Agenda item
UK Share Prosperity Funding (20:05 - 20:50)
Minutes:
5.1 This item covered:
1. Background to the UK Shared Prosperity Fund
2. LB Hackney allocations for each theme
3. What LBH will deliver:
a. Supporting Local Businesses
b. Communities and Place
4. Approach to the Business Support Programme
5. London-wide UK SPF funding plans.
5.2 The Chair asked Michael Toyer, Economic Development Manager from LBH to commence his presentation. The Economic Development Manager recapped on the information in the presentation and advised that his update would focus on the information about supporting local businesses and the approach to the business support programme.
5.3 The Economic Development Manager from LBH commenced his presentation and made the following main points.
5.3.1 The officer recapped on the background to the funding. Highlighting that £185 million was given to the GLA from the Government to cover the period 2022-2025. The fund became available from 2023 so there will be approximately 18-20 months of delivery.
5.3.2 This funding is significantly lower than it was previously under the European funding arrangements. Under the previous funding on average London received £90 million a year.
5.3.3 In consultation with Central London Forward, London Councils and other sub regional partnerships the GLA decided to allocate £78 million to London Boroughs. An sum of £30 million was held back for the GLA to deliver and commission programs themselves.
5.3.4 In Hackney across the 3 themes he allocation is as follows:
supporting local businesses (£441k);
communities & place (£1.36m);
People and skills(£870k) received a direct allocation of 1.8 million.
The spend for each theme in brackets.
5.3.5 Subject to the agreement, it is anticipated that some of the people and skills funding will go to sub regional partnerships and some to the council.
5.3.6 The council is hoping to address some of the local issues by applying for the London wide £30 million funding pot.
5.3.7 The officer pointed out that although applications can be from a single borough or large provider; The guidance encouraged consortiums, groups of boroughs or larger providers to deliver on a pan London basis or sub regional basis.
5.3.8 LB Hackney engaged in 3 groups discussions and 2 of them were successful. The unsuccessful bid was in partnership with Islington Council, and this was focused on supporting co-operatives and social businesses.
5.3.9 The bid was written by an organisation in Islington that supports co-operatives. The officer’s observation is that they might have been less experienced at writing bids than the two other orgqanisations that were successful.
5.3.10 In relation to the two successful bids, one was an existing partnership group of boroughs supported by a consultancy team. The other was related to legacy activity at the Olympic Park by an organisation called SHIFT that focuses on innovation in and around the park. The idea is that the Park and adjacent communities will trial innovative approaches to address some of the challenges in society - transition to net zero, public health and getting around a city.
5.3.11 The officer pointed out the council supported these bids but they do not control them. The Council is part of the assessment panels and will help with outreach.
5.3.12 There are 29 other programs and from this total there are 20 that Hackney businesses could bid for.
5.3.13 Slide 22 outlined the series of outputs and outcomes in the manual that the GLA investment was aligned to. The council’s pitch for funding related to the 5 themes outlined on the slide.
The council will have the standard business support and will target hospitality and creative arts through outreach.
The third workstream is the specific start up advice and training for socially focused businesses. These businesses could be a start-up with a social focus like a social business that might trade. The council is willing to be flexible with this definition if the organisation’s business is located within the borough i.e. not just their headquarters in the borough.
The workstream on pump priming and capacity will be from some of the local provider consortiums.
The fourth workstream is about transitioning to net zero. This program will be giving general advice.
The last workstream related to the communities and place projects is helping small businesses to reduce their energy bills in response to the cost crisis. This is a very specific audit of their operations and premises by a technician who talks them through changes and then makes recommendations. E.g. replacing slightly older machines, light bulbs etc.
5.3.14 The officer explained that hope is businesses will come together, receive support, engage and form networks (like they did during the grant funding during covid).
5.3.15 Slide 23 outlines the monitoring outputs from the council to the GLA and from the GLA to the council.
5.3.16 The officer highlighted on slide 24 the allocation of £910k for capital in relation to the communities and place element. Pointing out that initially the allocation looks large but in comparison to the Levelling Up Fund discussed earlier £910k for capital is quite small.
5.3.17 Slide 25 outlines some specific projects under communities and place element. The officer pointed out that the project for Dalston streets and spaces program (Gillet and Dalston Square) would cover basic public realm improvements. Then some of the revenue element will be used to activate the space.
The last 2 projects in the table are linked to revenue activity cultivating cultural activity involving engagement and outreach.
5.3.18 Slide 26 outlined the communities and place outputs and outcomes. The officer explained that these are not about public realm being created or improved but about outdoor access being better quality. The officer pointed out these metrics have been inherited.
5.3.19 The council was allocated £441 from the UK SPF and added some additional funding to the council’s local business support programs.
5.3.20 The officer pointed out that during the covid recovery period (over 18 months). In c of £2.5 million funding was received. This enabled the council to allocate a significant amount in grants to businesses to pump prime wider economic activity.
5.3.21 The officer explained that the pots of funding now are too small to run an equitable program to the one during covid. Highlighting that the pot for environmental improvements was likely to only cover light bulbs not machinery.
