NORTH EAST
LOCAL ENTERPRISE
PARTNERSHIP (North
East LEP)
ASSURANCE
FRAMEWORK
FOR THE LOCAL
GROWTH
FUND (LGF)
INCLUDING A
PROGRAMME DELIVERY
PLAN AND INVESTMENT
APPRAISAL
METHODOLOGY
North East LEP Assurance Framework – Local Growth Fund
Page 1 of 170
CONTENTS
Page
No.
Section
Title
1
Introduction
3
2
Aims and Objectives of the Programme
5
3
Governance, Management & Delivery Arrangements
7
4
Project Appraisal Methodology
13
5
Financial Tables
22
6
Systems and Processes
23
7
Key Performance Indicators
24
8
Financial Control and Budgeting
26
9
Risk Management
27
10
State Aid Consideration
28
11
Monitoring and Evaluation
30
12
Publicity and Communication
34
Appendix 1
North East LEP Constitution
36
Appendix 2
North East LEP Board Member Biographies
57
Appendix 3
Appendix 4
North East LEP Technical Steering Group Member
Biographies
North East LEP Technical Steering Group Revised
Terms of Reference
60
61
Appendix 5
North East LEP Conflict of Interest Protocol
64
Appendix 6
Programme Delivery Team Biographies
67
Appendix 7
Investment Fund Roles and Responsibilities
69
Appendix 8
Grant Drawdown and Payments Process
76
Appendix 9
Programme Risk Register
78
Appendix 10
Project Beneficiaries – Risk and Issues Guidance
79
Appendix 11
NELEP LGF Programme Principles Paper
84
Appendix 12
Transport Assurance Framework
93
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Section 1
Introduction
1.1
Programme Overview
Investment is from the Government’s Local Growth Fund through the North
East Growth Deal.
The North East LEP’s Growth Deal will drive growth across the area and
support the ambition to create thousands more jobs over the next decade.
The deal was negotiated following publication of the North East LEP’s
Strategic Economic Plan, ‘More and Better Jobs’, which drew on the evidence
in the North East Independent Economic Review led by Lord Adonis. The
cornerstone of the review and Strategic Economic Plan is the need to create
over 60,000 new private sector jobs in the North East to create a balanced
and sustainable economy.
The Growth Deal, subject to a satisfactory conclusion of the funding
agreement, will bring together local, national and private funding as well as
new freedoms and flexibilities to focus on five key priority areas as identified in
the LEP’s Strategic Economic Plan:





Driving innovation and improving business support
Working with schools to improve outcomes in education
Tackling skills and economic inclusion
Building economic assets and infrastructure
Enhancing transport and digital connectivity
The North East LEP has secured £329.9 m from the Government’s Local
Growth Fund to support economic growth in the area – with £47.9m of
new funding confirmed for 2015/16. This includes:


As part of the Government’s ongoing commitment to the North East
LEP a provisional award of a further £78.7m of funding for projects
starting in 2016 and beyond; and
£ 93.1m of funding which the Government has previously committed as
part of Local Growth Deal funding to the area.
The Economic Review and Strategic Economic Plan demonstrate a strong
ambition in the North East for local decision making and control, further
emphasised by the establishment in April 2014 of the North East Combined
Authority, which brings together the seven councils which are members of the
LEP and serve County Durham, Gateshead, Newcastle, North Tyneside,
Northumberland, South Tyneside and Sunderland. The Growth Deal will build
on this strong local leadership with a range of investments and greater
influence over some of the key levers affecting local growth. By 2021, this
Deal will create at least 4,500 jobs.
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1.2
Programme Approach
The LGF programme will build upon the good practice gained from the £55m
North East Investment Fund made up of Growing Places Funding (GPF) and
Regional Growth Funding (RGF). This document further develops those
arrangements and demonstrates how the lessons learned from previous
schemes have shaped the LGF delivery strategy. The LGF will support the
delivery of the vision as set out in the Strategic Economic Plan (SEP).
To this end, the North East LEP Board received a report Appendix 12 in
November 2014 setting out key principles to be adopted in the management
and re-allocation of LGF funds.
Local Growth Fund Management and Fund Re-allocation
Government is to provide each LEP with an annual sum of money for
investment in the programme to achieve an agreed level of outputs within a
time period. This has been allocated by Government against a clear set of
projects. The Government provides the LEP with the flexibility to manage the
programme funds in year as it sees fit to achieve agreed projects and outputs.
A programme of investments has been identified.
Should the profile of investments vary and/or need to change, the LEP has the
flexibility to re-allocate funds to other activities to achieve the agreed outputs
in consultation with the Department for Business Innovation and Skills (BIS).
It is proposed that the North East LEP LGF Programme is managed as a
single programme entity. This means that if and when projects within the
indicative programme stall or fail to deliver, recommendations will be made to
the North East LEP Board on how that funding should be re-allocated to
address the SEP’s strategic objectives and delivery.
Managing funds at this level, rather than on at the individual SEP theme level,
provides the LEP with the greatest flexibility in terms of how it can approach
re-allocation to appropriate projects which are in a position to deliver in a
timely fashion against SEP objectives. In addition it demonstrates the need for
each SEP Theme to prepare the strongest possible projects for a pipeline of
reserve proposals for adoption should funds become available.
This proposed approach will be adopted alongside the principles for
prioritising the adoption of new projects set out below.
The following approach is proposed for attaining new projects into the
programme when funds become available. Any overall project changes to the
current programme will also require approval by BIS.

Principle One - Prioritised projects from the existing call that Government
overlooked. In the SEP submission, partners prioritised projects for
inclusion in the SEP Programme. Several projects were not selected by
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Government. Should these projects be in a position to deliver immediately
and provide the requisite strategic fit and performance measures, these
investments would be considered first for investment. This includes
projects within the programme that have funding allocated in future years,
but can deliver now. Consideration should also be given at this juncture for
projects that are within the programme and can justify additional spend is
required to ensure deliverability, providing overall programme outputs will
be met.

Principle Two - Strongly performing existing projects within the
programme. As the programme progresses, monitoring may establish that
certain proposals are performing above and beyond their projected
profiles. If this is the case providing the incentive of additional funding for
expanded activity could have programme wide benefits. This priority has
the benefit of incentivising efficiency in delivery and over-performance in
output achievement at the project level.

Principle Three - New reserve projects from programme pipelines. It is
important that each of the SEP Thematic Programmes work up strong
sustainable pipelines of projects. It will be from these pipelines that new
proposals which can deliver the necessary performance measures over
the required timescale can be drawn.
Further to the discussion of these principles of fund management at North
East LEP Board on 20 November 2014, in the future each of these principles
will be given equal weighting. The Technical Steering Group will recommend
to the Board which principle should be adopted when funds become available
for allocation and provide a clear rationale for recommendation.
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Section 2
Aims and Objectives of the Programme
2.1
Local Growth Fund Aims and Objectives
Timely and targeted infrastructure development is at the heart of a thriving,
outward looking regional economy. The LGF recognises that private and
public investment is critical to realise opportunities in the area and as such is
aligned to the Strategic Economic Plan (SEP) objectives.
The SEP has a number of objectives which it sets out to deliver its vision,
these are;

Gross Value Added (GVA) per full time equivalent, with wages and
profits rewarding workers and investors and sustaining high levels of
employment.

Private Sector employment density, with more companies and jobs
driving a high growth economy.

Activity rate, with no one left behind, and those distant from or
disadvantaged in the labour market helped to take advantage of the
opportunities created by a successful growing economy.

Employment rate with the scale and quality of employment matching an
increasingly better qualified and higher skilled workforce.
These objectives will be delivered through the 6 themes of the SEP –
Transport & Connectivity, Business Support & Access to Finance,
Innovation, Skills, Employability & Inclusion and Economic Assets &
Infrastructure. The SEP is detailed on the following link.
http://nelep.co.uk/whatwedo/strategic-economic-plan/
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Section 3
Governance, Management and Delivery Arrangements
3.1
Introduction
This section outlines how we intend to manage, appraise and evaluate the
Programme whilst ensuring that it is Green Book and State Aid compliant and
that it meets LGF objectives.
3.2
Governance
Figure 1.0 illustrates the governance and decision making the key bodies
involved in the governance arrangement of the Programme. Further details of
the functions each body will fulfil are set out below.
Government - BIS / DCLG
Assure
North East Combined
Authority
Endorsement of
recommendations and
Agreement to Project
specific accountability
North East LEP Board
Decision maker
Technical Steering Group
Advise and recommend
Programme Delivery Team
Appraise, Deliver, Monitor
and Report
FIGURE 1.0 – Governance Arrangements
3.3
Key features of the governance structure are that;
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
The North East Combined Authority (NECA) will act as the Accountable
Body for the fund and will be the contracting body for the distributions of
funds to beneficiaries. This is set out in the Accountable Body agreement.

The North East LEP Board will provide high level direction for the
programme and will receive recommendations from the Technical Steering
Group to inform decisions to approve funds to beneficiaries.

The Programme Delivery Team will be a multifunctional team comprising
of the North East LEP and NECA staff. The team will have access to
specialist procurement and legal officers through the NECA including other
relevant
specialist support as necessary. The arrangements for the
provision of such support is set out in Agreements between the NECA,
LEP and Sunderland City Council.

Programme beneficiaries will be required to enter into a Grant Agreement.
The Grant Agreement letter will detail, their LGF funding award amount,
the project start and end date, the expected outputs & milestones and the
terms and conditions of the award.

Detailed project monitoring will be carried out by the Programme Delivery
Team with progress and issues reported to the respective North East LEP
Technical Steering Group and North East LEP Board meetings.

The scrutiny of the funding of delivery of the LGF Programme will be
afforded by the Overview and Scrutiny Committee of the NECA

Transparency in decision-making will be enabled not only by the
consideration of the delivery of the LGF programme by the formal public
meetings of the NECA such as the Leadership Board and other relevant
committees of NECA including Overview and Scrutiny, but also through
publication of the minutes of the meetings of the LEP Board.
3.4
The North East LEP Board
The North East LEP Board provides strategic direction and decision making to
the North East LEP Executive Team and wider partnership. Membership of
the board comprises, nine private sector representatives including the Chair,
seven local authority representatives, one higher education representative
and one representative of further education colleges. Further information
regarding the North East LEP Board’s make-up, principles and processes is
contained in the North East LEP Constitution attached at Appendix 1.
Appendix 2 provides a biography for each of the current Board Members.
Board members also provide leadership of the six SEP Themes.
Six SEP Theme Leadership
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Theme
Innovation
Business Support and
Access to Finance
Skills
Employment and
Inclusion
Economic Assets and
Infrastructure
Transport and Digital
Connectivity
3.5
Private Sector
Leadership
Prof Peter Fidler
Gillian Hall
Arnab Basu
Gill Southern
Paul Varley
Jeremy Middleton
Andrew Hodgson
Anne Isherwood
Andrew Hodgson
Public Sector
Leadership
Councillor Malcolm
Mayor Redfearn
Michael Bellamy
Councillor Watson
David Land
Councillor Forbes
Councillor Watson
Councillor Davey
Councillor Davey
North East LEP Technical Steering Group (TSG) – Officer Advisers
The North East LEP Technical Steering Group will be established as an
Advisory Sub-group of the North East LEP Board. The group to be chaired by
the North East LEP Chief Operating Officer supported by specialist technical
officers working on the LGF programme that provide technical expertise and
local knowledge in planning, surveying, finance, programme, performance and
risk management and economic development. For draft Terms of Reference
see Appendix 4.
Those on the TSG, as local authority staff but supporting the LEP in delivery
of the LGF programme, must ensure that they do not have any conflicts of
interest arising in respect of the matters they are considering, If any such
conflict is identified they must declare this and alternative arrangements will
be made to secure appropriate support for the TSG
3.6
Accountable Body – North East Combined Authority (NECA)
Decision making and Scrutiny
NECA will act as Accountable Body for the Programme. The NECA was
created on April 2014 by the Durham, Gateshead, Newcastle upon Tyne,
North Tyneside, Northumberland, South Tyneside and Sunderland Combined
Authority Order 2014. The Leaders and Elected Mayor of the seven local
authorities within the LEP area and comprising the constituent authorities of
the Combined Authority together with the Chair of the LEP comprise the
Leadership Board of the NECA. The Leaders and Elected Mayor are also the
local authority members of the LEP Board.
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The NECA is a local authority and is therefore governed by the requirements
of local government law. As a result, the requirements of the Local
Government Act 1972 (as amended) and other relevant legislation must be
complied with in respect of the governance and formal decision making
processes of the NECA. The NECA Constitution, included in Appendix 13 –
Transport Assurance Framework Annex A and B, sets out the required and
specific decision making arrangements for the NECA.
The NECA Order also requires the NECA to appoint an overview and scrutiny
committee to fulfil the scrutiny function for the authority and enhance
transparency in decision-making. The NECA arrangements for scrutiny as set
out in the NECA Constitution provide for a committee with representatives
from each of the NECA constituent authorities. The formal scrutiny of LEP
decisions and delivery of the LGF programme will be scrutinised by the
Overview and Scrutiny Committee of the NECA.
Operational Support
As Accountable Body for the LEP NECA will also secure such services as are
required to deliver operational services including fund management,
coordination, monitoring, reporting, evaluation and legal support as
necessary. Through the carrying out of these activities the NECA will strive to
ensure that the projects supported meet programme objectives, provide value
for money and are an effective use of public funds. Paul Woods, NECA
section 73 Officer, will be signatory to the Grant Offer and Beneficiary Project
Offers.
The NECA will secure (by a formal agreement) relevant services from
Sunderland City Council for the delivery of the programme. Prior to the
creation of the NECA Sunderland City Council provided these services to the
LEP directly and has in that context successfully managed a number of large
scale Government and European funding programmes in recent years.
Through the delivery of these programmes a significant amount of expertise
and experience has been developed, this will in turn be utilised on this
programme. Examples of current and recent initiatives delivered by the
Council include; ERDF, WNF (£30m), NDC, ESF, Urban (£17m), Single
Programme (£44m), Future Jobs Fund and Growing Places Fund (£25m) and
Regional Growth Fund (£30m). The latter £55m is being delivered in
partnership with the North East LEP. Additional services will be provided by
the NECA either directly from appropriate staff, such as the Chief Finance
Officer or the Monitoring Officer of the NECA or by securing external
providers.
3.7
Programme Delivery Team
Helen Golightly, Chief Operating Officer, will provide the leadership and
Matthew Ebbatson from the Executive Team will provide additional
programme management expertise with support from the wider North East
LEP Programme Delivery Team. This will be supplemented with significant
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support from experienced staff providing support to the NECA (as described in
part 3.6 above) Biographies of Key Officers are attached at Appendix 6.
The multidisciplinary Programme Delivery Team will include European
Funding specialists, chartered accountants, solicitors, project appraisal
officers and project monitoring officers. In addition the Team will utilise,
procurement, specialist legal and auditor support as required. This diverse
pool of specialists will ensure the programme is effectively supported and able
to ensure Green Book and State Aid requirements are adhered to.
By its nature, the Programme Delivery Team, taking in the officers above will
have responsibility for meeting the requirements of every element of a
successful programme cycle. This includes:










Strategic Programme Management
Programme/Project Development
Co-ordination of North East LEP Technical Steering Group and with
North East LEP Board
Project Assessment/Appraisal
Due Diligence and Contracting
Quarterly Monitoring Report Process
Claiming and Distribution of Funds
De-commitment and recycling of Funds
Record Keeping and Monitoring
Marketing and Publicity of LGF
Appendix 7 sets out how key functions will be fulfilled and how it is envisaged
they will be completed within the Programme Delivery Team and the External
Support to be retained.
3.8
Beneficiary Award Process
The detailed allocation process including bid appraisal is documented in
Section 4 – Project Appraisal Methodology.
Expression of Interest forms will be received, appraised and prioritised into a
schedule of projects to receive support. This will be overseen and considered
by the Technical Steering Group. If approved then a full business case is to be
developed and submitted for appraisal. This will include a review of the
project’s funding, funding basis (grant), Benefit Cost Ratio, alignment to fund
objectives, outputs and timescales. On the satisfactory completion of this
process the Programme Delivery Team will present to the North East LEP
Technical Steering Group for approval to make a recommendation to the
North East LEP Board of the projects to be supported. NECA statutory
officers, particularly the Chief Finance Officer and Monitoring Officer will be
consulted and their support obtained prior to formal endorsement of relevant
Projects by the Leadership Board in accordance with the NECA Constitution,
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When the North East LEP Board approval is agreed and formal support of the
NECA as Accountable Body is provided, Grant Award Letters will be issued to
the successful projects for acceptance.
3.9
Monitoring
The detailed Monitoring and Evaluation process is documented in Section 11
– Monitoring and Evaluation.
Following completion of the Funding Award the Monitoring phase will
commence. A member of the Programme Delivery Team will carry out a
Project Engagement Meeting with the organisation to set-out the monitoring
requirements and explain the importance of the monitoring returns process.
Projects will be required to submit a Quarterly Monitoring Return which
captures key information on the projects progress and any issues arising.
Quarterly Monitoring information will be collated and reviewed by the
Programme Delivery Team. The information will be used to;





Monitor actual against target progress.
Inform discussions with the Project in respect of any deviations from
profile, outputs, etc.
Inform the Quarterly Monitoring requirement to DCLG.
Inform grant drawdown requests.
Provide quarterly updates to North East LEP Technical Steering Group
and North East LEP Board detailing programme progress and highlighting
any risks and issues with proposed mitigating actions to be taken. The
NECA as Accountable Body will also be appraised of such programme
progress.
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Section 4
Project Appraisal Methodology
4.1
Introduction
Through the Growth Deal, the Local Growth Funding was allocated to an
indicative selection of projects as a means to achieving SEP targets. Should
the programme of selected projects vary or additional monies become
available, the principles set out in the Programme Principles paper (appendix
120) will be followed. This section sets out the general application and
appraisal approach to be taken for LGF programming in line with those
principles. Given the specific requirements of the Department for Transport,
and differences in project appraisals, Transport proposals will continue to be
taken through the established Transport Assurance Framework (Appendix
13).
4.2
Project Selection Criteria
All proposals will be assessed by North East LEP Programme Delivery Team
against the specific calls for projects that will be made across programmes
and aligned to the SEP objectives as detailed in section 2.1 above.
In addition these will be assessed against deliverability and economic growth
which will be cross cutting on all calls.
Unlocking Economic Growth. Projects will be assessed against the
contribution they would make to meeting the North East LEP’s objective of
More and Better Jobs. In particular key indicators will be considered as part of
the appraisal:








Jobs created and contracted for.
Jobs safeguarded.
Skills Level of Jobs
Construction Jobs created
Cost Benefit Ratio
Evidence of demand/market failure
Brownfield land developed.
Private sector investment and other sources of investment.
Risk Assessment. This is a cross-cutting theme. In considering the core
criteria, essential to programming for the Fund, is recognition on a project by
project basis that risks should be minimised. Risk assessment will include a
project’s readiness to deliver, the financial package it is proposing, its
strategic economic fit, due diligence factors and state aids implications.
All projects will be assessed to determine any potential state aids implications.
Lending to private or other undertakings will be subject to state aids
requirements.
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Table 2: Scheme Eligibility Criteria
Purpose of scheme
Schemes are required to make a significant contribution towards
achieving the objectives of the NELEP as defined by the SEP included in
Table 1.
Cost Threshold
In order to be eligible, schemes must have a total net cost to the NELEP
of at least £2.5m. This will prevent funding from being spread too thinly to
be effective. Funding can only be used for capital expenditure.
Strategic Impact
Promoters are required to demonstrate how their scheme will have a
positive impact on the objectives of the NELEP. It is desirable that
schemes will have an impact on a wide area however this does not
preclude localised issues being addressed, given the knock-on effect of
improvements to the local economy improving the sub-regional / regional
economy.
Policy Criteria
Schemes need to demonstrate how they contribute to the specified policy
criteria. Given the NELEP’s strong emphasis on economic growth and
development, the schemes should contribute towards local and economic
development.
Value for Money
Schemes are required to provide an estimate of the Value for Money (VfM)
a scheme is expected to produce. In order to be eligible, schemes must
demonstrate they provide high value for money. For the prioritisation
process, promoters will be required to estimate a Benefit Cost Ratio (BCR)
for their scheme(s). Regular VfM statements will be required in order to
adjust the BCR as part of the move towards full scheme approval.
Deliverability
Proposed schemes need to have a reasonable degree of public and
stakeholder support and must be deliverable within a clearly defined
timescale. An assessment of deliverability must be undertaken in order to
identify any potential “under spend”.
Local Contribution
Scheme promoters are encouraged to provide a local contribution which
would normally be at least 10% per scheme.
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4.3
Key Milestones
Below is a summary of the key milestones for the Local Growth Fund and the
dates for achievement of the milestones with regards to the first Growth Deal
announcement on 7 July 2014 (GD1) and second Growth Deal announcement
on 29 January (GD2) allocation.
Milestones for 2015/16
delivery
Date for achievement
Receipt of Applications
End Feb 2015 (GD1)
Ongoing (GD2)
Mid March 2015 (GD1)
End March 2015 (GD1)
1 April 2015
1 April 2015 (GD1)
Quarterly
Due diligence
Approval from Board
Award from BIS received
Delivery of Projects commence
Quarterly monitoring
4.4
Investment Fund Application – Stage by Stage
It is important to note that the North East LEP will manage the project pipeline
development, programme allocations and management for all potential
funding sources in one process, to ensure the North East LEP is ready to
respond to calls from external funding sources, as well as be responsive to
available funds within current programmes.
Briefly covered within the Section 6.1, this section explains how an applicant
is taken through each stage of LGF. Each stage can be referenced within the
schematic set out on Figure 2.
Value for Money (VfM) assessments will be required with the EoI and are
likely to be based on limited evidence. At Business Case a more robust VfM
statement will be required and they must show that a scheme remains high
value for money to stay in the programme.
Stage 1 – Call for Projects and Completion of Expression of Interest
(EoI) Form.
The North East LEP Programme Delivery Team will make calls to both the
Public and Private sector for prospective bids. The intention is to build a
healthy pipeline of projects that can form part of the full SEP Delivery
programme of investments and sit within a reserve list. To this end, should an
applicant approach the North East LEP at any time with an attractive
proposition within the Programme period, it will be given due consideration as
funding allows. As part of the Call for Projects, the Programme Delivery Team
will provide support and guidance to prospective applicants and request an
EoI Form is completed. This will be to give potential applicants an
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understanding in the first instance of whether their project is applicable to the
fund, and of the process that it entails
Stage 2 – Receipt of EoI and Check for Completeness / Compliance.
On receipt of applications, the North East LEP Programme Delivery Team will
initiate a Project File, providing it with a unique project number. The project
number will remain with the project for its lifetime. The Programme Delivery
Team will carry out a check against completeness within the form, before
looking in more detail at compliance with project call criteria. This includes
measures against eligibility, strategic fit, deliverability, achievement of
outputs/deliverables and ability to unlock economic growth. The application
form requires applicants to identify other confirmed or potential sources of
funding. The Programme Delivery Team will review funding opportunities with
applicants to ensure that proposed outputs are specific to the North East LEP
rather than other funding sources. The outcome of the initial assessment will
determine how an application is progressed with the project sponsor. The
Programme Delivery Team will return to the Applicant with a request for
additional information as required, and provide guidance on where the
application can be strengthened. If an application meets the necessary
criteria, the applicant will be informed and moved on to Stage 3. Should the
proposal not fit the demands of the fund, the Applicant will be informed and
reasons provided.
Stage 3 – Approval from the Technical Steering Group to proceed to
Business Case
Endorsement of Applications - on completion of Stage 2, the Technical
Steering Group (TSG) will be provided with outline summaries of the EoI
applications that have been received, and recommendations on how to
proceed with each of the propositions. Those that receive the required
endorsement from the TSG, will be requested to complete a full business
case.
Stage 4 – Completion of Business Case
Once endorsement is received from Stage 3 above, the Programme Delivery
Team will request that the applicant completes a full business case which
complies with HMT Green Book Five Case Model for Business Cases
covering:




The Strategic Case
The Economic Case
The Commercial Case
The Financial Case
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
The Management Case
Stage 5 – Investment & Financial Appraisal/Due Diligence
Following submission of a full business case the Programme Delivery Team
will complete the necessary assessment and due diligence checks. The
nature of the assessment required (property/infrastructure/financial appraisal)
will determine who is appropriate to carry out the assessment. Those
completing the appraisals and due diligence work then provide the appraisals
for consideration by the Technical Steering Group. It may be appropriate for
the applicant to attend a Technical Steering Group to answer outstanding
queries but this will be by exception.
As part of this process, the North East LEP will utilise the agreed Prioritisation
Methodology where appropriate to relevant calls. The Prioritisation
Methodology developed with KPMG LLP (UK) will help inform decisions as
and when new sets of projects are introduced. This builds upon work
undertaken by KPMG in developing a Prioritisation Tool which focusses on
productivity and jobs impact, and can be best utilised within Project Calls
relating to:

Capital development that impacts on commercial floorspace and job
creation.

Housing Developments

Capital investment in Skills projects that impact on up-skilling of the
employment base.
Having utilised the Prioritisation Methodology on selections of projects, the
outcome will provide comparative assessment of their economic impact based
upon GVA and Job creation. This can help inform the TSG on
recommendations for project selection across themes or calls.
With regards to transport proposals the current transportation prioritisation
methodology will be utilised as per the outline in the Transport Assurance
Framework which consists of a 10 element assessment process,
independently assessed by specialists. Further information on this can be
found in Appendix 13 – Transport Assurance Framework.
Recommendation to approve or reject for funds will be provided to the North
East LEP Board for a decision. Should further work be required as a result of
this element of work, and the TSG see that the project is worthy of further
investigation, the proposal will go back through Stage 5 with specific queries
attached, before returning to TSG. Those projects which are unsuccessful are
provided with clear feedback, and ideally directed towards alternative funding
sources that could be available. Successful proposals move on to Stage 6.
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In undertaking Financial Appraisal and Due Diligence, key elements to be
completed within this stage of activity can be summarised as follows:







Assessment of deliverability of project including timescales and ability
to spend to profile
Appraisal of financial position of the project and testing of the
underlying assumptions
Understand and consider the delivery, financial, commercial and
market risks associated with the project and the organisation
undertaking it
Assess project compliance with State Aid, including impact upon
investment offer
Confirm status of all the proposed funding for the project
Establish the extent to which risks could be overcome through
provisions in the contractual documentation including as appropriate
though loan security
Assess viability of projected level of economic growth (outputs) and
value for money standing of proposition
This assessment is carried out in line with the requirement of HMT Five Case
methodology for Business Cases.
These will be completed by the Programme Delivery Team.
Stage 6 – Co-ordination of Approval of Applications
Those projects recommended for approval/selection into the Programme, with
relevant conditions attached are then reported to the next North East LEP
Board meeting. The Chair of the TSG will provide the North East LEP Board
with an overview on recommendation for each proposal including intended
conditions to be attached. Applicants are informed of the decision (subject to
formal endorsement by the Accountable Body) and the process moves to
Stage 7.
Stage 7 – Endorsement by NECA and Completion of Grant Agreements
Following Stage 6 North East LEP Board Approval, NECA will review the
Board decision and provide endorsement of the funding allocation in
accordance with the Accountable Body Agreement. Following endorsement
NECA will prepare and produce the requisite grant offer letter incorporating
relevant grant conditions. Subsequently the NECA will produce the final
Project Grant Agreement for completion by the grant recipient and the NECA
as Accountable Body.
Dispute Resolution.
The wider appraisal process will function so that key senior officers from the
Accountable Body (NECA), including those sitting on the Technical Steering
Group remain informed and party to any decision making as to the status of
proposals going through the application/appraisal process, prior to final
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recommendations made to North East LEP Board. This approach significantly
mitigates against the possibility of their being a difference in opinion on the
final decision to grant by North East LEP Board and technical endorsement by
NECA as the Accountable Body. The approach to appraisal is such that
projects would not reach North East LEP Board approval and therefore
recommendation for NECA technical endorsement, should there be technical
issues that would result in a North East LEP Board decision being rejected by
the Accountable Body (NECA). Should this somehow occur, the technical
reasoning for the rejection would be reviewed and reported back to North East
LEP Board for their decision to be reconsidered. The final decision by North
East LEP Board to grant funds recognises that public finance must be
invested appropriately in compliance with public finance regulations and the
grant terms attached to the Local Growth Fund as outlined in the Grant Offer
letter. The North East LEP Board reserve the right to seek an independent
view if justified.
Stage 8 – Quarterly Monitoring Return Process
The detailed Monitoring and Evaluation process is documented in Section 11
– Monitoring and Evaluation. Following completion of the Funding Award the
Monitoring phase will commence. A member of the Programme Delivery
Team will carry out a Project Engagement Meeting with the organisation to
set-out the monitoring requirements and explain the importance of the
monitoring returns process. Projects will be required to submit a Quarterly
Monitoring Return which captures key information on the projects progress
and any issues arising. Quarterly Monitoring information will be collated and
reviewed by the Programme Delivery Team. The information will be used to;




Monitor actual against target progress.
Inform discussions with the Project in respect of any deviations from
profile, outputs, etc.
Inform the Quarterly Monitoring requirement to Government.
Inform grant drawdown requests.
Provide quarterly updates to the North East LEP Technical Steering
Group and North East LEP Board detailing programme progress and
highlighting any risks and issues with proposed mitigating actions to be
taken.
Transport Gateway Programme
The section below explains how an applicant is taken through each Gateway
Approval Stage undertaken by NECA in relation to Transport Schemes. Each
stage can be referenced within the schematic set out on Figure 2 and further
breakdown of each stage can be viewed in included in Appendix 13 –
Transport Assurance Framework.
Following prioritisation of the proposal by the NECA (Gateway 1 Programme Entry), the following process applies.
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Gateway 1 Approval Stage: Programme Entry
(Advancement to Gateway 2 requires the following steps)

Promoter prepares Outline Business Case and submits to the
Transport Officers Group..

