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APPENDIX 5: INVERNESS

The City Vision

A5.1 The Inverness City Vision sets out a 30 year framework for bringing about change in the city as it looks to consolidate its performance and reputation as the "natural place to be". The core strategy set out an aim to "cherish the best of the old, whilst capturing the zest of the new". The vision focuses on assimilating new ways, championing social change and pioneering sustainable developments while being rooted in Highland traditions and proud of its distinctive heritage and quality of life. The 2 key outcomes outlined in the vision cover improving quality of life for residents and raising the city's profile.

A5.2 In order to reach these ultimate outcomes the vision states that Inverness will have had to exhibit more of the following changes:-

A5.3 The vision outlines 6 explicit themes. These include:-

• City centre renaissance: creating a thriving safe and liveable city centre;
• A sustainable city: where people can live, work and study in a quality environment, now and in the future;
• The gateway to the highlands: developing a modern transport infrastructure as a basis for future prosperity;
• Cultural capital: by being a burgeoning European city set in Europe's most dramatic scenery;
• The learning city: ensuring that the citizens have access to the best educational facilities; and
• The expanding city: creating a new sustainable living environment for the future along the A96 Corridor.

A5.4 The vision is focused on developing Inverness's city status as the only major urban conurbation in the Highlands. It outlines a plan for growth that will allow Inverness to develop its urban role through a focus on the natural environment, in which the city sits, and by building on its heritage and culture.

A5.5 The vision was prepared by the Highland Council in association with its community planning partners. The vision is based on the Highland Community Plan, the Highland Structure Plan and the Inverness Local Plan.

A5.6 The document represents the Inverness City Partnership's ¹⁶ response to the challenges of city status, developed under the Highland Council's leadership in collaboration with its partners in the overarching Wellbeing Alliance ¹⁷, the strategic framework for delivering community planning in the Highlands.

City Growth Fund Projects

A5.7 Inverness developed 15 specific projects that were to receive CGF funding in the first round allocation. These are outlined in Table A5.1. The Table includes the project, the broader typology in which the project fits (developed by the consultant team) and the total original allocation for that project.

A5.8 The 15 original projects were funded to a value of £3.1 million. The projects fall into the following categories:-

• Just over half of the budget (52%) being allocated to Streetscape. This amounts to £1.6 million on 4 projects. Three of these 4 projects were allocated £500,000 each and included the Public Domain Around Inverness Castle, Streetscape Improvements and Waste Management projects;
• Just under a quarter of the original budget (£700,000) was allocated to Public Transport infrastructure. The Wired City project accounts for £500,000 of this total, with the remaining 2 projects accounting for £100,000 each;
• 6% of the budget was allocated to Business Property, Domestic Property and Community Participation (£200,000 each); and
• 3% of the initial allocation was for City Marketing and Cultural Events.

TABLE A5.1 Inverness City Growth Fund Projects and Original Budget Allocation

The Capital: Revenue Split

A5.9 The Inverness CGF allocation was largely committed to capital projects, with almost half (46%) of the capital allocation committed to the Streetscape activity (Table A5.2). The public transport infrastructure activities accounted for a further 29% of the capital allocation. These 2 activities together account for three quarters of the total capital allocation. These 2 activities account for the greatest proportion of the total Inverness CGF budget which explains why they account for such a large proportion of the capital allocation.

A5.10 Only 2 activities (business property units and community participation) had a revenue allocation. The total revenue allocation was relatively small with most of the money allocated to physical projects. However, in the case of the Business Property scheme, there were plans to recruit a Business Improvement District, while a partnership officer was recruited to support the Merkinch SIP, under the Community Participation activity.

A5.11 All of the mixed allocation was committed in the Streetscape projects. This activity area was the only one that had a mixed allocation which explains why it accounts for the full budget in this area.

TABLE A5.2 Capital and Revenue Split of Inverness Projects
(Column Percentages)

Leverage

A5.12 Inverness has levered in £10.1 million of third party support. This breaks down as £9.9million of public sector leverage, and around £270,000 from the private sector (Table A5.3).

A5.13 The public sector leverage is spread across the activities supported by the CGF, with the exception of the city marketing activity which has not managed to lever in any third party support. The greatest leverage was evident in the Business Property activity accounting for 35% of all public sector leverage. The main sources of funding were public sources including funding from the Scottish Executive. There were also 2 project specific funding sources with the University of the Highlands and Islands ( UHI) providing £1.9 million to the UHI executive office (or more correctly CGF allocated £100,000 to UHI's executive office) and the Inverness City Centre Management providing £30,000 towards the BID. In addition, Streetscape activity levered in £3.2 million, with almost all of this coming from public sources. Most of this leverage came through the Streetscape improvement project, which brought in leverage of around £2.8 million. Other areas of note included:-

• Community participation, which levered in £1.9 million. The single largest contributor from the public sector was the Scottish Executive Voluntary Issues Unit which contributed £1.6 million towards the cost of the Voluntary Sector Shared Resources Centre; and
• Over £800,000 of leverage in the transport activity. This appears to come from a range of local partners including Highland Council, Highland and Islands Enterprise and the local transport partnership ¹⁸ as well as national sources such as the Scottish Executive Public Transport Fund.

