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STRATEGIC INVESTMENT AND REGENERATION OF SITES BILL

EXPLANATORY AND FINANCIAL MEMORANDUM

INTRODUCTION
  1. This Explanatory and Financial Memorandum relates to the Strategic Investment and Regeneration of Sites Bill. It has been prepared by the Office of the First Minister and Deputy First Minister (OFMDFM) in order to assist the reader in understanding the Bill and to help inform debate upon it. It does not form part of the Bill and has not been endorsed by the Assembly.
  2. The Memorandum should be read in conjunction with the Bill, and is not intended to be a comprehensive description of the Bill. Accordingly where a clause or part of a clause (or Schedule) does not seem to require any explanation or comment, none is given.
    3. BACKGROUND AND POLICY OBJECTIVES
  3. The Bill aims to take forward two elements of the Reinvestment and Reform Initiative (RRI) which was announced by the First Minister and Deputy First Minister on 2 May 2002, after negotiations with the Prime Minister and Chancellor of the Exchequer. First, it creates a new organisation in the form of a Strategic Investment Board to ensure that strategic infrastructure is planned and delivered in a way that makes the most of all the means and resources available. Second, it deals with the identification of some strategic military bases and security sites which are to transfer to the Northern Ireland Executive (hereafter referred to as the Executive) free of charge, enabling use to be made of them for economic and social regeneration of local areas.
  4. The need to address the substantial backlog of major (capital) investment projects required to give Northern Ireland a first-class infrastructure for the 21st century was significant in bringing about the RRI. The RRI enabled the Executive to make an immediate £200 million available for the next two years. In addition, from 2004-05, a new borrowing facility will give the Executive the option of using additional revenue sources to lever in low cost borrowing, which could accelerate dramatically the pace of infrastructure investment. These resources would help meet a pressing need but money alone will not meet the scale of change which the Executive is seeking. It is just as important to take a highly innovative approach to managing and financing the infrastructure programme so that resources are wisely used and complement the Executive's existing programmes.
  5. In the context of the Reinvestment and Reform Initiative, the Executive has decided to create a new organisation in the form of a Strategic Investment Board to ensure that strategic infrastructure is planned and delivered in the most effective way possible. It is intended that the Strategic Investment Board should have the necessary expertise and resources to serve the Executive's programme of strategic capital investment. By using the new body the Executive hopes to provide the best possible opportunities to promote the effective use of all the various means available.
  6. The Bill also sets out the way in which the Strategic Investment Board will work in partnership with departments by empowering it to advise the Executive and public bodies and requiring the latter to have a duty to consider that advice.
  7. The legislation establishes the Board as a statutory corporation funded by the Office of the First Minister and the Deputy First Minister. The legislation also confers the appropriate functions on the Board, empowering it to carry out its duties.
  8. The second strand of the RRI which the Bill provides for is the transfer to the Executive, from the Ministry of Defence and Northern Ireland Office, of a number of military bases and security sites free of charge. The initial sites are Ebrington Barracks in Londonderry, Crumlin Road Gaol, the Maze Prison, and security force bases at Magherafelt, Malone Road, Belfast, and adjacent to the Maze Prison at Long Kesh. It is possible that further sites will transfer in the future, but this may not be free of charge.
  9. The Bill provides the OFMDFM with the power to hold, manage, develop and dispose of the assets transferred to the Executive under the RRI. In addition, it provides OFMDFM with the power to establish development corporations (DC), with the object of regeneration. DCs will be established, where the Executive has deemed this to be a feasible approach for a chosen site or sites, for the purpose of major economic and social and/or environmental regeneration. The Bill also provides for partnership with local communities and businesses.
    10. CONSULTATION
  10. Because of the urgency of the need to acquire the necessary powers it has not been possible to undertake pre-legislative consultation because of the tight timescale involved.
  11. The Bill provides for consultation with a number of statutory bodies and others in relation to the powers of the Development Corporation(s).
    12. OPTIONS CONSIDERED
  12. In examining the options for the strategic investment board the Executive and the Project Board examined in detail the option of establishing the body as some form of company. After careful consideration it was concluded that the statutory corporation option offered greater transparency and accountability from the Assembly's perspective and that option was therefore selected.
    13. OVERVIEW
  13. The Bill is in three parts with Part I containing provisions on the Strategic Investment Board, clauses 1 -5, Part II contains provisions on the Regeneration of Sites, clauses 6-23 and Part III Supplementary information, clauses 24-26. In addition the Bill has 3 Schedules.
    14. COMMENTARY ON CLAUSES

    Part I: The Strategic Investment Board for Northern Ireland

    Clause 1: The Strategic Investment Board for Northern Ireland

    Subsection (1) provides for the creation of a corporate body known as the Strategic Investment Board [SIB].

