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Sheffield City Region:

Single Pot Assurance Framework February 2017

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Contents

1. About this Assurance Framework

2. About the Sheffield City Region

3. Structures and Roles

4. Ensuring Openness and Transparency

5. Making Robust Decisions

6. Measuring Success

7. Appendix: Monitoring and Evaluation Logic Models

Document verification:

Produced By: Reviewed by: Approved by:

Metro Dynamics, Melanie

Dei Rossi, Fiona Boden

Melanie Dei Rossi, Fiona

Boden

Dave Smith

Version

number:

Final Draft Assurance Framework CA AGM

File

location:

file:///N:\SHEFFIELD%20CITY%20REGION%20FOLDER\LEP%20FOLDER\A

ssurance%20Framework\Feb%202017\Assurance%20Framework%20-

%2027.02.2017.docx

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Glossary

AFCOE Access to Finance Centre of Expertise

BCR Benefit to Cost Ratio

BIS Business, Innovation and Skills

BMBC Barnsley Metropolitan District Council

CA Combined Authority

CEX Chief Executives

D2N2 Derby, Derbyshire, Nottingham and Nottinghamshire

DC District Council

DCLG Department for Communities and Local Government

DfT Department for Transport

EFA Education Funding Agency

EoI Expression of Interest

FE Further Education

FLUTE Forecast the impact between Land-Use Transport and the Economy

GVA Gross Value Added

HA Highway’s Agency

HCA Homes and Communities Agency

IER Independent Economic Review

LCR Leeds City Region

LDF Local Development Framework

LEP Local Enterprise Partnership

LGF Local Growth Fund

LTA Local Transport Authority

LTP Local Transport Plan

MBC Metropolitan District Council

NEET Not in Education, Employment or Training

NR Network Rail

NTEM National Trip End Model

RGF Regional Growth Fund

S.73 Section 73 Officer

SAF Single Assessment Framework

SCC Sheffield City Council

SCR Sheffield City Region

SCRIF Sheffield City Region Investment Fund

SEP Strategic Economic Plan

SFA Skills Funding Agency

SOBC Strategic Outline Business Case

STEP Sustainable Transport Exemplar Programme

SYPTE South Yorkshire Passenger Transport Executive

TC Transport Committee

VfM Value for Money

VfMS Value for Money Statement

webTAG Web based transport appraisal guidance

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1. About this Assurance Framework

The role of this document

1.1.1. This document sets out:

The respective roles and responsibilities of the LEP, the CA and other elements of

the decision-making and delivery structure;

The key processes for ensuring accountability, probity, transparency, legal

compliance and value for money;

How potential investments to be funded by the Single Pot will be appraised,

prioritised, signed off, and delivered;

How the progress and impacts of these investments will be monitored and

evaluated.

1.1.2. The aim of this document is to set out how we will use public money responsibly and

transparently, and attain best value for public spending. In the event that future

funding falls outside of the Single Pot, the principles of this Assurance Framework will

still apply.

1.1.3. This document has been drafted on behalf of the LEP and the CA and will apply in

regards to the Single Pot funding.

1.1.4. The Assurance Framework sits alongside a number of other SCR documents – most

notably the Constitution of the CA, the Strategic Economic Plan (SEP), the Monitoring

and Evaluation Framework and the Combined Authority Financial Regulations. The

Framework has been developed in response to the national guidance for LEPs1.

Keeping the Assurance Framework current

1.2.1. The SCR is currently working with Government on the agreement of this document in

preparation to receive the additional funding and powers secured through its

Devolution Deal. Until such agreement is reached the Assurance Framework will be

applied only to the Local Growth Funds already secured.

1.2.2. The SCR is currently undertaking a review of its governance arrangements to ensure

that these are as effective and efficient as possible. Operationalising and

implementing the conclusions of this review is due to complete in June 2017. Part of

this process will include making any necessary updates to the Assurance Framework

to ensure that these changes are captured.

1.2.3. This Assurance Framework will be reviewed on an annual basis towards the end of

each calendar year with a view to having a revised Framework in place for February

of the following year. The next annual review of this document will take place in

December 2017.