Outline Business Case undergoes independent assessment

Value for Money Statement prepared by Scheme Promoter and
signed off independently.

Consultation held

The Transport Officers’ group reviews independent VFMS advice
and in the event of non-compliance with paragraph 12.5 informs the
Combined Autho rity
Gateway 2 Peer Review Stage: Conditional Approval Granted
(Advancement to Gateway 3 requires the following steps)

Promoter undertakes detailed design, acquires statutory
approvals, undertakes procurement and identifies
preferred supplier.

Final Business Case submitted to the NECA.

Final Business Case undergoes independent assessment.

Value for Money Statement prepared by Scheme Promoter and
signed off independently.

The Combined Authority reviews Independent advice and
considers Full approval
Gateway 3 Approval Stage: Full Approval Granted and offer letter issued

Monitoring/ evaluation framework submitted.

Construction commences.
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FIGURE 2.0 – Appraisal and Gateway Approval Stages
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Section 5
Financial Tables
5.1
Estimated Drawdown / Expenditure
Estimated yearly draw down and expenditure profiles required for the six LGF
draw down years (2015 to 2021) are as follows;
Expected Programme LGF Grant Instalments (£’000);
Date
15/16
16/17
17/18
18/19
19/20
20/21
Forecast
Drawdown
£’000
111.7m
94m
31m
27.3m
29.6m
28.8m
Expected Programme Expenditure Profile (£’000);
5.2
Date
15/16
16/17
17/18
18/19
19/20
20/21
Forecast
Drawdown
£’000
111.7m
94m
31m
27.3m
29.6m
28.8m
Programme Delivery Costs
The revenue funding requirement to support the Programme Delivery is
estimated to be 2.5% of the funding.
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Section 6
Systems and Processes
6.1
Appraisal Process Summary
All applications for grant will be subject to appraisal. The Programme Delivery
Team will undertake an initial assessment of EoI applications. This process
will include:







Completeness check
Initial eligibility check
Strategic economic fit
Deliverability
Ability to unlock economic growth
Achievement of key deliverables (jobs / leverage)
Risk assessment
The Fund will operate on specific call basis against which each application will
be assessed. Should a need to prioritise applications arise, the Programme
Delivery Team will implement the KPMG prioritisation model. This would be
undertaken as in internal exercise only to assist in informing the decision.
Outline appraisal summaries of the EoI will be presented to the TSG following
assessment of the EoI against the Project Call core criteria. The TSG will be
responsible for the selection of projects to be taken forward to the full
business case stage 4. If there is a need to seek LEP Board guidance at this
stage, the Board will be consulted.
Once a completed business case is submitted then a detailed investment and
financial appraisal will be carried out in line with green book standard by the
Programme Delivery Team. This appraisal will include an assessment of the
minimum level of funding needed to deliver the project and an assessment of
alternative funding options. Full appraisal summaries will be presented to the
TSG for consideration. Summaries will include recommended conditions to
apply to projects. Projects recommended by the TSG for approval will be
presented to the North East LEP Board for a decision.
6.2
Beneficiary Offer
Approved projects will be issued with grant offer letters, in accordance with a
model form developed by the LEP’s legal advisers. The documentation will
detail the amount awarded, the outputs and performance requirements and
the terms and conditions of the grant. To support compliance with State Aid
requirements under GBER II, agreements will also detail grant intervention
rates (where aid is being granted).
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6.3
Monitoring Systems
Section 11 – Monitoring and Evaluation, provides details of the processes and
systems to be used for recording approved and actual expenditure defrayal,
jobs, leverage and other beneficiary information.
Section 8 explains in more detail the processes for financial control and
budgeting.
6.4
Programme Monitoring Package
A Programme Management Database will be utilised as part of the
overarching programme management and monitoring arrangements.
Information recorded within the Programme Management database will
include: project contact details, funding allocations and payments to date;
output targets and actuals; and milestone targets and actuals.
A
comprehensive suite of reports will be available within the system with the
added ability to develop bespoke reports as required. This reporting ability will
allow timely, efficient and effective reporting to be provided to projects, the
TSG, North East LEP Board and to Government.
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Section 7
Key Performance Indicators
The key Performance indicators used to assess the success of the scheme as
agreed as part of the Grant Offer Letter are as follows:
7.1
Employment
The target Job numbers, either newly created or resulting from the
safeguarding of existing positions (that in the absence of the scheme would
be lost within a period of 12 months), are as follows:
Year
15/16
16/17
17/18
18/19
Jobs Direct
19/20
20/21
Total
4500
Jobs indirect
NOTE: Final output data to be agreed with BIS
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Section 8
Financial Control and Budgeting
8.1
Overview
NECA, in its capacity as the Accountable Body for the North East LEP, will
receive and distribute LGF for the Programme. NECA secure through formal
agreement with Sunderland City Council relevant services to support this
function. As a result of previous services provided direct to the LEP
Sunderland City Council have significant experience of managing
programmes and also regional initiatives i.e. Growing Place Fund.
To ensure separation of North East LEP funds from other NECA funds, LGF
transactions will be processed through a newly created cost centre(s) within
the Combined Authority’s SAP financial management system. The Risk and
Assurance section will provide support and guidance in the setting of key
processes and will also carry out a review of the programme to help identify
any risks, which in turn will be monitored and mitigated where possible.
8.2
Budget Planning
Overall Programme Planning will be carried out by the Programme Delivery
Team. The pipeline of projects will be developed and brought forward to
comply with the predetermined grant allocations set out in the Grant Offer
Letter, which are as follows:
2015-21 - £329.9m
Following funding awards to Projects, the agreed Project budget, outputs and
milestones along with the associated profiles will be input into Programme
Management Database. This information will form the basis of the reporting of
‘actual against target’, and will provide effective monitoring and claiming of
Programme Grant Drawdown requirements from DCLG.
8.3
Grant Drawdown and Payment
Appendix 8 provides a flow chart outlining the key steps in the Grant
drawdown and payments to beneficiaries’ process.
Completed payment forms will be submitted to the NECA for issue via BACS,
a remittance advice will be simultaneously dispatched to the beneficiary
organisation.
8.4
Treasury Management
The NECA will hold LGF balances in compliance with the investment protocol
and the NECA’s investment strategy will ensure funds are held securely whilst
providing a competitive rate of return. All interest generated from the holding
of funds will be credited to the LGF Fund balance on a quarterly basis.
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Working papers showing fund balances and the associated accrued interest
will made available for inspection by Government or other interest parties.
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Section 9
Risk Management
9.1
Risk Management Overview
A Risk Management Framework will be adopted for the Programme. This
framework provides for the development of a risk management strategy and
risk register.
In addition, comprehensive programme governance
arrangements are in place to ensure the programme is managed effectively
and risks are reported, escalated where necessary and dealt with
appropriately.
9.2
Programme Risk Register
An initial Programme Risk Register will be developed by 1st April 2015. This
will be further developed and maintained to take in to account all known risks
and will be continually monitored and updated throughout the programme.
The register will capture risk description, owner, cause, impact and mitigating
actions. The latest risk register will be included as part of the Quarterly
Monitoring information provided to DCLG. Appendix 9 shows the current
Programme Risk Register.
9.3
Project Risks
Detailed risk analysis and mitigation/contingency plans will be required for
each project as part of the application and appraisal process. Successful
projects will be required to submit an updated risk position and issue log as
part of their Quarterly Monitoring Return. Appendix 10 contains Project
specific Risk and Issues pro-forma documents and associated guidance for
their completion.
9.4
Risk Protection
Through the entering into formal Project Grant Agreements with beneficiaries,
the Programme will have the power to enforce mitigating action should project
risks become unmanageable. These powers will include terms and conditions
which allow the NECA to terminate the contract and/or clawback funds if the
Programme Delivery Team is not satisfied that the contractual obligations are
being fulfilled or are in doubt.
9.5
Issues Log
In addition to the management of risks, the Programme Delivery Team will
maintain an Issues Log. The log will include a description of the issue, its
severity, actions being taken and progress being made.
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Section 10
State Aid Considerations –
10.1
Compliance Requirements
As outlined in the Grant Offer letter, it is noted the Accountable Body will need
to ensure all LGF investments are State Aid compliant. In most instances
investment will be determined as Non-Aid (and managed through public
bodies) or as fitting to the new General Block Exemption Regulation. Given
this is a programme, the exact use of the funds will be determined by the
appraisal process and these will include:
(a) with regard to the costs included, these are eligible costs in accordance
with the GBER, and the Gross Grant Equivalent and the Aid Intensity of the
project are also in accordance with relevant GBER article.
(b) the amount requested is the minimum that will allow this project to proceed
in accordance with the Incentive effect under Article 6 of the GBER II.
While these wider compliance matters are taken into consideration as part of
appraisal, State Aid is also to be considered in the initial assessment of the
terms of the grant to be offered.
10.2
Due Diligence
State Aid due diligence will be supported by the provision of legal advice
provided by or secured through the NECA including the provision of advice by
external advisers if appropriate. This will ensure that the risk of projects failing
to achieve compatibility with all relevant State Aid regulations and
requirements is minimised.
10.3
Monitoring Arrangements
In the case of aid being awarded to Undertakings, State Funds will primarily
be given to a Beneficiary where the provision of such funding is compatible
with the categories of aid as set out in GBER (a “Permitted Purpose”). The
Beneficiary quarterly monitoring requirement will include the need to allocate
expenditure over the GBERII categories:
i.
ii.
iii.
iv.
v.
vi.
vii.
regional aid;
aid to SMEs;
aid for access to finance for SMEs aid;
aid for research and development and innovation;
training aid;
aid for disadvantaged workers and for workers with disabilities;
aid for environmental protection
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viii.
ix.
x.
xi.
xii.
xiii.
aid to make good the damage caused by natural disasters
social aid for transport for residents of remote regions
aid for broadband infrastructures
aid for cultural and heritage conservation
aid for sport and multifunctional recreational infrastructures
aid for local infrastructures
In addition a robust award process including analysis of the incentive effect
test for large companies will be carried out.
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Section 11
Monitoring and Evaluation
11.1
Monitoring Process
When funding agreements are accepted Project Monitoring will commence
with a Project Engagement Meeting. The purpose of the meeting will be to
explain and offer guidance on the completion of the monitoring requirements
and also answer any questions the project may have on these arrangements.
All beneficiary projects will be contractually obliged to submit Quarterly
Monitoring Returns (QMRs) to the Programme Delivery Team. The QMRs will
record actual defrayed spend, forecast drawdown requirements, output/key
deliverables and milestones. To provide additional assurance, detailed
transaction lists and evidence of expenditure will be required to support the
QMR. Information provided as part of this process will also be used to report
assets for recording on the programme’s asset register. Explanations for any
variance between actuals and forecasts will also be required, with corrective
action noted as necessary.
Projects will also be required to report on risks within the QMR. These risks
will be assessed and where necessary discussed further with the Project
contact. All attempts will be made to manage and mitigate risks. In instances
where risks are deemed unmanageable actions to trigger Funding Agreement
clauses will be carried out where appropriate. Appendix 10 provides Project
Risk templates and guidance for use by Projects as part of the QMR process.
The Programme Delivery Team will review the QMRs to verify that the money
is being spent appropriately, the project is on target to spend their entire
allocation and will achieve their performance targets. The Programme
Management database system will hold this data to allow efficient
interrogation and effective reporting. In addition, the project will be visited
annually by an officer to ensure the project is complying with the terms and
conditions of their funding agreement and discuss project progress. Where
necessary additional project visits will be carried out to address issues or
concerns.
Reports will be developed within Programme Management database system
to allow Quarterly Project and Programme reports to the TSG and at a more
summarised level periodically to the North East LEP Board. The TSG will be
responsible for determining the future of a project and any actions required if it
is failing to adhere to the terms and conditions of its offer letter, as well as
ensuring compliance with the programme grant offer letter.
Post-delivery monitoring will also require projects to continue to record the
amount of state aid received during this on-going monitoring period and for
the project to report accordingly if allowable thresholds are exceed.
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11.2
Output Recording
To ensure compliance with the aims of the LGF grant as set out in the Grant
Offer Letter, employment information and Private Sector investment to be
monitored in detail and recorded on the Programme Management database
system.
Private sector investment information will be obtained through the carrying out
of the appraisal process but this will be further confirmed through the QMR
return which will detail the full project costs and funding sources.
Through Programme Management database system, mechanisms to continue
to issue QMRs to projects to enable continued monitoring of outputs postdelivery will be in place. The Accountable Body recognises the requirement to
monitor job outcomes for 3-years for SMEs and 5 years large companies after
the LGF grant period for state aid compliance.
11.3
Project Evaluation
Upon financial completion, each project will be required to complete an
evaluation encompassing: Stage 1
Context
Aims
Baseline
What was the problem the project was designed to
address?
What were the original aims and objectives and are
they still relevant?
Data and information identified at the start of the
project, recording the initial status of the issues it
was designed to address.
Stage 2
Achievements
Economic impact
& additionality
Constraints
Value for Money
Progress in delivering the original aims and
objectives based on changes from baseline position.
What real difference has been made?
The difference between the ‘reference case’ i.e.
what would have happened anyway and the position
after the project has been implemented. This takes
into account additionality factors such as
deadweight and displacement.
What prevented the project from being delivered as
originally intended? How did the project change
over time? What learning from this is there for the
future?
What has been achieved for the expenditure
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Process
Added Value
Sustainability
incurred?
Could the project have been more effective if it had
been delivered differently? How effective have any
Partnerships been?
Have there been any unforeseen impacts? Have
these added value or created more problems? Are
there perceived benefits are well as measurable
ones?
Are the outcomes and impacts sustainable? Are
spin-offs/additional developments anticipated?
Stage 3
Key
What are the recommendations for future
Recommendations development?
Lessons Learned
What are the important lessons/key messages that
need to be shared for the benefit of similar projects?
11.4
Programme Evaluation
The North East LEP Executive Team will undertake (possibly by commission)
a mid-term programme-level evaluation and a final evaluation at the end of the
10-year delivery period. The mid-term and final evaluations will consider the
elements described above. The baseline position as at 2012 is described as
set out below.
North East LEP Area Baseline Position (2012)
The North East Local Enterprise Partnership area has recently achieved the
highest employment rate since 2008. In the quarter to January 2014
employment rose by nearly 20,000 on the previous year, leading to an
increase in the local employment rate that outperformed the UK average and
was second highest in England. We know that many local companies are now
poised to embark on a new growth phase. While these employment growth
figures are enormously positive and 79% of jobs in the area are now provided
by the private sector (up from 72% in 2009), the area still suffers from a
shortage of private sector jobs to provide a balanced and sustainable
economy. Independent forecasts expect employment in the area to increase
by 40,000 between 2014 and 2024. Implementation of our strategic economic
plan will deliver 60,000 private sector jobs over and above that forecast, to
take the number of people in employment in 2024 to one million.
The challenge is not just the number of jobs but the quality of these jobs. The
need for more and better jobs is therefore fundamental to our plan. Our
ambition is that at least 60% of the jobs created over the next ten years will be
high skilled and higher paid private sector jobs. While recent trends are
extremely encouraging, there remains a significant gap between the area’s
skills base, GVA per capita and that of other areas. It is therefore critical that
we build on the momentum of recent years and continue to close this gap.
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Since 1999 the area has seen a fall in the proportion of its working age
population with no qualifications and an increase in the proportion of its
working age population with qualifications at level 4. Educational achievement
has been on a steady rise since 2000.
Inspite of these improvements, the area needs to increase the volume of skills
at a higher level to address a changing demographic, in particular higher skills
required by employers of younger people and those moving into and between
work as a result of replacement demand and an anticipated demand for jobs
requiring level 4 and above rising by 120,000 by 2020.
Many young people are excelling in their education, and in some measures,
pupils and schools are doing well. The North East is the best performing area
in the country in terms of the percentage of students achieving five or more
‘good’ GCSEs (grades A* to C). From a starting position of being third from
the bottom of the national league table in 2005, the North East has been top
of this table every year since 2008.
However, huge disparities exist in educational achievement. The proportion of
secondary schools judged as good or outstanding for teaching in our least
deprived areas is 85% - almost equal to the national average of 86%. In our
most deprived areas however, this drops to 29% compared with a national
average of 65%. This means that there is a massive 56 percentage point
difference between the proportions in our most and least deprived areas.
There are a number of challenges facing the North East economy, although all
of the latest data suggests that progress is being made with regard to more
and better jobs. To continue this momentum there are a number of
demographic and skills challenges which have to be addressed, along with
strengthening the SME base to help diversify the economy and continue to
improve productivity.
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Section 11
Publicity and Communications
12.1
Communications
The North East Local Enterprise Partnership has a dedicated
Communications Specialist who is responsible for the delivery of
communication, including marketing and PR activity on all strategic priorities
programmes and projects.
There is an established corporate communications strategy to support the
delivery and promotion of the Strategic Economic Plan, as well as theme
specific communication plans for key theme areas including innovation, skills
and business support. These plans outline priorities, messaging and activity to
provide a co-ordinated, proactive and responsive approach to all
communications activity. The Local Growth Fund is a central element of the
delivery of the North East Strategic Economic Plan, and so all
communications activity on LGF projects is part of these action plans.
The North East Local Enterprise Partnership has recently completed work on
developing key communication channels to support this activity. This includes
a brand refresh and launch of a new website, social media channels, quarterly
e-newsletter and stakeholder analysis.
Brand guidelines and media protocols have also been produced and are
being disseminated to LGF projects contacts to ensure standards in
messaging and consistency are maintained.
This activity will ensure that there is proactive,
planned and
regular communications, to build profile and recognition of the North East
Growth Deal and Local Growth Fund. It will also encourage engagement with
partners, stakeholders and community and support project the development of
project pipeline development.
12.2
Project Call
Application forms, guidance notes and details regarding project call criteria
and decision making process will be made available on the North East LEP
website ( www.nelep.co.uk/) at the appropriate time. In addition, the seven
Local Authorities in the North East LEP area will signpost to this information
from their communication channels
As with previous funds, the Economic Development Directors (EDDs) of the
seven Local Authorities are available to field initial enquires regarding fit with
local priorities. Programme Delivery Team, as the central contact point for
enquires and receipt of applications, will refer to EDDs as required.
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Links to the public and private sectors are already well established. EDDs are
presently nearing completion of the development of a list of pipeline projects
to inform an Investment Plan for the North East LEP area from which eligible
LGF ready projects will emerge. This Investment Plan will cover all six
themes of the North East Strategic Economic Plan.
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Appendix 1
North Eastern Local Enterprise Partnership (NELEP)
Constitution
1.
Name
The Board shall be known as “The North Eastern Local Enterprise
Partnership Board (“the Board”).
2.
Vision and Role of the NELEP
2.1
The vision of the NELEP is to rebalance the economy and create
“Europe’s premier location for low carbon, sustainable, knowledge-based
private sector-led growth and jobs”
2.2
To achieve these ambitions the NELEP will deliver a series of actions
against four strategic economic priorities set out in the original
submission to Government, namely:




2.3
supporting enterprise and private sector business growth;
building on key economic strengths;
improving skills and performance; and
strengthening transport, connectivity and infrastructure.
The key roles of the NELEP will be:





to lobby Government on issues of economic importance to the
North East of England;
to act as an advocate and champion for business and
community interests;
to provide strategic economic leadership and local
accountability;
to demonstrate added value and efficiency; and
to commit to working across local administrative boundaries
2.4
over
The NELEP will have a decision making role, which is likely to evolve
time according to the development of the role of the Partnership.
3.
Membership of the Board and Related Matters
3.1
Membership of the Board will comprise:
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



3.2
nine private sector representatives, including the Chair (“private
sector members”);
seven local authority representatives (“local authority
members”);
one higher education representative;
one representative of further education colleges (together
”education members”)
The local authority members will be the respective Leaders of the
Council/Elected Mayor as appropriate.
3.3
Private sector members have been recruited, using the Nolan
principles (Appendix 1) to reflect the geography of the NELEP area, key
sectors and different sizes of business operation. Future recruitment of private
sector members shall similarly take these matters into consideration. The
Constitution includes a Code of Conduct at Appendix 2 to ensure the highest
standards of propriety in decision-making.
3.4
The Chair and non local authority Board Members of the NELEP shall
be appointed for a term of three years, through public appointment and
interview. Board members will not be remunerated.
3.5
The term of not more than one third of non-local authority members
shall end at the
same time and the Board shall determine arrangements to give effect
to this
provision to ensure continuity in the conduct of its business.
3.6
Substitutes for Board Members shall not be permitted to attend
meetings. Observers may attend in accordance with the arrangements for the
Conduct of Meetings set out at Appendix 5. However, this will be kept under
review.
3.7
The quorum for meetings of the Board shall be 10 out of the 18
provided at least five private sector members and four local authority
members are present.
3.8
All decisions shall be taken on the basis of consensus and where this
is not possible the procedure set out in para 4.1 Appendix 5 shall apply.
3.9
Local authority Members will be bound by the Code of Conduct of their
own authorities as well as this Constitution its principles and Code. Other
Board Members will comply with the principles set out in Appendix 1 (which
includes the Seven Principles of Public Life established by the Committee on
Standards in Public Life) and also the Code of Conduct at Appendix 2.
3.10 The NELEP is a voluntary partnership arrangement. One of the local
authorities will fulfil the role of accountable body and manage the financial and
human resources of the NELEP.
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4
Functions and Remit
The Board shall:
 provide high quality leadership and set the strategic direction for the
sustainable economic growth of the North East economy and
determine key objectives and investment priorities to deliver the
overall vision and strategy of the NELEP;
 lead the development of the NELEP Enterprise Zone;
 coordinate the Regional Growth Fund bidding and leverage of funding
from the private and public sector to support the delivery of
agreed NELEP priorities;
 manage and set the forward strategy for attracting new investment
and business in to the area locally targeted business support
activity
 approve the Budget of the NELEP, in line with the financial
procedures of the local authority accountable body;
 prepare for its approval and then monitor performance against an
Annual Business Plan;
 influence key sub-regional, regional and national strategies;
 approve review and amend the Constitution;
 appoint its Chair and Vice Chairs;
 appoint representatives to selected outside bodies;
 determine arrangements for the retirement from office of non local
authority members of the Board having regard to the need to
ensure continuity in the conduct of its business;
 establish Executive Support;
 establish Sub-Groups as required, appointing their Chairs and
determining their terms of reference;
 keep its representation under review having regard to the geography
of the NELEP area, its key business sectors and different sizes
of business operation;
 publish an Annual Report to coincide with the NELEP AGM in July;
and
provide a link to Government on all aspects of the NELEP’s work.
5.
Chairs / Vice Chairs and Board Members
5.1
The Chair of the NELEP shall be from the private sector. The roles of
the Chair
/Vice Chairs and Board Members are set out at Appendix 3.
5.2
There will be two Vice Chairs, with one appointed from the private
sector and one appointed from the local authority members.
5.3
Certain decisions may be delegated to the Chair and Vice Chairs in the
circumstances described in Appendix 4, together with the
arrangements for
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formally recording those decisions and communicating them to other Board
Members.
6
Meetings
Meetings of the Board shall be governed by this Constitution and, in
particular, the
provisions contained in Appendix 5
7
Freedom of Information
From time to time, local authorities in the NELEP may receive
information
requests under the Freedom of Information Act 2000, which relate to
the business
of the NELEP. The Board Members are each committed to deal with
those requests
in accordance with the Protocol set out in Appendix 6
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APPENDICES
1. Nolan Principles
2. Code of Conduct
3. Roles and Responsibilities of the Chair, Vice-Chair and Board
Members
4. Scheme of Delegation
5. Meetings of the Board
6. Freedom of Information Protocol
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APPENDIX 1
Nolan Principles
Nolan Principles:
Selflessness
Holders of public office should take decisions solely in terms of the public
interest. They
should not do so in order to gain financial or other material benefits for
themselves, their
family or their friends.
Integrity
Holders of public office should not place themselves under any financial or
other obligation to outside individuals or organisations that might influence
them in the performance of their
official duties.
Objectivity
In carrying out public business, including making public appointments,
awarding contracts, or recommending individuals for rewards and benefits,
holders of public office should make choices on merit.
Accountability
Holders of public office are accountable for their decisions and actions to the
public and must submit themselves to whatever scrutiny is appropriate to their
office.
Openness
Holders of public office should be as open as possible about all the decisions
and actions that they take. They should give reasons for their decisions and
restrict information only when the wider public interest clearly demands.
Honesty
Holders of public office have a duty to declare any private interests relating to
their public
duties and to take steps to resolve any conflicts arising in a way that protects
the public
interest.
Leadership
Holders of public office should promote and support these principles by
leadership and
example.
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Langlands Principles:
Good Governance and Principles of Public Life
The Code of Conduct in Appendix 2 is intended to conform to the six
Langlands Principles of good governance for all organisations delivering
public services. Members shall also conduct themselves in accordance with
the Nolan Principles of Public Life.
Good governance means focussing on the NELEP’s purpose and
outcomes for partners and other stakeholders:The Board establishes the NELEP’s purpose clearly and gives the
organisation clear strategic direction.
Strategic and financial plans are based on achieving its overall purpose.
The Board oversees the implementation of strategic and financial plans and
regularly reviews how far it has achieved the intended outcomes.
Strategies, plans and major decisions take account of the needs and views of
its stakeholders and the communities it serves.
Decision-making is consistent with the NELEP’s Constitution and with its legal
obligations.
Good governance means the Board and senior officers working together
effectively in clearly defined functions and roles:Board Members and senior officers understand their roles and ensure that the
Board exercises overall responsibility for the NELEP’s leadership and control.
Board Members must act in the best interests of the NELEP. They must not
act as representatives of any other organisation or interest group.
All Members of the Board accept collective responsibility for upholding its
decisions. Working relationships between the Board members and any
Executive Support are constructive and effective.
The Chair and the Vice Chair are responsible and accountable to the Board
for exercising any powers or authority delegated to them.
Governance systems and relationships enable the business to be managed
efficiently and effectively.
The Board receives objective professional advice on matters where it would
be appropriate to do so.
Good governance means promoting values for the whole organisation
and demonstrating the values of good governance through behaviour:The NELEP promotes clear values that guide its activities.
Board Members put these values into practice through their behaviour.
The Board upholds and applies the principles of equality and diversity in all
areas of its work, including its governance arrangements.
The NELEP conducts its affairs with honesty and integrity. Through its
actions, it maintains its good reputation.
Any conflicts of interest that Board Members and staff may have are declared
and managed openly and appropriately.
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Good governance means taking informed, transparent decisions and
managing risk:The Board acts and makes decisions in a way consistent with the NELEP’s
Constitution and delegations.
The Board receives information and advice that is appropriate to its strategic
role and the decisions it is asked to make.
The NELEP openly communicates the Board’s decisions to partners and other
stakeholders.
The Board identifies risks that might prevent it from achieving its objectives,
manages these risks and mitigates their effects, wherever possible. The
Board ensures that the NELEP has effective systems for risk management,
internal control and audit where appropriate.
Good governance means developing the capacity and capability of the
Board and senior officers to be effective:The Board have the skills, knowledge, experience and resources needed to
provide capable leadership and control, taking account of the objectives and
governance needs. The Board includes people who can offer different
perspectives on the NELEP’s work, provided they meet appropriate criteria on
skills, knowledge and experience.
New and existing Board Members receive support to enable them to fulfil their
governance responsibilities through induction, learning and other forms of
support that reflect the objectives and governance needs.
The NELEP regularly reviews the skills and composition of the Board and how
well it is fulfilling its governance responsibilities. It makes any improvements
needed and plans effectively for the renewal of the Board.
Where Board Members are nominated by an outside body, nominations and
appointments are made on the basis of the skills and experience that would
be most useful in meeting the NELEP’s governance needs.
Good governance means working with stakeholders and being openly
accountable to them:The NELEP gives partners, funders and local people information that meets
their needs about the NELEP, its performance and its future plans.
The NELEP gives other stakeholders the information they need about its
plans and performance.
The NELEP is open about what it does and publishes information about its
activities wherever possible. The NELEP agrees to respond to requests for
information about the work of the Board and the NELEP.
The NELEP is open and co-operative in dealing with all its partners and
funders, notifying them of anything that may affect its ability to fulfil its
obligations.
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APPENDIX 2
Code of Conduct
Code of Conduct for Board Members
1.
Board Members are expected to carry out their duties to the highest
standards of professionalism and integrity bringing experience, judgement
and critical detachment to their duties and must not be influenced by business
or personal relationships external to their Board duties.
2.
The Board should be open and accountable to the region and the local
community. As a general rule, information about the NELEP should be made
available unless there are good reasons of confidentiality or practicality why
not.
3.
The Board should publish an annual report providing information about
activities and performance.
4.
The Board should comply with requests for information where
practicable.
5.
The Board should review openness arrangements on an annual basis.
6.
Board Members must ensure that their personal or professional
interests do not influence their decisions and that they do not use their
position to obtain personal gain of any kind.
7.
Board Members should declare any conflicts of interest.
8.
When the Board discuss an item which poses a conflict of interest for
any member or employee present, that person should declare his/her interest
at the outset of the meeting.
9.
If the conflict is clear and substantial, the Board Member should offer to
withdraw and, if invited to remain, should refrain from voting on the matter or
taking part in the discussion.
10.
The Board should monitor the Code of Conduct on receipt of hospitality
and gifts by Board Members and staff.
11.
Board Members are expected to attend regular meetings of the Board
and any Sub-Group to which they are appointed by the Board as well as any
other meetings where their presence can reasonably be expected.
12.
Board Members must always act in good faith and in the best interests
of the NELEP the local community and economy and must have due regard to
the fact that they are administering public funds.
13.
Board Members shall not use information gained in the course of their
public service and in exercising their responsibilities as a Board Member for
personal gain nor seek to use the opportunity of public service to promote
their own interests.
14.
Board Members will not disclose information given to them in
confidence by anyone, or information acquired which they believe is of a
confidential nature, without the consent of a person authorised to give it, or
unless they are required by law to do so.
Gifts and Hospitality
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15.
Board Members shall not accept any gifts or hospitality from any
persons or bodies applying, or seeking to, apply for funding from the NELEP
or, involved in the negotiation of any contract, or other transaction, connected
with the NELEP or the resolution of any dispute with the NELEP.
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General
16.
Board Members must declare any personal interests during any
discussion or correspondence with officers of the NELEP, its Executive
Support or its agents
17.
Board Members shall review their membership/chairmanship if their
personal circumstances are likely to result in so many declarations of interest
that their value as a member/chair will be affected or are likely to result in a
weakening of public confidence in the duty of Board Members to work solely
in the public interest.
18.
If Board Members are unsure of the seriousness of a potential conflict
of interest they shall err on the side of caution and disclose that interest.
19.
Board Members shall:
i)
Promote equality by not discriminating unlawfully against any
person;
ii)
Treat others with respect;
iii)
Conduct themselves in a manner so as not to bring the NELEP
into disrepute;
iv)
Not use or attempt to use their position to improperly confer on
themselves or any other person any advantage or disadvantage.
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APPENDIX 3
Roles and Responsibilities of the Chair / Vice-Chairs and Board
Members
Role and Responsibilities of the Chair/Vice- Chairs
The Chair/Vice-Chairs will:
ensure efficient conduct of the Boards’ business;

