MD2477 Commitment of ERDF to applications under London Call 7

Type of decision: 
Mayoral decision
Code: 
MD2477
Date signed: 
11 June 2019
Decision by: 
Sadiq Khan, Mayor of London

Executive summary

This Mayoral Decision seeks approval for the award of European Regional Development Funding (ERDF) to applicants from the seventh call for proposals.

Mayoral Decision 1583 (March 2016) approved the designation of the Greater London Authority as an Intermediate Body for London’s share of the 2014-20 England ERDF programme.

The Greater London Authority’s functions as an Intermediate Body are set out in a Memorandum of Understanding with the ERDF Managing Authority, the Ministry of Housing, Communities and Local Government.

Decision

The Mayor approves:

The commitment and award of up to £26.61million ERDF to applicants of the seventh call for proposals to support jobs and growth, as set out in Part 2.

Part 1: Non-confidential facts and advice

Introduction and background

The Ministry of Housing, Communities and Local Government (MHCLG) is the ‘Managing Authority’ (MA) in England for the European Regional Development Fund (ERDF). In 2015, MHCLG MA agreed an ‘Operational Programme’ for England (revised in January 2019) with the European Commission (EC) for ERDF that set out the activities and targets in exchange for the funding. The ERDF programme is delivered across England's 38 Local Enterprise Partnership (LEP) areas, each of which has a European Structural and Investment Fund (ESIF) Strategy to support local delivery. In London the LEP is known as the London Economic Action Partnership (LEAP).

LEP Area ESIF Committees, including the London ESIF Committee, which reports to the LEAP Board chaired by the Mayor, provide advice to the Managing Authority (and the GLA as an Intermediate Body in London), on the needs and opportunities in an area and on the strategic fit of applications for funding.

Article 123 of EC Regulation 1303/2013 states that a Member State may designate ‘Intermediate Bodies’ (IB) to carry out certain tasks of the MA. MHCLG MA has devolved responsibility for managing London's share of England’s ERDF programme to the GLA as an IB. The relevant arrangements between MHCLG MA and the GLA are formally recorded in a Memorandum of Understanding (MoU).

Previous Mayoral Decisions

This request follows on from MD1583 (March 2016) where the previous Mayor:

• Approved the designation of the GLA as an IB for the 2014-20 ERDF programmes, and entering into a Memorandum of Understanding (MOU) between the GLA and MHCLG;
• Approved the delegation to the then GLA Head of Paid Service to sign the aforementioned MOU; and
• Approved the delegation limits for administration of the approved ERDF expenditure.

Subsequent Mayoral Decision 1613 (also March 2016) committed up to £286 million of ERDF and the European Social Fund to co-financing organisations and projects. Mayoral Decision 2039 (October 2016) further approved the award of up to £24.4 million ERDF to projects. Mayoral Decision 2145 (August 2017) approved the award of £6.5 million ERDF. Mayoral Decision 2317 (July 2018) approved the award of up to £14.1 million ERDF.

ERDF seventh call for proposals

In October 2018 MHCLG, as Managing Authority, launched the seventh call for proposals in London. This followed preparatory work by GLA officers in consultation with the London European Structural and Investment Funds (ESIF) Committee (LEC).

As part of the call MHCLG allowed existing Grant Recipients - which met MHCLG’s prescribed eligibility criteria - to apply for additional ERDF and to extend the lifetime of their projects.

£38.8m million ERDF was available across the four priorities of the ERDF Operational Programme (£11.3m for ‘Promoting Research & Innovation’; £1.2m for ‘Enhancing Access To, and Use and Quality of, Information and Communications Technology’; £11.4m for ‘Enhancing the Competitiveness of Small and Medium Enterprises’; and £14.9m for ‘Supporting the Shift towards a Low Carbon Economy’). The Priorities included the indicative activities on which the funding may be spent. The call was open to all eligible applicants (as defined by MHCLG in guidance available on gov.uk). The specification (including output targets and permitted activities), national eligibility rules and guidance, application forms, selection criteria were also published by MHCLG on gov.uk.

The MHCLG application process comprised two stages: Outline Application and if successful, a Full Application for new applicants or a Project Change Request form for existing grant recipients. Outline Applications were submitted to the GLA in November 2018 and assessed by GLA officers. The advice of the London ESIF Committee on the strategic fit of the applications (against the Operational Programme and the London ESIF Strategy) was then sought. Based on the assessment and strategic fit, the GLA invited successful applicants to progress to the next stage. Applications were submitted in April 2019, and officers’ appraisal commenced in line with MHCLG work instructions and guidance.