1.2.4. Reviews of the Assurance Framework will be undertaken by the SCR Executive

1 https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/567528/161109_LEP_Assurance_Framework.pdf

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Team at the behest of the CA and in consultation with the LEP. The purpose of the

review will be to examine whether there is any evidence that existing processes could

be improved, and to take into account any legal, funding, or other contextual changes

that might require a change of assurance process. A review will also consider how

any proposed changes to the Assurance Framework require changes to other SCR

documents (for example: The Constitution).

1.2.5. The CA will approve any changes to the Assurance Framework in accordance with

normal voting procedures.

The structure of this document

1.3.1. The remainder of this document is structured around the following sections:

Section 2 describes the Sheffield City Region, the City’s Plan for Growth and the

Single Pot of funding

Section 3 describes the structures and roles of the organisations that make up

the SCR’s decision-making bodies.

Section 4 describes policies for ensuring openness and transparency in what we

do.

Section 5 explains how we make robust and evidenced decisions.

Section 6 explains how we deliver projects, monitor and evidence their success,

and learn from experience.

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2. About the Sheffield City Region

Overview

2.1.1. The Sheffield City Region (SCR) is strongly committed to putting in place stable,

accountable and transparent decision making. Critical to this is a strong, high

performing private sector-led Local Enterprise Partnership (LEP) which supports and

works alongside a Combined Authority (CA). This ‘SCR Model’ combines the best of

private sector expertise and public sector capacity, transparency and accountability.

2.1.2. The SCR CA was established on the 1st April 2014. This comprises the nine local

authorities that collectively reflect the functional economic geography of the Sheffield

City Region (see Figure 1 below).

Figure 1: Sheffield City Region Geography

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The City Region’s Plan for Growth

2.2.1. The SCR has a 10-year Strategic Economic Plan (SEP) to create a bigger and

stronger private sector. The vision, priorities and strategic objectives of this Plan, and

thus the future growth of the City Region, is set out below2.

Figure 2: The SEP’s vision for the growth of the SCR

2.2.2. On the basis of this Plan the City Region was awarded £295.2m of devolved Local

Growth Fund (LGF) for investment between 2015/16 and 2020/21 through the Growth

Deal agreed in July 2014. This aligns a range of funding streams including major

scheme transport funding, skills capital funding and business investment funding

(formerly regional growth funding (RGF)). A further £30.7m of LGF was awarded in

January 2015 and a third-round allocation in January 2017 of £37.8m LGF for a total

LGF allocation of £363.7m.

2.2.3. The City Region’s Growth Deal also featured a number of freedoms and flexibilities.

This included allocating a number of revenue programmes to the City Region

including the Growth Hub and Skills Bank.

2.2.4. The LEP is currently in the process of refreshing the SEP. The new SEP will bring in

the latest evidence on the performance of the economy, and will respond to the

changed context in the wider UK economy. It is the intention of the LEP to keep the

SEP updated regularly to ensure a sound strategic basis for investment and action.

About the Single Pot

2.3.1. In 2015 the City Region agreed a devolution deal with Government that included a

£30m allocation of funding per annum for 30 years which is to be invested to boost

2 The SCR SEP is accessible online at the City Region’s website: http://sheffieldcityregion.org.uk/about/growthplan/

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economic growth. This funding will be subject to five-yearly Gateway Reviews to

ensure that the money is contributing to national growth.

2.3.2. As part of the devolution deal, the CA will have responsibility for a ‘Single Pot’ of

funding, comprising:

the devolution deal funds;

Local Growth Fund (LGF); and

the devolution deal’s multi-year transport settlement.

2.3.3. The advantage of the Single Pot for SCR is that it will provide greater flexibility and

enable the SCR to re-direct funding more easily when strategic priorities or the

investment context changes – whilst still fulfilling the City Region’s duty to spend

public money in an accountable way.

2.3.4. The SCR CA will be the Accountable Body for the Single Pot. The LEP will be

responsible for setting strategic direction on economic growth and will hold partners

to account in the delivery of our SEP.

