May and were discussed, with and welcomed by key interlocutors in Brussels and

Paris in a contribution to the ‘growth’ debate.

5. The City Office in Brussels hosted a lunch with two of the financial attachés of

the Permanent Representation of Cyprus and City stakeholders to discuss and

inform the incoming Presidency‟s priorities in financial services.

6. The City of London Programme 10th

Anniversary event took place in March

with your former Chairman delivering the opening remarks. This was followed


by a panel discussion on „delivering growth while maintaining fiscal

discipline‟ with panelists including representatives of BNP Paribas, the

European Banking Authority and the Association of British Insurers. The

discussion was moderated by an alumnus of the programme, Miroslaw

Kachniewski of the Polish Association of Listed Companies. Jonathan Taylor of

HM Treasury delivered the closing remarks for the event, which was also

attended by 36 alumni. A review is underway on the future shape of the City

programme.

7. Your Chairman hosted an event in May to mark the visit by the Governor of the

Polish National Bank and the Chief Executive of the Warsaw Stock Exchange.

City Affairs

8. Two major events were held with a focus on London‟s role as a centre for

global business and on the attraction and retention of international

companies. A conference on Corporate Governance in Emerging Markets in

conjunction with the International Centre for Financial Regulation, was opened

by Alderman Sir John Stuttard. This attracted asset managers, lawyers,

accountants, consultants on international development and other stakeholders.

The seventh annual Swiss Bankers Association – British Bankers Association

Round Table, held alternately in London and Switzerland, was hosted at the

Mansion House and opened by the Lord Mayor. This generated a wide-ranging

discussion on mutual concerns including regulation, supervision and

governance.

9. The stakeholder group on migration met during the period, giving members the

opportunity to question Home Office and UK Border Agency officials on

policy and operational matters. Business concern is now focusing on the

impact of problems at Heathrow and other points of entry to the UK. Your

Chairman proposes to take this matter up with the Home Secretary as part of a

broader business campaign.

10. The role of smaller businesses, both as a key element of the City and London

economy and as an agent for national economic growth, continues to be a major

focus. Follow-up work to the recent Breedon Review includes discussions with

City stakeholders on the need for government and regulatory policy to

favour a diversity of ways for smaller companies to raise capital. The team

has worked with the Research team on a project to map the concentration of small

businesses in a number of sectors in and around the Square Mile.

11. Working with a key partner The Honourable The Irish Society, we are leading the

early stages of an initiative to boost co-operation with Derry on that City’s role

as a centre for “digital industry” due to its position as the terminal for major

trans-Atlantic cables.

12. Presentations on the City as a global business centre have been given to

groups from Belgium, Saudi Arabia and the USA.


International Affairs

13. Policy support and the recruitment of a senior level business delegation were

provided to accompany the Lord Mayoral overseas business visits to Brunei,

New Zealand, Australia and Canada.

14. Your former Chairman hosted the high profile launch event for the City of

London initiative on London as a centre for renminbi business. The

Chancellor of the Exchequer, gave the keynote speech at the event. This was

followed by a panel discussion featuring the Chief Executives of the Bank of

China (London Branch), Barclays, Deutsche Bank UK, HSBC, and the Chairman

of Standard Chartered Bank. The launch attracted media coverage on both

Chinese state television, as well as in the UK and Hong Kong broadcast and print

media.

15. The City Office in Mumbai, along with Fixed Income Money Markets &

Derivatives Association (FIMMDA) and Brickwork Ratings held a workshop on

„Credit Default Swaps (CDS) – Documentation, Pricing & Trading‟ in

Mumbai. The participants included senior representatives from banks, asset

management companies and foreign institutional investors, while the Executive

Director of the Reserve Bank of India gave the opening remarks.

16. A three day programme of meetings on reform to the UK‟s regulatory

architecture was organised for Justice Srikrishna, Chairman of the Financial

Sector Legislative Reforms Commission (FSLRC), Government of India.

Meetings took place with a range of stakeholders including the Financial

Secretary to the Treasury, the Chief Executive of the Financial Services Authority

and the Chairman of the Financial Markets Law Committee. Your Chairman and

Deputy Chairman also hosted a roundtable for Justice Srikrishna with City firms.

Issues raised included the physical and operational restructuring of the UK‟s

regulatory architecture, how UK regulators and government bodies

undertake public consultation and the UK‟s public debt management

system. Indian regulators and exchanges met with key players in London to

gather information with a view to modernising the regulatory and structural

framework in India.

