MD2664 Innovation and Resilience

The Covid-19 pandemic poses significant challenges to small businesses and community organisations, and many will face difficulties in adjusting to the new circumstances they find themselves in. The London Resilience Fund aims to support London’s community of small businesses and community organisations to adapt, diversify and deliver services in new ways. London’s small businesses and community organisations are the backbone to most local communities providing essential jobs, services and emergency support. Helping their adaptation and survival will therefore also help to enable the adaptation of local communities themselves.

Investing in innovation during periods of crisis has been shown to be beneficial to businesses in the longer term, and innovators typically maintain stronger post-crisis profitability and demonstrate greater resilience . Firms with a track record of R&D and innovation perform better through periods of recession, particularly where that innovation is based on new technology . Sustaining innovation through and after a crisis is clearly a challenge, but it has been shown that awarding small grants to support innovation can make a huge difference .

Covid-19 has exacerbated existing stresses on London’s economy and society (from food insecurity to poor infrastructure and inequality). The London Resilience Fund has been designed to help London’s small business economy and civil society to respond and ‘bounce forward’ more resilient than before.

It is proposed that £1m is allocated for the delivery of the Resilience Fund, which will:

• build on the work of the 2020 London Resilience Strategy through supporting the development of innovation to help address gaps identified in London’s resilience, collaborating alongside London’s SMEs and community organisations to boost their levels of preparedness, awareness, skills and capacity;
• provide grants of up to £50,000 per recipient as a contribution to the costs of testing, creating or catalysing the adoption of innovations to make London more resilient; and
• produce intellectual property which is a combination of: open source, open standard or open licence, to ensure that it is accessible to maximise adoption across the economy.

Innovation & Resilience

The London Resilience Fund will support the development of innovation that will boost local business resilience, the resilience of social enterprises and community organisations helping local communities through the pandemic. Innovation that will be brought forward will range from new forms of data capture and digital infrastructure (for example to support the operational resilience of businesses, including adaptation and recovery planning) to tools, such as AI and machine learning, to support for example predictive analysis.

Case study example: last year Data Kind worked with the Welcome Centre, a Huddersfield based food bank, to build a machine learning model to predict which of centre’s clients would be more likely to become dependent on the food bank’s services in order to prioritise beneficiaries for additional support. The tool can now be scaled up across other food banks and service areas facing challenges of high dependency and usage.

Innovations should help businesses and organisations to deliver their services in new ways, for example, helping community groups to leverage collective action across networks remotely, or using data and technology to identify and address vulnerabilities in supply chains, local food or energy production. In more emergent areas where innovations have been accelerated at pace during the current crisis further R&D may be required, for example into the ethical use of data and digital solutions as they are applied across different sectors. Adaptability is key to remaining resilient. Organisations who can make best use of data and technology to pivot their way of working have been shown to have greater sustainability.

This proposal is for a £1m fund, which will be used to fund projects up to a maximum value of £50,000 per recipient to test and prototype new services and processes which will help London’s small businesses and civic society emerge from the current crisis stronger and more resilient.

The London Resilience Fund will support:

• • • the acceleration of developing products and services which will help London emerge from this crisis stronger and better prepared to deal with future shocks;
    • small businesses and civic society to engage in R&D activity, which has been shown to correlate with business survival and longevity, and increased innovation rates; and
    • the creation of intellectual property which is open source, open licence, open standard, interoperable and which leverages open data to maximise innovation adoption and spur wider development and progress beyond the timeline of this programme.

The process will follow best practice in terms of grant-making and project governance, and this will be augmented by the creation of an expert steering group who will be responsible for providing an outside perspective to the programme and the projects within it. Additionally, they will add value for the participants by bringing expertise, networks and guidance, and leading on the long-term scaling of the innovations.

It is intended that the combination of projects of the type that will be eligible for funding and any services to be commissioned will assist to deliver the following streams of activity:

The programme will deliver the following outputs:

In order to deliver the above benefits to businesses and Londoners, the following budget is proposed:

Under Section 149 of the Equality Act 2010, as a public authority, the Mayor of London must have due regard to the need to eliminate unlawful discrimination, harassment and victimisation as well as to advance equality of opportunity and foster good relations between people who have a protected characteristic and those who do not.

Evidence has shown that BAME Londoners have been disproportionately impacted by the current crisis both in terms of the health impact, as well as often facing specific barriers to accessing support available from HM Government. Additionally, the economic impact on BAME is expected to be higher.

The principal threats to London’s city-wide resilience as outlined in the London City Resilience Strategy include: poor social cohesion, inequality, poor health and wellbeing and poor housing. These are all issues which disproportionately impact BAME Londoners, and they provide the subject matter for what many of the projects which will be funded will focus.