2.3.5. This document establishes an Assurance Framework which the SCR CA and LEP will

follow in relation to decision making on Single Pot investments for the City Region.

The SCR is working with Government on the agreement of this document in

preparation to receive this additional funding. Until such agreement is reached the

Assurance Framework will be applied only to the Local Growth Funds already

secured.

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3. Structures and Roles

Summary

3.1.1. The key points of our decision-making structure are as follows:

The CA provides overall strategic direction for the City Region and approves all

large decisions over an agreed threshold as defined in the CA Financial

Regulations. It is the accountable body for the Single Pot funding.

The CA sets the overall budget for each of the Delivery Boards.

The LEP provides an independent business perspective on what is needed to

support economic growth. The LEP leads on the development of the Strategic

Economic Plan (SEP) for SCR which sets out the economic and investment

priorities for the City Region.

To ensure that there is sufficient oversight of investment decisions, investments

below an agreed financial threshold are reviewed and can be approved by the five

thematic Delivery Boards, where they are in accordance with the programme

agreed by the CA. Each Delivery Board comprises Leader, Chief Executive and

LEP private sector board membership and an officer of the SCR Executive. The

Delivery Boards ensure that decisions are made in a robust and evidence-based

manner. They do not originate policy.

In all cases, the final sign-off for funding will be done by either the CA or the

relevant Delivery Board if the project is within their delegated authority.

An Overview and Scrutiny Committee provides effective scrutiny of decisions and

an Audit Committee oversees the audit of the City Region’s spending.

Overview of structures

3.2.1. Figure 3, below, sets out the organisations and structures involved in SCR decision-

making and how they relate to one another.

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Figure 3: Sheffield City Region decision making structures

3.2.2. SCR decision-making involves several distinct groups working together. In brief:

The CA Board is the accountable body for the Single Pot. It provides the ultimate

democratically representative sign-off for the SEP and all investment decisions.

The LEP provides a vital business voice to City Region policy and is responsible

for reflecting the views of business and developing economic policy, embodied in

the SEP.

The CA and LEP, by virtue of overlapping membership of the latter, are closely

linked.

In order to ensure sufficient capacity to review, approve and monitor projects, five

delivery boards have been established which may approve business cases below

a specified financial threshold.

The programme board helps to review and co-ordinate the work of the delivery

boards to ensure that the overall objectives of the CA progress in a timely

manner.

The CA and LEP are supported by a dedicated SCR Executive Team, which

provides the day-to-day support on policy development, commissioning, project

development, project appraisal, programme management, and meeting

administration. The SCR Executive Team works closely with leaders, chief

executives and officers from the member authorities of the SCR to fulfil these

functions.

The SCR Audit and Scrutiny Committees provide essential oversight of the

functions of the SCR.

3.2.3. The following sections provide a description of the different elements of the structure,

and their respective roles.

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The Combined Authority

Role of the CA

3.3.1. The SCR CA and LEP will form the core decision making boards for the Sheffield City

Region. As the nine leaders of the member local authorities and the LEP Chair are

represented on both boards, there are strong linkages between the two.

3.3.2. The Combined Authority (CA) comprises the nine SCR local authority leaders. The

CA’s Constitution can be accessed online here:

http://meetings.southyorks.gov.uk/documents/s35243/SCR%20Combined%20Authori

ty%20Constitution%20updated%2030th%20July%202015.pdf?zTS=B

3.3.3. The SCR CA’s current remit is strategic economic development and transport, with

the constituent Leaders being accountable for where public money is being spent.

This provides the CA with a broad range of objectives aligned to its overarching

purpose of driving economic growth across Sheffield City Region and maximising

investment in order to achieve this purpose.

3.3.4. On this basis, typically the agenda for the SCR CA is focused on different elements of

the SEP and will discuss items including:

Programme updates – on initiatives being delivered;

Accepting Schemes to the programme;

Investment decisions;

Monitoring of performance; and

Assurance, strategic risk management and governance.

3.3.5. As the SCR CA is responsible both for setting the policy direction, commissioning and

making investment decisions on schemes it will be able to fulfil these functions

coherently in the context of the local economic growth agenda and the overarching

investment priorities of the SEP.