    Subsection (2) Schedule 1 (which makes detailed provision about theconstitution and operation of theBoard) to have effect. Schedule 1 covers arrangements for the functioning of the Board in terms of the number of members and the chairmanship; the appointed period of office for members; payments that may be made to members in terms of remuneration and allowances; staffing; the establishment of committees and the Board's powers of delegation; proceedings for Board meetings (including handling of conflict of interest) financing arrangements; and reporting requirements.

    Clause 2: Functions of the Board

    Subsection (1) provides that the Strategic Investment Board will advise the Northern Ireland Executive, at a strategic level, in relation to the formulation and implementation of its programme of major investment projects.

    Subsection (2) provides that the Strategic Investment Board shall advise and assist public bodies in carrying out of their major investment projects.

    Subsection (3) The previous subsections confer on the Board the power to advise on the planning and prioritisation of programmes and projects, the funding of projects (including borrowings for that purpose) and the general implementation of projects. Subsection (2) also enables the Board to provide research, consultancy and advisory services to public bodies.

    Subsection (4) Advice should be provided in accordance with arrangements as approved by the Executive. It is envisaged that further details of the arrangements will be decided by the Executive in due course. The advice in subsection (2) will be in relation to particular projects as have been identified and in accordance with such further arrangements as are agreed between the public body and the Board.

    Subsection (5) allows the Board to charge for its advice under subsection (2).

    Subsection (6) requires the Board to secure high quality and value for money in relation to the projects and also to consult with those affected or likely to be affected by the exercise of its functions.

    Subsection (7) defines "major investment projects".

    Subsection (8) defines a project in this context.

    Subsection (9) defines a "public body".

    Clause 3: Duty on public bodies in relation to the Board

    Subsection (1) requires every public body in the exercise of its functions to facilitate and cooperate with the Board in line with the arrangements approved under clause 2(4).

    Subsection (2) every public body must also have regard to any advice given to it by the Board under clause 2(2).

    Subsection (3) clarifies that this applies for advice relating to specific projects generally or more broadly and given to a body individually or more widely.

    Clause 4: Review of arrangements under this Part

    Subsection (1) provides for the Board to keep its functions and working under review and to report thereon to OFMDFM.

    Subsection (2) states the date the first review is due.

    Subsection (3) gives the timing of subsequent reports.

    Subsection (4) specifies the scope of the report.

    Subsection (5) requires the report of a review to be laid before the Assembly.

    Clause 5: Power to alter arrangements under this Part

    Subsection (1) enables (OFMDFM) to confer by order additional functions on the Board which relate to major investment projects and which are appropriate for exercise by the Board.

    Subsection (2) and subsection (3) allows (OFMDFM) by order to dissolve the Board and transfer its property, rights and liabilities.

    Subsection (4) requires (OFMDFM) to consult the Board and to lay a draft of any such order before the Assembly for approval.

    Part II: Regeneration of Sites

    Clause 6: The relevant sites

    Subsection (1) This refers to the arrangements between the Executive and Her Majesty's Government under the Reinvestment and Reform Initiative (RRI), which was announced on 2 May 2002, whereby a number of former prisons and security bases are to pass to the ownership of the Executive for the purpose of development of the surrounding region.

    These provisions apply to the sites announced on 2 May 2002 and any further security sites and military assets, as yet unknown, which may pass to the Executive under the RRI.

    Subsection (2) provides that the Office of the First Minister and Deputy First Minister (OFMDFM) may hold and manage the sites which are transferred.

    Subsection (3) stipulates that a certificate signed by the First and Deputy First Minister will prove that a particular area of land is part of a relevant site, and thus an area to which the provisions of the Act are applicable.

    Clause 7: Disposal of relevant sites by the Office

    Subsection (1) provides for OFMDFM, with DFP approval, to dispose of any of the sites.

    Subsection (2) provides that, where OFMDFM wishes to dispose of all or part of a relevant site, this may be for monetary reward or otherwise.

    Subsection (3) provides that OFMDFM may impose certain restrictions and conditions on the disposal of an asset. This may include, among others, conditions on how the land is to be developed, the use to which it is to be put, or stipulate a certain period during which the land cannot be subsequently disposed of. Such restrictions and conditions will be made at the discretion of OFMDFM.