This Mayoral Decision seeks approval for the commitment of ERDF to applicants who were successful at the Outline Application stage and have submitted next-stage applications (they are listed in Part 2). Assuming satisfactory appraisal, a Funding Agreement will be issued (or a contract variation to existing grant recipients) to the applicant organisations, after Mayoral Decision approval, setting out the terms, conditions and monitoring requirements against which the ERDF grant is awarded.

Once ERDF Funding Agreements and contract variations have been issued, they will be listed on the LEAP website at www.lep.london.

Objectives and expected outcomes

The objective of the ERDF programme is to focus on investment to support economic growth and job creation.

All ERDF applications are required to meet the objectives of the England ERDF Operational Programme. Applicants are required to explain how they will contribute to the overall expenditure targets and outputs of the London share of that programme.

Equality comments

The ERDF Operational Programme sets out the requirements for adherence to mandatory equalities ‘cross-cutting’ themes. ERDF promotes equality in accordance with European Union and national requirements.

Furthermore, 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.

The obligation in section 149(1) is placed upon the Mayor, as decision maker. Due regard must be had at the time a particular decision is being considered. The duty is non-delegable and must be exercised with an open mind.

This duty applies in the delivery of ERDF and means that the implementation of the England Operational Programme 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. In addition, where a project has a particular objective to work with people with specific protected characteristics, this will be presented in the project application by Grant Recipients, and they will be expected to monitor performance as part of their project management.

Other considerations

a) Key Risks and Issues

The Government has confirmed that funding secured by applicants through EU programmes will be guaranteed by the UK government after Brexit even in a ‘no-deal’ scenario. This means the ERDF programme will continue until closure, expected in 2023, whether a withdrawal agreement with the EU is successfully concluded or not.

As Funding Agreements and contract variations have yet to be issued, it is feasible that one or more applicant may withdraw from the appraisal process. Likewise, officers may withdraw applications from the appraisal process (which involves checks on compliance with ERDF eligibility rules, national law and guidance and that the project activities are deliverable).

The amount of ERDF awarded to each applicant may be revised during the appraisal process (for example, applicants may seek alternative amounts for their own organisational budgetary reasons). Any requests will be considered by officers, and collectively they are not expected to exceed the amount stated on the cover page of this Mayoral Decision. Any increase would be approved in line with the delegations listed in Mayoral Decision 1583.

Once Funding Agreements and contract variations have been issued and signed, officers will monitor the delivery of the projects to ensure compliance. It is common for ERDF projects to seek one or more contract variation during their lifetime (for example, revising expenditure and output profiles). Officers will manage this process in accordance with the process set out in the Funding Agreement and in line with MHCLG work instructions; and by ensuring a GLA officer with appropriate delegated authority approves any variation.

b) Links to Strategies and Strategic Plan

The projects approved for ERDF contribute to London’s share of the England ERDF Operational Programme targets, under which calls are launched. As part of their appraisal, all projects are assessed on their alignment with the LEAP’s ESIF Strategy which, in turn, supports the Mayor’s Economic Development Strategy for London which seeks to create a supportive environment for businesses and entrepreneurs; and the London Environment Strategy which promotes energy efficiency and reductions in CO2. A consultation on the ESIF Strategy was undertaken in 2013; the feedback was taken on board in the final drafting of the strategy submitted to MHCLG in January 2014. All LEPs’ ESIF Strategies were re-submitted, following changes in the formatting of the document, at Government’s request in April 2016.

c) Impact Assessments and Consultation

In accordance with MHCLG requirements, the views of the LEC were sought on the strategic fit of applications for ERDF. The comments of the LEC were considered in decisions regarding the approval of projects.

Financial comments

Approval is being sought for the commitment and award of ERDF up to a total of £26.61 million.

Should changes in the sterling/euro exchange rate result in fluctuations in individual claims, and in turn the overall total level of funding required, EPMU officers should ensure variations are authorised in line with the financial delegation limits laid out in MD1583. Any gains or losses in sterling/euro exchange rate fluctuations will be contained and manged by MHCLG.

Activity table

Activity

Timeline

Appraisal of applications

From April 2019

Issuing Funding Agreements or contract variations to applicants

After Mayoral approval; from c.June 2019

GLA monitoring of the Funding Agreements or contract variations

Once issued, from June 2019


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