Membership of the CA

3.3.6. The SCR CA membership is set out below, along with the type of membership. This

includes both constituent and non-constituent members and observers.

Table 1: SCR CA membership

Member Post CA Membership type

Barnsley MBC Leader Constituent

Bassetlaw DC Leader Non-constituent

Bolsover DC Leader Non-constituent

Chesterfield DC Leader Non-constituent

Derbyshire Dales DC Leader Non-constituent

Doncaster MBC Elected Mayor Constituent

North East Derbyshire DC Leader Non-constituent

Rotherham MBC Leader Constituent

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Member Post CA Membership type

Sheffield CC Leader Constituent

SCR LEP Chair LEP representative

Derbyshire CC Leader Observer

Nottinghamshire CC Leader Observer

D2N2 LEP Chair TBC

3.3.7. Democratic mandate – As set out in the SCR CA’s Constitution non-constituent

members can have voting rights extended to them by the consistent members. At

each meeting of the CA all items of business are considered in terms of if non-

constituent members may or may not vote. All voting members of the CA are

democratically elected Local Authority Leaders or Mayors.

3.3.8. Substitutes – The CA’s Constitution sets out that substitutes, for the purpose of CA

business, will be nominated and agreed by the full members for the basis of one year,

but an individual may be re-appointed any number of times. The majority of Local

Authority substitutes are Deputy Council Leaders (Mayors) or economic or transport

portfolio holders as is appropriate for each Local Authority. LEP substitutes are the

deputy chairmen or the appropriate private sector workstream lead.

3.3.9. Decision making – at least three members of the CA must be present for a meeting

to be valid. If a decision is required to meet agreed timescales and a meeting of the

SCR CA is not possible / scheduled, written procedures for decision making - as set

out in the constitution - will apply.

3.3.10. Full voting members – All full voting members of the CA will have one equally

weighted vote. Please note for background that in order to comply with legislation

regarding Combined Authorities and majority votes for constituent CA members, the

SCR CA Order makes available two additional membership places for the South

Yorkshire Local Authorities (the constituent members), but a protocol has been

established which means that the two additional members do not attend or vote at

SCR CA meetings (see SCR CA scheme – www.sheffieldcityregion.org.uk/the-

sheffield-city-region-authority). However, if the current membership changes, this

approach will be reviewed.

3.3.11. Local Enterprise Partnerships – The SCR and D2N2 (Derby and Derbyshire,

Nottingham and Nottinghamshire) LEPs do not have voting rights as standard on the

SCR CA, but the Authority may choose to give voting rights to the LEPs on matters it

deems appropriate.

3.3.12. Overlapping geography – The DfT statement on 23 January 2013 distributes 50%

of the notional Major Scheme Transport Funding allocation for Bassetlaw, Bolsover,

Chesterfield, and North East Derbyshire to SCR and the remaining 50% to the D2N2

LEP area. This model is being applied to the majority of Local Growth Funds and

European funding allocations. As such, and to encourage embedded joint investment

decision making across the areas, the SCR CA invite Derbyshire and

Nottinghamshire County Councils, in addition to the D2N2 LEP, to be full voting

members of the SCR CA when making decisions on SCRIF schemes located in the

overlap area.

3.3.13. LTA membership – the Sheffield City Region geography covers three LTA areas:

South Yorkshire, Derbyshire and Nottinghamshire. The SCR CA will form the LTA for

South Yorkshire and as such, it is not necessary to include an additional LTA member

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for this area. For the Derbyshire and Nottinghamshire LTA areas, the County

Councils will form the LTAs and their membership of the SCR CA is therefore

considered sufficient as representation of the LTAs for the County areas.

3.3.14. Observers – Observers will be invited to attend SCR CA meetings when relevant

business is being considered. Observers will be able to comment but will not have

voting rights. Observers might include:

Adjacent LEPs – Leeds City Region LEP will be invited to attend the SCR CA as

an observer given the close links between the two functional economies, the

overlap in economic geography (Barnsley MBC) and the potential impact on both

City Regions of major investments. Other LEPs, which are adjacent to the SCR or

have close economic links (for example but not restricted to the Manchester and

Humber LEPs) will be invited to attend as observers where the schemes being

considered for investment could have an impact on other areas or where the

agenda is appropriate.

