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									Annual Report and Accounts
East Midlands Development Agency
April 2005-March 2006
East Midlands Development Agency




Contents
  Chair’s foreword                                                     5
  Chief Executive’s review                                             6
1 Management commentary                                                9
  Introduction                                                        10
  Financial review                                                    11
  Economic context 2005-2006                                          15
2 Strategic programme activity and progress against the strands       17
  The Regional Economic Strategy                                      19
  Enterprise and business support                                     21
  Enterprising communities                                            23
  Employment, learning and skills                                     25
  Innovation                                                          26
  International trade and inward investment                           28
  Economic growth, energy and the environment                         30
  Site provision and development                                      31
  Transport and planning                                              33
  Information and communications technologies (ICT)                   34
  Tourism, culture and sport                                          35
  Rural development                                                   37
  Urban regeneration                                                  38
  Sub-regional Strategic Partnerships                                 40
  Governance                                                          44
3 Remuneration report                                                 47
  Remuneration and HR Committee                                       48
  Pension benefits                                                    53
4 Annual accounts financial year 2005-2006                            59
  Directors’ report                                                   60
  Statement on internal control                                       64
  The Certificate and Report of the Comptroller and Auditor General
  to the Houses of Parliament and East Midlands Development Agency    68
  Accounts                                                            70
Annual Report and Accounts 2005-2006                                    2|




Welcome to the 2006 Annual Report and Accounts from East Midlands
Development Agency. Inside, you will find key information from the 2005-2006
financial year.




Northampton Town Centre
East Midlands Development Agency




Cornerhouse, Nottingham
Annual Report and Accounts 2005-2006                                                                                4|5




I am delighted to introduce the 7th Annual Report from East Midlands
Development Agency. With four years to go, we are eight places away from
our goal to become a Top 20 region in Europe by 2010: and excellent progress
has been made on a number of fronts as the East Midlands continues to work
towards the challenging ambition we set ourselves back in 1999.




Chair’s foreword

I will take this opportunity to thank members of my                However we still have some serious and persistent
Board and the team at emda for their support, hard work       problems to tackle. A higher than average percentage of
and commitment over the past year. But all of our             our region’s working population has no qualifications at
achievements have only been made possible by the              all; and on the whole, the region has too many people in
enormous support of our partners across the region.           low skilled, poorly paid jobs. We also have some
I hope that you will all be with me, as we head into what     persistent pockets of serious economic under develop-
I am sure will be another busy and challenging year.          ment, particularly in the former coalfields, the east coast
    Over the course of the past year we asked the region      and inner cities.
to help us to review and update the Region’s Vision and            This review will shape the direction of not only
the Economic Strategy. Thousands of people, from all          emda’s resources, but the region’s resources over the
over the region: our partners; business people; and the       coming years. As we move into a much more challenging
general public responded to the review, showing a real        economic climate it is imperative that all partners
enthusiasm and commitment to the regional agenda.             actively translate the priorities in the revised Regional
The review required us to look ahead, to think where we       Economic Strategy into their own strategies and action
want to be in 10 or 15 years time; and asked what more        plans, if we are to do real justice to the people of the
we need to do to get there. It was also a prime opportunity   East Midlands.
to take a step back and look at what has been achieved
so far; and to take stock of the region’s economic
performance to date.




We found that the East Midlands’ economy
is performing well:
• We have a healthy labour market with high levels
  of employment – the employment rate for the East
  Midlands is 75.3%, compared to 74.1% for the UK
  as a whole;
• We have a vibrant economic and business
  environment, which continues to attract companies
  from overseas – the East Midlands is now home to
  over 1,000 overseas companies;
• The productivity gap between the East Midlands
  and the rest of the UK average has closed by
  some 2%.

                                                              Bryan Jackson, Chair
East Midlands Development Agency




This has been a year of significant achievement for emda. We have met or
exceeded all of the targets agreed with Government and set out in our
Corporate Plan and we have created and safeguarded over 8,000 jobs; created
over 2,000 new businesses; and have helped over 14,000 people to develop
their skills.




Chief Executive’s review

A full account of our performance against targets can be       Midlands. It has been a very busy first year for EMT,
found on page 11 of this report. This report also highlights   leading to a number of successful promotional campaigns
a number of other notable achievements across the whole        that highlight our region’s best assets such as the Peak
length and breadth of our activities. It is also good to see   District and our excellence in food and drink, as well as
that in this increasingly competitive environment the          investing in historic destinations such as Foxton Locks
East Midlands continues to successfully attract overseas       and Naseby Battlefield.
investment. Last year we helped 45 overseas companies to           Focus on the development of sustainable communities
invest or re-invest in the region, creating and safeguarding   has continued, as our Urban Regeneration Companies
3,480 jobs, including Japanese-owned FIUK, who opened          have moved from their master planning stages to starting
a manufacturing facility at Dove Valley, South Derbyshire,     to regenerate key areas of our towns and cities. In
employing 300 highly skilled people.                           Leicester, work has started to build over 9,000 square
    emda’s key role is to be the ‘catalyst for change’;        metres of office space and 40 apartments on the site of
bringing partners together to maximum effect to support        the former Charles Street Police Station and in Corby the
our shared ambition. A great example of this is East           £46M Parkland Gateway project, to transform the town
Midlands Tourism (EMT), charged, for the first time, to        centre, received approval from Government.
lead the clear and focused development of our region’s             We have also continued to attract national and
tourism industry and raise the profile of the East             international attention for our ground-breaking work.
                                                               Working with blueprint, the region’s innovative vehicle,
                                                               we have brought together the public and private sectors
                                                               to stimulate sustainable regeneration in the East Midlands.
                                                               Together with English Partnerships and a private investor,
                                                               we have joined forces to create a fund with assets of up
                                                               to £100M to kick-start regeneration in urban areas. At
                                                               the former Avenue Coking Works near Chesterfield – one
                                                               of the most contaminated sites in Europe – we are using
                                                               the latest remedial technology to make land fit for
                                                               development. Around 600,000 cubic metres of hazardous
                                                               waste will be treated for re-use on site, using the largest
                                                               application of sustainable technologies in the UK. The
                                                               site is a best practice demonstrator and visitors from all
                                                               over the world come to see the progress being made.
                                                                   However it is vital that we do not rest on our laurels.
                                                               We need to continue with our efforts to create the right
                                                               climate for our businesses to grow and prosper; and build
                                                               on our achievements to date. An important task for emda
                                                               this year has been to develop a strong, clear vision for the
                                                               future of the Business Link service in the region. From
                                                               April 2007 we will move to a regional delivery model that
                                                               will improve service to our customers and the region’s
                                                               businesses and deliver much better value for money.
Jeffrey P. Moore, Chief Executive
Annual Report and Accounts 2005-2006                                                               6|




                                                               Brook Park, Shirebrook




Over the course of this coming year, we will work with
East Midlands Business Ltd, our preferred provider, to
ensure a smooth transition, whilst at the same time
                                                               emda’s key role is to be
continuing to ensure the strong performance of the             the ‘catalyst for change’;
current Business Link operators in our region.
    This transformation of Business Link is a key              bringing partners together
component of our Business Support Strategy, launched
in March 2005. Over the past year we have also piloted a       to maximum effect to support
number of new business support programmes to increase
the number of businesses in the region by stimulating an
                                                               our shared ambition.
enterprise culture; and to increase the growth and             Jeffrey P. Moore, Chief Executive
profitability of our existing businesses by increasing
support for innovation and skills development. 20
companies with excellent growth potential are about to
embark on a high-growth coaching pilot; and a Universal
Start-up Offer will provide further specialist best practice
support to new businesses. This pilot programme will
link with our successful New Business New Life
campaign, which will be extended to include a number of
sub-regional road shows aimed at encouraging enterprise
in different target groups.
    Enterprise culture was further encouraged across the
region during Enterprise Week in November, which saw
over 17,000 young people attend 143 events.
    Of course, our excellent performance also relies
on the commitment of our many partners who play a
critical role in delivering results. No more so than our
Sub-regional Strategic Partnerships (SSPs), key agents
of economic development. With strong, business-led
boards, they translate the aims of the Regional
Economic Strategy into delivery at the local level. Last
year we reviewed their operation, moving their
administration into a shared resource centre, enabling
SSPs to concentrate much more on their role as project
developers and strategic leaders in the sub-regions.
    We all share a common aim to improve the prosperity
of our region. As we look ahead to what will no doubt be
another demanding year that will bring new challenges,
I am positive that together with our partners we can
achieve this ambition.
East Midlands Development Agency




Centre for Technology Excellence, Edwinstowe, Nottinghamshire
Annual Report and Accounts 2005-2006                     8|




                               1
                                 Management commentary
East Midlands Development Agency




East Midlands Development Agency (emda) was established under the
provisions of the Regional Development Agencies Act 1998 and came into
existence on 14th December 1998. The Agency became fully operational on
1st April 1999.




Introduction

Our vision for the East Midlands is to become a leading
region in Europe. Together with our partners and stake-
holders, we aim to drive competition whilst ensuring
we maintain a strong focus on the development of
sustainable communities.
   In order to achieve this, our 2005-2008 Corporate
Plan sets out our commitment to:

1. Allocate funding to deliver a balanced agenda
   across the three key drivers of the Regional
   Economic Strategy: Employment, Learning and
   Skills; Enterprise and Innovation; and Climate for
   Investment;
2. Ensure that the economic diversity within the East
   Midlands region is reflected, through the allocation
   of a significant part of funding for spending at
   sub-regional level through Sub-regional Strategic
   Partnerships;
3. Manage delivery at a regional level by adopting
   the strands of activity identified in the Regional
   Economic Strategy as the basis for allocating          Leicester
   resources.

The Corporate Plan shows how we will contribute to        The Strategy highlights three
the Regional Economic Strategy, Destination 2010.
    The Strategy highlights three central drivers of      central drivers of economic success
economic success – Employment Learning and Skills,        – Employment Learning and Skills,
Enterprise and Innovation and Climate for Investment
– together with 12 supporting strands and their           Enterprise and Innovation and
associated objectives. This report explains how we have   Climate for Investment – together
worked with our partners to deliver activities against
                                                          with 12 supporting strands and
these drivers.
    Other advancements include the excellent progress     their associated objectives.
we’ve made towards developing the Sub-regional
Strategic Partnerships; our broader role in economic
policy development; and our continued work towards
the development of a third Regional Economic Strategy.
Annual Report and Accounts 2005-2006                                                                         10 | 11




                                                            Port of Boston, Lincolnshire




Financial review

Outputs performance

 Target                                                                                Achieved     Target range for
                                                                                      2005-2006          2005-2006

 1	 Job	creation:	The number of jobs created or safeguarded                                 8,193     5,184 - 7,014


 2	 Employment	support: The number of people assisted to get a job                          4,260    1,388 - 2,313


    B
 3	 	 usiness	creation: The number of new businesses created and                            2,208     1,621 - 2,431
    surviving 12 months, and businesses attracted to the region

 4	 Business	support: The number of businesses assisted in improving                        7,869     2,684 - 4,026
    their performance

 4a The number of businesses within the region engaged in new collaborations                 400          248 - 414
    with the UK knowledge base (HE / business collaboration projects)

 5	 Regeneration:	Public and private regeneration infrastructure                              88       62.6 - 104.4
    investment levered (£M)

    Percentage of which is private                                                          89%        58% - 82%


 5a Hectares of brownfield land remediated                                                   107           98 - 163


    S
 6	 	 kills: The number of people assisted in their skills development                     14,562   8,000 - 12,000
    as a result of RDA programmes

 6a The number of adults gaining basic skills that count towards                             650          321 - 534
    the Skills PSA Target as part of the Skills for Life strategy

 6b The number of adults in the workforce we have helped achieve                             701        641 - 1,069
    at least a full Level 2 qualification or equivalent
East Midlands Development Agency




Funding
emda is primarily funded through the Department of Trade and Industry (DTI) under the Single Programme, which
replaced the many different funding streams previously received from Government when emda was first established
in 1999. Performance against our Corporate Plan is summarised below:

                                       Corporate Plan 2005-2006 (£M)    Actual 2005-2006 (£M)    Difference 2005-2006 (£M)
 Single	programme	expenditure	
 Regional expenditure                                           74.0                     83.9                          9.9
 Single Regeneration Budget                                     14.0                     11.3                         (2.7)
 Sub-regional Strategic Partnerships                            54.6                     57.0                          2.4
 Total	programme	expenditure	                                  142.6	                   152.2	                         9.6
 Other	costs	
 Administration – Single Programme                              15.4                     15.0                         (0.4)
 Non cash costs                                                 10.0                      6.8                         (3.2)
 Total	other	costs                                              25.4                     21.8                         (3.6)
 Total	expenditure	                                            168.0	                   174.0	                         6.0
 Income:	
 Single Programme Grant                                        156.0                    163.7                          7.7
 Receipts                                                       12.0                     12.7                          0.7
 Total	income	                                                 168.0	                   176.4	                         8.4

    The Single Programme Grant of £163.7M included funds carried forward from 2004-2005 and the repayment of
loans made to other RDAs. £3.2M of the allocation remained unutilised as a result of lower than anticipated write
downs against Coal Sites and will be carried forward to 2006-2007.
    In addition to the single programme funding a further £10.5M was invested through the Coalfields Programme
via English Partnerships, whilst £9.1M of European grant funding was also deployed. A total of £40.8M of other
funding was utilised during the year.

                                              Single Programme (£M)               Other (£M)          Total 2005-2006 (£M)
 Total	expenditure	                                            174.0	                    40.8	                       214.8
 Total	other	income	received	                                  176.4	                    38.9	                       215.3

Key drivers
We committed to allocate our programme funding across the three key drivers of the Regional Economic Strategy,
Destination 2010. The table below shows the split of single programme funding for 2005-2006 in line with the
Corporate Plan commitment.

                                                                               Corporate Plan                      Actual
 Climate for investment                                                                  37%                          37%
 Employment, learning and skills                                                         18%                          18%
 Enterprise and innovation                                                               45%                          45%
Annual Report and Accounts 2005-2006                                                                           12 | 1




The Priory Centre, Lincoln                                Belgrave Road, Leicester




Sub-regional funding
The Corporate Plan committed to allocate a significant part of total programme spend for deployment
sub-regionally; and in 2005-2006 this amounted to £68M (45% of the total) which comprised funding allocated to
Sub-regional Strategic Partnerships and the Single Regeneration Budget (SRB).

Regional expenditure
The twelve strands of the RES were used as the basis for planning and managing the Agency’s activity. Regional
programme spend was allocated between these strands:

                                                                  Corporate Plan               Actual      Difference
                                                                  2005-2006 (£M)       2005-2006 (£M) 2005-2006 (£M)
 Strand	
 Business support                                                              33.3              33.2            (0.1)
 Economic growth, energy and the environment                                    2.6               2.6             0.0
 Employment, learning and skills                                                3.6               4.8             1.2
 Enterprising communities                                                       2.8               3.1             0.3
 ICT                                                                            0.6               0.3            (0.3)
 International trade and inward investment                                      3.0               3.1             0.1
 Rural development                                                              2.0               2.2             0.2
 Site provision and development                                                10.8              18.6             7.8
 Strategic programme activity                                                   1.0               1.6             0.6
 Tourism, culture and sport                                                     6.0               5.8            (0.2)
 Transport and planning                                                         0.2               0.2             0.0
 Urban regeneration                                                             8.1               8.4             0.3
 Total	regional	expenditure	                                                   74.0	             83.9	            9.9


Efficiency
RDAs were tasked with delivering 2.5% efficiency savings for 2005-2006. For emda that translated into a savings
target of £2.98M. As a result of an excellent outputs performance and a number of efficiency programmes, which
were successfully implemented in 2005-2006, emda has delivered £4.05M of savings, an increase of £1.07M against
the target set.
    The Corporate Plan 2005-2008 sets out the targets against which emda’s performance is measured. A detailed
assessment of emda’s performance against the targets is included in its 2005-2006 Annual Performance Report which
is available at www.emda.org.uk.
East Midlands Development Agency




Inland Revenue, Nottingham
Annual Report and Accounts 2005-2006                                                                            14 | 15




                                                                Systems Engineering Innovation Centre (SEIC),
                                                                Loughborough, Leicestershire



Economic context 2005-2006

Overall economic performance in the UK in 2005 was                  In terms of employment in the region, the East
somewhat weaker than expected, with growth easing               Midlands has historically performed significantly better
back to 1.8%, which was lower than in 2004 and falls            than the UK average. The latest annual data, for 2004,
below the long term trend. This decline in growth was           suggests that the region’s labour market has continued
driven by the increase in energy costs and a slow-down          its strong performance. The employment rate in the
in consumer spending, which had driven much of the              region was 75.4% of the working age population,
growth in the UK in recent years whilst other European          compared to 74.2% in the UK overall. The East Midlands
countries had experienced periods of recession. However,        is the only region out of the five northern and midlands
despite the weaker performance in 2005, the UK economy          regions to exceed the national average. Similarly,
continues to outperform its European competitors.               unemployment is comparatively low, at 4.3% of
    Against this picture of weaker national performance,        economically active adults in 2004, compared to 4.9% in
the economy of the East Midlands performed relatively           the UK overall.2
strongly, and grew at an estimated 2.5% in 2005. Our
forecasts for the next decade suggest that the UK will
grow by an average of around 2.6% per year, and that
the East Midlands will be closely in line with this.1
However, the East Midlands remains behind the south
of the country in terms of output per head. In 2004, the
latest year for which data is available, the East Midlands
was 91.5% of the UK average.




                                                                Our forecasts for the next decade
                                                                suggest that the UK will grow by
                                                                an average of around 2.6% per
                                                                year, and that the East Midlands
1
2
    emda / Experian, ‘Scenario Impact Model’, 2006
    ONS Crown Copyright, ‘Annual Population Survey’,
                                                                will be closely in line with this.
    January 2004-December 2004, from NOMIS, 19th April, 2006.
East Midlands Development Agency




East Midlands Development Agency
Annual Report and Accounts 2005-2006                     16 | 1




                                 2
                                Strategic programme activity
                                and progress against the
                                12 strands of the Regional
                                Economic Strategy:
                                Destination 2010
East Midlands Development Agency




Strategic programme activity underpins our activities in regional strategic
leadership, evidence-based policy making, influencing, advocacy and
effective communication.
In May 2005 we launched a programme to develop the region’s third Regional
Economic Strategy (RES). This builds on the success of Prosperity through
People published in 1999 and Destination 2010, published in 2003.




Derby City Centre
Annual Report and Accounts 2005-2006                                                                         18 | 1




                                                            The Peepul Centre, Leicester




Strategic Programme Activity

The Regional Economic Strategy                              Evaluation
The Strategy aims to promote common goals and               May 2005 saw the start of our three-year evaluation
priorities for regional economic development to ensure      programme covering the period 1999 to date. The
a greater strategic focus and co-ordination of activity.    programme has been structured in line with the 12
The vision of the new RES is to create a flourishing        thematic strands of the Destination 2010 RES and its
region with growing and innovative businesses, skilled      objectives are as follows:
people in good quality jobs, participating in healthy,      • To provide evidence on the extent to which
inclusive communities and living in thriving and              programme activities under each strand of the RES
attractive places.                                            have been effective and efficient and whether
    We are responsible for drafting a RES that galvanises     expected outputs and outcomes (effects) have been
regional support. To achieve this we have undertaken          achieved; and to identify the secondary and tertiary
the most extensive consultation process to date,              impacts of these interventions;
engaging in direct dialogue with over 1,400 stakeholders.   • To provide evidence of how and why the particular
We also held three formal consultations, and received         activities and interventions we’ve pursued under
over 495 written responses from public, private and           each strand are working, or failing to work, to
voluntary sector partners. This consultation process was      inform the development of future policy and
supported by a high-profile marketing campaign based          programmes;
around the ‘have your say’ concept – this included a        • To articulate, examine and assess our strategic
bespoke website (www.haveyoursay.co.uk), a series of          added value.
regional road shows and an extensive advertising
campaign. This was the first time a region had used
advertising to promote the development of a Regional        Sustainable development
Economic Strategy and the high number of hits to the        One of our statutory functions is to contribute to
website (over 20,000), together with positive feedback      sustainable development in the East Midlands. In
shows the approach was a hugely successful one.             April 2005, Government published a revised national
    To produce a RES based on sound evidence, we            strategy: Securing the Future. This strategy provides the
developed the most comprehensive evidence base ever         context for which sustainable development is delivered
produced in the region. This consists of a quantitative     in the region.
data report and a compendium of ‘policy think pieces’           Our functions in relation to sustainable development
commissioned from a range of independent experts. To        cut across our strategic and investment roles. We are
measure the success of the Strategy we developed a          members of the East Midlands’ Regional Assembly’s
comprehensive performance management framework.             Promoting Sustainable Development Group and other
Central to this is our new, groundbreaking, Regional        groups relevant to sustainable development: climate
Index of Sustainable Economic Wellbeing, or R-ISEW,         change; energy; and waste. We have worked with the
developed in conjunction with the University of Surrey      Assembly and other regional partners in developing
and the New Economics Foundation. The R-ISEW                regional Waste and Energy Strategies resulting in
adjusts the region’s economic performance by a number       specific responsibilities for emda to deliver. We have
of factors relating to wellbeing, quality of life and the   also been a key partner in contributing to, and reviewing
environment. Following endorsement by Government,           the work of, the Sustainable Development Commission
the RES will be published in July 2006 alongside the        in relation to a review into the way that sustainable
final evidence base.                                        development is delivered in the English regions.
East Midlands Development Agency




Business Link




    In addition, through the RES development process           order to reinforce key messages around flexibility,
as described above, we have fully integrated the               simplification and engagement of the regions in the
aspirations of Securing the Future within the regional         early stages of policy development.
context. Embodied in the Regional Index of Sustainable
Economic Wellbeing (R-ISEW) the RES outlines how               Business Champions
the region’s development will be progressed, taking            This year has seen the continued development of the
into account economic, social and environmental                Business Champions’ initiative – the 500-strong group of
considerations.                                                volunteers has pledged to support the region’s economic
    In terms of funding for sustainable development, this      development and continue to make a significant impact
cuts across the range of programme activities detailed in      on the activities of the organisations and the businesses
this annual report. Examples of projects featured and          they support. Their contribution has been recognised, in
which contribute to sustainable development include:           part, through the annual Championing Change Awards.
• Supplier Diversity East Midlands (pg. 21)                    In 2005-2006, active recruitment has led to a steady
• Social enterprise (pg. 23)                                   increase in Champions from previously under-represented
• Programme for Implementing Resource                          groups (including women and ethnic minorities) and
  Efficiency (pg. 30)                                          certain parts of the region (in particular from Lincolnshire,
• Energy (pg. 30)                                              Northamptonshire, North Nottinghamshire and North
• Environmental improvements (pg. 30)                          Derbyshire).
• blueprint (pg. 39)                                               One of our priorities for 2005-2006 was to equip
                                                               Champions to act as ambassadors for the region. This
The East Midlands European Office (EMEO)                       included seeking opportunities to promote the region
Located in Brussels, the Office is managed by emda on          via inward investment, outward trade, tourism, sport
behalf of a wider regional partnership and this year has       and cultural activities and interests. Champions were
moved towards a more streamlined regional management           also involved in working with academia to stimulate
and funding model. Moving forward, these changes will          knowledge transfer between universities and business.
allow the Office to support key regional strategies and        Elsewhere, Champions have continued to provide
initiatives, as well as providing an effective and efficient   support by encouraging young people in work and
service to individual partners. The Office has continued       enterprise, supporting new and growing businesses, and
to support us in promoting our key regional strengths to       stimulating sustainability and social enterprise.
European Institutions and other European regions.
This has included work to enhance relationships with
the region’s MEPs, hosting secondees from the new
Member States, and participating in a number of
pan-European networks and events. In November 2005
the Office hosted the high-profile and hugely successful
‘English Regions Delivering Jobs and Growth’ event,
organised by emda on behalf of the RDAs and the
Regional Assemblies nationally. The event was targeted
at decision makers and political contacts in Brussels in
Annual Report and Accounts 2005-2006                                                                          20 | 21




We aim to improve the region’s productivity in two ways: firstly, by
increasing the quantity and quality of new businesses starting up, and
secondly, by helping existing businesses implement best practice and
overcome barriers to growth.




