MD2094 Management of 2014-20 European Social Fund Programme

1. Introduction and background

1.1 The Greater London Authority (GLA) was formally designated as an Intermediate Body (IB) in November 2016 by the European Social Fund (ESF) Managing Authority, the Department for Work and Pensions (DWP) for the award, management and administration of the London component of the 2014-20 England ESF Programme.

Previous Mayoral Decisions

1.2 This delegation follows on from Mayoral Decision 1583 (March 2016) where the previous Mayor:

1.2.1 Approved the designation of the GLA as an IB for the 2014-20 ESF programme, and the entering into a MOU between the GLA and DWP;

1.2.2 approved the delegation to the GLA Head of Paid Service to sign the aforementioned MOU; and

1.2.3 approved the delegation limits for administration of the approved European Regional Development Fund and ESF expenditure.

1.3 Subsequent Mayoral Decision 1613 (also March 2016) then committed and awarded up to £285m of European Regional Development Fund and ESF to ESF projects and Co-financing Organisations.

London Work and Health Programme

1.4 As announced in the Chancellor’s Autumn Statement the DWP, London Boroughs and the GLA have co-designed the London Work and Health Programme (WHP). The Work and Health Programme replaces two of Government’s mainstream welfare to work programmes: Work Programme and Work Choice. The new Work and Health Programme will run for 5 years (with the possibility of extension) and will support people out of employment with health conditions and the long-term unemployed. As part of this devolution of responsibilities, the DWP have agreed to transfer the funding for WHP in London to four sub-regional groupings of London Boroughs. In turn, the Boroughs have agreed to apply for ESF monies to provide match-funding to the WHP funding; thus increasing the scale and scope of WHP in London.

1.5 The majority of ESF provision is delivered via ‘Co-Financing Organisations’ which provide match funding and carry out their own procurement exercises to commission ESF support. In light of the devolution of responsibility, the ESF Managing Authority (DWP) revised the selection criteria for Co-Financing Organisations in December 2016 to allow for ‘sub-regional groupings of boroughs in Greater London’ to become CFOs. Accordingly the European Programmes Management Unit (EPMU) within the GLA invited the four London sub-regional partnerships (Central London Forward, Local London, West London Alliance and South London Partnership) to apply for CFO status in January 2017.

1.6 As the sub-regional partnerships are not legally constituted bodies, they have each nominated an accountable London Borough to act on their behalf and enter into the relevant MOUs. Following the award of CFO Status, CFOs submit applications for ESF funding for specific activities. The four new CFOs have been invited to submit funding applications for ESF. EPMU will appraise these applications in line with the national ESF business process assessing value for money and compliance of the proposed activity. Running concurrently to their applications for ESF, the four sub-regions have launched a procurement process to appoint providers to deliver the Work and Health Programme in their sub-region.

1.7 Following the appraisal of the four sub-regional partnership funding applications, EPMU will enter into a Memorandum of Understanding with each CFO on behalf of the Secretary of State for Work and Pensions. This Mayoral Decision seeks approval for the commitment of ESF to the four sub-regional CFOs.

Delegation Limits

1.8 For the 2007-13 ESF Programme, unlimited delegations were agreed with DWP. For the 2014-20 programme, a set of financial delegations limits were put in place based on the 2007-13 ERDF programmes. However, MD1583 acknowledged that the delegation limits may need to be reviewed once the first tranche of projects were live to ensure it facilitated effective programme management.

1.9 As all ESF projects apart from the sub-regional CFOs mentioned above were live by October 2016, EPMU took the opportunity to review the currently delegation limits in preparation for the first wave of CFO claims. At the same time the ESF Managing Authority (DWP) agreed their delegation limits for the 2014-2020 programme. It is therefore proposed that the Mayor approves to the revised delegation limits for all ESF beneficiaries (direct bid projects and CFOs) set out in Annex A because:



 The majority of ESF provision, unlike ERDF, is delivered through the national CFOs (Department for Work and Pensions, Skills Funding Agency, Big Lottery Fund). These organisations contract and manage multiple projects within an overall MOU signed by the GLA on behalf of the Secretary of State for Work and Pensions. Claims for reimbursement of ESF monies paid to beneficiaries therefore regularly exceed the delegation limits given to any officer in MD1583. This would mean that, on a quarterly basis, the GLA Executive Director – Resources and/or Head of Paid Service would be required to spend hours processing the majority of ESF claims for CFOs; which is not effective use of their time.

 The original delegations had been proposed on the basis that the GLA would physically pay ESF beneficiaries and would then receive payment from DWP to cover the costs incurred. As part of the final MOU negotiations, it was agreed that DWP would process and pay claims once GLA officers had authorised them.



1.10 Given these issues the delegations for ESF have been revised to equate with similar levels of seniority to those used by the ESF Managing Authority (DWP). The delegations recognise that ESF claims are ‘regular, routine, expected payments’. This is set out in Annex A.

2.1 The objectives of the ESF programme are to help unemployed and economically inactive individuals into employment, promote social inclusion and provide skills support for those in employment.

2.2 All ESF applications must meet the objectives of the England ESF Operational Programme (OP). The OP was drafted by the ESF Managing Authority (DWP) and agreed with the European Commission in 2015. Applicants for funding must explain how they will contribute to the overall expenditure targets and outputs and/or results targets of the London share of the ESF programme.