    Subsection (4) provides that where relevant sites are disposed of they will not be affected by the Stormont Regulation and Government Property Act (Northern Ireland) 1933 (c. 6).

    Clause 8: Regeneration of relevant sites by the Office

    Subsection (1) provides powers for OFMDFM, where appropriate, to develop a site itself.

    Subsection (2) provides that OFMDFM, with DFP approval, may provide financial assistance to either a person or body where their intention is to undertake activities, as defined in subsection (3), for the purposes of regenerating a site.

    Subsection (3) details those activities for which OFMDFM may provide financial assistance, in order to achieve regeneration of the relevant site. This includes economic, commercial, environmental, social and community undertakings. In addition, assistance may be provided by OFMDFM where housing is provided, buildings refurbished, or for any other activities which persons and/or organisations carry out, which OFMDFM believes will benefit the regeneration of the site.

    Subsection (4) provides that financial assistance given by OFMDFM to a person/body for activities listed in subsection (3), or which will benefit the site generally, may take the form of a grant, loan, provision of a guarantee, or interest in property of a corporate body.

    Subsection (5) states that where OFMDFM provides financial assistance for activities laid out in subsection (3), and which are of general benefit to the site, it may stipulate certain terms and conditions that are associated with the financial assistance that is provided. In addition, where appropriate, OFMDFM may stipulate certain terms and conditions where repayment of the financial assistance is required.

    Clause 9: Acquisition of land by the Office

    Subsection (1) provides that OFMDFM may acquire land, either by agreement or by law under limited terms and conditions. These include land that is adjacent to its site, and is required in order to achieve regeneration of the site or to carry out its functions; and land required in order to provide or improve access to the relevant site.

    Subsection (2) brings into effect Schedule 3 regarding compulsory acquisition of land for the purpose of subsection (1), or in order to provide OFMDFM and/or its authorised personnel with powers of entry so that it may acquire land for the purposes stated under subsection (1).

    Subsection (3) provides that where OFMDFM acquires land, under subsection (2), references in the Bill to the OFMDFM's relevant site shall also include the land that is acquired under the provisions of subsection (1).

    Clause 10: Agreements and consultation with other bodies and persons

    Subsection (1) provides that OFMDFM may enter into an agreement with any person or body in order to achieve development of its site, and may undertake whatever actions are necessary in order to achieve this development.

    Subsection (2) requires that the OFMDFM consults, in relation to the exercise of its functions, under clause 8, for the relevant site, the District council within whose area the site falls; other public bodies as the OFMDFM deems appropriate; and other bodies and persons that would appear to have an interest in the work of regenerating the site.

    Clause 12: Power to establish development corporations for relevant sites

    Subsection (1) provides OFMDFM with the power to establish a body known as a development corporation(s) (DC) for one or more sites transferred under RRI. Thus a development corporation may be responsible for the development of more than one site.

    Subsection (2) provides that the DC will be corporate body; the name of which will be specified in the order establishing the DC.

    Subsection (3) stipulates that Schedule 2 will have effect in relation to any development corporations that are established. Schedule 2 provides arrangements for the functioning of the DC in terms of the number of members, chairmanship of a DC; the appointed period of office for members; payments that may be made to members in terms of remuneration and allowances; staffing; the establishment of committees and their staffing; working procedures, financing arrangements and the production of an annual report.

    Subsection (4) provides for OFMDFM to make an order giving a DC that is responsible for one of the sites transferred under RRI similar functions and responsibilities for any other such site.

    Subsection (5) provides that where a DC is responsible for, and carrying out functions in relation to, two or more relevant sites, OFMDFM may stipulate that the DC ceases to function in relation to one or more of the sites.

    Subsection (6) lays out two conditions, which apply where OFMDFM, by order, creates a DC for a relevant site, or provides for a DC to carry out functions and responsibilities for another site. These are that the Assembly must approve the arrangements and that the site is owned by OFMDFM.

    Subsection (7) makes provision that where, a DC is responsible for two or more relevant sites, or OFMDFM has stipulated that the DC may carry out its duties and functions on an additional site, any references to the relevant site of a DC, should be taken as referring to all of the sites within the remit of the DC.

    Clause 13: Object and general powers of development corporations

    Subsection (1) provides that the objective of the DC is to regenerate and develop the site.