Enterprise and business support

Enterprise                                                   Business support
To sustain growth in the long term we need to continue       In 2005-2006 we launched our Business Support Strategy,
to nurture a flourishing enterprise culture in the East      setting out the vision for business support in the region
Midlands. This area of work aims to encourage a thriving     for 2005-2008. A series of key actions were proposed:
business climate, giving people from all backgrounds the     • Business Link transformation;
confidence to start up new businesses and encouraging        • Piloting new business support programmes
enterprising activity in existing businesses.                  including Universal Start-Up Offer, Mentoring
    Enterprise Week 2005, a showcase of young entre-           Escalator and High Growth Coaching;
preneurs and entrepreneurial skills in the region, took      • Supporting SMEs to innovate and raise development
place in November. Events were attended by 17,555              funding.
young people – a five-fold increase over 2004. Significant
support from regional partners, including the Prince’s           The transformation of the region’s Business Links
Trust, Business Link, Education Business Partnerships,       has progressed well over the past year. We tendered to
Young Enterprise and the Learning & Skills Council,          appoint a single regional Business Link from April 2007
helped make the week a success.                              onwards, supported by a separate Regional Business
    In November 2005 emda launched the consultation          Support Information System. It is projected that the new
process for Women’s Enterprise 2020. This led to the         arrangements will reduce back-office costs and allow
production, in March 2006, of an Action Plan focusing        greater resource for business advisors working at the
on delivering greater support to women in enterprise.        frontline with businesses.
This year, we also received news that emda had been
awarded funding to roll out a range of activities under
the SBS-sponsored Women’s Enterprise Unit Pilot.
    The Prince’s Trust Development Programme began
in March 2005 and over the next four years will provide      The Prince’s Trust Development
£7.8M to help young people from more deprived areas          Programme began in March 2005
of the region start up their own businesses. The only
regional project of its kind, it has so far created 31 new   and over the next four years will
businesses and 59 new jobs.                                  provide £7.8M to help young people
    Supplier Diversity East Midlands (SDEM) is an
emda-funded pilot programme aiming to maximise               from more deprived areas of the
supply-chain opportunities for ethnic-minority busin-        region start up their own businesses.
esses. The first such project in the UK, the programme
has won the support of companies including IBM,
PepsiCo, British Telecom and the Environment Agency.
We set ourselves the ambitious target of achieving £1.5M
of business opportunities, and we are well on course to
make this happen. By the end of 2005-2006, £1M worth
of contracts had already been won, and SDEM has
identified £23M of opportunities over the next two years.
East Midlands Development Agency




    The Business Link Operators responded to an 18%               Other regions have also committed to implementing the
decline in funding from all sources by increasing                 Framework from 2006.
efficiency measures, limiting their fall in performance               On 1 April 2005, we took on responsibility for the
to four percentage points. Hence, they achieved                   delivery of the Department of Trade and Industry’s
their annual targets both as a region and individually.           (DTI) Grant for Research and Development. The
Customer Satisfaction remains strong with a regional              scheme has been remodelled, resulting in the creation of
score of 92%.                                                     a funding package totalling £7.5M over three years.
    The Universal Start Up Offer (USO) was established            Between August 2005 and March 2006 we awarded 27
to provide a consistent, effective start-up service under         grants totalling £2.1M.
the Business Link brand, and to support the region’s target           In March 2006 we launched our regional Investment
of establishing 34,000 new business starts by 2008.               Readiness programme. Building on a successful pilot
    In the 2005 Budget we were tasked with developing             project, Connect InvoRed is a £2.3M programme to help
a national High Growth Coaching Framework, to                     600 East Midlands businesses to raise at least £25M to
provide growing companies with an intensive assistance            finance growth.
package. Our own regional scheme, the High Growth                     Good progress is also being made on all three of the
Company Programme, is now available to support                    European Funding programmes. In 2005-2006 we
companies with a turnover of £5-10M, with the potential           funded 72 projects, creating 896 new jobs and 22 science
to increase sales by at least 20% per annum. The value of         and technology spin out companies and developing 21
participation is estimated at £40,000 per company.                new environmental products.




Environmental Technology Centre at the University of Nottingham
Annual Report and Accounts 2005-2006                                                                             22 | 2




                                                              Hill Holt Wood, Lincolnshire




Enterprising communities

To address the economic issues of social exclusion and            SEEM manages, on our behalf, a £2M grant
community regeneration, we have focused on addressing         programme known as the Social Enterprise Development
economic disadvantage, equality of opportunity and            Fund, launched in October 2003 and scheduled to end
local sustainability.                                         in September 2006. The interim findings of the
                                                              independent evaluation show that 38 jobs have already
Local Enterprise Growth Initiative (LEGI)                     been created with forecasts projecting a further 129 by
LEGI was created to advance economic and enterprise           the end of 2006-2007 – exceeding the contracted target
development in disadvantaged areas and is managed in          by 100%. In addition, 33 new social enterprises have
the region by the Government Office for the East              been created by the scheme. SEEM has now made a
Midlands (GOEM). We have worked with regional                 total of 70 awards to emerging and established social
partners to ensure LEGI aligns with regional economic         enterprises from across the region, focusing on feasibility
priorities. Only the most disadvantaged areas, known as       studies, creating new social enterprises, building the
Neighbourhood Renewal Areas, can apply for LEGI               asset base, increasing employment, and improving
funds. There are seven in the East Midlands: in Ashfield,     business performance. Examples of social enterprises,
Bolsover, Mansfield, Leicester, Nottingham, Derby and         which have benefited include:
Lincoln. In November 2005 three bids were submitted           • Hill Holt Wood: a 14-hectare self-sustaining
for funding: one from the three cities (Derby, Leicester        woodland in Lincolnshire and a valuable community
and Nottingham); one from the Coalfield areas and one           leisure resource;
from Lincoln. The Government announced that the               • Aqoon Community Education and Training Services:
Coalfield bid was successful in March 2006 and awarded          a new social enterprise providing dedicated basic
the project £3.8M in funding over the next three years.         skills support to young people and adults from the
A second round of funding will be launched in summer            Somali community in Leicester;
2006 and, together with our Sub-regional Strategic            • Unique Scrap Store: a new social enterprise
Partnerships (SSPs), we will be working closely with the        employing young ex-offenders, which makes scrap
three cities and Lincoln to develop stronger proposals.         and art materials available to schools and comm-
                                                                unity groups.
Social enterprise
We continue to support the work of Social Enterprise          Single Regeneration Budget
East Midlands (SEEM) and other partners to drive              The Single Regeneration Budget (SRB) programme was
forward the social enterprise agenda. Social enterprises      established in 1995 to spearhead regeneration through a
are businesses which trade for an explicit social purpose,    local partnership approach. Although the last round of
with all profits reinvested back into the business (and the   SRB was awarded in 2000, the long-term nature of the
community they serve), rather than distributed to             programme ensures that a considerable amount of
shareholders. They are important for several reasons:         activity is still being delivered through SRB partnerships
they address market failures in disadvantaged areas; they     across the region. Over £11M was spent in 2005-2006
support groups excluded from mainstream society; they         across 12 separate schemes, tackling projects across the
provide new and innovative ways of delivering public          economic and community development spectrum and
services and they create new wealth and employment            delivering outputs that have contributed towards
opportunities in local communities.                           achieving our core targets.
East Midlands Development Agency




The University of Derby, Buxton, Derbyshire
Annual Report and Accounts 2005-2006                                                                            24 | 25




As forecasts suggest that 80% of the workforce needed for 2012 is already in
work today, and as employment rates in the East Midlands continue to
significantly exceed the national average, the priority for the region is to ensure
that it continues to up-skill and re-skill those who are in employment, so that
businesses can be creative, innovative and successful.




Employment, learning and skills

Employment, Skills and Productivity                              We have supported the development of the new
Partnership (esp)                                            School of Veterinary Science at The University of
The Regional Skills Partnership, known in the East           Nottingham. This is the first such school in the UK for
Midlands as the ‘Employment, Skills and Productivity         over 50 years. It will provide a major centre of education,
Partnership’ (esp), was officially launched in June 2005     training and research in veterinary sciences and will
with the vision of getting more people into better jobs in   create a regional, national and international focus for
better businesses. We take a lead role in the Partnership,   research. Similar support has also been given to the
working alongside the Learning & Skills Council (LSC),       development of a veterinary nursing facility at
Jobcentre Plus, Government Office for the East Midlands      Nottingham Trent University.
(GOEM), the Skills for Business Network, and the
Higher Education Funding Council for England                 The Mature Workforce
(HEFCE) to deliver a single strategy. This year Phil         We have always taken a lead role in developing a mature
Hope, Under Secretary of State for Skills, acknowledged      workforce agenda, as was reflected in the House of
the strong sense of partnership in the East Midlands. He     Commons report, Welfare to work: tackling the barriers
was particularly interested in the way the partnership       to the employment of older people. The Mature
was developing the esp Performance Management                Workforce initiative is a key element of the esp and also
Framework, how partners were aligning their research         supports the National Department for Work and
and how emda and the LSC had aligned their brokerage         Pensions (DWP) Age Positive campaign. Our project
tendering process. The esp has a good foundation from        has proved highly effective in developing a support
which to make progress, enhanced by the appointment          programme for over 45s and identifying employers to
of an esp Director.                                          pilot more flexible working arrangements of people
                                                             nearing retirement age.
Graduate skills and Higher Education
We continued to demonstrate our commitment to                Skills redeployment
retaining higher-level skills in the region by supporting    In 2005-2006 we invested £1.8M to support the
the ‘graddtobusiness’ initiative: a project which aims to    development of the Midlands Engineering Industries
promote all regional student and graduate employment         Redeployment Group (MEIRG), enabling the project
and placement programmes via one website. A total of         to lever in an additional £1.3M of European Union
17 programmes are currently being promoted through           EQUAL funding. The project enables engineering
www.graddtobusiness.org.uk. Our well-established ‘Get        businesses from across the Midlands to redeploy
on with Graduates’ programme, which in the past year         members of staff who are at risk of redundancy. The
alone has helped over 300 graduates find employment          project attracted significant Government interest prior
within regional SMEs, is an integral part of this and is     to the announcement of redundancies at MG Rover and
now promoted through the graddtobusiness website.            additional monies were sought by MEIRG to redeploy
    Our working in partnership with higher and further       MG Rover workers and engineering employees across
education and businesses has resulted in the development     the Midlands.
of a range of foundation degrees, designed to meet the
region’s need for more people with high-level vocational
qualifications. HEFCE also awarded additional student
numbers to support the delivery of these regionally
important courses.
East Midlands Development Agency




In order for East Midlands businesses to remain competitive in the global
marketplace they must increase their commitment to becoming more
innovative. Our work in this area has focused on helping businesses move
away from a position where they compete on lowest market price and towards
one where their goods and services are in demand because they are innovative,
unique and of higher quality than those of their competitors.



Innovation

National Technology Programme                               UK EU Council Presidency
The DTI’s National Technology Programme is a major          In December 2005 we sponsored the third annual
component of the Government’s 10-year Science and           ‘Manufuture’ European manufacturing conference, held
Innovation Investment Framework. The Technology             at Rolls Royce, Derby and attended by over 350 delegates
Programme provides £370M over the next three years to       from industry and research institutes.
support innovation in business. emda and the DTI jointly
hosted an Information Day in December 2005, informing       Innovation East Midlands
100 innovators from business of both the Programme          This year the region’s science and industry council,
and the opportunity to take advantage of the available      Innovation East Midlands (InnEM), has focused on two
funding. In the autumn 2005 Technology Call over £63M       major activities: developing the Regional Innovation
was available to UK businesses. To date East Midlands       Strategy and Action Plan and reviewing projects seeking
businesses have been awarded £33M in total, which           funding from our innovation strand.
equates to an impressive 10% of all funding.                    InnEM has been advising on our innovation
    The East Midlands is the second most successful         investment in light of the emerging innovation strategy
region in terms of funding won, and this year business-     and priorities. To date, it has reviewed six projects with
led consortia, including The University of Nottingham       over £8M of associated funding, including investment to
and Nottingham Trent University, secured £3.5M to           support the Science City Nottingham project.
develop a regional Micro Nano Technology (MNT)
centre. We supported their bid by approving £1.3M
to house the centre at Nottingham’s BioCity. This
groundbreaking facility demonstrates the successful
transfer of research from academia to industry.

Science City, Nottingham
In the March 2005 budget we were pleased to hear that
Nottingham had been designated a Science City
in recognition of its outstanding achievements and
scientific strengths. There are currently only five other
UK Science Cities: York, Newcastle, Manchester, Bristol
and Birmingham.
    Since the announcement, emda, Nottingham City
Council, Innovation East Midlands, the University
of Nottingham, Nottingham Trent University and
Nottingham Development Enterprise have come together
to develop a dynamic vision for the city, highlighting
cutting-edge research and the commercialisation of
scientific excellence.
                                                            Silson Ltd, Northamptonshire
Annual Report and Accounts 2005-2006                                                                           26 | 2




                                                               Critical Pharmaceuticals, BioCity, Nottingham




Sector development: Aerospace
As part of the National Aerospace Technology Strategy,         27 businesses are now engaged
we made a commitment to contribute £6M over the next
five years to support the £100M, five-year Environmentally
                                                               in a training programme to identify
Friendly Engine (EFE) Project, managed by a consortium         existing intellectual capital, develop
of aerospace companies and led by Rolls Royce in Derby.        skills to protect it and realise its true
The technology will benefit the environment and the
GDP of the region, as well as providing high-quality           value moving forward.
manufacturing jobs.

Creative industries
Late August 2005 saw the start of construction work on
a new media and computing centre at the University of
Lincoln’s Brayford Pool Campus. The state-of-the-art
centre will strengthen links between the University and
the business community, while providing a 250-seat
conference auditorium, research and development
facilities, training suites and advanced satellite uplinks.
We are contributing £1.8M towards the £5M cost.

Motorsport
One of the highlights of this year was the launch of an
innovative programme by Motorsport Development
UK. Jointly funded by the DTI, emda, Advantage West
Midlands, East of England Development Agency and
the South East of England Development Agency, the
programme aims to raise awareness of the benefits
of exploiting intellectual capital for commercial gain
via projects like ‘Unlocking Intellectual Capital’.
80 companies attended the initial workshops and
27 businesses are now engaged in a training programme
to identify existing intellectual capital, develop skills to
protect it and realise its true value moving forward.
East Midlands Development Agency




As the global marketplace changes, more and more opportunities are opening
up for East Midlands businesses – from the growth of the Chinese and Indian
economies and other emerging markets, to the technological advances that
are making the region even more accessible to the rest of the world. Our two
priorities have been to ensure that the East Midlands gets the best possible
share of new investment, and that companies in the region have what it takes
to compete effectively in a global market.


International trade and inward investment

Inward investment                                              healthcare roadshow in three locations in Scandinavia,
It has been another record year for inward investment.         establishing links with some 50 Scandinavian companies.
We have helped 45 overseas companies to invest or re-              We have also worked with UKTI to deliver a middle-
invest in the region, beating our target of 32; and, against   market variant on the Passport to Export programme,
a target of 2,400, created or safeguarded 3,480 jobs:          which provides dedicated advisor support and part-
                                                               funding for training and development activities. Through
• Japanese-owned FIUK opened a manufacturing
                                                               this project, which targeted middle-market businesses
  facility at Dove Valley Park in South Derbyshire,
                                                               ready for further internationalisation, 22 companies
  employing 300 highly skilled people. The company
                                                               broke into 41 new overseas markets.
  supplies pressed and welded parts to Toyota on a
  ‘just in time’ basis. This was the largest Japanese              This direct support for businesses has been
  manufacturing investment in to the UK in the last            underpinned by a number of activities to enhance the
  five years;                                                  climate for trade and investment:
• With support from our Investor Development team              • We have been working with stakeholders in the
  and the Manufacturing Advisory Service, 200 existing           region, including UKTI, to identify business
  jobs at Canadian-owned Lawrence Automotive in                  opportunities in China. For example, we sought
  Nottingham were secured, and a further 120 are to              to build on the opening of China’s first foreign-
  be created over the next three years.                          run campus by The University of Nottingham
                                                                 in Ningbo, and on the well-established links
                                                                 Leicestershire has with the Sichuan Province.
International trade                                              Activities are now underway to make the most of
The region’s international trade performance over the            these opportunities;
past year has also been outstanding, increasing by
£2 billion to take the 2005 total for export of goods to       • India has been identified as another priority market
£15.9 billion. The East Midlands is one of only two              for trade and a major Indian market promotion
regions in England to have a balance of payments                 event, Breaking Business Barriers, took place in
surplus. UK Trade & Investment’s (UKTI) regional                 September. Well over 100 businesses attended,
team, operating as emda’s international trade arm, has           participating in workshops to explore aspects of
helped 277 companies to become new exporters and has             trading with India. This was also the first regional
also helped companies to break into 578 new markets.             event of the newly-established East Midlands
    The team has had a targeted approach to the region’s         International Trade Association (EMITA), jointly
strongest sectors. For instance, we joined UKTI and the          funded by emda and UKTI with sponsorship from
Railway Industry Association for an international                Nelsons Solicitors and the Royal Bank of Scotland;
networking event for the rail industry in May, and in          • International students studying in the region can be
January, through the Government Motorsport Unit, we              important ambassadors for the East Midlands, and
worked with several regions and industry partners on a           as part of East Midlands International Connections,
similar event for the Motorsport sector, which is already        in April 2005 we arranged for 30 international
reporting some £700,000 in business secured and                  scholarship students to network with East Midlands
forecast. Also, working in partnership with Medilink,            businesses, exploring how the students could help
regional healthcare companies and UKTI, we ran a                 them develop international trade links.
Annual Report and Accounts 2005-2006                                                                          28 | 2




    Having successfully made the case to the Government      master class. The event allowed regional businesses to
and the UK rail industry for Derby to be the home for the    learn from the 2004 East Midlands International Business
UK Rail Centre, we are now in the process of procuring       Communications Awards winners and covered topics
a site to house the centre as well as local conferencing     such as language training for business; getting value for
and exhibition facilities. This will provide a focal point   money from translation and interpreting; and how to
for international investment and trade promotion,            build an international communications plan.
presenting the whole UK rail industry and providing
facilities for the industry to meet and exchange ideas.
    In April 2005 the Regional Languages Network,
jointly funded by emda, UKTI, the Learning & Skills
Council and the Department for Education and Skills
(DFES), organised an International Communications




Chevening Scholars
East Midlands Development Agency




By working to improve and protect our environment and promote the efficient
use of resources, we are contributing to both the quality of the region’s
communities and the well being of those who live and work in them.




Economic growth, energy and the environment

Programme for Implementing Resource                           for action and future commitments in relation to business
Efficiency (PIRE)                                             performance, economic exploitation and energy capacity.
Resource efficiency is a big issue for business – impacting
on productivity, competitiveness and profitability – and      Environmental improvements
we are investing national and regional resources in this      With our support, a range of environmental schemes and
area to support greater efficiency. With the addition of      improvements to infrastructure have been completed in
national Business Resource Efficiency and Waste               the past twelve months. Examples include:
(BREW) funding we have created an investment pool of
£4M for the three-year period from 2005-2006 to 2007-         • Creswell Crags
2008. In consultation with partners, we launched two            Major infrastructural work has been completed at
commissioning rounds to identify contractors to deliver         this archaeologically important site, including a
projects that will help achieve the aims of both the            new road to divert traffic, lake dredging and the
Regional Waste and Energy Strategies. To date £2M has           creation of new public areas for walkers, cyclists
been contracted, supporting a range of projects including,      and horse riders;
for example, cutting out waste in construction and city       • Industrial estate improvements
office recycling for SMEs.                                      Improvements including better signage and
                                                                security provision have been completed on a
Sustainable buildings                                           number of run-down industrial areas and estates
There are significant opportunities to change the way           across the region;
we build to make better use of natural resources,
reduce running costs and help reduce the region’s             • Derbyshire nature reserves
contribution to climate change. In May, the Royal               A number of environmental improvements have
Institute of Chartered Surveyors (RICS) hosted a                been made to Derbyshire Wildlife Trust sites over
regional awards ceremony at the National Space Centre           the last four years. Eighteen sites have been treated
in Leicester. Two projects which have received our              at a cost of £141,000 (£14,000 this year) and over
support were given awards: the environmentally friendly         20 hectares of land has been improved.
industrial units at Ollerton took a bronze award in the
sustainability category, and the Sherwood Energy Village
won the gold award in the regeneration category. The
latter was also elected the RICS East Midlands Project
of the Year.

Energy
In January, the Government launched a public
consultation into the future of national energy policy.
Our regional response, agreed following an event
attended by 60 regional businesses, has now been
submitted. Feedback from the event will also be used to
influence our future activities with regard to regional
energy policy and investments, as well as our framework
                                                              Conkers, Leicestershire
Annual Report and Accounts 2005-2006                                                                           0 | 1




Investment in sites and businesses is of huge strategic importance for the
region, creating the opportunity for quality employment and redressing the
environmental impact of former industrial uses. Throughout this process we
have applied the highest practical levels of sustainable construction.




Site provision and development

Site development                                            Gainsborough. This scheme will regenerate three
Throughout 2005-2006 we continued to focus on               hectares of brownfield land and listed buildings in a
developing sites in the former coalfield area to create     derelict area of Gainsborough’s town centre, creating
employment opportunities. An excellent example of this      800 jobs and attracting new businesses to the area. The
is the first phase of the £70M B&Q distribution centre      modern office accommodation will be linked to a much-
on the former Manton Colliery, which will create more       improved retail offering and popular housing sites
than 1,000 jobs.                                            adjacent to the river. This project will help promote
    We have also signed and exchanged a funding             Gainsborough as a rural capital, consistent with the
agreement with Thornfield Properties to begin the           principles of the Modernising Rural Delivery project.
restoration of the former Brian Donkin site at
Chesterfield. Work began in February 2006, with             National Coalfields Programme
completion expected by 2009. The site will eventually       On behalf of English Partnerships, we continued to
reclaim 10 hectares of brownfield land and create up to     deliver the National Coalfields Programme. Avenue
400 high-value jobs.                                        Coking Works remains a major focus in the former
    Working with the private sector we have also            coalfield area, and the tenders for the remediation of this
developed three other schemes; one in Mansfield and         site were returned in August 2005. This project is the
two at Sherwood Energy Village. In Mansfield, a derelict    largest application of remedial technologies – processes
factory, close to the town centre, will now provide a       used to convert contaminated waste into material fit
mix of high quality office accommodation and retail         for use – ever undertaken in the UK. It has already
units adjacent to an area of town centre housing. In        attracted considerable interest as an example of best
Sherwood Energy Village we have invested in two             practice in the clean up of difficult locations: 50 members
developments that will increase the availability of high    of the National Society for Clean Air have visited the
quality office provision.                                   site along with senior representatives of the British
    At the end of 2005 we fulfilled our commitment to       Nuclear Group.
support the Parkland Gateway site in Corby, by
contributing £5M to a major scheme that will provide a
range of public and educational services in the centre of
the town. Ultimately, the redevelopment of Corby town
centre is expected to see it doubling in size, attracting
around 50,000 new residents in the next 25 years. We
have also committed over £6M to a project with the
Northamptonshire Partnership to develop the Corby
Business Enterprise Centre. This will bring high-quality,
serviced office accommodation – vital in changing the
nature of the economy and generating high-value jobs in
the town. All these schemes can be seen as part of our
contribution to the delivery of the Milton Keynes South
Midlands (MKSM) growth agenda.
    We also worked closely with Dransfield Properties
to redevelop the former Marshall’s Yard site in
                                                            Sherwood Energy Village, Nottinghamshire
East Midlands Development Agency




Leicester Train Station
Annual Report and Accounts 2005-2006                                                                             2 | 




Transport and planning decisions play a strategic role in supporting the
sustainable economic development of the region, reflecting the region’s
economic priorities and ensuring accessibility of employment and markets.




