Tourism Development Fund 2011 Annual Report
1
STATES OF JERSEY
TOURISM DEVELOPMENT FUND:
REPORT FOR 2011
Presented to the States on xxxxxxxx by the Minister for Economic Development
STATES GREFFE
Tourism Development Annual Report: Message from the Chairman
I am pleased to present our Report on the activities of the Tourism Development Fund in 2011.
The tourism industry is more important than ever, as the economic challenges facing Jersey mean that a diversified industry base is essential to Jersey’s economy. It is a credit to the tourism industry that it has successfully bucked the recent economic trend. The number of staying leisure visitors and the contribution from visitor spending has remained largely consistent over the last three years, when many other similar destinations have seen falling visitor numbers as well as falling revenues. In 2011 the Island is estimated to have been host to 690,000 visitors who contributed £242 million to the economy.
The organisations supported by grants from the Fund last year and in prior years have all played their part in contributing to the resilience of the Island’s tourism industry. The role of the Fund is to provide independent advice, support and finance in the form of grants to non-profit organisations in the Tourism sector. The Fund actively encourages applications for grants which are considered fully by our Panel under established guidelines as noted in our Report. By improving our tourism infrastructure, developing events, and extending our facilities, they are bringing people to the Island, improving visitors’ experience once they are here, and encouraging their return. At the same time the Island’s residents benefit from their participation.
In our Annual Report for 2010 I noted that we were in discussion with the Ministers of Economic Development and Treasury and Resources to secure additional funding. Those discussions were successful and resulted in a further commitment of £650,000 to the fund in the summer of 2011. As a result of the delay the Fund carried out one proactive application process in 2011 rather than two as in recent years. The Panel members continued to be pleased by the range and diversity of the applications.
As far as the future of the fund is concerned, I noted in our 2010 Report that consideration was being given to expanding the remit of the Fund to enable us to consider grants to the private as well as the non-profit sectors of Tourism. The Panel are of the view that there should be no differentiation between non-profit and private organisations. If an application can be shown to bring a positive contribution to the Island by increasing visitors, enhancing infrastructure or the general tourism offering and leveraging additional investment in tourism, they are of the opinion that the nature of the organisation that submits the application should not prevent such applications being considered. The Minister of Economic Development, through the Minister of Treasury and Resources, introduced a Proposition to the States in March 2012 to expand our role which is presently being considered. The Panel is wholly supportive of the Proposition. A further commitment by the States to allocate additional funding will also be required in the course of 2012.
Our Panel held eight meetings in 2011 and I am grateful to the Panel members for voluntarily and constructively contributing their time and expertise. I would also like to thank Sarah Withers and her colleagues in the Economic Development Department for the excellent support they have provided to the Fund during the year.
The further development of Tourism offers a significant opportunity for the Island and there is much hard work to be done to continue the success of the industry. The Fund and the Panel members look forward to continuing to make our contribution. As always the Panel members welcome comments and suggestions as to how we best achieve this goal.
On behalf of the Tourism Development Fund Panel
Peter C. Funk, Chairman
- Introduction
In line with the terms of the Tourism Development Fund (TDF) Approved Scheme, the 2011 Annual Report is hereby submitted to the States of Jersey.
As of the 31 December 2011, since the TDF began its operations in 2002, there were 98 projects that had received, or were receiving assistance from the Fund. Eight new projects were approved for funding during the year and a further project was approved on the basis of further conditions being met.
- Background to the Fund
The Tourism Development Fund was established in 2001 and replaced the Tourism Investment Fund. The aim of the Fund is to stimulate investment in the tourism product and tourism infrastructure in order to improve Jersey’s competiveness and to sustain a flourishing tourism industry as a valuable contributor to the economy and the social fabric of the Island. Applications are assessed as to the likely impact on visitor numbers and the visitor experience, how sustainable the impact may be, and the associated investment that TDF funding would leverage.
When the Fund was established, an agreement was made in principle that the sum of £10 million would be set aside over the following five years. In 2003, £1.2 million was transferred to the Fund, and in 2006, an additional £1 million was transferred. The Panel Members were pleased that an additional £650,000 was granted to the Fund in 2011, although recognise that the total amount awarded to date is significantly less than the original £10 million agreed.
The Panel continue to be of the opinion that if the terms of the scheme allowed them to award grants to private sector investors it would greatly expand the number of grant applications that they would receive. They consider that this would increase the number of potential projects with the capacity to have a greater impact on visitor numbers and associated impact on the Tourism Industry as a whole.
The Panel comprises: Peter Funk (Chairman), Lawrence Huggler (Vice Chairman), Kristina Le Feuvre, Melinda Isherwood, Carol Canavan, Andrew Shrimpton, Dominic Jones and Steve Bailey. The Department is represented at officer level by Chief Executive, Mike King and Director of Tourism & Marketing, David de Carteret and the Panel is supported at executive level by Sarah Withers, Economic Development.
- Activities in 2011
The Panel met eight times during the year. Copies of the approved minutes of each of the Panel meetings are available on www.jersey.com/business.
An application for the refurbishment of Kempt and La Rocco Towers made in Autumn 2010 was approved in March 2011 following the provision of further information, including an independent budget review and site visit. Once this had been taken into account, there were insufficient funds available in the TDF to have a pro-active Spring round of applications. Therefore, until the Autumn when the TDF was allocated funds of £650,000, the fund accepted applications on an ad-hoc basis. This resulted in three further awards.