ensure, where possible, that all Members are given the
opportunity to express their views
before decisions are taken;

establish a constructive and supportive working relationship
amongst Board Members;

ensure that the Board delegates sufficient authority to its SubGroups, the
Chair, and others to enable the business of the NELEP to be carried
out effectively between Board meetings, and also to ensure that the
Board
monitors the use of these delegated powers;

ensure that actions comply with the Constitution;

represent the NELEP as appropriate;

work in consultation with other Board Members to take any
decision
delegated to the Chair;

seek to ensure the Board receives professional advice when
needed either
from its Executive Support or external sources.
Board Member Obligations









To uphold the values and objectives of the Board and in particular
the principles set out in Appendix 1. Board Members share
responsibility for its decisions and each member should only act in the
interests of the NELEP.
To contribute to and share responsibility for Board decisions.
To respect confidentiality of information.
To prepare for and attend meetings, training and other events.
To represent the Board as appropriate.
To declare any relevant interests.
To report back on relevant issues from their
employing/representative organisations.
To scrutinise financial information provided to ensure that
financial controls and systems of risk management are robust and
defensible.
To attend induction, training and performance review sessions or
events as are reasonably.
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
To operate in accordance with the Constitution.
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APPENDIX 4
Scheme of Delegation
Background
(1) The purposes of these delegated responsibilities are to:
(i) enable decisions to be taken efficiently and effectively;
(ii) enable the Board to provide clear leadership
(iii) ensure it works in partnership with other stakeholders;
(iv) assist Board Members carry out their role more effectively;
(v) create a powerful and effective means of holding decision makers to
public account;
Matters Reserved to the Board
(2) The Board shall have the power to delegate any of its functions in addition
to
those already specifically delegated as described below. The Board can at
any time withdraw any power delegated by it as it thinks fit. The Board may
determine that certain matters are to be decided only by the Board.
Urgent Decisions
(3) The Chair, acting in consultation with the Vice-Chairs, may take a decision
which would
usually be determined by the Board if the decision is required as a matter of
urgency.
However, the decision may only be taken:a) If it is not practical to convene a quorate meeting of the Board;
and
b) the reasons why it is not practical to convene a quorate meeting
of the Board
and the Vice-Chairs consent have first been noted on the record of
the
decision.
(4). Following the above decisions, the Chair will provide a report to the next
available Board meeting, explaining the decision, the reasons for it and why
the decision was treated as a matter or urgency as applicable.
Matters Delegated to Sub-Groups
(5) The Board shall have discretion to appoint any Sub- Group to assist with
the
execution of its functions or to provide it with advice and shall have the
power to delegate subject to:
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(i) determining the terms of reference and membership of any Sub-Group
which may include non Board members;
(ii) appointing a Member of the Board to chair the Group; and
(iii) the delegation must be exercised in a way which falls within the
approved policies of the Board.
(6)This Constitution, including the Code of Conduct for Board Members, shall
apply to any non-Board Member of a Sub-Group except in so far as it is
obviously inconsistent with membership of a Sub-Group.
Matters Delegated to the Chair
(7) The matters delegated to the Chair are:
(i) Such matters as the Board may from time to time determine
(ii) Urgent decision making in accordance with para (3) above
(8) Each exercise of delegation shall be reported to the next Board Meeting.
Scope and Remit of Local Authority Board Members Delegated Authority
(9) Local authority members on the Board are nominated by their respective
authorities and are required to act within the delegated authority given to
them.
(10) Local authority members should act at all times in a manner consistent
with the Policy Framework of their authorities; where it is anticipated that a
decision of the Board might involve a conflict with, or departure from, that
Framework then they should, on advice, consider referring the matter to their
Council for consideration and seeking a deferral of the Board decision
accordingly.
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APPENDIX 5
Meetings of the Board
1.
MEETINGS OF THE BOARD
(a)
Annual Meeting
The Annual Meeting of the Board shall be held in [July] of each year for the
purposes of appointing a Chair and Vice- Chair; considering an Annual Report
on the activities of the Board; making any necessary amendments to this
Constitution and transacting any other business.
(b)
Election of Chair and Vice- Chair
At the Annual Meeting, the Board shall elect from amongst its members a
Chair and the Vice- Chairs. Board Members shall make appropriate
arrangements amongst themselves to put forward nominees for these
appointments. Any vacancy arising in any of these offices shall be filled at the
next meeting following the occurrence of the vacancy.
The Chair and Vice- Chairs shall be entitled to serve a maximum of [two]
individual terms; the duration of each will be a maximum of [three years].
The Chair shall be appointed from amongst the private sector representatives
on the Board
One Vice-Chair shall be appointed from amongst the private sector and one
Vice-Chair shall be appointed from the local authority members
(c)
New Members
In the event of the resignation of a private sector or education sector
Board Member
the Board will immediately seek a replacement .In the case of a local
authority
Leader/Elected Mayor ceasing to hold that position that local authority’s
place will
revert to the newly elected Leader/Elected Mayor
Non local authority Board Members shall be entitled to serve for three
years.
(d)
Termination of Membership
Any Board Member wishing to resign from the Board may do so at any
time by
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writing to the Board’s Executive Support who shall immediately inform
the Board and
the Board shall put in place procedures to seek a replacement
(e)
Observers
In addition to the Board Members, such other persons may attend
meetings as the
Board shall from time to time agree as observers, who may address the
meeting but
may not vote.
(f)
2.
Frequency of Meetings
(i)
The Board shall meet [6-8 weekly] with the exception of August on
such days and at such times as it shall have determined at the
Annual Meeting unless in the opinion of the Chair the business to
be transacted does not warrant the holding of a meeting, or s/he
considers that an additional meeting is warranted.
(ii)
A Special Meeting of the Board shall be convened on a minimum of
21 clear days notice following receipt by the Board’s Executive
Support of a request from the Chair or from not less than [three]
Members save that where the Chair and Vice-Chairs agree the
period of notice shall be such lesser period as they consider
appropriate in case of urgency. .
PLACE OF MEETINGS
Meetings of the Board shall be held at venues approved by the Chair on
behalf of the Board.
3.
QUORUM
The quorum for meetings of the Board shall be 10 out of the 18 provided
at least five
private sector members and four local authority members are present.
4.
VOTING
4.1
The principle of decision making by the Board shall be that, wherever
possible, decisions of the Board will be by consensus, without the need for a
vote. Where this is not possible a vote may be taken where the Chair
considers it to be necessary to establish whether a consensus exists. The
vote will be by way of a show of hands and the vote of each member recorded
in the minutes. Where no consensus appears likely the item or matter shall
either a) be dealt with following an adjournment or b) be deferred to the next
ordinary meeting of the Board for decision in either case to allow informal
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deliberations to take place
4.2
In the event of a vote, only bona fide Board Members shall be entitled
to vote (including the Chair). In the event of a tied vote the Chair has no
second or casting vote. Any motion or proposal which results in a tied vote
will be deemed not to have been agreed.
4.3
Any member may request a formal ballot.
5.
AGENDA
Copies of the Agenda for meetings of the Board shall be circulated to
members normally at least seven days before the meeting, together with any
relevant reports and documents. Unless otherwise agreed in advance, the
Agenda and papers shall be circulated electronically .
Matters for inclusion in the agendas and any other reports or documents shall
be sent normally to the Board’s Executive Support at least seven days before
the meeting.
Agendas and Minutes shall be published on the NELEP’s website save where
matters of commercial sensitivity or confidentiality might arise
6.
ALTERATIONS TO THE CONSTITUTION
Alterations to this Constitution shall be made only by the Board at each
Annual Meeting or at a Special Meeting (if required) and the same shall be
kept under regular review.
7.
ATTENDANCE OF THE PUBLIC AT MEETINGS
Until the first anniversary of the Board, meetings of the Board shall be closed
unless otherwise determined by the Chair. Thereafter the position shall be
the subject of review.
Where members of the public are in attendance at a Board Meeting, the
Chair may exclude the public where any item of business might lead to the
disclosure of confidential or commercially sensitive information
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Appendix 6
Freedom of Information Protocol
Board Members recognise that public authorities, as defined by Freedom of
Information Legislation,(“FOI”), information may be the subject of an
Information Request.
Board Members shall assist each other in complying with these obligations
where they relate to NELEP business including but not limited to assistance
without charge in gathering information to respond to an Information Request.
Any local authority represented in the NELEP shall be entitled to disclose any
information relating to the NELEP in response to an Information Request,
save that in respect of any Information Request which is in whole or part a
request for Exempt Information:
the local authority which receives the Information Request shall circulate the
Information Request amongst organisations that are members of the NELEP
and shall discuss it with their representatives;
the local authority which receives the Information Request shall in good faith
consider any representations raised by other representatives when deciding
whether to disclose Exempt Information; and
the local authority which receives the Information Request shall not disclose
any Exempt Information beyond the disclosure required by FOI Legislation
without the consent of the Party or Parties to which it relates.
The Board Members acknowledge and agree that any decision made by a
local authority which receives an Information Request as to whether to
disclose information relating to the NELEP pursuant to FOI Legislation is
solely the decision of that authority.
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Appendix 2 – North East LEP Board Member Biographies
Paul Woolston Chair
As former Senior Partner at Price Waterhouse Cooper (PwC), Paul’s
expertise is in the public sector, focussing on high visibility issues such as
health, local government and education. Paul continues to be closely involved
with the business community and government, here in the North East,
nationally and internationally.
Andrew Hodgson – Vice Chair
As Chief Executive Officer of Soil Machine Dynamics (SMD), Andrew is a
leader in subsea engineering and in recent years has been awarded three
Queen’s Awards for Industry. He’s currently Chair of Subsea North East, a
board member of Subsea UK, Trust Board member for the International
Centre for Life. He has also been awarded as North East Business Exec of
the year, EY Entrepreneur of the Year and EEF’s UK manufacturing
champion.
Councillor Simon Henig – Vice Chair
Locally, Councillor Henig is Chair of the Combined Authority, Leader of
Durham County Council, Chair of the County Durham Partnership and Vice
Chair of the Association of North East Councils. Nationally, he is a lead
member on the Culture, Tourism and Sport Board of the Local Government
Association and a member of Labour’s National Policy Forum. Councillor
Henig is also Principal Lecturer in politics at Sunderland University and an
accomplished author on the same subject.
Arnab Basu
As Chief Executive Officer of Kromek Group Plc, Arnab has gained vast
personal experience in how to effectively source and achieve private equity
funding and business growth. His determined, focused and targeted approach
to business is now invaluable help which he can pass on.
Michael Bellamy
After 13 years working at ICI, in sales and marketing, Michael spent time in
Florence as General Manager of Marketing and Communications, before
accepting the role of General Manager at PII Pipeline Solutions
David Land
David has recently left his role with Gestamp Tallent having spent 26 years
helping the company grow and develop into a major player in the automotive
sector. Using his extensive experience he is actively involved with many
business groups to promote and support the growth of the manufacturing in
the North East. He has also been involved in gaining approval for the first
University Technical College in the region and a strong supporter of getting
young people into engineering.
Gillian Hall
Gillian was the first female Senior Partner at Watson Burton LLP, a national
law firm with offices in Newcastle, Leeds and London. Now retired from
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Watson Burton, where she was national head of corporate law for many
years, Gillian is a highly respected contributor to private and public sector
organisations across the region. Gillian does this through angel investments
and non-executive directorships, which include the Port of Blyth, Arch the
Northumberland Development Company. Gillian is also a longstanding CBI
Regional Councillor and a member of the Entrepreneurs’ Forum.
Jeremy Middleton
As Director of Middleton Enterprises Ltd, Jeremy’s work focuses on property
and Business Angel Investment across the North East including investments
across a range of sectors including manufacturing, environmental, digital
media and property trading. After a career in brand development with Procter
& Gamble and PwC, he co-founded HomeServe PLC. He is also a Board
member of Utilitywise PLC.
Gill Southern MBE
As well as being Commercial Director and Co-Owner of Wessington
Cryogenics, Gill is also on the Board of NOF Energy and is a long term
member of the North East Chamber of Commerce. In 2011, Gill was awarded
an MBE for her services to North East Industry.
Paul Varley
Paul’s past experience ranges from CEO of Newcastle Falcons to Managing
Director of Carillion Energy Services. Paul mentors numerous businesses in
the North East.
Councillor Grant Davey
With vast experience across a variety of public sector work, Councillor Davey
remains an active, hands-on contributor to the community. Councillor Davey is
leader of the Labour Group at Northumberland County Council and has seen
many changes in the area. He remains conscientiously involved.
Councillor Nick Forbes
Since 2011, Councillor Forbes has held the position of Leader of Newcastle
City Council. He is also Chair of North East Transport, Vice Chair of Tyne and
Wear Fire and Rescue Authority and Chair of FRESH, the campaign for a
Smoke Free North East. Councillor Forbes’ interest in health issues stems
from his NHS training and he’s also Chief Executive of Involve North East a
regional health charity.
Councillor Mick Henry CBE
Mick is Vice-Chair of the Combined Authority and has been Leader of
Gateshead Council since 2002, representing inner city ward Saltwell since
1986. He chairs Gateshead Strategic Partnership and Diversity Forum.
Formerly a Senior Lecturer in Photography at Northumbria University, Mick is
a member of Arts Council North and a Board Member of BALTIC, Sage
Gateshead and Live Theatre. He is a Non-Executive Director of Gateshead
NHS Foundation Trust and a member of the Court of Newcastle University.
Councillor Iain Malcolm
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Councillor Malcolm’s has been a member of South Tyneside Council since
1988 and Leader since 2008. He chairs the Board of Newcastle International
Airport, is a Member of the South Tyneside Foundation Trust, Chair of the
South Tyneside Health and Wellbeing Board and a Member of the LGA
Community Wellbeing Board. Professionally he is Deputy Chair of Sovereign
Strategy.
Elected Mayor Norma Redfearn
Mayor Redfearn was elected as Mayor of North Tyneside in 2013, which is
testament to her commitment and dedication to the area. Mayor Redfearn has
always served her community, from Cabinet Member of Children, Young
People and Learning; to national representative for primary schools. Mayor
Redfern was also the recipient of the Prize for Public Leadership in 1997 by
the office of Public Management.
Councillor Paul Watson
Councillor Paul Watson became Leader of Sunderland City Council in May
2008, after previously serving as Deputy Leader since May 2006. Prior to that,
he was Portfolio Holder for Regeneration and Community Cohesion. Made
redundant in 1981, he has been a self-employed businessman ever
since. Councillor Watson has an Honours Degree in Law awarded by
Teesside University in 1998. The Leader of the Council, as leader of the
controlling majority political group, chairs the Cabinet and acts as the
Council’s lead political spokesman. He is also Chair of the Port of Sunderland
Board, one of the leading North Sea ports.
Councillor Watson represents the City of Sunderland and the City Council at
national and sub-national levels on a number of key organisations. He is an
Executive Member of the Local Government Association; Vice Chair of the
LGA City Regions Board; Chair of the National Key Cities Group; Chair of the
Association of North East Councils; Member of the Combined Authority with
the Economic Portfolio; Member of the Sunderland Economic Leadership
Board; Member of the European Union’s Committee of the Regions,
representing the UK delegation on the Economic and Social, and Education
Committees. He also sits on the Board of the North East Local Enterprise
Partnership and Sunderland Football Club Foundation.
Professor Peter Fidler
Peter’s career has encompassed research and consultancy in both academic
and professional posts. He is an active contributor to several development
bodies in the North East and is President of Sunderland University.
Anne Isherwood
Anne has always been closely linked to the sourcing, supporting and
promotion of local skills with the aim of furthering the economic regeneration
of the North East. Anne’s experience ranges from the hospitality profession to
Principal at Sunderland College – all roles focus on delivering an outstanding
quality of service; this has always been a paramount principle in everything
that Anne puts her mind to.
North East LEP Assurance Framework – Local Growth Fund
Page 58 of 170
APPENDIX 3
Appendix 3 – Technical Steering Group (TSG) Membership
To provide the required knowledge and direction to the LGF Programme,
the Technical Steering Group will be composed of technical officers
from key stakeholder organisations. This will include:
North East LEP Chief Operating Officer - Helen Golightly
NECA Chief Finance Officer – Paul Woods
NECA Monitoring Officer- Vivienne Geary or her nominee to provide
Legal Advice as appropriate
Chair of the NECA Economic Development Directors Group – Sheila
Johnson
NECA – Senior Accountant – Eleanor Goodman
Support Authority Principal Accountant - Paul Dixon
North East LEP Programme Manager(s) - As required
BIS Local Representative – Adrian Coates (Observer status)
North East LEP Assurance Framework – Local Growth Fund
Page 59 of 170
APPENDIX 4
Appendix 4
North East Local Enterprise Partnership (North East LEP)
Technical Steering Group (TSG) - Terms of Reference
Purpose:
This is an Advisory Officer Group reporting into the North East LEP Board,
who will make the final decisions on grant awards.
To provide recommendations to the North East LEP Board on issues relating
to Local Growth Funds allocated to applicants for investment in economic
growth, development and job creation. This includes appropriate use of LGF.
The Technical Steering Group will make recommendations in regard to the
delivery and management of the LGF.
Responsibilities:
1. Work with the Accountable Body to identify potential projects to utilise
the Local Growth Fund.
2. To provide final recommendations to the North East LEP Board as to
which projects should be supported by the LGF Programme.
3. Ensure that strategic programme and project management key risks
and issues are taken to the North East LEP Board.
4. Recommend priorities, funding options, timescales for delivery and key
operational matters to the North East LEP Board.
5. Represent the North East LEP Board on LGF issues.
6. Provide opportunities for networking, sharing information, identifying
efficiencies and understanding concerns among LEP partners and
beyond (including with other LEPs).
The Technical Steering Group will build on, and engage with current
structures, which exist in the LEP area and, in particular, will develop links
with other LEPs in order to identify and address issues of common concern in
the most effective and efficient way. In addition, the Technical Steering Group
will collaborate and engage across the partnership to develop positive
relationships with funders of infrastructure and infrastructure providers for the
benefit of all.
The Technical Steering Group recognises that existing providers, local
authorities and other partners have specific responsibilities for planning and
infrastructure issues and delivery. The Group will seek to complement its
work in relation to the economic development of the North East LEP area.
North East LEP Assurance Framework – Local Growth Fund
Page 60 of 170
APPENDIX 4
Representation:
The Technical Steering Group should comprise the following representatives:
1. North East LEP Chief Operating Officer (Chair). This officer brings
significant Economic Development, Business, programme, financial,
performance and risk management and planning knowledge to the
Group. These skills will guide the Group to ensure its business has the
required impact on the real economy of the North East.
2. Chief Finance Officer of NECA. As the Accountable Body for North
East LEP funds, the Section 73 Officer must be content that all public
monies are being invested appropriately. The financial expertise
provided by this individual will assist in creating an auditable
programme of activities, and ensuring technical endorsement for offers
can be readily gained for approved proposals.
3. Monitoring officer of NECA. The Monitoring Officer provides legal
advice either directly or through securing services from other
constituent authorities or external providers to support the NECA in its
role as Accountable Body and the LEP as required. The Monitoring
Officer must ensure that the activities undertaken or planned to be
undertaken by the NECA are lawful. This is particularly significant when
considering the appropriateness of projects in the context of the State
Aid requirements.
4. Chair of the NECA Economic Development Directors Group.
Representing the Economic Development Directors of the NECA, the
officer provides a critical overview of the economic development
opportunities and demands arising from the different areas across the
area. In addition to their technical knowledge, the officer is an essential
conduit for information flowing between NECA LA7 CEOs/ EDDs and
the TSG.
5. Accountants from the Accountable Body (on behalf of NECA) and
Support Authority. Carrying out the day to day financial management of
LGF programme management activities, this officer will provide the
ongoing understanding of programme performance and delivery. The
officer(s) can also advise on financial elements of the project
assessment process.
6. BIS Local Representative. As the Government department providing
oversight of the Growth Deal and associated LGF, it is good practice to
involve local representation from the Department. This can assist
inpreparing for future negotiations and provide an external assurance
role.
7. Technical Officer(s) from the Programme Delivery Team working on the
management of the funds. The Officer(s) will act in an advisory
North East LEP Assurance Framework – Local Growth Fund
Page 61 of 170
APPENDIX 4
capacity having
undertaken/completed
project
appraisals, monitoring and programme management.
assessments,
Accountability:
The Technical Steering Group will be report to the North East LEP Board.
Chair:
The Chair will be the Chief Operating Officer of the North East LEP or
selected from the membership of the TSG in the Chair’s absence.
Responsibility of Chair
With assistance from North East LEP Executive Team and the Accountable
Body, the Chair will:





Develop agendas, and manage meetings, which reflect the TSG ’s
agreed Terms of Reference.
Recruit/co-opt TSG members with the assistance of other Group
members.
Act as a point of contact for the North East LEP and Accountable Body
officers as appropriate.
Present reports to the North East LEP Board.
Provide North East LEP Board Members with the agendas and minutes
of each meeting to facilitate information transfer as requested.
North East LEP Assurance Framework – Local Growth Fund
Page 62 of 170
APPENDIX 5
Appendix 5
This is superseded by the register of interests form and Code of Conduct
for members supplied a couple of weeks ago.
Officers are required to comply with Employee Codes of Conduct as well as
professional obligations and as a result will ensure that conflicts of interest
do not arise when advising the LEP (or the NECA) as appropriate. Similar
requirements to avoid conflicts of interest will apply for those providing
services under contracts for services or service level agreements.
NORTH EAST LOCAL ENTERPRISE PARTNERSHIP
PROTOCOL FOR DEALING WITH CONFLICTS OF INTEREST FOR THE
LOCAL GROWTH FUND
(1)
Board Members and Executive of the North East LEP have a general duty
to act in the best interests of the North East LEP Local Growth Fund (LGF)
and not to use their position to gain financial or other advantage or
disadvantage for themselves, family, friends or business associates.
(2)
All members of the North East LEP Board and Technical Steering Group
involved in the selection and approval of applications to the LGF must
ensure that they declare any interests, financial or otherwise, which may
conflict with their responsibilities to the North East LEP LGF.
(3)
References to a “Member” in this respect are to a person nominated to
represent an organisation or sector at a North East LEP Board or Technical
Steering Group meeting and who is entitled to vote on the selection and
approval of applications to the LGF.
(4)
Members will complete an annual declaration of interest form which will be
lodged with the Accountable Body. The register of declarations will be
open to public inspection.
(5)
In contributing to the work of the LGF, members must abide by the principle
of impartiality and operate in an entirely non-partisan fashion. In
circumstances where the North East LEP Board and/or Technical Steering
Group is discussing the selection or approval of projects:
 Where members have a direct interest in the project e.g. the
organisation by which they are employed is the applicant, they will
declare an interest and absent themselves from the meeting.
 Where members have an indirect interest e.g. the applicant is a
constituent, this will be noted and the member may remain in the
meeting and contribute to decision making.
 Where an application would result in so many members absenting
themselves that it would be no longer practical to continue with the
meeting, the Chair may allow members to remain in the meeting and
continue as normal, having noted the interests.
North East LEP Assurance Framework – Local Growth Fund
Page 63 of 170
APPENDIX 5
NELEP Local Growth Fund Member Declaration of Interest pro-forma
NORTH EAST LOCAL ENTERPRISE PARTNERSHIP
Local Growth FUND
STATEMENT OF INTERESTS OF NELEP BOARD/TECHNICAL STEERING GROUP
MEMBER
FINANCIAL YEAR 2015-2016
PERSONAL DETAILS
Full Name
Private Address
1)
OCCUPATION or PARTNERSHIP
Name of Employer or selfemployment
2)
Dates of office
Remunerated/
non-remunerated
Nature of business
Dates of office
Remunerated/
non-remunerated
DIRECTORSHIPS
Company name
3)
Nature of business
BUSINESS INTERESTS OR SHAREHOLDINGS
Companies or organisations in which you, your spouse or a close relative have shares with a nominal
value of over £25,000 or 1% of the total issued share capital
North East LEP Assurance Framework – Local Growth Fund
Page 64 of 170
APPENDIX 5
Name of Business
4)
Nature of Business
Holding/ interest
INTERESTS IN LAND
Land or property in which you and the Agency may have an interest, including value
5)
OTHER INTERESTS
Consultancies, sponsorships, memberships and other interests not covered above
Organisation
Nature of Business
Dates of office
in 2007-08
Remunerated/
non-remunerated
I certify that the information contained in this declaration is true and correct
Signed:
Date:
If there space is insufficient in any section, please continue on a separate sheet.
Additional sheets should be signed and annexed to this form
North East LEP Assurance Framework – Local Growth Fund
Page 65 of 170
APPENDIX 7
Appendix 6 – Programme Delivery Team Biographies
Helen Golightly – North East LEP
Helen is part of the North East Local Enterprise Partnership's Executive Team
with a focus on managing the programmes, Enterprise Zone, Infrastructure
and investments, and the overall operations of the LEP. Prior to this Helen
was at Newcastle City Council for over 20 years. She is a Prince2, Managing
Successful Programmes and Management of Risk Practitioner with over 15
years experience of leading major projects, from the implementation of
software systems and business change to physical, social and economic
regeneration programmes and projects, including responsibility for significant
capital and HMR Pathfinder funding. Helen began her career as a chartered
Town Planner and was responsible for programme managing the citywide
regeneration programmes and operational delivery of economic development
at Newcastle City Council. Previous roles have included being the lead
Council officer for the governance and monitoring of all major projects within
the Council and a senior manager within the Planning Department,
specialising in development control, managing change, customer care,
construction and property management and operations.
Matthew Ebbatson – North East LEP
Matthew joined the North East Local Enterprise Partnership as Economic
Adviser in 2012 having previously been Senior Policy Analyst at Tyne and
Wear City Region for three years and prior to that working in European
programme roles for Tyne and Wear Partnership, Sunderland City Council
and Durham County Council. Since joining the LEP Matthew has led on
developing and setting up the Regional Growth Fund and Growing Place Fund
and played a key role in the Tyne and Wear City Region Economic Review
considering key areas of economic growth, housing and skills.
Paul Dixon – Sunderland City Council
Paul joined Sunderland City Council in 2001 and is a member of the
Chartered Institute of Public Finance and Accountancy (CIPFA). Since joining
Sunderland, Paul has worked within the Financial Resources Service
providing financial support and guidance for a number of Council service
areas. In recent years Paul has worked as a Principal Accountant in the
Commercial Advice and External Funding Team, provided funding support to
projects and programmes, including the Building Schools for the Future
Programme, PFI schemes and the North East LEP Growing Places Fund.
Alison Clark – Sunderland City Council
Alison joined Sunderland City Council in 2002 as Assistant Programme Coordinator for the £17million URBAN II CIP for Hetton & Murton, assuming the
role of Programme Co-ordinator in 2005. From the commencement of her
employment at the Council Alison has led on the development, management
and compliance of external funding programmes including Future Jobs Fund,
Single Programme, Deprived Area Funding and the Growing Places Fund.
Alison currently holds the position of Senior Funding & Commercial Officer.
North East LEP Assurance Framework – Local Growth Fund
Page 66 of 170
APPENDIX 7
Paul Woods – NECA
Biography to be added
Eleanor Goodman - NECA
Eleanor joined Newcastle City Council in 2006 as a graduate trainee and
qualified as a member of the Chartered Institute of Public Finance and
Accountancy (CIPFA) in 2010. Since joining Newcastle, Eleanor has worked
in a number of different roles providing support for various service areas. In
recent years, Eleanor has worked as lead accountant for the Tyne and Wear
ITA and subsequently in providing comprehensive finance support to NECA,
particularly in relation to its Transport functions
Vivien Geary - NECA
Biography to be added
Sheila Johnston – NECA
Biography to be added
North East LEP Assurance Framework – Local Growth Fund
Page 67 of 170
APPENDIX 7
Appendix 7 – Roles and Responsibilities for the Local Growth Fund
1)
Introduction
NECA is the Accountable Body for the Local Growth Fund but will contract a
number of services to support this from Sunderland City Council and other
specialist external providers as appropriate. As Accountable Body the NECA
will enter into the formal arrangements that are required for the delivery of the
Fund. These arrangements are provided for as a result of the agreements
entered into to identifying the NECA as the Accountable Body.
It is the duty of the Accountable Body to ensure that all proper processes are
followed as described in the Grant Offer Letter and the guidance relevant to
the Fund. Following endorsement of the LEP funding decisions by the NECA,
the Authority will proceed to implement the decisions.
The Accountable Body Agreement represents an understanding of the roles
and responsibilities required of the Programme Delivery Team, the
Accountable Body, the North East LEP Executive and its partners in the
delivery and management of the Fund.
North East LEP Assurance Framework – Local Growth Fund
Page 68 of 170
APPENDIX 7
2)
Appraisal and approval of new projects
Programme Wide Evaluation
NORTH EAST
LEP Funding
Reject
Reject
NO
Projects
Funded and
repaid where
applicable
Fund sign off
by Acc
Body/MA.
Offer Letters
released
QMR Process.
Monitoring,
Reporting,
Audit
Project
Evaluation
Stage 5:
Independent
Appraisal and
Due Diligence
NO
YES
Stage 4 : Full App /
Bus Case Received.
Meet investment
criteria
YES
YES
YES
Stage 7 –
Project
Approvals –
LEP Board Sign
Off
YES
Stage 3 & 6:
Technical
Steering Group
Consideration
Stage 1 & 2:
Expressions of
Interest
Submitted. Check
for Strat Fit
&VFM
Stage 1:
Call For
Projects.
Recommend
Grant Award
NO
NO
Reject
Reject
NO
Reject
Appraisal Framework
North East LEP Assurance Framework – Local Growth Fund
Page 69 of 170
APPENDIX 7
Action
Development of
new project
proposals
Responsibility
Programme
Delivery Team
Receipt of
applications &
Completeness
Check
Programme
Delivery Team
Compliance
Check
Endorsement of
application
Investment &
Financial
Appraisal / Due
Diligence
Programme
Delivery Team
Programme
Delivery Team
Programme
Delivery Team/
Accountable
Body
Comments
The NELEP Programme Delivery Team will advise
potential project sponsors as to the eligibility of
proposed activities and guide them as they gather the
required evidence for an application.
The Programme Delivery Team will initiate a project file
for each application, providing it with a unique project
number. The project number will remain with the project
for its lifetime.
The Programme Delivery Team will undertake a
completeness check.
The Programme Delivery Team will undertake a
Compliance Check against eligibility, strategic fit,
deliverability, achievement of outputs/deliverables,
ability to unlock economic growth and ability to make
repayments in the case of loan applications.
A Project Summary will be prepared for Technical
Steering Group TSGconsideration.
The NELEP Programme Delivery Team will present
Project Summaries to the TSG for endorsement.
The NELEP Programme Delivery Team will forward a
record of the Decision(s) to the Accountable Body to
place on the project file.
Following the endorsement of an application by the
TSG, the Programme Delivery Team will assess
 a completed business case;
 information in support of the application as
required.
The Programme Delivery Team will complete an
appraisal of the application and provide a copy of the
appraisal findings to the Accountable Body to place a
record on the project file.
Co-ordination of
the approval of
applications
Production and
signing of Offer
Letters
Programme
Delivery Team
/TSG / Board
The NELEP Programme Delivery Team will seek the
recommendation of the TSG and the approval of such
recommendations by the Board.
Accountable
Body
The NELEP Programme Delivery Team will forward a
record of the Decision(s) to the Accountable Body to
place on the project file.
Following approval of applications for grant funding the
Accountably Body will prepare and issue an offer letter
for the project sponsor. Offer letters will be signed by
the Executive Director of Commercial & Corporate
Services before they are issued to the project sponsor.
For applications of loan funding, the Accountable Body,
with specialist legal support, will prepare and issue a
Facilities Agreement for the project sponsor. The
project sponsor will executive the agreement before
counter-execution by NECA.
The Accountable Body will ensure the completed signed
copy of the offer letter/facilities agreement is placed on
the project file.
North East LEP Assurance Framework – Local Growth Fund
Page 70 of 170
APPENDIX 7
3)
The Quarterly Monitoring Return process
Accountable Body
Programme
Delivery Team
Action
Production and
distribution of
QMR’s to
existing project
sponsors
Receipt of
QMR’s from
project sponsors
Completeness
check on QMR’s
Analysis of
QMR’s
Project
Sponsors
Responsibility
Programme
Delivery Team
Comments
The Accountable Body will produce a Quarterly
Monitoring Return for each live project and distribute
them to the appropriate project sponsor.
Programme
Delivery Team
The Accountable Body will receive each Quarterly
Monitoring Return from the project sponsors.
Programme
Delivery Team
The Accountable Body will check each return for
completeness and will check that each of the returns
that were expected have been received.
Programme
Delivery Team
The Accountable Body will make a technical check i.e.
That claims have been made at the correct intervention
rates.
The Accountable Body will hand over to the Programme
Delivery Team the body of Quarterly Monitoring Returns
that have been received.
The Programme Delivery Team will analyse the Quarterly Monitoring
Returns to check the following for each project:

Follow up with
projects
sponsors as a
result of QMR’s
Update
Database
records
Programme
Delivery Team
Programme
Delivery Team
North East LEP Assurance Framework – Local Growth Fund
the achievement of targets for performance
indicators;
 the achievement of targets for total project
expenditure and ERDF claims;
 the achievement of milestones;
 projects are operating within their agreed lifetime;
 all due interim and final project audits have been
received;
 asset registers are up to date.
Having identified any variations between the expected
performance of projects and the actual reported
performance the Programme Delivery Team will follow
up any discrepancies (outside a set of agreed ‘normal’
parameters) with the relevant project sponsors.
Any resolution to the identified discrepancies will be
recorded and passed to the Accountable Body to place
on file
The Accountable Body will update the Database with
actuals & future forecasts agreed in the QMR
Page 71 of 170
APPENDIX 7
4)
Claiming and distribution of LGF
Action
Approval of
quarterly claim
to DCLG
Receipt of LGF
from DCLG
Distribution of
LGF to project
sponsors
Reconciliation of
claims
Responsibility
Programme
Delivery Team
Programme
Delivery Team/
Executive
Director of
Financial
Resources
Accountable
Body
Accountable
Body
Programme
Delivery Team
North East LEP Assurance Framework – Local Growth Fund
Comments
The Accountable Body will prepare the quarterly claims
to DCLG.
The claims will be prepared using the forecast
information that is reported by the project sponsors and
held on the Database.
The Accountable Body will hand over a copy of the
prepared claim to the Programme Delivery Team.
The Programme Delivery will carry out the limited
checks that are possible before approving the claim.
The Accountable Body will Co-ordinate the signing of
the claim by the Executive Director of Financial
Resources.
The Accountable Body will co-ordinate the process to
allow for the receipt of the LGF claimed from DCLG.
The Accountable Body will co-ordinate the process for
the distribution of the LGF to individual project sponsors,
quarterly in arrears of defrayal.
The Accountable Body will distribute the LGF to project
sponsors in line with actual defrayal and allow for
reconciliation through the next Quarterly Monitoring
Return process where necessary.
Page 72 of 170
APPENDIX 7
5)
Additional monitoring requirements
DCLG
Accountable
Body
Project Sponsors
Mazars
Action
Project
Engagement
Visit
Responsibility
Accountable
Body
Quarterly
monitoring by
DCLG
Quarterly testing
of expenditure
and outputs
DCLG
Verification of
existing projects
Accountable
Body
Annual Audit
Accountable
Body
Mazars
North East LEP Assurance Framework – Local Growth Fund
Comments
The Accountable Body will undertake a project
engagement visit when the project is approved and offer
letter accepted to ensure the project understands its
responsibilities, monitoring requirements and
expectations
The Accountable Body assist the DCLG Monitoring
Officer to satisfy their quarterly monitoring requirements
through the timely and accurate provision of information.
As part of the checks of quarterly claims by project
sponsors, the Accountable Body will seek to sample
expenditure detailed on transaction lists and outputs
reported by requesting invoices and other evidence to
be provided by the project sponsor.
The Accountable Body will carry out verification visits to
projects that have claimed in the relevant year.
A copy of each verification report will be included on the
relevant project files.
The Accountable Body prepare and provide an audit file
to Mazars who will undertake independent verification
on an annual basis.
Page 73 of 170
APPENDIX 7
6)
Maintenance of records: Monitoring System & Project Files
Action
Initiation of
project files
Placing updated
information on
project files
Entry of new
project
information onto
the Monitoring
System
Entering QMR
records onto the
Monitoring
System
Responsibility
Programme
Delivery Team
Programme
Delivery Team
Comments
The PDT will allocate a number to and initiate a project
file for each new project application.
All approvals of new projects and revisions to existing
projects will be recorded on the individual project files.
Programme
Delivery Team
Following confirmation of project approval the PDT will
enter the details of the approved projects onto the
Moinitoring System.
Programme
Delivery Team
Following the receipt of the QMR’s from the project
sponsors the PDT will enter the information from the
forms onto the Monitoring System.
Following the receipt of the analysed QMR information
from the Programme Delivery Team will enter any
revisions of the information onto the Monitoring System.
Following the receipt of the revised project information
and evidence of decisions, the Accountable Body will
enter the revised details onto the Monitoring System.
Entry of revised
project
information onto
the Monitoring
System
Programme
Delivery Team
Closure of
projects on the
Monitoring
System
Final storage of
project files
Programme
Delivery Team
Following the receipt of the final claim and the passing
of the financial completion date of a project the PDT will
note the closure of the project.
Programme
Delivery Team
The PDT will be responsible for the storage of the
project files to comply with document retention
requirements.
All approvals of new projects and revisions to existing
projects will be recorded on the individual project files.
North East LEP Assurance Framework – Local Growth Fund
Page 74 of 170
APPENDIX 7
7) Programme Delivery Functions and Lead
NELEP Board
NECA
Technical Steering Group
Programme Delivery Team
NELEP Programme Delivery Team
Helen Golightly
Matthew Ebbatson
Investment Fund Support Officer
Accountable Body Lead and Support Authority Officers
Paul Woods
Eleanor Goodman
Paul Dixon
Alison Clark
Alexander Fall
Vivienne Geary/Legal Advisors
Lead Responsibilities/Programme Functions
Strategic Programme Management
Programme/Project Development
Co-ordination of Investment Panel/NELEP Board
Marketing/Publicity of Investment Fund
Lead Responsibilities/Programme Function
Co-ordination of Project Assessments/Appraisals
Quarterly Monitoring Report Process
Claiming and Distribution of Funds
De-commitment and recycling of Funds
Record Keeping and Monitoring
External Consultancy
Support
Commercial Project Appraisal
Due Diligence
Legal Advice
North East LEP Assurance Framework – Local Growth Fund
Page 75 of 170
APPENDIX 8
Appendix 8 – Grant Drawdown and Payments Process
The flow diagram below outlines the process for the quarterly drawdown of
funds and subsequent payments to projects. For illustrative purposes the
dates shown represent a Quarter 1 claim;
Project QMR - Forecast
Drawdown
Income Received
Project QMR - Actual
Drawdown Evidenced
Payment Authorisation
Payment to Project
North East LEP Assurance Framework – Local Growth Fund
Page 76 of 170
APPENDIX 11
Appendix 9 – Programme Risk Register (DRAFT)
Risk Register
Risk Description
Risk Owner
Cause
Likelihood
/
Probability
Impact
Mitigation
Operational
Strategic
Financial
Governance & Programme Management
North East LEP Assurance Framework – Local Growth Fund
Page 77 of 170
APPENDIX 11
Appendix 10
Local Growth Fund – Risk and Issue Management Guidance for Project
Beneficiaries
Introduction
Project beneficiaries of LGF funding will be required to manage risks and
issues in relation to their project and supply a quarterly report on progress. A
template is attached showing the required formats
Management of Risk
The LGF approach to risk assessment is set out below and applicants should
adopt a methodology that is not inconsistent with it.
LGF risk assessment policy
1. Risks should be assessed on the basis of impact and their probability of
occurring using the 5 by 5 matrix provided in this document, and prioritised
according to their relative significance (as illustrated below). Some risks
will have an uncertain impact and / or probability, and the actions
associated with them can be designed to further assess those factors.
The grids below illustrate the LGF policy on risk assessment.
Assessing Probability
Project beneficiaries will be expected to assess the probability of a risk occurring as set out
below.
Scale (points in
% likelihood of occurrence
brackets)
Very Low (1)
Less than 10% chance
Low (2)
10 to 30% chance
Medium (3)
30-50% chance
High (4)
50-70% chance
Very High (5)
More than 70% chance
North East LEP Assurance Framework – Local Growth Fund
Page 78 of 170
APPENDIX 11
Assessing Impact
Project beneficiaries will be expected to look at the impact on the project against the three
component elements of timescale, underspend and performance against job target and reach a
conclusion on the balance of these three as to where the impact is on a scale from very low to
very high.
Scale
Timescale
Funding
Performance
(points in
(months the
% underspend (in
against job target
brackets)
project is likely to
year or over the
be delayed)
project period) on
eligible expenditure
and grant.
Very Low
(2)
Less than 1 month
Less than 5%
Less than 5%
reduction in job
target delivery
Low
(4)
1 – 2 month delay
5 – 10 %
5-10% reduction in
job target delivery
Medium
(6)
3 – 4 month delay
10 – 15%
10-15% reduction
in job target
delivery
High
(8)
5 – 6 month delay
15 – 30%
15-30% reduction
in job target
delivery
Very High
(10)
More than 6 month
delay
More than 30%
Greater than 30%
reduction in job
target delivery
2. Having assessed both probability and impact, a risk can then be scored using
the points system set out in the tables above and thereafter located on the
risk assessment matrix below.
Probability
Very
High (5)
High (4)
Medium
(3)
Low (2)
Critical
Low
Medium
High
Low
Medium
High
High
High
Low
Medium
Medium
High
High
Low
Medium
Low
Medium
Low
Medium
Low
Low
(4)
Medium
(6)
High
(8)
Very
High
(10)
Low
Very
Low (1)
Low
Very
Low
(2)
High
Impact
North East LEP Assurance Framework – Local Growth Fund
Page 79 of 170
APPENDIX 11
Addressing Risks:
3. Project beneficiaries will need to set out their mitigating actions against
each project risk, including assigning an action owner and agreeing
timescales by which the action will be completed.
4. Mitigating actions may vary in their nature. The following types of
responses may be useful use as a guide:







Terminate risk – quick decisive actions are being taken by the applicant
to terminate the activity the risk relates to.
Treat risk – there are a series of mitigating actions by the applicant to
reduce the risk to an acceptable level.
Tolerate risk- no action being taken by the applicant as exposure to risk
is acceptable or ability to do anything is limited.
Transfer risk– risk being passed on to someone else to manage on
behalf of applicant.
Escalate risk– risk being escalated and dealt with at the highest level in
the company/organisation.
Contingency – clear that there is a proposed action or arrangement
that can be put in place to minimise the impact of a risk if it
materialises.
Countermeasures – applicant has measures in place to contain a risk
at an acceptable level or to reduce its impact or probability.
Risk Reporting
5. Project beneficiaries should review risks using a standardised LGF Risk
summary report template (below). This will provide a record to facilitate
regular monitoring. Applicants will be responsible for maintaining and
updating the template
Assessing Issues
6. The project beneficiary should also be providing an update on the most
significant issues in their quarterly monitoring report. To be clear, a risk is
something that could happen but has not happened yet. An issue is
something that has happened/is happening and needs to be dealt with
now. The impact of issues should be assessed using the same framework
for assessing impact as the one for risks. This is set out again below:
7. The high and critical issues of course need a great deal of scrutiny. The
summary issue report template is set out below and will need to be
completed each quarter.
North East LEP Assurance Framework – Local Growth Fund
Page 80 of 170
APPENDIX 11
Assessing Impact
Project beneficiaries will be expected to look at the impact on the project against the
three component elements of timescale, underspend and performance against job target
and reach a conclusion on the balance of these three as to where the impact is on a
scale from very low to very high.
Scale of
Timescale (months
Funding
Performance
severity
the project could be
% underspend (in
against job
(points in
delayed)
year or over the
target
brackets)
project period) on
eligible expenditure
and grant.
Very Low
Less than 1 month
Less than 5%
Less than 5%
(2)
reduction in
job target
delivery
Low
1 – 2 month delay
5 – 10 %
5-10%
(4)
reduction in
job target
delivery
Medium
3 – 4 month delay
10 – 15%
10-15%
(6)
reduction in
job target
delivery
High
5 – 6 month delay
15 – 30%
15-30%
(8)
reduction in
job target
delivery
Very High
More than 6 month
More than 30%
Greater than
(10)
delay
30%
reduction in
job target
delivery
Summary report of significant issues to be completed by Project
Beneficiaries.
Description of Issue (include date
raised)
North East LEP Assurance Framework – Local Growth Fund
Severity
of
issue.
Actions being taken and
progress being made.
Page 81 of 170
APPENDIX 11
Risk Management reporting template (also found in the quarterly monitoring report)
Risk Description (include date identified)
Probability
Impact
Assessment
(Critical/High/Medium)
Mitigating actions and progress being made.
Assessment post
mitigation
(critical/high/medium/low)
North East LEP Assurance Framework – Local Growth Fund
Page 82 of 170
APPENDIX 11
Appendix 11 NELEP LGF Programme Principles Paper
North East Local Enterprise
Partnership Board
20 November 2014
ITEM 11b: Local Growth Fund Update
1.0
Purpose of the Report
1.1
To update the North East LEP Board on the Growth Deal and the Local
Growth Fund programme. This includes setting out principles for management
of the programme and recommendations for final approval of projects.
2.0
The Growth Deal Projects
2.1
Capital Allocation
The North East Growth Deal announcement in July set out Local Growth
Funding for 22 of the 33 capital projects submitted as part of the Strategic
Economic Plan for 2015/16 delivery. The list of successful projects and funding
is set out in appendix 1. The funding is indicative funding from Government for
each of the 22 projects based on the project information available in March
2014. The strategic importance of the projects is agreed, however, the final
assessment covering deliverability, value for money and state aid will need to
be demonstrated to the LEP before funding can be released.
2.2
Revenue Allocation
In addition to the capital allocation, the North East Growth Deal also provided
£500k revenue funding for a North East Growth Hub and an indicative £1.7m
revenue towards the Mental Health Trailblazer project. This paper focuses on
the capital allocation for LGF but the revenue allocation is shown here for
completeness.
2.3
Funding offer letter
The North East LEP has not yet received its formal funding offer letter from
Government. Informal advice is that it will be received after the Autumn
Statement and the funding will be made available through a single Section 31
payment. This gives the LEP two issues to resolve:

The payment will not be project specific but reliant on the LEP to carry out
a full appraisal of each project, before finally allocating the funding as set
out in 2.1 above;

Formal funding offer letters cannot be issued by the LEP to project
sponsors confirming their funding allocation, until the LEP itself receives its
Page 83 of 170
APPENDIX 11
formal funding offer from government. This may impact on project delivery
and anticipated project spending profiles.
To address these points, the LEP needs to:

Establish key principles to manage the LGF programme;

Agree a timely approval process to formally approve funding to projects to
ensure no unnecessary delay in providing the project sponsors the funding
approval they need to deliver.
In addition, the offer letter and accompanying technical documents will set out
the monitoring arrangements which the North East LEP will need to implement
with regards to financial and outputs monitoring. The LEP will need to ensure
robust arrangements are in place, as well as ensuring that project sponsors
are fully informed of the requirements of them to report funding spend and
outputs achieved. This will be part of the individual project funding offer
letters.
3.0
North East LEP LGF Programme Management
3.1
Programme Assurance and Monitoring
To ensure the North East LEP is making progress and in a position to provide
project sponsors with their formal approval as soon as is possible following the
receipt of Government’s formal offer documentation, the following process has
been put in place.
1. Project Development and Full Application Completion
2. Technical Appraisal of Full Application
3. Report to North East LEP Board for Approval/Sign off
4. Conditional Offer Letter to Applicant from the Accountable Body
5. Final Offer Letter allowing drawdown of funds released when
conditions are met and the Accountable Body receives the final
Section 31 grant determination letter from Government
It is important to note that most projects need formal approval well in
advance of the April 2015 programme start to ensure their project
development and relevant commissioning can be progressed.
3.2
Final Project Approval
All 22 projects within the programme are in the process of developing
their full business cases to demonstrate delivery. They are at different
stages in the process. Some projects are currently being appraised and
undergoing due diligence to enable an early recommendation for formal
funding. This is important as the LEP must ensure that the LGF
allocation is spent efficiently, effectively and appropriately within the
timeframe
Projects are being assesses against:
Page 84 of 170
APPENDIX 11

Deliverability - Within full applications, projects are expected to provide a
breakdown of key delivery milestones from start to completion. Technical
appraisal addresses robustness of how projects can meet these delivery
milestones, while monitoring will assess whether projects continue to
deliver against agreed delivery profile. Failure to hit agreed delivery
milestones will trigger staged interaction with the Applicant highlighting
need for action to avoid clawback of funds. Failure to remedy the situation
by the applicant will result in a recommendation to withdraw the ‘indicative’
funding.

Performance - Projects have been indicatively included within the current
Growth Deal based upon the profile of outputs/outcomes specified within
proposals submitted within the SEP. Technical appraisal addresses
robustness of project output estimates, while monitoring will assess
whether projects continue to deliver against agreed profiles. Failure to
attain initial output targets and hit agreed output profiles will trigger staged
interaction with the applicant highlighting need for action to avoid
clawback of funds. Failure to remedy the situation by the applicant will
result in recommendation to withdraw the ‘indicative’ funding. .

