MD2879 Green New Deal Better Futures expansion

1.1    London’s low-carbon and environmental goods and services sector (its ‘green economy’) was worth £48bn in 2019-20, employing 317,000 people across 14,000 businesses. The sector has grown from £24bn in 2010-11, when it employed 164,000 people across 9,000 companies. 

1.2    The Mayor of London has several manifesto and recovery commitments and priorities that support the growth of the low-carbon sector in London:

• committing London to an ambitious target of becoming a zero-carbon city by 2030
• establishing a tech talent pipeline and developing a city-wide STEM strategy
• working in partnership with industry to deliver skills, infrastructure and growth 
• doubling the low-carbon and environmental goods and services sector by 2030 (a Green New Deal mission priority).

1.3    These commitments reflect legislation, and policy and environmental targets set by the GLA and the national government, as well as the drive to decarbonise the global economy. These targets do not generally specify pathways and technologies, which leaves a great deal of flexibility and scope for entrepreneurs to develop new products, services and ideas that can be used to meet them.

Green New Deal and Better Futures

1.4    The Green New Deal aims to tackle some of London’s defining environmental challenges, including the climate emergency and air quality, whilst creating jobs, developing skills and supporting a just transition to a low-carbon circular economy. The GLA has provided additional funding to support the priorities of the London Recovery Board’s Green New Deal mission as part of London’s response to the Covid-19 pandemic. 

1.5    The Better Futures (BF) programme has, over the past four years, provided tailored business innovation support, which includes access to networking, workspaces and expertise, to improve the success rate of low-carbon enterprises seeking to achieve innovation-led growth. It predated the Covid-19 pandemic but since 2020 has been part of the Green New Deal programme.

1.6    Project delivery partners include Sustainable Ventures, Imperial Consultants (ICON), Imperial College, West London Business, and the Old Oak and Park Royal Development Corporation (ODPC). 

1.7    The initial £4.2m project, part-funded by the European Regional Development Fund (ERDF), was originally approved via MD2077. In November 2020 the programme was extended until December 2022 (via MD2536). It aimed to support at least 150 SMEs; as of December 2021 the programme is on track to over deliver against outputs and targets. £900,000 of additional funding was provided from the Green New Deal budget (via MD2708) to provide an additional 100 SMEs with support including internships and innovation vouchers.

1.8    The Covid-19 pandemic has led to increased interest and take up by SMEs wanting to access support from the Better Futures business programme. To date, 179 London-based cleantech businesses have been accepted on the programme.  We have had a steady increase in expressions of interest. Demand is treble what the existing ERDF-funded project can deliver: 414 businesses have expressed interest in participating. However, we have allocated all our available business support for the 2021 European Regional Development Fund (ERDF) calendar year.

1.9    The additional Green New Deal funding was used to set up the Better Futures+ project, which supported the development of a digital platform, an accelerator programme and bespoke support to SMEs hit by the impacts of the pandemic. Since launching in February 2021, it has registered 30 London-based cleantech businesses on the programme, as well as issuing 16 emergency grants (totalling £105,000) to London based businesses affected by the pandemic. It has designed and created a digital cleantech business directory, which currently holds information on 168 businesses, and 12 Better Futures+ SMEs are showcased as “Net Zero Heroes” with case studies outlining their plans to reach net zero by 2030.

1.10    Expanding the BF programme will provide additional business support to improve the growth rates for innovative low-carbon enterprises. This support to businesses will help to accelerate London’s transition to a low-carbon circular economy. It will also focus on inclusive innovation for under-represented groups in the cleantech sector, particularly businesses led by women; Black, Asian and Minority Ethnic (BAME) individuals and community members; and young people who have been disproportionately affected by the Covid-19 crisis. These sectors, including cleantech, are still a high priority given the continued market failures (negative externalities, imperfect information and innovation coordination problems) and strong levels of demand from the business community.

