7. Introduction

7.1 The Land Management Information Service (LaMIS) research and development project has completed its first phase of system design, data capture, piloting and proof of concept. LaMIS is designed for the farming and land management community to access publicly held data easily. It provides access to information held both nationally and locally, and its purpose is to assist with agricultural business development and the delivery of the new agenda for a multi-functional countryside.

7.2 LaMIS has been operating on a pilot basis in Hampshire, across the South Downs and in the North York Moors National Park. The long-term intention is to roll it out live across the whole country; discussions are under way with two further National Parks and six County Councils to extend the area covered by LaMIS.

7.3 The purpose of this report is to seek support for Hampshire County Council funding a project that has been identified as part of the evaluation of the first phase of LaMIS - a CD-Rom version of the service. The proposal is to roll out LaMIS nationally to coincide with the launch of the new Agri-Environment schemes on 1 January 2005 and the Single Farm Payment on 1 April 2005.

8. Background

8.1 Agriculture in the UK is about to experience the greatest changes for over 50 years as a result of both, the reform of the Common Agricultural Policy and society's recognition that the quality of the countryside is directly linked to the social, economic and environmental well-being of the nation. It is happening at a time when we have failed to articulate clearly what is wanted from a multi-functional countryside and at a time when data and policy is fragmented across Government departments and agencies, as well as across different layers of local government.

8.2 LaMIS is a Hampshire County Council initiative to create an interactive `Portal' for the land management industry to access all public data. The first phase of this research and development project has now been completed, and has achieved:

(i) review of all relevant E-Government initiatives to avoid duplication;

(ii) proof of concept for the user;

(iii) software design and construction;

(iv) gathering of data sets and supporting management advice; and

(v) piloting to obtain customer feedback.

8.3 The total cost of this phase over three financial years has been approximately £450,000, funded mainly by the Department for the Environment, Food and Rural Affairs (DEFRA), Countryside Agency, South East England Development Agency (SEEDA) and the National Parks. The project management board signed off the delivery of the first phase at its meeting on 25 June. At that meeting two outcomes were agreed following the evaluation of the project:

(i) to establish a not for profit Company Limited by Guarantee to take forward the LaMIS project; and

(ii) to commission as soon as possible the production of an offline CD-Rom version of LaMIS, to roll out nationally in time for the launch of the new Agri-Environment schemes in January 2005 and the Single Farm Payment in April 2005.

9. Offline CD-Rom

9.1 The evaluation of the pilot phase of the project has clearly demonstrated that no other competing system exists, as all current Government initiatives, such as MAGIC and Genesis, are systems designed to assist the administration rather than empower the land management industry. LaMIS has negotiated access to all the main relevant national data sets to assist the industry, and presents the data in a way that is easy to use and understand, particularly for the farming community. The system is designed to enable local government and other information providers to add local data, including information on local communities' needs and priorities, eg arising from community strategies, Rights of Way improvement plans, etc. It also allows users to add their own farm specific information.

9.2 The recommended CD-based service was identified as an option at an early stage of pre-pilot research (see page 4 of the user specification report at http://www.lamis.gov.uk/pdf/Lamisuserspecificationforweb.pdf). This has been confirmed by users of the pilot online system (see the evaluation report at http://www.lamis.gov.uk/pdf/phase-2-pilot-evaluation-jun-2004.pdf). There are four main reasons this is being recommended as a way forward:

(i) speed - broadband is still some years away for many remote rural sites, and response times for online mapping are slow;

(ii) security - the land management industry prefers to work offline to control data security;

(iii) functionality - users can be offered a much wider range of data manipulation and analysis tools off-line; and

(iv) cost - the offline version can roll out nationally without the need for massive infrastructure server backup, and can generate an income stream to offset operating costs.

In the long-term a combination of online and offline services will be the most effective in reaching the maximum user base. LaMIS will continue to expand the online service gradually across the country (currently two National Parks and five County Councils are considering rollout in their areas).

