Somerset Energy Innovation Centre Phases 2 and 3
We delivered a service specification of the operator that would partner with Somerset County Council in operating Phases 2 and 3 of the Somerset Energy Innovation Centre, including deliber of business support services. Following the delivery of the full specification, SWMAS was appointed management operator, and Phase 3 of the SEIC was completed in March 2021.
Somerset County Council
Following the delivery of Phase 1 of the Somerset Energy Innovation Centre (SEIC) by Somerset County Council, the construction of Phase 2 was nearing completion and a funding package was in place to deliver Phase 3. Somerset County Council needed to appoint a partner to operate Phases 2 and 3 who would deliver business support services to tenant business and other businesses in the local economy. To appoint an operator, Somerset County Council required help developing a specification of the service that the operator should provide. This included a clearer statement of the expected use of the demonstrator/production space in the SEIC Phase 3 building, as well as a financial model to accompany the description of the service, to help to inform any potential operators and also to inform a state aid Article 56 calculation. HJA were commissioned to undertake the delivery of this specification.
Phase 2 of SEIC comprised of low carbon innovation related flexible space, intended for offices, meeting rooms or light workshops as well as an Enterprise Hub. It was expected that Phase 2 would accommodate business growth within the Hinkley Point C nuclear power station supply chain. Phase 3 of the SEIC comprised of office space and demonstrator and production space. The focus of Phase 3 was on demonstration, testing and programme validation for mechanical, electrical and heating ventilation air control systems.
The specification began with an outline of the scope of Phases 2 and 3 of the SEIC, which included details of the contract such as its value, duration, income and revenue estimations and the anticipated support provided to tenants and non-tenants. To deliver the specification, HJA needed to gain a full understanding of the background to the requirement of the SEIC, so that its context within Somerset’s growing low carbon energy sector could be conveyed to potential management operators. The specification defined the objectives of the SEIC, set out how the development contributes to national and regional policy objectives and complementary activity that the SEIC Phase 3 needed to be aligned with. HJA provided an analysis of local demand for high quality flexible office spaces and production, testing and demonstration space, which was informed through a series of consultations with stakeholders in the South West. The specification then detailed an overview of functional requirements of the management operator, including marketing and branding expectations and business and tenant support for innovation opportunities and inward investment. HJA finalised the specification by providing additional requirements of the management operator. Performance requirements were included within this, which involved the calculation of estimated economic outputs and outcomes, such as the number of Full-Time Equivalent jobs and GVA to the local economy. Additionally, HJA reported on expectations for equality and diversity, sustainability and the social value that the SEIC is anticipated to bring to the wider community of Somerset.
To inform the specification, HJA developed an indicative financial model for the management operator. The model calculated the value of the contract for the management operator, which considered fit out costs, staff costs, operating costs and rental income then calculated an annual revenue position and a cashflow balance, based on the ongoing revenue position. Following this, HJA created variants to the model to test the vulnerability to increases in cost or reductions in income. Examples of these include Somerset County investing in the fit-out, demonstration spaces generating less income and higher occupancy rates in early years. For each scenario, HJA reported the assumptions associated with the test and an analysis of the results.
Following the delivery of the full specification, SWMAS (South West Manufacturing Advisory Service) was appointed management operator. Phase 3 of the SEIC was completed in March 2021.