And so the saga of the North Queensway ‘Innovation Park’ continues. We were promised 865 jobs, but now a report from the South East Local Enterprise Partnership suggests the actual number to be created may be….six. Or is that a mistake, as SELEP claims? Below, we winkle out the numbers.
Jobs go up, jobs go down….
The jobs promised by this project, a business park on the western side of Hastings, have varied wildly over the years. Here’s a quick summary of the figures we’ve found:
July 2012: A bullish SeaChange Sussex announces in their ‘public consultation’ that the site ‘is predicted to create around 700 new jobs‘.
December 2012: The South East Local Enterprise Partnership (SELEP), even more optimistic, announces in a press release that ‘865 jobs could be created’ at the site.
March 2013: SeaChange issues a press release stating that construction has started at the site, ‘designed to create up to 300 jobs‘.
January 2016: By now, SELEP is feeling a little less optimistic, to the extent that it’s revised its predicted jobs downwards by a staggering 79%, and says that just 176 jobs will be created.
Now: perhaps wisely, SeaChange has removed all reference to jobs on its website page about North Queensway, presumably on the basis that if they make no promises, they can’t be held to anything.
But the reality of job creation on that site may be even more bleak than we’re being told. In December 2016, the SELEP ‘strategic board’ was given an update on the Growing Places Fund projects they had given money to. This included a powerpoint presentation from Rhiannon Mort, the SELEP Capital Programme Manager, who showed the following slide (click on it to view more clearly):
What this chart shows is unbelievable, even for those of us with long experience of SeaChange’s failed projects. The forecast number of jobs is shown as six, with the number achieved to date, zero. Six jobs, at a cost of £1.5m of public money – that’s £250k per job. One might well ask: what happened to the other 859 jobs we were promised?
And we did ask. We put in a Freedom of Information (FoI) request to SELEP (SeaChange, being a private company, is not required to respond to FoI requests). You can see the full list of questions and answers here, but we’ll summarise the information below.
‘An error within the reporting system’
Our first question was how a predicted 865 jobs was now just six. The answer?
‘The figure of 6 jobs is an error within the reporting system which should continue to reflect the anticipated outputs as outlined in the original business case’.
To which one can only say, Really? Really? It’s very hard to believe that the figure of 6 jobs is simply an ‘error’. Did nobody at the meeting say, hey, what happened to the other 859 jobs we were promised? And why was this massive error not noticed and corrected before the document was made publicly available? And if it genuinely was an error, why is the powerpoint presentation still up on their website as of 29 October 2017, over ten months later? (the document may well be removed at some point after this post is published, but not to worry – we’ve saved a copy).
Any more tenants?
We asked whether the forecast of 6 jobs suggested that SeaChange was assuming that they would not be able to find any more tenants. On the contrary, SELEP said:
‘Both Sea Change and Locate East Sussex, the county’s inward investment arm, continue to promote the site and have received in excess of 35 enquiries over the last 12 months.’
Which is all very well, but enquiries, even at the somewhat less than overwhelming rate of 3 per month, do not necessarily translate into tenants. They could have hundreds of enquiries every month and it would mean precisely nothing if none of the enquirers decided to take up a tenancy. Clearly, that is the case here: if any other companies had agreed to take up a tenancy, SeaChange would be crowing about it in the way they did when they managed to secure their first tenant.
Why isn’t the site more successful?
We asked why the site had been so commercially unsuccessful and were met with obfuscation about the geographical nature of the site and lack of utilities, which meant that private sector financing wasn’t possible. However, SELEP insists that ‘strong interest’ has been shown in the site, and that:
‘It is anticipated that as development on the site continues and additional interest is generated, North Queensway will eventually demonstrate longer term commercial viability’.
It fails to explain what ‘longer term’ means – five years on from SELEP’s announcement about 865 jobs, and with not a single job in sight, ‘longer term’ may turn out to be, well, a very much longer term.
And the money?
Finally, we asked about the financing of the project. It was funded with £1.5m of Growing Places Fund money – this is a loan, which is expected to be repaid. The loan agreement is between East Sussex County Council – who pass the loan on to SeaChange – and SELEP. According to SELEP, £1m has been repaid so far. As to the rest,
‘£0.5m was requested to be deferred from 2016/17 to be repaid in the current financial year, 2017/18’.
And if it’s not repaid?
SELEP told us that:
‘East Sussex County Council is not required to underwrite the loan in the event of project failure. In such circumstances, where the funding cannot be repaid, then the outstanding loan will be written off; however, before this can take place, East Sussex County Council must demonstrate to the SELEP Accountability Board that it has taken all reasonable steps to recover the outstanding loan from Sea Change Sussex’.
So really, it’s a win-win situation for SeaChange: they borrow the money, try to make the project work, but if it all goes belly up, then the loan is written off.
There must be a lot of people who’ve borrowed money to start their own small businesses who wish they could just write off loans if the business fails to take off. It would appear there’s one rule for SeaChange, and another for everyone else: if your business fails, you’re expected to do everything you can to repay the loan, or face bankruptcy. If SeaChange’s latest wheeze is a disaster, the money they’ve borrowed is just written off, and they move happily on to their next project.
An error or the truth?
We don’t think the figure of 6 jobs is an ‘error within the reporting system’. We believe it’s a realistic view, given the utter failure of SeaChange Sussex to find tenants for the site who are starting new businesses and thus creating jobs. The two potential tenants they’ve found so far (see here and here) are both existing businesses, moving from other parts of Hastings and creating not a single new job in the process. One is a car showroom business, forced to move because their current premises are slap bang on the route of the Queensway Gateway Road (another SeaChange project), so presumably they’ll be given a good deal on their tenancy, thus making the finances of the whole project even tighter.
Whatever the truth of the matter, one thing is clear: those 865 jobs we were promised are never going to materialise. Not now, not in the ‘longer term’. As with so many SeaChange projects, they were only ever pie in the sky.