CITY REGION COMBINED AUTHORITY

To: The Metro Mayor and Members of the Combined Authority

Meeting: 26 February 2021

Authority/Authorities Affected: All

EXEMPT/CONFIDENTIAL ITEM: No

KEY DECISION Yes

JOINT REPORT OF THE HEAD OF PAID SERVICE, TREASURER AND PORTFOLIO HOLDER FOR LOW CARBON AND RENEWABLE ENERGY

NORTH WEST LOCAL ENERGY HUB PROGRAMME FUNDING 2021/2023

1. PURPOSE OF REPORT

1.1. The Combined Authority is recommended to accept grant funding from central government to support the continued delivery of the Local Energy North West Hub programme. This grant will fully fund two-years of activity that will extend and expand the services of the hub until March 2023.

1.2 This paper also gives an update on the Local Energy North West Hubs progress in administering the Green Home Grant Local Authority Delivery Phase 2 Programme. Allocation of funding to North West Local Enterprise Partnership areas is explained.

2. RECOMMENDATIONS

2.1. It is recommended that the Combined Authority:

(a) Note that additional budget from BEIS is intended to staff the local energy hub until March 2023 and expand its provision of services.

(b) Approve receipt of continuation funding of up to £800,000

(c) Note that at the time of writing the report that the amount of money identified in recommendation (b) may increase. Officers will rely on powers contained in the Constitution to accept this funding. In these circumstances, officers will confirm the amount received in a subsequent update report.

(d) Delegate authority to the Head of Paid Service to work with the Growth Platform to agree any associated staffing and recruitment arrangements.

(e) Approve the proposed allocation of funding via the Local Energy Hub to North West LEP areas to enable delivery of Green Home Grant LAD 2 programmes in 2021.

(f) Delegate authority to the Interim Director of Strategic Delivery to work with the Local Energy North West Hub to scrutinise the GHG LAD2 Delivery Scopes for each LEP Area.

3. BACKGROUND

3.1. The Local Energy North West Hub is a programme that support the public sector in the North West of to develop energy projects in response to national policy and the ambitions of local government to respond to the climate emergency. The programme is funded by the Department of Business Energy and Industrial Strategy (BEIS). It is governed by the Local Enterprise Partnerships in the North West.

3.2. The Liverpool City Region Combined Authority is accountable body for the programme and the programme is delivered by the Growth Platform, the Liverpool City Region Growth Company.

3.3 The additional funding provided by BEIS is sufficient for an expanded team to deliver local energy support services to public sector organisations in the North West of England. The Local Energy North West Hub will retain a discretionary budget for local energy project support.

3.5 If acceptance of funding is not approved there will be less resource available in the Liverpool City Region and wider North West to develop and deliver projects that have an impact on energy use and carbon emissions.

4. GREEN HOME GRANT LOCAL AUTHORITY DELIVERY PHASE 2

4.1 Green Home Grants (GHG) are an economic stimulus measure to retrofit households and create jobs. Government has allocated the second phase of Local Authority Delivery (LAD) funding for GHG to the North West of England via the Local Energy North West Hub. LAD 2 is targeted at vulnerable households. A £51,800,000 housing retrofit programme is to be delivered by the end of 2021.

4.2 The Liverpool City Region Combined Authority has previously approved that it will enter into funding agreements with other local authorities in the North West acting in consortium within each LEP area, and thereby pass responsibility for delivery to these organisations. The Combined Authority is taking on ongoing responsibility for reporting progress to Government and leading on behalf of other partner organisations in the delivery of this ambitious programme.

4.3 The Hub is overseen by 5 LEP’s in the North West including the Liverpool City Region. The Local Energy North West Hub Management Board has approved an allocation method based on a combined weighting that considers each LEP areas share of population, number of homes in fuel poverty and the number homes with poor energy performance certificate ratings.

4.4 The Local Energy North West Hub will retrain 0.5% of the programme budget for regional programme administration. 88% of the programme budget must be used for capital works as defined by national guidance. 11.5% of the capital budget is allocated for LEP Area administration and ancillary activities as defined by scheme guidance.

4.5 Additional funding for the design and mobilisation of the programme of the GHG LAD2 has been provided by Government. This will be apportioned to each LEP area, with a proportion of the budget retained by the Local Energy Hub to support joint working.

4.5 The nominated Lead for each LEP Area will submit to the Local Energy North West a GHG LAD 2 Delivery Scope. This scope will be scrutinised and signed off by the Local Energy North West Hub management board in consultation with the Interim Director of Strategic Delivery to provide assurance of scheme delivery.

5. RESOURCE IMPLICATIONS

Financial

5.1. Continuation funding for the Local Energy North Hub will require the LCR to vary an existing Memorandum of Understanding (MoU) with BEIS.

