The purpose of the report is to seek Cabinet approval for European Union Funding submissions.
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1 NORTH AYRSHIRE COUNCIL Cabinet 2 nd October 2018 Title: Purpose: Recommendation: European Funding proposals for funding applications The purpose of the report is to seek Cabinet approval for European Union Funding submissions. It is recommended Cabinet:- - Approve applications to submit funding extension requests to 2022 for 3 programmes. - Note the intention to report back to Cabinet if the match funding required for the programmes differs significantly following the assessment process. 1. Executive Summary 1.1 The report outlines proposals to submit funding extensions to 3 European Union funded programmes. Grant funding bids totalling 4M are proposed covering the period The report sets out the funding package and provides details of planned activity. The programmes referred to are:- A European Regional Development Fund designed to provide support to businesses A European Social Fund programme for the provision of an employability pipeline A Poverty and Social Inclusion Fund which will support activity to engage excluded groups and progress them to mainstream employability services 2. Background 2.1 Cabinet received an update report on EU funding in June The report set out spend and progress of current programmes and set out opportunities for the period The final outcome of Brexit negotiations remain unclear, however the UK treasury has issued a guarantee around the funding post The Scottish Government have emphasised to all strategic partners that full commitments of the programme are imperative in order to demonstrate need in Scotland and are aiming to have the programmes fully committed by the end of Therefore the coming months represent the final opportunity for Local Authorities to bid for resources from these programmes.
2 2.2 Fluctuations in the exchange rate and a slow start to the programme has created a situation where there are significant EU funds left to commit and spend in Scotland. On the surface this represents a significant opportunity for local authorities to maximise their drawdown of funds. However this opportunity arises at a time of reducing local authority budgets which presents an issue in securing match funding. 2.3 North Ayrshire Council has the opportunity to bid into 3 main funding programmes, to secure funding from The opportunity exists to submit extensions to current approvals or to submit completely new applications if there is a significant and fundamental change in the nature of activity. Based on this, North Ayrshire Council has submitted expressions of interest in extending current programmes until 2022, with new grant approvals to cover this period. 3. Proposals 3.1 It is proposed to submit extension requests for 3 current programmes on the basis there are no fundamental changes to the nature of the activity from an EU funding perspective. The costs, proposed funding package and anticipated outcomes associated with the extension requests are detailed at Appendix The difficulties around submitting 4 year funding bids at a time of reductions in the council s budgets is recognised. It should be noted that the costs and match funding outlined in this report have been formulated based on what we know at this point. The government board considering the extensions may change the intervention rate available or could at worst consider some activity ineligible. While we believe this risk to be limited, we would propose that if the ultimate quantum of match funding required differs by 20% from that outlined in this report, then we would seek Cabinet approval before proceeding. Cabinet should also note that there is some annual flexibility within the agreed financial envelope. Match funding certificates are signed on an annual basis and represent the Council s legal obligations regarding match funding. Therefore any significant changes in the Council s financial position to match fund the programme in the coming years, could be incorporated into the funding arrangements. 3.3 In submitting these bids, it should be noted that a conservative position has been taken in relation to the availability of match funding. Based on previous experience, there will be an opportunity to source additional match funding through other sources, which could be used in the coming years to increase the size of the programmes or to achieve savings by replacing match funding. (subject to approval of external funders). 3.4 The structural funds governance board that will consider extensions to grant programmes to 2022, is meeting at least 6 weekly to the end of the year. It is proposed that North Ayrshire Council submit formal extension requests to a board meeting in October this should secure resources early enough to prevent uncertainty and potential redundancy situations with staff currently funded through to December It is important to note that although extensions to programmes infers no substantial changes to current service provision, services will be re-prioritised and re-aligned in light of the current economic circumstances and policy priorities. Full details are provided at Appendix 2 of the nature of any changes proposed in service provision.