9.3 A CD-based service would allow LaMIS to generate an income stream from its users on a subscription basis. This would be based on the combination of data, management advice and the more sophisticated functionality that can be offered to users offline. This would reduce the service's reliance on public sector funding in the longer term.

9.4 The radical changes in agriculture support next year, including the rollout of Agri-Environment schemes targeted at 70% of farmland (versus the current 10%), and the Single Farm Payment involving all farmland, will require for the first time a variety of farm audits. These include farm audits under the Entry Level Scheme; Farm Environment Plans under the Higher Level Scheme; a Whole Farm Appraisal supporting cross-compliance and the Single Farm Payment; as well as the Environmental Management System for Farms, Crop Protection Management Plan and Farm Waste Management Plan (all being developed by the Environment Agency to address current and future resource protection legislation). In addition, whole farm plans are required by many of the farm assurance schemes operated by the industry. Publicly held data will form the basis of these audits. LaMIS is the only system to have assembled the necessary data and presented it in an easily understood format, as well as offering a range of map and plan making functions to help the farmer to integrate the data into his or her business.

9.5 The launch of the Entry Level Scheme in January 2005 will provide a major opportunity for promoting LaMIS to a large proportion of the farming industry and gaining subscriptions. No other date in the foreseeable future will offer a comparable opportunity and it would be to the significant benefit of LaMIS' business viability if this date could be achieved.

10. Business Case

10.1 The business case for putting in place a system giving the land management industry easy access to public data and guidance can be summarised as follows:

(i) As a large rural county where the quality of the countryside is valued by all those who live and work in Hampshire, there are clear benefits in empowering the farming community to integrate public land management objectives into their farming operations by providing easy access to data and data analysis tools.

(ii) To assist the farming community in complying with land based regulations.

(iii) To reduce the significant impact on the County Council of farmers and land agents seeking data for farm audits and appraisals (eg biodiversity, archaeology, landscape character, etc), particularly in relation to the new Entry Level Scheme.

(iv) To empower the County Council's tenant farmers on the County Farm Estate to make the best use of new financial support; and to enable new tenants to undertake the whole-farm plans now required by the County Council.

(v) To encourage the implementation of the new statutory land management plans for Areas of Outstanding Natural Beauty covering 21% of the county area, as well as management plans for the two proposed National Parks.

(vi) To comply with E-Government targets and conform to the County Council's responsibilities under the Environmental Information Regulation.

(vii) To provide data and supporting information to service statutory functions of the County Council, such as Rights of Way, Farm Waste Management Planning, etc.

(viii) To help secure specific, locally targeted, public benefits from the national funding regimes for land management, in a way that is not otherwise possible.

10.2 A Business Plan is being developed for the company which identifies the optimum way forward, with a view to securing long-term funding and creating income to be re-invested into the LaMIS project for further refinement and development. A non-profit making approach will be necessary to sustain free access to public data, but through a company that is sustained through a market driven charging policy.

11. Development Costs

11.1 A quotation of £80,000 against specification has been provided by the consultancy Infoterra for the production of the CD and software, together with the production costs of the first 1,000 site specific CDs. Infoterra was appointed as a nominated sub-contractor through a competitive tendering process to deliver the pilot website and it is proposed to extend its contract to deliver the CD. The first stage of the contract extension (£28,000) needs to be let by 20 September if the CD is to be developed in time for rollout in January 2005 to coincide with the new Agri-Environment schemes.

11.2 The cost of the development of the project to date has been £450,000, largely funded by SEEDA, DEFRA, the Countryside Agency and the National Parks. The County Council has contributed £5,000 and the Hampshire and Isle of Wight E-Government Partnership a further £20,000 in the financial year 2003/04. South Downs authorities have contributed £15,000 and the National Parks £92,000.