17. Your Chairman and former Chairman visited New York and Washington in

April to meet with US-headquartered financial services firms, senior

policymakers, regulators and think tanks. Issues discussed included the

alignment of US and EU regulatory reform agendas and competitiveness

issues for doing business in the UK.

Research published and events

18. Delivering Power: The Future of Electricity Regulation in London’s Central

Business District was published in March. The research examined the

electricity distribution network in London‟s Central Business District,

looking at the regulatory framework and provision of new connections for


developments as well as direct and indirect impacts such as streetworks,

inefficiencies in the system and ways this could be improved such as investment

ahead of need. The findings have helped to inform the City Corporation’s

response to the current price control review, while the City Property Advisory

Team (CPAT) have set up a working party with representatives from London

First, the City Property Association (both of which were co-sponsors of the

research), Westminster Property Association, the GLA and UKPN to take the

report recommendations forward.

19. A Financial Transaction Tax – Review of Impact Assessments was published

in March for the International Regulatory Strategy Group (IRSG) by ADM

Advisory. The report reviewed a range of research looking at the potential

impact of a proposed EU financial transaction tax.

20. London: A Centre for Renminbi Business was published in April and produced

by Bourse Consult. This study was the first deliverable from the City of London’s

initiative on London as a centre for renminbi business. The research supports the

development of renminbi products and services in London as China looks to

encourage the international use of the renminbi. The research was launched at a

high profile event in April, hosted by your former Chairman and attended by the

Chancellor of the Exchequer.

21. The Public Health and Primary Healthcare Needs of City Workers (co-

sponsored by NHS North East London) was published in May and involved

departments across the City Corporation. The research provided a

groundbreaking body of evidence on the current state of the health of City

workers and identified the services they would most like to access near work,

which could be most beneficial for both workers and employers. The research

will support the new Health and Wellbeing Board to plan strategically the

commissioning of future primary care services in light of likely future demands

and the Health and Social Care Act 2012.

22. The annual research reception was held in April, hosted by your former

Chairman. There were approximately 100 attendees for the event including

stakeholders, consultants, academics and think tanks.

Partnerships

23. A new, two year phase of the City Careers Open House programme began in

April. The programme will provide aspiration-raising visits for young people

in neighbouring boroughs to City businesses with delivery agency, The

Brokerage Citylink, due to bring 2,200 secondary school students into the City.

Prospects in the City will also deliver the programme to 375 primary school

students.

24. To complement our sponsorship of Entrepreneur First, the new graduate

programme for aspiring entrepreneurs, a reception to launch the first cohort of

34 undergraduates took place in April at Guildhall. This was hosted by your


former Chairman, and was attended by 70 people following a press launch and

visit to 10 Downing Street earlier in the day.

25. The first of three investment pitching sessions as part of the Angels in the City

project took place in April at Innovation Warehouse. This was attended by

around 30 of the angels recruited to date who screened 15 small businesses from

neighbouring boroughs.

26. A roundtable discussion on social mobility took place in May, jointly organised

with the Institute for Chartered Accountants in England and Wales (ICAEW) and

attended by 15 businesses. The event aimed to encourage mid-tier accountancy

firms to adopt practices to help foster social mobility in neighbouring

boroughs.

27. A roundtable focusing on discussing and agreeing actions to encourage

entrepreneurship amongst women was held in May with 25 attendees taking

part. This included groups focusing on encouraging high-growth women

entrepreneurs, and various other business angels and other business individuals

with an interest in helping female entrepreneurs.

28. A new phase of Ready to Supply the City projects commenced in May,

providing training to around 400 small and micro businesses in neighbouring

boroughs. This is based on the needs of City firms’ supply chains and aims to

improve their understanding of City businesses‟ supply chains. It will also

raise awareness among City businesses of City fringe small and micro

businesses in order to facilitate links between the two.

Corporate Responsibility

29. Your Chairman has hosted an Action Group on Social Investment for the

Cabinet Office, attended by Iain Duncan Smith, Secretary of State for Work and

Pensions, and key players in the social investment field. An expert in social

investment has been recruited to develop the City Corporation’s strategy.

30. City Action, the City of London’s employee volunteering broker released their

2011-2012 Impact Report. During this period, City Action matched 576 skills-

based volunteers from 56 City businesses working alongside 42 community

organisations.

31. The 2012 Lord Mayor‟s Dragon Awards, recognising corporate community

engagement in London, were successfully launched in March with the Lord

Mayor’s visit to the Building Lives Training Academy. The Academy is a project

run by Lakehouse, the 2011 winners of the Economic Generation award and who

deliver a structured construction training programme to marginalised groups. The

launch attracted 17 pieces of press coverage from local, regional, trade and Black

Asian Minority Ethnic (BAME) publications, including the Evening Standard.