A5.14 There was a smaller amount of private sector leverage which has added extra resources to the CGF activities around public transport infrastructure, domestic property and community participation. Private funders include Fujitsu, for the Wired City project, and Moray Estates for the Regeneration and Expansion Masterplans project.

TABLE A5.3 Public and Private Sector Leverage in Inverness

A5.15 The basket of projects appears to be quite wide ranging splitting £3.1 million between 7 activity areas, 15 projects and a further 31 sub projects (that is more specific elements developed as part of a wider project such as Invernet or Affordable City housing). This "pepper pot" approach spreads a fairly limited resource over a number of different areas. The projects themselves can generally be described as "preparatory projects" in that they are laying the groundwork, such as market research or plans, for further action, with a smaller number of projects actually taking developments forward.

Fit between projects and City Vision

A5.16 The extent to which the selected projects meshed with the Vision was analysed. The analysis looks for areas where there has been no clear link made between the project and the city vision. This is not to say that there are no linkages between the project and the aims set out in the vision, but that the link is not immediately clear or has not been made in the review documents. The analysis is summarised in Table A5.4.

TABLE A5.4 Fit Between Projects and City Vision

A5.17 There are a number of activities that appear to fit with the themes in the city vision. In particular:-

• Public transport activity fits with the idea laid out in the Gateway to the Highlands development theme, which talks about a modern transport infrastructure as a basis for future prosperity; and
• City marketing activity fits closely with the Cultural Capital development theme in the vision, with the plan under this theme being to develop a burgeoning and authentic European city.

A5.18 There are a number of areas where the fit is less clear cut. There is no explicit link between the activities around Streetscape, Domestic and Business Property and Community Participation and the development themes that encapsulate the programme to achieve the city vision. However, the development themes are sufficiently wide in their description to cover these areas. For example, the City Centre Renaissance Development theme which talks about a thriving, safe and liveable city centre would be expected to require some Streetscape work as a part of it. The key issue though is that while there can be a link this has not been made explicit in the city vision.

Progress with City Vision Projects

A5.19 The Inverness City Growth Fund activities are at varying stages of completion as Table A5.5 shows. Completion is assessed in relation to the money actually spent on the projects as outlined in the evaluation report ( CGF Annual Report 2003-06).

TABLE A5.5 Project Spend and Underspend

A5.20 The activities that have experienced the greatest level of progress cover Business Property uses and Community Participation. These activities have spent 68% and 60% of their total allocation respectively. More specifically:-

• In the case of business property uses the UHI Executive office had spent its full allocation on the purchase and redevelopment of the former Royal Northern Infirmary, saving a 200 year old landmark and providing a vital resource to the future University of the Highlands and Islands; and
• The Voluntary Sector Resource Centre project, part of the community participation activity, had spent its full allocation on a new build property that would provide affordable third sector office space.

A5.21 The key factor behind both of these projects is that the CGF money was part of a larger allocation that went towards the development. The CGF money was used to fit out the office space developed at the Voluntary Sector Resource Centre and to develop conference and meeting facilities at the UHI Executive office. In many respects this makes these projects "quick wins" as the main development had already been completed, with the CGF funding being used to top up the wider allocation.

A5.22 The City Marketing activity was 81% over budget based on the original allocation, spending around £83,000 more than originally planned. This activity was based on one project based around the development of the City Partnership Office. The overspend was the result of increased overhead and equipment costs for 2 new members of staff and property and maintenance costs that were higher than expected. Agreement was sought from the Scottish Executive to increase the project budget and the budget is now being carefully monitored to avoid further issues.

A5.23 The activity areas which have had the largest financial allocations (Streetscape and public transport provision) are also the areas with the greatest level of underspend, with each activity accounting for 52% and 34% of the total.

A5.24 The Streetscape activity has spent around 43% of its original allocation, but has experienced a high degree of underspend across 3 of the 4 projects funded, while one has overspent. In particular:-

• The Waste Management project accounts for £432,000 of the underspend. This has been the result of significant slippage in investing in city centre recycling opportunities. Agreement with the Scottish Executive had been sought to significantly reduce the budget for this project;
• The Public Domain around Inverness Castle and Riverside accounts for £380,000 of the underspend. The slippage has occurred as a result of the delayed start to the Castle Environs part of the project. The delay was caused by the difficulty faced in achieving an acceptable scope of works within the budget
• The Streetscape Improvements project accounted for £129,000 of the underspend. This had occurred as a result of a delayed start to the Streetscape programme and the lag time from proposals through to design work and on to implementation; and
• The Greenspace project that sits within the Streetscape activity actually overspent by 27%. This was the result of cash flow issues at the end of the financial year. Income for Greenspace Scotland will bring this project back to budget

A5.25 The public transport activities funded by the CGF have also experienced a high degree of underspend. In total this activity accounted for one third of the total underspend and had committed just 16% of the budget allocation. One project in particular has underspent by a significant margin, while 2 others have failed to use the funds allocated. The project budget has been reduced with money being re-allocated to the Streetscape activity. Key projects that had underspent included:-

• The Wired City project, which had underspent by £459,000, or 92% of its original allocation. The project has underspent as a result of slippage on 2 of the sub projects: the Real Time Passenger Information and Local Partnership TV projects;
• The Invernet project has underspent by £100,000 largely due to slippage in drawing down funds from various partners; and
• There has been a small underspend on the Transport projects as a result of difficulties in recruiting appropriate candidates for the Strategic Transport Team.