1.11    Positive impacts that can be directly attributed to the programme’s engagement with businesses can be clearly evidenced:

• 72 per cent of businesses that have received business support from the Better Futures programme(s) reported an increase in staff employed within the business
• 89 per cent are still active in year four of trading, compared to overall London and UK survival rates of 47 and 48 per cent respectively 
• the businesses engaged have raised significant funds: a sample cohort of 126 SMEs raised more than £33m through 94 fundraising rounds, as well as accessing over £10m in grant funding
• 70 per cent of business founders engaged with the Better Futures+ programme identify as either BAME and/or Female
• out of GND six pilot internships undertaken by young individuals from underrepresented backgrounds, four have received offers of employment
• through Imperial Colleges four-month internship placements, 27 undergraduates have undertaken placements within Better Futures businesses
• through the award of 16 GND Emergency Grants, businesses advised that 92 per cent of jobs identified by the business as at risk due to impacts of Covid-19 have been retained due to the award of the grant
• out of a sample group of 72 businesses tracked by the programme, 29 per cent maintained FTE employee levels since registration, with 65 per cent experiencing an increase and only six per cent identified as experiencing a decrease.

1.12    The positive impacts of the programme’s interventions can also be evidenced through case studies highlighting the benefits of business engagement with the programme. These include Magway, an e-commerce delivery system driven by magnetic waves, that was able to access business support that led to nine further jobs being created and a further £770,000 in funding secured, and Treecomony, a forestry-based carbon offsetting firm, which secured £100,000 in funding, created two additional jobs and conducted two successful pilot projects.

Better Futures expansion programme

1.13    This Mayoral Decision seeks approval for further expenditure of £971,614 of funds from the 2021-22 Green New Deal and Environment team budgets, to be allocated over two years to the Better Futures expansion programme. £50,000 of funds will also be allocated from the core Growth Hub Grant issued by the Department of Business, Energy and Industrial Strategy (BEIS), which will be used to support year one of delivery. (The BEIS core Growth Hub grant covers 2021-22 only and must be spent within this year). 

1.14    The current Better Futures+ programme incorporates the following elements (which will be scaled up in the expansion programme, increasing the number of businesses supported):

• SME business support
• innovation support: a flexible package of innovation support focusing on technology readiness levels 4-6 
• product development and scaling products
• access to market: events and opportunities
• webinar series: designed to address challenges faced by businesses and more generally to bolster business stability
• net-zero readiness overview: four hours of business and commercial support; access to a one-to-many business-support programme
• internships – a pilot programme of internships that are 50 per cent funded by the SME, and last six months, for young people from under-represented communities

1.15    In addition, the Better Futures expansion programme will also focus on the expansion and/or continuation of the following elements:

• the internship programme with further focus on engagement with under-represented groups
• business support package measures, including Innovation Support Vouchers
• West London Business’s “greening all businesses” initiative.

Implementation

1.16    The Better Futures consortium and project is co-ordinated by the GLA and delivered with the partners outlined above. These partners are currently delivering both the Better Futures European Regional Development Fund (ERDF) programme and the Better Futures+ programme. They were originally selected based on their experience and track record, and ability to deliver the required activities. They have pre-established governance and delivery structures in place, allowing the programme to be delivered to a high quality and at pace.

1.17    Deeds of variation to pre-existing funding 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 prior to project commencement.

2.1    Building on the success of the established and oversubscribed Better Futures ERDF and Green New Deal-funded programmes, Better Futures Expansion will provide further support measures to London’s vibrant cleantech business community. Key aims of the expansion programme are: 

• to provide support to businesses transitioning to more sustainable business models
• to accelerate the development of viable, scalable cleantech businesses 
• to provide matchmaking services to enable these businesses to connect quickly with customers and partners
• to provide a pathway to finance, giving these businesses access to capital and grants for growth
• to support increased diversity and to provide opportunities for traditionally under-represented groups in these sectors
• to create new jobs and skills in the green economy.

2.2    Both elements of the existing internship offering have been oversubscribed and well received. A large volume of applications for internship opportunities has resulted in a healthy pipeline of potential placements.