Financial Package - Projects have been indicatively included within the
current Growth Deal based upon the funding package specified within
proposals submitted as part of the SEP. Technical appraisal addresses
robustness of funding package including State Aid compliance, while
monitoring will assess whether projects continue to deliver against agreed
spend profiles. Failure to attain agreed State Aid compliant funding
package and deliver against spend milestones will trigger staged
interaction with the applicant highlighting need for action to avoid
clawback of funds. Failure to remedy the situation by the Applicant will
result in recommendation to withdraw the ‘indicative’ funding.
Nine of the 22 projects are transport schemes which are being
appraised through the established transport appraisal framework before
a final recommendation for funding sign off is made.
LEP Board needs to agree how the formal final sign off for funding is
achieved
There are 3 options to consider:
1. Each of the 22 projects can be reported to the LEP Board meetings
on a case by case basis.
Pros – The LEP Board will have full visibility of all 22 projects.
Cons – This will be time consuming at Board meetings, given that
the principle of supporting these projects has already been agreed
by Board and are in the SEP. This will also cause delayed decisions
which will impact on delivery.
2. Each of the 22 projects can be reported to the LEP Board virtually by
email between meetings on a case by case basis.
Pros – The LEP Board will have full visibility of all 22 projects.
Cons – Board members will have up to 22 reports to consider by
Page 85 of 170
APPENDIX 11
email. This is quicker for applicants than (1) but may still cause
delayed decisions if the response rate is slow.
3. Board can agree to delegate the final sign off of the 22 to the Chair
and Vice Chairs of the LEP Board.
Pros – The applicant will have a quicker funding decision and can
continue delivery.
Cons – The Board will be appraised retrospectively on progress
within the programme.
It is proposed that option 3 is approved to minimise delay in delivery.
3.3
Programme Management Resource
In setting up the requisite strategic programme management function and
process for the Local Growth Funds, agreement of programme management
resources is required. A resource is required within the LEP to provide
financial, performance, risk and programme management of the funding and
oversee the external project development and delivery. It is important to
ensure spend and delivery targets, objectives and outcomes are met.
No funding has been allocated to this activity from Government. After
consultation with Government on how this critical resource requirement is met
to enable programme target delivery, it is proposed that the North East LEP
adopt an approach being taken by several LEPs, which is to ‘top-slice’ a small
percentage of the LGF allocation. It is proposed that Board approves 2.5% of
the 15/16 Section 31 Grant Determination being allocated to the strategic
programme management function.
3.4
Local Growth Fund Management and Fund Re-allocation
Government is to provide each LEP with an annual sum of money for
investment in the programme to achieve an agreed level of outputs within a
time period. The Government provides the LEP with the flexibility to manage
the programme funds in year as it sees fit to achieve agreed outputs. An
indicative programme of investments has been identified – the 22 projects.
Should the profile of investments vary and/or need to change, the LEP has the
flexibility to re-allocate funds to other activities to achieve the agreed outputs. It
is proposed that the North East LEP LGF Programme is managed as a single
programme entity. This means that if and when projects within the indicative
programme fail to proceed or deliver to plan, recommendations will be made to
the Board on how that funding will be re-allocated to address the SEPs
strategic objectives and delivery.
Managing funds at this level, rather than on a SEP theme by SEP Theme
basis, provides the LEP with greatest flexibility in terms of how it can approach
re-allocation to appropriate projects which are in a position to deliver in a
timely fashion against SEP objectives. In addition it demonstrates the need for
each SEP Theme to prepare the strongest possible projects for a pipeline of
reserve proposals for adoption should funds become available.
This proposed approach will be adopted alongside the principles for prioritising
the adoption of new projects set out below.
Page 86 of 170
APPENDIX 11
The following approach is proposed for attaining new projects into the
programme when funds become available. Any changes to the current
programme will also require approval by BIS.

Principle One - Prioritised projects from the existing call that Government
overlooked. In the SEP submission, partners prioritised projects for
inclusion in the SEP 2015/16 Programme. Several projects were over
looked by Government. Should these projects be in a position to deliver
immediately and provide the requisite performance measures, these
investments would be considered the first priority for investment.

Principle Two - Strongly performing existing projects within the programme.
As the programme progresses, monitoring may establish that certain
proposals are performing above and beyond their projected profiles. If this
is the case providing the incentive of additional funding for expanded
activity could have programme wide benefits. This priority has the benefit
of incentivising efficiency in delivery and over-performance in output
achievement at the project level.

Principle Three - New reserve projects from programme pipelines. It is
important that each of the SEP Thematic Programmes work up strong
sustainable pipelines of projects. It will be from these pipelines that new
proposals which can deliver the necessary performance measures over the
required timescale can be drawn.
Given the limitation in resource availability, it is proposed that when funds
become freed that the principles above be prioritised in order from One to
Three.
3.5
Project Pipeline Development and Prioritisation
Project pipeline development is important so the North East is in a position to
take advantage of all funding opportunities made available by Government or
Europe. It is important that there is a quick response to calls.
The LEP needs to ensure this message reaches partners.
The LEP is developing a prioritisation methodology with the Combined
Authority which will help inform decisions as and when new projects are
introduced. This builds upon work undertaken by KPMG in developing a
Prioritisation Tool which focusses on productivity and jobs impact, and can be
best utilised in relation to:

Capital development that impacts on commercial floorspace and job
creation.

Housing Developments

Capital investment in Skills projects that impact on up-skilling of the
employment base.
Any future prioritisation and adoption of additional proposals into the LGF
programme should be enabled by the section 31 grant flexibility, as long as
annual spend and output targets are met. Any re-profiling of project spend or
new projects into the programme will be agreed by the North East LEP Board.
4.0
Next Steps and Recommendations
Page 87 of 170
APPENDIX 11
4.1
The North East LEP will continue preparing the programme of investments in
advance of receipt of the formal Programme Offer Letter from Government
expected in December. To enable the requisite Programme Management
arrangements for the Growth Deal to be enacted, the North East LEP are
asked to:

Note the progress made to date in developing the programme and
working with partners and project sponsors;

Delegate the final funding approval for the 22 LGF indicative projects to
the Chair and Vice Chairs as set out in paragraph 3.2;

Agree to top slice the LGF allocation by 2.5% to fund the strategic
programme management function;

Agree to the programme management principles as set out in
paragraph 3.4.
Page 88 of 170
Appendix 1 - North East Local Enterprise Partnership - Local Growth Deal 2015/16 onwards (£289.3m not including
revenue for £0.5 Growth Hub and £1.7m mental health trail blazer)
SEP Theme
Skillls
1
Skillls
2
Skillls
3
Skillls
4
Skillls
5
Innovation
6
Innovation
7
Innovation
8
Innovation
9
Innovation
10
Transport and Digital
Connectivity
Transport and Digital
Connectivity
11
12
APPENDIX 12
Project Title
Total
project
cost
(£m)
LGF
2015/16
(£m)
LGF
2016/17
(£m)
LGF
2017/18
(£m)
LGF
2018/19
(£m)
LGF
2019/20
(£m)
LGF
2020/21
(£m)
Lead
Officer
1.2
"In
princip
le"
LGF
total
(£m)
1
Tyne Met College - STEM and
Innovation Centre
Facilities for Marine & Offshore
Engineering, South Tyneside
College
Rural Skills Development, East
Durham College
Newcastle College Group - Low
Carbon Tech Centre
Port of Blyth Offshore and Wind
Energy Training Facility (BEACH)
Centre for Innovation in
Formulation
Newcastle Laboratory and Life
Sciences Incubation Hub
Sunderland Enterprise &
Innovation Hub
Low Carbon Energy Centre at
Science Central
NetPark Infrastructure Phase 3
1
0
0
0
0
0
M Duggan
3.35
1.1
1.1
0
0
0
0
0
M Duggan
11.11
10
5
5
0
0
0
0
M Duggan
30
9.9
4.7
5.2
0
0
0
0
M Duggan
1.2
0.4
0.4
0
0
0
0
M Duggan
14.4
7.4
0.6
1.8
2.5
2.5
0
0
R Baker
11
5.55
2.8
2.75
0
0
0
0
R Baker
10.62
3.5
1.5
2
0
0
0
0
R Baker
5.5
2.8
1.40
1.4
0
0
0
0
R Baker
8
6.83
0.50
3.33
3
0
0
0
R Baker
A19/A194/A1300 Lindisfarne
Roundabout
Central Metro Refurbishment
4
3.48
3.48
0
0
0
0
0
M Wilson
7.88
2.51
2.51
0
0
0
0
0
M Wilson
Page 89 of 170
APPENDIX 12
Transport and Digital
Connectivity
Transport and Digital
Connectivity
Transport and Digital
Connectivity
Transport and Digital
Connectivity
Transport and Digital
Connectivity
Transport and Digital
Connectivity
13
Transport and Digital
Connectivity
Economic Assets &
Infrastructure
Economic Assets &
Infrastructure
Economic Assets &
Infrastructure
19
Transport projects:
Future schemes
Transport and Digital
Connectivity
Transport and Digital
Connectivity
Transport and Digital
Connectivity
Transport and Digital
Connectivity
Transport and Digital
Connectivity
Northern Access Corridor Osborne Road to Haddrick's Mill
Local Sustainable Transport
Fund Package
A19 employment corridor access
improvements (North Tyne)
A191 junctions including Coach
Lane and Tyne View Park
Newcastle Central Station to
Stephenson Quarter
A1056-A189 Weetslade
roundabout improvements and
A1-A19 link (A1056)
Scotswood Bridgehead
4.93
4.43
0.5
3.93
0
0
0
0
M Wilson
7.52
7.5
4.00
3.50
0
0
0
0
M Wilson
4.7
4.7
0.5
1.4
1.4
1.4
0
0
M Wilson
1.5
1.5
1
0.5
0
0
0
0
M Wilson
10
6
1
5
0
0
0
0
M Wilson
4.8
4.33
0.68
1.26
1.26
1.13
0
0
M Wilson
4.2
3.7
1.7
2
0
0
0
0
M Wilson
10
10
3.50
3.5
3
0
0
0
tbc
21
Infrastructure for Merchant Park,
Newton Aycliffe
North East Rural Growth Network
22.5
6
1.2
1.2
1.2
1.2
1.2
0
tbc
22
Swans Wet Berth Infilling
18
8
2
6
0
0
0
0
tbc
sub total capital funding to
LEP
196.41
110.63
41.07
49.77
12.36
6.23
1.2
0
Traffic movements along
A185/A194/A19 (The Arches)
Sunderland Strategic Transport
Corridor - phase 3
Western Relief Road, Durham
City.
Metro Enhancements
6.7
5.9
0
2.8
3.1
0
0
0
M Wilson
45
40.55
0
1
3.25
7.75
12.75
15.8
M Wilson
37.02
6.3
0
0
3.5
2.8
0
0
M Wilson
8
7
0
1.75
3.5
1.75
0
0
M Wilson
A1/A19 junctions improvement
programme
20.4
18.96
0
1.65
3.75
5.23
4.63
3.7
M Wilson
14
15
16
17
18
20
23
24
25
26
27
Page 90 of 170
APPENDIX 12
sub total capital funding to
LEP
117.12
78.71
0
7.2
17.1
17.53
17.38
19.5
Growth Hub (not included in
£289.3m announcement)
Mental Health Trail Blazer (not
included in £289.3m
announcement)
total revenue funding to LEP
0.5
0.5
0.5
0
0
0
0
0
D Jackson
1.7
1.7
tbc
tbc
0
0
0
0
tbc
2.2
2.2
tbc
tbc
0
0
0
0
30
South Shields Transport Hub
13.6
6.9
2.1
4.8
tbc
tbc
tbc
tbc
M Wilson
31
Sunderland Low Carbon Zone
13.5
6.0
6.0
0.0
tbc
tbc
tbc
tbc
M Wilson
32
A1058 Coast Road
8.7
5.8
2.9
2.9
tbc
tbc
tbc
tbc
M Wilson
33
A167 Park and Ride corridor
7.5
5.0
2.5
2.5
tbc
tbc
tbc
tbc
M Wilson
34
Northern Access Corridor
(Cowgate to Osborne Rd)
Horden Rail Station
8.1
4.1
3.5
0.6
tbc
tbc
tbc
tbc
M Wilson
7.1
3.3
3.3
0.0
tbc
tbc
tbc
tbc
M Wilson
sub total capital funding
58.5
31.1
20.3
10.8
tbc
tbc
tbc
tbc
e.g. Morpeth Bypass and
proportion of new Wear Crossing
38.6
20.1
18.5
0
0
0
0
Keepmoat
6.8
Other RGF schemes
23.4
Revenue Projects
Business Support &
A2F
Employability and
Inclusion
Six locally committed
transport majors
Transport and Digital
Connectivity
Transport and Digital
Connectivity
Transport and Digital
Connectivity
Transport and Digital
Connectivity
Transport and Digital
Connectivity
Transport and Digital
Connectivity
Previously committed
transport funding
Tail end transport
projects
Payments direct to
applicant
Payments direct to
28
29
35
Page 91 of 170
M Wilson
APPENDIX 12
applicant
sub
totals
Total capital funding (£m)
Total revenue funding (£m)
30.2
289.3
2.2
Page 92 of 170
APPENDIX 12
Appendix 12 – Transport Assurance Framework
NORTH EAST
COMBINED AUTHORITY
TRANSPORT
ASSURANCE
FRAMEWORK
March 2015
Page 93 of 170
APPENDIX 12
This page is intentionally blank
Page 94 of 170
APPENDIX 12
PART ONE: PURPOSE, STRUCTURE AND OPERATING PRINCIPLES
1. Structure and Operating Principles
1.1
The North East Combined Authority (NECA) was established on the 15 th of
April 2014 under the Local Democracy, Economic Development and
Construction Act 2009. NECA consists of the seven local authorities of
Durham County Council, Gateshead Council, Newcastle City Council, North
Tyneside Council, Northumberland County Council, South Tyneside Council
and Sunderland City Council.
1.2
The Order passed by Parliament which established the Combined Authority
also dissolved the Tyne and Wear Integrated Transport Authority (ITA). The
role of the ITA, along with its property, rights and liabilities, transferred to
the NECA. There is now one single body with responsibility for strategic
transport across the seven local authority areas.
1.3
The previous role of the local transport body will be fulfilled by the NECA,
which will assume responsibility for local major transport funding devolved
by government. The North East Combined Authority have been charged
with overseeing the programme management and delivery of transport
schemes which were included in the Local Growth Deal Round One and
published in the North East Strategic Economic Plan.
2. Support and Administration Arrangements
2.1
The resources to support the NECA will be managed by a core secretariat,
which will consist of officers working on behalf of the seven north east local
authorities. These officers (a Policy Manager and Policy Support Officer)
are already in place on a full time basis within Newcastle City Council, and
are jointly funded by the 7 local authorities in the NECA area. Officers
employed by Newcastle City Council Democratic Services will provide
secretariat and administration resource to the NECA.
2.2
The NECA will be able to seek specialist advice from the departments of its
constituent local authorities. This arrangement will ensure that adequate
officer resources are in place to underpin legal, financial, programme
management, democratic services and audit arrangements.
2.3
The NECA will provide the following support to the transport programme:

Day to day administrative functions such as the preparation of
meeting papers, minutes, agendas, working papers, progress
reports, information reports, decision reports etc;

Responding to information requests;

Give notice of meetings and publishing information:

Stakeholder engagement through regular update of the NECA web
page and organisation of specific consultation events as
appropriate;
95
APPENDIX 12

Procurement of independent technical advice on business case
material submitted by scheme promoters, which will be used to
make decisions on scheme priorities and programming;

Resource to assist in the programme management of the
prioritised list of schemes;

Updating this Assurance Framework based on the evolving role of
the NECA; and

Advice to NECA members on specific governance, transparency
and probity issues, and updating guidance as necessary.
2.4
Independent scrutiny of business cases will be provided by a neutral third
party with appropriate technical expertise. This expertise will be procured
by Newcastle City Council, for the North East Combined Authority
Transport Group (Terms of Reference in Annex E) on behalf of the NECA.
Financial resource to allow procurement of this specialist advice has been
identified and agreed.
2.5
Three groups: the NECA Transport Group, LA7 Economic Directors and
LA7 Chief Executives (Terms of Reference in Annex C, D, E), will advise
the North East Leadership Board and the Transport North East Committee
(TNEC), enabling them to:
 Forward manage their Agenda;
 Forward manage the development of a programme of transport
scheme priorities for the NECA area;
 Receive regular updates on progress towards targets and objectives; and
 Commission work as appropriate.
2.6
As illustrated by Figure One, the NECA Transport Group will report to the
NECA Leadership Board and its Transport North East Committee via the
LA7 Economic Directors and LA7 Chief Executives groups. The groups will
meet regularly in advance of meetings of the NECA Leadership Board
96
APPENDIX 12
2.7
North East LA7
Leadership Board
North East Local
Enterprise Partnership
Transport North East
Committee
LA7 Chief Executives
LA7 Economic
Directors
North East Combined
Authority Transport
Group
Figure 1: Governance and reporting structure
2.8
The information provided by scheme promoters to the NECA and
Transport North East Committee will be verified by independent technical
specialists commissioned and managed by the NECA Transport Group to
ensure rigour and data quality. Both the information provided and its
appraisal will be developed in accordance with the guidance published in
WebTAG at the time the business case is submitted to the NECA for
approval. Central case assessments will be based on forecasts which are
consistent with the definitive version of NTEM (DfT’s planning dataset).
This requirement will not preclude the use of alternative planning
assumptions as sensitivity tests.
2.9
The appointed independent technical specialists will then provide advice to
the NECA indicating how well each submitted scheme performs in terms of
policy fit, value for money and deliverability.
2.10 The NECA will use the advice provided by the groups outlined in sections
2.5 - 2.7 to programme manage and release funding for the prioritised
major schemes in the area.
3. Working Arrangements and Meeting Frequency
3.1
The NELB and the Transport North East Committee will meet at key points
in the business case and decision making process including those outlined
in para 10.4, to discuss progress on delivering the programme.
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APPENDIX 12
3.2
Meeting dates will be published on the NECA web page
(www.northeastca.gov.uk/home) with a minimum of one month advance
public notice (except in cases of an urgent / emergency meeting date being
calendared – arrangements for urgent meetings will be outlined in the
Standing Orders for meetings). North East Leadership Board and
Transport North East Committee (TNEC) meetings will be open to the
public.
3.3
Timescales for the completion of business cases, as outlined in part 3,
paragraph 10.4, will be agreed by the NELTB. Promoters will be expected
to adhere to such timescales and will only be able to draw down funding
once their full business case has been approved.
3.4
The ten transport schemes that were previously prioritised by the North
East Local Transport Body (NELTB) will not need to receive sign off from
the North East Leadership Board and, instead, approval can be granted by
TNEC. Those schemes that were not previously approved by the NELTB
will go to the North East Leadership Board for approval.
4. Operating Principles
4.1
4.2
Refer to The Durham, Gateshead, Newcastle upon Tyne, North Tyneside,
Northumberland, South Tyneside and Sunderland Combined Authority
Constitution, April 2014 for information on how the following are dealt with:

Conflicts of interest

Gifts and hospitality

Status and role of accountable body

Audit and scrutiny

Strategic objectives and purpose

Transparency and local engagement

Complaints and whistle blowing
The constitution can be found here; http://www.northeastca.gov.uk/whowe-are/north-east-leadership-board-constitution.
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APPENDIX 12
PART TWO: PRIORITISATION
5. Introduction
5.1
The NECA / NELEP has an established programme of major scheme
transport interventions starting in the period 2015/16-16/17. These
investments have been determined using a robust prioritisation process.
5.2
The prioritisation process, through which preferred local transport
investments have been identified, is an important element of this
Assurance Framework. The process is robust and transparent, and
intended to support decision making. The methodology will be available on
the
North
East
Combined
Authority’s
(NECA)
webpage
(www.northeastca.gov.uk/) and the North East Local Enterprise
Partnership’s (NELEP) webpage (www.nelep.co.uk/).
5.3
To enable prioritisation, a transparent and robust methodology for
prioritising local major transport schemes for delivery through the devolved
process has been developed. The methodology is clearly linked to
delivering the priority outcomes of the NECA/NELEP area and is designed
to be relatively simple, transparent and evidence based. It is broadly based
on three dimensions, namely:
-
Policy fit (including environmental and social and distributional
impacts);
-
Value for Money; and
-
Deliverability.
5.4
The methodology is an open framework, where all of the evidence inputs
can be clearly seen by stakeholders and decision makers. There is also no
attempt to imply an element of precision in evidence presented where there
is none, nor is there any attempt within the methodology to combine the
three dimensions (policy, value for money and deliverability) to give an
overall score for a scheme or intervention. Data gaps are identified, not
concealed.
5.5
Guidance has been issued to prospective scheme sponsors on the types of
evidence which are likely to support the policy criteria adopted (see Annex
F), and to guide scheme sponsors in providing evidence on value for
money and deliverability (sections 8 and 9 respectively). This guidance
identifies appropriate and acceptable sources of evidence and data,
helping to support data quality and the rigour of the process.
5.6
All schemes submitted for consideration are subject to independent
assessment. For consistency the scheme assessment is undertaken by two
separate assessors for each scheme. Following assessment of all schemes
submitted to a particular round of the LGF process a moderation exercise will
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APPENDIX 12
be undertaken by the scheme assessors and an independent adjudicator to
resolve any divergence in assessment scores. The promoter(s) of each
scheme or proposal will be required to attend a clarification meeting. Each
meeting will allow the independent assessors to verify scheme evidence and
data, and to cross examine scheme sponsors to clarify any issues which are
unclear within the evidence presented, and to enable the scheme assessors
to gain a clear understanding of the scheme and what it is trying to achieve.
5.7
Policy criteria have been developed based upon the three key themes
agreed by the partner organisations, namely:

Economic growth and jobs

Access to Opportunity

Quality of Life
5.8
These themes have been broken down into 9 policy challenges and 10
defined criteria in order to develop fully the component parts of the key
themes and ensure that the policy criteria fully reflect the themes they
represent across the North East (see Table 2). For each proposal or scheme
assessed, each component criterion is independently scored using
quantitative and qualitative evidence provided by the scheme sponsors,
against a numeric scale, with the lowest score of zero representing no
positive impact. The graduated scoring scale for each criterion reflects the
range of impacts likely from the transport schemes under consideration.
Detailed scoring notes, based on the North East area’s policies and plans,
including documents from the NECA’s constituent bodies, have been
developed to guide the independent assessment of proposals.
5.9
Independent assessment of value for money (VfM) will be based upon the
[estimated] BCR of the scheme that takes into account both qualitative and
quantitative evidence of both monetised and non monetised costs and
benefits. This assessment of value for money will reflect guidance from the
DfT’s Transport Business Case and from WebTAG. It is expected that
scheme sponsors will reference appropriate and proportionate use of the
DfT’s guidelines in presenting value for money evidence.
5.10 The independent assessment will establish an initial value for money
category from DfT Guidance (available from
www.gov.uk/government/uploads/system/uploads/attachment_data/file/26729
6/vfm-advice-local-decision-makers.pdf), based upon the [estimated] Benefit
Cost Ratio (BCR) of the scheme.
These categories are:

Poor VfM if the BCR is less than 1.0;

Low VfM if the BCR is between 1.0 and 1.5;

Medium VfM if the BCR is between 1.5 and 2.0;

High VfM if the BCR is between 2.0 and 4.0; and
10
0
APPENDIX 12

Very high VfM if the BCR is greater than 4.0.
5.11 Deliverability is a key element of the methodology. Potential schemes will be
assessed in relation to the level of risk associated with their deliverability.
Assessments of deliverability based around three areas will be used, with
each of these areas broken down into a number of components to ensure
that all critical aspects of deliverability are examined:

Risk to programme; Risk to cost; and

Risk to acceptability.
5.12 For each of the key deliverability components a Red-Amber-Green (RAG)
assessment will be undertaken based on the level of risk associated with
that component. Red will indicate a key deliverability issue indicating that it
is unlikely that the proposed scheme could be delivered within the indicative
time period.
5.13 As such, the prioritisation framework is evidence based and scheme
promoters are required to provide detailed evidence to demonstrate the
contribution their proposal will make towards achieving the objectives of the
NECA/NELEP. In order to enable this to be assessed, promoters must
illustrate that their scheme is deliverable, that it constitutes value for money
and they must explain its contribution towards the delivery of the set of policy
criteria (see Table 2) which have been formulated to address the policy
challenges faced by the NECA/NELEP area.
5.14 The NECA/NELEP will ensure that Highways England and Network Rail are
invited to comment on any strategic road or rail schemes that are to be
considered for major scheme funding. This will allow for their views on
deliverability and impact on the wider network to be taken into account
during the prioritisation process.
5.15 The prioritisation process will only consider schemes with a net requirement
from the local growth fund of £2.5m that have an adjusted BCR greater than
2. Advice will be provided to the NECA on the deliverability of schemes and
they will be assessed for value for money. Schemes that have poor value for
money, or that cannot be commenced and be significantly underway in the
2015-19 period will not be considered. Prioritisation will be as part of an open
framework taking in to account their contribution to addressing the policy
challenges outlined in Table 2.
5.16 Scheme promoters are expected to maintain any asset that is created and
this should be done in accordance with their Asset Management Plan or, in
the case of a Passenger Transport Executive or other potential transport
delivery agent, an equivalent document.
10
1
APPENDIX 12
6. Scheme Eligibility
6.1
Candidate schemes for consideration are identified by the respective
scheme promoters: (currently the seven local authorities in the
NECA/NELEP area and Nexus) via the North East Combined Authority
Transport Group. A ‘long list’ of candidate schemes is maintained taking in
to account the 3 Local Transport Plans in the NECA/NELEP area and the
current move towards a single Transport Plan for the seven, development
plans across the 7 local authorities and previous work on local major
schemes development such as the ‘Access to Tyne and Wear City-Region’
study.
6.2
This long list is maintained by the NECA Transport Group, and refined
using the governance and reporting structure outlined in paragraph 2.7 to
contain those schemes most likely to address a set of policy, deliverability
and value for money criteria (as outlined in sections 7-9).
6.3
Following these processes, a shorter list of candidate schemes will provide
detailed evidence of their suitability across these criteria. This evidence will
be scrutinised thoroughly by an independent third party appointed by the
NECA Transport Group because of their neutrality and technical expertise.
This third party will then provide the results of their findings to the
NECA/NELEP to aid their decision making.
6.4
Table 1 below outlines the major scheme criteria. More detail follows in
sections specifically on policy and deliverability criteria.
Table 1: Major Scheme Eligibility Criteria
Purpose of scheme
Schemes are required to make a significant contribution towards achieving
the objectives of the NECA/NELEP as defined by the Guidance on
Evidence document (Annex F). Proposals considered via this Assurance
Framework should be transport schemes.
Cost Threshold
In order to be eligible, schemes must have a total net cost to the
NECA/NELEP of at least £2.5m. This will prevent funding from being
spread too thinly to be effective. Funding can only be used for capital
expenditure.
Strategic Impact
Promoters are required to demonstrate how their scheme will have a
positive impact on the transport challenges within the NECA/NELEP area.
It is desirable that schemes will have an impact on a wide area however
this does not preclude localised issues being addressed, given the knock10
2
APPENDIX 12
on effect of improvements to the local economy improving the sub-regional
/ regional economy.
Policy Criteria
Schemes need to demonstrate how they contribute to the specified policy
criteria. Given the NECA/NELEP’s strong emphasis on economic growth
and development, the schemes should contribute towards local and
economic development.
Value for Money
Schemes are required to provide an estimate of the Value for Money (VfM)
a scheme is expected to provide. In order to be eligible, schemes must
demonstrate they provide high value for money. For the prioritisation
process, promoters will be required to estimate a Benefit Cost Ratio (BCR)
for their scheme(s). Regular VfM statements will be required in order to
adjust the BCR as part of the move towards full scheme approval.
Deliverability
Proposed schemes need to have a reasonable degree of public and
stakeholder support and must be deliverable within a clearly defined
timescale. An assessment of deliverability must be undertaken in order to
identify any potential “under spend”.
Local Contribution
Scheme promoters are encouraged to provide a local contribution which
would normally be at least 10% per scheme.
10
3
APPENDIX 12
7. Policy Criteria
7.1
The policy criteria build upon the objectives of the three Local Transport
Plans in the NECA/NELEP area and are based upon three key themes:
- Economic growth and job creation;
- Access to opportunity; and
- Quality of life.
7.2
These key themes are broken up in to ten discrete policy criteria. These
criteria allow scheme promoters to provide both quantitative and qualitative
information to describe the policy contribution of their scheme.
7.3
The overall assessment framework is an open framework, with the intention
that decision makers on the NECA/NELEP and supporting officers should
see exactly how and where each proposed scheme contributes to the
delivery of the North East’s agreed policy outcomes and its strategic
objectives. This is one of the key features of the approach, and is designed
to ensure maximum transparency both to stakeholders and the
NECA/NELEP. Where a scheme will deliver positively against a number of
these key outcomes, it will be clear that it does so, and a scheme will be
credited accordingly. There is scope within the process for the
NECA/NELEP to be made aware of where such benefits are
complementary.
20
APPENDIX 12
7.4
Table 2: Themes split by challenge and policy criteria
Theme
Challenge
Criteria
Economic Growth
and Job Creation
Supporting jobs
Will the scheme contribute to the
creation of new jobs and retention of
existing jobs in the NECA/NELEP area?
Supporting gateways and
national and international
trade
Will the scheme support
NECA/NELEP area gateways?
Contributes to skilled
employment or training
Will the scheme encourage the
development or retention of skilled jobs
(NVQ Level 4 and above) and support
sites that deliver the training for such
skills?
Support the NECA/NELEP
spatial strategies and
economy
Will the scheme provide sustainable
access solutions to existing and growing
development corridors, centres and
sectors or support housing growth?
Attractiveness of the
NECA/NELEP area as a
place to do business
Will the scheme ensure capacity and
speed of transport links to and within
the NECA/NELEP area are maintained
and enhanced in order to increase the
attractiveness of the NECA/NELEP area
as a place to do business, boosting
inward investment and improving
competitiveness of indigenous firms?
Access
to
Opportunities
the
Improves
connectivity Will the scheme deliver improved
from residential areas to accessibility from residential areas to
employment opportunities areas that have employment, education
or other opportunities?
Will the scheme contribute to an
improvement in the overall quality of
journeys, particularly those providing
links to employment and health or
education opportunities?
Quality of Life
Improving the local
environment
21
Will the scheme contribute to an
overall improvement in the local
environment including improving local
air quality or reducing the noise impact
APPENDIX 12
of transport corridors?
7.5
Achieving
carbon
reduction
targets
Will the scheme contribute to an
overall reduction in carbon
emissions relative to the existing
situation?
A healthy population
Will the scheme provide the
opportunity to improve health,
reduce levels of obesity among the
population or improve road safety
within the area?
A detailed set of guidance has been produced for scheme promoters
that ensures as far as possible a consistent level of information is
available to inform the prioritisation process. This guidance is contained
within Annex F and provides advice on Policy Criteria (for example,
environmental and social and distributional impacts), Value for Money
and Deliverability. A pro-forma for use by scheme promoters has been
developed to accompany the guidance and is contained within Annex G.
8. Value for Money
8.1
As part of the prioritisation process it will be necessary to provide an
estimate of the Value for Money (VfM) that a scheme is likely to
provide. At the first stage in the scheme development process not all
schemes will have a fully worked up business case that will include all
aspects of the Benefit to Cost Ratio (BCR). The guidance note
contained within Annex F provides advice on how VfM should be
assessed in this instance.
8.2
For schemes that have not yet been fully assessed the required
approach will be to examine the evidence from other previous schemes.
This approach is consistent with the DfT’s Early Assessment and Sifting
Tool (EAST) Guidance.
8.3
A local contribution to the scheme may contribute to its Value for Money.
It is expected that the local contribution should normally be at least 10%
of the total scheme cost. This contribution may, for example, include
money from section 106 planning agreements or the Community
Infrastructure Levy.
9. Deliverability
9.1
Deliverability is a key element of the methodology and great importance
is placed on a robust deliverability assessment.
9.2
A number of key deliverability criteria have been developed in order to
assess the potential for scheme delivery in the 2014-19 period. These
22
APPENDIX 12
are outlined in Annex F of this Assurance Framework. Schemes which
perform well against the deliverability criteria will have:

