Agenda item

 

To receive the presentation which provides a Review of the Rotherham Investment and Development Office (RiDO) Business Centres.

 

 

At the Chair’s invitation, Councillor Williams, Cabinet Member for Transport, Jobs and the Local Economy (Cabinet Member), introduced the item and explained that the presentation would provide Members with an overview of the RiDO Business Centres (Business Centres), covering areas such as: occupancy; financial performance; market competitiveness; economic impact; and future opportunities for the service.

 

The Cabinet Member commented that the Business Centres played a key role in supporting start-up businesses in Rotherham. The Business Centres supported more than 180 businesses, which equated to approximately 850 jobs. This represented a significant contribution to growth in the local economy.

 

The Cabinet Member shared with Members that they had recently visited one of the Business Centres and had been impressed with the level of support and guidance available for local businesses, along with the high-quality buildings and facilities. The Cabinet Member expressed the view that the Business Centres were an “unsung success story” and expressed pride in what the Council delivered for local businesses. 

 

Martin Beasley, the Head of Economic Development, took Members through the presentation highlighting the following points:-

 

·       There were currently five Business Centres across the borough – Century Business Park 1 & 2 in Manvers, Fusion at Magna, Matrix at Dinnington and Moorgate Crofts, which was close to the town centre.

 

·       Across the five sites there were 242 business units, including 156 offices. The Business Centres provided a mix of office accommodation, workshop units and specialist laboratory space. Two wet laboratory spaces had recently been introduced at the newest Business Centre, Century Business Park 2 in Manvers, in order to meet specific demand in that area. Co-working office space was also available at Moorgate Crofts.

 

·       The mixed-use units available provided flexible accommodation that could meet the needs of businesses at the different stages of their growth - from a nascent entrepreneur through to businesses wanting to move out into larger premises elsewhere in the borough.

 

·       Businesses who used the Business Centres benefitted from flexible one month licence agreements, access to administrative and digital services, experienced staff on site and direct links to the wider RiDO business support programmes.

 

·       The importance of providing flexibility to new businesses was explained, as it would reduce risk for entrepreneurs and would allow businesses to scale up or down as required, before eventually moving on to larger commercial premises across Rotherham.

 

·       There were 50 businesses on average who utilised the virtual office space offered by the Business Centres. This service was useful for start-up businesses who may not be able afford to rent an office space, but required a professional business address and call and post-handling services.

 

·       It was explained that the Launchpad Programme (Launchpad), which was a South Yorkshire initiative, had been established in Rotherham for around 10 years. Each South Yorkshire local authority had been able to put their own stamp on the support offered in their area, which made it an agile service.

 

·       Launchpad provided support to entrepreneurs looking to start up a business through to businesses with three years of trading. The co-working space at Moorgate Crofts provided a drop-in space for businesses without a dedicated office space, where Launchpad advisors were on site to provide business advice and support.

 

·       Members were informed that Launchpad had supported 41 businesses that were created from scratch in 2025. Over the last year, Launchpad had also supported 54 new businesses to secure start-up grants and had distributed over £50,000 of grants.

 

·       Occupancy levels across the Business Centres fluctuated but remained strong. The occupancy target set by the service was 85%, which provided a balance between income generation and sufficient space available for tenant churn. The overall aim of the Business Centres was to support businesses to grow out of the Business Centre space and on to bigger premises within the borough, hence a frequent turnover of tenants. It was noted that occupancy patterns had changed since Covid and increased hybrid working meant that some businesses had sought to downsize their space.

 

·       It was reported to Members that the Business Centres continued to generate positive financial returns and were financially viable. During the 2025-26 financial year, the Business Centres generated £1.4 million worth of income, against costs of approximately £1.2 million, which left a revenue surplus of approximately £175,000.

 

·       It was explained that it was more difficult to quantify the wider socio-economic benefits to the borough that the Business Centres provided, such as a platform for Rotherham residents to find gainful employment and the generation of increased business rates income.

 

·       A number of additional services were provided to businesses via the Business Centres, such as: administrative support; use of meeting rooms; access to business support programmes and networking; supply chain opportunities; and wider engagement activities. It was reported that a new business networking group had recently been launched with the local Chamber of Commerce, to encourage more businesses to start trading locally. 

 

·       The Business Centres provided true wraparound support, acting as the first connection with wider Council services and providing key links to Council departments that would last for the lifetime of the business.

