Loughry Food Business Incubation Centre and On-Street Parking

11 December 2000

Mr John Dowdall, Comptroller and Auditor General and Head of the Northern Ireland Audit Office, has today reported on the results of his examination of the above subjects. The Food Business Incubation Centre, situated at Loughry College near Cookstown, cost £3.9 million and was opened in February 1998 by the then Department of Agriculture for Northern Ireland. It comprises eight small factory units for the development of new or existing small food businesses. The units provide an opportunity for small businesses to test their ideas and concepts for foods, and commence production, without incurring the high capital cost normally associated with food manufacturing. The Audit Office review focused on the appraisal, construction and performance of the Centre over the period between its opening, in February 1998, and December 1999. The main findings were:

the Centre offers a high standard of accommodation for small food businesses and this has been a major factor in the decisions of companies to locate there. Given that providing their own accommodation elsewhere would require substantial resources, renting a unit at the Centre is a more cost-effective approach in the early stages of a company's development.
overall, the project was not as well planned as it should have been. In the Audit Office's view, this has contributed to the lower than anticipated level of uptake of the units.
the economic appraisal, to evaluate the costs and benefits of the project, was not carried out until after it had been selected by the Department for funding. Good practice would require that the appraisal be carried out before the project's selection, both to inform the decision-making process and to ensure that there could be no question over the objectivity of the appraisal and approval process. The Audit Office also found that, in a number areas, the standard of the economic appraisal fell short of the good practice set out in Treasury guidance.
there was a large variance between the original estimated cost for the project and the actual cost. Despite the greater costs incurred, the project that was delivered - eight factory units - was smaller in scale than the ten units originally proposed.
the Department's evaluation of the construction phase of the project was not carried out until December 1999, some ten months after the due date. The evaluation identified "some serious problems" with mechanical and electrical services at the Centre, that were ongoing some 18 months after opening. Although not affecting the operation of individual food units, these problems were impairing the ability of staff to run the facility in an efficient and businesslike manner.
the Department had anticipated that each of the units at the Centre would be occupied by March 1999. However, at December 1999, only four of the units were occupied. A fifth unit had been let from February to September 1999. The Audit Office calculated an overall occupancy level of 23 per cent, between March 1998 and December 1999.
while the Department has indicated that applications by businesses from the most disadvantaged areas would be favoured, the Audit Office found that there had been no marketing of the Centre aimed specifically at these target areas. As a result, the Centre is now reviewing its strategy for promoting the Centre.
the Department has not yet obtained any information from tenant companies on the performance of their businesses. In the Audit Office's view, this information would assist the Department in its management and evaluation of the effectiveness of the Centre. The Department has said that the Centre will work with LEDU to develop measures of business performance.

On-Street Parking

Belfast's On-Street Parking Scheme was introduced in 1987, with the aim of enhancing traffic flow and the commercial life of the city by providing convenient, short-stay parking. Roads Service is responsible for administering the scheme and it is enforced on a day-to-day basis by traffic wardens, who are employed and managed by the RUC. In 1999-2000, Roads Service received income of £1.23 million from the sale of On-Street Parking tickets and spent £0.35 million on running costs. The Audit Office's examination focused on the efficiency of the scheme and the scope for possible improvement, and the main findings were:

A survey commissioned by Roads Service revealed a high level of illegal parking, with extreme levels identified in some areas.
The survey also found a very low level of enforcement and the Audit Office examination indicated that enforcement was not being operated to a uniform standard.
The fine for on-street parking violations is a fixed penalty of £20 which is below the minimum penalty used in Great Britain.
The Audit Office considers that a low level of likelihood of detection, coupled with the low level of penalty, probably increases the numbers of motorists prepared to risk parking illegally. It estimates that Roads Service could be losing as much as £300,000 of income annually through unpaid parking charges.
Significant levels of ticket machine downtime and inadequate maintenance response may seriously compromise the effective operation of the scheme and increase the risk that income is being lost.
The Audit Office considers that the enforcement service is poorly managed. The levels of manpower may be inadequate to ensure a successful operation, there is a low level of cover during peak periods and high levels of overtime and sickness absence.
It is recommended that the Roads Service should establish a service level agreement with the Traffic Warden Service to include details of the standard of performance required and an agreed methodology for determining the costs to be reimbursed to the RUC.
In many parts of Great Britain, parking violations are no longer criminal offences and local authorities may enforce parking schemes. The Audit Office considers that giving Roads Service similar responsibility would be a viable alternative and would help overcome many of the problems with the current arrangements.