MD2218 Skills for Londoners Capital Fund: Small Projects and Equipment

Type of decision: 
Mayoral decision
Date signed: 
18 December 2017
Decision by: 
Sadiq Khan, Mayor of London

Executive summary

The Mayor, under cover of MD2142 (August 2017), approved the use of £3m of Skills for Londoners Capital Funding (from Growth Deal 3 funding) to create a Small Projects and Equipment Fund. 
Skills providers were invited to apply for between £25,000 and £200,000 of capital grant from this fund to invest in equipment and small projects that contribute towards creating fit for purpose and inspiring learning environments. Applicants were required to provide a minimum of 50 per cent match funding.
Projects and equipment purchases will support the delivery of high quality skills that employers say they need, in accessible learning environments that reflect real life work spaces. 
The Small Projects and Equipment fund has proven to be very popular with 46 applications received and an oversubscription of funding by £1.2m. This Mayoral Decision form seeks approval to invest into a 41 of the 46 projects, including approval to an additional £948,834 investment over and above the £3m approved by MD2142.  The London Economic Action Partnership (LEAP) Investment Committee and LEAP Programme Board have endorsed this additional funding on the basis that this will enable a larger number of high quality projects to be funded, resulting in good quality learner outputs.  


That the Mayor approves expenditure of up to £3,948,834 Skills for Londoners Capital Funding by way of grant funding to 41 projects through the Small Projects and Equipment Fund, and including £948,834 from Skills for Londoners Capital Fund underspend over and above the £3m agreed through MD2142.


Part 1: Non-confidential facts and advice

Introduction and background

1.1    London has available £114m Growth Deal funding to invest in the estate and equipment of skills providers, over the period 2017/18 to 2020/21, through the Skills for Londoners Capital Fund. This funding has been awarded to the LEAP to deliver a programme of capital expenditure on infrastructure which will support the facilitation of delivery of skills services in London and does not amount to the funding of education services. £3m of this funding was ringfenced to create a Small Projects and Equipment Fund. Skills providers and their partners were invited to apply for £25,000 up to £200,000 capital grant funding to invest in equipment and small projects, which contribute to creating fit for purpose and inspiring learning environments. Applicants were required to provide a minimum of 50 per cent match funding. 

1.2    The Small Projects and Equipment Fund application deadline closed on 2 October 2017 and 46 applications were received from a wide range of providers, ranging from general further education colleges (24 per cent), sixth form colleges (15 per cent) and local authorities (20 per cent) to offender learning institutions (2 per cent), adult learning institutions (15 per cent), private skills providers (21 per cent) and third sector providers (6.5 per cent). The total funding requested from the Small Projects and Equipment fund was £4,140,593, an oversubscription of circa £1.2m.

1.3    Forty-six per cent of applications received were for equipment purchases, 20 per cent for refurbishment, and 35 per cent for both equipment and refurbishments. Projects and equipment purchases range from creating brand new state of the art hospitality training facilities, nurse simulators and virtual reality and augmented reality technologies to creating sensory rooms for learners with SEND and STEM skills centres. 

1.4    The applications have been through a thorough validation and appraisal process. Applications were appraised by the LEAP Delivery Team, with comments provided by the Skills and Digital teams in the Economic and Business Policy Unit, Equalities and Diversity Team and Environment Team. Projects were shortlisted and underwent due diligence checks by GLA Economics before then being moderated and approved by an internal moderation panel chaired by the Assistant Director of Regeneration. Endorsement by the moderation panel was then followed by Group Finance’s scrutiny of applicants’ financial health and confirmation that projects proposed were capital and not revenue. 

1.5    LEAP Delivery Team Officers also presented the Small Projects and Equipment fund at a programme level to the Skills for Londoners Capital Fund Steering Group on 2 November and to the LEAP Investment Committee on 8 November. The Skills for Londoners Steering Group noted that for the scale of investment, substantial learner outcomes were being driven and that this fund makes a valuable difference to the sector, in that it enables providers to significantly enhance their curriculum offer for learners. For this reason, it was noted that this fund offers good value for money. The Chair of the steering group commented that skills providers struggle to raise money to invest in equipment and thus it was to be expected that this fund would be oversubscribed. The steering group noted that demand for this funding in future is anticipated and some discussion was had around running a future round. This formed part of the discussion at the LEAP Programme Board on 30 November who acknowledged that there may be demand for a future round of the fund and that this would be monitored within the sector over time. 