 

·       Desk-based research on market comparators had demonstrated that the pricing of rents at the Business Centres remained competitive within the South Yorkshire market, positioned below a number of local premium serviced office providers. This allowed RiDO to support business growth, whilst ensuring that the Business Centres remained commercially attractive and accessible to small and growing businesses.

 

·       It was confirmed that the Business Centre buildings were well maintained, with a full and frequent schedule of required compliance checks. However, it was acknowledged that the older buildings would require ongoing maintenance investment. Members were informed that Century Business Park 1, which was 25 years old, required full roof replacement at a cost of £927,000, and that work was due to start on this imminently.

 

·       It was acknowledged that a key area of improvement identified by the service was to strengthen marketing activity to promote the Business Centres. RiDO currently does not have a dedicated marketing resource within the service. Ways to support and enhance marketing activity within the existing staff profile were being explored, with a view to increasing awareness and strengthening digital promotion.

 

·       Formal tenant satisfaction surveys had paused during COVID and had not been reinstated. However, qualitative feedback on tenants’ experience at the Business Centres was routinely collected via one-to-one business growth discussions and exit interviews. Businesses largely left the Business Centres for the positive reason of being successful enough to move on to bigger premises. It was confirmed that the service would look to re-introduce the tenant survey to improve additional intelligence and help identify future opportunities.

 

·       An internally conducted SWOT analysis was shared with Members, which identified the current strengths and weaknesses of the RiDO team. Significant strengths were highlighted to be strong occupancy levels; an experienced team with an established reputation; the diverse range of accommodation on offer; and close integration to Council support services, which would not available in the private sector.

 

·       Areas for improvement highlighted included; marketing capacity; ageing property assets; a need to strengthen customer feedback; and improved business engagement activity to follow up with businesses once they leave the Business Centres.

 

·       Future opportunities had been identified to grow the offer via improved marketing utilisation, and possible use of a CRM system. Expansion of the Business Centre offer could be possible via future developments within the borough, such as Rotherham Gateway. It was acknowledged that there were also challenges that could threaten these opportunities, such as increased competition in the public and private sectors, rises in operation costs and uncertainty around the availability of future funding.

 

·       In summary, the Head of Economic Development commented that the Business Centres remained a valuable and successful component of the Council's economic development offer, generating positive economic and financial outcomes whilst supporting local business growth, job creation and wider investment across the borough.

 

The Chair thanked officers for the presentation and invited Members of IPSC to raise questions and queries on the item, and in the ensuing question and answer session the following points were raised:-

 

Councillor Jones commented that problems with marketing resources appeared to be a common theme across the Council and enquired what steps the Council was taking to try and enhance delivery of marketing across different Council services.

 

Simon Moss, the Service Director of Planning, Regeneration and Transport (Service Director) responded, acknowledging that marketing activity tended to be managed centrally via Corporate resources across Council services. However, that was always paired with input from the departments where the relevant expertise sat.

 

It was explained that over the period of austerity, where local authority finances had been constrained, marketing budgets had been affected. The Council had, however, found new ways of collaborative working to continue with marketing activity, which had achieved positive results. It was acknowledged that more resources for marketing would be welcome, but that the strengths at the Business Centres, such as positive tenant engagement and links with programmes such as Launchpad, contributed to wider marketing activity for the service.

 

In a follow on question, Councillor Jones asked for confirmation of the target audience of tenants for the Business Centre and where approaches usually came from?

 

The Head of Economic Development confirmed that the target audience for
Business Centre tenants was new entrepreneurs looking to start a business. It was explained that RiDO was sector agnostic, which meant that specific sectors were not targeted. The Business Centres would be available to anyone who was looking for support and wanted to start a business in Rotherham.

 

It was explained that it could be challenging to target someone who was at the early stage of starting a business as they would not yet be active and advertising. This emphasised the importance of the Launchpad programme, which sat alongside the Business Centres, as that represented a known brand with a wider promotional reach.

 

Amanda Parris, the Service Manager for Business Hubs & Markets (Service Manager) confirmed that a lot of enquiries and referrals came via word of mouth, and that the RiDO website also produced a high level of enquiries. The Business Centres were advertised on placards placed on roundabouts across Rotherham but other than that, very little active advertising was routinely done.

 

The Chair asked whether RiDO engaged with the local Chamber of Commerce, as that would be an obvious starting point for someone wanting to launch a new business.  The Service Manager confirmed that RiDO had strong connections with local business support agencies and the local Chamber of Commerce and frequently received referrals from the Chamber of Commerce.

