Decision details

12.1

The Executive Director, Place, submitted a report setting out proposals for the Council to act in the capacity of Accountable Body on behalf of the Sheffield City Region Local Enterprise Partnership (LEP) in relation to a £25m of Regional Growth Funding (RGF) programme secured under round 3.  The City Council will be responsible for contracting with the Department for Business, Innovation and Skills (BIS) for the delivery of the programme, for receiving and managing the funds, for undertaking the technical assessment of the business proposals and for contracting with the recipient businesses.  In respect of the contract with BIS, we will carry responsibility for the delivery of the programme outcomes. 

12.2

The LEP, in whose name the bid was submitted, will retain a strategic/policy responsibility for the programme, including setting the overall approach to investment, leading the call for new proposals and reviewing overall progress of the programme and reporting this to the LEP Board.

12.3

RESOLVED: That Cabinet agrees to:-

(a)

the principle of the Council taking on the role of Accountable Body and establishing management arrangements for the assessment of investment applications, contracting for the delivery of job outcomes with business and monitoring the performance of these projects until  2016/17;

(b)

delegate authority to the Executive Director, Place, in consultation with the Cabinet Member for Business, Skills and Development,  the Director of Finance, and the Director of Legal Services, to agree the terms of and conclude the funding agreement with the Department for Business Innovation and Skills (BIS);

(c)

delegate authority to the Director of Creative Sheffield, in consultation with the Cabinet Member for Business, Skills and Development and the Director of Legal Services and Director of Finance to agree any variations to the agreement with BIS;

(d)

delegate authority to the Director of Creative Sheffield, in consultation with the Director of Finance and Director of Legal Services, to approve the scheme delivery plan for this programme which will include detailed methodology for the assessment, contracting and monitoring of business investment proposals;

(e)

delegate authority to the Director of Creative Sheffield to approve investment decisions and contract with successful companies, in consultation with the Chief Executive of the Sheffield City Region Local Enterprise Partnership;

(f)

delegate authority to the Director of Creative Sheffield to contract with business applicants in a form agreed with Legal Services; and

(g)

delegate to the Director of  Creative Sheffield, in consultation with the Director of Finance and the Chief Executive of the Sheffield City Region Local Enterprise Partnership, authority to approve appropriate expenditure from the revenue finance approved by BIS for the purpose of managing these funds.

12.3

Reasons for Decision

12.3.1

This is now the third round of RGF and to date Sheffield specifically, and the City Region more generally, has had only very limited success in securing funds.  Round 1 was largely limited to direct, large scale, bids and very few went forward from Sheffield City Region and only the Finningley Link Road and Advanced Manufacturing Research Centre were successful. In round 2, BIS encouraged programme bids and SCC worked with City Region partners to put together a proposal designed to distribute funds (with support) to Small and Medium Enterprises.  The bid was not successful, although very similar programmes were supported through the Banks (eg Natwest and HSBC) which was clearly the Government’s preferred route. Against this background, when round 3 was announced, we felt that it was imperative that Authorities worked with the LEP to put together a credible programme bid which would be able to support companies in the City Region with investment projects smaller than £1m.  In order to do so, it was necessary to underpin the bid with a local authority accountable body and it was felt that Sheffield City Council was best placed to provide this function.

12.3.2

RGF is the most significant investment funding for business to emerge from Government since the demise of the RDAs.  It is important that we are able to play a significant role in ensuring these funds are available to the City Region and Sheffield businesses in particular.  We expect to support approximately 50/60 businesses through these funds up to half of which could be from Sheffield.  The £25m will lever in a minimum of £100m of additional private sector investment and generate an absolute total of  1900 new or safeguarded jobs by the end of 2015/16.

12.4

Alternatives Considered and Rejected

12.4.1

Not acting as Accountable Body for RGF

SCC was the only LA in South Yorkshire prepared to take on this role and probably the only one with capacity.   A Local Authority Accountable Body was a pre-requisite for a LEP led RGF bid, so failure to identify a suitably qualified authority acting in this role would have jeopardised our ability to draw down £25m for the benefit of small and medium sized businesses in the City Region.

12.4.2

Allowing the LEP business entity (LEPCO) to take over the role. 

This would not have been acceptable to BIS and the LEPCO would not have had the systems in place to carry out the essential functions required to administer the fund. In reality this was not a realistic option.

12.4.3

Procuring a Fund Manager/Grant Administrator

This would potentially have been a feasible option.  However, this would have only covered part of the issue – ie the actual, administration of the grants/loans.  The Council would still have had to contract with BIS and would have been responsible for the on-going monitoring of investments.  So, whilst aspects of this option would have had some merit, we believe that it would not have represented a comprehensive and cost effective option. 

12.5

Any Interest Declared or Dispensation Granted

None

12.6

Reason for Exemption if Public/Press Excluded During Consideration

None

12.7

Respective Director Responsible for Implementation

Simon Green, Executive Director, Place.

12.8

Relevant Scrutiny and Policy Development Committee If Decision Called In

Environment and Economic Well-being.

Councillor ……………………………………..

Chair,

Cabinet,

13^th February, 2013.