32. The Economic Development Office and City Bridge Trust have been working

together to develop the Social Investment market. Financing social enterprises

http://www.city-action.org/pdf/CityActionImpactReport2012final.pdf


or charities through Social Investment is designed to generate positive financial

and social returns, thereby providing a sustainable way of financing

community projects. A dedicated Social Investment expert, recently approved

by your committee, is working with the Economic Development Office and City

Bridge Trust to develop a Social Investment strategy for the City

Corporation.

33. The Employee Volunteering Programme reported that during the 2011/12

financial year 219 City Corporation employees were involved in skills based

volunteering ( 6% of total staff), 270 volunteering activities were undertaken,

and 63% of all volunteering activity took place through City of London

Community Partners.

34. The 2012 Learning and Development Awards will feature the category

'Demonstrating skills development through volunteering' for a second year.

Chief Officers have been invited to submit nominations via an online form with

the nomination process open for the whole of May.

Central London Forward

35. The Central London Forward (CLF) board has continued with its work on

business rates as the new way of financing local authorities from 2013/14.

Particular consideration is being given to the respective roles of the GLA and

the boroughs.

36. CLF’s programme on tackling youth unemployment continues, including work

on fostering employer engagement, better careers advice, and take up of

apprenticeships.

37. Central London transport issues are currently being addressed with the

support of Transport for London around improving air quality and the distribution

of bus services.

Heart of the City

38. The Lord Mayor received more than 120 Chief Executives and Chairmen to the

Mansion House recruitment breakfasts for Heart of the City in March.

Speakers included the Chief Executives of both MITIE and Rufus Leonard, the

Head of Institutional Investors Group at Northern Trust and the CSR Partner from

Speechly Bircham. Your former and current Chairmen, together with several

Members, attended one of the breakfasts.

39. 70 new businesses have signed up to the 2012 Newcomers programme against

a target of 55, three quarters of which are SMEs. These new businesses attended

their first CSR workshop in May, hosted by Rothschild with speakers from

KPMG, Investec and City Action.

40. The Director of Heart of the City supported three Government Giving action

groups, hosted by the Minister for Civil Society, Nick Hurd MP and John Hayes


MP, Minister for Further Education, Skills and Lifelong Learning.

TheCityUK

41. TheCityUK held an event at the Liberal Democrat Conference in Gateshead in

March, which focused on the role of Financial Services in delivering growth to

the economy.

42. Sir Nick McPherson, Permanent Secretary to HM Treasury was the guest at a

TheCityUK roundtable meeting in April.

43. A major Pensions Conference was held in April, bringing together

practitioners and pension experts under the theme of “Making Pensions

Work.” The headline speaker was Steve Webb MP, Minister for Pensions.

44. TheCityUK sponsored the main reception at the Foreign and Commonwealth

Office‟s annual Leadership Conference at which all British Ambassadors

return to London for high-level consultations. The Foreign Secretary, William

Hague, also spoke at the event.

General

Emerging Issues

45. As the economic situation continues to dominate the news across Europe, the

importance of growth in any programme of economic recovery is now gaining

ground. An essential part of EDO’s work is to demonstrate the essential role of

the financial services industry in creating the jobs and growth to drive the

economy. The IRSG has recently teamed up with the CBI to publish three short

guides to the role of Wholesale Financial Markets in supporting businesses in all

sectors of the wider economy. These papers have been well received in Brussels

and we have also been in touch with the French and German equivalents of the

CBI and are hoping to work closely with them in developing the programme. The

next stage will look issues of long-term financing for growth, important short-

term needs such as trade finance and the importance of ‘Market Finance’

including non-bank sources of finance for growth.

46. There is the potential for EU treaty change at the forthcoming European

Council Summit in June. This has implications for the City in terms of

government engagement at the EU level.

47. Research is currently underway in the following areas:

‘Mapping SMEs in the City’ by Experian.

‘Corporate and investor perspectives on London renminbi business’ by

Trusted Sources

‘Cost of Living and Quality of Life in International Financial Centres’ by

Mercer

‘The Social and Economic Impact of the City’s Arts and Culture Offer’ by

BOP Consulting.


48. The contract to deliver the City of London Business Traineeship (delivered by

the Brokerage Citylink since 2001) will be re-tendered over the summer. The

new contract will commence in November and run for a period of three years

with an option to extend for a further two.

49. The Olympic and Paralympic Games may affect the number of businesses

engaging in volunteering through City Action due to the possibility of a

number City employees volunteering for the Games.