2.3    Feedback from hosting businesses has been greatly positive, with SMEs advising that the internships offer great value in terms of skill sets and knowledge offered. Numerous placements have resulted in employment being offered. Additional elements would consist of: 
internships for under-represented groups – building on the successful pilot with additional part-funding of new roles within the Better Futures SME community 
continuation of university-led internships.

2.4    Table 1 (below) outlines the proposed outputs that will be delivered over years one and two of the Better Futures expansion programme funded by the Green New Deal. The West London Business outputs delivered within 2021-22 are inclusive of additional outputs funded through the allocation of budget from the core Growth Hub Grant issued by the Department of Business, Energy and Industrial Strategy (BEIS).

Table 1: Proposed delivery outputs for 2021-22

Output summary

2.6    The outputs being delivered by each element of the two-year programme period are as follows:

• business support measures – support will include business plan review/feedback, support for: funding strategy, investment readiness, grant targeting and review diagnostics, signposting and brokering relationships with relevant networks, agencies and complementary cleantech programmes
• Sustainable Ventures internships – expansion of the internship programme with further focus on engagement with under-represented groups; internships are full time positions taking place over the course of a six-month period
• ICON Innovation vouchers – access to bespoke academic and technical expert support for the development new technologies
• Imperial College internships – placement of pre-graduate level, four month FTE internships allowing further skillsets to be utilised by the hosting business
• Sustainability Executive Leadership Programme – Sustainability Executive Leader Programme (SELP) aimed at helping non-sustainability-focused business to make the transition towards net zero
• Net Zero support – four hours per business of net-zero readiness support focusing on sectors impacted the most by the Covid-19 pandemic (e.g., hospitality, construction, entertainment and retail)
• Cleantech database – continue to improve and refine the Better Futures CT directory with increased functionality (e.g. mapping) and categorisation (e.g. shovel-ready or investment stage); it will signpost to other CT databases (e.g. ReLondon and CCCI)
• Learning Zone – this will take forward the work achieved in the past six months to advance an online ‘learning zone’ for green jobs with the West London Alliance and Open Data Institute leveraging other funding sources
• SME carbon footprint measurements - 10 per cent of the highest-impact reduction plans will be selected to become case studies showcased as ‘Net Zero Heroes‘.

3.1    Under section 149 of the Equality Act 2010, in making these decisions “due regard” must be had 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. Protected characteristics include age, disability, gender reassignment, pregnancy and maternity, race, religion or belief, gender, sexual orientation (and marriage or civil partnership status for the purpose of the duty to eliminate unlawful discrimination only). This duty has been taken into account, but no additional equality impact assessments are required beyond those considered in the relevant project documentation for the Mayor to make these decisions. 

3.2    The Mayor’s Equality, Diversity and Inclusion Strategy sets out how he will work to create a fairer, more equal, integrated city where all people feel welcome and able to fulfil their potential.  Equality, diversity and inclusion are subsequently enshrined within the GLA’s strategies, programmes and activities. 

3.3    Due to systemic barriers that some groups face, SMEs led by diverse founders do not always realise their full potential. To address this, in targeting high-growth potential SMEs, the project will continue particularly to seek to engage and support:

• BAME individuals, women and disabled groups who own and run low-carbon sector businesses; or have the potential to develop innovations to support that market
• BAME individuals, women and disabled groups who may not view themselves within the sectorial focus of the project, but who with support could develop new low-carbon innovations. 

3.4     London SMEs are more likely than larger companies to be owned by women, BAME individuals or disabled people; and to this extent the project will therefore support equality and diversity. The project will monitor equality performance throughout the project to see if there is more that it can do to reach SMEs owned by women, BAME individuals or disabled people. To date, our engagement has been well targeted at underrepresented groups. 70 per cent of participating businesses have founders who identify as either BAME or female.