11.3 Both DEFRA and the National Parks now want to change their relationship with LaMIS to buy in services rather than funding development projects. The Countryside Agency has stated it will continue to fund LaMIS, but only for specific aspects of development rather than rollout because of the operating restrictions placed on the Agency. Its funding will cover further data analysis and interpretation work; they may also be able to contribute to the cost of developing the CD.

11.4 As there are corporate interests in LaMIS, agreements have been reached with the Head of Estates Practice and Head of the Countryside Service to contribute £17,000 towards the cost of the contract. It is proposed that the County Council contributes a further £40,000 from the Environment Department's consultancy budget.

11.5 Discussions are taking place with the Countryside Agency and other authorities in the South Downs to find the £23,000 shortfall in the budget requirements.

11.6 The CD will incorporate software which was developed for the pilot website as well as custom written software to enable off-line operation. The quotation of £80,000 is for a service which would operate in the three existing areas of coverage - Hampshire, the South Downs and the North York Moors - all of which authorities will have contributed funding to the product. Any roll-out of the service to other areas will require funding from the relevant central, regional or local government sources.

12. Limited Company

12.1 The decision to establish a not for profit Company Limited by Guarantee (CLG) was taken by the project management board following legal advice concerning the need for a legal entity to take the project forward and reduce risk to the funding partners. The rationale for this proposal is set out in detail in the attached appendix.

12.2 The most significant benefit of CLG status is that the liability of each member is limited to £1, which would be payable upon the company being wound up. At present a de facto partnership exists between the sponsoring organisations, with each partner having unlimited liability.

12.3 Hampshire County Council, DEFRA, the Countryside Agency, the CLA, NFU and RICS are all currently considering membership in the new company. (Membership of a not for profit CLG is the equivalent of a shareholding in a profit making limited company.) This would give the company an excellent balance between national and local interests and between the public sector and users' interests.

12.4 The company's memorandum and articles of association are currently being drafted and will be agreed at the next meeting of the project management board. Prior to this they will be submitted to the Head of Corporate and Legal Services for approval.

12.5 The project will also be submitted for consideration to the corporate Risk Management Board in November.

13. Conclusion

13.1 LaMIS has no competition in the provision of information that is targeted for easy use by the land management industry. It is a Hampshire County Council initiative that can now be rolled out nationally for the farming community to respond to the new context within which it is operating. There are distinct benefits to Hampshire County Council - its Environment Department, Countryside Service and tenant farmers - for the system to be in place in January 2005. The County Council is asked to contribute towards the cost of the offline CD-Rom version of LaMIS, with a view to making the service self-funding.

8914/BBt

APPENDIX

LaMIS Project Board: 25 June 2004

Project Ownership and Legal Structure

Part A: Proposal

Summary

This paper sets out the legal status and structure which are required to take the project forward.

The current informal management structure served LaMIS well through its early development phases. However, it now needs to be formalised to protect the interests of the funding partners; to enable the service to be developed in an efficient and responsive manner; and to offer a more relevant role to service partners (eg local authorities) and to system users.

Part B of this report sets out a number of issues which need to inform a decision about the project's legal structure. In light of these issues, and of the issues set out in the Evaluation Report, independent legal advice has been taken on the best model for the future legal entity of LaMIS. This advice clearly states that LaMIS should be established as a not-for-profit limited company. This paper seeks agreement from the current funding partners to this approach, and explores the role which they can and wish to play in the company.

The intention is to preserve the best elements of the current arrangements, in particular the strong focus on providing public benefit and public service, whilst giving LaMIS the operational freedom to develop its services and build its user base to enable it to deliver these public benefits.

Rationale

The main reasons for establishing a limited company are as follows:

(i) Liability - It has been strongly advised to limit the financial liability of the existing funding partners as a matter of urgency.

(ii) Increasing take-up - The evaluation report (paragraph 3.2.4) highlights the need for LaMIS to exploit business opportunities as a means of increasing users' response to, and delivery of, the pure public benefit aspects of the service. These business opportunities can realistically only be provided in a commercial environment.