Transport and planning

Transport                                                      positive comments about the vast majority of applications
The East Midlands’ transport infrastructure has important      and are playing a key role in supporting high-profile
implications for regional and national productivity as         developments across the region. Examples include the
well as the region’s overall economic performance and its      extension of the Eastside site in Nottingham and
attractiveness as a place to live and invest.                  improvements to Corby’s shopping centre.
    We were involved in the Regional Funding Allocation
process and supported the region in identifying and            Housing
agreeing key priorities for regional transport funding for     We have actively contributed to the work of the Regional
the next five years and beyond. We have also contributed       Housing Board (RHB) throughout 2005 and into 2006.
to the national work being led by Sir Rod Eddington            A key element of our support for the RHB was an
for the Treasury and Department for Transport (DfT),           examination of issues relating to low demand for housing
which is examining the links between transport and             in the East Midlands. This identified the links between
economic productivity. In addition, we responded to the        the need for affordable and quality housing and the role
request from DfT to identify potential regional transport      it plays in supporting regeneration and economic
schemes that could be partly funded through the                development. As a result of the study, three areas in
Productivity Transport Innovation Fund (PTIF).                 Mansfield, Derby and Bolsover were recommended by
    Understanding the interaction between land-use and         the Regional Housing Board as pilot projects and will
transport is vital if the appropriate decisions are to be      receive an allocation of £18.5M from the Regional
made at the strategic and large-scale project level. To this   Housing budget over the next two financial years, to
end, we have been supporting the development of a Land         deliver housing developments in each of the pilot areas.
Use and Transport Interaction (LUTI) model. This will              We have part-funded Meden Valley Making Places
explore the impacts of proposed decisions and investments      Ltd (MVMP) as a regeneration company to transform
in the Three Cities sub-area and, when complete, will          abandoned housing in 11 of the Meden Valley’s former
help inform the Regional Spatial Strategy and future           coalfield settlements, with plans now in place for a total
reviews of the Regional Economic Strategy (RES).               of 620 houses to be built and large numbers refurbished
                                                               over the next five years.
Planning
Our key contributions to the regional planning agenda          Smart Growth: The Midlands Way
have two primary purposes: influencing long-term               We are working closely with Advantage West Midlands
strategies, and supporting immediate delivery as a             and other partners to progress the ‘Smart Growth: The
statutory consultee for planning applications.                 Midlands Way’ cross-regional initiative. The objective is
   We have been actively engaged in the review of the          to identify opportunities to help accelerate improvements
Regional Spatial Strategy. Our responses stressed the          in Midlands productivity and growth, and the potential
importance of the links between the region’s future            to add value to the individual regional strategies and
Spatial Strategy and the RES; the crucial issue of             objectives through closer cross-regional activity and
reconciling job growth forecasts with planned housing          collaboration. Work on the current phase of work began
growth figures; and the priority of securing appropriate       in February 2006 to build on existing and new evidence
levels of employment land.                                     and partner representations to inform the development
   Over the year we have responded to 98 planning              of a focused, targeted and deliverable Action Plan, and
applications as a statutory consultee. We have made            will continue into the next financial year.
East Midlands Development Agency




ICT is a critical driver of productivity in business. The ability to engage in
e-commerce activity, whether by trading online or gathering or exchanging
information electronically, is becoming a key element of modern business
practices.




Information and communications technologies (ICT)

ICT and business                                                We also continued to support the First Steps project;
We hosted the first-ever regional Technology and            an ICT business-support programme advising on a
e-Business Expo on 30 November 2005 in Nottingham.          variety of topics including getting on line, using
The Expo brought together ICT experts and suppliers,        broadband, improving websites, trading electronically
and provided technology demonstrations, advisor             and using ICT for the best commercial benefit. The
workshops and a showcase of e-Business and emerging         programme also provides SMEs with grants to help with
technologies, as well as keynote speeches by leading        ICT set-up costs. Half-day workshops have been held
industry specialists Google, Overture BT and Cisco. The     across the region run by independent specialist ICT
key objective of the event was to promote the use of        trainers. Following the success of the pilot the contract
technology, providing practical advice and solutions to a   was extended with 66 workshops, attended by 429
range of problems previously identified by our survey of    SMEs in 2005-2006. Over the three years it has been
East Midlands businesses. The event was very well           running, the project has run 371 workshops supporting
received, with over 500 visitors attending.                 2,397 SMEs.
                                                                Also in 2005 we carried out our third in a series of
                                                            annual e-Adoption Studies looking at how East Midlands
                                                            businesses use technology across their processes. With
                                                            25% of businesses now trading online, the East Midlands
                                                            has exceeded its 2010 target of getting 20% of businesses
                                                            trading online five years ahead. The report can be viewed
                                                            online at www.ebusinessclub.biz
                                                                Aiming to accelerate the adoption of ICT, we have
                                                            produced an ICT Toolkit targeted at policy makers and
                                                            property development practitioners. The Toolkit is the
                                                            result of a joint venture with the East Midlands
                                                            Regional Assembly, with technical work undertaken
                                                            by independent ICT consultancy, the Analysys Mason
                                                            Group. The Toolkit is available as a download on our
                                                            website at www.emda.org.uk
                                                                Finally, we were pleased to support the National
                                                            eCommerce Awards, held to recognise and celebrate
                                                            small companies who have used the internet and ICT to
                                                            improve their business. The six regional category winners
                                                            went through to compete in the National eCommerce
                                                            Awards in London, where Mansfield-based Walkgrove
                                                            Ltd won the National ICT Innovator Award in the
                                                            Health Category.




The Richland Group Ltd, Nottingham
Annual Report and Accounts 2005-2006                                                                              4 | 5




Our goal is to ensure that regional strengths and attractions are recognised and that
tourism businesses in the East Midlands are able to receive the advice and support
they need to flourish.




Tourism, culture and sport

Tourism                                                        Culture and sport
Following the launch of East Midlands Tourism (EMT)            A wide range of cultural and sporting events and
in 2004, new structures for increasing visitor spend in        investment continues to make a significant contribution
the region are now bedding in. EMT’s two key priorities        to both the region’s economy and vitality.
over the last year have been marketing and quality                 We have worked closely with key regional partners,
improvement. In all, EMT supported 32 marketing                including the Arts Council, in developing the regional
campaigns delivering an estimated £18M in visitor              cultural infrastructure. Leicester Performing Arts Centre,
spend. The Peak District and Derbyshire Destination            The Quad in Derby, Northampton’s Royal and Derngate
Management Partnership (DMP) was established, which            Theatre and Nottingham’s Broadway and New Arts
completed a network of fit-for-purpose DMPs across the         Exchange have all received funding during the year as
whole region. EMT also delivered the UK’s first complete       part of an on-going investment programme.
overview of tourism’s economic impact at district, DMP             One of this year’s highlights was the commissioning
and regional level for 2003 and 2004 and, in partnership       and staging of the interactive video artwork installation
with the DMPs, has put a plan in place to improve the          Underscan, which was exhibited in Derby, Leicester,
quality of the region’s tourism offer.                         Lincoln, Northampton and Nottingham. A world first,
    A series of successful marketing campaigns have            this innovative installation attracted some 30,000 visitors
helped raise the region’s profile nationally. Notable          across the five venues and generated positive world-wide
examples include The Taste England campaign, which             media coverage, highlighting the development of the
generated £700,000 of visitor spend from a promotional         region’s cultural quarters and drawing global attention
outlay of £50,000 – a return of 14:1 against a 10:1 forecast   to the East Midlands as a centre of new ideas and
– and a 2005 Peak District campaign focusing on outdoor        innovation.
activities, which generated £5.3M in visitor spend and a           In November 2005 the Department of Culture Media
return of 17:1.                                                and Sport (DCMS) announced the launch of the Creative
    £1.5M was spent on DMP promotional campaigns,              Economies Programme, which will lead to the creation
all with return-on-investment targets. These included          of a revised national strategy to make the UK the creative
tie-ins with major film releases – Pride and Prejudice         hub of the world. Regional Development Agencies are
and The Da Vinci Code – which were filmed in the               taking an active role in this work and we took the lead by
region and feature iconic attractions such as Chatsworth       drafting a shared RDA response.
House, Burghley House, Lincoln Cathedral and
Belvoir Castle. A city breaks campaign focused on
Nottingham, and themed food breaks raised awareness
of Northamptonshire’s and Leicestershire’s local special-
ities. In addition, £1.5M was invested in improving the
visitor experience in attractions such as Stamford and
the Peak District.




                                                               Derby Museum and Art Gallery
East Midlands Development Agency




    Work on the £4M Revive Centre Project in Derby          Midlands could support, contribute to, and benefit from
started this year. Our contribution of £433,000 will        a successful Games.
provide a base to co-locate a range of services including       Our sponsorship of the Tour of Britain was successful
health and social care, child care, business start up and   on two counts: it achieved a positive return on investment
support, recreation, physical activity, culture and         for us and our partners, and it helped raise the region’s
community facilities.                                       profile via considerable media exposure. Research into
    Plans to develop a strategy to ensure that the East     the economic impact of sports tourism in the region
Midlands benefits from the London 2012 Olympic              found that Lincolnshire’s Burghley Horse Trials bring
Games and Paralympic Games were announced at a              £15.6M in visitor expenditure, while the Nottingham
major conference in February. Working with Sport            Open Tennis, British Open Squash and the International
England, we brought businesses, regional partners and       Synchronised Skating Nottingham Cup brought in a
sporting leaders together to hear more of the region’s      total of £1.2M and, collectively, attracted over
plans and ambitions and to look at how the East             160,000 spectators.




Loughborough University, Leicestershire
Annual Report and Accounts 2005-2006                                                                               6 | 




The East Midlands is one of the most rural regions in the country, with 30%
of the population living in rural areas, including villages and small market
towns – 10% more than the national average. The region also contains some
of the most productive farmland in the country, plus a diverse range of rural-
based businesses with the potential to make a significant contribution to the
region’s economic and social wellbeing.



Rural development

Rural strategy                                                 Market towns
This year, much of our rural development activity has          We have continued to champion the importance of market
been driven by major Government rural policy initiatives,      towns across the region and gave our full support to Market
particularly Defra’s 2004 Rural Strategy. This document        Towns Week in early May 2005. Building on 2004’s
sets out a framework for change, bringing additional           successful pilot, Action for Market Towns worked with
areas of responsibility to all RDAs under the title of         our SSPs to organise celebrations in 29 market towns
Modernising Rural Delivery.                                    across the East Midlands.
    The strategy included the transfer of the Countryside
Agency’s rural socio-economic remit and appropriate            Support for rural businesses
budget and staff resources to emda. In April 2005, we took     We have worked closely with local partners on the Welland
responsibility for £2M of additional funding for projects      Business Service Pathfinder project and the results will
tackling access to services, community facilities and          feed into the Government’s Comprehensive Spending
sustainable transport initiatives.                             Review. They will also help form our revised strategy for
                                                               support through Business Link in the East Midlands.
Sustainable transport                                              Our overall support for the rural economy extends
Building on successful pilots, we supported the develop-       far beyond those projects and initiatives outlined by
ment of Wheels to Work schemes, allowing young people          Defra’s strategy. SSPs have been actively working to
in rural areas to access training and employment in the        support small-scale rural community-based projects,
Welland, Northamptonshire and parts of Lincolnshire.           giving specialist business advice for rurally-based
We also funded a regional pilot, to supply mopeds to           enterprises and breathing new life into redundant rural
young people to help them travel to work or gain access to     buildings. We have also given our input to some large-
training facilities.                                           scale projects, such as the development of a new youth
                                                               hostel facility in the National Forest.
Community facilities and services
Central Stations is a joint East and West Midlands project     Migrant workers
that makes redundant station buildings available to            The presence of significant numbers of migrant workers
community groups at a peppercorn rent – the first such         in the region poses issues and opportunities in both rural
partnership in the country to be established between           and urban areas, and in many sectors, including agriculture,
Central Trains, Network Rail and Regional Development          horticulture, food processing, hospitality and tourism.
Agencies. In Leicestershire, we also awarded £180,000 to       emda’s involvement regarding migrant workers started in
improve access to rural services such as pubs, post offices,   2004 when we commissioned a report to assess the impact
village shops, farm shops, specialist butchers and bakers.     of migrant workers on the economy of South Lincolnshire.
We also supported a region-wide grant scheme with ‘Pub         The report showed that they were essential to the economy
is the Hub’ to provide advice and information to pubs          of that part of the region and that action was needed to
wanting to diversify and provide new community facilities.     welcome / integrate migrant workers into the community.
In addition, we funded the first regional rural-cultural       Proposals were developed by local partners, which have
development post to build an understanding of the social       been funded through Lincolnshire Enterprise. This has
and economic importance of culture in rural areas.             included the appointment of two liaison workers
                                                               (themselves from eastern Europe) and a range of activities
                                                               to improve access to services and information.
East Midlands Development Agency




Our urban areas are the powerhouses of the region’s economy. They are key
centres of opportunity and employment, but it is vital that everyone benefits
from these opportunities: and that crime reduction, improved housing,
education and health enhance quality of life for all.




Urban regeneration

Urban Action Plan                                              work on the site, which will see the development of an
This year saw the launch and implementation of the             impressive 9,126 square metres of office space and 40
region’s Urban Action Plan. Supported by partners from         residential apartments. This is a critical first stage in the
the public and private sector, this framework identifies       development of housing in the New Business Quarter –
the key projects to develop in the principal urban areas       essential in the city’s development.
of the East Midlands: activities in the public realm; skills       Enhancing the cultural offer in Leicester, we
and business development; transport issues; land supply;       supported the development of the Performing Arts
and culture, tourism and sport.                                Centre. This is a key part of delivering the Master Plan
    In the context of the Action Plan, we have supported       for the city, supported by Leicester Regeneration
the engagement of City Growth Strategies for both              Company. In Northampton, the growth agenda has
Leicester and Derby. Both strategies have now been             highlighted the importance of a thriving town centre for
published and a close working relationship is being            Northampton to ensure that benefits are accrued from
developed between partners in the two cities, as well as       the expected population growth. This has influenced
with those in Nottingham, to focus on replicating              work in the Borough and County Council to introduce a
Nottingham’s success in implementing an effective city         range of initiatives to help the town develop an improved
growth strategy.                                               retail and leisure offer. As part of this, we have recently
    The Right Honourable David Miliband MP, former             invested in the acquisition of a key site in the town centre,
Minister for Communities and Local Government,                 linked to the investments around The Royal and
visited Nottingham in November 2005 as part of his             Derngate Theatre.
series of city summits. We worked closely with partners            Major private sector investments are now underway
for this event to ensure city development issues for the       in Leicester and Derby to improve the retail offer of
East Midlands were given the prominence they needed.           these cities. Hammersons are leading the Shires
Bryan Jackson chaired a meeting with the ministerial           redevelopment in Leicester, expanding the centre and
team and business leaders to discuss the economic and          bringing John Lewis as a key anchor tenant to the site.
commercial prospects of the city.                              This was one of the key elements of the Leicester
                                                               Regeneration Company Master Plan and links to major
Town and city developments                                     improvement to the public realm in the City which we
Building on previous engagement with the market towns          have financially supported.
initiative, in April 2005 we worked closely with the               In Derby, as part of the Derby Cityscape Masterplan,
Association of Town Centre Management (ATCM) and               the expansion of the Eagle Centre by Westfield will more
hosted a showcase event at Boots in Nottingham to              than double the size of the existing centre. In both
highlight the importance of effective town centre              Leicester and Derby, such expansion will help secure
management. As a result, an ATCM good practice guide           local jobs for local people.
has been developed and a local branch of town centre               Over the last few years Lincoln has been a city of
managers has been created for the East Midlands.               change, having seen the introduction of both the
    Significant work has supported the activities of urban     University of Lincoln and a Civitas-sponsored, enquiry-
regeneration companies across the region. In Leicester,        by-design process (funded by us in 2005), to plan the
supporting the Leicester Regeneration Company, we              future development of the local area. The latter project
purchased the former Charles Street Police Station. The        saw us working closely with Lincoln City Council,
newly appointed developer, Akeler, has now started             the County Council and the Prince’s Foundation.
Annual Report and Accounts 2005-2006                                                             8 | 




This particular approach is influenced by the very
successful development of the Business Improvement
District in Lincoln, where private sector businesses have
come together to improve the area where they do
business. We have given our full support to this initiative
and as the pilot nears the end of its first year, the scheme
will generate £1.5M of private-sector investment over
the next five years.

Regeneration East Midlands
We have continued to contribute core running costs to
Regeneration East Midlands (REM) for the delivery of
activities through East Midlands Funders Forum,
Intelligence East Midlands and Opun (the Architecture
and Built Environment Centre for the East Midlands).
REM continues to provide support to those working in
regeneration, whether public, private or voluntary. They
act as a conduit and central resource, bringing together
the skills and expertise of professionals working in the
sector and providing learning through networking, best
practice, training, funding, support and intelligence.

blueprint
In September 2005 we saw the launch of blueprint. This         Eagle Centre Development, Derby
innovative regeneration partnership between emda,
English Partnerships and Morley Fund Management’s
igloo Regeneration is the first of its kind in the country.
Its objective is to create a fund with assets worth over
£100M from emda assets of £25M, using private-sector
expertise and investment funding and public-sector
influence and knowledge to lift the performance of the
region’s principle urban areas. Already blueprint has
begun preparations for the development of a 12-acre site
next to Nottingham Tennis Centre comprising the second
phase of the Nottingham Science and Technology Park.
East Midlands Development Agency




The region’s network of seven Sub-regional Strategic Partnerships (SSPs)
cover the whole of the East Midlands and bring together businesses, the
public sector, and voluntary and community groups to deliver the Regional
Economic Strategy at a local-community level. Last year, almost £57M of our
funding was allocated to SSP programmes and projects.




Sub-regional Strategic Partnerships

SSPs have continued to lead the strategic economic debate         The Alliance SSP invested £1M in innovative businesses
in their areas and the alignment of their economic            through the roll out of PERA’s Innovation Factory
development priorities with the Local Area Agreements         programme. This increases the availability of broadband
has been a key issue in the year.                             and networking between the sub-region’s Business
     Northamptonshire Partnership announced the               Innovation Centres. The programme also provided tailored
proposed merger of the main economic development              business support for companies hoping to diversify into
agencies in the county, and by the end of the year the SSP,   new areas, resulting in 174 new jobs and 460 businesses
Invest Northamptonshire, Explore Northamptonshire             increasing their use of ICT.
and the County Council’s Economic Development Unit                Leicestershire Economic Partnership’s (LSEP) Support
were co-ordinated through a steering group headed by the      Academy built on our First Steps programme and provided
SSP’s Chairman. The new body, Northamptonshire                grants of around £1,000 to SMEs, providing wireless
Enterprise Limited, will be established during 2006-2007      network connection and three months of technical support
and will deliver the economic agenda of the Local Area        and training. Two events informed 150 businesses about
Agreement as well as playing a significant role in the        the benefits of broadband and 119 of those applied to join
delivery of economic growth associated with MKSM.             the programme, which hopes to get 200 businesses on
     In Lincolnshire, the SSP had significant input in the    board at a total cost of £200,000.
formation of the Lincolnshire Assembly, which held its
first meeting in July. Issues considered included the         Information and communications technology
County’s Community Strategy, the draft Lincolnshire           GNP led an ambitious programme to implement
Economic Strategy, the Regional Spatial Strategy and other    technology and infrastructure improvements in industry,
local issues such as migrant workers.                         commerce, education and communities. One example was
                                                              S Cubed, a project to help knowledge-based companies
SSP review                                                    maximise their take up of innovation through improved
We completed our review of SSPs and introduced some           links with Nottingham’s universities. GNP contributed
important changes by transferring project appraisals,         £119,000 towards total project cost of £219,000, creating
project monitoring and claims administration to one single    25 new jobs and helping 20 businesses increase their use
Shared Resource Centre. This allows the SSPs to devote        of ICT.
more of their time and resource to the development of
projects in their respective sub-regions.                     Physical regeneration
   Below we have highlighted some of the projects the         While the Nottingham tram terminus to Hucknall has
SSPs developed and delivered last year across the full        attracted considerable commercial activity, the town’s
spectrum of economic development:                             market square is visibly run down and detracts from this
                                                              new vibrancy. Through landscaping, planting and
Business support                                              integrated art works, the Hucknall Market Place Project
Following the successful completion of the national           will invest £550,000 to turn the area into a high-quality
New Entrepreneur Scholarship programmes, Greater              public space and a focus for regeneration.
Nottingham Partnership (GNP) revamped the programme               Welland Shoparound measured the existing provision
to focus on people from more deprived areas of the City       of retail services to rural communities and encouraged
who were considering self-employment. GNP’s programme         SMEs to take advantage of services and grants. The
supported the delivery of 15 of a total of 40 scholarships,   project cost £107,000, created 10 jobs and safeguarded a
giving each scholar a £2,000 start-up grant.                  further ten.
Annual Report and Accounts 2005-2006                                                                               40 | 41




    On rural issues, Derby and Derbyshire Economic             Tourism
Partnership (DDEP) agreed to invest £275,000 in the            This was the second year of the Welland’s Quality Tourism
Rural Action Zone (RAZ) in West Derbyshire, which              for All project, which provided grants to allow small rural
included the introduction of a Redundant Rural Building        tourism businesses to raise the quality and accessibility of
Grant Scheme. The project will create over 30 new jobs,        their facilities. In its first year, the project exceeded its
750 square metres of refurbished space and 10 new              forecast outputs, creating 24 jobs and helping 24 businesses
businesses.                                                    achieve accredited tourism standards.
    DDEP’s New Environmental Economy helped                        Leicester’s National Space Centre reported a 30%
businesses develop a new service or product while making       increase in visitor numbers since the LSEP-funded Human
creative use of environmental assets or resources, providing   Space Flight was launched in July. Visitor numbers are
up to £20,000 per project. The total project cost was just     predicted to increase further following the latest stage
over £2M, which included £346,000 from DDEP.                   of development.
     Lincolnshire Enterprise approved a contribution of
£2.6M towards the development of a flagship Innovation
Centre in Lincoln. This will see the creation of a high-
quality, environmentally sustainable building in Brayford
Enterprise Park. The total cost of the project is over £9M
and will create at least 38 new businesses.




Brocks Hill Visitor Centre and Country Park, Leicestershire
East Midlands Development Agency




Northampton Town Centre




Enterprise and innovation                                      Skills
The Turbine, North Nottinghamshire’s latest business           Northamptonshire Partnership invested £200,000 on the
innovation centre, opened for business, offering high          second phase of the East Northants Trades Academy, run
quality, fully serviced workshop and office space for          by Moulton College and modelled on the successful
50 businesses.                                                 Silverstone Trades Academy. SSP funding supported the
    Across the UK the average cost of crime to individual      development of additional teaching rooms, IT facilities,
businesses is £8,000 per annum. Northamptonshire               workshops and a library area, enabling teaching of a wider
Partnership helped support Northamptonshire Action             range of trades to be delivered.
Against Business Crime (NAABC) with an investment of               DDEP invested £381,000 in Fast Track Construction,
£235,000. Around 7,000 companies will benefit from an          a £1.2M public / private sector partnership that enables
anticipated 15% reduction in business crime during the         participants to gain the rapid work experience, skills and
next two years.                                                qualifications needed to succeed in the industry. The
    Erewash Business Crime Reduction helped reduce             project will deliver 216 jobs and training opportunities.
crime levels in businesses around Junction 25 of the M1.
Crime had risen to unacceptable levels and local businesses
had warned DDEP that they would relocate if the situation
was not addressed. By improving security around the site,      Northamptonshire Partnership helped
the £663,000 project safeguarded 406 jobs.
    Welland’s Social Capital Development Project worked        support Northamptonshire Action
with Social Enterprise East Midlands to support enterprises    Against Business Crime (NAABC)
run by voluntary and community groups and generate
income, reducing their dependence on more traditional
                                                               with an investment of £235,000.
forms of funding. 15 jobs, eight new community facilities      Around 7,000 companies will benefit
and 15 new social enterprises came out of the project. The     from an anticipated 15% reduction in
total project cost is £184,000, of which the Welland SSP
contributed £52,000.                                           business crime during the next two years.
    The Women into Enterprise project also received
approval from The Welland SSP, providing customer-
focused and targeted support for women in business. The
project will run for three years at a total cost of £400,000
and will generate 43 jobs and 132 new businesses.
    Lincolnshire Enterprise’s Creative Industries Workspace
provided art studios and a variety of business support
services. The £6M centre will create 18 jobs and accomm-
odate 10 businesses. £1M was invested by the SSP.
Annual Report and Accounts 2005-2006                                                                       42 | 4




Cross-regional activity                                   England. Specifically, the Alliance have helped to draw
Alongside Northamptonshire Partnership, we have           up a Development Programme for Sheffield City Region
continued to support the development of the Milton        (CRDP), which was submitted to Government in May
Keynes South Midlands (MKSM) growth agenda,               2005, looking at how the Sheffield City Region can
working closely with the two neighbouring RDAs –          increase economic output. This includes strategic road
South East of England Development Agency (SEEDA)          and rail improvements, the successful development of
and East of England Development Agency (EEDA) to          Markham Vale (Junction 29a M1) and A61 Corridor
ensure cross-border co-ordination of efforts on the key   developments in Chesterfield.
economic development issues affecting the growth area.        Alliance SSP has continued its involvement in Robin
   The Alliance SSP has been working closely with the     Hood Airport in South Yorkshire by helping the
South Yorkshire Partnership as part of the wider          developer recruit and train local people in on-site non-
Northern Way initiative, in which regions in the north    flying jobs through the Top Flight initiative – a project
have been tasked by central Government to produce a       run by North Nottinghamshire College with £83,000 of
programme of actions to help reduce the £30 billion       SSP funding.
productivity gap between the north and south of




East Midlands road network
East Midlands Development Agency




Operating review
We are committed to being a responsible corporate citizen. We are actively
working to ensure that everything we do takes account of broader social,
environmental and community impacts. This is in terms of our role as an
employer; purchaser of goods and services; and strategic investor.




