Tourism Development Fund - Ministerial Response - 4 September 2012

Findings

Comments

1

A vast majority of applications to the scheme have been refused due to their inability to meet the clearly- defined  criteria  set  by  the  TDF Panel.

Agreed.

2

Only  a  small  percentage  of  the £10 million,  which  was  originally agreed to be set aside for the TDF in P.70/2001, has been awarded to the Fund since 2001.

It  is  accepted  that  the  full  £10 million originally agreed to be set aside in 2001 has not been allocated to the TDF. This funding  was  agreed  in  principle  without funding being identified – such procedures are no longer practised.

In total, £5.5 million has been allocated to the  TDF.  Of  this,  £1.8 million  was transferred from the Tourism Investment Fund and £2.85 million from the Treasury and  Resources  and  Economic Development  Budgets;  the  remainder  is derived from accrued interest.

3

A  wide  variety  of  schemes  have benefited  from  grant  assistance since  the  TDF  was  established  in 2001.

Agreed.

4

States Departments have benefited from over half of the £5.5 million that  has  been  approved  for allocation by the TDF Panel since 2001.

Agreed –  it  should  be  noted  that  in  the majority  of  cases  the  States  Department was  partnering  external  organisations  to deliver a specific product – for example, for Air Route Development.

Findings

Comments

5

Unless  it  can  be  clearly demonstrated  that  projects  are going to add a considerable value to tourism, States Departments should not receive TDF Funding.

Agreed.

6

The TDF would leverage additional investment in tourism and increase visitor numbers if grant assistance was  extended  to  private organisations.

Agreed.

7

The  Sub-Panel  fully  supports  the Proposition  to  grant  assistance  to private sector entities.

The Sub-Panel's support is welcomed.

8

The  Proposition  should  not  have been  brought  to  the  States  until future funding had been identified.

£500,000 in each of the years 2013–2015 has been identified within the MTFP. In addition, £5 million has been identified for the new Innovation Fund. Tourism-based business could apply for funding from this source.  As  referred  to  in  the  Comments presented on 9th July, whilst approval of funding  in  advance  would  have  been preferred,  it  was  not  felt  appropriate  to postpone the decision until after the States debate on the MTFP, as this would delay changes  that  will  improve  the  tourism sector. The appropriate approach is for all spending decisions to be taken as part of the Medium Term Financial Plan debate, with  in-principle  policy  decisions  only taken at other times of the year.

9

The  Minister  for  Economic Development  has  requested £500,000  annually  over  a  3 year period  in  the  MTFP  for  TDF Funding.

Agreed.

10

The TDF Panel may well dissolve unless funds are made available.

It is agreed that without funding to allocate there would be no need for a TDF Panel; but is not envisaged that this scenario will materialise  unless  there  was  an  express decision to close the scheme.

Findings

Comments

11

The  Minister  for  Treasury  and Resources is of the opinion that a higher bid should have been made for TDF Funding in the MTFP.

The Minister for Treasury and Resources made clear that this was a personal view, rather than one of the Minister. He also made  clear  that  it  was  a  matter  for  the Minister for Economic Development how much funding was bid for in the MTFP.

12

The  TDF  must  have  significant funds in order for the private sector to benefit from grant assistance.

Agreed.

13

There is a high possibility that the proposed  amount  of  £500,000  a year  for  a  3 year  term  will  be insufficient if the private sector is given access to the TDF.

This is untested  and the TDF  Chairman himself  stated  that  until  we  open  the scheme we will not be aware of the level of  demand.  On  the  basis  of  the  last 2 rounds,  there  are  sufficient  funds available to support additional bids.

14

Applications  received  from  both private organisations and non-profit organisations should be assessed on their merit only.

Agreed.

15

Great  care  must  be  given  when awarding  grants  to  private  sector organisations to ensure that projects do not displace existing operations.

Agreed.

16

Any States-assisted funding scheme should have mechanisms in place to ensure  funds  are  allocated  fairly and appropriately.

Agreed.

17

If the bid for TDF Funding is not included in the MTFP, it will have a detrimental effect on the future of the Fund.

Agreed,  but  the  MTFP  has  now  been published  and  includes  £500,000  per annum to the TDF.

18

The  Minister  for  Economic Development should ensure that, in seeking  £10 million  for  the Innovation  Fund,  attention  is  not diverted away from TDF funding.

Agreed. These are 2 separate funds which have distinct and separate aims, objectives eligibility  criteria  and  assessment processes.

19

If the Innovation Fund was to be used to support larger projects from the  tourism  sector,  clarity  would need to be provided as to how the new  Fund  and  the  TDF  would operate  in  conjunction  with  one another.

Agreed. As stated above, the 2 funds are distinct  and  the  specific  nature  of  the Innovation Fund will be further clarified in the Fund's guidelines once established.

Findings

Comments

20

Consideration should be given to a possible loan scheme for the TDF in the future.

Agreed.

21

A repayable scheme would not be appropriate  for  all  types  of applications.

Agreed.

22

Improved lines of communication, co-operation  and  understanding between  the  Planning  Function  at the  Environment  Department  and the  Economic  Development Department  could  help  leverage additional  investment  in  tourism, whilst allowing TDF funds to be set aside for other projects.

Agreed.

Recommendations

To

Accept/ Reject

Comments

Target date of action/ completion

1

If  the  MTFP  bid  is  accepted  for  TDF Funding, then the amount allocated should be re-visited by the Minister for Economic Development after the 3 year period in order to evaluate its appropriateness.

Accept

In time for

the 2016–19 MTFP.

2

The  Minister  for  Economic  Development should  ensure  that  a  new  and  strong compliance  model  is  established  and governance arrangements are put in place if the Proposition is agreed in the States.

Accept that a strong compliance model is required.

The strong compliance and governance arrangements for the TDF that are currently in place are being adapted to ensure that these are effective in dealing with private sector applications. Treasury is supporting Economic Development in delivering this work.

October 2012

3

The  Proposition  should  not  be  debated unless  the  Minister  for  Economic Development can clearly demonstrate how the TDF will be funded.

Already debated.

N/A

N/A