2. The broad aim of the regional development programme is to facilitate and promote sustainable regional development to help regions respond to local opportunities.

3. Overall, the programme will support joint initiatives from partnerships of regional groups such as local government, iwi, economic development agencies, community organisations, business representatives and educational institutions. Proposals will need to identify key outcomes and milestones related to sustainable development, indicate how other government and non-government programmes and resources will contribute to the proposal, demonstrate how the funding will add value to existing activities, and not involve explicit transfers or competition with other regions.

4. Expressions of Interest will be called from regional groups in order to help assess and sort the proposals on a geographic basis and make some initial conclusions on coverage, overlaps, and consistency with objectives and criteria. Initially calling for Expressions of Interest will help manage expectations and demand for funding.

5. Industry NZ will enter into negotiations and discussions with regional bidders, in order to bring different regional groups together and encourage them to put forward a joint proposal, with the aim of forming the best possible partnership with Government. Once this process is completed the lead agencies in each region will be provided with detailed guidelines for putting forward a full proposal. A Regional Development Programme Approval Committee, made up of representatives of Industry NZ, the Ministry of Economic Development, relevant government departments and regional development experts, will meet as required to undertake a final assessment of proposals and recommend funding payments.

6. Criteria for evaluation, prioritisation and funding of the proposals will be developed based on the proposal's partnership approach, relationship to the region's competitive advantages, consistency with sustainable development objectives, and regional resources.

Background

7. On 12 June 2000, Cabinet agreed that (CAB (00) M 19/3 refers):

Industry NZ will administer the Regional Development Programme to work in partnership with local authorities and other representative local groups to support local regional development efforts by:

Providing financial support for the development of local and regional development strategies and for undertaking strategic audits, including pre-engagement support for building local partnerships;
Assisting capability and capacity building at the regional level in developing and implementing the strategies, including pre-engagement support for building leadership capability;
Providing grants to assist in implementing regional development initiatives consistent with the strategies developed and the Government's goal of sustainable development;

The broad criteria for financial support for both strategy development and capability building would be:

The proposed approach is consistent with national vision and policy objectives;
Local commitment to a partnership approach between key stakeholders for bringing about change;
A cap of $100,000 for the Government contribution to any single strategic planning or audit initiative in any single region;
Local part-funding or in-kind contribution available of no less than 30% of estimated initiative total cost, determined on a case-by-case basis with the level of poverty and disadvantage in a region taken into account;

The criteria for funding of any proposed regional initiative would be:

It is a major regional/community initiative that involves a number of community groups;
The initiative emerged from an inclusive process and is consistent with the region's development strategy;
Consistency with Government strategies, policy objectives and priorities;
Consistency with sustainable development;
Consistency with international commitments;
A cap of $2 million for central government contribution to any single initiative in any single region with local part-funding or in-kind contribution of no less than 25% of requested funding amount, determined on a case-by-case basis with the level of poverty and disadvantage in a region taken into account.

8. Cabinet Economic Development Committee also approved an appropriation of $5.625m in 2000/2001, $11.25m in 2001/2002, and $16.875m in 2002/2003 and outyears (all GST inclusive) within Vote: Industry and Regional Development for the Regional Development Programme.

More Detailed Criteria and Funding

9. The broad aim of the regional development programme is to facilitate and promote sustainable regional development to help regions respond to local opportunities. The scheme also aims to facilitate learning and cooperation across regional groups and to improve their understanding of the value of locally driven strategic development processes.

10. Overall, the criteria for assisting regional groups under the Regional Development Programme will include the following. Proposals must:

demonstrate a partnership between a range of regional groups such as local government, iwi, economic development agencies, community organisations, business representatives, educational institutions i.e. proposals must represent joint initiatives
identify key outcomes and milestones relating to sustainable development
show why they need this funding rather than any alternative funding
indicate how other government and non-government programmes and resources will also contribute (i.e. Department of Work and Income Regional Commissioners, Te Puni Kokiri regional offices, Ministry of Agriculture and Fisheries funding, the BIZ programme, Tech NZ, Trade NZ etc)
demonstrate how the funding sought will add value to existing activities
not involve explicit transfers or competition with other regions
be consistent with New Zealand's laws and regulations.

11. In addition to these overall criteria, specific criteria around each component will be developed, including the following.

12. Under component 1 - Strategy Building:

the strategy should be broad and cross sectoral
proposal should indicate the intended process for consultation
proposal should indicate the intended "structure" for delivery and implementation
define the region and justify why this makes sense
indicate why government assistance is required to support this process i.e. why has this not occurred before
funding will be available for up to 70% of total costs up to a maximum of $100,000 (GST inclusive) per strategy cycle (at least 3 years) for supporting the early stages of the regional development process and strategic audits. Regions must contribute at least 30% of the funding or as an in-kind contribution.