    Subsection (2) stipulates that the DC's objective, of regenerating the site(s) for which it is responsible, can be achieved through a number of means. Any or all of these can be applied. The objective of the DC can be achieved by making effective use of land and buildings on the relevant site; encouraging both the public and private sector to invest in the proposed development programme; facilitating the development of industry and commerce in the relevant site, creating an attractive environment; and ensuring that social recreational, cultural and community facilities are available where regeneration work is being undertaken.

    Subsection (3) stipulates that the DC's objective may be achieved through a range of activities ranging from holding and developing the sites to providing financial assistance, carrying out research and generally anything necessary to achieve its objective.

    Subsection (4) states that a DC must comply with the law in general.

    Subsection (5) Where the DC is involved in a transaction with others in exercising its powers any such transactions shall not be made void by the failure of the DC to observe its object or the range of activities listed in subsection (3).

    Clause 14: Special provision concerning powers of development corporation

    This subsection provides for an order, under clause 12, restricting the general powers of a DC available to it. In addition OFMDFM / DFP consent is required.

    Clause 15: Financial assistance by development corporation

    Subsection (1) gives the Development Corporation the power to provide financial assistance to either a person or body where their intention is to undertake activities, as defined in subsection (2), for the purpose of regenerating the site.

    Subsection (2) details those activities for which the DC may provide financial assistance, in order to achieve regeneration of the relevant site. This includes economic, commercial, environmental, social and community undertakings. In addition, assistance may be provided by the DC where housing is provided, buildings refurbished, or for any other activities which persons and/or organisations carry out, which the DC believes will benefit the regeneration of the site.

    Subsection (3) provides that financial assistance given by the DC to a person/body for activities listed in subsection (2), or which will benefit the site generally, may take the form of a grant, loan, provision of a guarantee, or interest in property of a corporate body.

    Subsection (4) states that where the DC provides financial assistance for activities laid out in subsection (2), and which are of general benefit to the site, it may stipulate certain terms and conditions that are associated with the financial assistance that is provided. In addition, where appropriate, the DC may stipulate certain terms and conditions where repayment of the financial assistance is required.

    Clause 16: Directions to a development corporation by the Office

    Subsection (1) provides that OFMDFM may direct the DC as to the way in which its functions under the Bill should be executed.

    Subsection (2) provides that, where the DC is given direction by OFMDFM with regard to carrying out its functions, it shall discharge its duty accordingly.

    Subsection (3) provides that, where OFMDFM directs the DC as to how to discharge its function, OFMDFM should consult the DC except where, due to urgency, this is not practical.

    Subsection (4) Where the DC is involved in a transaction with others in exercising its powers any such transactions shall not be made void by the failure of the DC to comply with a direction given by OFMDFM. There is no onus upon persons involved in a transaction with the DC to determine whether a direction has been given by OFMDFM or followed by the DC.

    Clause 17: Land: - transfer to, and acquisition of land by, development corporation

    Subsection (1) provides that OFMDFM may transfer all or part of the transferred site(s), which it owns, to a DC.

    Subsection (2) provides that a DC may acquire land, either by agreement or by law under limited terms and conditions. These include land which is adjacent to its site, and is required in order to achieve regeneration of the site or to carry out its functions; and land required in order to provide or improve access to the relevant site.

    Subsection (3) brings into effect Schedule 3 regarding compulsory acquisition of land for the purpose of subsection (2), or in order to provide the DC and/or its authorised personnel with powers of entry so that it may acquire land for the purposes stated under subsection (2).

    Subsection (4) provides that the DC may remove or modify a public right of way for the purposes described.

    Subsection (5) provides that where a DC acquires land, under subsection (2), references in the Bill to the DC's relevant site shall also include the land which is acquired under the provisions of subsection (2).

    Clause 18: Land: - disposal or transfer of land held by development corporation

    Subsection (1) provides that a DC may dispose of land which is held by it, as it considers necessary to ensure the regeneration of its site, and in order to achieve this objective.

    Subsection (2) provides that a disposal under subsection (1) may be for monetary payment, and on such terms and conditions as the DC feels is appropriate.

    Subsection (3) provides that where the DC does dispose of land it may impose restrictions on how the land is to be used, and also grant or restrict rights related to the land, as it deems necessary.

    Subsection (4) provides that OFMDFM may order that land held by the development corporation should be transferred to another public body or OFMDFM itself.

    Clause 19: Agreements and arrangements with other bodies and persons

    Subsection (1) provides that the DC may enter into an agreement with any person or body in order to achieve development of its site, and may undertake whatever actions are necessary in order to achieve this development.

