Subject: ESF Co- Financing
Report Number: Part 2 Item 21
Date: 25th October 2002
Report to: LDA Board
Report of: Executive Director
Nick Sharman, Director of Operations and Local Strategies
1.1 That the Board notes
The progress and next steps that the LDA will have to fulfil to successfully manage
and deliver the ESF co-financed programme.
1.2 That the Board agrees
The LDA Co-financing plan- attached
That the LDA develops a detailed prospectus for an open bidding process.
2.1 This report provides the LDA Board with details of the activities undertaken following the
decision of the Board at its meeting of 8th May that the LDA formally applies for ESF Co-
Financing Organisation status & that the LDA executive develops a detailed co-financing
plan which clearly identifies the appropriate measures for co-financing and the level of
LDA funding committed.
2.2 Progress to date has been reviewed and endorsed by the LDA Skills Committee with the
Skills Committee agreeing the outline co-financing plan at its meeting of 11th October
2.3 This paper provides the detail of the measures that the LDA is looking to co-finance, the
measure level financial breakdown (including the LDA investment of £5 million to co-
finance the programme through to December 2004). It also highlights how the programme
will support and deliver the LDA strategic objectives as outlined in the EDS & the draft
corporate plan. The ESF programme is designed to support the actions identified in the
forthcoming Framework for Regional Employment & Skills Action (FRESA) and will be a
fundamental component of the LDA’s support to the activities of the London Skills
Commission in implementing the FRESA.
2.4 The new LDA programme under ESF Co-financing will bring added value to existing
activities, provide regional direction and coherence, support regional capacity initiatives
and work in partnership with a range of key stakeholders
2.5 This paper also provides an update on the issues relating to management of the programme
and of the intermediary organisation Greater London Enterprise (GLE) that is contracted to
undertake a range of administrative functions to support the LDA’s plans.
3.1 As detailed in the May 2002 board paper, ESF Objective 3 is a national programme
currently administered at a regional level by the Government Office for London. The
primary aims of the ESF programme are around addressing the barriers to the labour
market participation as experienced by the unemployed and the socially excluded. Support
is also available for work to enhance adaptability and promote lifelong learning. The
programme is divided into five ESF policy fields each made up of several measures. The
Policy fields and measures are agreed nationally; although each region produces a Regional
Development Plan (RDP) to target spend within the region.
3.2 To streamline the ESF process the Government has introduced arrangements where ESF
and required match funding are channelled to providers in a single funding stream. This
process is known as Co-financing and bodies, which have co-financing status, are Co-
Financing Organisations (CFO’s). In London seven CFO’s have been fully approved: the 5
local LSC’s, the ALG, and Business Link for London. Jobcentre Plus & South London
Connexions services have also been conditionally approved.
3.3 The LDA has been through the first of a two-stage process and had in principal co-
financing status agreed. The second stage relates to the approval of a detailed Co-financing
Plan, which draws together the precise detail of what the LDA is planning to co-finance,
what target groups they are seeking to address, the level of outputs that will be generated
and how the LDA will be working with other co financing organisations. The LDA’s co-
financing plan is attached at Appendix 1 and summarised in section 5.
3.4 The LDA will be investing £5 million Single Programme funds to co-finance the
programme to 2004, giving the total amount of programme funding available for two
Calendar years of over £9m. The LDA ESF programme will directly contribute to the
achievement of Tier 2 & 3 targets particularly in relation to Core Tier 3 targets for learning
opportunities, jobs created & sustained and businesses supported. The targeting of specific
beneficiary groups will also contribute to the achievement of the LDA’s additional London
specific targets & activity such as the Mayoral campaign against employment
3.5 There are two key priorities for LDA funded projects within the ESF programme:
Pan-London Projects - As the Regional Development Agency, the LDA will encourage
projects which look to address skills issues which impact on the whole London economy.
In particular, projects which provide a coordinated approach to pan-London skills issue
will be supported
Projects targeting LDA priority areas: - The Mayor’s Spatial Development Strategy sets
London’s spatial priorities and provides a spatial and policy context for the
implementation of the ESF Plan. Within the context of the London Plan the LDA has
also identified priority areas for intervention and investment, initially these include
Barking/Dagenham, Wembley/Park Royal, and the City Fringe1. Other areas for future
intervention include South Central2, Upper and Lower Lee, Woolwich/Bexley, Kings
Cross/Finsbury Park, and Southall/Hayes. In addition the Thames Gateway is a priority
sub-regional area for the LDA and the Greater London Authority Group.
4 Progress and Next Steps
4.1 The previous paper to the LDA board, outlined the stages that the LDA had to go through
to become a CFO. This section is an update of how the LDA has progressed against each
of these stages.