Governance

The following examples illustrate how we demonstrate     People
corporate responsibility:                                We currently have 247 established posts, 235 of which
• blueprint is a socially and environmentally            are occupied. This is an increase from last year due to
  responsible property investment fund delivering        the additional responsibilities gained over this period,
  quality commercial property for regional businesses    notably in the areas of rural, tourism, innovation and
  which deliver social and environmental best practice   business support.
  in relation to the built environment;
• Supplier	 Diversity	 East	 Midlands is successfully    Investor in people
  creating business opportunities for the region’s       We have been re-recognised as an Investor in People.
  black and minority ethnic businesses with large        The assessor gave very positive feedback on how we had
  multinational corporations like PepsiCo, JP Morgan     met and exceeded the required standards, with great
  Chase bank and IBM;                                    progress made since we received recognition in 2002.
• A suite of projects focused on supporting businesses
  to improve their resource	efficiency (water, energy    Vision and values
  and materials) thereby reducing their impact on the    We have redefined and launched our vision and values,
  environment, reducing costs, boosting productivity     in partnership with our employees, to ensure they reflect
  and preparing for climate change;                      the ethos of the Agency. Our vision is to be the best
                                                         Regional Development Agency in all facets of our work,
• We are committed to realising the opportunities of     exceeding the expectations of employees, partners,
  a diverse and inclusive regional economy. This is      businesses, Government and the people of the East
  reflected in the projects and investments we make      Midlands. This is supported by the following set
  and in the way equality issues are embedded in all     of values:
  strands of our work. In May we launched our
  revised Race	Equality	Scheme in accordance with        •   Respect for colleagues and partners’ diversity
  the requirements of The Race Relations Amendment       •   Excellent performance in everything we do
  Act (2000). This act places a duty on statutory        •   Service to customers
  organisations to demonstrate how they are meeting      •   Professionalism
  their obligations to eliminate unlawful racial         •   Efficiency, effectiveness and economy with resources
  discrimination and ensure equality of opportunity      •   Continuous Improvement
  is actively promoted. Following public consultation    •   Teamwork with colleagues and partners
  the scheme was adopted by our Board in
  September 2005.                                        An extensive process to integrate the vision and values
                                                         within all facets of the operations was initiated.
Annual Report and Accounts 2005-2006                                                    44 | 45




Managing risks
We take responsibility for managing risks and
opportunities using a structured and focused approach
set out in the Risk Management Strategy, which is
updated annually.
The key mechanisms in place to manage risks are:
• Internal audit
  The Internal Audit function has carried out
  reviews of significant risk areas. These reviews are
  carried out in accordance with an Audit Plan
  devised in consultation with the Audit Committee
  and senior emda staff. All audit reports are
  presented to the Audit Committee including
  action plans that highlight areas for improvement.
• External audit
  The Annual Accounts are audited by the National
  Audit Office (NAO). As part of the final audit, a      Chevening Scholars
  management letter is submitted to the Audit
  Committee following the signing of Accounts
  outlining any risk areas which may require
  attention.
• Risk management
  The Executive Team is responsible for monitoring
  and managing risks within the Agency through a
  Risk Register on a continuous basis. The Risk
  Register is reviewed by the Audit Committee each
  quarter and any significant risks are examined by
  the Committee to ensure appropriate actions are
  being taken to mitigate the risk.
• Review of the financial position of the agency
  The Audit Committee receives a report at each          We take responsibility for managing
  meeting outlining the financial position of the
  agency. The Audit Committee reviews the financial
                                                         risks and opportunities using a
  information to gain assurance that the Agency is       structured and focused approach set
  controlling the available funds effectively.           out in the Risk Management Strategy,
The Audit Committee provides a forum for discussion      which is updated annually.
of any risk related issues identified during the year.
East Midlands Development Agency




East Midlands Development Agency
Annual Report and Accounts 2005-2006                   46 | 4




                                3
                                 Remuneration report
East Midlands Development Agency




This report for the year ended 31 March 2006 is produced by the Board on
the recommendation of the Remuneration & HR Committee and deals with
the remuneration of the Chair, Chief Executive, Board Members and Executive
Directors who have influence over the decisions of the Agency as a whole.




Remuneration & HR Committee

Membership
The Membership of the Remuneration Committee consisted of the following Board Members during the
Financial Year.

                                                                           Position         Membership of Committee
 Dr Bryan Jackson OBE                                                       Member                            Full Year
 Dr Ron Whittaker                                                           Member                    Resigned Dec 2005
 Bryan Carr                                                                   Chair                   Resigned Dec 2005
 Jonathan McLeod                                                              Chair                 Appointed Dec 2005
 Valerie Dwyer                                                              Member                            Full Year
 Parvin Ali                                                                 Member                  Appointed Dec 2005



The Remuneration & HR Committee met four times during the course of the year to advise the Chairman of the
Agency on the remuneration of the Chief Executive Officer (CEO) and to advise the CEO on Directors’ remuneration.
The committee was chaired by Bryan Carr until December 2005, and Jonathan McLeod from December 2005.
A minimum of two Board members is required for the committee to have a quorum.

Role of the Committee
The role of the Remuneration & HR Committee is:
• To assist management in the formulation of principles relating to the remuneration package, including benefits,
  for all employees ensuring that the package is sufficient to enable recruitment, motivation and retention of staff
  of the required calibre, with due regard to parameters set by the sponsoring government department;
• To agree amendments to the remuneration package and terms and conditions for the Chief Executive and
  Executive Directors, referencing guidance from the sponsoring body as appropriate;
• To ensure that management introduce and review new procedures and practices taking into account the
  effectiveness and efficiency of staff in the delivery of the Corporate Plan;
• To consider and endorse the implications arising out of re-structuring exercises with due regard to the impact
  on remuneration levels for the Chief Executive and Executive Directors;
• To provide a forum in which employment legislation changes and best practice initiatives can be explored with
  the purpose of assisting the Executive Director of Corporate Services and the HR Director to assess priorities,
  define objectives and measure progress.
Annual Report and Accounts 2005-2006                                                                          48 | 4




                                                             East Midlands Development Agency




Remuneration policy
The remuneration of the Chief Executive Officer is decided by the committee on recommendation from the Chairman
of the Board. Progression through the pay scale is set at a maximum of 5%, plus the appropriate cost of living
increase. There is also a non-consolidated bonus of up to 20% of salary, based on performance against objectives
agreed by the Remuneration & HR Committee and reviewed by the Executive Director of Government Office for the
East Midlands (GOEM). Both elements are ratified by the Secretary of State for Trade and Industry.
    The remuneration of the Executive Directors (including Deputy Chief Executive) is decided by the Remuneration
Committee on recommendation from the Chief Executive. Progression is through emda Director salary scales which
are linked to the Chief Executive’s salary scale. There is also a non-consolidated bonus of up to 10% of salary, based
on performance identified by the Chief Executive Officer in the Performance Appraisal.

Service contracts
The remuneration of the Board is set by the Department of Trade and Industry. The remuneration figure for the
Board is reviewed every year in line with the recommendations of the Senior Salaries Review Board. Board Members
appointments are made in accordance with the Commission of Public Appointments Code. For Board Members
there is no provision in place for early termination of appointment.

Board Members
 Name                             Position              Appointment /              Resignation date       Length of
                                                   Re-appointment date                                  Appointment
 Dr Bryan Jackson OBE                 Chair              December 2004                                        3 years
 Steve Brown                   Deputy Chair              December 2004                                        3 years
 Dr Ron Whittaker             Board Member               December 2002               December 2005            3 years
 Bryan Carr                   Board Member               December 2002               December 2005            3 years
 Samantha Gemmell             Board Member               December 2004                  January 2006          3 years
 Rita Patel                   Board Member               December 2004                                        3 years
 Jonathan McLeod              Board Member               December 2004                                        3 years
 Peter Ramsden                Board Member               December 2004                                        3 years
 Neville Jackson              Board Member               December 2005                                        3 years
 Cllr Ross Willmott           Board Member               December 2005                                        3 years
 Valerie Dwyer                Board Member                    April 2003                                      3 years
 Cllr Gary Hunt               Board Member               December 2004                                        3 years
 Cllr Jon Collins             Board Member               December 2004                                        3 years
 Cllr Geoff Stevens           Board Member               December 2004                                        3 years
 Prof. Philip Tasker          Board Member               December 2004                                        3 years
 Parvin Ali                   Board Member               December 2005                                        3 years
 Stan Crawford                Board Member               December 2005                                        3 years
East Midlands Development Agency




Oakham Market, Rutland




The following tables provide details of the remuneration and pension interests of Board members, Chief Executive
and Executive Directors of the Agency.
    Benefits in kind consist of mileage paid. From February 2006 the mileage to and from emda is subject
to statutory deductions.
    All Board Members have been appointed on fixed term contracts, and with the exception of the Chairman and
Deputy Chairman, are contracted to carry out two days work per month on behalf of the Agency.
    The Chairman is contracted to work three days per week, and the Deputy Chairman four days per month
for the Agency.

Board Members
  Name                                              Salary          Benefit in Kind             Total Salary          Salary
                                             2005-2006 (£)           2005-2006 (£)            2005-2006 (£)    2004-2005 (£)
 Dr Bryan Jackson OBE                                 74,868                     538                  74,868          22,048
 Steve Brown*                                         27,540                     339                 27,540           14,936
 Dr Ron Whittaker                                      6,115                     448                   6,115           7,931
 Bryan Carr                                            6,115                     276                   6,115           7,931
 Samantha Gemmell                                      7,474                        -                  7,474           7,931
 Rita Patel                                            8,153                        -                  8,153           7,931
 Jonathan McLeod                                       8,153                        -                  8,153           7,931
 Peter Ramsden                                         8,153                     199                   8,153           7,931
 Neville Jackson                                       8,153                     262                   8,167           7,931
 Cllr Ross Willmott                                    8,153                     190                   8,153           6,259
 Valerie Dwyer                                         8,153                      50                   8,164           7,931
 Cllr Gary Hunt                                        8,153                     213                   8,153           2,643
 Cllr Jon Collins                                      8,153                        -                  8,153           2,643
 Cllr Geoff Stevens                                    8,153                     161                   8,197           2,643
 Prof. Philip Tasker                                   8,153                      37                   8,153           2,643
 Parvin Ali                                            2,717                      47                   2,717               -
 Stan Crawford                                         2,717                        -                  2,717               -

*Remuneration for Steve Brown includes £11,679 for services as Chairman of East Midlands Tourism

Chief Executive and Executive Directors
The Chief Executive and all other Executive Directors are employed under permanent, full time employment
contracts. The contractual notice period for the Chief Executive is six months, for the Executive Directors the notice
period is three months.
   For the Chief Executive and Executive Directors early termination, other than for misconduct, will be under the
terms of the Principal Civil Service Pension Scheme (PCSPS). The terms of this scheme come under the terms of the
Civil Service Compensation Scheme.
Annual Report and Accounts 2005-2006                                                                                             50 | 51




                                                                         Accordia, Nottingham




Chief Executive and Executive Directors
                                      Salary Band Including         Benefits in Kind         Full Year Salary      Salary Band Including
                                           Performance Pay               2005-2006                 Equivalent           Performance Pay
                                          2005-2006 (£’000)         (£ nearest £100)       2005-2006 (£’000)           2004-2005 (£’000)
 Jeffrey	P.	Moore                                      120-125                   7,600                  120-125                  100-105
 Chief Executive
 Abby	Johnson	Brennan                                    85-90                  3,300                     85-90                    65-70
 Deputy Chief Executive
 Alison	Simpson                                          70-75                       -                    70-75                    70-75
 Director of Regeneration and Development
 (resigned 30th June 2005)
 Sue	MacDonald                                          20-25*                       -             not available                   55-60
 Director of Business Services East Midlands
 (secondment ended 30th June 2005)
 Michael	Carr                                            60-65                       -                    70-75                        -
 Executive Director of Business Services
 (appointed 13th June 2005)
 Glenn	Harris                                            60-65                       -                    70-75                        -
 Executive Director of Corporate Services
 (appointed 31st May 2005)
 Diana	Gilhespy                                          40-45                       -                    70-75                        -
 Executive Director – Regeneration
 (appointed 29th September 2005)

*This figure represents the net of VAT cost to the Agency for the Secondee for the period 01 April 2005 to 30 June 2005

Salary
‘Salary’ includes gross salary, performance pay or bonuses and any other allowance to the extent that it is subject to
UK taxation.
    Two Directors (Jeffrey P. Moore and Abby Johnson Brennan) received a bonus of 10% during the Financial Year
based on performance during 2004-2005.

Benefits in kind
Jeffrey P. Moore and Abby Johnson Brennan are each entitled to a lease car under their contract of employment. The
equivalent monetary value of the benefit is detailed in the table above.
    The monetary value of benefits in kind covers any benefits provided by the employer and is treated by the HM
Revenue and Customs as a taxable emolument.
East Midlands Development Agency




Attenborough Nature Reserve, Nottinghamshire




                                     Real increase in Total accrued CETV at CETV at      Employee      Real increase in Length of
                                        pension and      pension at 31/03/05 31/03/06 contributions        CETV after relevant
                                       related lump    aged 60 and                              and     adjustment for service
                                      sum at age 60    at 31/03/06                      transfers-in      inflation and
                                                        and related                                          changes in
                                                         lump sum                                    market investment
                                                                                                                 factors
                                             (£’000)         (£’000) (£’000)   (£’000)      (£’000)              (£’000)    years
 Jeffrey	P.	Moore                           5-7.5 plus    40-45 plus    565        827         0.0-2.5             108        33
 Chief Executive                              15-17.5       130-135
                                            lump sum      lump sum
 Abby	Johnson	Brennan                      2.5-5.0 plus    5-10 plus     37         86         2.5-5.0               31        7
 Deputy Chief Executive                         0.0-2.5         5-10
                                             lump sum     lump sum
 Alison	Simpson                            0.0-2.5 plus   10-15 plus    188        209         0.0-2.5                6       17
 Director of Regeneration                       0.0-2.5       40-45
 and Development                             lump sum     lump sum
 (resigned 30th June 2005)
 Sue	MacDonald                             0.0-2.5 plus   10-15 plus    100        115         0.0-2.5                5       15
 Director of Business Services                  0.0-2.5       20-25
 East Midlands                               lump sum     lump sum
 (secondment ended 30th June 2005)
 Michael	Carr	                                 0.0-2.5       0.0-5.0      0         13         2.5-5.0               11        0
 Executive Director of Business Services
 (appointed 13th June 2005)
 Glenn	Harris                             12.5-15.0        10.0-15.0      0        153         2.5-5.0             150        12
 Executive Director of Corporate Services
 (appointed 31st May 2005)
 Diana	Gilhespy                                0.0-2.5       0.0-5.0      0         11         2.5-5.0               10        0
 Executive Director – Regeneration
 (appointed 29th September 2005)
Annual Report and Accounts 2005-2006                                                                          52 | 5




                                                            The Priory Centre, Lincolnshire




Pension benefits

Pension benefits of Board Members                           arrangements and for which the CS Vote has received a
With the approval of the DTI, a pension scheme has          transfer payment commensurate to the additional
been put in place for the Chairman with contribution        pension liabilities being assumed. They also include any
rates and benefits which are identical to the Principal     additional pension benefit accrued to the member as a
Civil Service Pension Scheme but which is funded            result of their purchasing additional years of pension
directly by the Agency. The Agency is not permitted to      scheme at their own cost. CETVs are calculated within
pay these contributions to a personal pension plan          the guidelines and framework prescribed by the Institute
provider. On retirement, payment of the Chairman’s          and Faculty of Actuaries.
pension will be the responsibility of the Agency,               Please note that some of the factors used to calculate
underwritten by DTI. No other Board Members are             the CETV were revised on 1 April 2005 on the advice of
eligible for pension contributions, performance related     the Scheme Actuary. The CETV figure for 31 March
pay, or any other taxable benefit as a result of their      2005 has been restated using the new factors so that it is
appointment with the Agency. Full disclosure of the         calculated on the same basis as the CETV figure for 31
assets and liabilities of the scheme are provided in Note   March 2006.
7 to the Accounts.
                                                            Real increase in CETV
Pension benefits of Chief Executive and                     This reflects the increase in CETV effectively funded by
                                                            the employer. It takes account of the increase in accrued
Executive Directors                                         pension due to inflation, contributions paid by the
The Chief Executive Officer and all of the Executive
                                                            employee (including the value of any benefits transferred
Directors are members of PCSPS and no Directors have
                                                            from another pension scheme or arrangement) and uses
opted for the Partnership Pension Account.
                                                            common market valuation factors for the start and the
                                                            end of the period.
Cash equivalent transfer values (CETV)
A CETV is the actuarially assessed capitalised value of     Non cash remuneration
the pension scheme benefits accrued by a member at a        No other benefits or non cash remuneration was paid to
particular point in time. The benefits valued are the       any member of the Board, the Chief Executive Officer
member’s accrued benefits and any contingent spouse’s       or the Executive Directors.
pension payable from the scheme. A CETV is a payment
made by a pension scheme or arrangement to secure
                                                            Compensation paid, significant awards to
pension benefits in another pension scheme or
arrangement when the member leaves a scheme and             former directors
chooses to transfer the benefits accrued in the former      Costs paid during the Financial Year totalled £54,000.
scheme. The pension figures shown relate to the benefits
that the individual has accrued as a consequence of their   Amounts payable to third party for services as
total membership of the pension scheme, not just their      a senior manager
service in a senior capacity to which disclosure applies.   No payments were made to third parties.
    The CETV figures, and from 2003-2004 the other
pension details, include the value of any pension benefit   Payments made for loss of office
in another scheme or arrangement which the individual       Redundancy costs paid during the Financial Year
has transferred to the Civil Service Pension (CSP)          totalled £61,000.
East Midlands Development Agency




Civil Service Pensions                                        pension. The enhancement depends on length of service
Pension benefits are provided through the CSP                 and cannot exceed ten years. Medical retirement is
arrangements. From 1 October 2002, civil servants may         possible in the event of serious ill health. In this case
be in one of three statutory based “final salary” defined     pensions are brought into payment immediately without
benefit schemes (classic, premium and classic plus).          actuarial reduction and with service enhanced as for
The Schemes are unfunded with the cost of benefits met        widow(er) pensions.
by monies voted by Parliament each year. Pensions
payable under classic, premium and classic plus are           Premium Scheme
increased annually in line with changes in the Retail         Benefits accrue at the rate of 1/60th of final pensionable
Prices Index. New entrants from 1 October 2002 may            earnings for each year of service. Unlike classic, there is
choose between membership of premium or joining a             no automatic lump sum, but members may give up
good quality “money purchase” stakeholder arrangement         (commute) some of their pension to provide a lump sum
with a significant employer contribution (partnership         up to a maximum of 3/80ths of final pensionable earnings
pension account).                                             for each year of service or 2.25 times the pension if
    Employee contributions are set at 1.5% of                 greater (the commutation rate is £12 of lump sum for
pensionable earnings for classic and 3.5% for premium         each £1 of pension given up). For the purposes of
and classic plus. Benefits in classic accrue at a rate of     pension disclosure the tables assume maximum
1/80th of pensionable salary for each year of service. In     commutation. Members pay contributions of 3.5% of
addition, a lump sum equivalent to three years                pensionable earnings. On death, pensions are payable to
pensionable pay is payable on retirement. For premium,        the surviving spouse or eligible partner at a rate of 3/8ths
benefits accrue at the rate of 1/60th of final pensionable    of the member’s pension (before any commutation). On
earnings for each year of service. Unlike classic, there is   death in service, the scheme pays a lump sum benefit of
no automatic lump sum (but members may give up                three times pensionable earnings and also provides
(commute) some of their pension to provide a lump             service enhancement on computing the spouse’s pension.
sum). Classic plus is essentially a variation of premium,     The enhancement depends on the length of service
but with benefits in respect of service before 1 October      and cannot exceed ten years. Medical retirement is
2002 calculated broadly as classic.                           possible in the event of serious ill health. In this case,
                                                              pensions are brought into payment immediately without
Classic Scheme                                                actuarial reduction.
Benefits accrue at a rate of 1/80th of pensionable salary         Where the member’s ill health is such that it perman-
for each year of service. In addition, a lump sum             ently prevents them undertaking gainful employment
equivalent to three years pensionable pay is payable on       service is enhanced as for widow(er) pensions.
retirement. Members pay contributions of 1.5% of
pensionable earnings. On death, pensions are payable          Classic Plus Scheme
to the surviving spouse at a rate of half of the member’s     This is essentially a variation of premium, but with
pension. On death in service the scheme pays a lump           benefits in respect of service before October 2002
sum benefit of twice pensionable pay and also provides        calculated broadly as classic.
a service enhancement in computing the spouse’s
Annual Report and Accounts 2005-2006   54 | 55




Brayford Waterfront, Lincoln
East Midlands Development Agency




Pensions payable under classic, premium, and classic           experience of the scheme. At the balance sheet date
plus are increased in line with the Retail Prices Index.       there were no prepaid / outstanding contributions to the
                                                               scheme.
Partnership Pension Account Scheme                                 Pension benefits are provided through the Civil
The partnership pension account is a stakeholder               Service pension arrangements. From 1 October 2002,
pension arrangement. The employer makes a basic                civil servants may be in one of three statutory based
contribution of between 3% and 12.5% (depending on             “final salary” defined benefit schemes (classic, premium,
the age of the member) into a stakeholder pension              and classic plus). New entrants after 1 October 2002
product chosen by the employee. The employee does              may choose between membership of premium or joining
not have to contribute, but where they do make                 a good quality “money purchase” stakeholder based
contributions the employer will match these up to a limit      arrangement with a significant employer contribution
of 3% of pensionable salary (in addition to the employer’s     (partnership pension account).
basic contribution). Employers also contribute a further
0.8% of pensionable salary to cover the cost of centrally
provided risk benefit cover (death in service and serious
ill health retirement).
     Further details about the CSP arrangements can be
found at the website www.civilservice-pensions.gov.uk
and in note 7.