3 4. Implications Financial: Human Resources: All match funding requirements are detailed in Appendix 1 and have been agreed with Corporate Finance. A number of council posts are currently funded to December 2018, tied to the current grant approvals. An extension to the funding would allow extensions to these contracts of employment in line with the funding. It is anticipated that a restructure of the employability and skills team will be required to reflect the different priorities of the service moving forward, in addition to the need to realise savings. Legal: Equality: Children and Young People: Environmental & Sustainability: Key Priorities: Community Benefits: The council will if successful with funding requests be required to accept offers of grant and make legal commitments to match funding. Equality is a key horizontal theme which applies to all EU programmes, and all applications are required to demonstrate will address these themes. While EU programmes are focused on working age residents, the Economic Growth service is clear that work to secure employment and more income for parents will have a beneficial impact on young people. Moving forward the employability service will have increased focus on supporting parents back to work and to increase their wages. Sustainability is a key horizontal theme which applies to all EU programmes and all funding requests are required to demonstrate how activity will address this theme. The outlined funding and activity will support council priorities to: - Grow our economy, increasing employment and regenerating towns - Working together to develop stronger communities - Ensuring people have the right skills for learning, life and work Decision have yet to be taken on the scale of procurement to be employed to deliver the services outlined in the report. However any procurement will be actioned in line with the council s community benefit policy and practice.
4 5. Consultation 5.1 Colleagues in Corporate Finance have been consulted around the match funding requirements. 5.2 Education and Youth Employment have been consulted around the schools based activity in the employability pipeline extension. 5.3 The Health and Social Care Partnership have been consulted, in the main around the Poverty and Social Inclusion programme which currently funds some H &SCP posts and activity supporting service users. 5.4 Over the past year, the Local Employability Partnership have been consulted around future plans. Karen Yeomans Executive Director Economy and Communities For further information please contact Greig Robson on Background Papers None
5 Appendix 1 Costs and Funding Package for EU Programmes Programme Employability Pipeline Poverty and Social Inclusion Business Competitiveness (ERDF) Total Four Year Programme Budget ,973,887 1,555,000 1,600,896 9,129,783 Anticipated Grant 45% 2,688, ,750 3,387,999 Anticipated Grant 40% (ERDF) 640, ,358 Match Funding Requirement: Support In Kind - Existing Staff Resources 627, , , ,037 Use of Earmarked Reserves 1,100, ,000-1,750,000 Employability and Skills Revenue Commitment 1,558, ,750 1,659,388 Business Development Revenue Commitment 720, ,000 Total North Ayrshire Council Funding Commitment 3,285, , ,537 5,101,425 Total Funding 5,973,887 1,555,000 1,600,895 9,129,782
6 Appendix 2 EDRF Business Competitiveness The Business Competitiveness programme has been a vital resource for Business Development in the last three years, increasing the assistance available to accelerate the growth of small and medium sized businesses in North Ayrshire. The remit of the project in phase two will remain the same providing grant and consultancy support for growth projects - and will build on the success experienced in phase one. Given the annual savings to date / forecasted, this support mechanism has never been more important for the local business base and the Business Development team. A change in programme rules has presented an opportunity to secure additional income, without committing additional match funding from the revenue budget. In the current phase of the programme ( ), reclaiming staff costs was only eligible if the Business Adviser worked 100% on the project, which was not the case. In phase two however, the managing authority has permitted the reclaiming of ERDF on staff costs where only a percentage of their time is spent on the project. Business Development will now seek to recover ERDF on 40% of Business Adviser time, securing a further 160,000 income over the four year period. The staff costs committed as match would have been incurred anyway in phase 2, therefore this provides an opportunity to secure additional European income with no impact on the revenue budget. ESF Employability Pipeline & Poverty and Social Inclusion The intention with the North Ayrshire employability pipeline is to build upon success over the previous 3 years, while refining, prioritising and improving the approach to be more impactful and efficient where possible. As unemployment has dropped and stabilised across Scotland and North Ayrshire in recent years, focus is now shifting to services which support smaller numbers of residents but those who face multiple and complex barriers to support. By providing more intensive and holistic support, our services will provide support not available through national provision. It should be noted that activity contained within both the employability pipeline funding stream and the poverty and social inclusion programme, are separate only in funding terms in practice they form an integrated pipeline of support to support people towards and into work. Targets for all the EU funding extensions will need to be negotiated with the Scottish Government, however the intention with the Employability and Poverty and Social Inclusion Activity is that over 3000 people will be supported over the 4 years, with over 1000 people supported into employment. 1. Engagement The creation of the employability hubs network over the past 3 years came after the previous application for funding was submitted, therefore to an extent the hubs were a bolt-on to provision. The plan is now that the hubs will be the cornerstone of our engagement in local communities, with more staff using hubs as their main base.
