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Report to Councillor Kevin Bentley, Deputy Leader and Cabinet

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Report to Councillor Kevin Bentley, Deputy Leader and Cabinet Report to Councillor Kevin Bentley, Forward Plan reference number: Deputy Leader and Cabinet Member FP/047/03/15 for Economic Growth, Infrastructure, Waste and Recycling Date of report: 2 July 2015 County Divisions affected by the decision: All Divisions in Braintree and Harlow Districts Title of report: ICS Skills Capital Report by Chris Kiernan, Interim Director for Commissioning: Education and Lifelong Learning Enquiries to: Peter Cook, Head of Commissioning for Education & Lifelong Learning, 03330 136600, [email protected] 1. Purpose of report 1.1. The report seeks agreement to award capital grants to Colchester Institute and Harlow College to support their bids to the South East Local Enterprise Partnership (LEP) Skills Capital Fund to finance the construction of new training facilities. 1.2. To seek agreement to re-profile £200,000 of the capital budget for this scheme from 2015/16 into 2016/17. 2. Recommendations 2.1. Agree to award one-off capital grants from the Integrated County Strategy (ICS) Fund to the following FE colleges on terms to be agreed by the Director for Commissioning: Education and Lifelong Learning: £1million to Colchester Institute for the construction of a science, technology, engineering and manufacturing (STEM) building at The College at Braintree; £2million to Harlow College for the construction of the Harlow Advanced Manufacturing and Engineering Centre. 2.2. Agree to re-profile £200,000 of the capital budget for this scheme from 2015/16 into 2016/17 as a result of revised cashflow forecasts. 3. Background and proposal 3.1. Central government funding for skills capital projects has been devolved to Local Enterprise Partnerships. As part of the South East LEP’s Skills Capital Fund, FE colleges are required to provide a minimum funding contribution. Our local FE colleges did not have access to sufficient funding to be able to meet this match funding requirement. 3.2. It is imperative that the skills sector in Essex is able to support the delivery of training that responds to the economic need of residents and businesses. As a result, FE colleges in Essex were invited to apply for ECC match funding through a competitive process. Colleges needed to demonstrate how their projects would support economic growth and benefit learners and employers. Bids were received from Colchester Institute and Harlow College. Both were judged to have made a strong case for ECC funding. 3.3 Colchester Institute and Harlow College then applied to the South East LEP Skills Capital Fund to finance the construction of the following: Colchester Institute: Embracing STEM at The College at Braintree, involving the construction of a new 2-storey STEM building at the Braintree campus, creating 3 engineering workshops, 2 construction workshops to support engineering, advanced manufacturing and construction; Harlow College: Harlow Advanced Manufacturing and Engineering Centre, involving the demolition of an existing building on the campus, allowing the construction of an Advanced Manufacturing and Engineering Centre to provide over 2,000m2 of new state-of-the-art facilities. 3.4 As both projects are dependent on other capital funding, ECC funding would only be paid if the colleges are able to secure the total funding required for the projects. 3.5. It is proposed that ECC funding would be offered to Colchester Institute and Harlow College on terms which require them to commit to the delivery of training to an agreed number of learners. The colleges will be required to deliver training to a minimum number of learners by the end of the second academic year of operation of the new facility. This will then be monitored annually until the building has been open for 10 years. 3.6 Should either college fail to achieve this number for a particular year, ECC can exercise its discretion in requiring the college to repay a proportion of the grant. This would be initiated in the event that the minimum number of learners is not achieved by the end of the second academic year of operation or during the following eight academic years. Any repayment will be due annually and reflect the extent of shortfall in delivery. The fixed sum will be determined by the Director for Commissioning: Education and Lifelong Learning. In the event that the college fails to recruit any learners during the 10 year monitoring period, they would be expected to repay the entire grant to ECC. 3.7 The South East LEP has approved Harlow College and Colchester Institute’s bids in full. Construction of the new buildings is due to start in September 2015 at Harlow College and in September/October 2015 at Colchester Institute. Completion and handover for both projects is scheduled for Autumn 2016. 