Application for CFO status; The Application to become a CFO was submitted to GoL in
August 2002, which GoL endorsed and was formally approved by the Objective 3 SAG in
September. The next stage is the development of the full CFO plan, which will be
submitted for approval at the next Objective 3 SAG meeting in December.
LDA Funding Criteria; ESF funding requires that the LDA hold an open process to select
projects rather than directly commissioning projects as we currently are doing under the
Single Pot procurement procedures. To facilitate this process the LDA will have to
produce a funding specification that will detail the criteria they will be using to select and
appraise projects. To maintain the LDA’s strategic focus the funding specification will
clearly specify that projects that support and compliment the LDA’s strategic focus through
area interventions, sector strategies and regional priorities will be the projects that will be
selected for ESF/LDA co-financing support.
A funding specification will be developed in parallel to the development and submitting of
the CFO plan, so that when the approval is given and the LDA becomes a Co-financing
organisation, the funding prospectus can be launched straight away.
4.2 Staffing; The LDA are currently recruiting two additional members of staff, on a fixed –
term basis, to manage and ensure compliance with ESF criteria, with a view to get the new
staff in post as soon as possible. Whilst many of the administrative activities will be
undertaken by an intermediary body (GLE – see below); in order to retain strategic control
and meet the legal and financial responsibilities of a CFO accountable body, key tasks
could not be delegated to a managing agent, hence the requirement to directly recruit
additional LDA officers. The staffing costs for the new posts are fully recoverable from
technical assistance, which is included in the funding that the LDA will receive from GoL
to run the Objective 3 programme.
4.3 GLE; GLE have been selected by the LDA to help deliver the programme taking on the
responsibility for publicising the programme, providing information & advice to applicants,
tracking of applications through their database, the application process, including the
The arc of adjacent wards to the north of the city of London covering parts of the Boroughs of Camden,
Islington, Hackney and Tower Hamlets.
The South Central area runs along the south side of the River Thames, comprising a number of areas
including Elephant & Castle, Bankside, Waterloo, Vauxhall and the Pool of London.
appeals process and informing successful/unsuccessful applicants. This will include a two-
stage evaluation & scoring of bids, some monitoring visits and verifying the claims process
with the actual payments made by LDA. The final project selection will be undertaken by
the LDA, along with the management and overall strategic direction of the Co-financed
4.4 The table below highlights the key stages and next steps;
Submission to the Government Office Following revisions and comments from the
for London LDA Board
Consideration & approval by the Early December 2002
Objective 3 SAG
Launch of programme Late December 2002
Appraisal process for first stage of Jan – Mar 2003
First stage of delivery April 2003 onwards either to December 2003 or
Appraisal process for second stage of Oct – Dec 2003
Second stage of delivery January – December 2004
5 The LDA Co-financing Plan
5.1 The LDA Co-financing plan has been developed in parallel to the development of the
London Skills Commission’s Framework for Regional Employment & Skills Action
(FRESA) & the LDA’s draft corporate plan 2002-2006.
5.2 The LDA co-financing plan is divided into the three policy fields and six measure level
activities that the LDA is looking to support. These fields and measures are as follows,
with the indicative levels of funding attached to each measure in brackets and indicative
projects listed beneath the relevant measure;
5.3 Policy Field 2. Equal Opportunities & Social Inclusion for all
Measure 2.2 To provide help to improve the employability and remove barriers to labour
market entry for those groups disadvantaged in the labour market. (£4,157,028)
Indicative project’s; Building on the LDA’s nascent Education Commission work,
projects will be encouraged that target the needs of under performing groups in the
education system who are at risk from becoming disengaged. Other projects the LDA
will be looking to fund are basic and higher level skills programmes with refugee
communities, job brokerage projects for refugee communities, social enterprise start up’s
and projects that will create greater access to the employment opportunities in the NHS.
Measure 2.3 To combat discrimination in the labour market, in particular to combat race,
disability and race. (£191,100)
Indicative project’s; Projects under this measure will have to be informed by the findings
of the LDA commissioned research ‘Labour market participation: BME, women, older
workers and the disabled’ (September 2002) and the separate research work on the
economic potential of asylum seekers. Likely projects will include those that encourage
changes in recruitment practices, address employer’s perception, help enterprises to
manage and benefit from diversity and projects that address barriers to and increases the
economic potential of refugees and asylum seekers.
5.4 Policy Field 4. Adaptability and Entrepreneurship
Measure 4.1 To update and upgrade employees’ vocational skills, including basic and
key skills (£722,222)
Indicative project’s; Projects under 4.1 will be encouraged that focus on London wide
programmes to address skills shortages and up skill existing employees, especially in ICT
for Small, Medium and Micro enterprises. This measure will also be used to support
priority sector initiatives such as London wide creative skills development programmes
and London wide programmes that address basic skills needs in the construction sector.
