HIE REPORTS ON YEAR OF RECORD INVESTMENT

13th May 2007

Highlands and Islands Enterprise (HIE) will report on a year of record investment in the Highland economy when it delivers its annual review to the May board meeting on May 15th.

Head of strategic planning and research, Alastair Nicolson, will tell board members in Thurso that all primary measure targets were exceeded and significant progress made against key strategic projects in a year that saw the network invest £118m in the regional economy.

One of HIE's biggest investments was in the UHI Millennium Institute for which a £4.9m commitment over three years has been agreed to consolidate the drive to university title, complementing the steady build of academic staff with 48 senior research positions now filled.

Highland 2007, the Scottish Year of Highland Culture, got off to a buoyant start in January and promises high profile events still to come such as the Elton John concert in Inverness, the World Mountain Bike championships in Lochaber, the Outsider festival in Aviemore and the Connect Argyll music festival. It will be further complemented, board members will be told, by the opening this autumn of the refurbished Eden Court Theatre in Inverness for which HIE responded to an application for additional assistance.

Broadband has now been taken up by 59 per cent of organisations in the Highlands and Islands and significant progress is being made on the development of renewable energy projects. The network-managed construction of the European Marine Energy Centre's tidal test facilities in Orkney are almost complete, with its first client, Open Hydro, about to connect to the grid.

The £23m Centre for Health Science in Inverness is developing on time and on budget with Phase I completed in September 2006 and Phase II scheduled for occupation by spring 2008.

A short-term lease has been awarded for the manufacturing yard at Arnish on Lewis after former tenant Camcal went into administration. The current tenant is completing work outstanding from Camcal's order book and assets have been acquired by the network to enable a fully operational manufacturing facility to be leased.

A further £12m was committed over four years to the post-Dounreay regeneration action plan in Caithness and Sutherland established with other partner agencies and recruitment is underway to appoint additional key personnel. The network has opened a part-time office at Dounreay to assist prospective business start-up enquiries and a supported business incubator unit 'Innovation Forss' was launched. The Decommissioning and Environmental Remediation Centre (DERC) and T3UK - each centres of excellence for training and research into decommissioning techniques, were officially opened during the year.

Land acquisition negotiations at Inverness Airport will shortly be concluded for the provision of a new business park and work on an airport rail halt should start by the end of the year with funding from HITRANS.

The Moray 2020 initiative saw significant progress with a clean manufacturing facility completed at Forres, a new office under construction at Keith and land secured for a business park in Buckie.

In 2006/07 HIE's strengthening communities group assisted the acquisition of over 500 new community assets and helped 198 community groups increase their range of activity. It assisted 14 community land acquisitions and provided advice to the social enterprise sector, particularly on identifying and securing procurement opportunities.

Under the heading of developing skills, ambitions were exceeded in both supporting businesses to increase workforce skills (target 655), and supporting people to move towards or into sustainable employment (target 2405) - each goal was overachieved by nearly 25 per cent.

As part of HIE's growing businesses objective, 560 new businesses were helped to start up and over 300 existing firms helped to expand.

There was a further encouraging result in the private sector earning index, which measures wage levels for HIE network-assisted jobs, as it exceeded expectations at 116 per cent. The number of businesses engaging in overseas trade rose to 175 against a target of 160. The network handled 28 inward investment enquiries leading to five new businesses and two existing clients expanding in the area.

Analysis shows that £75m invested in businesses and communities by the network levered £190m from the private sector and other funding sources while HIE was also able to bring important influence to key issues for the region such as transport strategy and islands policy.

The Highlands and Islands Community Energy Company (HICEC) assisted 28 community wind farm projects through the technical development stage with three now submitted for planning consent and 67 smaller projects completed such as the new wood fuel heating system at Lochaber College.

The network continued to promote innovation with active involvement in creating a new campus for Inverness College and the establishment of the Distance Lab technology centre which will be delivered across the region.

Following HIE's internal audit of the £50m of European grants awarded under the Highlands and Islands Special Transitional Programme (HISTP), £1m was identified as eligible for decommitment. This sum was reallocated to the Highlands and Islands Partnership Programme for re-investment in the region.

Success in key sectors included the approval of a £5.5m funding package for the Balcas combined heat and power plant in Invergordon which will create 38 full-time jobs, an agreement to administer a national development fund for Scotland's music industry and productive dialogue between the Department of Trade and Industry and particular life science companies.

In the south of Skye, work is continuing on the £7.2m Fàs Centre for Creative and Cultural Identity, scheduled to open in December this year, which will complement the Gaelic College Sabhal Mor Ostaig at Sleat.

HIE has further contributed to the Dunoon and National Park strategic gateway framework and action plan to increase the attractiveness of Dunoon, the Clyde islands and Cowal, and the marine science initiative in North Argyll is forging ahead with Integrin Advanced BioSystems Ltd entering negotiations to move into a new bespoke laboratory in Oban.

In Lochaber, BSW Timber is preparing to move to the site vacated by Arjo Wiggins and negotiations are now underway with the network over the purchase of land at Annat, adjacent to the new site.

Following a ballot of residents on Raasay in the HIE Skye and Wester Ross area last month, funding will now be sought for a £3.5m project to start later this year to refurbish Raasay House as an outdoor activities base.

The full report can be read at
http://www.hie.co.uk/hie-board-meetings-minutes.html