3.5     The project will work with relevant business organisations to attract referrals to the project – for example, the Asian Business Association, the Prince’s Initiative for Mature Enterprise and Business in the Community. We will actively monitor the volume of applicants from minority groups. If these groups are under-represented, we will look to proactively drive participation through specific engagement techniques, such as ‘women in innovation’ workshops or work with third-sector organisations to find and target suitable companies.

3.6     The project will work with sectors that have been disproportionately affected by impacts of the pandemic, such as the hospitality and creative sectors, allowing businesses to transition to more sustainable businesses models and remain viable. The project shall further increase diversity across sectors by placing young individuals from under-represented backgrounds into paid internships.

3.7     There is some evidence that the low-carbon sector is giving rise to employment opportunities that are far less gender-biased, e.g. supply chain coordinators and quality assessors. The delivery activities will be planned to account for working patterns of both men and women, arranging events at a range of times to enable carers and people with school age children to attend.  

3.8    As part of the outcome capture for this project, we will monitor the equality mix of new jobs created by the beneficiary companies and actively promote success stories from equality group SMEs who develop and introduce new products and services to the market.

3.9     Additionally, the project will be marketed to a diverse range of entrepreneurs and early-start cleantech SMEs through established networks, press and social media. It will specifically target and engage female cleantech entrepreneurs, where there is clear under-representation in those that go on to form start-ups. This will be done through the provision of support and advocacy from successful female role models in the sector.

3.10    In order to prevent discrimination of protected characteristics, the delivery partners will:

• ensure that selection and assessment of innovation SMEs, applicants and sub-contractors is non-discriminatory on the grounds of the applicants’ protected characteristics
• 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. 

3.11     As part of the support offered to SMEs in market readiness and accessing innovation procurement opportunities, we will promote the importance of adhering to equal opportunities legislation, reinforcing the message that this will not only result in social benefits but considerably improve their chances of securing commercial supply chain opportunities, for example highlighting the advantages of gender-balanced boards. We will also highlight the benefits of diversifying and attracting a more diverse market for their products or services, e.g. developing products and services to alleviate fuel poverty.

Key risks and issues

4.1     The GLA, as lead partner, is ultimately responsible for the ownership and management of risks within the project. However, the partnership as a whole has a shared approach to risk identification; and it is clear where ownership of risks and issues lie between partners. 

4.2    During the project development phase of this project, the team has identified key risks and issues relating to the project. These will be updated as the project moves into the delivery phase. 

4.3    A detailed risks and issues log will be held by the project team. During delivery, monthly meetings will be held to identify and understand the risks to project set-up and ongoing delivery. 

4.4    The team will quantify the risk probability, impact and mitigation strategy. If the risk is realised, it is moved to the issues log where its impact is managed. High-impact risks 

Links to Mayoral strategies and priorities

4.5    Delivery of the Better Futures project will contribute to improving the quality of life for Londoners. The project is linked to the delivery of the Mayor’s following strategies.

4.6    London Environment Strategy: 

• Objective 10.1: enabling the transition to a low-carbon circular economy 
• Policy 10.1.1: to build on London’s strengths, and grow the low-carbon and environmental goods and services sector 
• Proposal 10.1.1.c: the Mayor will explore approaches that support innovative businesses to create solutions to London’s environmental challenges 
• Proposal 10.1.1.d: the Mayor will work with the GLA Group and other public-sector organisations to maximise the use of sustainable procurement approaches to drive demand for low-carbon and environmental goods, services and solutions 
• Policy 10.1.2: to build on London’s strengths and enable London’s businesses, academics and citizens to actively compete in and contribute to the low-carbon circular economy 
• Proposal 10.1.2.a: to support start-ups and business growth across the economy, including in the low-carbon and environmental goods and services sector 
• Proposal 10.1.2.b: to support students and young entrepreneurs to think about new business opportunities within the low-carbon circular economy; and establish start-ups that exploit these opportunities.

