RISK MANAGEMENT AND CONTINGENCY ARRANGEMENTS

Our first Delivery Plan highlighted what were considered to be the main elements of risk. These related to the lack of systems and procedures at the outset of the sub regional programme both within the Agency and the Partnership. These were:

• Delays in having all guidance and systems in place to ensure an early start of programme activities.
  
• Delay in having appraisal documentation and systems in place.
  
• Availability of match funding.
  
• Under-performance on operational and/or financial objectives.

In our second Delivery Plan we were able to report on the further measures taken to eliminate/minimise these risks, including:

• The establishment of a Central Secretariat and appointments to the posts of Partnership Manager, Programme Co-ordinator, and Programme Administrator.
  
• The establishment of the Tees Valley Executive Group, meeting on a three weekly basis, to make decisions within delegated levels as to the approval/rejection of applications, refer non delegated projects forward to One NorthEast for secondary appraisal, to regularly review the programme, respond and react to change/variance through management of over-programming and delivery of reserve projects where appropriate.
  
• The establishment of an Officers working sub–group with representation from each of the five LPMGs, the Accountable Body and Central Secretariat, meeting on a monthly basis for the dissemination of information, programme updates, revised guidance and sharing of best practice across the Partnership.
  
• Monthly attendance at Manager level at the One NorthEast/SRP managers’ meetings.
  
• A commitment on the part of the Partnership to ensure the optimising of match funding (particularly EU Structural funds) to secure maximum benefit and the efficient use of Single Programme funding.

The Partnership welcomes the recent engagement with the Agency and the commitment to joint working in a wide ranging review of its internal compliance, monitoring and evaluation procedure scheduled for early to mid 2004.

The achievements made in our first two years of operation will be further enhanced in the life of this Plan. However, the single biggest perceived outstanding risk remains the revision of programme allocations from One NorthEast.

Set against the Partnership’s allocation of £24.398m in 2004/2005, existing approved commitments total £13.310m. The Partnership is thus endeavouring to minimize the impact of excessive over-programming through identifying its high risk projects (considered to be all projects seeking in excess of £1.0m Single Programme support in 2004/2005), and seeking detailed development programme and spend profile submissions (GANTT Charts) over and above that required for inclusion in the Delivery Plan, by 31 March 2004. These projects are:

• Coastal Arc – a joint proposal from the Redcar & Cleveland and Hartlepool LPMGs
  
• Hi Tech Incubator Units – a proposal from the Hartlepool LPMG
  
• Darlington Gateway – a submission from Darlington LPMG
  
• KIB – proposals to extend the University of Durham Queens Campus
  in Stockton on Tees
  
• Tees Corridor – proposals from Stockton and Middlesbrough LPMGs
  
• Middlesbrough Art Gallery – proposals from Middlesbrough LPMG
  
• Pioneer Process Park – A proposed public/private joint venture between SembUtilities Teesside Ltd. and One NorthEast

With regard to future years (2005/2006) the Partnership’s programme has been prepared reflecting the original indication of funding given in April 2003 of £34.4m. The Partnership however recognizes that as the Agency reviews its regional and sub-regional responsibilities this figure may be subject to adjustment. The Secretariat will therefore take the prudent measure of managing the programme to an assumed level of resource no greater than £25.0m (split 50/50 between revenue and capital) and will work with Partners in the strategic prioritisation of the Tees Valley programme. Against this background the Partnership has already approved commitments in to 2005/2006 of £4.786m.

The Partnership, however, looks to One NorthEast for stability of future programme allocation and a recognition of the scale of Single Programme investment that will be required to successfully implement the key strategic initiatives that have been identified within the emerging long-term investment programme of the Tees Valley Vision.