SHEFFIELD CITY REGION INVESTMENT FUND (SCRIF)
25 November 2013
AGENDA ITEM 2.3
SCRIF links to the Strategic Economic Plan
Summary
This paper describes how the SCRIF programme links to the Strategic Economic Plan (SEP) and the actions
required to establish the programme management functions to support the LTB decision-making process.
Issue
1.
To describe the relationship between the Strategic Economic Plan (SEP) and the Sheffield City Region
Investment Fund (SCRIF) programme, highlighting the areas where further work is needed. This paper
seeks agreement on the approach to communication for the wider infrastructure role of the Local
Transport Body (LTB). The paper also describes the proposed approach for defining future schemes that
can contribute to delivering the SEP, future funding options for infrastructure investment and the need to
agree programme management functions.
Recommendations
2.
It is recommended that the LTB:
a) Note the relationship between the SEP and SCRIF
b) Agree the need to communicate the wider infrastructure remit of the LTB
c) Note the funding opportunities that are being considered to deliver SCRIF and infrastructure
elements of the wider SEP.
d) Note the work underway to define the programme management required to deliver SCRIF and
the SEP
Background to the infrastructure element of the SEP
3.
Local Enterprise Partnerships (LEPs) have been asked by Government to develop strategic, multi-year
plans that set out how they will deliver economic growth within their area. This will provide a single
strategy for growth in the Sheffield City Region and clearly articulate our vision for growth and change
and how we will realise this in the area.
4.
This SCR SEP will form the basis of negotiations with Government on the amount of money that will be
received from the Local Growth Fund (LGF). The Government will be having similar negotiations with the
other LEPs in the country, creating a competitive process. This will mean that the quality of our Plan is of
fundamental importance in determining the amount of money available and the wider freedoms and
flexibilities needed to deliver growth in SCR. There are strong links between the Strategic Economic Plan,
Local Growth Fund and SCR Investment Fund that we need to ensure is clearly communicated in the SEP.
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5.
Government has set out that the agreement of Strategic Plans will be an iterative process. Our initial draft
Plan will need to be presented to Government before the end of the year, but prior to this, the document
will have been developed in consultation with partners.
SCRIF and the SCR Growth Plan
6.
The SCR SEP will contain significant ‘bottom up’ element of inputs and priorities articulated by the SCR
Local Authorities. The programme of schemes already within SCRIF will form part of the SCR SEP, setting
out a significant element of our capital investment priorities.
7.
The programmes presented in the paper for item 2.1 provide a strong starting point for developing a
economic plan that seeks to grow a bigger and stronger private sector. We can clearly demonstrate the
focus that has been placed on selecting schemes that are forecast to create GVA and job growth as our
primary objective. It is suggested that this well-defined objective, underpinned by the robust Assurance
Framework, represents an attractive offer to Government and negotiation platform for further funding
and flexibilities in the future.
8.
Going forward, it is expected that the SCR Growth Plan will influence future iterations of the SCRIF
programme and future prioritisation exercises. The SCR SEP may, for example, identify priority areas or
themes for investment to which the current SCRIF proposition does not respond. Perhaps the clearest
emerging example is broadband speed and coverage. The SCR SEP would be used help to define these
future infrastructure investments. The SEP will also help to define how we approach SCR wide
interventions, where investment is needed across Local Authority boundaries.
9.
The LTB is asked to note the strong links that have been made between the SCRIF programme and the
SEP.
Communicating the remit of the Local Transport Body
10. The specific requirement to establish a decision making body named the ‘Local Transport Body’ was made
by the Department for Transport, in response to the devolution of Major Scheme Transport Funding. SCR
Leaders and the LTB took an early decision to consider a wider range of infrastructure investment, beyond
transport, with supporting governance structures developed to support this wider approach. SCR are also
progressing with the creation of a Combined Authority which seeks to make decisions on strategic
economic regeneration and investment in one place.
11. The creation of the Combined Authority and the wider focus on infrastructure investment has meant the
communication of the role and function of the LTB could be improved. Specifically the naming of the body
immediately sparks confusion as it does not only consider strategic transport investment.
12. The LTB are asked to agree that the name is changed to the ‘Infrastructure Investment Body’ to provide
a more transparent description for the role and function of the body. If agreed, the Assurance
Framework will be revised to reflect this change. It is suggested that this change will better align the body
with the functions of the Combined Authority and governance for the SEP.
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Funding the SCRIF programme and SEP
13. A number of programmes have been developed for the consideration of the LTB, ranging in cost from
£120m to £280m. Funding sources that are considered to be available to contribute towards SCRIF
include:
Source
Devolved Major
Scheme Transport
Funding
Local Growth Fund
Comments
£113m has already been committed to the SCR over a 10 year period from
2015/16. This will be wholly available to SCRIF.
Other National
Funds
Potential sources of other national funds to SCRIF are more likely to be at a
project level and may have already been factored in by project sponsors to
reduce the direct call on SCRIF. However, agencies such as the HCA and
Highways Agency may still contribute towards SCRIF projects where such
activity aligns with their investment priorities and these are being explored. In
particular where projects are associated with initiatives such as the Enterprise
Zones options for funding with other funds need to be fully explored.
European
Programme
The current ERDF Programme comes to a close in 2013 limiting the opportunity
to access funds to complement SCRIF activity. However if funds are returned to
the Programme, there might be an opportunity to support SCRIF activity subject
to the eligibility, match funding and the need for projects to be complete by
mid-2015.
The Government has announced a 5 year LGF to support economic growth from
2015/16. The first year national allocation is £2.1bn. A per capita SCR ‘share’ of
this would be c£70m per year, although the proportion of this available for
infrastructure investment is yet to be agreed.
The 2014-20 Programme is currently under development but indications are
that there will be very limited funding available to capital projects within SCRIF
but the option to utilise this funding will not wholly be ruled out within the
drafting of the EU Strategy.
Private Sector
With the exception of energy generating projects the majority of SCRIF projects
are providing ‘public’ infrastructure rather than income generating assets. Such
investment will not directly attract private sector finance unless a PFI or similar
route is adopted. However, this investment should leverage significant private
sector associated investment, as development proceeds on the back of public
sector investment in infrastructure. Where applicable joint ventures or similar
models would be pursued.
JESSICA
As with the private sector, the £23m JESSICA fund will only look to fund
development that has an ability to generate a return. As such, any contribution
from JESSICA will likely be in the form of leverage rather than a direct
contribution to the current SCRIF programme.
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Local Contributions
Local contributions to SCRIF activity is may occur at two levels (although no
decisions have currently been reached::
Project Level – The promoter of a SCRIF project has the ability to contribute
towards the project cost through whatever means it considers appropriate, eg
CIL, NHB, TIF, covenant strength or capital programme to enable a project to
proceed. This contribution at project level reduces the call on SCRIF resource.
Programme Level: Local Authorities have the option to raise finance to
supplement the programme. In addition pooled business rates such as those
from the Enterprise Zone could also contribute to SCRIF activity.
14. The reference to Local Contributions in the table above is considered as a potential part of the overall
budget for the SCRIF Programme for the following reasons:

Local contributions will enable the SCRIF budget to increase the number of projects brought
forward and/or enable an earlier start to projects by making funds available ahead of any
Government allocation.

Within the Guidance of for the Growth Deal, Government will welcome Local Contributions
and will consider them as part of the process when determining the competitive allocation
of the Local Growth Fund.

Greater Manchester (GM) has recently secured an ‘Earn Back’ deal with Government
whereby the Government will allocate additional and new funding to GM’s equivalent to
SCRIF in return for uplift in GVA. This deal is based upon GM’s local contribution to their
Fund. Should Government consider Earn Back for other areas it will likely also require local
contributions.
Programme management for SCRIF and the SEP
15. The LTB will need to monitor the progress of schemes included in the SCRIF programme as they progress
through the stages of the Assurance Framework. To enable the LTB to make informed decisions, a
programme management function will be established that makes use of existing best practice for
monitoring a significant programme of investment. This will include the creation of a monitoring
framework, regular reporting on programme updates, decision making on schemes to progress through
the stages of the Assurance Framework and issue resolution to manage the risk of delivering the overall
programme, where individual schemes stall or fail.
16. To enable the agreed programme to be delivered, promoters will require advice on when funding will be
available. The following sets out the principles that should enable the programme to be managed:

The expectation that schemes providing the highest forecast GVA per £ are progressed by
promoters first
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



Where this direction is not followed there should be a clear explanation provided. It is expected
that the main consideration will be deliverability
In this case the Promoter will be asked to explain when the highest performing schemes will be
progressed and any corrective action required
Scheme Promoters will be encouraged to progress all schemes in the agreed programme, subject to
available resources. This will enable the programme to bring forward schemes if others stall or fail
As each scheme progresses through a stage of the Assurance Framework, the available funding
across the programme will be reviewed. Where costs are reduced this will be reflected in
programme reporting and schemes ready to progress will be identified to take up the available
funding
17. The LTB are asked to note that a future paper will propose how the programme management functions
will be implemented and the wider role for programme management for the SEP.
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