Download The Turner Contemporary Art Gallery in Margate has generated £32m in

The Turner Contemporary Art Gallery
in Margate has generated £32m in
four years, attracting the investment
needed to kickstart regeneration of other
attractions such as Dreamland – and reviving
interest in the town in general
THE UPS AND
DOWNS OF
COASTAL TOWNS
The package holiday hastened a decline for
seaside towns – but now they’re fighting back.
Clive Stevens looks at the funding options
open to SMEs with an eye for regeneration
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OCTOBER 2015 FINANCE & MANAGEMENT
REGENERATION
t has been 50 years since the
heyday of the British seaside
holiday. Margate in the 1960s was
a magical place, its Winter Gardens booked
with stars for the summer season and the
Dreamland amusement park in full swing.
My first paid job was working on the
deckchairs along Margate Sands – a
wonderful summer job for a teenager. But
that all changed with the advent of the
package holiday in the 1970s and low-cost
airfares. Coastal towns like Margate,
dependent on the seasonal summer trade
for survival, fell into decline.
Myriad issues came with economic
decline: disproportionate levels of
unemployment with relatively ageing or
transient populations; an imbalance in
seaside labour markets with low
representation in economic growth
sectors; polarisation in the quality of local
housing and, possibly, a concentration of
poor private rented housing; and a
peripheral location to centres of economic
growth with poor transport links (and
currently poor broadband connectivity).
But, at long last, coastal towns are
fighting back. A lot of work and
government support has gone into
positively promoting regeneration in
coastal areas. And while there is no ‘one
size fits all’ solution, many towns are
starting to be reinvented, making them a
more attractive place to live and work as
well as visit. This, in turn, has led to the
availability of funding and investment
initiatives for enterprising FDs to tap into
to expand their business.
I
GETTY
IS ART THE ANSWER?
Margate and East Kent are a good example
of what is being achieved with the opening
of the Turner Contemporary Art Gallery in
2011. It has welcomed 1.5 million visitors to
Margate in the past four years generating
over £32m for the community. The
landscape building – designed by awardwinning architect David Chipperfield and
initially funded by Kent County Council
and Arts Council England – acted as
catalyst for renewal.
This initial government-funded initiative
has now resulted in private investment
coming into the town with shops,
restaurants and hotels all opening to profit
from the regeneration effect. This will be
pushed further with the re-opening of
Dreamland, the old amusement park
FINANCE & MANAGEMENT OCTOBER 2015
redesigned by Wayne Hemingway.
The model seems to be a persuasive one:
introduce two or more attractions to draw
people in and then support them with a
range of quality hotels, restaurants and
businesses. It certainly works in Margate.
Other areas in the UK have embraced
this public arts-led approach in their own
way. Around the coast from Margate,
Folkestone has promoted its Triennial for a
number of years with both temporary and
permanent art. It is just one project led by
the Creative Foundation, which has also
focused on property acquisition and
REGENERATION:
WHY IT MATTERS TO BUSINESS
FDs can take advantage of public
investment that has been ring-fenced for
the UK’s most depressed regions. There is
no doubt that the private sector is
essential to the effective delivery of
urban regeneration. Investment can be an
attractive prospect for businesses in
areas, like East Kent, that are benefiting
from regeneration projects.
The experience of many first mover
investors in such areas shows potentially
higher returns are achievable, particularly
as property prices move upwards while
labour costs are relatively low.
There are various grants and funding
packages available from local councils
and others to assist with job creation.
Public and private partnership
arrangements can help leverage the
returns for the private sector in the
delivery of urban regeneration.
Early developers can stimulate
confidence in the property market and
potentially create opportunities for
longer-term investors.
The effect of regeneration makes
coastal areas better places to live and
work and start to attract people from
urban centres who are looking for an
improved quality of life. In Margate, DFLs
(Down from London) are one
demographic increasingly bringing
money to the area.
FUELLING BUSINESS:
THE EAST KENT EXPERIENCE
These are the incentives helping
businesses in East Kent. Most regions
operate similar incentive schemes.
Discovery Park Enterprise Zone
100% relief for three years on business
rates (up to £55,000 a year for five
years – £275,000 in total)
Simplified planning procedures
Access to Business Premises
Renovation Allowance (100% capital
allowances until 31 March 2017 on the
renovation of premises vacant for over
a year)
Discovery park Technology Investment
Fund – provision of equity capital
Those operating businesses in the zone
may be eligible for broadband grants.
tinyurl.com/GOV-EntZone
Local Government Incentives
Small Business Boost: matched
funding loans from Kent County
Council up to £50,000
Start Up Loans: up to £25,000 and
free business mentoring for a year for
new businesses
Expansion East Kent Regional Growth
Fund; 0% loans (applications
suspended temporarily from 2
February 2015)
Business Premises Renovation
Allowance (BPRA)
Company A purchases the freehold of a
qualifying building in East Kent and
coverts it into office accommodation for
its staff. The costs are:
Original purchase £125,000 (including
of the property
£25,000 for the land)
Renovation
costs
£150,000 (building
work, architects,
surveys, etc)
Total cost
£ 275,000
Company A receives tax relief for the
100% of the costs incurred (excluding
land) against its profits – a total tax relief
of £250,000.