5.3.22 There is a partnership with a £90k pot with Tower Hamlets to cover Hackney Wick Fish Island creative enterprise zone.
5.3.23 They are running three cycles of business support with local partners (and lead partner Alia) and this will build on the learning from each cycle. Particularly on outreach.
5.3.24 The officer pointed out that having the consortium approach was different and will bring some challenges. The issues, constraints, opportunities, and risks are outlined on slides 28 and 29.
5.3.25 The officer informed the commission that the partner organization Alia had engaged a separate learning partner, and the council is waiting to see the evaluation framework for the program delivery to understand the learning and development for delivery organisations.
5.4 Questions, Answers and Discussion
(i) Members queried if there was some revenue implication for the investment. Members asked how much of this is revenue allocation and what is the expectation of how this will be maintained after the funding pot period has ceased.
In response to the question the Economic Development Manager from LBH clarified that in terms of the timing the program ends on the 31st March. The expectation is that a new round of SPF funding will commence from 1st April 2025 (This was a post Brexit promise to replace the European funding). However, with the pending General election there is uncertainty about the plans by the national government. Currently they must assume that there will be some form of program in the future although there is no certainty about the form of this will take.
In response to revenue verses capital costs. For the business support element, it is all revenue even for the purchase of small items. This is because for accountancy purposes the capital threshold is approximately £3000 and is likely to be classified as disposable revenue.
The officer highlighted that for the communities and place element the allocation was approximately £900k for capital and approximately £400k for revenue.
(ii) Members raised concern about capital investment that have revenue implications. Citing as an example having an capital investment planting 30 trees. However this would have revenue implications because they would require ongoing maintenance to survive. Members asked if the council had factored in revenue implications for the capital investment? Members highlighted that they are concerned with value for money and whether the council is clear about its revenue implications for some of the investments.
In response to the question the Economic Development Manager from LBH confirmed yes, they are factored in revenue implications. The officer explained that the Fairchilds Garden Project is delivering most of them and that this is small contribution that is part of a larger project. The officer pointed out that the revenue implications are part of the larger project.
The officer pointed out for the Gillett Square investment they already have revenue allocated to the maintenance of the square. Highlighting that this site already has street furniture so replacing it with new furniture will not add or create revenue costs.
(iii) Members reference the workstream outputs for pump priming and capacity building for local organisations (independent businesses). Members pointed out that they are keen to see the development and growth of co-operatives and social enterprise businesses rooted in communities. Members referred to the stakeholder engagement carried out and asked about the council’s engagement with Hackney Co-operative Development (HCD) and how the partnership is being developed with the objective of growing the sector.
In response to the question the Economic Development Manager from LBH confirmed they always planned to include local delivery organisations. This would be a grant funding agreement rather than a contract. So, it was not a procurement process but an open process.
The officer explained that prior to the grant allocation they held meetings with Hackney Co-operative Development, Social Founders Network (who worked mainly with charities and some social enterprises) and East End Trade Guild (who work with independent traders. These organisations do a lot of social support work with communities - they are not shareholder driven businesses. The council tried to get HCVS involved in delivery (the council is aware that their focus is on the voluntary and community sector) but they did not feel it was the right time but have assisted with outreach.
The council facilitated a session with all these organisations and introduced them to Alia to talk about the opportunity.
The officer also pointed out that this was not the only funding opportunity to support them. Other funding opportunities are likely to require engaging with a wider provider.
The council’s open event had 28 attendees. Following this a consortium with Alia was formed. The organisations referred to earlier in the presentation will be the delivery organisations. The officer pointed out that in some instances their capacity is quite low and that there may be capacity challenges but they are aware of this.
The officer explained that the East end Trade Guild is largely a campaigning organization and does a small proportion of business support and mentoring. Whereas Social Founders is more about mentors and matching. So in the consortium is an experienced social founder and a fairly new social founder. The council is hoping to see more networking.
HCD has focused a lot on affordable workspace provision (specifically, getting Bradbury Works up and running). The officer pointed out that HCD have not delivered revenue business support for a while. So, the council is encouraging them to learn more about delivery again to return to this.
All these organisations are part of the consortium. The officer acknowledged that there is some risk because they all have a different angle. But this is why they have implemented the wrap around learning framework. The council is of the view that this will give a better reach into the business community for sign ups.
(iv) Members commented that the funding provided post Brexit is significantly lower than the European funding. Members reflected on a previous presentation about outreach and engagement. Members asked if the change was because it is more prescriptive in terms of where the money can be allocated or was the change due to the funding pot being smaller to invest in outreach to target effectively.
In response to the question the Economic Development Manager from LBH confirmed it related to all the points made in the question. The officer agreed that it was more prescriptive and there was less funding. However, this funding was for business support. There were grants running alongside for engagement.
In terms of engagement, they have good data from the recent business survey. This survey informed them about the challenges businesses are facing and what they want. This main request is grant funding which the council does not have but they can signpost.
The officer highlighted that traditionally Economic Development does not engage with communities and community groups about business support like a regeneration program. This is because they have different target audiences.