 

Councillor Thorp commented that occupancy levels at the Moorgate Crofts Business Centre had consistently been lower than the other Business Centres and enquired as to the reasons behind this site being less popular with tenants.

 

The Head of Economic Development confirmed that the lack of parking available at Moorgate Crofts was the biggest barrier to higher occupancy levels there. Most tenants were looking for affordable rent and available parking for their business, but the parking offer was very limited at Moorgate Crofts, due to the town centre position.

 

The Service Manager added that Moorgate Crofts also only offered office space, rather than the mix of office and workshop space offered at the other locations, which also had an impact on the attractiveness of the site to tenants.

 

In a supplementary question, Councillor Thorp enquired whether the limited parking and more limited offer of business space at Moorgate Crofts meant that it was a viable Business Centre?  In response, the Service Manager commented that Moorgate Crofts provided good opportunities for businesses that wanted office space close to the town centre and confirmed that occupancy rates had risen recently.

 

The Chair asked whether, given the parking issues, there were any plans to redevelop the site at all or change its use from purely office space. The Head of Economic Development confirmed that Moorgate Crofts remained dedicated to office space only, but that co-working space had recently been introduced as part of the Launchpad scheme, and this could be more attractive to people coming into the town centre via public transport. The Launchpad Hub was also based at Moorgate Crofts, where Business Advisors were available on a drop-in basis. The numbers of people that used this drop-in service were not included in the occupancy figures but did represent other frequent users of the Business Centre.

 

Councillor Bennett-Sylvester noted the comment on the SWOT analysis slide of the presentation (page 41 of the Agenda Pack) around the “centres operating within Council governance, procurement and financial frameworks, which provide important controls but may limit flexibility compared with some private sector competitors”. Councillor Bennett-Sylvester enquired whether Council use of the sites could dilute the commercial identity of the Business Centres and whether there were any Council services currently using space at the Business Centres.

 

The Service Manager explained that at the inception of the first Business Centre in 2000, the Council was acutely aware of the importance of not filling the spaces with Council departments, but to keep them available to encourage new business growth in the borough. This had been maintained as the Business Centres had grown, and therefore, Council use of the Business Centres was not currently an issue.

 

In a supplementary question, Councillor Bennett-Sylvester noted that an affordability analysis against local competitors had been carried out but enquired whether there was any scope to provide more flexible terms or rates for those Business Centres with lower occupancy rates, in order to attract tenants.

 

The Service Manager confirmed that at Moorgate Crofts, a reduction of 20% on rents had been offered on the ground floor units which had been slower to rent. This flexible approach had proved to be successful as the units were now full.

 

Councillor C Carter asked a further question on the limited parking situation at Moorgate Crofts and enquired whether any options had been explored to provide users of the centre with discounted parking elsewhere in the town centre, as an incentive for them to use Moorgate Crofts.

 

The Service Manager explained that every tenant at Moorgate Crofts had one car parking space allocated per unit. Visitor car parking was also available on pay and display spaces and the nearby multi-storey car parks, such as at Wellgate, were promoted. The Service Manager confirmed that possible discounts at local car parks had been discussed with tenants but that to date, no one had taken this option any further. On the whole, tenants wanted parking to be as close to their office as possible.

 

In an additional question, Councillor C Carter asked whether work was done as a matter of course within the Council, to engage and connect local businesses with RiDO when they first came into contact with other Council services.

 

The Head of Economic Development confirmed that they also oversaw Business Support and Employment Skills service and that all staff who engaged with local businesses were fully briefed to provide information on the range of local business support available from the Council, as well as regional and national programmes. It was explained that there was also a Customer Relationship Management (CRM) system in place, which enabled staff to log in and track any interactions with businesses and referrals made.

 

In a supplementary question, Councillor C Carter asked what work was being done to reach small businesses in parts of the borough that were not near a Business Centre. In response, the Head of Economic Development reflected that it was a challenge to support businesses that were not near a Business Centre. This had been highlighted as a gap, and service intended to explore potential funding opportunities with the South Yorkshire Mayoral Combined Authority (SYMCA) to provide more support to potentially “hidden entrepreneurs”.

 

The Service Director commented that there was a good geographical spread of Business Centres across the borough and reminded Members that over the past year, a team of High Street Advisors had also been established to help businesses access premises on High Streets and other commercial areas across Rotherham.

 

Councillor Taylor referred to the required roof repair and other maintenance issues at Century Business Park 1, at a cost of approximately £1.2 million. Councillor Taylor enquired how these repairs would be funded and whether any of these costs would be passed on to tenants

 

In addition, Councillor Taylor asked whether, considering the ages of some of the other Business Centres, there was a strategy in place to address any projected maintenance requirements and repairs.