For a full list of BPRA conditions visit
tinyurl.com/GOV-BPRA
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refurbishment for letting to arts
organisations. Development of destination
restaurants like Rocksalt and other
businesses around the harbour draw
people to the Creative Quarter. Unlike
Margate with its building-led revival,
Folkestone has focused on a core problem
and come up with a detailed plan within a
small area of town.
We can see other examples around the
country too: Tate St Ives has drawn
people from miles around, and in
Blackpool the Great Promenade Show
was established in 2001 as a permanent
outdoor public art gallery spread across
2km. Blackpool has since established the
Comedy Carpet to build on this early
success. The Guggenheim in Bilbao is a
good example of the positive effect that
arts-led regeneration can potentially have
on deprived areas abroad. However, of
course these effects are not guaranteed.
These
changes
represent a
welcome
reversal of
fortunes; East
Kent has
suffered
greatly in
recent years
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National Tax Incentives
R&D Tax Credits
Increasing tax relief available for SMEs on qualifying
expenditure of 130% of cost from 1 April 2015,
together with the ability to generate tax repayments
for loss making SMEs equivalent to 14.5% of the lower
of the unrelieved trading loss for the accounting
period or 230% of qualifying R&D expenditure. For
every £100 of eligible R&D spend after 1 April 2015, an
SME incurring losses may reclaim £33.35 thereon.
R&D tax credits of 11% of spend are also available to
larger companies.
Patent Box Tax relief
reducing the rate of Corporation Tax from 20% to 10%
in respect of profits derived from patents
Local Enterprise Partnerships (LEPs)
There are 39 LEPs across England that bring together
public and private sector bodies to determine economic
priorities for a specific area to help boost employment.
Depending on an area’s needs, each LEP bids for
available funding. An example is Coast to Capital – an
initiative covering West Sussex. It awards grants totalling
£9.5m over six years to help SMEs expand in priority
sectors such as advanced engineering; manufacturing;
environmental technologies, goods and services; creative,
digital and IT; and healthcare, medical technology and life
sciences. tinyurl.com/Coast-Cap
THE WINDS OF CHANGE
These changes are a welcome reversal of
fortunes; East Kent has suffered greatly in
recent years. A few miles from Margate in
Sandwich, pharmaceuticals giant Pfizer
was the town’s largest employer until the
company moved much of its operation
back to the US; this led to the loss of almost
2,400 jobs. But with government support,
the area won regional Enterprise Zone
status and developed Discovery Park.
It is now attracting local businesses,
biotech start-ups and significant overseas
companies locating in the UK. My own
firm, Kreston Reeves LLP, has opened an
office there to serve the fast-growing
business community. However, it’s not only
arts-led regeneration attracting business,
but also investment in the High Speed 1 rail
link to London and the Eurostar to
mainland Europe.
Margate, once made affluent by
Georgian and Victorian developers, was in
decline by the time I was working on the
deckchairs. But today I see genuine signs of
regeneration. Turner Contemporary sits
proudly by the harbour wall. The Old
Town is packed with shops, hotels and
restaurants. Dreamland is open again for
business. Out to sea, wind farms dominate
the Thames Estuary, their turbines hinting
at other developments shaping this region’s
future. And I’m proud of the small part I
have played in helping my home town
move forward with confidence.
OTHER REGENERATION:
BOOSTING FUNDS AND INITIATIVES
Finance Wales
Support available for SMEs in Wales includes tailored
debt, equity and mezzanine investment; commercial
growth investment can range from £1,000 to £2m.
financewales.co.uk
Clive Stevens is
executive chairman
at Kreston Reeves
LLP and an ICAEW
Council member. He
is a trustee of Turner
Contemporary and a
non-executive
director of Locate in
Kent, the inward
investment arm
Coastal communities fund
With more than 11 million Brits living in coastal
communities, and UK-based visitors spending in excess
of £8.4bn per year during visits, it’s no surprise that the
government’s summer Budget extended funding until
2020/2021. Since its set-up in 2012, the fund has
provided 211 projects and businesses with a £119m pot.
Money can be spent on developing high-tech clusters;
restoring heritage buildings; flood defence improvement
and vocational training for offshore industries.
The latest £90m injection is on top of the £36m
awarded to 36 projects under the previous government
in Jaunary 2015. The aim is to create 3,000 jobs and
1,500 apprenticeship and training places.
The money comes primarily from Crown Estates and is
administered by The Big Lottery Fund. Projects share
cash equivalent to 50% of revenues generated from the
likes of offshore wind and tidal power and ship moorings.
tinyurl.com/Lottery-CCF and tinyurl.com/GOV-coast
OCTOBER 2015 FINANCE & MANAGEMENT