13. Examples of what could be funded under this initiative include:

bringing regional groups together in consultation meetings
Strengths, Weaknesses, Opportunities, Threats (SWOT) analysis
preparing the written strategy.

14. Under component 2 - Building Implementation Capability:

for employing regional development expertise, the proposal must identify the expertise, background and experience
for consulting with other regional areas or agencies, the proposal must indicate who and justify reasons
for seeking funding for training and development of regional development `workers', the proposal must indicate who will be undertaking training, for how long, and intended outcomes
any proposal under this component must clearly demonstrate how it links back to an inclusive regional development strategy process
funding will be available for up to 70% of total costs up to a maximum of $100,000 (GST inclusive) per annum for building regional development implementation capability. Regions must contribute at least 30% of the funding or as an in-kind contribution.

15. Examples of what could be funded under this component include:

employing a regional development expert or facilitator
consulting with other regional bodies in forums
training for regional development agencies.

16. Under component 3 - Implementing Major Regional Initiatives:

the proposal must show how the initiative/s implement an inclusive regional development strategy
funding will be available for up to 75% of total costs up to a maximum of $2,000,000 (GST inclusive) per region per strategy cycle (at least 3 years) for major regional initiatives. Regions must contribute at least 25% funding.

17. Examples of what could be funded under this component are initiatives that enhance existing regional resources and assets (including infrastructure where appropriate), tourism promotion and cluster development.

18. The part-funding requirement is consistent with a principle of partnership, and encourages commitment from applicants and an improved understanding of the value of the assistance.

19. Applications must be made prior to incurring expenses. Once an application has been approved and a contract entered into, payments will be made on a reimbursement basis on production of invoices/receipts. The proposed use of the funding must be indicated in advance. No funding will be provided to contribute to the purchase of other government services (i.e. Tech NZ, Trade NZ).

Delivery and Administration

20. It is proposed that the Regional Development Programme will be delivered and administered as illustrated in Figure 1.

Figure 1: Delivery and Administration Process

21. The key to the promotion and delivery of this scheme is the emphasis on partnership and the long-term nature of the process.

22. Expressions of Interest (EOIs) will be called for from regional groups in early July 2000. The Expressions of Interest will outline the objectives of the programme, the three components, the criteria, the intended process and encourage groups to work together to put forward EOIs.

23. Regional groups will have until end of August to put forward EOIs, including brief information on the intended proposal, the groups involved, and estimates of funding. Industry NZ (Industry NZ Establishment Team in the Ministry of Economic Development in the interim) will then undertake a basic assessment of the quality and scope of the EOIs and use these to sort the likely proposals on a geographic basis and make some conclusions on coverage, overlaps, and consistency with objectives and broad criteria. The EOI process will help to manage expectations and demand for funding.

24. Industry NZ and the Ministry of Economic Development (where appropriate) will enter into a process of negotiation and discussion with the regional bidders, with the aim of forming the best possible partnership with Government. In some cases it may be necessary to bring different regional groups together and encourage them to put forward a joint proposal.

25. Once the regional groupings are finalised, a process that may be immediate or take some months, the lead agencies or champions in each region will be provided with detailed guidelines for putting forward a full proposal.

26. Industry NZ Regional Case Managers will be the regional groups' key liaison throughout the process and will be available to assist in bringing groups together and in preparing the full proposals. This will help to ensure that proposals are consistent with the government's objectives and are based on region's competitive advantages.

27. It is clear that some regions will be at different stages of the regional development process. Thus the process will vary for different regions. Some regions may be able to put in a full proposal within a few weeks of receiving the programme guidelines. Others could take some months to manage.

28. Once proposals are received they will be pre-assessed by the Regional Development Team in Industry NZ (to ensure suitability and completeness of the application, contact the Industry NZ Case Manager where required to clarify information, contact the local regional agencies where required to obtain additional information, check budgeted figures and consider the quality of the proposal), evaluate the applications against key criteria and provide comments.

29. A Regional Development Programme Approval Committee, made up of representatives from Industry NZ, the Ministry of Economic Development, relevant government departments and regional development experts (including specialist appointees where required), will meet as required to undertake a final assessment of the applications and recommend funding payments. In the interim the Ministry of Economic Development will be responsible for the final funding decisions, until Industry NZ is established. All applicants will be notified of the decisions and contracts will be entered into with lead agencies in regions.