Recently calculated outturn costs in a WebTAG compliant way;

Established key milestones for delivery;

Established a process for reaching detailed design;

Established realistic timescales for obtaining statutory consents,
carrying out / illustrating public consultation and acceptance and
procuring contractors;

A robust risk assessment; and

A detailed governance and project management structure.
23
APPENDIX 12
PART THREE: PROGRAMME MANAGEMENT AND INVESTMENT DECISIONS
10. Scheme Assessment and Approval
10.1 The NECA will carry out programme management of agreed transport
schemes, on behalf of the wider NECA/NELEP partnership to ensure
their delivery. There is a clear distinction between scheme promoters and
the NECA. The identification of schemes, development of scheme
proposals and completion of business cases is the responsibility of
scheme promoters. The NECA will act as the programme manager. The
NECA will assess business cases and the findings will help inform
decisions on whether to provide funding for a scheme. This working
arrangement will be underpinned by the establishment of formal back to
back agreements that protect the financial interests of the NECA as the
Accountable Body and enables the NECA to fulfil its responsibility to
deliver value for money while setting out respective responsibilities
including reporting and audit requirements.
10.2 An assessment of all major scheme business cases will be carried out
by an independent third party with the relevant technical expertise, and
this expertise will be procured by Newcastle City Council on behalf of
the NECA Transport Group. The independence of each review will be
signed off by an appropriate senior member of the independent
organisation undertaking the review.
10.3 Scheme promoters will be required to use DfT’s Transport Business
Case Methodology when developing their business case.
The process for the NECA assessment and approval of a major
scheme will comprise of three ‘gateway’ stages and full scheme
approval will require a robust business case to be developed as part of
Gateway 2, with further refinement as part of Gateway 3.
10.4 The methodology outlined in part 2 will assist the NECA/NELEP in
prioritising schemes. Those prioritised schemes will then proceed
through the summarised process outlined below in order to progress a
scheme to Full Approval. This approach is consistent with DfT’s ‘The
Transport Business Case’ guidance:
24
APPENDIX 12
Following prioritisation of the proposal by the NECA (Gateway 1 Programme Entry), the following process applies.
Gateway 1 Approval Stage: Programme Entry
(Advancement to Gateway 2 requires the following steps)

Promoter prepares Outline Business Case and submits to the
Transport Officers Group..

Outline Business Case undergoes independent assessment

Value for Money Statement prepared by Scheme Promoter and
signed off independently.

Consultation held

The Transport Officers’ group reviews independent VFMS advice
and in the event of non-compliance with paragraph 12.5 informs the
Combined Authority
Gateway 2 Peer Review Stage: Conditional Approval Granted
(Advancement to Gateway 3 requires the following steps)

Promoter undertakes detailed design, acquires statutory
approvals, undertakes procurement and identifies
preferred supplier.

Final Business Case submitted to the NECA.

Final Business Case undergoes independent assessment.

Value for Money Statement prepared by Scheme Promoter and
signed off independently.

The Combined Authority reviews Independent advice and
considers Full approval
Gateway 3 Approval Stage: Full Approval Granted and offer letter
issued

Monitoring/ evaluation framework submitted.

Construction commences.
10.5 At Gateways 2 to 3 the promoter will be required to provide evidence that the
scheme is still value for money and deliverable (and therefore should remain
in the prioritised programme). At Gateway 2 the independent VfM
assessment will be considered by the Transport Officers group, should the
VfM statement demonstrate a BCR of less than 2 officers will recommend a
review of the scheme at the next suitable NELB or TNEC meeting. At
Gateway 3 the NECA will consider full Value for Money Statements and
approve schemes based on the stipulations contained in paragraph 12.5.
The NECA will publish a Value for Money Statement (VFMS) for schemes
that have received full approval at Gateway 3. These Gateway 3 VFMS will
be produced by the Scheme Promoter in line with the Department for
Transport’s
guidance
found
on
the
DfT
website
25
APPENDIX 12
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file
/267296/vfm-advice-local-decision-makers.pdf and will be signed off as true
and correct by the lead Chief Executive of the LA7 Chief Executives group
as part of the business of this group. This group will, in the event of any
perceived conflict of interest, nominate an alternative Chief Executive to
sign-off a VFMS. Decisions will be recorded as part of the minutes of the
group. Audits will be carried out at each gateway stage of the process –
including an independent review of the VFMS.
10.6 The NECA will need to approve the promoter’s full business case before
funding can be released and construction commenced. The production of
business cases at the end of each stage will identify whether the scheme
continues to offer high value for money. If a business case does not provide
the required assurance of value for money the NECA can decide to withdraw
a scheme from the programme. The scheme promoter is responsible for all
business case costs – including if the scheme is withdrawn by the NECA at
any point in the process.
10.7 Completion of Gateway 2 provides the opportunity for independent peer
review, therefore reducing the overall risk to the scheme promoter of
producing a non-compliant full business case. It is however permissible for
promoters to move directly to a full business case submission at their own
risk.
10.8 The NECA’s assessment and approval decisions will be based on advice
provided by the NECA Transport Group and by independent technical
specialists procured and managed by the NECA Transport Group who will
have the necessary skills and expertise to ensure that scrutiny of business
cases is quality assured. The appointed independent technical specialists
will work directly with the NECA Transport Group and report to the NECA.
10.9 Scheme promoters are responsible for informing the NECA of any changes
to the scope of a scheme, its costs and implementation timescales. The
NECA will be responsible for assessing the impact of any changes on the
overall scheme programme working with the promoter and the NELEP to
address any specific issues.
10.10 The NECA will not meet any scheme cost increases either in full or part and
these will be the responsibility of the scheme promoter. Scheme costs for
the purpose of allocating local major scheme monies will be fixed at
Programme Entry stage. Design and development costs for schemes that
receive Full Approval will be eligible as a local contribution.
10.11 Delays to a scheme may mean that it is not possible to allocate funding
within the period up to March 2021. In this case, the NECA/NELEP
reserves the right to re-prioritise the programme and bring forward another
scheme that is deliverable within the timescales.
26
APPENDIX 12
10.12 As part of Full Approval, the NECA will clearly set out the conditions under
which the devolved funding will be spent – specifically to deliver a capital
asset based on an approved scheme design which has a contractor’s
price and spending profile.
11. The Transport Business Case
11.1 All schemes submitted by promoters are required to follow the DfT’s
Transport Business
Case guidance, which is available at
www.dft.gov.uk/publications/transport-business-case/.
11.2 The Business Case guidance sets out the minimum requirements of the
development of a major scheme and use of the guidance will ensure that
the information and assessment of a scheme is set out according to five
cases:

The strategic case;

The economic case;

The commercial case;

The financial case; and

The management case.
11.3 Business cases will include a statement of objectives and specific
outcomes the scheme is expected to achieve. This will assist with
scheme evaluation.
27
APPENDIX 12
12. Value for Money (2)
12.1 Value for Money is the core of the Economic Case.
12.2 The use of the WebTAG toolkit will be mandatory and must be used to
conduct appraisals and value for money assessments. The toolkit can
be accessed at www.dft.gov.uk/webtag.
12.3 A value for money assessment compares the economic, social and
environmental impacts of a scheme with the costs of its construction and
ongoing maintenance. It takes into account both the monetised and nonmonetised costs and benefits to produce a value for money rating. The
monetised costs and benefits are expressed as a Benefit to Cost (BCR)
ratio but this on its own is insufficient to provide a value for money rating
as the non-monetised impacts must also be taken into account. This can
result in either a higher or lower value for money rating than the BCR
alone may suggest.
Scheme benefits potentially encompass a wide range of economic
impacts including:

Journey time savings for individuals.

Reduction in costs to businesses, transport operators and passengers.

Increasing access to education and jobs.

Increasing inward economic investment.

Keeping roads open to traffic (especially freight).

Reducing accidents / improving safety and security.
12.4 Value for money assessments at Gateway 1 stage, are likely to be based
on limited evidence. At Gateways 2 and 3 more robust Value for Money
statements will be required and they must show that a scheme remains
high value for money to stay in the programme.
12.5 High value for money schemes with an adjusted BCR of greater than or
equal to 2:1 will be eligible for funding.
12.6 Central case assessments will be based on forecasts that are consistent
with the definitive version of NTEM (DfT’s planning dataset). The NECA
reserves the right to use alternative planning assumptions as sensitivity
tests and considering the results of these when coming to a decision
about whether to approve a scheme.
12.7 An independent assessment of appraisal and modelling assumptions
contained within business cases will be carried out by an independent
third party with the relevant technical expertise, and this expertise will
28
APPENDIX 12
be commissioned, monitored and signed off via NECA Transport Group.
The assessment carried out will review compliance with the WebTAG
standard and identify if these standards have been met, should this not
be the case the review will produce a series of recommendations that
the scheme promoter will be expected to address in order to ensure
compliance with WebTAG standards, The independence of each review
will be checked and signed off by a named officer of the NECA with
relevant skills and expertise. The NECA Transport Group will be
responsible for ensuring that scheme promoters act upon any
recommendations resulting from a review and that the results are made
available to promoting authorities and the NECA.
12.8 A value for money statement (VFMS) in line with published DfT WebTAG
guidance will be produced for consideration at each gateway stage of the
approval process. These statements will be checked by an independent
source and adjusted if necessary. This assessment will be signed off by
a named officer within the NECA with requisite skills and experience.
13. Monitoring and Evaluation
13.1 Scheme promoters will be required to put in place mechanisms to ensure
that schemes are monitored and evaluated in line with DfT guidance on
the evaluation of local major schemes. This will be enforced as part of the
gateway process, and schemes that do not have a robust monitoring and
evaluation strategy as part of their business case will not receive Full
Approval.
13.2 Evaluation Plans and Reports will be published on the web site of the
relevant scheme promoter. The relevant scheme promoter will be
required to ensure an independent review of the monitoring and
evaluation of their scheme, and this will be ensured as part of the grant
award process.
14. External Views on Business Cases
14.1 The NECA will welcome external views on business cases, but there may
be occasions where some information has to be withheld due to
commercial sensitivity. In order to ensure external comment is possible,
promoters will be required to publish their business case on their website.
The publication of business cases will also be publicised by the relevant
scheme promoter and on the NECA web page.
NECA members will be able to see all external views on request.
15. Release of Funding, Cost Control and Approval Conditions
15.1 No funding will be allocated to a scheme promoter via the NECA until a
Business case has received Full Approval. The approval will contain:
29
APPENDIX 12

General conditions of approval (such as the condition that monies
may only be used for capital expenditure);

Scheme specific approval conditions (such as those relating to
scheme design, matched or third party contributions);

The agreed allocation for the scheme;

An agreed funding profile to ensure delivery in the 2015-19 period; and

Provision for ‘clawback’ and recovery of non-delivery or money
not spent for purposes intended.
15.2 Before any funding is released, the scheme promoter will need to ‘accept’
the funding (and the conditions for its use) through confirmation by the
appropriate finance officer that the money will be spent on the agreed
purpose.
15.3 The NECA will develop a ‘back to back’ agreement with the eligible
scheme promoters to underpin this arrangement. This agreement will
also address the issue of ‘clawback’. It will ensure a working
arrangement is in place that protects the financial interests of the NECA
as the Accountable Body and enables it to fulfil its responsibility to
deliver value for money while setting out respective responsibilities
including reporting and audit requirements.
15.4 Funds will be released to scheme promoters quarterly in arrears. Release
of funds will be based on defrayed expenditure and made upon receipt of
grant claim forms and evidence of eligibility of expenditure and delivery
progress (which may include invoices, valuations of capital works etc).
Scheme promoters will be required to retain evidence for audit purposes.
15.5 Finance reports will be provided to the NECA on a quarterly basis (or more
frequently if required) in line with payment of claims to scheme promoters.
There will be a named finance officer at an appropriate grade who will
also act as a point of contact for ad hoc finance-related queries from the
NECA or scheme promoters and to attend meetings as required.
16. Programme and Risk Management
16.1 The North East Growth Deal will initially run from 2015/16 to 2020/21. A
realistic programme is essential as a means of understanding when
schemes are likely to spend.
16.2 Scheme promoters will be required to provide an initial project programme
for each scheme given ‘Preliminary Prioritisation’ status by the
NECA/NELEP. The project programme should include estimated
timescales for the following:

Production of business cases;
30
APPENDIX 12

Completion of associated technical work;

Progress of outline and detailed design;

Statutory orders;

Public consultation;

Procurement; and

Construction of scheme.
16.3 Potential risks to the delivery of the scheme programme, such as
overspend and delays to timescales, must be highlighted. Promoters
should also produce and maintain risk registers for their schemes and set
out how they will manage potential risks.
31
APPENDIX 12
ANNEX A
North East Leadership Board – Responsibility of Functions
Membership – 8 (one Member for each Constituent Authority and a non-voting LEP
Member)
Quorum – 6 (not including the LEP Member)
In the absence of specific delegations to other bodies referred to in the
Constitution (including committees and subcommittees of the NELB), all
functions remain with the NELB
A
Only the NELB will exercise the following functions which require a
unanimous vote in favour by all Constituent Authorities:
1.
The adoption of, and any amendment to or withdrawal of, any Growth Plan
included in the Budget and Policy Framework.
2.
The adoption of, and any amendment to or withdrawal of, any local
transport plan under section 108(3) of the Transport Act 2000.
3.
The approval of, and any amendment to, the NECA’s annual budget.
4.
The setting of any transport levy under section 74 of the Local
Government Finance Act 1988 and in accordance with regulations made
thereunder.
5.
The allocation by the NELB of local transport plan funding to the
individual Constituent Authorities and Nexus, and the approval of all
other capital and revenue matters relating to the NECA’s transport
budget save where such matters have been expressly delegated to
another body.
6.
The approval of, and any amendment to or withdrawal of, growth
schemes set out in any adopted Growth Plan including the local major
schemes devolved funding.
7.
The approval of, and any amendment to or withdrawal of, borrowing limits,
treasury management strategy including reserves, investment strategy and
capital budget of the NECA.
8.
The approval of, and any amendment to or withdrawal of, such other plans
and strategies as determined by the NELB and included in the Budget and
Policy Framework.
9.
The transfer of any further functions by the Constituent Authorities to the
NECA.
10.
The appointment of any individual co-optees to the NELB.
11.
The use of the general power of competence by the NECA beyond the
powers provided within the Local Democracy, Economic Development
and Construction Act 2009.
12.
The approval of any amendment to the NECA’s Constitution which has not
been delegated to the Monitoring Officer (see Part 3.6 Scheme of
APPENDIX 12
Delegation of Functions to Chief Officers).
13.
The appointment of a statutory chief officer (Head of Paid Service,
Monitoring Officer and Chief Finance Officer).
The
14.designation of the NECA’s Head of Paid Service.
B
Other functions reserved to the NELB which do not require a unanimous
vote in favour by the Constituent Authorities include (but are not limited
to):
15.
The approval of (and any amendment to or withdrawal of) all other major
transport schemes (including such matters as Quality Contract Schemes
and/or Voluntary Partnership Agreements).
The
16.approval of (and any amendment to or withdrawal of) a public transport
strategy.
17.
Influence and/or co-ordination of strategic investment in the highway
network across the combined area.
18.
Co-ordination, with the statutory Highway Authorities, of the development
of a joint highway management plan. Strategic influence of the
development and operation of air, rail, road, river, sea and public
transport networks.
19.
The approval of (and any amendment to or withdrawal of) transitional
transport arrangements following the formation of the NECA.
20.
The approval of (and any amendment to or withdrawal of) formal
partnership agreements and arrangements with external partners and
other stakeholders (e.g. central government, MPs/ MEPs, rail
franchisors/franchisees) on strategic transport issues.
The21.
approval of the policies and strategies to be included in the policy framework.
The22.
approval of the NECA’s annual accounts.
23.
The appointment/selection of the Overview and Scrutiny Committee and
any other committee or sub-committee as considered by the NELB as
appropriate to discharge its functions.
24.
The appointment/selection of a Chair and Vice Chair(s) of any joint
committee, committee or sub-committee.
25.
The appointment of co-opted members to any of its joint committees,
committees or sub-committees.
26.
The appointment of the Independent Person as required by the Localism
Act 2011.
27.
The appointment of any independent expert adviser for the NECA or any
of its joint committees, committees or sub-committees.
28.
The designation of the Thematic Leads.
29.
The dismissal of a statutory chief officer (Head of Paid Service, Monitoring
Officer and Chief Finance Officer) and the appointment or dismissal of any
deputy of such a statutory chief officer and the appointment or dismissal of
any non-statutory chief officer or any deputy of such a non-statutory chief
officer (See Part 4.5 Officer Employment Rules of Procedure).
APPENDIX 12
See also Part 4 of the NECA Constitution – Rules of Procedure for further
information on the items of business for the Annual Meeting and ordinary
meetings of the NELB.
ANNEX B
Transport North East Committee (TNEC) - Responsibility of Functions
Membership – 14 (two Members from each Constituent Authority)
Quorum –10
A
Transport functions delegated by the NECA to the TNEC.
The TNEC shall be able to exercise these functions provided that it does
not cause the NECA to incur any expenditure other than that which the
NELB has authorised for such purposes.
1.
Monitoring the NECA’s transport budget
2.
Approval of releases from the NECA’s transport funding for capital schemes
within the agreed capital programme and the agreed budget (as defined by
the NELB) for the scheme concerned.
3.
Formulation, development and monitoring of procedures for public
consultation on, and lobbying for, the NECA’s transport policies including
taking responsibility for the active promotion of the Combined Area’s
transport interests.
4.
Monitoring and overseeing the activities and performance of the County
Council of Durham and Northumberland County Council in the discharge
of the transport functions delegated to them by the NELB.
Note: the functions delegated to the TNEC also include those functions set
out in Part 3.3. Such functions have been delegated to TNEC on the strict
understanding that they will be exercised in practice by the TWSC, as a
subcommittee of the TNEC.
B
Transport functions referred to the TNEC
The NELB shall seek the advice and recommendations of the TNEC on
such transport matters as the NELB considers appropriate which shall
include (but are not limited to):
The
1. NECA’s revenue budget for transport and the setting of any transport levy.
2.
The borrowing limits of the NECA in relation to transport matters pursuant
to section 3 of the Local Government Act 2003.
3.
The capital programme of NECA and the Delivery Agencies.
4.
The development of policies for the promotion and encouragement of safe,
efficient and economic transport facilities and services and the production of
any Local Transport Plan pursuant to sections 108-112 of the Transport Act
2000.
APPENDIX 12
5.
Formulation of general policies with respect to the availability and
convenience of public passenger services pursuant to section 9A (5)-(7) of
the Transport Act 1968.
6.
Determination of issues arising from the rail franchising process.
7.
The development of policies, setting of budgets and operational
arrangements in connection with the NECA’s Transport Studies Function.
Information:
1.
The Chair of the TNEC will be selected annually by the NELB. The Chair
of the TNEC will be the Thematic Lead for Transport appointed by the
NELB.
2.
There will be three Vice Chairs of the TNEC selected annually by the
NELB who will be drawn from the members of the Constituent Authorities
appointed to the TNEC with portfolio responsibility for Transport in their
respective Constituent Authority area. One Vice Chair will be selected
from the members of the Tyne and Wear Authorities. One Vice Chair will
be the Executive member with portfolio responsibility for Transport for the
County Council of Durham and one Vice Chair will be the Executive
member with portfolio responsibility for Transport for Northumberland
County Council.
ANNEX C
LA7 Chief Executives Group
Terms of Reference – February 2013
Membership
1. The LA7 Chief Executives Group comprises the Chief Executives of Durham,
Gateshead, Newcastle, North Tyneside, Northumberland, South Tyneside and
Sunderland, supported by the Policy Manager.
Purpose
2. The Chief Executives Group provides a forum for strategic discussion and
collaboration between the 7 local authorities to ensure delivery of the LA7
Leadership Board’s shared vision for the economic development of the North
East.
APPENDIX 12
3. The role of the LA7 Chief Executives is to:

Advise the LA7 Leadership Board on matters of strategic
significance across the LA7 geography, with a primary focus on:
-
Economic Strategy and Growth
-
Local Transport Body
-
Newcastle International Airport

Maintain strong links with the North Eastern Local Enterprise Partnership
(NELEP) and advise the LA7 Leadership Board on all aspects of NELEP
activity

Undertake activity requested by the LA7 Leadership Board in
support of their work programme and priorities

Commission activity and receive updates and advice from the Economic
Directors Group
Operational Arrangements
4. The Chief Executives Group will meet on a monthly basis, prior to each of
the LA7 Leadership Board meetings. Additional meetings will be organised
as/when required.
5. The chair of the Chief Executives Group will rotate annually between the
participating authorities on an alphabetical basis, in line with arrangements
previously agreed for the LA7 Leadership Board meetings. The chair will
change in November of each year. The current chair is Jane Robinson,
Gateshead.
6. The Chief Executives Group will have two vice chairs, which will be the chair
from the previous year and the incoming chair for the following year.
7. If any member of the Chief Executives Group is unable to attend a meeting a
named alternate may attend.
8. The Chair will have responsibility for attending NE LEP Board meetings as an
observer and in an advisory capacity, reporting back to the Chief Executives
Group.
9. The Chair will have responsibility for communicating with members of the
Chief Executives Group between meetings, including arrangements for taking
decisions that may be needed as a matter of urgency.
ANNEX D
APPENDIX 12
Economic Directors Group – Draft terms of reference (updated 20
February 2014)
Purpose
1.
The Economic Directors group involves the senior officers with
responsibility for economic policy and development across the local
authority areas of Durham, Gateshead, Newcastle, North Tyneside,
Northumberland, South Tyneside and Sunderland. The group has
been established at the request of Chief Executives to help ensure that
the seven local authorities work together strategically on the key
economic issues affecting the North East and to coordinate input into
the North Eastern LEP.
Key Activities
2.
The role of the 7 LA Economic Directors is to:
 Advise the seven Chief Executives and Leaders/Elected Mayor on all
aspects of the Combined Authority’s and LEP’s work;
 Advise the seven Chief Executives and Leaders/Elected Mayor on
broader economic issues across the area covered by the seven local
authorities; and
 Undertake work requested by the seven Chief Executives, the North
East Leadership Board, the combined authority theme groups or the
LEP in support of their work programmes.
Membership
3.
The members of the 7 LA Economic Directors are:
Member
Sub
Durham Council
Ian Thompson
Adrian White
Gateshead Council
Sheila Johnston
Newcastle Council
Andrew Lewis
Rob Hamilton
North Tyneside
Council
Paul Buie
Sean Collier
Northumberland
Council
Geoff Paul
Rob Strettle /
Heather Smith
South Tyneside
Council
David Cramond
John Scott
Sunderland Council
Janet Johnson
Vince Taylor
NE LEP
Helen Golightly
LEP Transport /
NELTB
Mark Wilson
APPENDIX 12
Homes and
Communities Agency
Neil Graham
Martin Wilks
On occasion other partners may be asked to join the group depending
on the agenda
Chairing Arrangements
4.
The Chair will rotate around each of the seven local authorities in
alphabetical order, following the Chairs of the Chief Executives and
Leaders and Elected Mayors groups. The Chair will change in
November of each year. The current Chair is Sheila Johnston,
Gateshead. The group will meet on average every six weeks, or more
often depending on urgent business.
ANNEX E
Purpose of the group
APPENDIX 12
NORTH EAST COMBINED AUTHORITY TRANSPORT GROUP
ROLE AND REMIT