7 Our marketing approach will be focused on priority groups, which we take from the results of the Inclusive Growth diagnostic. These will be young people, disabled and with long term health issues, females (parents in particular). Our marketing will be targeted on these groups. 2. Priority groups (a) Young people Youth unemployment has dropped by half since the start of the EU programme. While the Inclusive Growth diagnostic points to this still being an issue, we believe it requires not blanket youth unemployment programmes now but more targeted provision to those who still remain excluded. Our approach will focus on care experienced young people and young people in S4 who have been identified as at risk of becoming economically inactive. Throughcare employability An employability post will be funded as an integrated part of the Throughcare service. This will build upon the success of this approach currently. (b) Females North Ayrshires female employment rate is 10% below the Scottish average. We believe there is an opportunity with the expansion of childcare to support more females back to work. We intend to build on the successful We Work for Families approach which utilises health visitor s engagement with parents and refers them to a bespoke package of support. (c) Disabled and those with health issues A significant new service is being developed to support disabled residents. The Supported Employment Service was approved for creation by Cabinet in May and will utilise Challenge Poverty Funding to be matched into the EU bid. This service will a completely new element to the employability pipeline in North Ayrshire. In addition we will continue with the NHS Salus health interventions service, albeit it is envisaged that this will be funded through the Ayrshire Growth Deal. (d) Ex-offenders P & SI currently funds two criminal justice mentors within Health and Social Care and this approach will continue as it has been deemed a success to date. (e) Homelessness Plans are currently being developed with colleagues in Housing, to develop a dedicated employability resource linking to those being supported into sustainable tenancies. 3. Key worker support The proposal is to extend the current procured key worker contract until June 2019, in order that a new approach can be developed and implemented. Two main options exist (a) new procurement exercise to appoint a contractor for the remainder of the programme. (b) new inhouse service developed delivered by Employability and Skills Team within the council. There are arguments for and against both options, which require some work to explore. It is anticipated that a final decision on this would be made by the end of the calendar year.
8 4. Barrier removal (a) Health - the NHS Salus programme has been widely hailed by the partnership as a key service in the pipeline. As such we have developed an Ayrshire Growth Deal proposal to continue this but would upscale it and widen access within North Ayrshire and across Ayrshire. (b) Basic skills A literacy and numeracy worker will be incorporated as an integrated service within the employability pipeline. (c) Financial inclusion A financial inclusion service will be incorporated as an integrated service within the employability pipeline. 5. Vocational training The approach over the past few years has been to provide vocational training where demand from employers was clear but to utilise national funded provision where possible. We will continue with this approach and will likely utilise Scotland Excel procurement frameworks where we can to access specialist training. 6. Job Brokerage/Employer Engagement/Aftercare While this service is a current part of the EU funding applications, there is a possibility that an Ayrshire Growth Deal proposal would supersede this through the creation of an Ayrshire wide service entitled Fair Work Ayrshire. This would offer employers a recruitment service across Ayrshire, with in-built vacancy management/job brokerage and vocational training. The new Ayrshire service would see vacancies shared across Ayrshire for the first time and reduce duplication of effort. 7. Work experience (a) Skills for Life The programme provides 6 month paid work placements in the council for disadvantaged group. Recent programmes have seen 80% sustainable job outcomes achieved, which is outstanding given the target groups. As a result, the approach will be continued. (b) Volunteering It is the intention to continue providing volunteering opportunities for unemployed residents and build upon successfully models developed by Ayrshire Community Trust and the Scottish Fire Service in particular.
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