Government Agencies – On occasion, it is likely that a range of Government

agencies will have an interest in decisions made by the SCR CA. These agencies

include but are not restricted to the Homes and Communities Agency (HCA), the

Highways England (HE), and Network Rail (NR). These agencies will not be full

voting members of the SCR CA, but will be consulted on matters of relevance and

may be invited to attend SCR CA meetings as observers where the SCR CA

deems it appropriate. Memorandums of Understanding will be developed with

relevant agencies as required.

3.3.15. Membership review – As set out in the SCR CA Constitution Members of the SCR

CA shall be appointed for a one year term at the Annual General Meeting, but an

individual may be re-appointed as a Member any number of times.

Status and Role as Accountable Body

3.3.16. The SCR CA was formally constituted in law on the 1 April 2014. This Authority is the

Accountable Body for funding devolved to the SCR CA and LEP, including all money

allocated to the City Region’s through its Growth Deal, and the devolution and

transport funding.

3.3.17. As the accountable body, the SCR CA will hold the Single Pot funding and make

payments to delivery bodies. It will provide programme management to account for

each of these funding elements and ensure that investment impact can be assessed.

3.3.18. As the Accountable Body the SCR CA will also be responsible for the following:

Ensuring that the decisions and activities of the SCR CA conform with the legal

requirements with regard to equalities, environmental, European Union legislation

(e.g. State Aid), etc. and that records are maintained so that this can be

evidenced.;

Ensuring (through its Section 73 Officer or equivalent) that the funds are used

legally, appropriately and are subject to the usual local authority checks and

balances, for example, including financial duties;

Ensuring that the funds are used in accordance with the conditions placed on

each grant;

Ensuring that the approved Assurance Framework is being adhered to;

Responsibility for the decisions of the SCR CA in approving schemes (for

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example, if subjected to legal challenge);

Ensuring funds are used in accordance with relevant rules concerning capital and

revenue expenditure; and

Maintaining and publishing annual accounts (including LGF and other funding

sources received from Government), in accordance with the relevant regulations,

each year in draft form in June / July and finalised in September.

3.3.19. The SCR Executive Team will have an important role in pro-actively advancing the

decision-making process through close co-ordination and working with member

authorities, leaders and chief executives. The SCR Executive Team will also manage

the administration and support of the SCR CA, and as such will maintain the official

record of the CA proceedings and hold all CA documents.

3.3.20. Appraisal Panel - The Statutory Officers will ensure the Accountable Body duties are

discharged through their representation on the Appraisal Panel. This will embed the

roles and functions of the Statutory Officers in the project appraisal process. All

projects seeking funding from SCR will be reviewed by the SCR Appraisal Panel and

be subject to independent technical scrutiny. This Panel consists of representatives

of the three statutory officers of the CA, and officers from the SCR Executive Team.

The Local Enterprise Partnership

Role of the LEP

3.4.1. The LEP is the originator of economic policy within the SCR and is the author and

custodian of the SCR SEP. It is responsible for ensuring that SCR policy and

decisions receive the input and views of key business leaders, and by extension

reflects the views of the wider business community. The LEP leads on engaging with

local businesses and understanding the needs of different sectors and markets.

3.4.2. On the basis of this role typical items for discussion on the LEP Board agenda

include:

Economic programme, strategy and policy development – on new initiatives being

brought forward;

Performance of SCR programmes; and

Providing a forum for debate between the public and private sectors.

Membership of the LEP

3.4.3. The SCR LEP comprises a private sector majority with 10 private sector

representatives and the nine Leaders of the member Local Authorities. The private

sector Board includes a representative from the City Region’s Higher Education

sector, to be agreed by these institutions.

3.4.4. The Chair and Vice Chair of the LEP are appointed from the private sector. The Chair

leads on building the reputation and influence of the City Region at a national and

international level and chairs the LEP Board. The LEP Chair is also a nonvoting

member of the Combined Authority.