50. The City Corporation’s strategy for social investment will be developed (led by

Your Chairman) to complement a separate strategy to be developed by City

Bridge Trust for philanthropy.

B. Budget

51. Total net expenditure on the EDO local risk budget for the 2011/12 financial year

was £4,324,000 on an approved budget of £4,410,000. Requests will be

submitted to carry forward three sums which total £54,000 from 2011/12 into

2012/13 and, should they be agreed, the budget will show as 99.3% spent with a

final total underspend of £32,000. The underspend can be accounted for by

salary savings due to staff vacancies/changes; success in securing funding from

external sources for our research programme; a reduction in spending on Inward

Investment brochures and events so that we could focus on providing one-to-one

support to firms; and spending on travel for business delegates on Lord Mayoral

overseas visits being less than anticipated.

Annex A EDO Progress Against Business Plan to Quarter 4

(January to March 2012)


Objective 1. In partnership with TheCityUK, ensure the success of the International Regulatory Strategy Group (IRSG).

Action Due Date

Resp Status Comments on Progress (by exception)

Q1 Q2 Q3 Q4

1.1 Deliver strategy for use of output of IRSG workstreams

Mar-12 JI/MV G G G G

1.2

Deliver regular programme of meetings with Commission officials, Council members, MEPs and political staff in European Parliament to increase engagement

Mar-12 MV G G G G

1.3

Sustained and phased contact building lead by Chairman P&R (Brussels, key EU capitals, US & Switzerland) and through regular Brussels events

Mar-12 MV/PS G G G G

1.4 Use Research on issues to drive the approach of relevant EU member states towards UK financial services industry Mar-12 MV G G G G

1.5 Deliver PR programme to ensure CoL leadership role is well publicised. Mar-12 JI/MV G G G G

Objective 2: Maintain CoL’s profile in promoting the City and influencing government policy in all areas that affect the competitiveness of City industries.

2.1

Development of policy paper on CoL support for small businesses in City and fringe boroughs as a basis for better promotion of CoL’s work

Mar-12 JF G G G A

This has been rescheduled to take into account changed circumstances

2.2

Follow-up work on migration and business visa issues as part of on-going work on regulation, taxation, availability of skills, and infrastructure.

On-going

JF G G G G




2.3

Undertake a programme of well-designed, value-added research for the City through explicit engagement across CoL and with influential partners, including TheCityUK, IRSG, and HMG. Milestone: Deliver research report on Capacity Exchange

On-going

SB G G G G

Good progress achieved with current and recent research involving a wide range of partners including London First, the City Property Association, and the NHS (East London and the City) as well as other departments such as the Department for the Built Environment and Community and Children's Services.

Dec-11 SB G G G Achieved.

2.4

Deliver the City of London Programme for future EU leaders including Programme for Poland, the 10th Anniversary event and continue building the Alumni and Fellowship network.

Mar-12 YF G G G G

2.5 Enhance dialogue and closer engagement in the key markets of India, China and the US

On-going

PSissons G G G G

2.6 Develop support for Lord Mayor on policy and overseas visits.

On-going

PSissons G G G G

Objective 3: Ensure the provision of a high quality business environment in the City (including physical infrastructure and the built and retail environment).

Objective 3 is no longer reported here as CPAT is now in Department of Built Environment




Objective 4: Deliver successfully the business incubator project (‘Innovation Warehouse’)

4.1 Put in place the lease and governance arrangements including Board memberships

Milestone: Community Interest Company (CIC) and For-Profit Board memberships confirmed. 01-Apr-

11 LS/ EM G A A A

Partially achieved. CIC board membership is confirmed. The For-Profit company does not have a formal board as yet.

Milestone: Boards agree finance and operations arrangements.

01-Apr-11

LS/ EM A A A G

Achieved. The City Corporation has provided a framework for the establishment of robust finance and operation arrangements, including by funding a consultant to provide specific guidance, and recruiting a board member with relevant financial expertise. The Board has accepted and acknowledged the recommended arrangements.

Milestone: Lease and governance arrangements signed off.

01-Apr-11

LS/ EM G Achieved

4.2

Oversee refurbishment of premises (including upgrade of services and fit out). Milestone: Facilities ready for use and signed off for handover.

31-May-11

LS/ EM G

Achieved

4.3

Manage selection of occupiers and service providers. Milestone: Services in place and open for business

30-Jun-11

LS/ EM G G G

Achieved

4.4

Monitor and fine tune operating arrangements and performance against targets

31-Mar-12

LS/ EM G G G G

Achieved. Innovation Warehouse has met its first year targets, and the City Corporation has provided a framework for the establishment of robust management, operational and governance systems.




