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									Executive Committee 2 October 2001 Foot and Mouth Recovery

Report of Cabinet
We have noted the attached report of the Director of Economic Development and Planning which summarises the main actions taken to address the impact of foot and mouth disease on the economy of County Durham and the North East Region. The Chief Executive informed us that One NorthEast is expected to produce a report of its findings in early October and therefore suggested that the Director of Environment and Technical Services arrange the seminar for as soon as possible after the report’s publication.

Cabinet 25 September 2001 Foot and Mouth Recovery

Report of Mark Lloyd, Director of Economic Development and Planning
Purpose 1 This report summarises the main actions taken to address the impact of foot and mouth disease (FMD) on the economy of County Durham and the North East Region.

Background 2 The first case of FMD in the UK for 20 years was confirmed on 20 February 2001 near Brentwood in Essex. Since then 2,023 cases have been confirmed in Great Britain (as of 18 September 2001) with 93 cases in County Durham. The last confirmed case in the County was on 4 September, the first since 3 June. Anecdotal evidence from several events held recently have revealed that many tourism businesses are worried about their survival over the winter months, as they have suffered a lack of income during the summer, in some cases none at all. One organisation particularly worried about its survival is the Youth Hostel Association. Of the three hostels situated in County Durham, two have seen their income fall by 65% and one has been unable to open at all. Other anecdotal evidence is beginning to filter through from businesses situated in the blue box zone, which is covering an area north of Stanhope. A lack of visitors to the area is adversely affecting the income of many tourism businesses situated there.




Action taken by the Government to address the impact on the rural economy 6 The Government announced a range of measures aimed at assisting businesses affected by FMD to survive the immediate and in many cases severe financial jeopardy. These initiatives were set out in my earlier report in May.


Since that report, the following additional schemes have been introduced:  The Countryside Agency has announced the second phase of its grant scheme designed to accelerate the reopening of footpaths, with particular support for those areas still experiencing outbreaks of FMD. The Inland Revenue and Customs and Excise have deferred some £71m of tax without interest charge for severely affected businesses. Local authorities have granted or are considering some 3,500 applications for hardship rate relief in addition to deferment of rates bills and applications for revaluation The Rate Relief scheme announced by the Government in April will continue to apply until the end of this year. It will help Councils to grant 100% rate relief to eligible small businesses in these areas for this period. For the 37 Councils in the areas most seriously affected by FMD (including all District Councils in County Durham except Chester-le-Street), Central Government’s 95% contribution to the cost of rate relief will apply to larger businesses with a rateable value of up to £50,000. The local authority will pay the remaining 5%. The Prince of Wales launched the Business in the Community Rural Action programme on 24 July 2001, an extension of the Prince’s Business in the Community initiative. This programme includes a package of hands-on measures designed to transform the rural economy. Examples include: businesses encouraged to source food locally, and efforts to revive market towns. Its main aim is to decrease migration of younger people from the rural areas and to create a sustainable rural economy. Funding totalling £400,000 for the second Rural Stress Action Plan was announced by the Government on 3rd August 2001. This is an extension of the original Plan and now includes initiatives for rural communities as well as agricultural based initiatives. An extension was also announced for the match funding scheme, operated by the Countryside Agency, which matches public donations to voluntary organisations helping farming and rural communities hit by FMD. The Government announced a £3m boost to the UK’s food and drink industry on 9 August 2001 to help it recover from the foot and mouth crisis. More than half the £3m will be spent in the UK to boost the marketing and promotion of regional food and the rest will be spent by the export marketing agency – Food from Britain – on rebuilding overseas sales. A strategy and framework for action enabling tourism to make a positive and sustainable contribution to the rural economy has been launched by the Countryside Agency and the English Tourism







Council. It is a 16-point, five year strategy aimed at revitalising rural tourism. It identifies four priorities for action: influencing and enabling visits, enriching the rural tourism experience, fostering rural tourism enterprises and improving the management of rural destinations. Impact and Action Taken within the North East Region 8 A survey was carried out in June by the Federation of Small Businesses to discover the impact FMD has had on the regional business community. It reveals that considerable damage has been caused to local businesses and predicts a continuing ‘slow burn’ effect. In the Region over a 12-month period from the start of the crisis, 11% of businesses expect to lose 0 to 9% of their turnover with 9% losing 10 to 19%. The survey reveals that in County Durham, 5% of businesses expect to go bankrupt due to the effects of this crisis and only 10% have applied for a business rate reduction. Worryingly, of those that have been affected by FMD, 58% have sought no advice or help for problems they are experiencing. One NorthEast are currently working up a North East Rural Action Plan together with the Countryside Agency, Government Office North East and the North East Assembly. Its aim is to develop and implement a longer-term recovery plan for rural areas and is due to be published in October.