3.4.5. The LEP Vice Chair will be appointed from the private sector. The Vice Chair will

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provide day to day leadership and support to the LEP Board Members, will lead on

business relations within the City Region, including engaging with the SME business

community and will deputise for the Chair when necessary.

3.4.6. At all times, one member of the LEP private sector Board members will be the

designated small business representative. It is anticipated that typically this person

will be from a small business themselves. The small business representative will be

tasked with leading engagement with small businesses, to ensure that the views of

SMEs are adequately represented by the LEP. Currently, this role is being fulfilled by

the Vice Chair.

3.4.7. The membership of the LEP therefore provides strong private sector leadership, and

a forum for business leaders to work with public sector and HE leaders to develop the

economic strategy for the City Region.

3.4.8. All Board members are expected to conduct themselves in accordance with ‘The 7

principles of public life’3.

3.4.9. All appointments for private sector LEP Board membership are made through an

open, transparent, competitive and non-discriminatory process using application

forms and interview to judge experience, suitability and fit.

3.4.10. The SCR is committed to diversity. As part of the process of making future

appointments to the LEP Board the SCR will publish a diversity statement explaining

how the Board and its Delivery Boards will ensure they have diverse representation,

which is reflective of their local business community, including geographies and

protected characteristics.

3.4.11. Private sector LEP Board members are appointed for a three-year term, but an

individual may be re-appointed for a further term(s) with the agreement of the Chair.

In order to ensure that members are suitably committed to the important work of the

LEP, consistent non-attendance at meetings will be grounds for termination of

membership.

Delivery Boards

3.5.1. The SCR CA has established a series of Delivery Boards, accountable to the CA and

LEP. Each has a defined thematic portfolio, as agreed by the CA, that combined

cover the full delivery scope of the CA and LEP. In addition to projects and

programmes funded via LGF activity this includes the following other programmes /

initiatives utilising government investment:

Transport – includes responsibility for the development of the HS2 Growth

Strategy, with the development of this work forming a standing item for the

Delivery Board.

Infrastructure – includes responsibility for JESSICA / GPF funds and the

Enterprise Zone with regular updates provided to the Delivery Board / CA as

appropriate. Updates are on the performance of the JESSICA fund are included

within the quarterly performance / finance reports received by the CA.

Housing – includes responsibility for overseeing the work on One Public Estate

with updates provided to the Delivery Board and escalated to the CA / LEP as

appropriate.

3 https://www.gov.uk/government/publications/the-7-principles-of-public-life

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Skills, employment and education – includes responsibility for the Skills Bank with

updates on performance provided at each meeting of the Delivery Board. Key

aspects of these updates are then captured within the resolution record for

consideration by the LEP and CA.

Business growth – includes responsibility for overseeing the Growth Hub, with

updates captured in the resolution record as appropriate that are provided to the

CA and LEP.

3.5.2. The purpose of the Delivery Boards is to provide adequate experienced leadership

capacity to review projects and make investment decisions. These Boards bring

together the public and private leadership of the CA and LEP to drive the delivery of

the SCR’s programme of activity, ensuring that the focus remains on the outcomes

being delivered. The creation of these Delivery Boards also therefore enables the

CA and LEP Board to operate strategically rather than merely as investment boards.

3.5.3. The Delivery Boards review appraised projects and, depending on the size of the

individual project in question:

Either approve business case stage approval (including investment sign-off)

where they are within the financial limit of delegated authority and are within the

yearly programme and budget agreed by the LEP and CA;

Or, make a recommendation to the CA Board to do similar.

3.5.4. Within their respective themes, it is the role of Delivery Boards to provide leadership

review of programme performance and to identify and recommend mitigations for any

programme risks or poor performance. It is not the role of the Delivery Boards to

discuss or develop new policy, but rather to ensure that policy agreed by the CA and

LEP is enacted through the investments in different areas.

3.5.5. Membership of each of these Delivery Boards at present comprises:

Two Leaders from the CA;

The two-lead private sector LEP Board members;

The two-lead local authority Chief Executives; and

An officer of the SCR Executive, either the Head of Paid Service or a deputy.