PCSPS
The PCSPS is an unfunded multi-employer defined
benefit scheme but East Midlands Development Agency
is unable to identify its share of the underlying assets and
liabilities. The Scheme Actuary (Hewitt Bacon Woodrow)
valued the scheme as at 31 March 2003. Details can
be found in the resource accounts of the Cabinet
Office, Civil Superannuation (www.civilservice-pensions.
gov.uk).
    For 2005-2006 employers’ contributions of
£1,213,733 were payable to the PCSPS (2004-2005
£786,869) at one of four rates in the range 16.2 to 24.6
per cent of pensionable pay, based on salary bands (the
rates in 2004-2005 were between 12 and 18.5 per cent).
The scheme’s Actuary reviews employer contributions
every four years following a full scheme valuation. From
2006-2007, the salary bands will be revised and the rates
will be in a range between 17.1 and 25.5 per cent. The
contribution rates reflect benefits as they are accrued,
not when the costs are actually incurred, and reflect past
                                                               East Midlands Development Agency
Annual Report and Accounts 2005-2006                                                                               56 | 5




                                                                 Nottingham




Partnership Pension Account                                      During 2001-2002 the organisation harmonised all the
Employees joining after 1 October 2002 could opt to              terms and conditions of staff including pensions. All
open a partnership pension account, a stakeholder                staff were given the opportunity to join the PCSPS
pension arrangement with an employer contribution.               pension scheme. The above contributions made to the
Employers’ contributions of £nil (2004-2005 £4,027)              English Partnerships Scheme relate to employees who
were paid to one or more of a panel of four appointed            decided to stay with this pension scheme.
stakeholder pension providers during the financial year.             No members of staff took early retirement due to ill
The employer makes a basic contributions of between 3            health during the financial period. The total cost of the
to 12.5 percent (depending on the age of the member)             additional liability to the Agency is estimated to be £nil
into a stakeholder pension product chosen by the                 (2005 £44,775).
employee. The employee does not have to contribute
but where they do make contributions the employer will
match employee contributions up to 3% of pensionable
salary (in addition to the employers’ basic contribution).
Employers also contribute a further 0.8% of pensionable
salary 2005-2006 £nil (2004-2005 £252), payable to the
PCSPS to cover the cost of centrally provided risk benefit
cover (death in service and ill health retirement) of these      J P Moore
employees. At the balance sheet date there were no               Chief Executive
prepaid / outstanding contributions to the scheme.               5th July 2006

English Partnerships Scheme
The English Partnerships Scheme is a multi-employer
defined benefit scheme and East Midlands Development
Agency is unable to identify its share of the underlying
assets and liabilities. A full actuarial valuation was carried
out at 31 March 2002 and more details can be found
in the separate scheme statement of the English
Partnerships Pension Scheme. For 2005-2006 employer
contributions of £13,978 were payable to the English
Partnerships Scheme (2004-2005 £14,824) at the rate of
14.5% of pensionable pay from 1 January 2003. It has
been agreed that contributions will be reviewed on an
annual basis although the Actuary conducts a full
revaluation of the fund every three years. The contribution
rates reflect benefits as they are accrued, not when the
costs are actually incurred, and they reflect past
experience of the scheme. At the balance sheet date
there were no prepaid / outstanding contributions to
the scheme.
East Midlands Development Agency




Systems Engineering Innovation Centre (SEIC), Loughborough
Annual Report and Accounts 2005-2006                        58 | 5




                                4
                                 Annual accounts
                                 financial year 2005-2006
East Midlands Development Agency




The Directors present the Annual Report and Accounts for the period ended
31 March 2006.




Directors’ report

Non- Executive Directors (The Board)
Membership of the emda Board during Financial Year 2005-2006 is as follows;

 Name                                      Position         Appointment         Resignation date      Length of
                                                      Re-appointment date                           Appointment
 Dr Bryan Jackson OBE                         Chair         December 2004                                 3 years
 Steve Brown                           Deputy Chair         December 2004                                 3 years
 Dr Ron Whittaker                     Board Member          December 2002          December 2005          3 years
 Bryan Carr                           Board Member          December 2002          December 2005          3 years
 Samantha Gemmell                     Board Member          December 2004            January 2006         3 years
 Rita Patel                           Board Member          December 2004                                 3 years
 Jonathan McLeod                      Board Member          December 2004                                 3 years
 Peter Ramsden                        Board Member          December 2004                                 3 years
 Neville Jackson                      Board Member          December 2005                                 3 years
 Cllr Ross Willmott                   Board Member          December 2005                                 3 years
 Valerie Dwyer                        Board Member              April 2003                                3 years
 Cllr Gary Hunt                       Board Member          December 2004                                 3 years
 Cllr Jon Collins                     Board Member          December 2004                                 3 years
 Cllr Geoff Stevens                   Board Member          December 2004                                 3 years
 Prof. Philip Tasker                  Board Member          December 2004                                 3 years
 Parvin Ali                           Board Member          December 2005                                 3 years
 Stan Crawford                        Board Member          December 2005                                 3 years



emda maintains a Register of Board Members’ Interests which is available on emda’s website at www.emda.org.uk,
or on request from the Director of Corporate Services at Apex Court, City Link, Nottingham, NG2 4LA.
Full details of the disclosure for Board Members are contained in the Remuneration Report.
Annual Report and Accounts 2005-2006                                                                            60 | 61




                                                              Sulgrave, Northamptonshire




Executive Directors                                           In preparing the accounts the Agency is required to:
The Board appointed during 2005-2006 the following            • Observe the Accounts Direction issued by the
individuals to manage the activities of the Agency:             Secretary of State, including the relevant accounting
                                                                and disclosure requirements, and apply suitable
Jeffrey	P.	Moore                                                accounting policies on a consistent basis;
Chief Executive                                               • Make judgements and estimates on a reasonable
Abby	Johnson	Brennan                                            basis;
Deputy Chief Executive                                        • State whether applicable accounting standards set
                                                                out in the Government Financial Reporting Manual
Diana	Gilhespy	
                                                                have been followed, and disclose and explain any
Executive Director – Regeneration
                                                                material departures in the financial statements;
(Appointed 29th September 2005)
                                                              • Prepare the accounts on the going concern basis,
Michael	Carr	                                                   unless it is inappropriate to presume that the
Executive Director of Business Services                         Agency will continue in operation.
(Appointed 13th June 2005)
Glenn	Harris	                                                 The Accounting Officer for the Department of Trade
Executive Director of Corporate Services                      and Industry has designated the Chief Executive as the
(Appointed 31st May 2005)                                     Accounting Officer of emda. His responsibilities as
                                                              Accounting Officer include responsibility for the
Alison	Simpson	
                                                              propriety and regularity of the public finances and for
Director of Regeneration and Development
                                                              the keeping of proper records, as set out in the ‘Non-
(resigned 30th June 2005)
                                                              Departmental Public Bodies’ Accounting Officer’s
Sue	MacDonald	                                                Memorandum’ issued by the Treasury and published in
Director of Business Services East Midlands                   Government Accounting.
(secondment ended 30th June 2005)                                 The Agency and the Chief Executive are also
                                                              responsible for ensuring that there are appropriate
Statement of the Agency’s and Chief                           controls over any publication of the financial statements,
Executive’s responsibilities                                  including the publication of the National Audit Office
Under section 14 of the Regional Development Agencies         audit report on the Agency’s website and in other
Act 1998 the Agency is required to prepare a Statement        electronic form.
of Account for each financial year in the form and on the
basis determined by the Secretary of State, with the          Financial Memorandum
consent of Treasury. The accounts are prepared on an          The Secretary of State issued the Agency a Financial
accruals basis and must give a true and fair view of the      Memorandum on its formation setting out the financial
Agency’s state of affairs at the year-end and of its income   framework under which the Agency should operate.
and expenditure, total recognised gains and losses and        This Memorandum was updated in November 2005 and
cash flows for the financial year.                            the Agency has complied in all material respects with
                                                              the terms of this memorandum during the course of
                                                              2005-2006.
East Midlands Development Agency




Poachers Hideaway, Lincolnshire




Principal activities                                         to manage the available resources. The Single Programme
East Midlands Development Agency (emda) was                  replaced the many different funding streams previously
established under the provisions of the Regional             received from Government Departments, which were
Development Agencies Act 1998 and came into existence        allocated for specific legacy and inherited programmes.
on 14th December 1998. The Agency is a Non                       This Single Programme funding was supplemented
Departmental Public Body (NDPB) sponsored by the             by European Funding, funding from English
Department of Trade and Industry.                            Partnerships under the Coalfield Programme and
    The principal activity of the Agency is to support       capital receipts from the disposal of assets.
improvement of the economy in the East Midlands by               The Agency will continue to seek additional resources
delivering a competitive region and at the same time         to support our activities and those of our partners, in
ensuring that the region has sustainable communities.        contributing to the delivery of the revised Regional
    Our deliverables are measured against output targets     Economic Strategy and the ultimate ambition of
over a range of activities identified in the RDA Tasking     becoming a top 20 European region.
Framework.                                                       The Agency recognises the support of the European
                                                             Community via the European Regional Development
Financial	results	and	review                                 Fund (ERDF).

Financial summary                                            Freedom of Information enquiries
During the 2005-2006 financial year emda was primarily       During the period January 2005 to 31 March 2006 the
funded by grant in aid from the Department of Trade          Agency received 17 requests for information under the
and Industry. This amounted to £176.4 Million in respect     Freedom of Information Act. All the enquiries were
of the 2005-2006 financial year. Other funding sources       answered within the prescribed period required by
amounted to £38.9 Million. The Agency has continued          the Act.
to maximise the efficient use of programme budgets.
                                                             Employment of disabled persons
Results                                                      Under its recruitment policies, the Agency gives full and
The results for the year ended 31 March 2006 are set out     fair consideration to all applications for employment
in the financial statements on pages 70 to 105.              from disabled persons having regard to their particular
                                                             aptitudes and abilities. Should any employees become
Transfer to reserves                                         disabled while employed by the Agency, arrangements
The surplus of the Agency for the year of £79,000 has        will be made wherever possible for appropriate retraining
been transferred to the Income and Expenditure Reserve.      with a view to continued employment.

Review of activities –                                       Employee relations
Financial performance 2005-2006                              The Agency seeks to promote and maintain good
The Agency’s principal source of funding is the Single       relations with its staff and considerable emphasis is
Programme received from Government. The Single               placed on an open management style with a Staff
Programme allows the Agency to effectively influence         Consultative Forum and jointly recognised PCS, GMB
regional economic priorities and gives greater flexibility   and Prospect unions to represent staff interests.
Annual Report and Accounts 2005-2006                                                                     62 | 6




                                                         Old Market Square, Nottingham




Better payment practice code                             Audit services
The Agency is committed to the Better Payment Practice   The Comptroller and Auditor General is appointed by
Code (previously the CBI Prompt Payment Code) and        statute to audit emda, and reports to Parliament on the
aims to pay all undisputed invoices within 30 days. In   truth and fairness of the annual accounts and the
2005-2006 the Agency paid 90.3% of invoices on time.     regularity of income and expenditure. The following
This is a substantial improvement from 2004-2005 and     costs have been incurred in relation to the services
the Agency is committed to continual improvement.        provided by the Comptroller and Auditor General:

The Agency’s environmental policy                        Audit Services                                  £52,000
for operation                                            Further Assurance Work                               £0
The Agency is committed to using, where possible,        Other work                                           £0
‘environmentally friendly’ office and hospitality
consumables from sustainable or recycled sources, many   The Comptroller and Auditor General also has statutory
of which are in turn recycled. Furthermore, we are       powers to report on the economy, efficiency and
committed to controlling the amount of water and         effectiveness with which emda has used its resources. In
energy consumed in administration buildings, and where   November 2003 the Comptroller and Auditor General
possible to make use of fuel efficient transportation    published the ‘Success in the Regions’ report on how the
methods to reduce unnecessary production of greenhouse   agencies and the departments work together. This and
gases and pollution.                                     other reports issued by the Comptroller and Auditor
                                                         General can be found on the National Audit Office
                                                         website at www.nao.org.uk.
Audit committee
The Audit Committee meets on a quarterly basis. The
following Board Members serve on emda’s Audit            Political and charitable donations
Committee:                                               No political or charitable donations were made during
                                                         the year.
Dr	Ron	Whittaker
Chair until appointment ended December 2005              Annual Public Meeting
Neville	Jackson	                                         The Annual Public Meeting will be held on 29th
Chair from December 2005                                 September 2006 at the East Midlands Conference
                                                         Centre.
Cllr	Ross	Willmott
Stan	Crawford	
Appointed December 2005
Prof.	Philip	Tasker
Appointed December 2005


                                                         J P Moore
                                                         Chief Executive
                                                         5th July 2006
East Midlands Development Agency




Statement on internal control
Scope of responsibility                                       Capacity to handle risk
As Accounting Officer, I have responsibility for              We recognise that emda is in a unique position in our
maintaining a sound system of internal control that           relationship with private enterprise and public
supports the achievement of emda’s policies, aims and         accountability. Our raison d’être is to lead, innovate and
objectives, whilst safeguarding the public funds and          provide a catalyst for the development of the region – to
departmental assets for which I am personally responsible,    take risks that others will not. Calculated risk-taking to
in accordance with the responsibilities assigned to me in     enhance investment performance and achieve our
Government Accounting. I also share responsibility with       desired outcomes is fundamental to our way of working
the Board for ensuring that emda continues to operate         and aligns us in our risk management strategy with some
within the framework specified by the Secretary of State      types of private enterprise.
and the Department of Trade and Industry (DTI) in                 At the same time we are a public body, accountable
emda’s Management Statement and Financial                     to Parliament and the people of our region, and operating
Memorandum. The Board and I use a common                      in a governance framework set and monitored by the
mechanism for obtaining assurance on the adequacy,            Treasury and our sponsoring Department. This, rightly,
effectiveness and efficiency of emda’s risk management,       requires us to comply with the highest standards on legal
control and governance process. The Chairman and I            and financial matters, and to be able to account in detail
are therefore making a joint statement on the effectiveness   for our decisions and actions.
of internal control.                                              Leadership in the Risk Management process is
                                                              provided by the Audit Committee through the review of
The purpose of the system of internal control                 emda’s Risk Management Strategy and at an Executive
The system of internal control is designed to manage risk     level, I have charged the Executive Director of Corporate
to a reasonable level rather than to eliminate all risk of    Services with operational responsibility to maintain an
failure to achieve policies, aims and objectives; it can      effective risk management system.
therefore only provide reasonable and not absolute                The way we have sought to achieve this across the
assurance of effectiveness. The system of internal control    Agency is to integrate risk management processes into
is based on an ongoing process designed to:                   our core business processes. By giving guidance, training
                                                              and equipping our staff to deal effectively and efficiently
• Identify and prioritise the risks to the achievement
                                                              with their everyday duties, we believe the key risks we
  of emda’s policies, aims and objectives;
                                                              face as an Agency will be managed.
• To evaluate the likelihood of those risks being
  realised and the impact should they be realised,
  and;
• To manage them efficiently, effectively and
  economically.

   The system of internal control has been in place in
emda for the year ended 31 March 2006 and up to the
date of approval of the Annual Report and Accounts,
and accords with Treasury guidance.
Annual Report and Accounts 2005-2006                                                                               64 | 65




                                                              The Hive, Nottingham Trent University




The risk and control framework                                For this year, the risk priorities of the Agency fall into the
Our management of risk is embedded in policymaking,           areas listed below. In each area, we have developed and
planning and delivery by consideration of risk by the         continue to review and improve risk management
Executive team in establishing strategy and in managing       processes to help us manage our risks.
operational activities. The main processes which we have
in place for identifying, evaluating and managing risk are:   • Revision of the Regional Economic Strategy
                                                                emda is tasked with leading the revision of the
• Risk management strategy                                      Regional Economic Strategy in concert with other
  Our risk management strategy is updated annually              regional partners and stakeholders. In order to
  and approved by the Audit Committee. The risk                 ensure that all interested bodies have been engaged,
  management strategy sets out our approach to the              an extensive consultation exercise has been
  different stages of the risk management process               undertaken supported by research. The revised
  including risk identification, analysis, evaluation           RES will guide our own Business Planning once its
  and control.                                                  conclusions are known.

• Directorate risk profiles                                   • Engaging with partners
  Each Directorate has a risk profile. The most                 A key mechanism for the delivery of the Corporate
  significant risks are then incorporated into an               Plan is through partners such as Sub-regional
  overall risk profile that brings together and                 Strategic Partners (SSPs), Business Links and
  combines similar types of risk. Each risk profile sets        Urban Regeneration Companies (URCs). We have
  out identified risks, the risk priority and outlines a        undertaken a review of how we wish to operate
  control strategy for managing the risk. Where                 with SSP and Business Link partners this year and
  further action is needed to strengthen the control            each review has highlighted some changes in the
  environment an action plan is put in place. These             way we will work with these bodies. In managing
  Risk Profiles are reviewed quarterly and reported to          the changes, risk management is a key component
  the Audit Committee.                                          in the transition activities through the use of risk
                                                                registers and good project governance.
• Project risk profiles
  For any complex or high risk activity, a Risk Register
  is maintained by the project team using the processes
  adopted at the Directorate level. This provides a           Our management of risk is embedded in
  consistent framework for managing project risk
  which can be used to feed into the management of            policymaking, planning and delivery by
  overall agency risk.                                        consideration of risk by the Executive
                                                              team in establishing strategy and in
                                                              managing operational activities.
East Midlands Development Agency




The Peepul Centre, Leicester




• Financial control                                          The above controls are supplemented by weekly
  The risks that the Agency faces in relation to the         Key Performance Indicators which cover a wide
  ability to spend the funds allocated appropriately         range of organisational measures.
  are managed through a number of mechanisms –
  financial management, project appraisal and project      • Business failure
  monitoring.                                                The Agency has a Business Continuity Plan
                                                             incorporating all areas of the business and has
  Financial	management                                       undertaken a number of Business Continuity
  emda operates in accordance with a Financial               exercises during the year.
  Memorandum underpinned by financial regulations
  and procedures. Guidance is available to all staff on    Significant internal control problems
  processes to follow for key financial activities such    There are no significant internal control issues to report.
  as purchasing and procurement and budgeting.
                                                           Review of effectiveness
  Project	appraisal
                                                           As Accounting Officer, I have responsibility for reviewing
  The Agency manages project risk by adopting the
                                                           the effectiveness of the system of internal control. My
  guidance offered by the DTI under the Single
                                                           review of the effectiveness of the system of internal
  Programme. As part of project appraisal, an
                                                           control is informed by the Audit Committee’s Annual
  assessment of potential challenges and risks is
                                                           report to the Board, the work of the Internal Auditors
  undertaken and alternative options for delivery are
                                                           and the executive managers within emda who have
  considered. The appraisal process has been
                                                           responsibility for the development and maintenance of
  improved this year and a new Shared Resource
                                                           the internal control framework, and comments made by
  Centre has been established to provide a specialist
                                                           the External Auditors in their management letter and
  appraisal service to our key partners. This has
                                                           other reports. I have been advised on the implications of
  delivered efficiencies to our partners and improved
                                                           the result of my review of the effectiveness of the system
  the consistency of the appraisals that partners use
                                                           of internal control by the Board and the Audit Committee
  to base key funding decisions on.
                                                           and a plan to address weaknesses and ensure continuous
                                                           improvement of the system is in place.
  Project	monitoring
  Outputs and spend are measured against budget on
  a regular basis and performance is managed through
  weekly performance reporting and monthly Board
  reporting. In addition, each Strand of activity in the
  Corporate Plan is managed by a Director Strand
  Champion and performance under each Strand is
  assessed monthly by the Strand Champion though
                                                           J P Moore
  a formal review.
                                                           Chief Executive
                                                           5th July 2006
Annual Report and Accounts 2005-2006   66 | 6




East Midlands Development Agency
East Midlands Development Agency




The Certificate and Report of the Comptroller
and Auditor General to the Houses of Parliament
and East Midlands Development Agency

I have audited the financial statements of East Midlands     information and explanations I require for my audit, or
Development Agency for the year ended 31 March 2006          if information specified by relevant authorities regarding
under the Regional Development Agencies Act 1998.            remuneration and other transactions is not disclosed.
These comprise the Income and Expenditure Account,                I review whether the statement on page 64 reflects
the Balance Sheet, the Cashflow Statement and Statement      East Midlands Development Agency’s compliance with
of Total Recognised Gains and Losses and the related         HM Treasury’s guidance on the Statement on Internal
notes. These financial statements have been prepared         Control, and I report if it does not. I am not required to
under the accounting policies set out within them.           consider whether the Accounting Officer’s statements
                                                             on internal control cover all risks and controls, or form
Respective responsibilities of East Midlands                 an opinion on the effectiveness of East Midlands
Development Agency, Chief Executive /                        Development Agency’s corporate governance procedures
                                                             or its risk and control procedures.
Accounting Officer and Auditor                                    I read the other information contained in the Annual
East Midlands Development Agency and Chief Executive
                                                             Report and consider whether it is consistent with the
/ Accounting Officer are responsible for preparing the
                                                             audited financial statements. This other information
Annual Report, the Remuneration Report and the
                                                             comprises the Chair’s foreword, the Chief Executive’s
financial statements in accordance with the Regional
                                                             review, the Directors’ report and the Management
Development Agencies Act 1998 and the directions
                                                             commentary and only the unaudited parts of the
made there under by the Secretary of State and for
                                                             Remuneration report. I consider the implications for
ensuring the regularity of financial transactions. These
                                                             my report if I become aware of any apparent
responsibilities are set out in the Statement of Agency
                                                             misstatements or material inconsistencies with the
and Accounting Officer Responsibilities.
                                                             financial statements. My responsibilities do not extend
    My responsibility is to audit the financial statements
                                                             to any other information.
in accordance with relevant legal and regulatory
requirements, and with International Standards on
Auditing (UK and Ireland).
    I report to you my opinion as to whether the financial
statements give a true and fair view and whether the
financial statements and the part of the Remuneration
Report to be audited have been properly prepared in
accordance with the Regional Development Agencies
Act 1998 and the directions made there under by the
Secretary of State. I also report whether in all material
respects the expenditure and income have been applied
to the purposes intended by Parliament and the financial
transactions conform to the authorities which govern
them. I also report to you if, in my opinion, the Annual
Report is not consistent with the financial statements, if
East Midlands Development Agency has not kept proper
accounting records, if I have not received all the
Annual Report and Accounts 2005-2006                                                                           68 | 6




Basis of audit opinion                                         Opinions
I conducted my audit in accordance with International          In my opinion:
Standards on Auditing (UK and Ireland) issued by the           • The financial statements give a true and fair view, in
Auditing Practices Board. My audit includes examin-              accordance with the Regional Development Agencies
ation, on a test basis, of evidence relevant to the amounts,     Act 1998 and directions made there-under by the
disclosures and regularity of financial transactions             Secretary of State, of the state of East Midlands
included in the financial statements and the part of the         Development Agency’s affairs as at 31 March 2006
Remuneration Report to be audited. It also includes an           and of it’s financial results for the year then ended;
assessment of the significant estimates and judgments          • The financial statements and the part of the
made by East Midlands Development Agency and Chief               Remuneration report to be audited have been properly
Executive / Accounting Officer in the preparation of the         prepared in accordance with the Regional Development
financial statements, and of whether the accounting              Agencies Act 1998 and directions made there-under
policies are most appropriate to East Midlands                   by the Secretary of State; and
Development Agency’s circumstances, consistently               • In all material respects the expenditure and income
applied and adequately disclosed.                                have been applied to the purposes intended by
    I planned and performed my audit so as to obtain all         Parliament and the financial transactions conform to
the information and explanations which I considered              the authorities which govern them.
necessary in order to provide me with sufficient evidence
to give reasonable assurance that the financial statements     I have no observations to make on these financial
and the part of the Remuneration Report to be audited          statements.
are free from material misstatement, whether caused by
fraud or error and that in all material respects the
expenditure and income have been applied to the
purposes intended by Parliament and the financial
transactions conform to the authorities which govern
them. In forming my opinion I also evaluated the overall
adequacy of the presentation of information in the             John Bourn
financial statements and the part of the Remuneration          Comptroller and Auditor General
report to be audited.                                          National Audit Office
                                                               157-197 Buckingham Palace Road
                                                               Victoria
                                                               London
                                                               SWIW 9SP