The project will be promoted through a marketing campaign, which will reflect the diversity of London, and will seek to actively promote good relations between people of different characteristics. Moreover, by reaching out through peer-to-peer networks, as well as through London’s Business Improvement Districts and local authorities, we will ensure that the opportunity to fund raise reaches business founders across the whole of the city, including those who are not typically able to access this kind of funding.

The London Resilience Fund will work with delivery partners to ensure a engagement with community and faith groups in order to access harder to reach communities to avoid discrimination and make sure there is equality of opportunity.

1. 1. Risk Register:

Links to Mayoral Strategies and priorities

London City Resilience Strategy 2020

The programme has been designed to boost London’s resilience by helping its firms and community organisations to better withstand current and future shocks. In addition, by targeting support at London’s civil society organisations who are helping to address London’s major stresses (from inequality to food insecurity and poor health and wellbeing), the programme will help to accelerate progress towards enabling positive social change.

Through working to improve the resilience of SMEs, including across the everyday economy, the programme will also help to prevent the impacts of Covid-19 and any subsequent shockwaves from causing disproportionate damage to the sectors which employ the majority of Londoners.

Economic Development Strategy

The programme meets the Mayor’s Economic Development Strategy objectives to support the adoption of innovation, including digital technologies, across the economy and society, and to enable the benefits of innovation to be more widely shared. This is aligned with the UK’s Industrial Strategy, and London’s approach to its evolving Local Industrial Strategy.

This work sits alongside the LEAP’s activity to help London SMEs respond to the Covid-19 crisis, including:

• • Funding London – which will provide bridging investment to earlier stage companies missed by the Government’s Future Fund, whilst leveraging investment from angel investors; and
  • Pay it Forward (match funding) – which will provide cashflow to companies who have been forced to close their physical premises as a result of covid-19.

Approval is being sought for the expenditure of £1,000,000 to set up the London Resilience Fund.

This proposal is directly linked to the city’s resilience phase of recovery in which London businesses can apply for grant funds of between £30,000 - £50,000 to help adapt their products and services to a new way of operating. In addition, the fund will also support the development of innovation through marketing, research and web tools to help prepare London’s SME’s and community organisations become more agile for any future pressures.

In essence the requested £1,000,000 will be funded from recycled returns obtained from the growing places fund which the Authority has taken receipt of. However, because these are strictly capital funds it is proposed an exchange will take place between uncommitted revenue funds identified within the Skills for Londoners (£1,400,000) and Further Education programmes (£660,000). The proposal is to use £400,000 and £600,000 respectively to enable the London Resilience Fund to be created. The profiles for each of these are shown below with the original and revised budget

^* A separate decision is being considered for approval relating to a Pay It Forward project (MD2636) in which £1,000,000 has been requested from the unallocated Skills for Londoners programme. This figure is based upon the assumption this has been approved.

Due to the amount requested, this will require drawing upon funds previously profiled as future spend to enable the expenditure to take place this financial year. This will have a net nil financial impact on the GLA’s budget as the funding source for this programme stems from MHCLG as part of the Growth Deal funding which the Authority has taken receipt of. As such, because the proposed uncommitted funds do not belong to the Authority they cannot be offered as savings and must be spent as outlined in the Growth Deal agreement.

Growth Deal funds allow expenditure to take place at any time across a fixed period and permits repurposing towards projects which create jobs, support businesses and encourage growth. To enable this, permission must first be sought from the LEAP investment committee. In this instance it was obtained on 24^th June 2020.

It is important to note that this funding is a fixed amount and cannot be supplemented, therefore drawing upon funds early will result in the diminished availability in future years as set out in the table above.

The foregoing sections of this report indicate that:

- the decisions requested of the Mayor concern 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, conducive or incidental to the promotion of economic development and wealth creation in Greater London; and

- in formulating the proposals in respect of which a decision is sought officers have complied with the Authority’s related statutory duties to:

• pay due regard to the principle that there should be equality of opportunity for all people;
• 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
• consult with appropriate bodies.

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 and foster good relations between persons who share a relevant protected characteristic (race, disability, gender, age, sexual orientation, religion) 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.

Should the Mayor be minded to make the decision sought officers must ensure that to the extent that expenditure is to be incurred on the:

- award of grant funding that funding is distributed fairly, transparently, in accordance with the GLA’s equalities policies and in manner which affords value for money in accordance with the GLA’s Contracts and Funding Code and appropriate funding agreements are put in place between and executed by the GLA and the recipients before any commitment to fund is made;

- purchase of services or supplies for delivery of the proposed fund are procured by TfL Commercial and in accordance with the GLA’s Contracts and Funding Code and the GLA and service providers/suppliers enter into and execute contracts for the provision of the same before the commencement of such services and supplies; and

- all GLA HR protocols are followed and approvals obtained as may be applicable.

As officers have indicated that a key aim of the fund is to facilitate the development of innovative items on a wide and openly accessible basis they must ensure that contacts for services/supplies and funding agreements make express provision in this regard and such provisions are enforced.