3.5.6. This combination of membership on the Delivery Boards provides accountability to

both the public and private sectors.

3.5.7. Consistent attendance at the Delivery Board meetings is essential. Attendance at

Delivery Board meetings will be recorded. Where members of the Delivery Boards do

not attend 50% of Board meetings within any given six-month period a motion will be

made to the CA / LEP Board to replace this member with a suitable alternative, and a

vote on this issue will be held in the normal manner.

3.5.8. For each Delivery Board, a nominated Leader and private sector LEP Board member

are responsible for co-chairing their respective Delivery Boards. Due to this Co-

chairing role, they would also report back the progress made and decisions taken by

their Board to the LEP and CA respectively, alongside formal reporting of decisions

made by the SCR Executive Team.

3.5.9. All decisions taken by the respective Delivery Boards will need to be unanimous

between Board members. If agreement cannot be reached the decision required will

need to be escalated to the CA and LEP as appropriate.

3.5.10. Each of these Delivery Boards has delegated authority from the Combined Authority

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to make decisions. The parameters of these delegations are set out within the

Combined Authority’s Constitution and Financial Regulations. Due to the legal

restrictions of the Order by which the SCR CA was established these delegations are

required to rest with an officer of the Combined Authority. As such for each Delivery

Board delegations will formally reside with the Head of Paid Service to the SCR.

3.5.11. The Chairs and Vice Chairs of the CA and LEP respectively will be able to attend all

Delivery Boards and be the initial point of call for any issues arising within these

Boards.

3.5.12. Each Delivery Board would be supported by a wider group of advisors that would

bring together key stakeholders from the public and private sectors specific to that

technical portfolio area. However, the role of these groups would be in an advisory

capacity only and as such they would not have voting rights.

3.5.13. The SCR CA is also the Local Transport Authority (LTA) for South Yorkshire. The

Transport Delivery Board operates in an advisory role to the SCR CA in matters

concerning LTA business, whilst having a number of delegated powers. Additionally,

the co-chairs of the Transport Delivery Board will be the nominated representative for

the SCR CA and LEP respectively on the Transport for the North Partnership Board.

Sub Boards discharging the duties of the Delivery Boards, as delegated

by the Combined Authority

3.5.14. In addition to the five thematic Delivery Boards the SCR also has in place two sub

boards that discharge the duties of the Delivery Boards, with delegated authority from

the Combined Authority. These two Boards relate to specific funds allocated to the

SCR from Government through the LGF and GPF, where the Boards have delegated

authority to make decisions – within delegation limits – to take forward a defined

programme of activity.

3.5.15. Given their delegated authority to make decisions both of the Boards with delegated

powers contain members of the LEP Board. This ensures that they remain

consistently aligned to achieve the outcomes of the SCR SEP. The current

membership composition and the respective sub boards links to the Delivery Boards

are shown in the table below.

Table 2: Sub Boards discharging the duties of the Delivery Boards, as delegated by the Combined Authority

Sub Board Delegation

from

Reports to Membership

requirements

Business

Investment

Fund

Programme

CA CA where the grant is

in excess of £2m

Otherwise reports

through at each

Business Growth

Delivery Board

- 1 LEP Board member

- 3 private sector

experts

- Lead CEX

- CA Finance Manager.

JESSICA

Investment

CA Infrastructure Delivery

Board

- Representatives from

Barnsley, Doncaster,

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Board Part of the quarterly

update to the CA on

the capital programme

performance

Rotherham and

Sheffield.

- 4 LEP Board

nominees.

Directs work of the

“General Partner”.

The Programme Board

3.6.1. The Programme Board sits above the Delivery Boards and;

provides a check on the financial decision making powers of boards, ensuring that

the work of the Delivery Boards is co-ordinated and that projects are progressing

in line with SCR objectives,

on advice from the Statutory Officers, reviews and recommends to the CA

delegation limits as appropriate for each Board,

in support of the Appraisal Panel monitors how Delivery Board delegations are

being exercised,

has oversight of the application of the Assurance Framework by the Delivery

Boards,

where necessary, recommends changes to a Delivery Board decision or

delegation level,

may itself exercise some cross cutting financial delegations for the CA.