                                                               14th July 2006
East Midlands Development Agency


Group Income and Expenditure Account
For the Year Ended 31 March 2006

                                                                                                                               As restated
                                                                                            Notes           2005-2006          2004-2005
                                                                                                                £’000                £’000
 Income	
 Grant-in-aid                                                                               Note 2             127,551              119,126
 European funding                                                                           Note 2               9,633                6,132
 Other grants                                                                               Note 2               4,958                  350
 Coal grant                                                                                 Note 2               1,854                (701)
 Proceeds from disposal of operating assets                                                                        291                    4
 Proceeds from disposal of investment assets                                               Note 13              24,369                  547
 Proceeds from disposal of development assets                                              Note 17               2,519                5,934
 Proceeds from disposal of partnership workspace assets                                    Note 14               1,809                    -
 Reimbursement of provision for environmental liabilities                                                            -                3,521
 Transfer from Government Grant Reserve                                                    Note 23              36,136                5,505
 Transfer from Brussels Office Reserve                                                     Note 24                  30                   32
 Brussels office income                                                                    Note 24                 275                  304
 Rents and maintenance charges                                                                                     706                3,082
 Other income                                                                                                    2,990                4,397
 Book value of development assets written back                                             Note 17                 390                4,331
 Income from subsidiaries                                                                  Note 31                 237                    -
 Total	income	                                                                              Note 3	            213,748	             152,564
 Expenditure	
 Grant expenditure                                                                                             166,630              126,372
 Salaries and wages                                                                         Note 6               9,023                7,410
 Other administrative costs                                                                 Note 8               6,779                6,106
 Administrative costs in relation to subsidiaries                                          Note 31                 248                   86
 Brussels Office expenditure                                                               Note 24                 305                  336
 Bad debts written off and movements in provision                                                                (124)                1,461
 for bad and doubtful debts
 Movement in provision for environmental liabilities                                       Note 21              (3,063)              (2,479)
 Release of provision for environmental liabilities                                        Note 22                3,063                1,100
 Book value of operating assets sold                                                       Note 12                  271                  250
 Book value of investment assets sold                                                      Note 13              21,930                   395
 Book value of partnership workspace assets sold                                           Note 14                1,486                    -
 Book value of development assets sold                                                     Note 17                2,344                3,897
 Book value of partnership workspace assets written off                                    Note 14                    -                  743
 Book value of development assets written off                                              Note 17                6,831                7,096
 Total	expenditure	                                                                         Note 3	            215,723	             152,773
 Operating	deficit	                                                                                 	           (1,975)	              (209)
 Interest receivable                                                                        Note 5                1,795                 336
 Bank loan interest payable in relation to subsidiaries                                    Note 31                (108)                 (42)
 Surplus from share in joint ventures                                                      Note 31                   16                   18
 Surplus from share in associates                                                          Note 31                  264                    -
 Prior period adjustment in respect of accounting for share of                             Note 31                    -                 121
 taxation from associates and joint ventures
 Notional cost of capital                                                                   Note 9              (1,185)              (1,152)
 Deficit	for	the	period	on	ordinary	activities	                                                     	           (1,193)		             (928)
 Taxation                                                                                  Note 10                  600                (151)
 Taxation from share in joint ventures and associates                                      Note 31                   (7)                   -
 Prior period adjustment in respect of accounting for share of                             Note 31                     -                 (4)
 surplus from associates and joint ventures
 Deficit	for	the	period	after	tax	                                                                  	             (600)	            (1,083)
 Minority interests                                                                        Note 31                   12                  15
 Reversal of notional cost of capital                                                       Note 9                1,185               1,152
 Surplus	for	the	period	for	group		                                                        Note 24	                 597	                 84	
 and	share	of	joint	ventures	and	associates


Of the Surplus for the period of £597,000, the Agency contributed a Surplus of £79,000 (Note 24).
Income relates to continuing operations except for rental income of £329,939 (2004-2005 £2,897,819.97.) Discontinued operations are separately
identified in Note 4.
The notes on pages 75 to 105 form part of these accounts.
Annual Report and Accounts 2005-2006                                                                                                        0 | 1


Group Statement of Total Recognised Gains and Losses
For the Year Ended 31 March 2006

                                                                                                                                       As restated
                                                                                                 Notes            2005-2006            2004-2005
                                                                                                                      £’000                  £’000
 Retained (Deficit) / Surplus after taxation                                                                              597                    84
 Grant in aid not released to Income and Expenditure account                                     Note 2                32,924                12,757
 Unrealised surplus / (deficit) on revaluation of operating assets                              Note 12                     29                  224
 Unrealised surplus / (deficit) on revaluation of intangible assets                             Note 11                   (10)                    -
 Unrealised surplus / (deficit) on revaluation of investment assets                             Note 13                     14                  402
 Unrealised surplus / (deficit) on revaluation of development assets                            Note 17                   181                     -
 Unrealised surplus / (deficit) on actuarial valuation of By                                     Note 7                    (3)                    -
 Analogy pension scheme
 Total	recognised	gains	for	the	year	                                                                    	             33,732	               13,467
 Prior	Period	Adjustment:	
 Increase in income and expenditure reserve                                                     Note 24                    23                     -
 Increase in valuation of development assets                                                    Note 17                     -                 2,843
 Total	gains	recognised	since	last	annual	accounts	                                                      	             33,755	               16,310


The prior period adjustment in 2005-2006 relates to a change in the Agency now accounting for its share of gross assets or gross liabilities in all
joint venture companies and net assets or net liabilities in all associate companies. Such results had previously not been accounted for on the basis
that if the companies are wound up or dissolved, any remaining property after all of its debts and liabilities have been satisfied will be transferred
to a company or institution having similar objectives to the members.
The prior period adjustment in 2004-2005 relates to a change in the method of valuing development assets from the lower of cost and net
realisable value to the lower of current replacement cost and net realisable value. This was due to a change in accounting policy to follow
NDPB guidance.
All gains and losses relate to continuing operations except those disclosed in Note 4.
The notes on pages 75 to 105 form part of these accounts.
East Midlands Development Agency




Group Balance Sheet as at 31 March 2006
                                                                                                          As restated
                                                               Notes                    2005-2006         2004-2005
                                                                                            £’000               £’000
 Intangible	Assets
 Intangible operating assets                                  Note 11                          77	               135
 Fixed	Assets	
 Tangible operating assets                                    Note 12          5,855                  5,788
 Investment assets                                            Note 13             60                 21,523
 Workspace assets                                             Note 14              -                  1,457
 Investments in joint ventures:
    Share of gross assets                                     Note 31            434                    265
    Share of gross liabilities                                Note 31          (262)                  (247)
 Investments in associates                                    Note 31            142                      -
 Prior period adjustment in respect of accounting for share   Note 31              -                     23
 of investments in associates and joint ventures
 	                                                                     	            	       6,229	             28,809
 Long	Term	Debtors
 Reimbursement in respect of provisions                       Note 22         31,258                 34,321
 Long term loans                                              Note 16         19,930       51,188       115    34,436
 Current	Assets	
 Stock of development assets                                  Note 17         27,205                 28,470
 Debtors                                                      Note 18         15,732                  8,555
 Cash at bank and in hand                                     Note 29         12,035                 28,369
                                                                              54,972                 65,394
 Creditors	
 Amounts falling due within one year                          Note 19         20,010                 22,576
 Net	Current	Assets	                                                   	            	      34,962	             42,818


 Total	Assets	Less	Current	Liabilities	                                	            	      92,456	            106,198
 Creditors: amounts falling due after more than one year      Note 19                       1,926               1,905
 Provisions for liabilities and charges                       Note 20                      59,310              66,983
 Total	Assets	Less	All	Liabilities	                                    	            	      31,220	             37,310


 Reserves	and	Financing	
 Government Grant Reserve                                     Note 23                      24,781             27,883
 Income and Expenditure Reserve                               Note 24                       (971)             (1,568)
 Brussels Office Reserve                                      Note 24                         111                 116
 European Funding Reserve                                     Note 24                       7,076             10,644
 Minority interest                                            Note 31                         223                 235
 		                                                                    	            	      31,220	             37,310


The notes on pages 75 to 105 form part of these accounts.


Approved by:



Chief Executive / Accounting Officer                          J P Moore




Chairman                                                      Bryan Jackson


Date:                                                         5th July 2006
Annual Report and Accounts 2005-2006                                                                         2 | 




Agency Balance Sheet as at 31 March 2006
                                                                                                         As restated
                                                             Notes                    2005-2006          2004-2005
                                                                                          £’000                £’000
 Intangible	Assets	
 Intangible operating assets                                Note 11                          77	                135
 Fixed	Assets	
 Tangible operating assets                                  Note 12          1,834                   2,079
 Investment assets                                          Note 13             60                  21,523
 Partnership workspace assets                               Note 14              -                   1,457
 Investment in subsidiary and associate undertakings        Note 15          1,812                   1,810
 	                                                                   	            	       3,706	              26,869
 Long	Term	Debtors	
 Reimbursement in respect of provisions                     Note 22         31,258                  34,321
 Long term loans                                            Note 16         19,930       51,188		      115    34,436


 Current	Assets	
 Stock of development assets                                Note 17         27,205                  28,470
 Debtors                                                    Note 18         15,639                   8,552
 Cash at bank and in hand                                                   11,652                  28,132
                                                                            54,496                  65,154
 Creditors	
 Amounts falling due within one year                        Note 19         19,585                  22,464
 Net	Current	Assets	                                                 	            	      34,911	              42,690


 Total	Assets	Less	Current	Liabilities	                              	            	      89,882	             104,130
 Creditors: amounts falling due after more than one year    Note 19                          26                    5
 Provisions for liabilities and charges                     Note 20                      59,310               66,983
 Total	Assets	Less	All	Liabilities	                                  	            	      30,546	              37,142


 Reserves	and	Financing	
 Government Grant Reserve                                   Note 23                      24,781               27,883
 Income and Expenditure Reserve                             Note 24                      (1,422)             (1,501)
 Brussels Office Reserve                                    Note 24                          111                 116
 European Funding Reserve                                   Note 24                        7,076              10,644


 		                                                                  	            	      30,546	              37,142




The notes on pages 75 to 105 form part of these accounts.


Approved by:



Chief Executive / Accounting Officer                        J P Moore




Chairman                                                    Bryan Jackson


Date:                                                       5th July 2006
East Midlands Development Agency


Group Cash Flow Statement for
the Year Ended 31 March 2006

                                                                                     As restated
                                                             Notes     2005-2006     2004-2005
                                                                           £’000           £’000
 Cash	Flow	Statement
 Operating	activities	
 Net cash inflow / (outflow) from operating activities      Note 28      (54,103)          3,141
 Returns	on	investment	and	servicing	of	finance	
 Interest receivable                                         Note 5         1,795           336
 Interest payable by subsidiary                                             (108)           (42)
 Taxation	
 UK corporation tax paid                                    Note 19         (367)           (13)
 Capital	expenditure	and	financial	investment	
 Purchase of intangible assets                              Note 11            (8)          (50)
 Purchase of operating assets                               Note 12         (786)        (1,383)
 Purchase of investment assets                              Note 13         (453)          (499)
 Purchase of partnership workspace assets                   Note 14          (29)           (31)
 Purchase of investment property by subsidiary              Note 12         (199)        (3,264)
 Proceeds on disposal of operating and investment assets                   24,660            551
 Loan advances                                              Note 16      (22,885)          (800)
 Loan repayments                                            Note 16         3,079             57
 Acquisitions	
 Investment in joint venture and associate undertakings     Note 15           (2)              -
 Financing	
 Grant-in-aid received for capital expenditure               Note 2        10,039         12,757
 Other grant-in-aid received                                 Note 2        22,885            800
 European funding                                           Note 24           123            241
 Brussels office other income                               Note 24            25              -
 Debt due in more than one year of subsidiary company       Note 19             -          1,900
 Increase	/	(decrease)	in	cash	in	the	year	                 Note 29	     (16,334)	        13,701


The notes on pages 75 to 105 form part of these accounts.
Annual Report and Accounts 2005-2006                                                                          4 | 5




Notes to the financial statements




1 Accounting policies

(1) Basis of accounting                                     (3) Assets – investment and development
The financial statements of East Midlands Development       Land and buildings held are shown in the balance sheet
Agency have been prepared in a form directed by the         at open market value.
Secretary of State for the Department of Trade and              Undeveloped land is valued at open market value.
Industry, with the consent of H M Treasury, in accordance   Properties in the course of development are valued at the
with the Regional Development Agencies Act 1998. The        lower of open market value of the land plus current costs
financial statements have been prepared, as set out in      of construction at the date of valuation, or open market
Treasury guidance, under the historical cost convention     value of the completed development (with the benefit of
as modified by the policies set out below and in            any contracted lettings) less the cost to complete.
accordance with applicable Accounting Standards in the          Valuations are carried out in accordance with best
United Kingdom and, without limiting the information        practice as contained in the Appraisal and Valuation
given, to meet the accounting and disclosure requirements   Standards (5th Edition) published by the Royal
of the Companies Act 1985.                                  Institution of Chartered Surveyors.
    A summary of the main accounting policies, which
have been applied consistently, is set out below.           (3a) Investment assets
                                                            All of the portfolio of industrial and commercial
(2) Basis of consolidation                                  investment properties was disposed of at open market
No separate income and expenditure account is               value during the year except two pieces of land where
presented for the Agency as provided by Section 230 of      disposals are currently underway. The basis for valuation
the Companies Act 1985.                                     on the residual land held is open market value.
    The consolidated accounts incorporate the accounts          Any overall surplus on revaluation of these properties
of the Agency and its subsidiary undertaking, Silverstone   to open market value, and subsequent adjustments
Innovation Centre Limited.                                  thereto, are credited to the Government Grant Reserve
    Joint ventures relating to British Midlands             after eliminating the overall accumulated unrealised
Development Corporation and East Midlands Regional          deficit, as originally charged, by revaluation adjustment,
Aggregation Body LLP have been accounted for on a           to the Income and Expenditure Account.
gross equity accounting basis.                                  Disposals and purchases of land and buildings are
    Two Urban Regeneration Companies, North                 accounted for on the date of legal completion.
Northamptonshire Development Company and Derby                  A valuation of the whole portfolio was carried out
Cityscape Limited, have also been accounted for as          as at 31 March 2006, and was undertaken by Innes
Joint Ventures by the gross equity accounting method        England.
on the basis of the control emda can exert over these
organisations.
    Investments in Associate Undertakings relating to
Blueprint Limited Partnership, Biocity Nottingham
Limited, Regeneration East Midlands Limited and
Meden Valley Making Places have been consolidated on
an equity accounting basis.
East Midlands Development Agency




1 Accounting policies (continued)

(3b) Development assets                                        (7) Investments and loans
Development assets, consisting of land and buildings,          Investments and loans are shown net of provision for
are shown at the lower of current replacement cost or          amounts considered doubtful and of write-offs for
net realisable value. Any resulting write downs of these       amounts considered irrecoverable. Provision has been
properties to open market value, are accounted for             made for all loans where recovery appears doubtful.
annually and separately identified in the income and           No loan is written off until the impossibility of recovery
expenditure account. Any surplus on revaluation of             is beyond doubt. Approval from the Department of
these properties to open market value, and subsequent          Trade and Industry is obtained for any write-off in excess
adjustments thereto, are credited to the Government            of £250,000.
Grant Reserve after eliminating the overall accumulated
unrealised deficit, as originally charged, by revaluation      (8) Pension costs
adjustment, to the Income and Expenditure Account.             The Agency’s employees are covered by the provisions
   The assets were valued by Innes England at                  of the Principal Civil Service Pension Scheme (PCSPS),
31 March 2006.                                                 which is a non-contributory defined benefit scheme and
                                                               is unfunded, or by the provisions of the English
(4) Workspace assets                                           Partnerships Pension Scheme, which is also a defined
The Agency’s interest in the workspace assets was              benefit scheme. East Midlands Development Agency
disposed of during the year at open market value;              recognises the expected cost of providing pensions on
therefore there is no longer any requirement for a year        a systematic and rational basis over the period during
end valuation.                                                 which it benefits from employee services by payment to
                                                               the scheme of amounts calculated on an accruing basis.
(5) Fixed assets                                               Liability for payment of future benefits is a charge on
Tangible Fixed Assets are valued at depreciated                the scheme.
replacement cost. Software Licenses are capitalised as
Intangible Assets and are valued at amortised                  (9) Government grants receivable
replacement cost.                                              The Agency’s activities are funded primarily by grant-in-
                                                               aid provided by the Department of Trade and Industry
(6) Depreciation and amortisation                              for specified types of expenditure. Government grants
Depreciation is provided to write off the modified cost        receivable of a revenue nature are credited to the Income
of tangible fixed assets over their anticipated useful lives   and Expenditure Account in the year to which they
on a straight-line basis at the following annual rates:        relate. Government Grants in respect of capital
                                                               expenditure on assets that are depreciated are credited
Freehold buildings                                 50 years    to the Government Grant Reserve and released to the
Fixtures and fittings                              10 years    Income and Expenditure Account over the expected
Intangible Assets                                   4 years    useful life of the relevant tangible fixed assets.
Office furniture, and equipment                     4 years
Computer equipment                                  4 years
Annual Report and Accounts 2005-2006                            6 | 




1 Accounting policies (continued)

(10) Deferred taxation
Deferred taxation has been recognised as a liability or
asset if transactions have occurred at the balance sheet
date that give rise to an obligation to pay more taxation
in the future, or a right to pay less taxation in the future.
    Deferred taxation assets and liabilities have not
been discounted.

(11) Foreign currency transactions
Transactions in foreign currency are recorded in sterling
at the rates prevailing at the date of the transaction.
Monetary assets and liabilities in foreign currency are
translated into sterling at the rates prevailing at the
Balance Sheet date. Resulting exchange gains and losses
are taken to the Income and Expenditure Account.

(12) Operating leases
Operating lease rentals are charged to the Income and
Expenditure Account over the period of the lease term.
There are no Finance Leases.

(13) Financial instruments
The Agency has no borrowings and relies primarily on
departmental grants for its cash requirements, and is
therefore not exposed to material liquidity risks. Any
material deposits are held as bank deposits repayable
on demand. All material assets and liabilities are
denominated in sterling, so the Agency is not exposed to
currency risk. Loan notes issued are at a fixed interest
rate eliminating any associated interest rate risk.
East Midlands Development Agency




2 Analysis of total grant utilised
In 2005-2006 the Agency was mainly funded by grant-in-aid from the Department of Trade and Industry and
English Partnerships.


                                                                                            As restated
                                                                                 Agency         Agency
                                                                              2005-2006     2004-2005
                                                                                  £’000           £’000
 Grant-in-aid received from DTI                                                  142,043       137,282
 Opening grant-in-aid creditor / (debtor)                                          8,561        (3,949)
 Closing grant-in-aid (creditor) / debtor                                          2,992        (8,561)
 Coal grant received from English Partnerships                                     8,249          7,617
 Opening coal grant creditor / (debtor)                                            1,077           670
 Closing coal grant (creditor) / debtor                                            (593)        (1,077)
 European Community grants received                                                9,633          6,132
 Other grants received                                                             4,958           350

 Total	grant	receivable	                                                         176,920	       138,464

 Expenditure in year                                                             214,399        152,760
 Less: non grant income                                                         (37,479)       (14,296)

 Total	grant	utilised	                                                           176,920	       138,464

 Grant-in-aid	applied	to	capital	expenditure:	
 Grant-in-aid applied to additions of operating assets                               668          1,415
 Grant-in-aid applied to additions of partnership workspace assets                    29            31
 Grant-in-aid applied to additions of investment assets                              453           499
 Grant-in-aid applied to additions of development assets                           8,887         10,812
 Grant-in-aid applied to additions of investment in joint venture
 and associate undertakings                                                            2              -

 	                                                                                10,039	        12,757

 Grant-in-aid applied to long term loans                                          22,885           800
 Grant-in-aid credited to Income and Expenditure Account                         127,551        119,126
 Coal grant (debited) / credited to Income and Expenditure Account                 1,854          (701)
 European grants credited to Income and Expenditure Account                        9,633          6,132
 Other grants credited to Income and Expenditure Account                           4,958           350

 Total	grant-in-aid	utilised	                                                    176,920	       138,464
Annual Report and Accounts 2005-2006                                                                         8 | 



3 Analysis of income and expenditure of group
by key driver

                                Total income      Climate for     Employment       Enterprise and              Total
                                 recorded in      investment         learning         innovation        expenditure
                               I&E Account                          and skills                           recorded in
                                                                                                       I&E Account
                                 2005-2006        2005-2006         2005-2006          2005-2006          2005-2006
                                     £’000            £’000             £’000              £’000               £’000

 Single Programme                    172,934          64,195             31,230              78,075          173,500
 Other Programme                      31,181                                                                  32,590
 ERDF                                  9,633                                                                   9,633

 	                                   213,748			                                                             	215,723	


Of the Single Programme expenditure in the year £13,029,000 has been provided to other Government Agencies
with the balance of £160,471,000 being provided to the private sector.




4 Discontinued operations

                                                                Continuing Discontinued                       Total
                                                                operations    operations
                                                                     £’000        £’000                       £’000
 Turnover                                                          213,418            330                    213,748
 Cost of Sales                                                    (199,921)              -                 (199,921)
 Net operating expenses
     Administrative expenses                                       (15,653)          (149)                  (15,802)
     Other operating income                                               -              -                         -

 Operating surplus / deficit                                        (2,156)	          181	                   (1,975)


Discontinued operations relate to income and expenditure on the portfolio of investment assets (Note 13) and
partnership workspace assets (Note 14) that were disposed of on 13 May 2005.




5 Interest receivable

                                                                                  Group & Agency Group & Agency
                                                                                       2005-2006      2004-2005
                                                                                           £’000          £’000
 Bank deposit                                                                                  638              315
 Other                                                                                        1,157               21

 	                                                                                            1,795	            336
East Midlands Development Agency




6 Salaries and wages
(a) Total salaries and wages

                                                                                   Group & Agency Group & Agency
                                                                                        2005-2006      2004-2005
                                                                                            £’000          £’000
 Board	Members
 Board Members’ fees                                                                           197              176
 Pension costs                                                                                   20              10
 Social Security costs                                                                           16              13
                                                                                               233              199

 Staff	
 Salaries and wages including overtime of permanent staff                                     6,550            5,456
 Other staff                                                                                   297              581
 Pension costs                                                                                1,228             688
 Social Security costs                                                                         600              456
 Redundancy costs                                                                              115               30
                                                                                              8,790            7,211

 Total	UK	emda	staff	salaries	and	Wages	                                                      9,023	           7,410

 Brussels office salaries and wages                                                            141              141

 Total	staff	salaries	and	wages	                                                              9,164	           7,551



(b) Staff numbers
The average number of staff employed by the Agency during the period (including all agency and seconded staff)
was 225. The Full Time Equivalent of staff classed as civil service staff during the period was 210. Staff, including
temporary and seconded staff, were distributed within the following departments and directorates.


                                                                                         2005-2006       2004-2005
                                                                                         Staff Nos.      Staff Nos.

 Chief Executive department                                                                       7               7
 Corporate service and investment                                                                40              70
 Economic development directorate                                                                58              56
 Strategy and communications directorate                                                         57              53
 Business services directorate                                                                   63              24




                                                                                         2005-2006       2004-2005
                                                                                         Staff Nos.      Staff Nos.

 Senior management roles                                                                         13              10
 Other                                                                                         212              200
Annual Report and Accounts 2005-2006                                                                   80 | 81




6 Salaries and wages (continued)
(c) Seconded staff
Staff were seconded from the following organisations during the accounting period.


                                                     2005-2006       2004-2005       2004-2005      2004-2005
                                                     Staff Nos.          £’000       Staff Nos.         £’000

 Name	of	organisation
 Sport England                                                -               -              1             46
 DTI                                                         1              22               1             69
 Mapp Secretarial Services                                    -               -              1             17
 GOEM                                                        1               3               1             29
 Derbyshire Police                                           1              24               1             33
 Highways Agency                                              -               -              1             15
 Nottingham Trent University                                  -               -              1              4
 Prowess                                                     1              56               1             44
 Lincolnshire Police                                         1               3                -              -
 Manor Sports College                                        1               7                -              -

 Total	                                                      6	            115	              8	           257



(d) Temporary and agency staff
Temporary and agency staff were employed to cover the following number of full time equivalent roles during the
accounting period.