Measure 4.2 To identify and meet emerging skills shortages, including higher level skills
Indicative project’s; A new London wide approach for Higher Level Skills, especially
including projects that focus on embedding and creating science, technology, engineering
and maths skills demand.
5.5 Policy Field 5. Promoting the Participation of Women in the Labour Market
Measure 5.1 To improve access to learning & removing barriers to employment
Indicative project’s; Projects will focus on combating under-representation in the labour
market of women (particularly in sectors such as construction). Projects will be
prioritised that target ethnic minority women, lone parents and address other priority
sectors that have high levels of under-representation.
Measure 5.2 To research into issues related to gender discrimination in employment
Indicative project’s; As with measure 2.3, projects under this measure will have to be
informed by the findings of the LDA commissioned research ‘Labour market
participation: BME, women, older workers and the disabled’ (September 2002) and
research projects will be encouraged that investigate and pose solution to high inactivity
rates caused by family commitments.
5.6 As stated in paragraph 4.1, the LDA will have to hold an open process to select projects
rather than directly commissioning them, as is the current procedure. To eliminate the
risk of compromising the LDA’s strategic focus by holding an open bidding round, the
LDA will develop a targeted funding specification that will clearly set the parameters for
project development. The specification will be drawn from the existing LDA’s strategic
priorities of area interventions, sector strategies and regional priorities. In total the LDA
will be seeking to fund between 36 and 50 projects under the ESF programme.
5.7 The target groups for the programme which will have a specific reference will include
black males aged 13 – 19, ex-offenders, lone parents (for measure 2.2); ethnic minorities,
disabled people, people over 50 and refugees and asylum seekers with permission to
work, long term unemployed, homeless people (for measure 2.3); employees with low or
basic skills (for measure 4.1 & 4.2) employees in SME’s, those at risk due to
technological or structural change e.g. manufacturing and/or those employees whose
training would address skills shortages and women (for measure 5.1 & 5.2)
5.8 Capacity building; A key objective for the LDA is to empower organisations to deliver
appropriate services to the target groups listed above, with the aim of building capacity
for the continuing provision of services. Under this programme, 5% of total funding to
providers will be allocated to capacity building. This will represent approximately
5.9 Consultation; The LDA will be using the period up until the final submission to GoL to
consult with other co-financers on the plan. This will be to ensure that duplication and
funding of existing projects is minimised. The LDA has already reviewed the plans of
other CFO’s to ensure that LDA fills gaps in provision and adds strategic value, as well
as using the information collected during the FRESA process to inform the plans
5.10 The LDA ESF programme will over its lifetime create the following additional outputs;
Learning Opportunities Created - 2373
Employment Opportunities Created or Safeguarded - 557
6 Financial Implications
6.1 The current ESF programme for London, for which the LDA seeks to co-finance runs
until December 2004. ESF operates on a calendar year basis i.e. from January to
December, in contrast to the LDA's financial year, which runs from April to March.
Consequently LDA investment in the programme, if co-finances begins in January 2003
will cover the three financial years 02/03, 03/04 & 04/05.
6.2 Funding has been identified in the current corporate plan (02/03) to support ESF co-
financing; additional funding for subsequent years has now been included within the
LDA's budget building & corporate planning cycle for the next two financial years (03/04
and 04/05) under the regional priorities (capacity) budget.
6.3 Across the three measures the total programme, including the LDA Single Programme
contribution and technical assistance support, over two calendar years, will be worth
6.4 Paragraph 5.2 details the total levels of funding against each policy field.
7 Legal Implications
7.1 None advised by the corporate services directorate. However additional funding has been
built into the budget so that additional appropriate legal advice can be sought to ensure
that the LDA contract with successful applicant organisation are compliant with ESF
8 Equalities Implications
8.1 The ESF National programme and the London RDP are designed to ensure that the
equalities benefits of this funding are realised. ESF is a programme that particularly
focuses on the needs of beneficiaries, targeting groups that face particular disadvantage in
the London Labour Market. These groups include lone parents, young people, men over
50, ethnic minorities, disabled people, offenders & ex-offenders, refugees & asylum
seekers, homeless people and problematic drug & alcohol users.
8.2 The Policy Fields and measures outlined for LDA co-financing deal directly with
researching, tackling and addressing economic exclusion.
Checklist for LDA Staff Report Originator to be appended to Report
All Reports to the LDA Board Committees and Working Groups must complete this
Yes No N/
1. Identify Financial implications X
2. Identify Legal Implications
3. Identify Equality Implications X
4. Identify Health Implications X
5. Identify Sustainability Implications X
6. Seek financial advice from Director of Finance & Corporate services or X
7. Seek approval from your Director X
8. Submit report to Head of secretariat and Corporate Governance X
9. Seek approval of the Chief Executive X