To establish a forum for discussion and decision-making in respect of strategic
transport issues affecting the NECA area
To provide advice to elected members responsible for transport on the NECA
To develop and deliver a programme of local major transport schemes.
Responsibilities of the group
The group is required to:
 Inform the Forward Plan for the Transport North East Committee and the Tyne
and Wear Sub Committee;
 Offer advice and recommendations to north East Leadership Board the
Transport North East Committee and the Tyne and Wear Sub Committee on
matters relating to transport policy, priorities and funding opportunities;
 Establish and oversee appropriate sub-groups, with suitable terms of reference,
In order to assist its work;
 Forward manage the programme of transport schemes funded by the Local
Growth Fund for the NECA area and ensure effective delivery of such schemes
in line with the agreed Assurance Framework;
 Co-ordinate transport funding bids relating to the NECA area and, in the event of
such bids being successful, ensure effective delivery mechanisms are in place
for the approved measures;
 Manage relationships with external bodies including (but not limited to) the
Department for Transport, the Highways Agency and Network Rail;
 Oversee regular updates on progress towards targets and objectives that enable
the NECA to assess the value for money being obtained from the money it is
spending and the effectiveness of delivery of transport strategies against the
targets agreed by the NECA;
 Co-ordinate the NECA’s participation in rail devolution and advise on national
rail issues relevant to the NECA area;
 Assist the NELB and TNEC in developing a transport strategy for the NECA
area;
 Commission work as appropriate to support the Group’s objectives; and
 Receive regular updates and advice on transport matters of strategic
significance across the NECA area.
Membership
Newcastle City Council (Chair)
Durham County Council
Gateshead Council
Nexus
North East Combined Authority/North East LEP
North Tyneside Council
Northumberland Council
South Tyneside Council
Sunderland City Council
Attendance
The North East Combined Authority Transport Group will meet regularly in advance of
meetings of Transport North East Committee. Members of the group are requested to
APPENDIX 12
attend as many of the meetings as possible. If members of the group are unable to
attend a meeting, it is requested that any Deputy should be agreed in advance with the
Chair of the group.
Governance and Reporting
LA7 Leadership
Board
LA7 Chief Executives
North East Local
Enterprise Partnership
LA7 Economic
Directors
North East Combined
Authority Transport
Group
Integrated Transport
Strategy Group
Technical Analysis
Group
Strategic Highways
Group
Sustainable and green
transport group
Tyne and Wear
Delivery Group
The chair of the North East Combined Authority Transport Group is a member of the
LA7 Economic Directors and will ensure that the Economic Directors are informed of
progress made by the NECA Transport Group. The chair is also responsible for
informing the Combined Authority Transport Group of any tasks delegated by the
Economic Directors.
Support and Organisation
The NECA Transport Group receives support from the Regional Transport Team. The
agenda, minutes and relevant papers for the group will be sent out in advance by the
Regional Transport Team. Notes of meetings and an actions log will be maintained by
the Regional Transport Team.
Sub Groups
Five sub groups report to the NECA Transport Group. The sub groups may be
requested to progress tasks associated with the discharge of the Transport Group’s
responsibilities. The sub groups will be chaired by a member of the NECA Transport
Group.
Meetings
The group will meet on a monthly basis.
Review
This role and remit will be reviewed annually.
APPENDIX 12
ANNEX F
APPENDIX 12
LOCAL MAJOR SCHEMES DEVOLUTION
PROCESS
GUIDANCE ON EVIDENCE REQUIREMENTS
Report
22 January 2013
APPENDIX 12
LOCAL MAJOR SCHEMES DEVOLUTION
PROCESS
GUIDANCE ON EVIDENCE REQUIREMENTS
REPORT
14 December 2012
Job No
NEA6094
Report No
Prepared By
Amy Sykes & James
Jackson
Verified By
Martin Revill
Approved By
Martin Revill
Status
Final
Issue No
2
Date
22 January 2013
NEA6094
JMP Consultants Limited
Rotterdam House 116
Quayside
Newcastle Upon Tyne
NE1 3DY
T 0191 206 4085
F 0191 206 4001
E newcastle@jmp.co.uk
www.jmp.co.uk
Local Major Schemes Devolution Process - Guidance on evidence requirements
ii
i
APPENDIX 12
CONTENTS
1
Introduction ...................................... 5
2
Criterion 1 - Will the scheme
contribute to the creation of new
jobs and retention of existing jobs in
the North East LEP area? ................. 7
3
Criterion 2 - Will the scheme support
the North East LEP area gateways?. 9
4
Criterion 3 - Will the scheme
encourage the development or
retention of skilled jobs (NVQ level 4
and above) and support sites that
deliver the training for such skills?.. 10
5
6
Criterion 4 - Will the scheme provide
sustainable access solutions to
existing and growing development
corridors, centres and sectors, or
support housing growth? .................12
Criterion 5 - Will the scheme ensure
capacity and speed of transport links
to and within the North East LEP
area are maintained and enhanced
in order to increase the
NEA6094
attractiveness of the North East LEP
area as a place to do business,
boosting inward investment and
improving competitiveness of
indigenous firms? ............................ 14
7
8
9
Criterion 6 - Will the scheme deliver
improved accessibility from
residential areas to areas that have
employment, education or other
opportunities? ................................. 16
Criterion 7 - Will the scheme
contribute to an improvement in the
overall quality of journeys,
particularly those providing links to
employment and health or education
opportunities? ................................. 18
Criterion 9 - Will the scheme
contribute to an overall reduction in
carbon emissions relative to the
existing situation? ........................... 21
11 Criterion 10 - Will the scheme
provide the opportunity to improve
health, reduce levels of obesity
among the population or improve
road safety within the area? ............. 22
12 Value for Money ............................... 24
13 Deliverability ................................... 26
Risk to Cost ........................................... 26
Risk to Programme................................ 27
Risk to Acceptability .............................. 28
Criterion 8 - Will the scheme
contribute to an overall improvement
in the local environment including
improving local air quality or
reducing the noise impact of
transport corridors? ......................... 19
10
Local Major Schemes Devolution Process
iv
APPENDIX 12
1
Introduction
This document provides guidance on the
evidence requirements for policy criteria to be
used as part of the prioritisation of Local Major
Transport Schemes in the North East Local
Transport Body (LTB) area.
When considering the evidence base, scheme
promoters should give regard to the date the
scheme will be delivered and consider as far
as practically possible if the evidence will still
be of relevance at that time.
Clearly some schemes will address some
policy criteria more strongly than others,
however the criteria have been designed in
such a way that all types of scheme could
contribute to all criteria. The approach to the
policy assessment within the prioritisation
process is designed to allow the contribution of
proposed investments to be clearly identified,
and for credit to be given appropriately where
a proposed scheme will contribute to achieving
key outcomes in the North East. In this way
the Local Transport Body will be able to see
clearly what each intervention will contribute,
and will accordingly be in a position to make
informed decisions.
This document provides a guide to the types of
evidence which are likely to support the policy
NEA6094
criteria. Scheme promoters are advised
wherever possible to provide evidence in line
with the guidance outlined below. This will
ensure consistency of assessment between
schemes and help to ensure that proposals are
credited appropriately where they contribute to
the achievement of key policy outcomes.
However scheme promoters may provide
additional evidence outside of these guidelines
if relevant and appropriate and credit will be
given where possible and appropriate.
Given the need to demonstrate how the
scheme supports the broader outcomes of the
LTB
area,
scheme
promoters
are
recommended to liaise with their counterparts
in their Forward Planning, Development
Control and Economic Development teams in
the compilation of a comprehensive evidence
base.
Scheme promoters are reminded to use their
professional judgement in the development of
evidence and to concentrate on providing
focused and concise evidence on the
contribution of schemes to delivering the
broader policy outcomes. Scores are allocated
on the strength of the case provided by the
evidence not by the quantity of the evidence.
Local Major Schemes Devolution Process
A number of the criteria reference specific
spatial influences and geographic locations
identified from policy. These references
illustrate specific priorities or issues that are
addressed in policy, and act as examples of
where transport schemes may positively
influence policy in specific locations. While
providing guidelines to key locations it is
understood
that
there
are
proposed
interventions that will deliver improvements
that will support important locations not listed.
These lists are therefore not intended to be
exhaustive, and scheme sponsors can provide
evidence with respect to other spatial priorities
or geographic locations where that evidence
demonstrates that the scheme or intervention
will help contribute to the achievement of
policy outcomes in the North East. Transport
improvements that make a contribution or
improve access to and from geographical
locations not listed may therefore be given
appropriate credit within the
policy
assessment.
In such cases where scheme sponsors can
identify that a scheme will deliver
such
spatially specific benefits, they are encouraged
to provide evidence of how their proposal or
scheme contributes to the achievement of key
5
APPENDIX 12
policy outcomes for the North East; details of
these locations, businesses, facilities and other
issues resolved; and justification for the
inclusion of evidence relating to a specific
geographic location including references to
any policy documents that support the
evidence.
A number of the criteria highlight the
importance of reference to local policy
documentation. In the scheme assessment
weight will be given to evidence from emerging
plans according to the stage of preparation.
Similarly evidence from policy prepared under
previous national, regional and local context
will be given credit based on their continued
relevance and consistency with new and
emerging policy.
NEA6094
Local Major Schemes Devolution Process
6
APPENDIX 12
2
Criterion 1 - Will the scheme contribute to the creation of new jobs and retention of existing jobs in the North
East LEP area?
Creation of new jobs
There are a number of sources of information
that may provide evidence that a scheme will
contribute towards the creation of jobs within
the North East LEP area economy. The
following are likely to be the main sources of
information on the number and likelihood of
jobs being created. If other forms of evidence
not described here are available they may also
be submitted.
If a Local Plan or Local Development
Framework (LDF) has identified employment
sites within an allocations docum ent then
these may be pre sented as evidence that the
major scheme will contribute to the
development of these sites, assuming that it
can be shown that the major scheme is of
relevance to access and connectivity to these
sites.
If a site of relevance to a scheme has a
national or local designation associated with it
that would contribute to the creation of jobs, for
example an Enterprise Zone or a Local
Development Order (LDO) site, this could be
included, however scheme promoters should
consider the designations anticipated and the
extent to which the jobs created at this location
NEA6094
are supported
consideration.
by
the
scheme
under
Scheme promoters should be mindful of
maximising contributions from third parties into
the funding pot, alongside consideration of the
extent to which the scheme is affordable by a
developer or which a developer could be
reasonably expected to provide under the
terms of a planning condition. It is therefore
important to exercise professional judgement
regarding the inclusion of evidence relating to
live planning
applications
or planning
distinguish
between
permissions,
and
nfrastructure
that
will
evidence supporting i
support future job creation and that being
provided to support existing proposals.
Evidence for this criterion should, where
possible, include an assessment of the number
of jobs likely to be created and if transport
issues have been identified as a barrier to
development. For employment sites that do
not have a total number of jobs associated with
them it is possible to estimate this using work
by English Partnerships on employment
densities:
http://www.eastherts.gov.uk/media/pdf/a/8/SM
_Employment_Densities.pdf
Local Major Schemes Devolution Process
Retention of existing jobs
Evidence that the scheme will help with the
retention of jobs can be shown based on the
impact that the scheme will have on access to
existing significant centres of employment.
Proximity of the scheme alone to a significant
employer is not sufficient. It is important to
consider the relationship of the scheme to the
location and employer. Evidence for this could
be presented as follows:
Scheme improves access to a locally
significant employer, for example
employers referenced in the North East
Top 200 Businesses or other sources of
evidence illustrating the importance of
employment at that location;
Scheme maintains current accessibility to
a significant regional or local employer
while increasing overall capacity.
Locally significant employers have been
highlighted as these employers will be likely to
have a local supply chain and significant
multiplier effects within the local economy.
Scheme promoters should state which
significant employers will be affected by the
scheme and where possible provide an
7
APPENDIX 12
estimate of the transport benefit that the
employer will receive.
NEA6094
Local Major Schemes Devolution Process
8
APPENDIX 12
3
Criterion 2 - Will the scheme support the North East LEP area gateways?
If a scheme improves surface access to a
gateway, evidence needs to be provided to
demonstrate this to be the case. It should be
noted that proximity to a gateway alone is not
deemed to be sufficient evidence of a positive
contribution to improving access.
The area’s primary international gateways are
identified within the Draft North East LEP
Transport Strategy as:
Port of Tyne; and
Suggested evidence includes:
Amount/proportion of gateway trips
impacted by improvement;
Amount/proportion of freight impacted by
improvement (tonnage and value);
Time savings for gateway trips or freight;
Improvement in reliability; and
Changes in the balance of modes used to
access the gateway.
Newcastle International Airport.
The ports of Berwick, Blyth, Seaham and
Sunderland are also highlighted as providing
international connectivity.
Gateways on the fringe of the NELEP area, in
particular Teesport and Durham Tees Valley
Airport, are highlighted within the Draft North
East LEP Transport Strategy as enhancing the
international competitiveness of the area and
are important for export led industries and
those requiring links to a wide range of
international markets and firms.
NEA6094
If it can be shown from evidence based policy
document that the proposed scheme would
support the development of the gateway or
that the future or planned growth of the
gateway will be constrained by issues that the
proposed scheme could resolve this may be
included as evidence. Examples of sources of
this evidence may be through Economic
Development Strategies, Local
Transport
Plans, Local Plans or documentation produced
by the operator of the gateway itself. Such
evidence could either identify the general
constraint that the scheme will contribute to
resolving or the scheme itself.
Local Major Schemes Devolution Process
9
APPENDIX 12
4
Criterion 3 - Will the scheme encourage the development or retention of skilled jobs (NVQ level 4 and
above) and support sites that deliver the training for such skills?
A range of evidence is available to fulfil this
criterion. In general, evidence may relate to
both assisting the development of skilled jobs
and sites for training as well as improving
access to existing sites that provides these
skills.
Map 1: Universities, Centres for Excellence,
Clusters and Innovation Connectors
As a starting point the list below presents the
main institutions in the LTB area which provide
higher education opportunities:
University of Durham
University of Newcastle
University of Northumbria
There is an emphasis across the North East
LEP area on providing higher level training. It
is therefore suggested that where the scheme
supports employment sites offering Level 4 or
above training, evidence is presented in
support of this criterion.
University of Sunderland
East Durham College
Gateshead College
New College Durham
Northumberland College
In addition to employment sites that offer this
level of skills training, education sites can also
be included if the scheme provides improved
accessibility to them.
South Tyneside College
Sunderland College
Tyne Metropolitan College
Bishop Auckland College
Newcastle College
Source:
http://www.investnortheastengland.co.uk/invest
ment-guide/north-east-england-map.html
NEA6094
Local Major Schemes Devolution Process
A number of ‘Innovation Connectors’ have
been established within the sub area. These
Connectors have the dual aims of stimulating
innovation in their respective fields and
catalysing regeneration in their surrounding
areas. They are also:
10
APPENDIX 12
promoting and supporting their respective
fields, including links to key industry
bodies;
driving R&D, including links to universities
and colleges;
supporting business incubation, start-up
and growth;
catalysing inward investment;
maximising physical and economic impact
on the local community and creating
employment opportunities; and
acting as a network to serve the wider
region.
Information on the Connectors is provided
below:
Newcastle Science City is working to
stimulate the development and
commercialisation of science, particularly
in the areas of ageing, stem cells and
regenerative medicine, energy and
molecular engineering. The core of
Science City is in the western area of
Newcastle at the former Newcastle
Brewery Site, Newcastle General Hospital
and the areas around the Centre for Life.
The National Renewable Energy Centre
(NaREC), based in Blyth, is at the forefront
of the North East’s leading position on
renewable energy, and is helping the
region rapidly develop a reputation for
international excellence in the sector.
NEA6094
Sunderland Software City (SSC) is
building on the region’s university
strengths – particularly the University of
Sunderland – to develop the North East’s
software industry and attract new
companies to the region.
the relevant level of skills development and
training.
NETPark is helping science and
technology companies lead the way in
developing world-class technologies. The
focus is on physical sciences, particularly
plastic electronics, microelectronics,
photonics, nanotechnology, and their
application in the fields of energy, defence,
and medical-related technologies. It builds
on the strengths of the Universities of
Durham and Newcastle, process industry
businesses located primarily in Tees
Valley and electronics and electrical
engineering businesses.
Existing Sites
The Northern Design Centre will be a focal
point for creating design solutions, with a
remit that cuts across all industries. It will
stimulate investment in the region’s design
industry, promoting innovative and
productive design companies, while at the
same time helping businesses across all
sectors use design to improve their own
productivity. The Centre will be based in
the new Baltic Business Quarter, which is
already having an impact on companies in
the region.
Scheme
promoters
can suggest other
institutions if it can be shown that they provide
Local Major Schemes Devolution Process
The following paragraphs provide guidance on
assessing existing and new sites with respect
to skills and improvements in accessibility:
For locations where skilled employment
already exists or skills training is provided it is
important to demonstrate that the proposed
scheme will improve the accessibility to such
sites. This could be shown in one of two ways,
the first being through an improvement in
connectivity for business travel to and from the
site which will help an existing business
develop and contribute to the retention of
existing jobs. The second aspect relates to
improvements in connectivity from residential
areas to either skilled employment or training.
It is important to demonstrate the nature of the
areas connected, with any step changes in
accessibility being particularly important.
New Sites
New employment sites can be included in the
assessment if it can be shown that occupiers
will be providing higher skilled employment
(NVQ level 4 and above), or that employers
will be providing apprenticeship schemes to
train employees. Equally if a centre for training
such as a college is planned this could also be
included in the scheme assessment if the
major scheme will have an impact on
accessibility to the site.
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APPENDIX 12
5
Criterion 4 - Will the scheme provide sustainable access solutions to existing and growing development
corridors, centres and sectors, or support housing growth?
Existing and growing sectors
The scheme promoter should identify if the
scheme addresses the development of key
business sectors which have been identified by
the North East LEP. These sectors are:
Automotive
Off shore renewable
Creative and digital
Life sciences
Printable electronics
Business professional and financial
services
Source:
http://www.nelep.co.uk/key-sectors/
Addressing the development of key business
sectors refers to improving accessibility to the
sites where these sectors are developing or
improving the capacity to
these
sites.
Evidence should be provided on the scale of
the capacity change or scale of improvement
in accessibility.
should be identified.
These might include
corridors or locations identified within a Local
Plan/Local Development Frame work or a Local
Transport Plan, for economic gro wth.
Farringdon Row (Sunderland Core
Strategy Alternative Approaches)
The following employment zone s are identified
as Strategic
Employment Areas,
Key
Employment Areas or Economic Growth
Corridors within the emerging and adopted
Local Plans within the sub area:
Vaux (Sunderland Core Strategy
Alternative Approaches)
Blyth Estuary Renewables Energy Zone
Strategic Employment Area
(Northumberland Core Strategy Issues
and Options)
Aykley Heads (Durham Local Plan
Preferred Options)
Team Valley (NewcastleGateshead One
Core Strategy)
Follingsby (NewcastleGateshead One
Core Strategy)
Newcastle Airport (NewcastleGateshead
One Core Strategy)
Existing and growing development
corridors and centres
Walker Riverside (NewcastleGateshead
One Core Strategy)
In addition to these sectors for development,
any existing and growing business corridors
that are likely to benefit from the scheme
North of Nissan (Sunderland Core
Strategy Alternative Approaches)
NEA6094
Local Major Schemes Devolution Process
Stadium Village (Sunderland Core
Strategy Alternative Approaches)
Holmeside (Sunderland Core Strategy
Alternative Approaches)
The Port (Sunderland Core Strategy
Alternative Approaches)
South Ryhope (Sunderland Core Strategy
Alternative Approaches)
A19 Economic Growth Corridor (South
Tyneside Adopted Core Strategy)
Tyne Tunnel Trading Estate (North
Tyneside Preferred Options)
West Chirton Industrual Estate (North
Tyneside Preferred Options)
Balliol Business Park East (North Tyneside
Preferred Options)
North Bank Area (North Tyneside
Preferred Options)
Esso (North Tyneside Preferred Options)
Gosforth Business Park and Balliol West
(North Tyneside Preferred Options)
12
APPENDIX 12
Weetslade (North Tyneside Preferred
Options)
Proctor and Gamble (North Tyneside
Preferred Options)
South Shields
Jarrow
Hebburn
Washington
Houghton le Spring
Alternatively it may include key centres for
business such as sub regional centres and
main town locations.
The sub regional centres and main towns as
identified within the latest version of the Local
Plan documents are:
Sub regional centres
Durham City
Gateshead
Newcastle
Sunderland
Main Towns
Berwick upon Tweed
Alnwick
Amble
Ashington
Blyth
Wallsend
North Shields
Whitley Bay
Cramlington
Haltwhistle
Hexham
Porteland
Bishop Auckland
Prudhoe
Chester-le-Street
Crook
Peterlee
Seaham
Shildon
Spennymoor
Stanley
Newton Aycliffe
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Farringdon Row (Sunderland Core
Strategy Alternative Approaches)
Stadium Village (Sunderland Core
Strategy Alternative Approaches)
Urban core (NewcastleGateshead One
Core Strategy)
Callerton Park (NewcastleGateshead One
Core Strategy)
MetroGreen (NewcastleGateshead One
Core Strategy)
Wallsend AAP (North Tyneside Preferred
Options)
North Shields AAP (North Tyneside
Preferred Options)
Coastal AAP (North Tyneside Preferred
Options)
Morpeth
Barnard Castle
Consett
Groves (Sunderland Core Strategy
Alternative Approaches)
Supporting housing growth
When assessing the effect on corridors or key
centres the scheme promoter should be clear
about the effect on accessibility and capacity
of the transport system for accessing these
locations.
Any existing and growing strategic housing
areas that are likely to benefit from the scheme
should be identified. The following are
identified at strategic housing sites, strategic
growth areas or potential strategic allocations
within the emerging and adopted local plan
documents:
Local Major Schemes Devolution Process
13
APPENDIX 12
6
Criterion 5 - Will the scheme ensure capacity and speed of transport links to and within the North East LEP
area are maintained and enhanced in order to increase the attractiveness of the North East LEP area as a place
to do business, boosting inward investment and improving competitiveness of indigenous firms?
The evidence for this criterion will relate to the
scheme’s contribution to the strategic
operation of the transport network. It should
be demonstrated
that the scheme will
contribute, directly or indirectly, to mitigating
existing capacity or reliability issues on the
transport network. This could include capacity
constraints on or affecting any mode. This
contribution may be direct (physical relief of
junction which is at capacity or increase in
overall capacity of the transport system) or
alternatively an indirect contribution (transfer of
trips, which presently occupy an at capacity
junction, to another route or mode).
Evidence should be provided regarding the
capacity or reliability issue. This evidence may
be taken from Local Transport Plans, or from
information provided by other Agencies, for
example Route Utilisation Studies (RUS)
produced by Network Rail.
The following locations on the highways
network are identified within local policy
documents as suffering from congestion or
being over capacity:
NEA6094
A197 Telford Bridge (Northumberland
LTP3 evidence base)
Junctions on the A19 trunk road (Tyne and
Wear LTP3)
A1061 South Newsham Roundabout to
Laverock Hall Roundabout
(Northumberland LTP3 evidence base)
Central bridges across the River Tyne
(Tyne and Wear LTP3)
A193 Cowpen Road (Northumberland
LTP3 evidence base)
Central River Wear crossing at
Millburngate Bridge (County Durham Plan
Summary of Transport Evidence Base)
A181 Gilesgate on its approach to the
junction with the A690 (County Durham
Plan Summary of Transport Evidence
Base)
Western and northern approaches to
Durham city centre (Sutton Street and
Framwellgate Peth), and Finchale Road,
outbound at Framwellgate Moor (County
Durham Plan Summary of Transport
Evidence Base)
A1 Western Bypass (Tyne and Wear
LTP3)
A19 Tyne Tunnel (Tyne and Wear LTP3)
Local Major Schemes Devolution Process
River Wear bridges in Sunderland (Tyne
and Wear LTP3)
In addition the following elements of the rail
network are experiencing overcrowding:
Between Northumberland and Newcastle
in the AM peak (Northumberland LTP3
evidence base)
Capacity issues between County Durham
and Tyne and Wear (Durham Core
Strategy Issues Paper)
Examples of the type of evidence that might be
present can be found in, for example, the
Northumberland
Local
Transport
Plan
Evidence Base, which presents link flows and
capacities
for
roads
across
the
Northumberland area as a means of assessing
14
APPENDIX 12
congestion. Clearly if other evidence has also
been collected as part of the scheme
specification, for example traffic counts or
passenger counts, this could also
be
presented as evidence, subject to an indication
of what level of capacity is currently being
used.
As well as demonstrating an improvement to
part of the network it is also necessary to
define the importance of the section of network
improved, for example if the link or public
transport service is of regional, district level or
local importance.
NEA6094
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APPENDIX 12
7
Criterion 6 - Will the scheme deliver improved accessibility from residential areas to areas that have employment,
education or other opportunities?
The scheme promoter should identify which
residential areas will benefit most from the
proposed scheme, and also identify the
employment, education or other opportunities,
to which accessibility will be improved. The
following provides an indication of the types of
opportunities to which accessibility might be
improved:
Employment
Access to skilled jobs or jobs identified as
being one of the key sectors for the region,
although clearly if the present levels of
unemployment in the area were extremely
high, access to all types of job would be of
relevance. The sites should be identified and
an estimate of the scale of the benefit arising
given.
Education
The emphasis should be on access to post
compulsory secondary education. This might
include sixth form colleges, further education
colleges or universities, or any other locations
where academic or vocational skills training
would take place. The sites should be
identified and an estimate of the scale of the
benefit arising given.
NEA6094
Other Opportunities
Other types of opportunity to which access
would be improved by the scheme might
include access to hospitals, health centres and
clinics. This would be of particular relevance if
the residential area can be shown to have
wider health problems, for example with issues
of obesity, or long term sickness. Other
examples might include access to retail or
leisure facilities, for example if access to
grocery retailers was improved for an area
which presently only has limited access to
retail facilities. Improvements to access to
leisure facilities might particularly include
sports facilities and swimming pools.
Having identified these areas information
relating to the residential area that would
benefit from the major scheme should also be
presented. This should include the following:
Unemployment
Information on unemployment should be taken
from
the
Nomis
website
(http://www.nomisweb.co.uk/default.asp) and
utilise the latest available JSA Claimant Count
figures for the appropriate wards affected by
Local Major Schemes Devolution Process
the Major Scheme. The figure for the North
East region and UK as a whole should also be
presented.
Skills
The level of skills and unemployment in the
area can be found at the neighbourhood
statistics website. The rank of education, skills
and training should be presented, from the
Indices of Deprivation for Super Output Areas,
by entering the postcode for the residential
area of interest.
The link is as follows:
http://www.neighbourhood.statistics.gov.uk/dis
semination/
Health
Information should be present on the level of
health inequalities in the area that would
benefit from the scheme. This should use the
Rank of Health of Deprivation and Disability
score from the Index of Multiple Deprivation
2007 for the appropriate output area in which
the residential area affected lies. This can be
found by entering postcode for the residential
area and selecting lower super output area at
the following link:
http://www.neighbourhood.statistics.gov.uk/dis
semination/
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APPENDIX 12
Levels of Deprivation
Information on the level of deprivation should
be provided using the rank assigned
to
relevant Lower Super Output Areas using the
2007 Index of Multiple Deprivation. This
information can be found at the following link
on the neighbourhood statistics website by
entering the postcodes(s) for the residential
area(s) under study:
http://www.neighbourhood.statistics.gov.uk/dis
semination/
Information should also be provided on the
existing level of accessibility to opportunities
based on car and public transport journey
times, and the likely level of improvement that
the major scheme would provide. Accessibility
mapping may be a useful way of illustrating
this improvement. Alternatively journey time
savings or increase in service frequencies
could also be used.
Scheme promoters are asked to make clear
the relevance of the transport improvement to
the
communities,
neighbourhoods
and
localities affected, for example,
an
improvement in highway accessibility to/from
an area with low car ownership maybe of less
value than an equivalent public transport
improvement.
NEA6094
Local Major Schemes Devolution Process
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APPENDIX 12
8
Criterion 7 - Will the scheme contribute to an improvement in the overall quality of journeys, particularly
those providing links to employment and health or education opportunities?
The scheme promoter should identify
improvements in the quality of journeys. This
might relate to the condition of interchanges,
issues around journey time reliability, the
quality of vehicles being used for a service or
information systems provided to users. The
evidence for this might be presented as
follows:
For road schemes an assessment of the
effect on journey time reliability should be
presented. For example, will the scheme
make journey times more consistent
across the whole day, or reduce the
instance of occasional variations in delay
caused by congestion? Equally if
substantial development is forecast around
the scheme, will the major scheme prevent
a further deterioration in reliability?
For public transport schemes, will journey
reliability be improved (for example
through bus priority measures) or delays
reduced (for example replacement of
obsolete and unreliable equipment or
improvement in capacity allowing a more
robust service plan)? Will the quality of
interchanges be improved to make
NEA6094
integration within or between modes more
efficient or more comfortable?
For all modes, will the scheme deliver
improved information systems?
Scheme promoters should state if the
scheme is likely to have an impact on
personal security issues in the area
surrounding it. This assessment could be
presented as a simple positive, neutral or
negative. Examples of improvements to
personal security might relate to
improvements to lighting or provision of
CCTV cameras.
Clearly not all schemes will be able to address
all of the issues set out above. Promoters
should provide as much detail as possible
about the extent of any improvements in
journey quality that the scheme will bring.
Local Major Schemes Devolution Process
18
APPENDIX 12
9
Criterion 8 - Will the scheme contribute to an overall improvement in the local environment including improving
local air quality or reducing the noise impact of transport corridors?
The scheme promoter should establish if the
scheme is likely to have an effect on any
existing local environmental issues. Scheme
promoters should consider if the scheme is
going to have both positive and negative
effects on local environmental issues.
very localised then the effect is likely to be
localised, where as a route based scheme may
have an impact at a number of locations. The
assessment should also highlight Noise Action
Plan Priority Locations affected by the scheme.
The issues to be considered under
criterion are:
An estimate of the effect (positive or negative)
on any Air Quality Management Areas (AQMA)
should be presented.
this
Noise
Air Quality
Areas of environmental or cultural
significance
Whilst some of these issues could be
assessed in a quantitative manner it is
accepted at this point that a more qualitative
approach may be appropriate. The following
approach is recommended for each of the
issues:
Noise
An assessment should be provided of the
estimated number of dwellings likely to be
affected by changes in noise levels. This is
likely to be based around the size and extent
of the scheme. For example, if a scheme is
NEA6094
Air Quality
The following are identified AQMAs within the
sub area:
Blyth Town Centre (recommended to be
undeclared)
Blue House Roundabout (Newcastle)
Jesmond Road (Newcastle)
Newcastle City Centre
Gateshead town centre and Dryden
Road/Durham Road junction (Gateshead)
Boldon Lane (South Tyneside)
Leam Lane (South Tyneside)
Newcastle Quayside
Durham city incorporating Highgate,
Milburngate and Gilesgate areas
The estimated effect will in most cases be
highly localised, although it should be noted
that a scheme that involves rerouting traffic
may have an effect on an AQMA through the
abstraction of traffic from the AQMA area.
Other sites of concern relating to air quality,
but which are not classified as an AQMA may
also be assessed within this process.
Areas of Environmental or Cultural
Significance
Scheme promoters should provide description
of the significance of the site and magnitude of
positive or negative impact anticipated from
the scheme. The extent to which the identified
significance will be either compromised or
enhanced should be made clear, including the
mitigating effects of any
amelioration
incorporated formally into the proposals or
allowed for as standard good practice.
Areas of
include:
environmental
significance
may
Areas of Outstanding Natural Beauty
National Parks
Heritage Coast
Ramsar sites
Special Areas of Conservation
Local Major Schemes Devolution Process
19
APPENDIX 12
Sites of Special Scientific Interest
Areas of cultural significance may include:
World Heritage Sites
Listed Buildings and conservation areas
Scheduled Ancient Monuments
Guidance on the magnitude of the impact
particularly on culturally significant sites can be
found in Table 1 of the following WebTAG
units:
Townscape
http://www.dft.gov.uk/webtag/documen
ts/expert/unit3.3.8.php
Heritage of Historic Resources
http://www.dft.gov.uk/webtag/documen
ts/expert/unit3.3.9.php
NEA6094
Local Major Schemes Devolution Process
20
APPENDIX 12
10
Criterion 9 - Will the scheme contribute to an overall reduction in carbon emissions relative to the existing
situation?
Scheme promoters should provide evidence as
to the overall effect of the scheme on carbon
emissions. This should include an assessment
of the net change in emissions, for example if
the operation of a public transport scheme
contributes to emissions through operation of
vehicles this may be offset by a reduction in
emissions from cars. Clearly at this point the
assessment need not be fully worked up;
however it should be possible to provide an
indication of the likely effect on carbon
emissions based on the scheme objectives
and background information known about the
area the scheme will affect.
In considering the likely impact on carbon
emissions scheme promoters should consider
the impact of the scheme in terms of the
following areas:
It is not necessary to consider the impact of
embedded carbon from construction within this
prioritisation process, unless this is considered
to be a significant issue. Equally if a scheme
is only likely to have a very insignificant impact
on embedded carbon this should be stated. It
has been assumed within this guidance that
the majority of schemes, by their nature, will
have a similar impact in terms of embedded
carbon impact on a pound for pound basis.
This criterion does not include consideration of
how the scheme may support the low carbon
economy or renewable sector. The impact of
that is considered within earlier criteria. This
criterion is concerned with the direct reduction
in emissions from transport moving towards a
low carbon transport system within the area.
The shift to lower carbon transport modes;
Changes in average speed; and
The shift to new technologies and cleaner
fuels.
Scheme promoters are encouraged to quantify
the likely level of impact through the use of a
suitable comparator scheme.
NEA6094
Local Major Schemes Devolution Process
21
APPENDIX 12
11
Criterion 10 - Will the scheme provide the opportunity to improve health, reduce levels of obesity among the
population or improve road safety within the area?
It is recognised that the impact of transport on
health has two elements:
based-estimates-of-healthy-lifestylesbehaviours-at-la-level-2003-05
Beneficial to health; and
Severance
Detrimental to health.
The scheme may also address issues of
severance which
would contribute to
improvements in health and a reduction in road
safety issues. Scheme promoters should give
consideration to issues of severance as it
affects those using non-motorised modes
especially pedestrians.
Improve health and reduce the levels of
obesity among the population
The scheme promoter should provide evidence
that a scheme will provide some contribution to
improvements in health. This could be through
the encouragement of mode shift to active
travel modes either directly, for example
through the provision infrastructure for cyclists
and pedestrians; or indirectly, for example
through the development of public transport
services which would involve use of active
travel to access the service.
Evidence for this criterion should include
information on levels of obesity or poor health
in the area that the scheme will affect. The link
below provides information on obesity levels
by local authority and may be appropriate if
more localised information is not available:
http://www.ic.nhs.uk/statistics-and-datacollections/population-andgeography/neighbourhoodstatistics/neighbourhood-statistics:-model-
NEA6094
Severance may be classified according to the
following four broad levels.
None - Little or no hindrance to pedestrian
movement.
Slight - All people wishing to make
pedestrian movements will be able to do
so, but there will probably be some
hindrance to movement.
Moderate - Some people, particularly
children and old people, are likely to be
dissuaded from making journeys on foot.
For others, pedestrian journeys will be
longer or less attractive.
of their activities. In some cases, this could
lead to a change in the location of centres
of activity or to a permanent loss of access
to certain facilities for a particular
community. Those who do make journeys
on foot will experience considerable
hindrance.
The following steps are required to enable the
assessment of the impact of projects on
severance:
estimate the level of severance for the dominimum case;
estimate the level of severance for the dosomething;
by comparison of the level of severance
for the do-minimum and do something
cases, estimate the change in severance
(reductions and increases); and
estimate the numbers of people likely to be
affected by changes in severance.
Severe - People are likely to be deterred
from making pedestrian journeys to an
extent sufficient to induce a reorganisation
Local Major Schemes Devolution Process
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APPENDIX 12
Improve Road Safety
Assessment of change in severance
The scheme promoter should provide evidence
where a scheme will provide some contribution
to improvements in road safety issues.
Evidence for this criterion should include
information the local authority holds on
accident clusters in the area the scheme
effects. In terms of accident information, this
could focus on number of people Killed and
Seriously Injured in accidents (KSIs), and the
number of such accidents taking place, or
where appropriate issues relating specifically
to pedestrians or children.
Source:
http://www.dft.gov.uk/webtag/documents/archi
ve/1104/unit3.6.2.pdf
Scheme promoters should provide an
indication of the likely scale of reduction in
road accidents and casualties if available.
The assessment of severance may also refer
to the provision of Disability Discrimination Act
compliant facilities on a public transport
system.
NEA6094
Local Major Schemes Devolution Process
23
APPENDIX 12
12
Value for Money
As part of the prioritisation process it will be
necessary to provide an estimate of the Value
for Money (VfM) that the scheme is likely to
provide. Clearly at this stage in the scheme
development process not all schemes will have
a fully worked up business case that will
include all aspects of the Benefit Cost Ratio
(BCR). This note sets out some guidance on
how VfM might be assessed in this instance.
For schemes that have not yet been fully
assessed the most appropriate approach
would be to examine the evidence from other
previous schemes. Indeed the DfT’s Early
Assessment and Sifting Tool (EAST) Guidance
notes that “In many cases, only high level
information will be available at the early stage
of assessing options: respondents are
expected to form a view based on the best
evidence available.”
While there are various attributes that will
count towards VfM, which are summarised in
the Appraisal Summary Table (AST), the main
focus of VfM for the prioritisation process
relates to the estimation of the BCR.
Best and Final Funding Bid (BAFFB) process
in Autumn 2011. These were the most recent
schemes to pass through the Major Scheme
Process and between them provide a good
mixture of the types of schemes that are likely
to be put forward as part of this prioritisation
process.
Scheme promoters can find a list of schemes
and information about the schemes at the
following link:
http://assets.dft.gov.uk/publications/interopera
bility/final-funding-bids.pdf.
Other guidance could also be included where it
is felt, for example, that the schemes in the
BAFFB are not representative of the scheme
being entered into the prioritisation process.
This may particularly apply to public transport
schemes or package measures where the
number of potential comparators is limited.
Existing feasibility studies might also be used,
although this would be subject to the inclusion
of any caveats that surround them, and it may
also be appropriate to cite comparators where
possible.
Evidence could be taken from previous major
scheme business cases, the most appropriate
being those that were funded as part of the
NEA6094
When comparing a proposed scheme with the
fully worked up schemes there are a number of
issues to consider:
1.
The objective that the comparator
scheme sets out to address – are these
comparable with the scheme being promoted?
2.
Assessments of VfM should give
consideration to both the size of the benefits
and the cost of the scheme.
3.
What is the nature of the comparator
scheme, for example, for road schemes is it a
link length scheme or a junction scheme?
4.
Are the cost characteristics
comparable; does either the scheme or the
comparator have very high or low costs for a
particular reason, which would in turn impact
on VfM?
5.
Are there any ongoing operating costs
associated with the scheme and the
comparator and what is the likely impact on
VfM? Operating costs will be discounted over
the life of the scheme in the same way that
ongoing benefits would be.
6.
Can it be shown that the nature of any
journey time benefits of the comparator would
be similar to the scheme being promoted, for
Local Major Schemes Devolution Process
24
APPENDIX 12
example would journey time benefits tend to
be in the 0-2 minutes per vehicle category or
2-5 minute category?
7.
Does the comparator scheme have a
similar mix of business; commuter and other
users as the values held by these groups are
distinct and strongly influence the BCR?
8.
Have other quantifiable benefits (such
as carbon emissions) formed a substantial part
of the comparator schemes benefits, and is
this appropriate to the scheme being
promoted?
Scheme promoters should provide a narrative
to justify their choice of comparator(s) and to
explain why the conclusions they have drawn
are valid. It is important that the sources of
benefits for both the scheme being assessed
and the comparator scheme are presented, for
example to ensure that the types of journey
time saving produced are comparable. This is
important to ensure that the comparator
scheme used is appropriate for comparison
against the scheme being assessed.
It maybe that it is appropriate to compare the
scheme being promoted with more than one
comparator scheme if the mixture of
characteristics does not lend itself to
comparison with a single scheme. BCRs
should be presented as being in one of the
following categories:
Medium value for money (BCR 1.5-2.0)
High value for money (BCR 2.0 and
above)
A factor to consider when examining the
evidence for schemes is the diversity of BCRs
that exist, based on different scheme
categories. For example road schemes and
maintenance schemes tend to have larger
BCRs while public transport or package
schemes tend to have lower BCRs.This is an
artefact of the appraisal system and does not
mean that BCRs are unrealistic.
Local Contribution
A further issue when considering VfM is the
need to consider the scale of any local
contribution made as this influences the scale
of VfM to the Local Transport Body rather than
the BCR to the scheme promoter. Examination
of the results for previous schemes show that
this has been an important aspect within the
decision making process in the past. This is
also of importance to the LTB in terms of being
able to maximise the overall value to the LTB
area of the funding available.
Low value for money (BCR 1.0-1.5)
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APPENDIX 12
13
Deliverability
Risk to Cost
What is the latest estimated cost of the
scheme?
The cost should include construction costs,
land and property, compensation, preparation
and administration and on site supervision and
testing see WebTAG Unit 3.5.9 (August
2012) para 2.2.1 – 2.2.3 and table 1 for more
detail.
When were the costs of the scheme last
updated?
Have costs been independently checked?
Scheme costs should include an adjustment
for risk.
DfT require a Quantified Risk Assessment
(QRA) for projects with a cost greater than
£5m. For schemes under £5m a QRA is
encouraged alternatively there may be scope
for using generalised risk allowances for each
cost element. For detailed guidance on risk
see WebTAG Unit 3.5.9 (August 2012) para
3.2.3 – 3.4.1.
NEA6094
Please highlight what % of the total cost is risk
allowance.
Please specify what price base the original
cost was developed in and what inflation
assumptions have been made to the present
day and for the forecasting of future years.
Guidance on Inflation assumptions is
detailed in WebTAG Unit 3.5.9 (August
2012) para 2.1.2 – 2.1.6.
Guidance on outturn cost calculation is
provided in WebTAG unit 3.9.2 para 6.3.9
and table 1.
What is the funding gap between the latest
outturn cost and the cost to the LTB?
Please provide total and breakdown by
forecast future year.
Local Authority contribution
What is the potential for Local Authority
contributions?
Please provide total and breakdown by
forecast future year.
Developer contributions (Third party
contributions)
What
is the
contributions?
potential
for
developer
Please provide the total outturn cost and a
breakdown of the outturn cost by forecast
future years.
Please provide total and breakdown by
forecast future year.
What is the level of funding you are
requesting from the LTB?
What is the potential for funding from other
funding pots and budgets?
Please provide total and breakdown by
forecast future year.
Other funding bids and budgets
Please specify bid or budget details?
Please provide total and breakdown by
forecast future year.
Operating costs
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APPENDIX 12
What are the likely operating costs of the
scheme?
This should include all running costs to keep
the scheme in operation.
This should include subsidy costs.
Level of design
What work to date has been undertaken on the
scheme design?
Options testing;
Preliminary design/outline design; or
Detailed design.
Please provide latest design drawings.
Funding compliance
How will identified risks be actively managed?
Provide a risk rating of 1 (low risk) to 5 (high
risk). Supporting evidence should be
provided where possible and this might
include examples of what similar schemes
have cost in the past, how these costs have
differed from original estimates or
extrapolations drawn from pilot schemes.
Risk to Programme
Programme/ Implementation timetable
Provide a plan with key milestones and
progress including critical path.
Are there planning
provide details.
implications?
Please
Is all the land within scheme promoter
ownership?
Quality of supporting evidence for the
scheme
Provide detail of what level of work has been
undertaken on the scheme for example
feasibility study or full Business Case.
If it is based on evidence from where similar
options have been implemented, how
transferable are the impacts likely to be?
Is funding compliant with ‘Managing Public
Money’ and other central government
guidance?
What is the estimated start and completion
date of the scheme?
How well developed is the supporting evidence
at this stage (model availability/validated)?
Practical
GRIP Stage
Affordability
Has the option been tested and proven to be
practical and effective?
Provide details of GRIP stage if appropriate.
Technology
Resource availability/governance,
organisational structure and roles
Is the option affordable in the context of the
available budget and relevant spending review
period(s)?
What risks have been identified with regard
to this option?
All projects are expected to have a risk
management plan proportionate to their scale.
How probable are the risks? Include
examples
of
problems
and
risks
experienced in similar schemes.
NEA6094
If technology is involved is this proven,
prototype or still in development?
Legal powers - How certain are you of the
legal feasibility of the option?
Have the required statutory powers been
granted?
Has a governance structure for the scheme
management been established?
Summarise the overall approach for project
management at this stage of the project.
Describe the key roles, lines of accountability
and how they are resourced.
If no what additional statutory powers are
required?
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APPENDIX 12
Risk to Acceptability
Stakeholders and Public Acceptability
Who are the relevant stakeholders?
What consultation has
relevant stakeholders?
taken place
with
Provide an assessment of whether there are
likely to be any issues around stakeholder
acceptability.
Letters of support may be useful
Provide an assessment of whether there are
likely to be any issues around public
acceptability.
Has any public consultation taken place?
What public consultation is likely to be
required?
Statutory Consultees (HA, Env Agency,
Natural England)
What consultation has
Statutory Consultees?
taken place
with
Letters of support may be useful
Value for money
Have you calculated the BCR (benefit cost
ratio)?
If you have calculated the BCR:
What is it?
Provide the following information relating to the
appraisal investment cost:
NEA6094
What is the investment appraisal cost of the
scheme? (WebTAG Unit 3.9.2 para 6.3.10
and table 2)
The price base year should be the
Department’s standard base year of 2010
(WebTAG Unit 3.5.4 August 2012, Para
4.1.6.)
It is important that scheme costs are as
robust as possible and include a proper
allowance for risk and optimism bias is
crucial.
What level of optimism bias has been
included?
Detailed guidance on the application of
optimism bias can be found in WebTAG
Unit 3.5.9 (August 2012) para 3.6.1 to 3.7.11.
At this stage it is anticipated that the
majority of schemes will be in Stage 1 and
the relevant level of optimism bias should
be applied based on the type of project
(Road, Rail, IT project) for further guidance
see table 9 of WebTAG Unit 3.5.9.
Is there a programme for measuring/evaluating
desired outcomes and wider impacts?
Is there a clear logic model for how outcomes
will be achieved?
If you have not yet calculated the BCR, is
there evidence of the BCR and/or value for
money of similar options that may be relevant,
explaining why similar results might be
expected? (see Chapter 12)
Evaluation
Summarise
outline
arrangements
monitoring and evaluating the intervention.
Local Major Schemes Devolution Process
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28
APPENDIX 12
Contents Amendments Record
This document has been issued and amended as follows:
Status/Revision
Revision description
Issue Number
Approved By
Date
Draft
Initial draft
1
MJR
11/12/2012
Draft
All methodology elements
2
MJR
14/12/2012
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Local Major Schemes Devolution Process
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APPENDIX 12
ANNEX G
North East Major Schemes Prioritisation Pro forma
North East Major Schemes Prioritisation Pro forma
This pro forma should be used to provide evidence in support of specific proposals in relation to the
prioritisation of major schemes in the North East LEP area. The pro forma allows for the provision of
evidence covering the policy, value for money and deliverability criteria, as well as an opportunity to
describe the scheme and its context.
Scheme promoters are asked to provide evidence in support of their scheme, including a narrative,
and any quantitative and qualitative evidence that demonstrates:



how the scheme delivers or contributes to the achievement of the North East’s policy
objectives;
how the scheme represents value for money; and,
the deliverability of the scheme.
Guidance on the evidence required to complete the pro forma is provided in the document Guidance
on Evidence Requirements and the pro forma should be read and completed with reference to that
guidance.
In addition to the space provided for the presentation of the full evidence on the contribution any
scheme makes to each of the policy criteria, the pro forma includes a number of summary boxes at
the end of each criterion. These summary boxes are intended to highlight the key contributions that
the proposal makes to delivering policy outcomes in the North East. An assessment will be made
based on the full evidence submitted including any narrative, not solely on the information in the
summary boxes.
These boxes should however assist promoters in providing appropriate quantitative data and will
assist the independent assessment team in undertaking the scheme assessment. Scheme promoters
should therefore complete these summaries where possible in addition to providing the appropriate
evidence under each criterion. It is not necessary to complete all the policy sections and boxes, just
the ones where evidence is available that is relevant to the scheme under assessment and the
criterion in question. Evidence must be presented on value for money and deliverability.
Please use this pro forma to highlight the significance of any designations or sites included within the
evidence, including reference to where designations feature in national, sub regional or local policy.
Graphs, tables, hyperlinks and maps should be included if appropriate.
Please use more than one page per criterion if required.
APPENDIX 12
Scheme Background and Description:
Scheme name
Scheme Description:
This section should clearly state the scope of the scheme and describe all of its key components. Scheme
promoters should also set out the rationale for the scheme including the primary objectives of the scheme.
Scheme promoters should provide a location plan of the scheme.
APPENDIX 12
Policy Criteria:
For each policy criterion set out below promoters should provide an appropriate description of how the
scheme will address the criterion, based on the guidance provided separately, and where possible
address the specific evidence requirement for each criterion.
Criterion 1: Will the scheme contribute to the creation of new jobs and retention of existing jobs
in the North East LEP area?
Category
Site name or reference
No. of Jobs Scheme will
Support
Local Plan
Other Designated Site (s)
Locally Significant Employers
Employer name
Evidence of significance
No. of
Employees
Benefit of Scheme
APPENDIX 12
Criterion 2: Will the scheme support the North East LEP area gateways?
Gateway(s) affected by scheme:
Amount/proportion of gateway trips impacted by
improvement
Amount/proportion of freight impacted by improvement
(tonnage and value)
Time savings for gateway trips or freight
APPENDIX 12
Criterion 3: Will the scheme encourage the development or retention of skilled jobs (NVQ level
4 and above) and support sites that deliver the training for such skills?
Name of employment sites or
training centre
Nature and level of training
provided
Benefit of the scheme
APPENDIX 12
Criterion 4: Will the scheme provide sustainable access solutions to existing and growing
development corridors, centres and sectors, or support housing growth?
Sectors/Business
Corridors/Key Centres
Evidence of significance
Benefit of the scheme
APPENDIX 12
Criterion 5: Will the scheme ensure capacity and speed of transport links to and within the
North East LEP area are maintained and enhanced in order to increase the attractiveness of the
North East LEP area as a place to do business, boosting inward investment and improving
competitiveness of indigenous firms?
Provide evidence on the nature of the existing issues on the transport network in question.
Quantify the issues where possible.
Identify where the transport network in question has national or local significance, and identify any
specific designations of the networks affected.
Outline how the scheme will address any issues.
APPENDIX 12
Criterion 6: Will the scheme deliver improved accessibility from residential areas to areas that
have employment, education or other opportunities?
Residential area name
Unemployment Rate
Skills levels
IMD (2007) Health Ranking
IMD (2007) Overall Ranking
Description of access to opportunity
(employment/education/other
opportunity)
Benefit of the scheme
APPENDIX 12
Criterion 7: Will the scheme contribute to an improvement in the overall quality of journeys,
particularly those providing links to employment and health or education opportunities?
APPENDIX 12
Criterion 8: Will the scheme contribute to an overall improvement in the local environment
including improving local air quality or reducing the noise impact of transport corridors?
Noise – nature and quantification of
change or impact
No. Dwellings affected by noise:
Air quality – nature and quantification of
change or impact
AQMAs or sites of concern affected:
Environmental or cultural significance –
nature of change or impact
Area of environmental or cultural
significance (name and designation)
Magnitude of impact on area of
environmental and cultural significance
APPENDIX 12
Criterion 9: Will the scheme contribute to an overall reduction in carbon emissions relative to
the existing situation?
If a comparator scheme is being used provide details within the narrative.
Promoted Scheme
Potential mode shift
Potential change in average speed
Comparator Scheme:
(name)
APPENDIX 12
Criterion 10: Will the scheme provide the opportunity to improve health, reduce levels of
obesity among the population or improve road safety within the area?
Active travel
Potential mode shift
IMD health ranking or obesity levels
Severance
Location of severance
Level of severance now
Estimated level of severance post scheme
implementation
Number of people affected by severance
Road safety
Location of accident cluster
Number of KSIs
Potential reduction in KSIs
APPENDIX 12
Value for Money Criteria
Using the value for money section of the Guidance on Evidence, scheme promoters should present
below an estimate of the Benefit Cost Ratio (BCR) of the scheme being promoted. This should
include a narrative giving a description of how the estimated BCR has been calculated or derived and
why it is judged to be appropriate. Information should be provided on the nature of any comparator
scheme used or alternatively any other case study information used. Any information used to inform
the estimation of BCR should be referenced, or if the information is not available online, it should be
appended with the submission of this pro forma.
Value for Money Assessment:
Promoted scheme
Scheme Name
BCR
Brief scheme overview
Objectives of the scheme
Scheme cost
Monetised benefits
Non monetised benefits
Operating costs
Profile of journey time
savings
Less than – 5 minutes
-5 to -2 minutes
-2 to 0 minutes
0 to 2 minutes
2 to 5 minutes
Greater than 5 minutes
Split between:
Business users and transport
providers
Commuting and other users
Local Contribution
Comparator scheme
APPENDIX 12
Deliverability Criteria
Using the guidance scheme promoters should complete the tables below to provide evidence on
deliverability.
Costs
What is the latest estimated cost of the scheme?
Please provide the total outturn cost and a breakdown of the outturn cost by forecast future years.
2015/16
2016/17
2017/18
2018/19
Total
When were the costs of the scheme last updated?
Have costs been independently checked?
Have scheme costs included an adjustment for risk?
What price base was the original cost was developed in?
What inflation assumptions have been made to the present
day and for the forecasting of future years?
What is the level of funding you are requesting from the LTB?
2015/16
2016/17
2017/18
2018/19
Total
What is the funding gap between the latest outturn cost and the cost to the LTB?
2015/16
2016/17
2017/18
2018/19
Total
2018/19
Total
2018/19
Total
What is the potential for Local Authority contributions?
2015/16
2016/17
2017/18
What is the potential for developer contributions?
Provide a brief narrative on the source of these contributions.
2015/16
2016/17
2017/18
APPENDIX 12
What is the potential for funding from other funding pots and budgets?
Please specify bid or budget details.
2015/16
2016/17
2017/18
2018/19
Total
Operating costs
What are the likely operating costs of the scheme?
Level of design
Include a narrative on what work to date has been undertaken on the scheme design
Please tick as appropriate
Options testing
Preliminary/outline design
Detailed design
Funding compliance
What risks have been identified with regard to this option?
Risk
Risk rating
1 (low risk) to
5 (high risk)
How will this risk be managed or
mitigated?
Programme/Implementation timetable
Provide a plan with key milestones and progress including critical path.
Milestone
Practical
Technology
Expected completion date
Legal powers
How certain are you of the legal feasibility of the option?
Include a narrative on the legal feasibility of the option including any issues around statutory powers,
planning permissions and land ownership
Have the required statutory powers been granted?
Yes/No
Are there planning implications?
Yes/No
Is all the land within scheme promoter ownership?
Yes/No
Quality of supporting evidence for the scheme
GRIP Stage (if appropriate)
Resource availability/governance, organisational structure and roles
Summarise the overall approach for project management at this stage of the project.
Describe the key roles, lines of accountability and how they are resourced.
Stakeholders and Public Acceptability
Include a narrative on public and stakeholder acceptability including discussion of any consultation that has
taken place to date, issues around stakeholder acceptability, issues around public acceptability and what
further public consultation is likely to be required.
Statutory Consultees (HA, Env Agency, Natural England)
Include a narrative on specific engagement or discussions with statutory consultees, identifying any issues
noted around acceptability and what further consultation is likely to be required with the statutory
consultees.
Value for money
BCR
Evaluation
Summarise outline arrangements for monitoring and evaluating the intervention