                                                                     2005-2006                      2004-2005
                                                                     Staff Nos.                     Staff Nos.

 Chief Executive department                                                0.00                           0.75
 Corporate service and investment                                          1.75                           6.00
 Economic development directorate                                          1.00                           2.00
 Strategy and communications directorate                                   2.25                           0.75
 Business services                                                         2.00                           0.50
East Midlands Development Agency




7 Retirement benefits

PCSPS
The PCSPS is an unfunded multi-employer defined benefit scheme but East Midlands Development Agency is unable
to identify its share of the underlying assets and liabilities. The Scheme Actuary (Hewitt Bacon Woodrow) valued the
scheme as at 31 March 2003. Details can be found in the resource accounts of the Cabinet Office, Civil Superannuation
(www.civilservice-pensions.gov.uk).
    For 2005-2006 employers’ contributions of £1,213,733 were payable to the PCSPS (2004-2005 £786,869) at one
of four rates in the range 16.2 to 24.6 per cent of pensionable pay, based on salary bands (the rates in 2004-2005 were
between 12 and 18.5 per cent). The scheme’s Actuary reviews employer contributions every four years following a full
scheme valuation. From 2006-07, the salary bands will be revised and the rates will be in a range between 17.1 and
25.5 per cent. The contribution rates reflect benefits as they are accrued, not when the costs are actually incurred, and
reflect past experience of the scheme. At the balance sheet date there were no prepaid / outstanding contributions to
the scheme.

English Partnerships Scheme
The English Partnerships Scheme is a multi-employer defined benefit scheme and East Midlands Development
Agency is unable to identify its share of the underlying assets and liabilities. A full actuarial valuation was carried out
at 31 March 2002 and more details can be found in the separate scheme statement of the English Partnerships
Pension Scheme. For 2005-2006 employer contributions of £13,978 were payable to the English Partnerships Scheme
(2004-2005 £14,824) at the rate of 14.5% of pensionable pay from 1 January 2003. It has been agreed that contributions
will be reviewed on an annual basis although the Actuary conducts a full revaluation of the fund every three
years. The contribution rates reflect benefits as they are accrued, not when the costs are actually incurred, and they
reflect past experience of the scheme. At the balance sheet date there were no prepaid / outstanding contributions to
the scheme.

Partnership Pension Account
Employees joining after 1 October 2002 could opt to open a partnership pension account, a stakeholder pension
arrangement with an employer contribution. Employers’ contributions of £nil were paid to one or more of a panel of
four appointed stakeholder pension providers during the financial year. The employer makes a basic contribution of
between 3 to 125 percent (depending on the age of the member) into a stakeholder pension product chosen by the
employee. The employee does not have to contribute but where they do make contributions the employer will match
the employee contributions up to 3% of pensionable salary (in addition to the employers’ basic contribution).
Employers also contribute a further 0.8% of pensionable salary (2005-2006), payable to the PCSPS to cover the cost
of centrally provided risk benefit cover (death in service and ill health retirement) of these employees. At the balance
sheet date there were no prepaid / outstanding contributions to the scheme.

Bi-Analogy Pension Scheme
emda operates a defined benefit scheme with contribution and benefit rates identical to those provided by the PCSPS
scheme. The contribution rate for the period beginning 1 April 2006 will be 25.5% (2005-2006 24.6%). A full
actuarial valuation was carried out as at 31 March 2006 by a qualified independent actuary.
The major assumptions of the actuary were:


                                                                             31/03/06         01/04/05          31/03/05

 The rate of increase in salaries                                                4.0%              4.0%             4.0%
 The rate of increase for pensions in payment and deferred pension               2.5%              2.5%             2.5%
 The rate used to discount the scheme liabilities                                5.4%              5.4%             6.1%
 The inflation assumptions                                                       2.5%              2.5%             2.5%
Annual Report and Accounts 2005-2006                                                                                          82 | 8




7 Retirement benefits (continued)
The market value of the assets, the present value of the liabilities and the resulting defecit were as follows:


                                                                                     For the year ended           For the year ended
                                                                                        31 March 2006                31 March 2005
                                                                                                   £’000                        £’000

 Total market value of the assets                                                                       -                            -
 Present value of the scheme liabilities                                                             (30)                          (6)

 (Defecit) / surplus of the scheme                                                                   (30)                          (6)

 Net	pension	(liability)	/	asset	                                                                   (30)	                         (6)

 Amounts charged to operating profit
 Current service cost (net of employee contributions)                                                 19                            4
 Past service cost                                                                                     -                            -

 Total	operating	charge	                                                                              19	                           4

 Amounts	included	as	other	finance	costs	
 Expected return on pension scheme assets                                                               -                            -
 Interest on pension scheme liabilities                                                               (1)                            -

 Net	return	                                                                                         (1)	                            -

 Amounts	recognised	in	the	Statement	of	Total	Recognised	Gains	and	Losses	(STRGL)	
 Experience gains / (losses) arising on the scheme liabilities                                        (2)                            -
 Change in the assumptions underlying the present value of the scheme liabilities                     (1)                            -

 Actuarial	gain	/	(loss)	recognised	in	the	STRGL	                                                    (3)	                            -


                                                                                                                          2005-2006
                                                                                                                             (£’000)

 Movement	in	surplus	during	the	year	
  Opening (defecit)                                                                                                                (6)
  Movement in year:
      Current service cost                                                                                                       (19)
      Contributions                                                                                                                 3
      Settlements / curtailments                                                                                                    0
      Past service costs                                                                                                          (4)
      Other finance income                                                                                                        (1)
      Actuarial (loss) / gain                                                                                                     (3)

 Closing	(defecit)	                                                                                     	                        (30)


                                                                                                                          2005-2006

 History	of	experience	gains	and	losses	

 Difference between expected and actual return on scheme assets
   Amount (£’000)                                                                                                                  (1)
   Percentage of scheme assets                                                                                                    3%

 Experience gains and losses on scheme liabilities
   Amount (£’000)                                                                                                                  (2)
   Percentage of scheme liabilities                                                                                               7%

 Total amount recognised in Statement of Total Recognised Gains and Losses
   Amount (£’000)                                                                                                                  (3)
   Percentage of scheme liabilities                                                                                              10%
East Midlands Development Agency




8 Other administration costs
                                                                                   Group & Agency Group & Agency
                                                                                        2005-2006      2004-2005
                                                                                            £’000          £’000

 Travel and subsistence                                                                        412              394
 Other staff costs                                                                             415              442
 Office costs                                                                                  641              607
 Estate management                                                                             727              862
 Marketing and PR                                                                              918              647
 Professional costs                                                                           1,283            1,356
 IT and communication                                                                          584              234
 Depreciation, amortisation and impairment                                                     710              837
 Auditors’ remuneration                                                                          52               47
 Operating lease rentals                                                                       585              240
 Irrecoverable VAT                                                                             445              453
 Exchange losses / (gains)                                                                        -             (13)
 Interest payable                                                                                 7                -

 Total	                                                        	                              6,779	           6,106	




9 Notional cost of capital

When calculating the surplus or deficit for the year the Agency is required to include as expenditure a notional cost
of capital, to the extent that there is no real charge for this. This has been calculated as 3.5% (2004-2005 3.5%)
of the average of the Agency’s net assets. After the surplus or deficit for the year there is an entry reversing
this amount.




10 Taxation
The Agency and Group taxation charge based on taxable profits for the year at 30% comprises:

                                                          Note                     Group & Agency Group & Agency
                                                                                        2005-2006      2004-2005
                                                                                            £’000          £’000

 Corporation	Tax	
 UK Corporation tax charge at 30%                                                             1,125             361
 Adjustment in respect of previous periods                                                        6             (50)

 Deferred	Tax
 Origination and reversal of timing differences         Note 18                               (276)                -
                                                        Note 20                             (1,455)            (160)

 Tax	charge	/	(credit)	on	the	surplus	for	the	period	          	                              (600)	            151
Annual Report and Accounts 2005-2006                                                                    84 | 85




10 Taxation (continued)
The corporation tax charge for the current year is higher than the standard rate of corporation tax in the UK of
30%. The differences are explained below:


                                                                               Group & Agency Group & Agency
                                                                                    2005-2006      2004-2005
                                                                                        £’000          £’000

 Surplus / (defecit) for Agency before tax per accounts                                   (521)            208
 Add / (less) amounts related to grant funding activities                                  521            (208)

 Tax	on	profit	at	30%	                                      	                                 -	              -

 Disallowable items                                                                        103             341
 Depreciation less capital allowances                                                      514              63
 Capital gains less profit on disposals                                                    508             (43)

 Current	year	tax	charge	                                   	                             1,125	           361	




11 Intangible assets

                                                                               Group & Agency Group & Agency
                                                                                    2005-2006      2004-2005
                                                                                        £’000          £’000

 Gross	Current	Replacement	Cost	or	Valuation	

 At 1 April 2005                                                                           250             235
 Additions in year                                                                            8             50
 Disposals                                                                                    -               -
 Revaluation                                                                                  -               -
 Impairment                                                                                (10)            (35)

 At	31	March	2006	                                          	                              248	            250	

 Amortisation	
 At 1 April 2005                                                                           115              59
 Amortisation in the year                                                                    62             63
 On disposals                                                                                 -               -
 Backlog amortisation                                                                       (6)             (7)

 At	31	March	2006	                                          	                              171	            115	

 Net	Current	Replacement	Cost	

 At	31	March	2006	                                          	                                77	           135	
East Midlands Development Agency




12 Tangible operating assets
Group

                                       Investment           Freehold        Fit out    Equipment            Total
                                       property of          property       costs of   fixtures and     2005-2006
                                        subsidiary       occupied by     leasehold     fittings and
                                         company          the Agency    properties          vehicles
                                            £’000              £’000         £’000            £’000        £’000
 Gross	Current	Replacement	Cost	or	Valuation	
 At 1 April 2005                                3,692           250          1,529            2,051         7,522
 Additions in year                               199               -           186              601          986
 Disposals                                          -          (250)              -           (372)         (622)
 Revaluation                                        -              -            14               15           29
 Impairment                                         -              -              -            (60)          (60)

 At	31	March	2006                               3,891	             -	        1,729	           2,235	        7,855

 Depreciation	
 At 31 March 2005                                   -              -           500            1,234         1,734
 Depreciation in the year                           -              -           185              408          593
 On disposals                                       -              -              -           (351)         (351)
 Backlog depreciation                               -              -             4               20           24

 At	31	March	2006                                   -	             -	          689	           1,311	        2,000

 Net	Current	Replacement	Cost	
 At	31	March	2006                               3,891	             -	        1,040	             924	        5,855

 Net	Current	Replacement	Cost	
 At	31	March	2005	                              3,692	          250	         1,029	             817	        5,788
Annual Report and Accounts 2005-2006                                                                 86 | 8




12 Tangible operating assets (continued)
Agency

                                                       Freehold        Fit out    Equipment            Total
                                                       property       costs of   fixtures and     2005-2006
                                                    occupied by     leasehold     fittings and
                                                     the Agency    properties          vehicles
                                                          £’000         £’000            £’000        £’000

 Gross	Current	Replacement	Cost	or	Valuation	
 At 31 March 2005                                          250          1,529            2,033         3,812
 Additions in year                                            -           186              473          659
 Disposals                                                (250)              -           (372)         (622)
 Revaluation                                                  -            14               15           29
 Impairment                                                   -              -            (60)          (60)

 At	31	March	2006                                             -	        1,729	           2,089	        3,818

 Depreciation	
 At 31 March 2005                                             -           500            1,233         1,733
 Depreciation in the year                                     -           185              393          578
 On Disposals                                                 -              -           (351)         (351)
 Backlog depreciation                                         -             4               20           24

 At	31	March	2006                                             -	          689	           1,295	        1,984

 Net	Current	Replacement	Cost	
 At	31	March	2006                                             -	        1,040	             794	        1,834

 Net	Current	Replacement	Cost	
 At	31	March	2006	                              	          250	         1,029	             800	        2,079
East Midlands Development Agency




13 Investment assets
                                                                                                     As restated
                                                                   Group & Agency                  Group & Agency
                                                              2005-2006      2005-2006        2004-2005        2004-2005
                                                                  £’000           £’000           £’000            £’000
 Balance at 1 April 2005                                                           21,523                             21,016
 Additions in the year                                                                453                                 39
 Prior period adjustment in respect of                                                  -                                461
 the capitalisation of disposal costs incurred
 on the sale of assets to Blueprint Limited Partnership
                                                                                   21,976                             21,516

 Profit on disposal of properties                                 2,439                              152
 Proceeds on disposal of properties                            (24,369)                            (547)
 Book value on disposal of properties                                             (21,930)                              (395)

 Revaluation transfer to Government Grant Reserve                                      14                                402

 Valuation	at	31	March	2006	                              	            	               60	              	             21,523


The portfolio of investment assets, with the exception of land with a net book value of £96,000, was sold on 13 May
2005 to Blueprint Limited Partnership, a Limited Partnership in which emda holds a 25% share, as detailed in
note 31.
The prior period adjustment relates to the capitalisation of costs incurred on the disposal of investment assets to
Blueprint Limited Partnership. Such costs had previously been written off to the Income and Expenditure Account.




14 Partnership workspace assets
                                                                                                                 As restated
                                                                           Group & Agency                   Group & Agency
                                                                                2005-2006                        2004-2005
                                                                                    £’000                              £’000

 Balance at 1 April 2005                                                            1,457                              2,169
 Additions in year                                                                     29                                  -
 Prior period adjustment in respect of                                                  -                                 31
 the capitalisation of disposal costs incurred
 on the sale of assets to Blueprint Limited Partnership
                                                                                    1,486                              2,200

 Profit on disposal of properties                                   323                                -
 Proceeds on disposal of properties                             (1,809)                                -
 Book value on disposal of properties                                              (1,486)                                  -
 Amounts written off                                                                     -                              (743)

 Valuation	at	31	March	2006	                              	            	                 -	                            1,457


The portfolio of partnership workspace assets, was sold on 13 May 2005 to Blueprint Limited Partnership, a Limited
Partnership in which emda holds a 25% share, as detailed in note 31.
The prior period adjustment relates to the capitalisation of costs incurred on the disposal of workspace assets to
Blueprint Limited Partnership. Such costs had previously been written off to the Income and Expenditure Account.
Annual Report and Accounts 2005-2006                                     88 | 8




15 Investments
                                                          Group          Agency
                                                       2005-2006      2005-2006
                                                           £’000          £’000
 Balance at 1 April 2005                                    1,810          1,810
 Additions                                                      2              2
 Disposals                                                      -               -
 Revaluation                                                    -               -

 Balance	at	31	March	2006	                                  1,812	         1,812

 Provision at 1 April 2005                                      -               -
 Change for the year                                            -               -
 Provision	at	31	March	2006	                                    -	              -

 Net	Book	Value

 At	31	March	2006	                                          1,812	         1,812

 Net	Book	Value

 At	31	March	2005	                                          1,810	         1,810




16 Long term loans
                                                  Group & Agency Group & Agency
                                                       2005-2006      2004-2005
                                                           £’000          £’000

 Loan	Capital
 Balance at 1 April 2005                                     193             500
 Advances in year – Loan notes A                            5,720               -
 Advances in year – Loan notes B                           17,165               -
 Other advances                                                 -            800
 Repayments scheduled in the year                         (3,079)            (57)

 Capital	Balance	at	31	March	2006	                         19,999	         1,243

 Provision	for	Doubtful	Debts
 Balance at 1 April 2005                                     (78)            (80)
 (Increase) / Reduction in provision                            9              2

 Provision	for	Doubtful	Debts	at	31	March	2006	              (69)	          (78)

 Amounts Written Off                                            -         (1,050)

 Total	Loans	                                              19,930	           115
East Midlands Development Agency




16 Long term loans (continued)

During the financial year the Agency has issued Fixed Interest Rate Loan Notes to Blueprint Limited Partnership,
an associated undertaking.
The loans are secured on property holdings held as assets by the Partnership.
The loans are included at book value which is not materially different from fair value calculated by discounting
cashflows by the cost of capital.
The loans are repayable as follows:


                                                                                       Group & Agency Group & Agency
                                                                                            2005-2006      2004-2005
                                                                                                £’000          £’000

 Within one year or less                                                                         3,031             79
 In more than one year but not more than two years                                               3,021             31
 In more than two years but not more than five years                                             8,215             57
 In more than five years                                                                         5,732             26

 	                                                                                              19,999	           193




17 Stock of development assets
                                                             Group & Agency                      Group & Agency
                                                        2005-2006      2005-2006            2004-2005      2004-2005
                                                            £’000           £’000               £’000          £’000

 Balance at 1 April 2005                                                     28,470                            26,029
 Additions in the year                                                        8,887                            10,812

                                                                             37,357                            36,841

 Profit on disposal of assets                                  175                               2,037
 Proceeds of disposal of assets                            (2,519)                             (5,934)

 Book value on disposal of assets                                            (2,344)                           (3,897)

 Amounts written off                                                         (6,831)                           (7,096)
 Amounts written back                                                            390                             4,331
 Amounts written up                                                              181                                 -
 Expenditure covered by release of                                           (1,548)                           (1,709)
 Environmental Provision

 Valuation	at	31	March	2006	                                      	          27,205	                  	        28,470


Amounts written off represent costs incurred in undertaking significant remedial work to development sites.
The nature of these sites means significant regeneration investment is required and end use sales value is not expected
to exceed cost.
Amounts written back on development assets represent an increase in the market value of the assets up to an amount
not greater than costs previously written off.
Amounts written up on development assets represents an increase in the market value over and above that previously
written off.
Annual Report and Accounts 2005-2006                                                                                   0 | 1




18 Debtors
                                                                        Group                             Agency
                                                         2005-2006              2004-2005        2005-2006       2004-2005
                                                             £’000                  £’000            £’000           £’000

 Amounts	received	within	one	year:	
 Trade debtors                                                    748                     551           736               551
 RDC loan debtors                                                  69                      79             69               79
 Prepayments                                                      267                     170           261               170
 Deposits and advances                                              -                     480              -              480
 Other debtors                                                6,837                  2,431             6,762            2,428
 Grant-in-aid receivable                                      2,992                         -          2,992                 -
 SSP debtor – cash floats                                     4,139                  4,410             4,139            4,410
 Amounts due from joint ventures (see note 31)                     50                     109             50              109
 Value Added Tax                                                  354                     325           354               325
 Deferred tax                                                     276                       -           276                  -

 	                                                           15,732	                 8,555	           15,639	           8,552



                                                         2005-2006              2004-2005        2005-2006        2004-2005
                                                            (£’000)                (£’000)          (£’000)          (£’000)

 Analysis	of	debtors	–	Intra-government	balances	
 Balances with other central government bodies                4,084                  2,322             4,084            2,322
 Balances with local authorities                                   68                     527             68              527
 Balances with bodies external to government                 11,580                  5,706            11,487            5,703

 	                                                           15,732	                 8,555	           15,639	           8,552


A deferred tax asset has been fully recognised at a corporation tax rate of 30%. This is on the basis that it is regarded
as more likely than not there will be suitable taxable profits from which the future reversal of the underlying timing
differences can be deducted. In the financial year to 31 March 2005 a deferred tax liability had been fully provided
for, as detailed in Note 20.
The major components of the deferred tax asset are as follows:


                                                                         Balance b/Fwd           Recognised     Full potential
                                                                                                current year           c/Fwd
                                                                                    £’000             £’000             £’000

 Other plant and machinery                                                           -                  284               284
 Revaluations / rollovers on investments assets                                      -                   (9)               (9)
 Trading losses                                                                      -                     1                1

 	                                                            	                      -	                 276	              276
East Midlands Development Agency




19 Creditors
                                                                       Group                                 Agency
                                                      2005-2006                2004-2005        2005-2006          2004-2005
                                                          £’000                    £’000            £’000              £’000

 Amounts	payable	within	one	year:	                                 	                        	
 Trade creditors                                           5,257                    2,492            4,926              2,489
 Grant-in-aid received in advance                              -                    8,561                -              8,561
 Accruals                                                  4,242                    3,103            4,242              3,046
 SSP accruals                                              5,579                    4,973            5,579              4,973
 Deferred income                                           3,120                    1,957            3,120              1,957
 Corporation Tax                                           1,125                     361             1,125                361
 Grant for coalfield expenditure                            593                     1,077             593               1,077
 Other creditors                                              94                       52                -                  -

 	                                                        20,010	                  22,576	          19,585	            22,464

 Analysis	of	creditors	–	Intra-government	balances	
 Balances with other central government bodies             2,909                   11,047            2,909             11,047
 Balances with local authorities                           4,220                     632             4,220                632
 Balances with bodies external to government              12,881                   10,897           12,456             10,785

 	                                                        20,010	                  22,576	          19,585	            22,464



                                                      2005-2006                2004-2005        2005-2006          2004-2005
                                                         (£’000)                  (£’000)          (£’000)            (£’000)



 Amounts	payable	in	more	than	one	year:	
 By Analogy Pensions Creditor                                 26                        5               26                  5
 Bank Loans of subsidiary company                          1,900                    1,900                -                  -

 	                                                         1,926	                   1,905	              26	                 5
Annual Report and Accounts 2005-2006                                                                           2 | 




20 Provisions for liabilities and charges
                                                           Note                     Group & Agency Group & Agency
                                                                                         2005-2006      2004-2005
                                                                                             £’000          £’000
 Environmental	provision	

 Balance	at	31	March	2006	                               Note 21	                             58,950	          63,562

 English	Partnerships	pension	provision	
 Balance at 31 March 2005                                                                        166              250
 Provision in year                                                                                  -             (84)

 Balance	at	31	March	2006	                                      	                                166	             166

 By	Analogy	pension	provision	
 Balance at 31 March 2005                                                                           -                -
 Provision in year                                                                                 4                 -

 Balance	at	31	March	2006	                                      	                                  4	                -

 Development	asset	profit	share	provision	
 Balance at 31 March 2005                                                                      1,800             1,600
 Provision in year                                                                               190              200
 Provision utilised in year                                                                   (1,800)                -

 Balance	at	31	March	2006	                                      	                                190	            1,800

 Deferred	taxation	
 Balance at 31 March 2005                                                                      1,455             1,615
 Release of provision                                                                         (1,455)            (160)

 Balance	at	31	March	2006	                                      	                                   -	           1,455

 Total	Provisions	for	Liabilities	and	Charges	                  	                             59,310	           66,983


The provision for environmental liabilities represents the value of remediation work required, as a minimum, to
return three sites to a saleable and safe condition. The provision represents the amount, which in the opinion of the
valuers, emda would have to pay a third party to take on the sites and associated environmental liabilities. The timing
of the provision is uncertain. The provision is to be funded by English Partnerships and DTI Energy and a debtor
has been set up to reflect this (see Note 22).
The English Partnerships pension provision of £166,000 is the difference between the future liability for providing
pensions to English Partnerships transferred staff compared to the value of contributions provided by English
Partnerships. The transfer is expected to take place during the course of the 2006-2007 financial year.
The By Analogy Pension provision of £4,000 represents the difference between the amount of payments paid into a
defined benefit pension scheme to 31 March 2006 and the actuarial valuation of the scheme as at that date.
The development asset profit share provision represents an amount that was payable under an agreement, where the
net profits on sale of a specific site are shared equally between emda and a third party.
The deferred tax provision has reversed in the period due primarily to the crystalisation of corporation tax on the
sale of investments assets to Blueprint Limited Partnership. A deferred tax asset has been fully recognised as detailed
in Note 18.
East Midlands Development Agency




21 Provision for environmental liabilities
                                                                        Group & Agency
 Site name                                     Avenue     Shirebrook        Steetley     Pleasley        Total
                                                £’000          £’000          £’000        £’000         £’000

 Provision	for	environmental	liabilities	
 Balance at 1 April 2005                       62,112           500            500           450         63,562

 Provision utilised in the year                (1,549)             -             -              -       (1,549)
 Provision released in the year                (2,563)         (500)             -              -       (3,063)
 Net	movement	                                 (4,112)	        (500)	            -	             -	      (4,612)