5.2. Additional budget for the programme of around £800,000 is fully funded in the form of Section 31 grant from central government and requires no additional budget to be provided by regional organisations. The programme is managed through an approval process to ensure that activity represents value for money. The Combined Authority provides financial management in keeping with standard procedures.

5.3 BEIS has in the past and may in future fund the local energy hub to carry out research on its behalf via ringfenced budget allocations within MoUs and variations. Budgets for BEIS research and discretionary activities are subject to the final grant determination and MoU, which is anticipated from BEIS in early 2021.

5.4 The Green Home Grant LAD 2 programme budget will be allocated to LEP areas on the following basis.

Capital LEP Area Admin Regional Design LAD 2 Programme Programme Budget Prog. Admin Support Total CAPITAL BUDGET SHARE 88% 11.50% 0.50% £51,550,000 TOTAL BUDGET £45,364,000 £5,928,250 £257,750 £1,000,000 £52,550,000 REGIONAL PROG DESIGN £250,000 & WARRINGTON 12.2% £5,534,408 £723,247 £150,000 £6,407,655 CUMBRIA 9.6% £4,354,944 £569,112 £150,000 £5,074,056 34.0% £15,423,760 £2,015,605 £150,000 £17,589,365 22.4% £10,161,536 £1,327,928 £150,000 £11,639,464 LIVERPOOL CITY REGION 21.8% £9,889,352 £1,292,359 £150,000 £11,331,711 100.0% £52,550,000

Human Resources:

5.6 The Combined Authority Energy Policy Lead Officer co-ordinates activity of the local energy hub for Liverpool City Region. Staff are employed by the Growth Platform.

5.7 It is recommended that the Head of Paid Service work with the Growth Platform to agree and operational plan and staffing and recruitment arrangements for the energy hub programme from April 2021 to March 2023. This may involve recruitment to either of these organisations, and the entering into of funding agreements with accountable bodies in other LEP areas. 5.8 Funding agreements with North West LEPs will enable staff to be recruited to a LEP or partner organisation via a designated accountable body. Job descriptions will include standard requirements with some scope to recruit specialist skills most relevant to the needs of a particular LEP area.

Physical Assets & Information Technology

5.9 Standard IT equipment, laptops and phones, will be provided to staff funded from the programme budget.

6. LEGAL IMPLICATIONS

6.1 Continuation funding for the programme will be managed through existing MoU with BEIS. The programme is evaluated on the capital funding committed to building energy infrastructure and associated Key Performance Indicators. Requirements for programme reporting can be passed to other NW LEP areas as part of funding agreements. Funding agreements will include a requirement to support overall programme delivery outside the boundary of an individual LEP area.

6.2 It is proposed that the LCRCA will participate in the governance of the LAD2 Programme via a programme board which will be established by the Local Energy Hub. An organogram for the governance structure is attached as Appendix One.

7. RISKS AND MITIGATION

7.1. A risk management process is in place for the current Local Energy North West Hub programme, which can be carried forward. Additional risks associated with continuation funding are:

Risk Area Risk Mitigation Financial Additional budget to be Manage through established Management committed before March 2023 programme controls.

8. EQUALITY AND DIVERSITY IMPLICATIONS, PRIVACY IMPLICATIONS & COMMUNICATION ISSUES

8.1 Management of the programme by the Combined Authority and Growth Platform conforms with equality and diversity policies of these organisations. Delivery of the programme conforms with the privacy policies of these organisations. Communication by the programme is through an established network and processes.

9. CONCLUSION

9.1. Continuation funding for the programme and a revised operational model will enable additional resources to be dedicated to delivery activities aligned with an important policy area for the Liverpool City Region Combined Authority and partner organisations.

FRANK ROGERS HEAD OF PAID SERVICE

JOHN FOGARTY TREASURER

CLLR ROB POLHILL PORTFOLIO HOLDER FOR LOW CARBON AND RENEWABLE ENERGY

Contact Officer(s): Dr Aileen Jones, Interim Director, Strategic Delivery

Mark Knowles, Energy Policy Lead Officer

Local Energy North West Hub Contact : James Johnson, Head of Regional Programme, Local Energy North West Hub, Growth Platform, [email protected]

APPENDIX ONE: GREEN HOME GRANT GOVERNANCE STRUCTURE

The delivery of the LAD2 programme will be governed and overseen by programme administrators, reporting to the Local Energy North West Hub Management boards and a newly created Green Home Grant LAD2 Programme Board. A Technical Panel will report to the Green Home Grant LAD2 Programme Board to inform decision making. The Green Home Grant LAD2 Programme Board will be responsible for agreeing any reallocation of funding between North West LEP areas due to underperformance by any LEP area which creates a significant risk to programme delivery.

ORGANOGRAM