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Date of meeting: 17 December 2014 Title of report: Growing Places Fund Update To be presented by: Debbie Jackson, Assistant Director, Regeneration Cleared by: (Director) Fiona Fletcher-Smith, Executive Director Development, Enterprise and Environment Classification: Public 1 Executive Summary 1.1 This report provides an update for the Growing Places Fund including an update on programme expenditure, notification of the withdrawal of the proposal for the Queens Road Roundabout project by London Borough of Bexley and an update on the West Anglia STAR scheme. 2 Recommendations 2.1 It is recommended that the London Enterprise Panel (LEP): Notes the withdrawal by London Borough of Bexley of the Queens Road Roundabout project making available £5.7m capital funding and that a process for reallocating this funding will be considered at a future LEP meeting; Notes the update on programme expenditure and project progress; and Notes the update on the West Anglia STAR project. 3 Introduction and Background 3.1 The Growing Places Fund Programme is currently 95% allocated to projects, with delivery underway for many projects, and others undergoing detailed project development and design. 4 Issues for consideration 4.1 Queen’s Road Roundabout, LB Bexley 4.2 The London Borough of Bexley has withdrawn their bid to the Growing Places Fund for £5.7m for the Queen’s Road Roundabout project in early November. This has resulted in a significant reduction to forecast expenditure for 2014/15. 4.3 Proposals for the reallocation of these funds will be presented to the LEP at a future meeting. 4.4 Programme Expenditure 4.5 By end 2013/14, £3.3m of GPF funding had been spent, and to date this financial year an additional £1.2m has been spent bringing total spend to date to £4.5m. Current forecasts suggest that £9.7m will be spent by the end of 2014/15 (subject to approvals, due diligence and project development work progressing as planned). This is significantly reduced from the previous forecast of £16m primarily as a result of the withdrawal of the Queen’s Road Roundabout project and issues arising with other capital projects relating to funding partner activities causing slippage to the approvals and agreement process. In particular the Central Research Laboratory (CRL) and Hackney Wick projects were both programmed to be in contract and commence delivery this calendar year. The CRL project cost model is being reviewed and the London Legacy Development Corporation has been exploring design and construction methodology alterations to achieve a more cost-efficient project. Discussions are underway with the funding partners to understand the overall delays to programme and spend. 4.6 Projects Delivery Highlights Southall project – An agreement has been signed with the London Borough of Ealing for the Southall project which will make improvements to junctions and support site development bringing forward development of 1,500+ housing units. Detailed design work is now underway. London Co-Investment Fund – An agreement has been signed and the fund launched on 4 December at City Hall. Following the completion of an OJEU procurement process the Co-Investors of the Fund are confirmed as Wellington Partners, Playfair Capital, London Business Angels, Angel Lab, Firestartr and Crowdcube/Braveheart Consortium. The fund is now open to applications. Apprenticeships – Ongoing paid for activity includes press advertising, digital display, search and e-marketing. In addition GLA marketing continue to utilise owned and earned channels such as London.gov web pages, City Hall blog and social media. The GLA has grant funded the Skills Funding Agency to deliver a Direct Mail/Telemarketing (DM/TM) campaign with a view to increasing in the number of employers becoming a ‘qualified lead’ for Apprenticeship opportunities in London. Activity commenced in June and so far the SFA has contacted over 43,000 businesses and created 213 Apprenticeship Starts. This performance exceeds the agreed delivery profile. Film London – Film London were invited to China by the Beijing Film Academy where they promoted and presented the latest works of six London-based animation studios to approximately 600 Chinese delegates. While in Beijing, Film London also met with other key TV and distribution companies in the Chinese animation industry. In October Film London attended MipCom with 31 business leads generated. Super-Connected Cities – As of the 27th November, more than 2000 SMEs had received connection vouchers in London, enabling them to achieve a step change in connectivity to their premises, showing good progress towards London's revised target of 4270. The SCCP is working towards the implementation of a second Mayoral letter campaign promoting the scheme the SMEs in London, which will begin in early December. Monitoring of Wave 1 & 2 grants to public institutions continues. In November, the first grant payments were made to completed projects and a number of funded intuitions reported good progress towards their go live dates. Exports – The Mayor's Export Programme team successfully delivered the India Marketing and Strategy programme (3 - 7 November), the pre-mission briefing for the Singapore and Malaysia trade mission (10 November) and the ‘Celebrating Exports’ event (w/c 10 November). The export team is leading the ‘Creative Technology’ trade mission to Singapore & Malaysia, an intensive six days of pitching, networking and meetings, taking place 26 November - 2 December 2014. This mission will coincide with the Mayor's visit to East Asia during the same time. MedCity - MedCity had a stand at the Pharma