Following the approval of additional money to the Fund, the procedures for applications that had been initiated in 2009 were reinstated. A round of applications was initiated in October 2011. To alert potential applicants of the opportunity of funding, adverts were placed in the Jersey Evening Newspaper, it was promoted on the Jersey.com website and it was highlighted in the Jersey Tourism e-newsletter. A press release resulted in both radio and newspaper coverage. Twenty six applications were received. The Panel reviewed each application, taking regard of the potential impact on tourism, the additional investment from other sources that the project would generate, the sustainability of the potential impact and the project governance. Five applicants were awarded funding, one of which was subject to the fulfilment of additional conditions to be completed early in 2012.
During this round of applications, for those projects where further information was required, individual Panel members were tasked with contacting the applicant, and gathering details to report back to the Panel. This process proved to be an effective way to provide additional scrutiny to applications without causing unnecessary time delays in the application process.
The following projects were approved for funding during 2011:
1 Refurbishment of Kempt and La Rocco Tower – Jersey Heritage
2 P1 Powerboat racing – Jersey Tourism
3 Marketing for Branchage – Branchage
4 Tour Des Ports – St Helier Yacht Club
5 Development of a wetland visitor centre – National Trust for Jersey
6 Development of a business plan to extend the scope of Branchage - Branchage
7 Liberation Music Festival – Music in Action
8 Development of a Marine Guide and Associated resources – Jersey Seasearch
9 Development of luxury camping at Durrell (subject to further conditions being met)[1] – Durrell Wildlife Conservation Trust.
The TDF committed £406,250 towards these projects, details of which can be found in the table below. The total investment in tourism through these projects, including the funds contributed by organisations themselves and additional project sponsors, amounted to £1,340,400.
- The Future
The Panel maintain the view that there should be no differentiation between the public and private organisations. If an application can be shown to bring a positive contribution to the Island by increasing visitors, enhancing infrastructure or the general tourism offering, and leveraging additional investment in tourism, they are of the opinion that the nature of the organisation that submits the application should not prevent such applications being considered. The Panel are of the view that if the TDF was extended to the private sector, it would be able to increase the impact of the fund on the tourism sector as a whole.
The Panel agreed that having pro-active rounds of applications is the most effective approach and seek to continue this in the future. The Panel are optimistic that there are sufficient funds available for two successful rounds in 2012 but are still keen to develop a more secure funding system so that a repeat of 2011, where the Spring round had to be omitted, is avoided.
Accounts
Highlights:
Closing Net Asset Position of £936,963, an increase of 105.1% on 2010
Net Revenue Income of £480,196, compared to Net Revenue Expenditure of £252,168
Key Results
Changes in NAV £’000 2010 NAV 457 Grants paid (170) Grant received from EDD 650 2011 NAV 937 | Changes in Net Asset Value from 2010 The Net Asset Value of the Fund increased from £456,766 to £936,963 an increase of £480,196 (105.1%). The increase is due to a grant received from the Economic Development Department (£650,000) and the payment of grants (£170,453) in accordance with the purpose of the Fund. |
Key Variances from 2010 £’000 2010 NRE (252) Grants paid 82 Grant received from EDD 650 2011 NRE 480 | Performance compared to 2010 Income £650,000 more than 2010 The Fund received a grant of £650,000 in November 2011 from the Economic Development Department to allow the TDF Panel to continue further rounds of grant allocations during 2012 and beyond. Expenditure Grants £81,978 (32.4%) less than 2010 Grants from the Fund are considered and approved by a committee comprising business leaders and senior officers from the Economic Development Department. The amount paid in grants each year is dependent upon the number and financial amounts of applications received and approved by the committee. |
Operating Cost Statement |
| | |
| 2011 | 2010 |
Actual | Actual |
£’000 | £’000 |
Notional Interest | 4 | 5 |
Other Revenue | 650 | - |
| | |
Total Revenue | 654 | 5 |
| | |
Supplies and Services | 2 | 4 |
Administrative Expenses | 2 | - |
Grants and Subsidies Payments | 170 | 253 |
| | |
Total Expenditure | 174 | 257 |
| | |
Net Revenue (Income)/Expenditure | (480) | 252 |
No other gains and losses were recognised in the year
Balance Sheet |
| | | | |
| 2011 | 2010 |
Actual | Actual |
£’000 | £’000 |
| | | | |
Current Assets | | | | |
Trade Debtors | - | | 24 | |
Balance due from Consolidated Fund | 987 | | 435 | |
| | | | |
Total Current Assets | | 987 | | 459 |
| | | | |
Current Liabilities | | | | |
Creditors | (50) | | (2) | |
| | | | |
Total Current Liabilities | | (50) | | (2) |
| | | | |
Net Current Assets / (Liabilities) | | 937 | | 457 |
| | | | |
Total Assets Less Current Liabilities | 937 | | 457 |
| | | | |
Net Assets | | 937 | | 457 |
| | | | |
Reserves | | | | |
Accumulated Revenue Reserves | (937) | | (457) | |
| | | | |
Total Reserves | | (937) | | (457) |
* As at December 2011, £211,980 had been committed. Following the contractual arrangements being completed in early 2012 with reference to the Autumn round of applications that the Panel considered in November and December 2011, a further £218,550 was committed. This leaves uncommitted funds of £506,000.
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