ADD2282 Revolving Investment in Cities (RICE)

Type of decision: 
Assistant Director's decision
Code: 
ADD2282
Date signed: 
30 October 2018
Decision by: 
Debbie Jackson, Assistant Director of Regeneration

Executive summary

The Mayor approved (under MD2062 and MD2105) GLA expenditure on the Revolving Investment in Cities in Europe (RICE) project of up to €309,228 (€293,766 - EU RICE funding and up to €15,462 - existing GLA staff budgets) to explore how to increase the use of Financial Instruments (FIs) to tackle urban development issues, in particular in relation to Smart Cities, the environment and regeneration.

To further develop the link between SMART Cities and use of FIs, this ADD is seeking approval for expenditure of up to £18,920 of RICE funds to employ specialist consultants, Urban DNA, to undertake detailed economic modelling of Sharing City smart measures, focusing on Smart Lampposts, Public Housing retrofits and E-Bikes.

Decision

That the Assistant Director of Regeneration and Economic Development approves:

1. The expenditure of up to £18,920 on consultancy services (provided by Urban DNA) to provide specialist economic modelling services

2. a related exemption from the GLA’s Contracts and Funding Code in order that the above services be procured without a competitive exercise (i.e. a single source exemption).

Part 1: Non-confidential facts and advice

Introduction and background

In December 2016, the GLA in partnership with the City of The Hague and the Department for Communities and Local Government (DCLG) was successful in securing €2.3m (GLA share €245k) from the European Commission (EC) to fund the Revolving Investment in Cities in Europe (RICE) project.

The project explores how to increase the use of Financial Instruments (FIs) and the levels of investment (both public and private) secured and deployed through them in order to tackle urban development issues, in particular in relation to Smart Cities, the environment and regeneration.

The Mayor approved (under cover of MD2062 and MD2105) GLA expenditure on the RICE project of up to €257,870 (€244,976 EU RICE funding and up to €12,894 - existing GLA staff budgets) and subsequently approved an increase in expenditure to €309,228 (€293,766 - EU RICE funding and up to €15,462 - existing GLA staff budgets) following a project extension. MD 2188 later approved £110k from RICE (and an additional £100k from Infrastructure) for economic modelling work to demonstrate the future impact of investments.

To further develop the link between SMART Cities and use of FIs, the RICE team has been working with the GLA Sharing Cities (Horizon 2020) team. Sharing Cities fosters international collaboration between industry and cities to seeks to develop affordable, integrated, commercial-scale smart city solutions with a high market potential.

RICE and Sharing Cities have jointly commissioned the development of a detailed economic modelling of Sharing City smart measures to support the Sharing Cities programme in achieving its strategic aim of triggering €500m in investment. Focusing on Smart Lampposts, Public Housing retrofits and E-Bikes, the economic modelling of these measures has been developed to show the level of funding needed, the other costs associated and what benefits emerge from this technology. Furthermore, the work will explore the benefits of scale in these models, demonstrating the impact that joint procurement across multiple cities can have on the economic models and the impact of upfront funding versus long term financing on the measures being implemented.

Since the beginning of July 2018, this work has been undertaken by a temporary agency worker (gifted resource), who has specific smart city and public-sector finance knowledge. This contract is due to come to an end and as the proposal is to engage a consultant - UrbanDNA - who specialise in the delivery of smart solutions to urban issues.

Furthermore, UrbanDNA are the work package leads for the development of Finance and Business models in the Sharing Cities programme and are therefore ideally placed to ensure the continuation of this additional piece of work which will inform the scale up opportunities in London and beyond, an objective of the Mayor’s Smarter London Together Roadmap.

The work to be undertaken will continue after the end of the RICE programme and scope of this approval. The continuation of this work will be funded through the Sharing Cities programme by UrbanDNA as an Associate Agreement. As Urban DNA are already project partners on the Sharing Cities programme, this will not be a GLA contract and is outside the scope of this decision. By jointly funding the project it is possible to share best practice and align project priorities.

Officers acknowledge that section 9 of the GLA’s Contracts and Funding Code requires where the expected value of a contract for services is between £10,000 and £150,000, that the services required should be procured competitively. However, Section 10 provides that an exemption from this requirement may be approved where a supplier has had previous involvement in a specific current project or the where the work proposed is a continuation of existing work, which cannot be separated from the new work. To this end, UrbanDNA’s expertise and knowledge of RICE and Sharing Cities is unique due to their previous involvement on the programme and their appointment would allow the continuation of the economic modelling work already begun. Officers will liaise with TfL Procurement to ensure that appropriate contractual documents will be put in place.

Objectives and expected outcomes

The objectives of this work are to:

• Determine the benefits of scale in the models developed that will be used to demonstrate the impact that joint procurement across multiple cities can have on the economic models.
• Develop cross-border investment products and frameworks working with European Partners to help catalyse innovation and creating investment appetite for aggregated smart technologies.
• Demonstrate the benefits of joint procurement relevant to the measures through develop examples and case studies
• Develop cross-border investment products and frameworks to help catalyse innovation and creating investment appetite for aggregated smart technologies.
• Increased uptake of smart solutions by City Managers
• Generate / trigger demand – prompting the needs
• Put the case up for Innovation and City scale up

Equality comments

The GLA as a public authority must comply with the Public Sector Equality Duty set out in section 149 (1) Equality Act 2010. This provides that, in the exercise of their functions, public authorities must have due regard to the need to:

• Eliminate discrimination, harassment, victimisation and any other conduct that is prohibited by or under the Equality Act 2010;
• Advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it; and
• Foster good relations between persons who share a relevant protected characteristic and persons who do not share it.

This duty also applies in the delivery of European funded projects and means that delivery of this RICE funded project will consider the needs of all individuals and have due regard to the need to eliminate discrimination, advance equality of opportunity, and foster good relations between
different people. The Project Manager has given due regard to the above in commissioning this work.

Other considerations

a) Links to strategies and Mayoral and corporate priorities

The project directly contributes to the delivery of the Mayor’s key strategic objectives of the London Smart plan which aims to solve London’s environment challenges by bringing together people, technology and data.

The Mayor has promised to be the most pro-business Mayor that London has ever had. This has meant protecting small and technology businesses through public investment and protecting workspaces and ensuring businesses get a say in policy formulation through the formation of a Business Advisory Board. The Mayor is also keen that London gets the best deal possible in a post-Brexit scenario and is confident in the enduring strength of London’s deep-seated, competitive assets, which include its economic dynamism, a highly skilled workforce and an innovative and entrepreneurial culture.

All of these priorities will be enhanced by a better understanding of how to further unlock private sector investment to bolster London’s existing global leading sectors and also of potentially growing and emerging sectors. This project will help show that London is at the forefront of innovation and will also help to highlight the vast opportunities London offers to potential investors and business partners both home and abroad and will help ensure London stays open to the world.

b) Impact assessments and Consultation

TfL Procurement have been consulted in the development of this proposal and have approved the exemption from the GLA Contracts and Funding Code.

c) Risk

The need to commission another entity, rather than use Urban DNA, which would pose a risk to the continuation of work which is time critical due to the end of the RICE project on 14 December 2018, after which there can be no further spend.

Financial comments

The proposed expenditure of up to £18,920 on procuring Urban DNA to provide specialist economic modelling services will be funded the Revolving Investment in Cities project budget for 2018-19 as approved by MD2105 and MD2188.

Activity table

Activity

Timeline

Procurement of contract

15.10.18

Delivery Start Date

15.10.18

Main milestones – delivery of proposed model

30.11.18

Delivery End Date

14.12.18

Project Closure:

14.12.18