 Balance	at	31	March	2006	                     58,000	             -	          500	          450	        58,950




22 Reimbursement in respect of provision
                                                                        Group & Agency
 Site name                                     Avenue     Shirebrook        Steetley     Pleasley        Total
                                                £’000          £’000          £’000        £’000         £’000

 Reimbursement	of	environmental	liabilities	
 Balance at 1 April 2005                       33,821           500              -              -        34,321
 Debtor released in the year                   (2,563)         (500)             -              -       (3,063)

 Balance	at	31	March	2006	                     31,258	             -	            -	             -	       31,258


The balance relates to amounts recoverable from the Department of Trade and Industry in respect of environmental
liabilities.
Annual Report and Accounts 2005-2006                                     4 | 5




23 Government grant reserve
                                                           Group & Agency
                                                      2005-2006      2005-2006
                                                          £’000           £’000

 Balance at 1 April 2005                                                 27,883

 Operating	Assets	
 Additions                                                                  667
 Disposals                                                 (270)
 Depreciation, amortisation and impairment                 (710)
 Backlog depreciation                                                       (18)

 Investment	and	partnership	workspace	assets	
 Additions of investment assets                                             453
 Additions of partnership workspace assets                                   29
 Disposals of investment assets                         (21,930)
 Disposals of partnership workspace assets               (1,486)

 Development	assets	
 Additions                                                                8,887
 Disposals                                               (2,344)
 Amounts written off                                     (6,831)
 Amounts written back                                       390
 Amounts written up                                                         181

 Loans	
 Repayments scheduled in year                            (3,079)

 Debtors	
 Bad debts written off / provided for                       124

 Revaluation	
 Operating assets                                                            29
 Investment assets                                                           14

 Blueprint	loan	notes	
 Advanced in the year                                                    22,885

 Investments	in	associated	undertakings	
 Additions                                                                    2

 Net	Liabilities	transferred	
 Balances transferred from Countryside Agency                               (92)

 By	Analogy	pension	
 Deficit on actuarial valuation                                              (3)

 Environmental	provisions	
 Environmental liability                                  3,063
 Reimbursement of environmental liability                (3,063)
 Amounts released to Income and Expenditure Account                     (36,136)

 Balance	at	31	March	2006	                                         	     24,781
East Midlands Development Agency




24 Other reserves
                                                      Income and expenditure    Brussels Office   European Funding
                                                             Reserve                   Reserve              Reserve
                                                           2005-2006                2005-2006            2005-2006
                                                              £’000                      £’000                £’000
                                                      Group       Agency       Group & Agency       Group & Agency
 Balance at 1 April 2005                              (1,591)      (1,501)                 116               10,644
 Prior period adjustment in respect of accounting         23             -
 for joint venture and associate undertakings

 Restarted balance at 1 April 2005                    (1,568)      (1,501)

 Movement	in	year	
   Income of Agency                                  215,305      215,305                  275                  466
   Expenditure of Agency                            (214,886)    (215,226)                (305)              (3,691)
   Repayment of rental bond to landlord                                                     25
   Repayment of funding                                                                                       (343)
   Deficit in relation to subsidiary                     (95)            -
   Share in joint ventures                                 9             -
   Share in associates                                   264             -

   Net movement                                          597           79                   (5)              (3,568)

 Balance	at	31	March	2006	                             (971)	      (1,422)	                111	               7,076


The movement in the European Funding Reserve represents funding released from projects following the
retrospective allocation of European Funding to those projects. The released funds contained within the reserve can
only be applied to projects with specific objectives.
The Brussels office operation is financed by partner contributions and by a transfer from reserves.
The prior period adjustment relates to a change in the Agency now accounting for its share of gross assets or gross
liabilities in all joint venture and associate companies, as disclosed in the Group Statement of Total Recognised
Gains and Losses.
Annual Report and Accounts 2005-2006                                                                            6 | 




25 Operating leases
As at 31 March 2006 the Agency had annual commitments under operating leases as follows:

                                                                         2005-2006                    2004-2005
                                                                 Buildings         Others     Buildings         Others
                                                                     £’000          £’000         £’000          £’000
 Leases	Expiring:	
     Within one year                                                      -             3             -             12
     Between one and five years                                           -            30             -             33
     In over five years                                                564              -          564                -

 	                                                                     564	            33	         564	             45




26 Contingent liabilities

At 31 March 2006 the Agency had no contingent liabilities (2004-2005 £4,320,000 in respect of a conditional contract
for the purchase of a development site. A deposit of 10% of the purchase price had been paid and the balance of
£4,320,000 would have been payable upon certain conditions being met. The conditions were not met and the
deposit was fully repaid to emda.)




27 Commitments
                                                                                                Agency         Agency
                                                                                             2006-2007      2005-2006
                                                                                                 £’000          £’000
 Capital expenditure authorised by the board and contracted at 31 March 2006                      7,987          19,040
 Revenue expenditure authorised by the board and contracted at 31 March 2006                     30,018          18,642

 Total	Commitments	at	31	March	2006	                                                             38,005	         37,682


All the commitments for 2006-2007 are as per the 2005-2008 Corporate Plan.
East Midlands Development Agency



28 Reconciliation of group operating surplus /
(deficit) to net cash flow from operating activities
Reconciliation of operating deficit to net cash flows from operating activities

                                                                  Notes     2005-2006     2004-2005
                                                                                £’000         £’000
 Operating surplus / (deficit)                                                 (1,975)         (209)
 Transfer from Government Grant Reserve                          Note 23      (36,136)        (5,505)
 Transfer from Brussels Office Reserve                           Note 24          (30)           (32)
 Transfer from European Funding Reserve                          Note 24       (3,691)         (524)
 Transfer of net liabilities from the Countryside Agency                          (92)              -
 Depreciation, amortisation and impairment                                        721            837
 Book value of operating assets sold                             Note 12          271            250
 Book value of investment assets sold                            Note 13        21,930           395
 Book value of workspace assets sold                             Note 14         1,486              -
 Proceeds from disposal of operating assets                                      (291)            (4)
 Proceeds from disposal of investment assets                     Note 13      (24,369)         (547)
 Additions to stock of development assets                        Note 17       (8,887)       (10,812)
 Book value of development assets sold                           Note 17         2,344         3,897
 Amounts written off long term loans                             Note 16             -         1,050
 Amounts written off development assets                          Note 17         6,831         7,096
 Amounts written back on development assets                      Note 17         (390)        (4,331)
 Amounts written off partnership workspace assets                Note 14             -           743
 Grant funding to subsidiary company                                             (340)              -
 (Increase) / decrease in debtors                                              (7,187)         3,737
 Increase / (decrease) in creditors                                            (1,837)        12,035
 Environmental liability provision increase / (decrease)         Note 21       (3,063)        (2,479)
 Reimbursement of environmental liabilities provision increase   Note 22         3,063        (2,421)
 Grant-in-aid to cover corporation tax charge                    Note 10          600          (151)
 Other provisions increase / (decrease)                          Note 20       (3,061)           116

 Net	cash	inflow	/	(outflow)	from	operating	activities	                 	     (54,103)	        3,141




29 Reconciliation of group net cash
flow to movement in net funds

                                                                            2005-2006     2004-2005
                                                                                £’000         £’000

 Net funds at 1 April 2005                                                      28,369        14,668
 Change in net funds                                                          (16,334)        13,701

 Net	Funds	at	31	March	2006	                                            	       12,035	       28,369
Annual Report and Accounts 2005-2006                                                                       8 | 




30 Post balance sheet events

There are no post balance sheet events to report.



31 Subsidiaries, joint ventures and associated undertakings
Subsidiaries and joint ventures

 Name of undertaking                            Interest at year end      Year end           Nature of business
 Silverstone Innovation Centre                 87.86% equity holding,     31 March                   Provision of
 Limited (Limited Company)                   voting interest 50% with                       workspace for hi-tech
                                           casting vote on some issues                      motorsport companies
 East Midlands Regional Aggregation                    50% (Principal     31 March          Provision of access to
 Body LLP (EMRAB)                                      Associate DTI)                  broadband internet services
 (Limited Liability Partnership)
 British Midlands Development               50% (Principal Associate      31 March         To promote investment
 Corporation (US not for                   Advantage West Midlands)                   in and trade with the British
 profit Corporation)                                                                 Midlands by US Corporations
 emEP Limited (Limited Company)             50% (Principal Associate      31 March   Holding company of Blueprint
                                               English Partnerships)                      General Partner Limited


 North Northamptonshire                       25% Reported as a joint     31 March             Regeneration of the
 Development Company                         venture by virtue of right                     Borough of Corby area
 (Company Limited by Guarantee)                 of veto of all members
 Derby Cityscape Limited                      25% Reported as a joint     31 March        Regeneration of the City
 (Company Limited by Guarantee)              venture by virtue of right                             of Derby area
                                                of veto of all members


EMRAB (Regional Aggregation Body) ceased trading during Financial Year 2004-2005. The income and expenditure
of the Partnership in 2005-2006 consists of transactions required to close the organisation.
In accordance with Guidance issued during 2005-2006 Urban Regeneration Companies are classified for disclosure
purposes as joint ventures on the basis that control is shared between the Member organisations.
East Midlands Development Agency



31 Subsidiaries, joint ventures
and associated undertakings (continued)
Associates

 Name of undertaking                     Interest at               Year end               Type of                       Nature of business
                                           year end                                   organisation

 Meden Valley Making Places Limited            25 %                31 March       Company Limited                         Regeneration of the
                                                                                     by Guarantee                          Meden Valley area
 Biocity Nottingham Limited                  33.3%           31 December          Company Limited                  Development of healthcare
                                                                                     by Guarantee                     biosciences and related
                                                                                                                      environmental sciences
 Regeneration East Midlands Limited            20%                 31 March       Company Limited                            To improve the
                                                                                     by Guarantee              effectiveness of regeneration
                                                                                                                       in the East Midlands
 Midlands Aerospace Alliance                   20%                 Not yet        Company Limited                            To promote and
                                                               determined            by Guarantee                       advance commerce in
                                                                                                                         the aerospace sector
 Blueprint Limited Partnership                 25%                 31 March        Limited Liability                     Regeneration of land
                                                                                        Partnership                          and property in
                                                                                                                           the East Midlands




Key Financial Results of subsidiaries, joint ventures and associates

                                                Profit / (loss)  Agency    Agency                Profit / (loss)        Agency     Agency
                                                     after tax  Share of   share of                   after tax        share of    share of
                                                 for the year Net Profit Net Assets               for the year        Net Profit Net Assets
                                                  2005-2006 2005-2006 2005-2006                    2004-2005         2004-2005 2004-2005
                                                             £         £          £                           £               £           £
 Name	of	Undertaking	
 Silverstone Innovation Centre Limited                 (106,434)      (93,513)    1,608,414            (122,910)      (107,989)    1,701,927
 East Midlands Regional Aggregation Body LLP                   -              -           -                    -               -            -
 British Midlands Development Corporation                15,659          7,850      27,000               35,041          17,521       19,000
 Meden Valley Making Places Limited                     107,044         26,761      41,686               59,729          14,932       14,932
 Biocity Nottingham Limited                             (17,141)       (5,714)    (159,721)             142,606          47,535    (154,064)
 North Northamptonshire Development Company             (10,952)       (2,738)      (2,738)                    -               -            -
 Derby Cityscape Limited                                 39,555          9,889     147,897              124,332          31,083      130,509
 Regeneration East Midlands Limited                      41,799         8,360       32,158              118,992          23,798       23,784
 Midlands Aerospace Alliance                       not trading                -           -        not trading                 -            -
 emEP Limited                                                  -              -        500         not trading                 -            -
 Blueprint Limited Partnership                          913,000       228,250      229,250         not trading                 -            -
Annual Report and Accounts 2005-2006                                                                          100 | 101



31 Subsidiaries, joint ventures
and associated undertakings (continued)

                                                                                 Debtor / (creditor) Debtor / (creditor)
                                                                                       at year end         at year end
                                                                                        2005-2006           2004-2005
                                                                                                  £                    £
 Name	of	Undertaking	
 Silverstone Innovation Centre Limited                                                     (607.45)                    -
 British Midlands Development Corporation                                                         -           108,900.65
 East Midlands Regional Aggregation Body LLP                                             (9,273.24)                    -
 Biocity Nottingham Limited                                                            (660,131.94)                    -
 Blueprint Limited Partnership                                                        19,884,760.00                    -


There were no balances outstanding between the Agency and other subsidiary or associate companies other than
disclosed above.
In addition to the above the Agency’s share of Blueprint Limited Partnership’s financial results are as follows.


                                                                                         2005-2006           2004-2005
                                                                                                 £                   £
 Turnover                                                                                   129,250                    -
 Fixed assets                                                                                     -                    -
 Current assets                                                                           9,064,000                    -
 Liabilities due within one year                                                          (863,000)                    -
 Liabilities due after one year or more                                                 (7,971,750)                    -
East Midlands Development Agency




32 Related party transactions
East Midlands Development Agency is an Executive Non-Departmental Public Body sponsored by The Department
of Trade and Industry (DTI). During the year ended 31 March 2006 the Agency received Grant-in-aid and European
funding through DTI. No other significant transactions have taken place between the two bodies. Debtors at the
year end include a total of £1,359.37 due from and creditors include £14,100.00 due to DTI.

During the year East Midlands Development Agency has had a number of transactions with the other Regional
Development Agencies for which the DTI is regarded as the parent department. These agencies are:

•    Advantage West Midlands (AWM)
•    East of England Development Agency (EEDA)
•    London Development Agency (LDA)
•    Northwest Development Agency (NWDA)
•    One NorthEast (ONE)
•    South East England Development Agency (SEEDA)
•    South West of England Regional Development Agency (SWRDA)
•    Yorkshire Forward (YF)

Debtors at the year end include a total of £67,386.57 due from Advantage West Midlands, £7,342.88 due from
Northwest Development Agency, £2,309.60 due from One NorthEast and £54,000 due from South East of England
Development Agency.
Creditors at the year end include a total of £1,833.67 due to Advantage West Midlands.
East Midlands Development Agency has a number of associate companies to which payments were made in the
current financial year. The associates are:


                                                                                           Amounts paid by emda in
                                                                                                        2005-2006
                                                                                                             £’000
    Name	of	Undertaking	
    Biocity Nottingham Limited                                                                                 1,471
    Regeneration East Midlands Limited                                                                          384
    Midlands Aerospace Alliance                                                                                  75



In addition to the above transactions on 13 May 2005 emda disposed of investment assets (Note 13) with a net book
value of £21,883,559 and partnership workspace assets (Note 14) with a net book value of £1,484,892 to Blueprint
Limited Partnership, a Limited Liability Partnership, in which emda holds a 25% interest. The assets were transferred
for sale proceeds of £24,154,853 and £1,808,773 respectively. Sale proceeds of £17,164,695 (Note 16) were exchanged
for “B” loan notes and are being repaid at £3,000,000 per annum with an interest rate of 6% of the outstanding
balance being applied. Sale proceeds of £5,720,065 (Note 16) were exchanged for “A” loan notes, the balance of
which is due to be paid after not more than ten years from the date of the commencement of the loan. An interest
rate of 15% of the undrawn balance is applied.
In addition to the above transactions emda also granted Blueprint Limited Partnership an option to purchase four
of its development asset sites, at a date in the future for a fixed price, for which emda received a non-refundable
deposit of £357,517.
Annual Report and Accounts 2005-2006                                                                                            102 | 10




32 Related party transactions (continued)
The agency was involved in the following related party transactions during the period which are considered to be
material. Transactions between emda and organisations in which Board Members have an interest are shown below.


 Name                      Role                            Related party             Position in     Total value Total value Nature of
                                                                                   related party    of payments of receipts payments
                                                                                                     2005-2006 2005-2006
                                                                                                              £’s         £’s

 Bryan Jackson         Chairman            Derby and Derbys Rail Forum           Board Member            1,980.00           -      Grants
 Ron Whittaker     Board Member                       East Midlands CBI        Council Member          17,860.00            -     Services
 Ross Willmott     Board Member                    Leicester City Council             Leader of      5,803,770.88   10,000.00      Grants
                                                                                 Labour Group
                                         Regeneration East Midlands Ltd                Director       384,234.00            -      Grants
                                                  Culture East Midlands          Board Member          67,910.00    37,639.29      Grants
 Neville Jackson   Board Member             Lincolnshire County Council              Councillor       480,773.59    90,294.14      Grants
                                           East Midlands Quality Centre          Board Member           2,937.50       352.36     Services
                                             Lincolnshire Enterprise SSP         Board Member       8,348,373.04            -      Grants
 Rita Patel        Board Member           Belgrave Baheno Peepul Centre           CEO / Lead          300,000.00            -      Grants
                                                                                     Officer /
                                                                             Company Secretary
 Bryan Carr        Board Member              Lincolnshire Enterprise SSP             Chairman       8,348,373.04           -       Grants
                                         Lincs and Rutland Business Link         Board Member       2,081,208.00      171.90       Grants
                                             East Midlands International             Chairman          31,984.50           -       Grants
                                                           Trade Forum
                                            Sport England East Midlands          Board Member                   -    8,548.13         n/a
                                                      TransLinc Limited            Shareholder                  -    4,156.56         n/a
                                                                                    / Chairman
 Valerie Dwyer     Board Member                Prince’s Trust – Businesses       Board Member         566,706.04            -      Grants
                                                         Advisory Group
                                                   Groundwork Greater                 Chair and        61,010.19            -      Grants
                                                              Nottingham         Board Member
 Geoff Stevens     Board Member                        Derbyshire Dales         Elected Member         38,568.00            -      Grants
                                                         District Council                                      -    10,000.00         n/a
                                  East Midlands Regional LGA Executive                 Member
                                        East Midlands Regional Assembly          Board Member          12,000.00     9,500.00      Grants
 Jon Collins       Board Member                 Nottingham City Council                  Leader     4,242,831.44    11,046.93    Grants /
                                                                                                                                 Services
 Philip Tasker     Board Member                  De Montfort University          Chief Executive      490,808.94     5,100.01      Grants
                                                                               / Vice Chancellor
                                                Leicester Shire Economic         Board Member       10,106,150.00   10,340.00      Grants
                                                              Partnership
                                               East Midlands Universities             Chairman                  -    5,275.00         n/a
                                                              Association
 Steve Brown       Board Member                         North Midlands           Non Executive          7,233.30            -     Services
                                                       Construction PLC               Director
 Stan Crawford     Board Member                Sherwood Environmental              Shareholder /      601,378.00     7,452.50      Grants
                                                       Village Limited                 Company
                                                                             Secretary / Director
 Parvin Ali        Board Member                            East Midlands        Executive Board        12,000.00     9,500.00      Grants
                                                      Regional Assembly                Member
                                                     Voice East Midlands               Director       100,000.00            -      Grants
 Samantha          Board Member            Nottingham Business Venture                  Director       19,350.00            -      Grants
 Gemmell
East Midlands Development Agency




32 Related party transactions (continued)
Transactions between emda and organisational in which Directors have an interset are shown below.

 Name                        Role                        Related party       Position in    Total value Total value Nature of
                                                                           related party   of payments of receipts payments
                                                                                            2005-2006 2005-2006
                                                                                                     £’s         £’s
 Jeffrey           Chief Executive           Derby Cityscape Limited      Board Member      269,287.94            -   Grants
 P. Moore
                                            Nottingham Regeneration       Board Member      250,587.50            -   Grants
                                                              Limited
                                                East Midlands Council          Member       566,706.04            -   Grants
                                                      of Prince’s Trust
                                          Nottingham Trent University      Relative with   2,846,699.91           -   Grants
                                                                                Interest
                                                           Rolls Royce     Relative with    650,000.00            -   Grants
                                                                                Interest
                                         Midlands Aerospace Alliance       Relative with     75,000.00            -   Grants
                                                                                Interest
 Abby Johnson        Deputy Chief                Arts Council England     Board Member       13,700.00    89,989.19   Grants
 Brennan               Executive
                                                    Northamptonshire       Relative with    237,088.56    26,447.98   Grants
                                                      County Council            Interest
 Michael Carr            Director        Silverstone Innovation Centre        Chairman      349,563.00            -   Grants


 Glenn Harris            Director            North Northamptonshire            Director     438,567.14            -   Grants
                                              Development Company


All transactions described above were in normal course of the Agency’s business and include creditors and debtors.
Annual Report and Accounts 2005-2006                                                                         104 | 105




32 Related party transactions (continued)
During the year the Board discussed the following where a related party interest was disclosed:

 Date                                                           Related party                                    Name
 April 2005                                                      Renewal Trust                                Jon Collins
                                                 Belgrave Baheno Peepul Centre                                 Rita Patel
 May 2005                                             Lincolnshire Enterprise SSP                           Bryan Carr
                                            Leicester Shire Economic Partnership                          Philip Tasker
                                              North Northamptonshire Together                            Ron Whittaker
                                                               Lifelong Learning                         Neville Jackson
 June 2005                                          Lincolnshire Enterprise SSP                               Bryan Carr
                                                    Midlands Aerospace Alliance                         Jeffrey P. Moore
 July 2005                                                           Rolls Royce                        Jeffrey P. Moore


 August 2005                                                  No Board Meeting


 September 2005                                                      Rolls Royce                        Jeffrey P. Moore


                                                               Leicester Projects                          Ross Wilmott
                                                     Lincolnshire Enterprise SSP                             Bryan Carr
 October 2005                                                        Rolls Royce                        Jeffrey P. Moore


 November 2005                                                       Rolls Royce                        Jeffrey P. Moore


 December 2005                                                  National Forest                             Steve Brown
                                                   Caravan Club of Great Britain                            Steve Brown
                                                             Regional Assembly                            Geoff Stevens
                                                             Regional Assembly                                 Parvin Ali
                                                                    Rolls Royce                         Jeffrey P. Moore
 January 2006                                                        Rolls Royce                        Jeffrey P. Moore


 February 2006                                                       Rolls Royce                        Jeffrey P. Moore
                                                     Lincolnshire Enterprise SSP                         Neville Jackson
 March 2006                                                          Rolls Royce                         Jeffrey P. Moore
                                                     Lincolnshire Enterprise SSP                          Neville Jackson
                                                                Ravensgroup plc                              Steve Brown
                                                              Weber Shandwick                          Jonathan McLeod



In each of the above cases, the Board member or Director concerned took no part in the discussions or in the subsequent
decisions by the Board on the proposals. There were no other transactions in which Board members, key management
staff or other related parties registered a material financial interest with East Midlands Development Agency.
East Midlands Development Agency




Accounts direction given by the Secretary of State, with
the approval of the Treasury, in accordance with section
14(2) of the Regional Development Agencies act 1998

The annual accounts of East Midlands Development Agency (hereinafter referred to as “the Agency”) shall give a true
and fair view of the income and expenditure and cash flows for the financial year, and the state of affairs as at the year
end. Subject to this requirement, the Agency shall prepare accounts for the financial year ended 31 March 2006 and
subsequent financial years in accordance with:

a. The Government Financial Reporting Manual (FreM)¹ issued by HM Treasury and as amended from time to time;
b. Other guidance which the Treasury may issue from time to time in respect of accounts where the requirement is to
give a true and fair view of the financial statements; and
c. Any specific disclosures required by the Secretary of State,

except where agreed with the Treasury, in which case the exception shall be described in the notes to the accounts.

This direction replaces that dated 10 March 2004.

Signed by authority of the Secretary of State for Trade and Industry




Assistant Director in the Department
of Trade and Industry
09 November 2005
Annual Report and Accounts 2005-2006                    106 | 10




East Midlands Development Agency
Apex Court
City Link
Nottingham
East Midlands
NG2 4LA

Tel: +44 (0)115 988 8300
Fax: +44 (0)115 853 3666
Email: info@emd.org.uk
www.emda.org.uk

All photography taken for emda
by Green Imaging Ltd.
www.greenimaging.co.uk

This publication is printed on ERA Silk. Era is UK
produced, comprising 50% de-inked post-consumer
waste collected from within 100 miles of the mill,
which lessens the impact on UK landfill. The balance
is ECF pulp sourced from managed / certified forests.

Cover image Leicester City Centre.
East Midlands Development Agency

								
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