Integrates conference in London on 18-19 November, and Eliot Forster (MedCity Executive Chairman) and Sarah Haywood (MedCity COO) spoke on two panels. On 9 December, MedCity sponsored the Source Lounge (for potential partners, clients and investors) at the Genesis conference in London, a major event bringing together the life sciences industry with policy makers and trade agencies. In support of the GLA's work on establishing an International Dementia Research Institute, MedCity published an investment case which was commissioned from PWC. The first Angels in MedCity investor workshop took place on 4 November, with further workshops planned for January and February. Skills London - Skills London 2014 took place on the 21 and 22 November. The focus of the Project Partners (London First and Prospects) is now to complete an evaluation of the event (to be completed by mid-December) in order to inform Skills London 2015. Project Partners have reported the following final figures against the contractual KPI's; - 196 exhibitors attended the event 45% of which were employers (equal to the contractual target). - 32,490 visitors attended the event (vs a target of 30,000), with 17,301 attending on Friday and 15,189 attending on the Saturday. These included over 160 schools and colleges from all over London. - Over 45,000 jobs opportunities were available, which also included apprenticeships (vs a target of 40,000). SME Business Support – the following recent activity has taken place: the Business survey has been completed and will be published at the beginning of December. The information in the report will help the LEP SME working group identify in which areas SMEs need support. the BIDs programme is progressing and 4 agreements with BIDs have been signed. the Growth Hub, as the business web portal is to be called, will be part of the LEP web page and independent (as requested by the LEP members) from the GLA web page. There will be two phases of development. The first phase will go live in January and the second phase, with more complex tools, in Spring 2015. The first phase will be developed internally and a review will take place in six months to identify if the rest of the work should take place by external contractors. 4.7 West Anglia / STAR Update 4.8 The GLA’s Investment and Performance Board has approved expenditure of up to £1.67m to fund Network Rail’s development costs for the upgrade of the rail line between Tottenham Hale and Angel Road, which is funded from £25m allocated by the LEP in June 2013. The initial £1.67m funding is being used to develop the scheme to initial option selection stage, and to refine current cost estimates. At the STAR/Angel Road Steering Group meeting on 27th November, Network Rail presented the latest STAR scheme cost estimate. The costs associated with the LEP funded portion of the project have increased and there is currently a significant funding gap based on the £25m GPF allocation. This increase has been attributed to a number of factors, but predominantly relates to the inclusion of active provision for four tracking (an addition to the original scope), additional construction safety initiatives, and Access For All provisions at Tottenham Hale and Angel Road Stations. 4.9 Network Rail are now working on a revised cost estimate which includes a costed three track base scheme for comparison. The revised cost estimate will be issued by 11th December and the STAR/Angel Road Steering Group will reconvene on 16 December to review further. Once the revised cost estimate is fully understood, the GLA and its partners will need to move quickly to consider any requirement for additional funding and seek the necessary approvals. A further update will be submitted to the LEP in March, setting out the final cost estimate and any agreed funding package. 4.10 Until such time as the STAR scheme is confirmed, no further approvals for revenue expenditure can be made as the £1.67m could be abortive expenditure and needs to be held against any uncommitted revenue budget. This has an impact on the Employer-Led Apprenticeship Creation Programme and the London Games Festival where allocations of Growing Places Fund are sought or have been approved which are subject to confirmation of revenue availability. 5 Equality Comments 5.1 There are no identified impacts of this decision on those with protected characteristics. 6 Risks Arising / Mitigation 6.1 As a result of the withdrawal of the Queens Road Roundabout project there are now unallocated funds and an ongoing risk of criticism due to slow expenditure of the Growing Places Fund. The withdrawal of this project will be reported to DCLG and a proposal for reallocation of funds will be brought to the LEP at the next meeting. 6.2 There remains a risk relating to the West Anglia/STAR project of that on completion of the option selection stage the costs of the STAR scheme will exceed available funding. 7 Financial comments of the Executive Director Resources 7.1 The updated forecast profile of spend is shown in the table below. Approximately half of the total GPF spending is now expected to be incurred in 2015-16. GPF forecast spending 2012-13 (£m) 2013-14 (£m) 2014-15 (£m) 2015-16 (£m) Future (£m) Total (£m) 0.1 3.2 9.6 55.5 42.3 110.7 7.2 GPF revenue grant funding has now been almost wholly allocated to activities and as set out in 4.10 no further revenue funding can therefore be committed until there is a clear resolution of the STAR West Anglia project. 8 Next steps 8.1 An update on the West Anglia/STAR scheme will be presented at the next LEP meeting to include the revised cost estimate and proposals for the funding package. Appendices: None.