Tuesday, October 18, 2016

News: Sheffield city region at risk of losing £27m


The Sheffield City Region Combined Authority (CA) is being warned that over £27m of funding for projects that benefit the local area and economy could be going back to the Government if it is not spent in six months.

The CA brought together two statutory bodies – the South Yorkshire Integrated Transport Authority (ITA) and the Economic Prosperity Board (EPB) in order to align political decision making around strategic economic development and transport. It operates executive boards focusing on business growth, skills, housing, transport and infrastructure.

As part of the ongoing devolution deals with the Government, the Sheffield City Region (SCR) Local Enterprise Partnership (LEP) has helped to secure over £250m from the Government's Local Growth Fund (LGF).

The LEP, the private sector partnership that focuses on economic development, is currently bidding for £156m from the latest round of the fund but is yet to fully commit to spending previous awards. It means that £94m needs to be spent in this financial year.

Current projects in the capital programme include infrastructure projects such as the Superfast South Yorkshire broadband scheme, the BRT North transport scheme and the potential university campus in Rotherham town centre. They are forecast to spend £66.4m this year but concerns have been raised over problems with projects that could cause slippages in the ability to defray (spend) the money allocated to them.


A paper to the CA explains that concerns were raised earlier in the financial year over the authority's ability to spend all money that was not spent in the previous year, by the end of July 2016 - around £18.3m. This was only achieved due to the acceleration of some activity and spend by partners, and also the award of £5m to the JESSICA investment fund - the revolving fund used for regeneration projects such as the creation of new commercial floorspace, brownfield redevelopment or investment in infrastructure.

Now there has been further slippage against programme spend and a forecast fall in expenditure which "exacerbates the challenge in defraying all 2016/17 LGF monies by the end of March."

The paper states: "This is particularly difficult as the Authority started the financial year having underspent in the prior year by £18.3m, and had a £75m target to spend by the of March 2017. This means that for the year, the Authority needs to spend £94m in twelve months. Forecasts suggest that we will come in under this target significantly."

After initial concerns were raised, an early call was made for schemes to come forward that were "shovel ready" and able to progress significant amounts of spend in this financial year.

The LEP wanted deliverable projects which contribute to the delivery of its Strategic Economic Plan and prioritisation was to take in to consideration the priorities such as the Advanced Manufacturing Innovation District (AMID), the Doncaster Sheffield Airport and housing schemes; as well as projects in support of town and city centres and maximising the benefits of HS2 to the city region.

35 individual expressions of interest came in from from partners and are being reviewed. Rotherham Council identified the growth fund as a potential pot of funding to assist with the acquisition and demolition of Forge island - the key site in the regeneration of Rotherham town centre.

Eugene Walker, who acts as the city region's finance manager, identifies that £27.5m is at risk of being clawed back from the Government if it is not spent by the end of March 2017 but makes it clear that adding £27.5m of new projects would put the overall programme over budget over the life of the programme.

However, Walker adds in the report that by not accepting new projects, "the £27.5m will be lost, and those schemes that have slipped will not be able to proceed at all; and the reputational damage on the Authority would be acute, and it is likely that it would affect Government’s view of us as a reputable delivery partner."

Images: Bond Bryan


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