MD3148 UKSPF funding for the Better Futures Project

UK Shared Prosperity Fund
1.1.    The UK Shared Prosperity Fund (UKSPF) is a central pillar of the UK government’s Levelling Up agenda and provides £2.6 billion of funding for local investment by March 2025. The Fund aims to improve pride in place and increase life chances across the UK investing in communities and place, supporting local business, and people and skills. For more information, visit https://www.gov.uk/government/publications/uk-shared-prosperity-fund-pr…;
1.2.    The UK government is providing London with £144,444,970 of funding through the UK Shared Prosperity Fund (UKSPF). 
1.3.    UKSPF funding can be used to invest in projects that cover one or more of the investment priorities set out in its Prospectus across three pillars: Community and Place; Supporting Local Businesses; and People and Skills. In Great Britain, the fund is managed in partnership with local authorities who act as Lead Authority for their area. In London, this is the Greater London Authority (GLA) and MD3058 provides details of the projects that have been awarded funding across London under the Supporting Local Businesses pillar.
The Better Futures project
1.4.    The Better Futures project draws on a well-established partnership of leading organisations in London’s public and private sectors and helps to address London's environmental sustainability and pathway to Net Zero challenges by supporting innovation in and for Small and Medium Enterprises (SMEs). The project will provide direct support to help SMEs innovate and bring new ideas to market, delivering business growth and jobs, and promoting diversity in the low carbon sector. To complement this, the GLA has developed a holistic package of support to address the Net Zero decarbonisation and sustainability challenges at scale for London’s SMEs. SMEs are incredibly diverse and varied in their resources, and no one-size support programme will fit all businesses, so the project has been carefully designed to tackle the different needs of SMEs at different stages of development.
1.5.    The project will target Cleantech (also known as climate tech) SMEs from across London, who are seeking to innovate, grow and create jobs, bring new low carbon solutions to market, and reduce London’s greenhouse gas emissions. The project will also support non-climate tech (everyday businesses) SMEs to innovate towards low carbon business models and adopt low carbon technologies to accelerate their emissions reductions. We have tested this design with other delivery organisations in London that are also applying to UKSPF to avoid duplication, ensure our respective projects are complementary, and understand signposting opportunities to increase impact and better meet the participating businesses’ needs. For example, we will cross refer circular economy businesses to ReLondon for more specialist support, and black founder start-ups would be directed to Foundervine for specialist support, alongside support from Better Futures for the net zero aspect of their programme. 
Delivery Partners 
1.6.    The Better Futures partners, who have a proven track record of working together successfully over the last six years on Better Futures (ERDF-funded) and Better Futures+ (Green New Deal-funded), are now building on their success by using the lessons learnt and SME insights gained to create a highly impactful project to help tackle climate change and accelerate progress towards London’s challenging target of achieving Net Zero by 2030. The combination of the strength of the partnership and each individual organisation’s deep expertise in specific activities relating to the achievement of Net Zero, has enabled the GLA to develop a project that has strong potential to successfully tackle this critical challenge.
1.7.    The Delivery Partners were selected based on their experience and track record, ability to deliver the required activities and the fit of their match funding and future plans. UKSPF does not require match funding but the delivery partners have offered a total of £200,286 in contribution to further support the project delivery. The GLA will contribute £35,598 (staff time) with the remaining from the project partners, including £117,188 from Sustainable Ventures and £47,500 from West London Business. All Delivery Partners (except for Imperial College London – who will not be providing a match on this project) have confirmed their match funding to the project which includes delivery, staff time and other committed revenue expenditure. The Delivery Partners are:   
•    GLA
•    Sustainable Ventures (SV)
•    Imperial College London (IC)
•    West London Business (WLB).
1.8.    The GLA will be the lead Delivery Partner for this project and will be responsible for coordination and project management, supported by the Better Futures team of public and private sector Delivery Partners who will deliver the business support activities within the project (see below). The Delivery Partners were selected based on their experience and track record, ability to deliver the required activities, and experience of successfully working together to deliver the Better Futures and Better Futures+ projects in the past.
1.9.    Grant funding agreements or Service Level Agreements will be put in place between the GLA as Lead Partner and all Delivery Partners detailing roles and responsibilities, outputs, and governance of the provision of funding and projects. 
1.10.    The delegated authority to the Executive Director of Good Growth is to allow for efficient decision-making regarding adjustments to be made locally, by someone with close knowledge of the scope, context, and priorities of the project.
Success of previous Better Futures projects 
1.11.    The recently just completed Better Future ERDF and GND projects supported 280 cleantech businesses and over 300 non-climate tech businesses in the transition to Net Zero. The project also offered and completed 90 student internships, awarded 53 innovative vouchers, launched 84 new product or services to market and awarded 16 grants. Through the project, the supported businesses were able to raise over £3.5 million in grants and £63 million in equity and recorded high increases in job creation (53 per cent) and maintenance (29 per cent) since registration on the project. 
1.12.    Both projects delivered well on social value and EDI strategy expectations: 
•    The projects delivered support to a high percentage of diverse business owners, achieving 57 per cent on Better Futures and 77 per cent for Better Futures+ for the cleantech start-ups supported. 51 per cent of BAME, Female-led or Black-owned businesses were supported on Betters Futures, and 76 per cent of BAME, Female-led or Black-owned businesses were supported on Betters Futures+.
•    In addition, over 90 per cent and 98 per cent respectively of Better Futures (six years of operations) and Better Futures+ (two years of operations) companies are still trading (as of 30 June 2023). This compares very favourably to London’s start-up survival rate of only 39.35 per cent after five years and the UK two-year survival rate of between 82-91 per cent.  
 