Objective 5: Maintain the impact of regeneration (with particular focus on skills, training and job brokerage programmes, and support for SMEs) and corporate responsibility programmes

5.1

Pursue opportunities to leverage external funding into our regeneration and corporate responsibility programmes to maintain levels of activity. Channels of funding identified, scoped, and applied for (as and where available and appropriate)

Mar-12

LS (DP/SH)

G G G G

Achieved. £200,000 funding in European Social Fund monies secured via London Councils, with projects commencing imminently after some delays owing to decision-making at City Hall. Funding opportunities are being reviewed for the CR team, but not many are relevant for brokers

5.2

Try creative ways to maximise involvement of City businesses in a) our ‘Ready to Supply the City’ programme supporting City fringe SMEs, and b) our training, employment and aspiration-raising programmes.

Mar-12

LS (DP) G G G G

Achieved. Some of the challenges of involving City businesses in 'Ready to Supply the City' were overcome with 'roundtable' discussions between buyers and suppliers held in Q3 and a review of activity during Q4. This informed a new approach for 2012/13 based on input from City buyers, small businesses and enterprise agencies. Work to engage City businesses in training, employment and aspiration-raising activities continues well with planning underway for a social mobility roundtable in May.

5.3

Manage the re-alignment of Cross River partnerships funding operating model in conjunction with CLF. Milestone: CRP’s funding & role secured for 2011/12 and closer alignment achieved with CLF

Jun-11

LS (ES) G

Achieved

5.4

Define CoL framework for ‘The Big Society’ and define EDO’s role and scope in working towards the five business commitments.

Jun-11

LS (DP/SH)

G

Achieved

5.5

Develop the impact measurement of Partnership and CR programmes. Milestone: Have identified initial areas of potential impact to measure.

Sep-11

LS (DP/SH)

G G G G

Achieved. All project appraisal, monitoring and evaluation paperwork have now been updated to include relevant elements relating to measuring impact.

5.6

Investigate opportunities to raise awareness of social finance agenda. Milestone: Research report delivered in 2011 and opportunities followed up.

Jun-11

LS (SH) G

Achieved




Objective 6: Manage change and maintain staff motivation in the context of budgetary constraints.

6.1 Prepare for next IIP (including follow-up to CoLC staff survey 2009) to be ready for review

May-11

AH G Achieved

6.2 Action plan in place working towards ‘Excellent’ in the Equalities Framework to be ready for review

Mar-12

KC G G A G

6.3

Deliver change programme including development of Intranet, Internet and Information Management projects

Mar-12

SMT G G G G

6.4

Develop strategy for future IS e.g. Electronic Document Management, sharing information with external partners

Mar-12

KC G G G G

6.5

Ensure benefits of office move to West Wing, Guildhall are realised including improved team working with rest of Town Clerk’s Department and Remembrancer’s

Sep-11

AH G

Achieved

Annex B Top Level Indicators to Quarter 4



Financial /Business Outcomes

Q4 Act

Cum 11/12

Year Target

Client/Customer Q4 Act Cum 11/12

Year Target

ED02 Number of government and business decisions influenced

19 68

ED17 SRS E % calls answered in 20 secs (5 rings)

96% 95% 95%

ED07 Number of City and City fringes residents engaged in learning opportunities 603 1722 1910

ED51 Number of City & City fringes residents helped into jobs 25 83 280

ED52 Number of SMEs in City and City fringes provided with business support 273 666 580

ED11

Number of new City employers recruited to support CSR programmes. Includes City Action and Heart of The City programmes

11 74 57

% Actual spend against budget for year 99% 100%

Comment: Decisions influenced (ED02) include: City companies attending two or more Lord Mayoral visits; support to City firms to develop their businesses in India and China; and EU engagement. 273 SMEs (ED52) were supported in Q4, across a range of projects including Ready to Supply the City and sponsorship of both Entrepreneur First and the Enterprise Europe Network. Target outputs for ED51 and ED07 were not achieved for 11/12 mainly due to: i) two major, part EU funded projects not commencing until 2012/13 as a result of long delays within the EU funds unit at the Mayor’s Office and ii) other existing projects failing to achieve targets, with action underway to address this. We anticipate that most of the outputs not achieved in 2011/12 will be delivered in 2012/13.

Comment: On target.

Innovation & Change

Q4 Act

Cum 11/12

Year Target

People Q4 Act

Cum 11/12

Year Target

ED14 % Invoices paid in 30 days

99% 99% 98%

ED13 Sickness level - average working days lost/person 0.2 0.3

Top quartile

Comment: On target.

Comment:

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