    Subsection (2) allows agreement to be reached for a DC, in relation to its sites, any powers of any other public body.

    Subsection (3) requires the approval of OFMDFM for the use of the power under subsection 2 in relation to any public body other than a Northern Ireland department.

    Subsection (4) allows agreement to be reached for another public body to exercise any powers of a DC on its behalf.

    Subsection (5) makes any exercise of powers by another public body on behalf of a DC subject to the provisions of Part II of the Act.

    Clause 20: Exercise of other statutory powers in relation to site of development corporation

    Subsection (1) allows OFMDFM by order to specify that certain functions of another public body cannot be exercised in relation to a DC site, or cannot be exercised without the DC's consent.

    Subsection (2) specifies that any such order must be approved by the Assembly.

    Subsection (3) is explanatory.

    Clause 21: Duty on public bodies to co-operate with and facilitate development corporation

    Subsection (1) places a duty upon public bodies when carrying out their functions to make it possible for the DC to carry out its functions, and to co-operate with the DC as it exercises its functions.

    Clause 22: Consultation

    Subsection (1) requires that the DC consults, in relation to the exercise of its functions for the relevant site, the District council within whose area the site falls; other public bodies as the DC deems appropriate; and other bodies and persons that would appear to have an interest in the DC's work of regenerating the site.

    Subsection (2) provides that where the Planning (Northern Ireland) Order 1991 (NI 11) requires the Department of the Environment to consult with the relevant District Council about any matters affecting or relating to the site, that the Department of the Environment should also consult with the DC about this matter.

    Clause 23: Power to dissolve a development corporation

    Subsection (1) provides that OFMDFM may make provisions for, or in connection with, the dissolution of a DC.

    Subsection (2) provides that an order under subsection (1) may allow the property, rights and liabilities of the DC (including the rights and liabilities associated with employment contracts) to be transferred to another public body; enable any public body to continue the work of the DC or complete anything in which the DC was currently involved; contain any other measures which appear to be appropriate in order for the functions of the DC to be transferred.

    Subsection (3) requires that where an order to transfer the functions, rights, liabilities and assets of the DC to another public body is required by OFMDFM, a draft of the order must be placed before the Assembly and approved.

    Clause 25: Orders

    Subsection (1) provides that an order under this Bill shall contain other such provisions as OFMDFM considers necessary, including an order to amend or appeal any legislative provision (including this Bill).

    Clause 26: Short Title

    This clause provides that the Act may be cited as the Strategic Investment and Regeneration of Sites Act (Northern Ireland) 2002.

    FINANCIAL EFFECTS OF THE BILL
  14. The Bill will have a number of distinct financial impacts. Overall, the purpose of the Strategic Investment Board will be to ensure that public monies are deployed as effectively as possible. There will also be a number of costs arising from the establishment of the Board. At this stage these have not been precisely quantified as more work needs to be done to define precisely how the Board will operate and to define the numbers of staff needed and the skills mix. However, the running costs could be in the range of (£1.5 to £2 m) for staff costs with additional set-up costs dependent on the type of accommodation etc also required. The Board would also need a consultancy budget which could be in the region of £ 1m p.a. In relation to development corporations evidence elsewhere suggests that each one might have around 20 staff with estimated costs of £750k and estimated annual operating costs of £900k. Development corporations will inevitably vary in size depending on the site(s) they are responsible for.
    15. HUMAN RIGHTS ISSUES
  15. No adverse impacts on Human Rights have been identified
    16. EQUALITY IMPACT ASSESSMENT
  16. The impact of these proposals has been assessed in accordance with Section 75 of the Northern Ireland Act 1998. The Strategic Investment Board and DC's will be public authorities under the definition in Section 75 (3) of the Northern Ireland Act 1998. They will, therefore, be committed to producing Equality Schemes in their own right. In such Schemes they will be required to set out their responsibilities, list their policies and functions, submit them to screening and carry out equality impact assessments as appropriate.
    17. SECRETARY OF STATE'S CONSENT
  17. The Secretary of State has consented under section 10(3)(b) of the Northern Ireland Act 1998 to the Assembly considering this Bill.
    18. LEGISLATIVE COMPETENCE
  18. At Introduction the First Minister and Deputy First Minister had made the following statement under section 9 of the Northern Ireland Act 1998:

"In our view the Strategic Investment and Regeneration of Sites Bill would be within the legislative competence of the Northern Ireland Assembly."