Objectives 
2.1.    The objectives of the Better Futures project are to:
•    stimulate innovation amongst London’s climate tech SMEs in order to bring new ideas to market, support growth of the green economy, including green jobs, and improve their survival rate
•    help SMEs become more climate resilient and social purpose-driven in order to ensure these businesses survive and thrive in London’s future economy as London transitions to Net Zero 
•    develop climate tech start-ups as a pipeline for the wider climate tech ecosystem in London in order to provide technologies and services to non-cleantech businesses to enable their decarbonisation
•    develop the market for climate tech products and services by stimulating demand amongst SMEs for low carbon solutions to reduce their emissions.
2.2.    In support of these objectives, the project will aim to:
•    Accelerate the path to innovation and commercialisation of climate tech SMEs, so that highly impactful and easily scalable low carbon solutions can quickly be established in London and the UK.
•    Support the growth and development of new and existing low carbon circular economy SMEs with a tailored set of activities for each business, reflecting their stage of development. This may include innovation vouchers to enable business transformation and to bring new products and services to market. 
•    Create and scale innovations through providing open-innovation, mission-led challenges and convening early adopters around inclusive design and the development of novel solutions and approaches. 
•    Support innovative climate tech SMEs and non-climate tech SMEs to develop and grow in a way that embraces Equality, Diversity, and Inclusion (EDI) objectives and helps to address social inequalities.
•    Support non-climate tech SMEs to decarbonise their products, services and business activities with a flexible suite of business support that is scalable and adaptable for different audiences (e.g. all sectors, online businesses and those with physical premises).
Outcomes 
2.3.    The project will provide non-financial support to 582 SMEs. We will engage 1500+ businesses through our extensive partner networks and targeted events hosted by the GLA and the delivery partners. We anticipate a conversion rate of c.50 per cent from attendance to sign up, but a proportion of those who sign up will not be eligible to participate in the project. We anticipate that we will identify 157 suitable businesses who will then be selected to receive intensive cleantech support and 425 businesses who will be supported on their emissions reduction journey and help build the market for the Low Carbon Environmental Goods and Service (LCEGS) businesses.
2.4.    The outputs that will be provided through the project are set out in the table below:

Delivery model
2.5.    The project provides a unique approach to supporting innovation and decarbonisation, via three pathways as set out below:
•    The project will support potential innovative climate tech SMEs whose technologies can provide a significant impact in reducing greenhouse gas (GHG) emissions from the built environment. Support will be tailored to technical and market requirements and include interventions such as R&D advice, internships and technical workspace access, and will bring together high potential innovative climate tech SMEs and industry stakeholders to create opportunities for demonstration trials and deployment of low-carbon building innovations (delivered by Imperial College London).
•    The project will support climate tech SMEs of varying sizes and levels of maturity to progress innovations through different levels of technology readiness levels and commercialisation, including:
o    business and commercialisation support (delivered by Sustainable Ventures and Imperial), including investment readiness support in a peer learning setting for seed stage SMEs and tailored 1:1 commercialisation support for venture stage SMEs
o    innovation support (delivered by Sustainable Ventures and Imperial), including Innovation Vouchers for academic support and/or product development support and innovation challenges bringing together established businesses with start-up innovators to solve real Net Zero problems and create a commercial pathway for SMEs.
•    The project will help London-based SMEs across all sectors contribute to achieving Net Zero by 2030 by providing carbon foot printing, decarbonisation action plans, energy audits, grants, and a holistic package of sustainability support across social and environmental sustainability (delivered by West London Business).

3.1.    Under Section 149 of the Equality Act 2010, as a public authority, the GLA must have due regard to the need to eliminate unlawful discrimination, harassment, and victimisation and to advance equality of opportunity and foster good relations between people who share a protected characteristic and those who do not. Protected characteristics under the Equality Act comprise age, disability, gender reassignment, pregnancy and maternity, race, religion or belief, sex, sexual orientation and marriage or civil partnership status. The equalities comments should specifically relate to the decision.
3.2.    Due to systemic barriers that some groups face, SMEs do not always realise their full potential. In terms of targeting high growth potential SMEs, the project will continue to seek to engage, monitor and support Black, Asian, and Minority Ethnic (BAME) individuals, women and disabled individuals who own and run low carbon sector businesses or have the potential to develop innovations to support that market.
3.3.    The project will continue to work with the London Sustainable Development Commission (LSDC), London and Partners (L&P) through the Wayfinder programme, ReLondon and Undaunted (Centre for Climate Change Innovation) to run events, workshops and partnerships that will help the project to reach a wider range of cleantech SMEs led by individuals from diverse groups and will continue to support the resulting Women in Cleantech Action Plan and Workstreams.
3.4.    To prevent discrimination against those with protected characteristics, the Delivery Partners will continue to:
•    ensure that selection and assessment of innovation SMEs, applicants and sub-contractors is non-discriminatory on the grounds of the protected characteristics of the applicants
•    work to ensure business support is open and accessible to all by removing barriers to participation whenever encountered 
•    encourage feedback from participants on equality of opportunity in terms of access and participation in competition events and business advice sessions: difficulties encountered will be addressed as a priority and appropriate adjustments made 
•    make all promotional information available in accessible formats when requested. 
 

4.1.    The project was reviewed and approved under the UKSPF application stages by GLA and UKSPF officers using the assessment framework agreed by the Local Management Committee (LMC), moderated by a Project Selection Committee aimed at ensuring objectivity in the appraisal process
4.2.    The project will be overseen by an Advisory Group, made up of Strategic Partners including GLA, London Councils, London & Partners and external experts. 
Risks
4.3.    The GLA as the lead partner is ultimately responsible for the ownership and management of risks. However, the partnership has a shared approach to risk identification and is clear where ownership of risks and issues lie between the partners.
4.4.    A detailed risks and issues log is held by the project team and updated regularly during delivery. The risk register will be reviewed and managed by the Project Manager, with support from delivery partners. A risk will either not materialise due to the mitigation actions or other factors and can be closed, or, if the risk is realised it is moved to the issues log where the impact of the risk occurring is managed.  High impact risks will be escalated and discussed at Programme management board level. 
4.5.    The following table details the key high-level risks currently identified by the project team: 