A5.26 There has also been underspend in the Domestic Property and Cultural Investment activities funded, though these account for around 4% of the total underspend each.

A5.27 Underspend was also analysed based on the type of project, in effect capital, revenue or mixed. This showed that 68% of the underspend was accounted for by capital projects, 25% by mixed and 8% by revenue projects.

A5.28 More specifically, the capital element of the Public Transport Infrastructure project accounted for 34% of the underspend, followed by the capital element of the Streetscape project (27% of the total underspend). The mixed element of the Streetscape project accounted for one quarter of the total underspend. This means that these 3 areas accounted for 86% of the total underspend, essentially based on 2 activity areas and 6 projects

A5.29 The CGF allocation could be used not just in the core city, but could also be spent in the surrounding area which makes up the city region. In total 5% of Inverness's first round allocation was spent in wider areas, mostly focussed around the A96 growth corridor.

A5.30 Overall, the original investment plans for the CGF have changed across a number of projects, though the overall effect on the activity typologies we have developed is quite minimal. The budgets have been reduced in the Wired City, Waste Management and Affordable City Housing projects, with corresponding increases in the Streetscape and City Partnership Office projects.

A5.31 Current progress shows that Business Property, Community Participation and City Marketing have been the main areas of spend, even though they only accounted for 15% of the total Inverness first round allocation. The original project set focused more on Streetscape and Public Transport Infrastructure, which accounted for three quarters of the planned expenditure and, while these are still the primary focus of the scheme, it will only be once the spend has been committed that these will be the main outputs, However, there is an expectation that when the spend is committed they will meet their revised allocations.

Project Management Issues

A5.32 In common with the other cities overall responsibility for tracking progress with projects and taking decisions on amending budget allocations to projects has been retained by a strategic board consisting broadly of the original community planning partners involved in the development of the Visions and selecting the projects. In Inverness's case this forum is the Board of the Inverness City Partnership which consists of Councillors, business representatives through the Chamber of Commerce and other key partners including the HIE network.

A5.32 The project management of CGF at the level of implementation has presented some difficulties. Initially it was expected that individual project managers within partner agencies would implement projects, and report directly into this strategic board. In practice this proved problematic, and progress with the implementation of CGF projects was slow over the first 18 months. A number of reasons are perceived to have contributed to this including a lack of buy in from service delivery staff; many of whom had not been directly involved in the project selection process; a lack of capacity within Inverness city to support the implementation of projects; the sheer number of projects that Inverness was pursuing, some 15 in total; and that given the previous factors the scope of some of the projects were overly ambitious.

A5.33 The City Partnership Board recognised these difficulties and in 2005 appointed a dedicated project manager to oversee implementation, with a remit to accelerate the pace of spend, and bring some focus to the basket of projects being pursued. The viring of monies to achieve this was agreed with the Scottish Executive. On the face of things the project manager has had some success, with significant progress being made on a number of key projects, including the streetscape project. Funding has also been moved away from some projects that were proving difficult to pursue, including the Waste Management Project, with the scale and ambitions of those projects amended to a more pragmatic level.

Scottish Executive

A5.34 Consultees noted that at the outset the Guidance on the deployment of CGF monies from the Executive was very light touch, with an emphasis on cities developing a response that was appropriate to their particular circumstances. As a result they detected no initial concerns over the broad focus of the Inverness Vision and project set.

A5.35 As issues around underspend emerged, Inverness was aware of a more active approach on the part of the Executive to bring spend forward. Discussions over the appointment of project manager were viewed as positive and the Executive was commended for the flexibility that was inherent in the fund to allow new issues to be addressed without an overly formal approval process. More recently Inverness has become aware of concerns around the level of revenue versus capital spend in the CGF project set. While this feedback was welcomed it was highlighted that again, no clear guidance had been given by the Executive on this issue at the outset of CGF.

Impacts

A5.36 There has been no formal appraisal of economic impact of the Inverness CGF projects to date. The City Centre Streetscape project is expected to bring benefits to the vitality of the main shopping area and surrounding areas, although these will take time to emerge.

A5.37 The consultations suggested that some important softer benefits have already been delivered through the awarding of CGF monies. Importantly CGF has brought a renewed focus on the importance of the City to the future development and growth of the Highland Region. The establishment of the City Partnership was the first step in doing so and CGF has provided an important budget stream with which to implement projects.

A5.38CGF has also delivered some important environmental benefits, particularly in around the riverside, and will do so in the City's main shopping area with the completion of the City Centre Streetscape project. Both projects are perceived to have the potential it improve the image of the city, particularly amongst business visitors and tourists.

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