1.6    LEAP Delivery Team Officers explained at the moderation meeting that the quality of applications received was very high and as a result it was very difficult to draw a line between recommended projects and a reserve list. While eight projects were added to a reserve list, it was strongly believed and evident that the reserve projects were fundable, ready to start delivering and would deliver good quality outputs. Further, the LEAP Investment Committee endorsed that unallocated budget from the Skills for Londoners Capital Fund should be used to fund reserve SPEF projects that were of a high quality and strongly aligned to the fund’s priorities. For this reason, it was endorsed by the moderation panel that the eight reserve projects should receive funding. All endorsement was agreed on the condition that clarification questions that arose throughout the meeting would be followed up with applicants and grant agreements would only be entered into once satisfactory responses have been received by the prospective projects. To date the majority of clarification questions have been answered and discussed with the Senior Capital Project and Programmes Manager. Any outstanding clarification questions that have not yet been fully addressed have been noted in Appendix 1 in the ‘recommendation’ box at the bottom of the individual score sheets. It can be seen that the outstanding requests are mostly asking for more detailed breakdowns of project costs, which already forms part of the grant agreement/signing process and so costs will be scrutinised by LEAP Delivery Team Officers as well as Group Finance.  An additional £984,834 is therefore required to add to the £3m pot of Small Projects and Equipment funding. See Appendix A which sets out the recommendation for each of the 41 projects for funding. 

Objectives and expected outcomes

2.1    The Small Projects and Equipment fund prospectus was developed in consultation with sector and     skills     specialists. It identified the following priorities and objectives to deliver high quality and     inspiring learning environments:

•    Improvements to building efficiency
•    Increase and improve accessibility of College estate
•    Equipment purchases which enhance innovation and enable a more employer responsive curriculum
•    Equipment purchases which respond to the needs of the skills sector
•    Refurbishment of facilities and equipment in need of upgrading
•    Projects which enhance learner experience and lead to better training outcomes
•    Projects which lead to better progression outcomes for learners 
•    are responsive and adaptable to current and future requirements of employers and learners through development, modernisation and rationalisation of facilities;
•    improve quality of provision and learner satisfaction, progression and success rates, including for example for those learners previously or at risk of becoming NEET (not in education, employment or training), learners with special educational needs and disabilities (SEND) and offender learners;
•    where appropriate, support the implementation of recommendations of the HM Government-led Area Review of the FE sector.
2.2    The Small Projects and Equipment Fund prospectus places strong emphasis on measuring and     assessing the outcomes and benefits delivered either directly or indirectly by investments.     Proposals were invited to demonstrate how projects would deliver both quantitative and     qualitative measures, with the core outputs and benefits including:

•    number of learners supported as a result of the Small Projects and Equipment fund investment
•    cost savings (in terms of maintenance and running costs);
•    jobs created within the organisation as a result of the investment;
•    number of apprenticeship starts;
•    number of SEND (Special Education Needs and Disabilities) learners supported;
•    reduction in the number of people who are NEET (Not in Education, Employment or Training; 
•    support to learners at risk of becoming NEET;
•    improvement in teaching and learning;
•    improved educational outcomes; and
•    number of students progressing to employment as an indirect result of the project. 

2.3    Successful applications are required to deliver the full project outputs and benefits by an agreed     date, providing appropriate evidence of the achieved output and/or benefit. Individual project     outputs will be clarified during the grant agreement process.

2.4    Applicants must undertake a self-evaluation of the project at both six months and three years after     completion of the project to assess whether and how well the original project objectives have been     met and the output and benefits that have been achieved. 

Equality comments

3.1        The Small Projects and Equipment fund will support skills providers to invest in improving their     estate that has poor accessibility.
3.2        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. 

3.3        The GLA’s Social Policy Team provided specialist comments on the applications which were then     incorporated into the appraisal process.

3.4    As a condition of funding agreements, recipients of funding are required to assist and co-operate with the GLA in the fulfilment of its Public Sector Equality Duties.

Other considerations

4.1        Key risks and issues: 
    Funding required to deliver projects exceeds that available – the projects which are being     recommended for funding exceed the initial ringfenced £3m Small Projects and Equipment Fund by     £948,834. The LEAP     Investment Committee and LEAP Delivery Board agree and endorse that     additional funding should be sought     from the underspend of the Skills for Londoners Capital Fund     to fund the additional £948,834. 

4.2        Risks associated with individual projects have been identified as part of the bidders’ applications,     and the overall GLA evaluation process considers risk and deliverability when prioritising projects.     Thorough due diligence is carried out on shortlisted projects by Economics and Finance before     investments are made     and individual grants will then be monitored through the GLA’s Budget and     Performance Review process.