30. This process will be repeated in subsequent years.

Risk Management and Communications

31. There are potential risks with this approach:

regional case managers could get captured by regional groups
difficulties in facilitating partnerships between regional groups
difficulties in prioritising funding in terms of national objectives and balancing national versus regional benefits (some regional initiatives may be evaluated as not appropriate for funding)
ensuring regions are not overtly competing with one another but are building a strategy based on local competitive advantages
public expectations may be for more easily accessible funds and higher levels of funding than will be delivered through this process
some regional proposals may need to be worked through over a period of months, and regions may perceive that they are missing out in the interim
most proposals will seek funding over a period of several years. This will have to be carefully managed.

32. These risks can be mitigated through the Expression of Interest Process, a well-developed communications strategy and clear monitoring and accountability arrangements.

33. In terms of communications, it will be important to emphasise that:

this is only one initiative of many available from the public and private sector that supports regional development
this is not a simple "apply for funding" approach; proposals will need to be developed through a consultative approach between local groups and central government
there is an emphasis on partnerships both at the regional level and between central government and the regions
funding is based on supporting a broad regional development strategy process - not for ad-hoc initiatives.

Consultation

34. In developing the more detailed criteria and the delivery and administration system, officials consulted with the Treasury, Ministry of Research, Science and Technology, Ministry of Foreign Affairs and Trade, Department of Labour, Ministry of Agriculture and Fisheries, Department of Internal Affairs, State Services Commission, Te Puni Kokiri, Ministry of Pacific Island Affairs, and the Ministry of Women's Affairs.

Fiscal Implications

35. There are no fiscal implications associated with this proposal.

Legislative Implications

36. There are no legislative implications associated with this proposal.

Publicity

37. A communications strategy for the launch of the Regional Development Programme is being prepared in consultation with my office.

Recommendations

38. It is recommended that the Committee:

Note that on 12 June 2000 Cabinet Economic Development Committee agreed to the implementation, broad criteria and appropriation for the Regional Development Programme;
Note that the more detailed criteria for the Regional Development Programme will include that proposals must:

demonstrate a partnership between a range of regional groups such as local government, iwi, economic development agencies, community organisations, business representatives, educational institutions i.e. proposals must represent joint initiatives
identify key outcomes and milestones relating to sustainable development
show why they need this funding rather than any alternative funding
indicate how other government and non-government programmes and resources will also contribute (i.e. Department of Work and Income Regional Commissioners, Te Puni Kokiri regional offices, Ministry of Agriculture and Fisheries funding, the BIZ programme, Tech NZ, Trade NZ etc)
demonstrate how the funding sought will add value to existing activities
not involve explicit transfers or competition with other regions
be consistent with New Zealand's laws and regulations;

Note that, in addition to these overall criteria, specific criteria around each component are being developed;
Note that the delivery and management process will involve:

Expressions of Interest (EOIs) will be called from regional groups in early July
Regional Groups will have until the end of August to put forward EOIs, and these will be assessed by Industry NZ (the Ministry of Economic Development in the interim until Industry NZ is established) to sort the likely proposals on a geographic basis and make some conclusion on coverage, overlaps and consistency with objectives and broad criteria
Industry NZ and the Ministry of Economic Development (where appropriate) will enter into a process of negotiation and discussion with regional bidders, with the aim of forming the best possible partnership with Government
Once regional groupings are finalised, lead agencies or champions in regions will be provided with detailed guidelines for putting forward a full proposal
Industry NZ Regional Case Managers will be the regional groups' key liaison throughout the process
Proposals will be received and pre-assessed by the Regional Development Team in Industry NZ
A Regional Development Programme Approval Committee, made up of representatives from Industry NZ, the Ministry of Economic Development, relevant government departments and regional development experts, will meet as required to undertake a final assessment of proposals and recommend funding payments

Note that the process described in paragraph (d) above will be repeated in subsequent years;
Note that criteria for evaluation, prioritisation and funding of proposals will be developed based on the proposals' partnership approach, relationship to the region's competitive advantages, consistency with sustainable development objectives, and regional resources;
Note that in communicating the objectives of the scheme it will be important to emphasise that:

this is only one initiative of many available from the public and private sector that supports regional development
this is not a simple "apply for funding" approach; proposals will need to be developed through a consultative approach between local groups and central government
there is an emphasis on partnerships both at the regional level and between central government and the regions
funding is based on supporting a broad regional development strategy process - not for ad-hoc initiatives.

Hon Jim Anderton
Minister for Industry and Regional Development

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Printed: 24/11/2009

Implementing the Regional Development Programme

Contents

Proposal

Executive Summary