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LEP Digital Creative, Science and Technology Working Group
Date of meeting:
27 January 2016
Title of report:
Growing Places Fund allocation – Round 3
To be presented by: Debbie Jackson, Assistant Director, Regeneration
Cleared by:
Fiona Fletcher-Smith, Executive Director-Development,
Enterprise & Environment
Classification:
Public (with reserved appendices)
1
Executive Summary
1.1
The Growing Places Fund (GPF) received 11 applications in Round 3 requesting a
total investment of £16.4m capital. The applications have been evaluated and
moderated. Four projects are being recommended for endorsement through round
3, which seek a total investment of £4.65m. This paper seeks LEP Digital Creative,
Science & Technology Working Group (DCST WG) endorsement for two of these
projects relevant to the Group’s priorities, which seek a total investment of £2.95m
capital, to be funded from the £7.5m available.
2
Recommendations
2.1
It is recommended that the Group:
2.1.1 Endorse the proposals recommended by officers at Appendix 3;
2.1.2 Note that two other projects are being recommended for endorsement and
are being considered by the LEP SME Working Group on 2 February 2016;
2.1.3 Endorse the proposal from officers that six projects will be informed their
proposals have not been successful, as detailed at Appendix 4;
2.1.4 Note that the bid received from the LLDC was rejected through an early
decision process at the December 2015 LEP meeting and that the bidder
has been informed of the outcome;
2.1.5 Note that £4.80m of capital GPF funding will remain unallocated; this is a
combination of the £2.85m remaining from the Round 3 pot and the £1.95m
returned to the pot from the Custom House project who withdrew their
proposal in late October 2015; and
2.1.6 Note that three of the proposed rejected projects have a strong alignment
with LEP objectives but fell short of the requirements in some areas, and
that these projects may be considered at a future stage of round 3 or a
separate competitive round in the event the issues can be addressed.
3
Introduction and Background
3.1
On 10 September 2015 the third round of the Growing Places Fund (GPF)
launched, through which £7.5m capital funding was available. The round closed to
applicants on 21 October 2015.
3.2
11 bids were received seeking a total investment of £16.4m capital (Section 4.2).
This included a post deadline bid which Officers recognised had very strong
alignment with the LEP priorities relating to supporting science related small
businesses; the bid was therefore accepted in line with the Round 3 prospectus
which stated that in exceptional circumstances we would accept bids outside of
the timeframe advertised in the prospectus.
3.3
The majority of bids were private sector led, which aligns well with the aim of the
GPF fund (to use public sector funding to encourage private sector investment). All
ten priority areas set out in the LEP’s London 2036: An Agenda for jobs and
growth report were addressed, with many bids focusing on: training more
technical talent; increasing the focus on emerging markets; securing long-term
infrastructure investment; and helping London stay open for business. In addition,
the prospectus also included a wider set of parameters around SMEs than what is
identified in London 2036.
3.4
The focus of bids submitted in Round 3 ranged widely, from those seeking to
create workspace for SMEs across a range of sectors (including science,
technology, arts, culture and design) to those looking to support the growth of
investment funds for social SMEs.
3.5
Bids were evaluated in November 2015 in line with the criteria in Appendix 1,
which included a process of clarification questions, and moderated in
December 2015.
3.6
In December 2015 an early decision was made on the bid received from the
London Legacy Development Corporation (LLDC), who were informed that their
proposal was not successful. Officers noted that whilst this was a strong bid in
terms of strategic fit and deliverability, it failed to offer any additional outputs (when
compared to the Round 2 proposal GPF already funds). This was viewed to be a
fundamental issue with the bid as consequently supporting this bid would reduce
the value for money of the GLA’s current investment. An early decision was taken
because the project is time sensitive; in particular the project reaches a pivotal
point in March 2016 when they need to award the station contract to meet the
allocated rail possession window they have in Easter 2017. This meant a quick
answer on the outcome of their GPF Round 3 bid would help inform the
conversations they needed to have with other stakeholders about where the
investment can come from to bridge the £5.34m shortfall before project reaches
March 2016 (instead of finding out about the outcome of Round 3 in
February 2016).
4
Issues for consideration
4.1
The Group is asked to endorse and approve two bids identified by officers as
aligning strongly with the Group’s priorities, identified and detailed at Appendix 3.
An overview of Round 3 bids can be found in the table at Appendix 2, with
additional information provided for bids relevant to the LEP DCST WG and
recommended for rejection from round 3 at Appendix 4.
5
Equality comments
5.1
The GLA Regeneration Team work with delivery partners to target investments in
places with the greatest potential to secure inclusive jobs and growth
opportunities, and ensure all investments promote equality and work to deliver
new and secure existing diverse and inclusive opportunities and services. The
GPF application process invited bidders to demonstrate how they give due regard
to the requirements of the Public Sector Equality Duty Act. This is reinforced by
the requirements set out in the funding agreement of any successful project.
6
Risks arising / mitigation
6.1
Risks at a programme level include State Aid issues and working with
non-borough organisations. Initial advice has been received on these issues, and
they will be investigated further on individual projects with applicants prior to
entering into funding agreements.
6.2
Risks associated with individual projects have been identified as part of the
bidders’ applications, and the overall GLA evaluation process considered risk and
deliverability when prioritising projects. Individual loans will be monitored through
the GLA’s Budget and Performance Review process.
7
Financial comments of the Executive Director Resources
7.1
The recommended projects can be funded from the headroom of unallocated GPF
budget. Bidders will need to be subject to due diligence checks. Funding would be
provided as a loan to the first bid identified at Appendix 3 and terms will need to be
agreed for repayment and the rate of interest to be applied. Further work is
required to ensure that the project costs of the second bid at Appendix 3 can be
fully funded as capital expenditure together with confirmation of the project funding
package and agreement of repayment terms. As the funding will be repayable the
security for this in the event of non-repayment will also need to be agreed for both
projects.
8
Next steps
8.1
The next steps following consideration by the Panel/Group are summarised below:
Activity
Timeline
LEP SME Working Group
2 February 2016
LEP paper submitted (through urgency procures) 3 February 2016
Publically announce LEP endorsement of Round Mid-February 2016
3 projects
Investment and Performance Board (IPB)
16 February 2016
Round 3 programme approval sought
Director Decision for Round 3 programme sought Early March 2016
IPB and director decision approval sought for
March – July 2016
individual projects
Funding Agreements signed
April – August 2016
Appendices:
 Appendix 1 – GPF round 3 evaluation criteria and scoring framework
 Appendix 2 – Overview of bids received (reserved from publication)
 Appendix 3 – Round 3 project information sheets for preferred bidders (reserved from
publication)
 Appendix 4 – Round 3 project information sheets for recommended reject bidders
(reserved from publication)
Additional Information:
The following documents are available upon request:
 Growing Places Fund Round 3 prospectus (lep.london/gpf_r3)
 Scoresheets for individual projects, including detailed evaluator comments
 Project proposals and responses to evaluators clarification questions