 

The Service Manager responded, confirming that the Business Centres did make a surplus profit, which would go back into the wider Regeneration & Environment Directorate budget. When funds were required for major repairs, such as the roof, RiDO would bid for capital funds. There were also dedicated budgets which covered the ongoing maintenance requirements of the buildings. It was important that maintenance and regulatory compliance was routinely carried out to ensure that the Business Centres remained of high standard and attractive to tenants.

 

The Service Director added that any costs of maintenance and repairs would not fall on the tenants directly but would flow through the Council’s internal budgeting processes. It was explained that the Business Centres were managed as part of the Council's wider operational estate and that regular maintenance and condition checks were undertaken in line with appropriate corporate processes. The Business Centre team was timely in reporting issues and liaising with Property Services where repairs and improvements were required. There was a planned programme of improvements and modernisations at the Business Centres, such as energy efficiency improvements and boiler replacements, and there would occasionally be the need for one-off costly repairs, such as the roof at Century Business Centre 1.

 

In response, Councillor Taylor commented that, given the age profile of some of the Business Centres, they would have expected the Council to have taken a more strategic approach rather than on a case-by-case basis.

 

Phillip Horsfield, the Council’s Monitoring Officer (Monitoring Officer) explained that the Council was currently undertaking a wholesale review of repairs and maintenance with respect to the Council’s property portfolio, with a view to becoming more proactive in identifying repairs further in advance. This would enable the Council to plan and manage cash flow within budgets that were ring-fenced for larger capital costs. Where certain costs could not be managed within existing budgets and cash flows, Members would be consulted with regard to the prioritisation of project and repairs.

 

The Chair enquired whether the planned programme of projects referred to for the Business Centres equated to a five-year or longer-term plan. The Service Director explained that projects were identified through collaboration with the Property Services team, who would conduct condition surveys and regular checks to determine which projects should be prioritised. The roof requirement had been identified as part of a five-year programme of works for Century Business Park 1. This programme was now in year 4 and the cycle would commence again soon.

 

Councillor Steele, Chair of the Overview and Scrutiny Management Board (OSMB), added that OSMB had asked Property Services to conduct a review of all Council owned properties to assess what repairs were required and the potential costs of such repairs. This report could be consulted if helpful.

 

The Chair asked whether the costs figure of approximately £1.2 million at page 35 of the Agenda Pack included maintenance and staffing costs, and whether a more detailed breakdown could be provided.

 

In response, the Head of Economic Development confirmed that a more detailed financial overview could be provided outside of the meeting. The Service Manager explained that regular, smaller maintenance costs and ongoing staffing costs related to the service were included in the costs figure, but that larger maintenance costs (such as the roof) were not.

 

Councillor Jones commented that the two objectives of the Business Centres were to incubate new businesses, whilst bringing in income to the Council. With this in mind, Councillor Jones commented that they would have expected a lifetime investment profiling exercise to have been carried out for each building. The level of overall profit reported would not cover larger scale investments, when needed.

 

Councillor Jones enquired whether any work had been done to look into possible investment from SYMCA regarding solar panels and other energy efficiency measures that could reduce the operating costs of the Business Centres.

 

The Head of Economic Development explained that it was a challenge to identify funding for solar panel installation, as a lot of initiatives were aimed at SMEs rather than the public sector.

 

The Head of Economic Development asked Members to be mindful of the fact that the initial build cost of the Business Centres had largely been covered via external funding. Therefore, they represented cost-effective assets for the Council over their lifetime as there had been little initial outlay for the Council. Members were reassured that RiDO was constantly “horizon scanning” and seeking out opportunities for additional external funding streams to complement the current offer. The wider contribution to the local economy that the Business Centres made was not as easily quantifiable but arguably represented economic benefit to the borough.

 

The Service Manager added that the option of adding solar panels to the roof repair at Century Business Park 1 had been explored but unfortunately, had not been possible due to the structure and positioning of the building.

 

The Monitoring Officer commented that for future reports to Scrutiny Commissions, it would be useful for Officers to make early enquiries with Property Services to ensure that detailed information on specific property maintenance costs was available. This would provide assurance to Members that plans and ongoing programmes of works were in place.

 

The Monitoring Officers also asked Members to consider that where projects such as the RiDO Business Centres were set up to achieve a wider social and economic development outcome, they would not necessarily appear to be profit-making on the surface. It was important that Members could make the budgetary decisions that were required of them every year and were provided with enough information to enable them to assess how much such projects would cost local taxpayers.