4.3         It should be noted that bidders recommended to receive funding may have received funding for     separate projects through the Further Education Capital Fund, the predecessor to the SfLCF.     Officers assessed the     applications against the criterion set out in the SfLCF Prospectus     independently, with the highest scoring applications proceeding for endorsement. Using this     approach helped mitigate against the chance of being challenged in instances where funding is     awarded to an organisation that has received LEAP funding in the     past, as it means that a     competitive and rigorous evaluation process has been followed. Further, applicants     that have     received funding in previous rounds were assessed on their performance on delivering and     reporting against LEAP funded projects in accordance with the GLA grant agreement to ensure     that applicants remain     compliant to the terms and conditions of funding.

4.4        It is the expectation that grants will be managed through the GLA-OPS system currently being built     within the GLA.

4.5        Links to Mayoral strategies and priorities:
The Skills for Londoners Capital Fund supports the Mayor’s manifesto commitment in that it provides a significant foundation and support for the skills sector to ensure that London’s Further Education skills system meets the needs of London’s businesses while supporting all Londoners to access the skills they need to find and progress in work. Projects supported through the Small projects and Equipment fund are also broadly supportive of the new Skills and Adult Education Strategy for London that is currently out for consultation. 

4.6        The Small Project and Equipment Fund investment also supports the priorities set out in a City for All     Londoners based on the principles of ‘good growth’ and investment in London’s future. This     includes further developing London’s strengths in innovation by encouraging collaboration     across     sectors, promoting more productive links between business and academia, providing support     for innovation activities, fostering entrepreneurial skills and helping access funding.

4.7        If applicable to the nature of the proposal, capital projects will be subject to design review during     the design and implementation phase. Reviews will be undertaken by the independent panel of     Mayor’s Design Advocates – a newly appointed pool of experts with skills across the breadth     of the built environment disciplines. Design review will be in line with the Mayor’s Design     Review     Charter, following best practice principles of proportionality, timeliness, continuity and     independence. Officers will work closely with the GLA Regeneration Good Growth by Design     team to ensure that appropriate and meaningful scrutiny is applied to each project as required.

4.8        The Skills for Londoners Capital Fund also supports the London Infrastructure Plan 2050 by enabling     skills providers to understand London’s forward infrastructure investment pipeline and ensure that     skills provision     aligns to the capital’s requirements. 

4.9        Links to national strategies and priorities:
    The Skills for Londoners Capital Fund aligns to the government’s Post-16 Skills Plan and Industrial     Strategy green paper’s commitment to ‘developing skills’ by providing investment in FE estate     and machinery to enable the delivery of high quality skills provision. 

Financial comments

5.1    The Small Projects & Equipment Fund forms part of the overall Skills for Londoners Capital Fund for     which a total of £114m has been earmarked for this programme, previously approved by MD2142.     The proposal to invest £3,948,834 in capital grant will be funded from this ring-fenced budget     allocation. It should be noted that the initial budget allocation for the Small Projects & Equipment     Fund was £3m, thus meaning an overallocation of £948,834, which is being offset by some under     allocation within the Overall Skills for Londoners Capital fund.

5.2    All proposed grant recipients have gone through a robust due diligence process and no significant issues have been highlighted with those for which approval is being sought. The proposed grants will be governed by the GLA’s standard grant agreement with each provider and will set out the conditions for use of the grant, including the indicative project completion date of March 2019 for spending the funding awarded through the Fund and the phasing of the proposed grants. In addition, the Government imposes various conditions on the use of this capital funding; these conditions will be reflected in the grant agreement for each of the approved projects. This minimises the risk that the Government will seek to ‘claw back’ any funding.


Planned delivery approach and next steps

7.1    This report seeks approval for the allocation of £3,948, 834 to invest in the projects set out in Appendix 1.

7.2    Once in grant agreement the 41 projects will be managed by project leads within the Regeneration team by the LEAP Delivery team.

7.3    Projects will draw down all funding in arrears against achievement of milestones and/or outputs and either evidence of cost incurred or certified expenditure.

7.4    Following completion, projects will also be required to undertake a self-evaluation after completion of the project and, as part of the grant funding conditions, will be required to undertake a longitudinal evaluation sometime after completion which should be submitted to the GLA. This will include the benefit or impact of the project, lessons learnt and dissemination of information and risk and issues.

7.5    Due to the successful experience of running this first round and confidence gained that there is high demand for such funding, the LEAP Delivery Board and LEAPIC will explore the potential of running a future funding round.



CIB, MD signed off

18 December 2017

Privately announce (to individual projects) the outcome of this funding round

20 December 2017

Projects in grant agreement

Jan 2018

Public announcement of this funding round

Mid Jan 2018

Projects in delivery

Jan/Feb 2018

Projects complete

March 2019


Appendices and supporting papers

Appendix 1: 41 projects for funding