4.7    Economic Development Strategy – Policy 5.5: Low-carbon and Environmental Goods and Services:

• set a clear ambition for London to transition to a low-carbon circular economy that will be catalysed by the Mayor’s environmental ambitions for London, as set out in the London Environment Strategy, and the ambitions of central government, including its Clean Growth strategy 
• support households and businesses across all sectors to actively contribute to, participate in and benefit from London’s transition to a low-carbon circular economy 
• help to accelerate innovation in the cleantech sector by assisting start-ups to test, prototype and commercialise their innovation in London, and gain greater access to both public and private-sector markets 
• identify and support opportunities to increase the participation of women in cleantech, and the growth of cleantech enterprises led by women and other under-represented groups.    

4.8    The project also helps to contribute to various mayoral manifesto commitments and recovery priorities including: 

• A Green New Deal – tackling the climate and ecological emergencies and improve air quality by doubling the size of London's green economy by 2030 to accelerate job creation for all 
• establishing a tech talent pipeline and developing a city-wide STEM strategy
• diversification of London’s economic base, including manufacturing
• committing London to an ambitious target of becoming a zero-carbon city by 2030
• working in partnership with industry to deliver skills, infrastructure and growth to achieve economic fairness and inclusion.

4.9       There are no conflicts of interest to note for any of those involved in the drafting or clearance of the decision.
 

5.1    Approval is being sought for expenditure of £1,021,614 to support the London Recovery Board’s Green New Deal Mission in tackling climate change and ecological emergencies. The estimated expenditure profile is summarised in the below table:

5.2    The proposed expenditure of £619,000 in 2021-22 will be funded via a combination of Growth Hub grant from BEIS (£50,000) and GLA funding allocated to the Environment Unit, specifically from the Green New Deal budget (£479,000) and underspends that have accrued during 2021-22 against the Energy Engineering (£55,000) and Solar and Community Grant (£35,000) budget lines.  The underspends identified will be used to further support SMEs working on technologies that will support community energy projects such as solar energy, battery technologies, smart energy solutions and energy monitoring solutions. 

5.3    It is proposed that the expenditure of £402,614 scheduled for 2022-23 is funded via a combination of the 2022-23 Environment Programme budget (£41,614), Environment Programme Green New Deal (£261,000) and Solar and Community Grant budget (£100,000) which will be subject to the Authority’s 2022-23 budget setting process, currently underway. The funding from the Solar and Community grant budget line is able to be reallocated because we are completing early the feasibility study that was the main intended output from this part of the budget line, and no further development funding is required (the wider programme will now be delivered by project partners). The funding will therefore be repurposed to support SMEs working on technologies relevant to community energy projects such as solar energy, battery technologies, smart energy solutions and energy monitoring solutions.

5.4    The proposed reallocation and prioritisation of the Environment budget lines noted above will fund the GND flagship Better Futures business support programme. The project will continue to help deliver against Mayoral targets by supporting the growth of cleantech SMEs who produce the products and services needed to achieve net zero. The project will as well as diversifying the business sector will look to create new green jobs and skills and help other SME to transform their business models to move towards net zero.

6.1    The foregoing sections of this report indicate that the decisions requested of the Mayor fall within the statutory powers of the Authority to promote and/or to do anything which is facilitative of or conducive or incidental to the improvement of the environment within 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:

• (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
• (c)    consult with appropriate bodies.

6.2    In taking the decisions requested of him, 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    Paragraphs 1.18 and 1.20 above discuss the variation of various funding agreements. Officers must seek specific approval of the relevant variations via a director’s decision form pursuant to the delegation set out in the second decision above. Furthermore, to the extent that any of the variations relates to a contract rather than a funding agreement, officers must also seek approval of the said variation via a director’s decision and, where relevant, seek approval of an attendant exemption from the requirements of the Contracts and Funding Code.    

6.4    Any function exercisable by the Mayor on behalf of the Authority may also be exercised by a member of the Authority’s staff albeit subject to any conditions, which the Mayor sees fit to impose.  To this end, the Mayor may make the requested delegation to the Executive Director, Good Growth, if he so chooses.