Agenda item

9.1

The report updated the Committee on the progress of the Sheffield City Region Urban Development Fund (the JESSICA Fund) over the past ten years and seeks approval for the Fund to retain its initial allocation of capital funding for a further ten years to enable additional commercial investment loans across South Yorkshire.

Approval was also sought to expand the Investment Strategy of the Fund to include investment in residential, leisure and retail developments.

9.2

RESOLVED UNANIMOUSLY: That Finance Sub-Policy Committee:-

1.     Notes the progress of the JESSICA Fund over the past 10 years and approves the Council maintaining its lead role in the oversight of the JESSICA Fund;

2.     Approves the JESSICA Fund retaining the Growing Places Fund Legacy for a further ten-year period with an expansion of the associated Investment Strategy to include residential, retail and leisure development; and

3.     Notes the JESSICA Fund’s intention to retain, with the permission of the Department for Levelling Up Housing and Communities, the original ERDF investment and the existing Sheffield City Region funding for a further 10 years.

9.3

Reasons for Decision

9.3.1

The underlying benefit that this proposal brings is that it retains a sustainable source of finance that can be used for future capital developments that might not be feasible through traditional commercial (private sector) finance and will support the economic regeneration of the City and wider region. A successful JESSICA Fund represents an opportunity to progress the local and regional regeneration agenda creating jobs and wealth.

9.3.2

Retaining the JESSICA Fund with its Legacy funding and newly procured Fund Manager for a further ten years with an expanded Investment Strategy will:

       I.          Retain £32m in the South Yorkshire economy to support property development and the wider economy through the accommodation of indigenous business growth and inward investment.

     II.          Enable a local Fund to invest in a broader range of property investments thereby improving the opportunity for businesses to access finance. iii)

   III.          Provide an innovative local investment vehicle to attract additional private and public sector investment into the region.

9.4

Alternatives Considered and Rejected

9.4.1

A do-nothing option would see the Fund end its activity in supporting activity in South Yorkshire and its capital proportionally returned to DLUHC to be invested in the UK and to SYMCA with investment in the South Yorkshire economy.

9.4.2

The Fund could be ‘sold’ as an ongoing asset to a private investment vehicle. This would likely generate a small return for the Funds original investors but would see a loss of control of the Funds activity. It is likely that the geographic and sector restrictions in the Investment Strategies would be removed, and investments would no longer be directed at those that have both economic and social benefits for South Yorkshire.

8.1

The Head of strategic Development and External Programmes presented the report which updated the Committee on the progress of the Sheffield City Region Urban Development Fund (the JESSICA Fund) over the past ten years and seeks approval for the Fund to retain its initial allocation of capital funding for a further ten years to enable additional commercial investment loans across South Yorkshire.

Approval was also sought to expand the Investment Strategy of the Fund to include investment in residential, leisure and retail developments.

8.2

Members raised questions and gave comments and responses were given surrounding funded areas, investment strategy, the focus of energy generation, potential commercial funding, repayment terms and renewable energy.

8.3

RESOLVED UNANIMOUSLY: That Finance Sub-Policy Committee:-

1.    Notes the progress of the JESSICA Fund over the past 10 years and approves the Council maintaining its lead role in the oversight of the JESSICA Fund;

2.    Approves the JESSICA Fund retaining the Growing Places Fund Legacy for a further ten-year period with an expansion of the associated Investment Strategy to include residential, retail and leisure development; and

3.    Notes the JESSICA Fund’s intention to retain, with the permission of the Department for Levelling Up Housing and Communities, the original ERDF investment and the existing Sheffield City Region funding for a further 10 years.

8.4

Reasons for Decision

8.4.1

The underlying benefit that this proposal brings is that it retains a sustainable source of finance that can be used for future capital developments that might not be feasible through traditional commercial (private sector) finance and will support the economic regeneration of the City and wider region. A successful JESSICA Fund represents an opportunity to progress the local and regional regeneration agenda creating jobs and wealth.

8.4.2

Retaining the JESSICA Fund with its Legacy funding and newly procured Fund Manager for a further ten years with an expanded Investment Strategy will:

      I.         Retain £32m in the South Yorkshire economy to support property development and the wider economy through the accommodation of indigenous business growth and inward investment.

    II.         Enable a local Fund to invest in a broader range of property investments thereby improving the opportunity for businesses to access finance. iii)

   III.         Provide an innovative local investment vehicle to attract additional private and public sector investment into the region.

8.5

Alternatives Considered and Rejected

8.5.1

A do-nothing option would see the Fund end its activity in supporting activity in South Yorkshire and its capital proportionally returned to DLUHC to be invested in the UK and to SYMCA with investment in the South Yorkshire economy.

8.5.2

The Fund could be ‘sold’ as an ongoing asset to a private investment vehicle. This would likely generate a small return for the Funds original investors but would see a loss of control of the Funds activity. It is likely that the geographic and sector restrictions in the Investment Strategies would be removed, and investments would no longer be directed at those that have both economic and social benefits for South Yorkshire.