Top business people running our LEP … er, perhaps not!

Agusta Westland not doing too well according to this article. One of our Local Enterprise Partnership board members is Simon Barker, Business Director of Agusta Westland.

And no doubt, if the Government does mount a rescue package via a ” ministerial directive” for Agusta Westland, it will be via our Local Enterprise Partnership and Simon Barker ….

Westlands burnt by Boeing, May 29 2016

“American giant Boeing is set to win the contract to rebuild the army’s Apache helicopters, in a blow to Westlands in Somerset.

The defence secretary Michael Fallon is expected to rubber-stamp the £2bn contract ahead of the Farnborough air show in July. Britain’s Apache fleet was built in Yeovil by what was then AgustaWestland, under licence from Boeing, but 50 of the attack helicopters will be rebuilt by the American defence company in Arizona.

Westlands is understood also to have missed out on a contract to make gearboxes and blades for Apaches used by armed forces around the world. Negotiations are ongoing about giving the company support work on the British Apache revamp, but sources said that may require a ministerial direction from Fallon. The government is considering handing Westlands a contract to develop an unmanned military helicopter, in an effort to be seen to be keeping helicopter manufacturing alive in Britain.”

Easy to see what benefits our LEP brings to its board members (including Midas, see post yesterday) but not at all easy to see what is in it for the rest of us.

John Osman – Councils lead on Local Enterprise Partnership

“One of John’s proudest achievements was being elected Leader of Somerset County Council in May 2012 and has made it his number one priority to listen and consult with residents on the future of the County.”

That’s your number one priority down the pan then, John, but, of course, that won’t worry you.

Chair of LEP – proud of a conflict of interest?

The staggering arrogance leaves Owl stunned (but not for long). Though, no doubt the Government, Mr Hindley and the LEP see no problem.

“The Millfields Trust’s state-of-the-art Genesis building received the Community Benefit award at the prestigious RICS South West Awards 2016 held at Cheltenham Racecourse. …

… The pioneering, ERDF and Heart of the South West LEP’s Growing Places funded building was designed to create employment and serve the local community in one of the most deprived areas of Plymouth. It comprises of flexible workspaces, meeting rooms, a full height internal atrium and Plymouth’s first living walls. …

… “Steve Hindley, Chair of the Heart of the South West Local Enterprise Partnership (HotSW LEP) said: “Genesis is a great example of development that benefits the local environment as well as the community by providing much-needed employment space with and original and eye-catching architectural design. The project is an exemplar of the LEP’s Growing Places Fund, which is designed to unlock growth and create new jobs.

“As Chair of Midas – the contractor for the project – as well as being Chair of the LEP – which has the strategic mission to generate funding – I am doubly proud to be part of this new asset to Plymouth’s city-scape.”

“Leave Hinkley to the hedgehogs. This debacle needs to be taken in hand”

“Environmental protections on EDF’s troubled Somerset construction site are excellent, apparently. Very little else about the project is.

Have you heard about the terrific bat houses and hedgehog tunnels down at Hinkley Point in Somerset? Energy minister Andrea Leadsom has been to inspect them herself and raved about them last week to a select committee of MPs. They were evidence, she suggested, of the depth of commitment of French firm EDF to the £18bn nuclear power station due to be built on the site.

Well, maybe. Talk of bats and hedgehogs at least provided some relief from the familiar crop of Hinkley news. French economy minister Emmanuel Macron said he was “fully behind” the project but EDF’s unions confirmed that they weren’t. Jean-Luc Magnaval, secretary of EDF’s workers’ committee, told the BBC that the unions “have reservations about several aspects of the project: organisation, supply chain, installation and procurement”. That’s a long list.

Meanwhile, EDF Energy chief executive Vincent de Rivaz, appearing before the same committee as Leadsom, had to adopt a humbler tone than on his last outing two months ago. Then he had promised a final investment decision “very soon”; this time he wouldn’t speculate about a date.

This farce – which has been running since last October, when the final sign-off was due within weeks – could yet roll on and on. The UK government is disinclined to set a deadline: it’s a “commercial decision” for EDF.

Meanwhile, the current French government could have a radically different shape this time next year – there is a presidential election in 2017 and the incumbent, François Hollande, is the least popular leader in modern French history. French union opposition to Hinkley Point appears entrenched and the workers’ representatives have six seats on an 18-strong board.

In theory, management and government can proceed regardless; but to embark on an £18bn venture with a divided boardroom would invite trouble down the line. That is especially so when you remember EDF’s last finance director, Thomas Piquemal, resigned over concerns that Hinkley could threaten the company’s future.

The best thing the UK government could do at this point is to stop and consider whether the obstacles facing Hinkley are simply too big.

Nervousness in France is understandable. EDF’s two current attempts to built a European pressurised reactor – the model to be used at Hinkley – are agonising; one is four years late, the other nine years. And the financial arithmetic was always challenging. Hinkley could take 10 years to build, and the owners receive nothing during the construction phase; the cash only arrives when electricity starts to be generated. And, while the returns on capital under the 35-year contract are theoretically enormous, the penalties for failure to hit a 2029 deadline are stinging, and ratchet up.

That is why the UK government had to make the 35-year contract so generous – struck at almost three times today’s wholesale price. That contract now looks to belong to another era given the subsequent fall in the oil price, and thus energy costs. The only weak support holding Hinkley in place is its capacity to provide 7% of the UK’s electricity in a low-carbon fashion.

But there are other ways to meet the legally binding emissions targets. Offshore wind is expanding with no Hinkley-style fuss, and its costs are falling. More importantly for the UK’s requirement for secure baseload supplies, other builders are waiting to pursue projects that use different nuclear technology.

In theory, planning and appraisal can continue in parallel; in practice, confidence in the UK’s commitment to its new-nuclear programme will drain away.

There is not – yet – a crisis in UK energy policy because it is always possible to build a few gas-fired stations to avert an emergency. But the Hinkley show is becoming an embarrassment. The project is expensive, uses unproven technology and its builder is a disunited and over-borrowed company that requires constant financial assurances from an ever-changing cast of politicians.

The UK government should set EDF a deadline and be ready to enforce it. We can do better – much better – than Hinkley.”