4.6.    The project will contribute to improving quality of life for Londoners and to the delivery of Mayoral programmes, manifesto commitments and priorities including: the London Environment Strategy, Economic Development Strategy, and the Green New Deal Mission. It will support the achievement of Net Zero by 2030, with associated benefits such as cleaner air and affordable energy, by supporting the growth of innovative Cleantech SMEs.
4.7.    The project is directly linked to the Mayor’s Economic Development Strategy (EDS) and the London Environment Strategy (LES). Each of these strategies contains policies aimed at growing the low carbon and environmental goods and services sector, including creating demand and supply for low carbon products and services. The LES looks to develop demand and market opportunities for low carbon and resource efficient businesses, supporting the development of products and services to help reach Net Zero by 2030. The EDS includes policies to grow the low carbon, resource-efficient business sector and support the cleantech ecosystem in London. Specific polices include: 
•    EDS Policy 5.5 Low Carbon and Environmental Goods and Services sector. This sets out the importance of this sector in creating a fairer and more sustainable future economy for London, both through providing solutions to London’s environmental challenges and creating opportunities for economic growth and job creation. It specifically references the important role of the BF programme in accelerating innovation within the cleantech sector by assisting start-ups to test, prototype and commercialise new products and services in London.
•    LES Policy 10.1.1 (‘To build on London’s strengths and grow the low carbon and environmental goods and services sector’) and Proposal 10.1.1a (‘The Mayor will establish a Centre for Cleantech Innovation to provide workspace, collaboration space and business support’).
4.8.    The project also helps to bring the wider London Cleantech business ecosystem together to simultaneously help tackle the climate and ecological emergencies whilst creating businesses that generate growth and create jobs. This will play an important role in supporting the Green New Deal mission’s target of doubling the size of the green economy by 2030.
4.9.    The Mayor is committed to transform small business support in London with a single front door for business owners and aspiring entrepreneurs to easily access the right advice and support. The Better Futures project will support this by working with the London Business Hub and their Wayfinder programme as one of the access routes into the project.
Subsidy control 
4.10.    The Better Futures project follows the UKSPF subsidy control rules as set out below and will continue to adhere to these for the remainder of the project lifetime in line with UK subsidy control regulations: 
•    The Grant Recipient will ensure that delivery of the Funded Activities does not breach the UK’s international obligations in respect of Subsidies.
•    The Grant Recipient will maintain appropriate records of compliance with the Subsidy Control Rules and will take all reasonable steps to assist the Lead Authority and/or the Secretary of State to comply with the same and respond to any proceedings or investigation(s) into the Project Activities by any relevant court or tribunal of relevant jurisdiction or regulatory body.
•    The Grant Recipient acknowledges and represents that the Grant is being awarded on the basis that the Project Activities being undertaken using the Grant do not affect trade in goods and wholesale electricity between Northern Ireland and the European Union and shall ensure that the Grant is not used in way that affects any such trade.
•    The Grant Recipient acknowledges it has undertaken its own independent assessment of the compatibility of the Project with Subsidy Control Rules and confirms to the Lead Authority and the Secretary of State that the Project is structured so that it is compliant with Subsidy Control Rules.
•    The Grant Recipient acknowledges a finding of non-compliance with Subsidy Control Rules in respect of a Project by an authority, court or tribunal of competent jurisdiction may lead to the Grant Recipient being ordered or otherwise required to repay funding received with interest.
•    The Grant Recipient acknowledges and accepts that the Grant is awarded on the Grant Recipient’s assessment of its Project and the Project Activities compliance with Subsidy Control Rules.
Grant funding
4.11.    The UK Shared Prosperity Fund invests in projects that cover one or more of the investment priorities set out under its three pillars: Community and Place; Supporting Local Businesses; and People and Skills. In Great Britain, the fund is managed in partnership with local authorities who act as Lead Authority for their area. In London, this is the Greater London Authority (GLA). Funds provided under the UK Shared Prosperity Fund are provided pursuant to section 50 of The United Kingdom Internal Market Act 2020. The Secretary of State administers the UK Shared Prosperity Fund for the UK government.
4.12.    The table below shows the funding allocation profiles for the project lifetime:

5.1.    Approval is requested for:
•    expenditure of up to £2,258,796 UK Shared Prosperity Funding for the period July 2023 to March 2025
•    expenditure of up to £35,598 GLA match contribution for the period of July 2023 to March 2025
•    delegation of authority to the Executive Director of Good Growth to agree and execute changes to the delivery of the Better Futures Project within the above budget envelope.
5.2.    Receipt of UKSPF funding and the delegated authority for the Executive Directors of Good Growth and Community and Skills over grant approvals for the award and payment of UKSPF was previously approved under MD3058 and DD2638. This decision approves the allocation of £2,294,394 of the UKSPF and GLA funding to the Better Futures team within the Environment and Energy unit. 
5.3.    The expenditure will be a mix of direct expenditure within the GLA and grant funding to Sustainable Ventures, Imperial College London, and West London Business. The planned profile of expenditure is shown below:

5.4.    The GLA expenditure will mainly be for the funding of two FTE posts in the Better Futures team: one Grade 8 Project Compliance & Communication & Engagement Officer (1 FTE) and one Grade 9 Project Manager post (1 FTE). The Grade 9 post already exists, funded from ERDF funding that is ending this financial year whilst the Grade 8 is an existing 0.5FTE post that is being extended to 1 FTE until 31 March 2025. These posts will be approved in parallel through Establishment Control procedures. 
5.5.    All relevant budget adjustments will be made.
 

6.1.    The foregoing sections of this report indicate that: 
•    the decision requested of the Mayor concern the exercise of the GLA’s general power, failing 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 social development
•    in formulating the proposals in respect of which a decision is sought, officers (including the Executive Director of Good Growth) 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 and persons, health inequalities between persons and contribute towards the achievement of sustainable development in the United Kingdom 
    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 and foster good relations between persons who share a relevant protected characteristic (race, disability, gender, age, sexual orientation, religion) and persons who do not (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.    If the Mayor makes the decisions sought, officers (which would extend to the Executive Director of Good Growth) must ensure that to the extent the expenditure concerns the:
•    award of grant funding, it is distributed fairly, transparently, in a manner which affords value for money and in accordance with the requirements of the GLA’s Contracts and Funding Code and grant funding recipients before a commitment to fund is made 
•    payment for services, those services are procured in liaison with TfL Procurement and in accordance with the GLA’s Contracts and Funding Code and contracts are put in place between and executed by the GLA and contractors before commencement of such services 
•    variation of current agreements that such variations are agreed, documented in accordance with the corresponding provisions of those agreements and executed by the GLA and the counterparty(ies) before any commitment to vary is made.
6.4.    The foregoing sections of this report indicate that the decisions requested of the Executive Director of Good Growth concern the exercise of the GLA’s general powers, falling within the GLA’s statutory powers to do such things considered to further or that are facilitative of, or conductive or incidental to, the promotion of economic development and wealth creation, social development or improvement of the environment, in Greater London.
6.5.    Section 1 of this report indicates that part of the sought budget will amount to the provision of funding. Officers must ensure that the funding is distributed fairly; transparently; in accordance with the GLA’s equality policy and subsidy control rules; and in a manner that affords value for money in accordance with the GLA Contracts and Funding Code. Officers must ensure that an appropriate funding agreement is put in place and executed by the GLA and the recipient before any commitment to funding is made.
 

7.1.    Initial stages are underway for the procurement of contract (UKSPF – GLA internal delivery) and delivery inception (GLA – Delivery Partners).