Action Taken within County Durham 10 Significant assistance has been made available and has been taken up in County Durham. The County Durham Foundation has set up a countryside relief fund consisting of public donations to help all businesses and farms affected by the crisis. The Fund is being matched £ for £ by the Countryside Agency Rural Distress Fund through the Community Foundation Network. It supports:  Funding to enable voluntary organisations to increase their capacity to help people directly affected by FMD.  Emergency funding to help those voluntary organisations which are experiencing funding shortfalls and loss of revenue due to FMD.  General support to maintain community activities and projects in directly affected areas.  Support for individual hardship cases where all other sources of support have failed, they cannot fund the activity themselves, and can demonstrate a sustainable plan for the future.  Support for a collective of businesses affected by the epidemic will be available to cover additional marketing costs. There is no financial assistance available for individual businesses.  The closing date for applications is 30th November 2001. Priority will be given to projects that provide services and support to people suffering greatest hardship, those in the areas hardest hit by FMD will be prioritised.


As of 6 September 2001 the take up of Business Link County Durham’s Rural Recovery Grant Scheme is as follows:    applications for the Interest Relief Grant worth a total of £5,800 106 applications for the Marketing Grant worth a total of £402,000 88 applications for the Investment Support Grant totalling £138,000

Early indications from One NorthEast revealed that County Durham had submitted 75% of the total applications for the Region. Unfortunately since July the Marketing Grant has been closed due to over-subscription and the Investment Grant only has around £3,000 left in the pot. The closing date for applications to this Fund is the 30 September 2001. This leaves a major question – where will support for businesses come from in the future? 12 The bid which was submitted by the County Durham Rural Development Programme (RDP) Partnership to One NorthEast in March had an allocation of £181,344 approved in principle. Listed below is the status of each project submitted.

Under Appraisal

UTASS FMD Crisis Response including Rural Advice Worker Wear Valley Tourism and Promotion Officer Wear Valley Local Food Links and Promotions Officer Wear Valley Rural Business Support and Advice Worker Small Scale Drama: Commission and Tour

Assistance Required (£) 44,143 12,655 24,350 25,750 18,000

Approved Rural Recovery Promotional Campaign – Teesdale Rural Recovery Events Promotion – Teesdale Support for Tenant Farmers in Teesdale 13

Assistance Granted (£) 5,673 5,000 3,000

£80,000 has since been made available by One NorthEast for which five projects have come forward. The deadline for the return of these applications to the RDP Secretariat is Monday 24 September, after which appraisals will commence. The five projects are listed below:      Destination Marketing – County Durham ICT and Business Competitiveness Training for Rural Based Industries (Bishop Auckland College) Durham City Farmers Market Recovery Co-ordinator for Tow Law Tow Law Commercial Building Improvement Grant Scheme


Local authority areas eligible for the Rate Relief Scheme in County Durham are as follows: Derwentside – Have had 14 enquiries of which 4 applications have been approved (assistance is to be extended to 2 of these); another 2 are likely to be approved this week and 3 other applications are pending. Durham City – The Revenue Department were unaware of the scheme. Easington – Have had 12 enquiries of which 3 applications are being considered and are to be put to Members this week. Sedgefield – Had 10 enquiries, 5 of which are valid and 1 has been approved. Teesdale – 64 applications, 59 approved. Wear Valley – 6 applications approved from 130 enquiries, a lack of staff resources was cited as the reason for delays in the process.

Conclusions 15 The take-up of financial assistance in County Durham is welcome, but leaves at least two questions that need to be addressed: (1) What is to be available, if anything, as financial assistance for the rest of the current year? (2) What will the long awaited Regional Rural Action Plan propose for the medium to long-term recovery of the rural economy? 16 Members may wish to seek answers to these questions at the seminar being organised for all members by the Director of Environmental and Technical Services. John Ashby Tel: 0191 383 3342


Appendix 1: Implications Finance


Equal opportunities


Crime and disorder


Human rights


Young people


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