Task force delivers 30 day report to Ministers

15 March 2011

Following the announcement of Pfizer in February that it will exit its research and development facility at Sandwich, in East Kent, by the end of 2012, the Sandwich Economic Development Task Force today delivered its 30 Day Report to Ministers (pdf, 376k).

The report, requested by the Secretary of State for Business, Innovation and Skills and the Minister of State for Universities and Science, makes recommendations which will stimulate business growth and employment in East Kent, including in Sandwich.  

What the task force has done so far

Over the last 4 weeks, the task force has made significant progress. As well as developing the proposals set out in its 30 Day Report, it has:

• Visited and investigated examples of former research and development facilities which have found new futures after major industrial restructuring,
• Drawn together venture capital experts to advise us on the right incentives to stimulate business investment,
• Co-ordinated collaboration between Pfizer and inward investment body Locate in Kent in promoting the site,
• Initiated a coordinated approach to support for the existing workforce
• Commissioned, via Kent County Council, a full assessment of the impact of Pfizer’s exit, in the context of wider changes to the East Kent economy and a longer term strategy for growth.

The opportunities of transition

The Sandwich Economic Task Force has identified five phases of action, moving from an immediate focus on preserving jobs and activity on the site through to the longer term delivery of wider opportunities for East Kent: 

• Phase 1: Pfizer’s efforts to attract contract research organisations (CROs) to the site will hopefully result in the transfer of assets and staff. Pfizer is currently in detailed and commercial in confidence negotiations with a number of CROs, which could provide a positive basis around which further economic activity and job opportunities can be generated,
• Phase 2: Building on a CRO core, further opportunities to attract venture capital investment in new business start-ups,
• Phase 3: Over the medium term, a range of options for additional R&D and other high-tech activity (for example in food sciences, aviation and environmental technology) at Sandwich, Manston and the East Kent Assisted Area,
• Phase 4: Looking beyond Pfizer’s exit in 2012, consideration of longer term ownership and management options for the future of the site and links with neighbouring locations to provide a core of other high-value activity,
• Phase 5: Delivery of a longer term strategy for the future of East Kent.

Solutions and recommendations

The task force must now maintain momentum and is focussing activity in three main areas.

Firstly, action must be taken quickly to support the staff, contractors and communities directly affected by Pfizer’s exit.

Pfizer is already supporting its staff through the transition with a comprehensive out-placement service that includes training events to help them develop business proposals.

Work is in progress to co-ordinate this with the support that can be offered by other agencies, and to align EU, national and other funding to support enterprise development. We recommend a focused effort on support for training and enterprise, and we will bring forward more detailed recommendations in our second report to Government. 

Secondly, we recommend that Government designates the Sandwich, Manston and key sites within the East Kent Assisted Area as a Research, Innovation and Technology Zone (RITZ).

This would bring together a range of potential incentives backed by Government and by local partners, including: 

• Full exemption from business rates on empty properties,
• Capital incentives for further business growth,
• National Insurance contributions holiday for business start-ups,
• Support to business to secure research and development tax credits,
• A full research and development business support package Incentives to attract equity investment, similar to the Business Expansion Scheme of the early 1990s,
• Streamlined regulatory and planning processes,
• Promotion and marketing of business and investment opportunities.

We propose that Government formally identifies the RITZ designation based on these incentive measures. Kent County Council has commissioned further work to quantify costs and benefits which will take place over the coming month. We are also seeking the views of experts in venture capital to establish the priority incentives to drive forward business growth.

Thirdly, we need these incentives to be supplemented by investment in critical infrastructure, jobs and skills to support substantial economic growth. We therefore recommend the creation of an East Kent Recovery and Growth Package, to add value to the RITZ, building on Assisted Area status.

In particular, the development of high speed rail access and a reduction in journey times to Thanet and Dover will have a significant impact on the potential of the Sandwich site and the wider local economy.  A proposal to the Regional Growth Fund has already been prepared and discussions with Network Rail have been highly positive.

The Task Force has discussed this with the Secretary of State for Transport and Ministers at BIS and CLG and we recommend that Government supports Regional Growth Funding for East Kent.

Moving forward

Over the coming weeks, the task force will focus on establishing the costs, benefits and viability of its proposals, working with Government and Pfizer on the long term options for the Sandwich site, its knowledge base and the East Kent economy.

In particular, the task force will:

• Complete work to understand the impacts of Pfizer’s exit and wider economic change in East Kent, incorporating the outcomes in our next report to Government,
• Establish a Skills and Employment Sub-Group to align national, local and European programmes and funds and investigate the potential for additional resources. The sub-group will hold its first meeting on 17 March,
• Co-ordinate the contribution of the higher education sector to support the retention and expansion of the East Kent knowledge base,
• Build on the current work between Locate in Kent and Pfizer to co-ordinate a marketing and inward investment strategy for the area, establishing a closer understanding of the product and its unique selling points,
• Investigate the full costs and benefits of the proposed Research, Innovation and Technology Zone,
• Develop an integrated approach to the wider economic growth of East Kent, to support the Recovery and Growth Package, building on the work achieved to date in advancing proposals for significant transport improvements focused on the enhancement of high speed rail.

At today’s briefing in Westminster, Task Force Chairman Paul Carter stated:

“Our report focuses on the opportunities presented by the world class skills and facilities built by Pfizer over the last 60 years. Combined, they offer a unique asset on which to build a new model of high tech growth and employment which would be of importance not only to Kent, but to the country.

“Time is of the essence. The task force has brought together experts from business, finance, universities, politics and local government. We have sought to understand best practice from around the UK and the world in developing workable solutions which will deliver our vision of growth in this unique and historic area.
 
“We will leave no stone unturned in stimulating new business at the Pfizer site and growing wider employment opportunities to help Pfizer staff, local contractors and the local community.”

MP for South Thanet Laura Sandys said:

“The publication of the task force report - just 30 days after Pfizer’s announced exit - is an ambitious and necessary step following Pfizer’s withdrawal from an area which already has a fragile economy. At the heart of the report are recommendations for finding ways that staff and the wider community, affected are supported.

“Having learnt from examples of best practice from other companies’ withdrawals, the task force believes that the designation of Sandwich, Manston and key sites within East Kent as a Research, Innovation and Technology Zone could help stabilise the site and create new employment opportunities. This aspiring proposition could see Sandwich and East Kent building on its existing skills base and leading the way in global enterprise, science and technology.

“To realise this vision, Government must sustain its momentum. It could consider offering economic incentives to businesses relocating to the site and might also acknowledge that improving transport links to Thanet and Deal would make East Kent far more attractive to investors. Along with my colleagues on the Taskforce and local East Kent MPs, I will work tirelessly to attract new businesses to the site and support existing Pfizer staff with any business start up ideas they might have.”

Commenting on the Taskforce report, Sandwich Site Head Ruth McKernan said:

“The task force has speedily identified positive and well-considered options to help diversify the opportunities for the Sandwich site as well as the East Kent region”.

“As noted in the report, our immediate priority is to continue to support our staff through this transition which we are doing through training and out-placement events, as well as to continue our discussions with third parties that could help provide some jobs to meet the skills and expertise of our colleagues and help sustain the future of the Sandwich site.”