The council has an associated piece of work looking at the right ecosystem to support the formation of more social businesses. Their findings show that co-operative businesses come from within communities and take a long time to set up. It is quite a bureaucratic process. This also requires trust and involves quite a few people. There are three rounds of learning so this may be applied in round three.
(v) Members referred to the information provided earlier about co-operatives and highlighted that the officer referred to a small grant to help business decarbonize. But the grant would be a one off. Members also referenced the point about wider help to support businesses to understand how to decarbonize and improve. Members asked for more information about this.
In response the Economic Development Manager from LBH advised that under the last round of grant funding, Alia set up an agreed business program. This was a multi-day course totaling 18 hours. It was designed to help businesses to think through their business model, trading and emissions (in the supply chain and direct). They found there was a very low uptake of this course. Therefore, if the council did something similar it would be light touch engagement to help businesses understand. This support would be different to a technical audit.
The council hopes this will give them a gateway into businesses to get them to engage with the wider net zero agenda. The council is hoping to get some local interest so they can sign post local businesses to other London programs or a technical audit. The officer highlighted that a fast-food takeaway shop and a clothing retailer would think about the challenge differently and both would need or take different approaches.
(vi) Members referred to the learning from previous business support programs and asked what the learning has been.
(vii) Members also asked the Cabinet Members in attendance to highlight what manifesto commitments were met by the activities funded through the Shared Prosperity Fund. The Chair advised that the Commission would be sending in a written request for an answer to this question for the Levelling Up Fund.
In response to the question the Economic Development Manager from LBH replied that the learning from the previous programs is not to be too prescriptive in setting out the in-depth design and delivery of a business support program or a grant program. This is because you need flexibility. The officer pointed out that even over a short period of 18 months the needs of an individual business can change. This is why they set this up as a grant funding agreement and not a contract, to emphasize that the outputs and approach are important and to let the delivery organisations come to them with their ideas. This happened in the last program but it was not planned. This time it is planned and built in.
Another learning from the grant funding program was that through grant funding the council had encouraged use of local suppliers and producers to create a circular investment. The data showed that for every £1 invested the return was £3. Creating what is termed as the local multiplier effect.
Another learning was being very clear about the target and outreach.
The officer pointed out from the first round of funding they needed to review the outputs because this started late (all the boroughs did) whilst the funding agreements were put in place.
The council is encouraging the providers to think more about their outreach. This will include some street walking along the high street to go into businesses who are not digitally literate. The officer informed the Commission that previously they relied on digital communications but they are including on the ground outreach too.
In response the Deputy Mayor and Cabinet Member for delivery, inclusive economy & regeneration referred to page 27 (Chapter 7) of the 2022 manifesto booklet. He advised that this outlined many of the areas mentioned by the Economic Development Manager earlier.
The Cabinet Member explained that the Executive recently concluded that the manifesto was mainly based on reopening, recover and growth. The SPF and its precursor has helped and continues to do so. But now economically it is not so much about reopening as it is about thriving and growing. Equally it is also the thread related to the green economy and creating a green economy. This is reflected in the SPF investment. What the Executive is try to do is to make sure they are capitalizing on the SFP because enables the council to be work with local businesses to bring growth and opportunities to residents and local businesses.
The Cabinet Member for health, adult social care, voluntary sector and culture replied in relation to public health they have had SP funding to help them meet the Health and Wellbeing Strategy. Particularly the strand around financial inclusion and the pledges in the Ageing Well Strategy. Aimed at making sure spaces are inclusive and accessible especially places like Fairchild Gardens mentioned earlier.
(viii) Members referred to the responses about the learning and referred to the council visiting some shops following concerns about digital exclusion / inclusion. Members asked if there is more staffing to resource this work and if this includes business on the fridges of the borough like Blackstock Road. Members highlighted that this location would benefit from more engagement to make a difference.
(ix) Members also asked for an update on the future skills aspect that was being developed.
In response the Economic Development Manager from LBH advised this is not being resourced by the council but by the providers. The program manager was keen to do this and had worked with Library Service to do drop in events at Hackney Central Library. The manager is trialing the walk around approach in the town center before committing more resources.
The officer pointed out that additional funding is running alongside this (funding by the GLA for London and partners). The GLA has established a single front door service to makes it easier for businesses to get the right type of business support. This is via standard communication inviting businesses to contact them. On contacting the single front door the business will be triaged and refer to the relevant program.
A report from the GLA team has advised Hackney about a new approach that will involve visits and outreach to Hackney. The officer informed the Commission that he was unable to provide any further details about this at the time. However, The officer offered to return in 6-8 months to give an update on the learning reported because it was a new approach.
The Economic Development Manager informed the Commission that a communication will be sent to all Councillors providing information about the program so they can use this in their Ward to sign post or make contact. The officer highlighted that the Economic Development Team would be happy to attend events to give Cllrs a briefing.
The Chair thanked the Officers and Cabinet Members for attendance and the updates on the wider context, impact and how the funding will be used. Also for the update on how the Executive is meeting their targets, ambitions and fulfilling their manifesto commitments.
Supporting documents:
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