(iii) Need for a legal entity - LaMIS needs to become a legal entity in order to enter into commercial agreements with others, eg with Infoterra for development of the CD, and to protect its interests within such an arrangement.

(iv) Operational flexibility - Particularly if private funding is drawn in, there is a need of an operating environment which, where appropriate, provides more flexibility than local government processes allow; whilst retaining proper accountability for public funds.

How would it work?

Existing partners could receive equity participation in LaMIS Limited in return for the assignment of relevant know-how, data usage rights and intellectual property rights relating to the project.

Service contracts would be put in place with public sector partners (existing funders and/or others) for LaMIS to deliver the core information service for land managers. Two forms of contract are proposed:

(i) the national service contract, setting out a basic service available nationwide; and

(ii) local service contracts with participating local authorities, covering the delivery of locally focused and targeted information and advice.

These contracts would incorporate service development and improvement targets and would provide the company with its core income. Any existing funding partner not wishing to (or being unable to) take up equity in the company could still enter into a national or local service contract, and could continue to support the venture through its contract payments.

Separate data supply contracts would be established with data suppliers to govern the use of their data by LaMIS and to clarify what added value LaMIS could derive from their data. These contracts would inform the conditions of use imposed on end-users, which could be developed to distinguish between online and CD users and/or between land managers and commercial advisers.

Subject to the conditions of data supply, LaMIS would be free to generate income from users and raise private sector funding to develop value-added products and services, which would increase take-up of the core information service.

The company would be run by a Board of Directors who would be fully involved in its day-to-day operations. They would be accountable to the shareholders. Consultative fora would be established with users and participating public bodies on a standing and/or ad hoc basis.

Hampshire County Council could continue to provide office space and support services (eg payroll, personnel, IT and financial services) as support in kind, or these could be bought in from other providers in due course.

Alternatives

The alternatives to a not-for-profit limited company are as follows:

Continued hosting by a local authority. This would leave the issues of liability and operational flexibility unresolved; take-up would be restricted as it would not be possible to respond as effectively to business opportunities; there would be a risk of confusion about LaMIS's operations outside its host authority's area.

Hosting by a national agency. Again, this would leave the issues of liability and operational flexibility unresolved; take-up would be restricted as it would not be possible to respond as effectively to business opportunities; LaMIS would be perceived as a government tool rather than a tool for the farmer; no single national agency has a professional remit covering all environmental, economic and social factors which LaMIS will cover.

Charitable status. This offers no advantages over a limited company; restricts the ability to trade freely; and introduces extra complications in terms of the Charity Commission.

Profit-making limited company. This may cause problems in terms of the ability to secure public sector data and funding.

Joint committee of local authorities. This raises many of the same issues as the first two options; the management structure would be unwieldy and poorly suited to LaMIS's business needs.

Part B: Issues

Current arrangements - liability and intellectual property rights

There is no formal partnership agreement in place covering LaMIS. However, legal advice states that a de facto partnership exists between the existing funding bodies¹, and that these bodies have unlimited liability for any claim made against LaMIS, eg for provision of inaccurate or misleading data or advice, or for loss or damage sustained as a result of inappropriate use of or access to the data.

Copyright and intellectual property rights in LaMIS are shared between the bodies represented on the Project Board. This is enshrined in Clause 12.4 of Contracts 6A and 6B: "The licence [to use the Custom Written Software during the pilot hosting period] granted to the Employer [Hampshire County Council] under Clause 12.2 shall extend without further payment to those Partners, Local Authorities and Government Departments, listed at Appendix 2." A similar provision is made in Clause 12.5 in respect of the licence to use the Custom Written Software in perpetuity at no additional cost for the LaMIS Phase 2 project.