4. Policy context and Outcomes Framework 4.1. Both proposed capital projects firmly align with the priorities identified in the Essex Vision 2013/17, including to increase educational achievement and enhance skills and also to support employment and entrepreneurship across the county. The projects also directly support the following ECC Corporate Outcomes: Outcome Outcome indicator People have aspirations and achieve Rates of literacy and numeracy at their ambitions through education, all ages training and lifelong-learning Percentage of people participating in further education/higher education/vocational learning Percentage of young people not in education, employment or training Percentage of adults participating in lifelong learning Percentage of working age people in employment Sustainable economic growth for Percentage of Essex businesses Essex communities and businesses who think they can recruit suitable people Percentage of working age people in employment 4.2. The skills set of residents and that within businesses is vital to the growth ambitions of Essex. As such, it is imperative that Essex has a skills sector that is able to support the delivery of training and qualifications that respond to economic need and serve learners and employers alike. The Essex Employment and Skills Board, through its Evidence Base, confirmed that skills shortages in Essex continue to impede businesses and hinder economic growth. Vacancies in key sectors remain high. 4.3. Investment in skills provision and facilities will help address these skills needs, by enabling our colleges to offer high value training dedicated to providing the skills in demand by employers. The proposed capital projects will significantly enhance training provision in north and west Essex, notably for the delivery of STEM subjects and will directly support key economic sectors. 5. Financial Implications 5.1. A total of £3million of ECC ICS funding has been allocated to these projects: £1million to Colchester Institute and £2million to Harlow College. Sources of funding for each project are stated below: Colchester Harlow Project funding/finance Institute (a) College LEP Skills Capital Funding £4,000,000 £2,500,000 Applicant contribution (cash reserves) £1,000,000 -- Private sector funding -- -- Harlow College funding -- £3,000,000 Disposal proceeds -- -- Other -- -- ECC Skills Capital grant £1,000,000 £2,000,000 Total £6,000,000 £7,500,000 5.2. It is proposed to offer ECC ICS funding to the colleges on a one-off grant basis. The capital programme currently has profiling budgeted to be £1.25m in 2015/16 and £1.75m in 2016/17. This CMA proposes to re-profile £200,000 of the capital budget for this scheme from 2015/16 into 2016/17 as a result of revised cashflow forecasts. In addition, both colleges have provided appropriate scheme contingencies to ensure scheme affordability. 5.3. The colleges will be required to sign grant agreements with ECC, which will seek to minimise the cost to the authority but still achieve the desired outcomes. Conditions of the grant include: Colleges will be expected to deliver training in specified subjects from the new buildings for a minimum of 10 years and also commit to the delivery of an agreed volume of provision or be required to repay all or a proportion of their grant. Should either college fail to achieve this number for a particular year, ECC can exercise its discretion in requiring the college to repay a proportion of the grant. This would be initiated in the event that the minimum number of learners is not achieved by the end of the second academic year of operation or during the following eight academic years. Any repayment will be due annually and reflect the extent of shortfall in delivery. The fixed sum will be determined by the Director for Commissioning: Education and Lifelong Learning. In the event that the college fails to recruit any learners during the ten year monitoring period, they would be expected to repay the entire grant to ECC; No grant funding will be paid unless ECC is satisfied that such payment has been used for proper expenditure in the delivery of the project and in accordance with the agreed budget and timings; The college shall provide ECC with a financial report and an operational report on its use of the grant and delivery of the project, in accordance with timescales agreed with ECC; The college shall repay ECC any money incorrectly paid; The amount of grant shall not be increased in the event of any overspend by the colleges in respect of the project; ECC grant funding shall be allocated to the project after all other funding streams have been fully allocated. Therefore if the overall project underspends, any resulting unused grant must be returned to ECC; ECC may, at its discretion, require repayment of all or part of the grant if the building(s) delivered by the project is (are) subsequently sold by the college. Both colleges own the freehold to the land. 6. Legal Implications 6.1. ECC has power to make grants of this nature under its general power of competence given by section 1 of the Localism Act 2011.
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