3.1 The EC, DCLG and DWP-agreed ESF and ERDF Operational Programmes set out the requirements for ensuring adherence to a mandatory equalities ‘cross-cutting’ theme. ESF and ERDF will promote equality in accordance with European Union and national requirements. The 2010 Equality Act provides the framework to effectively tackle disadvantage and discrimination. The Public Sector Equality Duty applies in the delivery of ESF and ERDF and means that delivery of the Operational Programme at local level, including in London, must 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.

3.2 In particular, the ESF programme targets its support to individuals; and seeks to make positive contributions to long-term unemployed people, inactive people, lone parents, disabled people, people from ethnic minorities, ex-offenders, young people and older people. DWP has set output targets to ensure the programme helps appropriate numbers of these people; the GLA will be required to contribute to these targets.

3.3 Programmes are required to record equality and diversity data on individuals receiving support to ensure there is no inherent bias in the provision of help and that it is accessible by all. This monitoring data will be submitted by Beneficiaries as part of the claims process. Where a project has a particular objective to work with people with specific ‘Protected Characteristics’ as defined in the Equality Act, this will be inherent in the project application; Grant Recipients will be asked to capture this data as part of their project management.

a) Key Risks and Issues

4.1 The amount of ESF allocated to each CFO may be revised during the approval process as officers negotiate the contracts (for example applicants may request a lower amount for their own organisational reasons). However, they are not expected to exceed the amounts stated on the cover page of this Mayoral Decision. Any under-allocations will be recycled in the programme. Final commitments and awards to beneficiaries are published on the London Economic Action Partnership’s (LEAP) website (lep.london).

4.2 Within the CFO programmes there may be variances in the performance of individual provider contracts. The GLA does not have a direct contract with these providers, as this is the responsibility of the CFO as the Contracting Authority for procurement purposes. But the GLA will monitor potential underperformance and underspends through contract management of the CFO in line with ESF guidance.

4.3 While the outcome of the recent referendum on EU membership may result in the programme’s overall curtailment, this does not affect the projects subject to this Mayoral Delegation or the functions of the GLA as an IB. The Government has confirmed that it will honour all funding committed up to the point that the UK leaves the European Union.

b) Links to Strategies and Strategic Plan

4.4 EPMU delivers London’s share of the England ESF Operational Programme, under which Calls for Proposals are launched, and decisions are made on which applications are funded. The programmes are aligned to the LEAP’s European Structural and Investment Funds Strategy and support Mayoral economic objectives for a competitive and fairer London.

c) Impact Assessments and Consultation

4.5 In accordance with DWP business processes, the views of the London ESIF Committee (made up of local partners reflective of the priorities of the ESF Operational Programmes and, as far as possible, the breadth and diversity of partners specified in Article 5 of the Common Provisions Regulations and the European Union Code of Conduct on Partnership) must be sought on the strategic fit of applications for Funding. For ESF the comments of the Committee were taken into account in decisions regarding the approval of projects.

5.1 The GLA is the designated Intermediate Body for the management and administration of the 2014-20 European Social Fund (ESF). Unlike the 2007-2013 European Regional Development Fund (ERDF) programme the GLA will not make direct payments to ERDF or ESF projects in the 2014-2020 programming period. Instead, in line with the revised delegations set out in Appendix A, the Managing Authority will be responsible for processing and making payments to the projects, following the review and authorisation of claims by the GLA. The European Programmes Management Unit (EPMU) will be responsible for managing the programme on behalf of the GLA.

5.2 Approval is being sought for the commitment and award of ESF funding of up to £68m across the four Greater London CFOs :

• £27m ESF to the City of London Corporation on behalf of the Central London Forward sub-regional grouping of boroughs

• £14m ESF to the London Borough of Ealing on behalf of the West London Alliance sub-regional grouping of boroughs

• £20m ESF to the London Borough of Redbridge on behalf of the Local London sub-regional grouping of boroughs

• £7m ESF to the London Borough of Croydon on behalf of the South London Partnership sub-regional grouping of boroughs

5.3 On-going monitoring will be subject to the GLA’s financial decision making and monitoring framework in its role as the Intermediate Body

6.1 Sections 1 to 2 of the report indicate that the decisions requested of the Mayor concerns the exercise of the GLA’s general powers, falling within the GLA’s statutory powers to do such things considered to further or which are facilitative of, conductive or incidental to the promotion of economic development and wealth creation, social development or the promotion of the improvement of the environment in Greater London; and in formulating the proposals in respect of which a decision is sought officers have with the GLA’s related statutory duties to:

a. Pay due regard to the principle that there should be equality of opportunity for all people;

b. Consider how the proposals will promote the improvement of health of persons, health inequalities between persons and to contribute towards the achievement of sustainable development in the United Kingdom; and

c. Consult with appropriate bodies.

6.2 In taking the decisions requested, the Mayor must have due regard to the Public Sector Equality Duty; namely the need to eliminate discrimination, harassment, victimisation and any other conduct prohibited by the Equality Act 2010, and to advance equality of opportunity between persons who share a relevant protected characteristic (race, disability, gender, age, sexual orientation, religion or belief, pregnancy and maternity and gender reassignment) 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 (section 149 of the Equality Act 2010). To this end, the Mayor should have particular regard to section 3 (above) of this report.

6.3 Officers shall ensure all relevant documentation is put in place with the CFOs.

7.1 Following Mayoral approval, CFO MOUs will be issued and signed. EPMU will then manage operations in line with ESF instructions and guidance; and in respect of the delegation limits set out in this Mayoral Decision.