This wording was agreed between the funding partners prior to the contract being signed. The intention was that, if the existing partnership arrangements should be dissolved for any reason, any one or more of the existing partners could continue to operate and develop LaMIS. At the time it was also understood by the funding partners that LaMIS might in due course take on its own legal entity, and that in this event all the rights and interests accrued by the project would be assigned to the new entity.

Clearly, the existing partners would still be free to make full use of the research, etc carried out during Phase 2 under the current arrangements.

Accountability

LaMIS is clearly positioned on a continuum of information systems, services and transactions:

It is neither a wholly public-interest nor a wholly commercial enterprise, but falls between the two and adds value to both. LaMIS balances (a) serving the industry's information needs with (b) the delivery of public benefit. The balance is an extremely sensitive one which needs to be, but is not, properly reflected in the project's management structure.

LaMIS relies heavily on the public sector to supply data at nil or low cost, on the basis that public benefits will accrue. Local government has been a useful host up to this point, but it is (quite properly) too bound up with the wider public interest to be able to focus adequately on delivering the specific needs of the farming industry. Likewise, many users rightly or wrongly have some problems of perception with a service that is provided by government, as noted in paragraph 3.2.4 of the evaluation report. LaMIS has always been promoted as a separate and distinct brand, which has been a strength, although its public sector origins and funding have always been clearly acknowledged. The project partnership has always recognised the need to support and inform individual decision-making by individual farmers and their private businesses, rather than imposing management prescriptions from on high. To maintain and build upon this position, the project requires a direct line of accountability to its users, and must be able to respond effectively to their business needs.

However, LaMIS cannot be delivered through the free market/private sector alone. LaMIS does not control any funding or incentive schemes, so there is little commercial incentive for farmers to use the system (or indeed to deliver these public benefits). Nor is it realistic that farmers should be expected to pay for data which will help them to deliver discretionary public benefits, especially if these benefits diverge from their commercial interests. However, if LaMIS failed to offer data on public benefits, much of the potential value of the system (and the entire rationale for its development) would be lost - not least because society so desperately needs the benefits which farmers are able to provide. Hence LaMIS still requires both funding and data from the public sector, if it is to achieve its potential.

A not for profit limited company, operating commercially where appropriate, but drawing on public funding and information, is the best if not the only model to deliver this. This conclusion is supported by recent research by Reading University, which confirmed the view that government should continue to fund and support information and advisory services, but these services are often best delivered by the private, independent or charitable sector. Discussion with DEFRA's Spatial Information Programme (SIP) confirms this view.

It is worth noting that the limited company model was first put forward by the National Park Authorities in March 2003. NPA Members in particular were anxious that as much as possible of LaMIS's service should operate on a commercial footing, in order not to undercut other legitimate commercial information systems and advisory services.

Expansion of the project partnership

The above table shows the investment made by the original funding partners over the last three complete financial years. There is clearly a need to acknowledge this investment and the particular stake it has given these partners in the project, should the partners wish to remain involved.

Rollout to new geographic areas will engage more authorities in the project, who will be asked to contribute both capital and revenue funding. This income would be treated as revenue by LaMIS Limited, rather than giving these authorities equity in the company.

These authorities cannot be represented on the Project Board without it becoming unwieldy and unworkable. The new model of governance needs to engage the support and commitment of these authorities, without paralysing the project. The proposed local service contracts and data supply contracts will provide this, and will show local authorities how to build LaMIS into their own dealings with land managers in order to generate the greatest possible local public benefit.

Operational flexibility

Aspects of the current arrangements - for example, in terms of employment, procurement and other business support functions - are not necessarily appropriate for the more commercial elements of LaMIS's developing business. For example, Hampshire County Council's business processes are not ideally suited to supporting services or staff with LaMIS's geographic remit. These may be relatively minor issues, but the creation of a limited company would allow them to be resolved.

Clearly, the company would continue to adhere to suitable standards and processes in its use of public funds, data and other resources. This could be incorporated into the national and local service contracts.

Ben Bennetts

Project Director

23 June 2004