 

Councillor Adair referred to an offer that had been available at Rotherham Youth Enterprise Treeton Community Resource and Business Centre, where occupancy was set at a 12-month period and enquired whether the same criteria was in place at the Business Centres.

 

The Service Manager confirmed that there was no fixed term of occupancy in place at the Business Centres as the main aim of the service was to provide adequate business support to tenants to enable them to move on as quickly as possible, usually within six months. However, it was noted that it could occasionally be challenging to find tenants suitable alternative accommodation within these timescales, and therefore, some tenants remained in the Business Centres for longer.

 

Councillor Thorp asked whether service could provide a more detailed breakdown of the costs of each Business Centre on an individual basis, as the costs and profit breakdown had been presented as a total for all units. It was therefore difficult for Members to assess whether any of the Business Centres were essentially unprofitable. Officers agreed to provide this follow-up information outside of the meeting and confirmed that each Business Centre operated on different costs centre.

 

In a further question, Councillor Thorp asked whether, when Exit Surveys were conducted with tenants, issues with the buildings had come up as a reason for them leaving. The Service Manager confirmed that tenants did not generally report issues with the buildings as a reason for leaving and explained that it was usually because tenants had run out of space due to their business expanding. Some areas at Century Business Park 1 had been closed off due to water ingress from the recent roof issues, but this had not adversely affected any tenants, and it was reported that work on the roof would commence within the next few weeks.

 

Councilor Jackson enquired how RiDO helped tenants with negotiations with private landlords, and potentially the Council, to move into different commercial premises, and gave the example of a number of empty shop units available in their ward of Wath. Councillor Jackson asked how the Council encouraged tenants to consider moving to empty shop units across the borough.

 

The Head of Economic Development explained that there was a property database embedded into RiDO’s website and Officers liaised with property agents on a regular basis to identify potential units and signpost RiDO tenants to different premises across the borough. The Head of Economic Development confirmed that work was also being done with the new team of High Street Advisors to provide information on empty units that could be suitable to tenants moving out of the Business Centres.

 

The Chair commented that in their view, any initiative that supported businesses and made even a pound of profit was a worthwhile endeavour for the Council. The Chair enquired what the plan for the next five years looked like for the Business Centres, as changes in working patterns have changed space requirements for tenants.

 

The Service Director agreed that RiDO had experienced real success in supporting local businesses and maintaining relatively high occupancy rates in the post-Covid workplace environment. It was confirmed that there were currently no firm proposals to expand and develop any more Business Centres. However, as they had proved to be a successful and resilient model, this would be considered in the future, subject to available funding.

 

As mentioned previously, the geographical spread of the Business Centres could be widened and there could be opportunities to explore this further with future planned developments at Rotherham Gateway and the Don Valley Corridor project with SYMCA. There was also a clear need for more medium-sized office space for emerging businesses, which could be factored into future plans.

 

The Chair commented that in future, the Business Centres could consider providing other types of unit space, such as laboratory kitchens, to widen the offer to new business owners. The Service Director agreed and offered Members the opportunity to undertake a site visit to Century Business Park 2, as this Business Centre provided the widest mix of units and demonstrated the eclectic and diverse mix of new businesses which were using the Business Centres.

 

The Chair asked if any Members wished to suggest any specific recommendations in response to the presentation. Councillor Jackson requested that the new High Street Advisor team return to IPSC with an update on how successful they had been in their work of mapping out empty shop units across the borough and making connections to fill them. IPSC Members voted in favour of this recommendation, subject to confirmation on appropriate timescales with Officers. 

 

The Cabinet Member reminded Members that the establishment of the High Street Advisor team had been approved by Members via the budget process. Member engagement was key to the success of this scheme and the Cabinet Member expected that the Neighbourhoods team would help to establish working relationships between the High Street Advisors and Members.

 

The Chair thanked officers for their input and Members for the questions asked.

 

Resolved:-

 

1)    That the contents of the presentation be noted;

 

2)    That a visit be arranged for IPSC Members to a selection of the RiDO Business Centres to improve Members’ knowledge of the range of facilities and support available to local businesses;

 

3)    That a briefing note providing a detailed breakdown of the costs and profitability of each Business Centre be provided to IPSC; and

 

4)    That the new High Street Business Advisor team attends IPSC within the next 12 months to report on the success of the scheme to provide support to businesses across the Borough's High Streets.