Agenda item

A paper was delivered to inform LEP Board Members of the LGF current position noting that this was the final year of the current six-year LGF programme.

The Board noted that the LGF grant allocation for the 2020/21 financial year was £43.2m.  Government required that the resource is used in full in year.  To meet this expenditure target, and avoid resource being returned to Government, an over-programming position had been adopted.  This position afforded a degree of protection against programme slippage. 

Over three successive Growth Deals the MCA/LEP had been awarded £360m for LGF schemes.  However, within the £360m envelope, there was a ring-fenced amount of £40.1m, which was included for the A630 Parkway Widening Scheme.  This scheme was ‘retained’ by the Department for Transport, meaning that the scheme was appraised outside of the MCA’s usual Assurance Framework and could not proceed without DfT approval.  The scheme had now been approved by the DfT, with a formal funding offer made to the MCA for acceptance at the MCA meeting on 16^th November 2020. 

The current programme position was noted as follows:

·           To date, approximately £330.7m of schemes have been committed to with LEP approval. 

·           The schemes were in various stages of delivery, with some completed, some in delivery, and some finalising contracting.  It was expected that, subject to governance, the Parkway Widening Scheme would commence imminently, bringing total commitments to £370.8m.

·           Commitments at this level place the programme over the funding envelope by £10.8m.  However, this was being managed through the repayments of loans granted to business and partners.  There was no requirement to spend any recycled funding within the LGF funded window. 

·           The remaining funding headroom available for LGF projects across all thematic areas was now £6.6m. 

·           A further £1.2m of proposed expenditure, subject to appraisal, would be put forward for approval at a future MCA meeting.  If approved, this would give a total spend or committed position of £372m thus reducing the available headroom to £5.4m. 

·           At the beginning of the year forecast LGF programme expenditure for 2020/21 stood at £52.4m, against the MHCLG spend target of £43.2m. 

·           Adjusting the projects recently approved, total forecast expenditure to the end of the programme had increased to £54m. 

·           Due to challenges of delivery during the pandemic, partners had submitted change control requests totalling £10.3m, the effect of which is to slip expenditure from the current financial year into 2021/22. 

·           The in-year expenditure was now forecast at £43.7m.  This level of expenditure marginally exceeds the expenditure target for the year and secures the in-year funding. 

Programme monitoring remains vigilant to the risk that this level of expenditure may fall below target, and approaches to contracting that could mitigate the risk of increased slippage and loss of the in-year grant were being actively considered. 

The Chair noted that a further update paper on the LGF programme would be presented to the January Board meeting.  He asked that the Co-Chairs of the Thematic Boards were appraised of the specific investments (informed by the MCA Team), so that they are able to provide advice and recommendations as to which programmes would be completed in the 2020/21 financial year and which new programmes would need to be brought forward and replaced by those schemes which were subject to funding slippage. 

Mayor Jones suggested that work be undertaken to identify the schemes which had already been approved and where costs had increased to ascertain if funds had been spent. 

S Sykes acknowledged the suggestion and confirmed that this exercise would be undertaken. 

RESOLVED – That LEP Board Members noted the current programme position.