3.6.2. The Programme Board is currently being established and will begin operating from

June. The Programme Board will bring together the statutory officers of the CA,

political representation and a private sector LEP Board representative.

SCR Audit and Scrutiny Committees

3.7.1. The SCR CA has established a joint SCR Overview and Scrutiny Committee to

exercise scrutiny functions over its activities and decisions (and those of formal sub-

boards/committees and the LEP). This comprises 14 Members and has a political

balance. Each Local Authority appoints at least one Elected Member to the joint

Overview and Scrutiny Committee – often this is the chair of each authority’s own

overarching scrutiny committee. The joint SCR Overview and Scrutiny Committee will

produce an annual work plan which will be made available to the public on the SCR

CA website.

3.7.2. The SCR CA also has established an Audit Committee to the SCR CA in accordance

with the Chartered Institute of Public Finance and Accountancy (CIPFA) guidance.

The CA has established a process for internal audit. This is provided by Barnsley

Metropolitan District Council (BMBC), whilst KPMG have been appointed as external

auditors. This process is in keeping with arrangements in place for local authority

spend. As the accountable body for all LEP funds this covers the requirements for

both the LEP and the CA.

3.7.3. In conjunction with the BMBC internal audit team the SCR CA Head of Paid Service,

Section 73 Officer and Monitoring officer will prepare an annual Internal Audit Plan.

19

The Internal Audit Plan could include all aspects of the business case evaluation and

monitoring process for all Growth Deal schemes. This will provide independent and

objective assurance to the CA. The Plan will be approved by the SCR CA and be

considered by the Overview and Scrutiny Committee.

3.7.4. The Authority will be required to consider the conclusions of any review by the

Overview and Scrutiny Committee at the next available meeting of the Authority.

There shall be no requirement to delay the implementation of any decision of the

Authority in anticipation of consideration of that decision by an overview and scrutiny

committee.

SCR Executive Team

3.8.1. The SCR Executive Team has an important role in pro-actively advancing the

decision-making process through close co-ordination and working with member

authorities, leaders and chief executives. It provides a significant proportion of officer

support to the functioning of the above structure, which is supplemented by and

complements officer support in the member authorities.

3.8.2. The SCR CA and LEP appoint three Statutory Officers with a formal role of

discharging the duties and obligations on their behalf. The roles are defined in the

SCR CA constitution but briefly comprise:

Head of Paid Service – The SCR Managing Director fulfils the role of the Head of

Paid Service. The Head of Paid Service discharges the functions in relation to the

Combined Authority as set out in section 4, Local Government and Housing Act

1989 and act as the principal advisor to the LEP.

Section 73 Officer – The Finance Director fulfils the role of Section 73 Officer in

accordance with the Local Government Act 1985 to administer the financial affairs

of the Combined Authority and LEP.

Monitoring Officer – The Monitoring Officer fulfils their role in accordance with

the Local Government Act 1972 to administer the Legal duties of the Combined

Authority and LEP.

It should be noted that the Section 73 and Monitoring officers have been appointed by

the Combined Authority from within the organisational structure of SCC and BMBC

respectively. As such these posts and their associated officers are not shown in

Figure 4 below.

3.8.3. For the purposes of this document it is important to note the SCR Executive Team’s

important role in supporting the following:

Developing Policy: The SCR Executive Team supports both the CA and the LEP

to draft key policy, including the SEP.

Initiating and Encouraging Project Ideas: The SCR Executive Programme

Commissioning Team will have a responsibility to work with officers from member

authorities and other project promoters to identify and help bring forward viable

project ideas that support the strategic objectives of the City Region. However,

this team will act as a scheme promoter only be exception where this is a new

area of work or something that affects multiple authorities and therefore

represents the most cost effective solution.

Developing business cases: The SCR Executive External Capital Team will

provide support to project promoters to develop businesses cases where such

20

support is required.

Appraising projects: Members of the SCR Executive Team within the assurance

and performance directorate will sit on the SCR’s Appraisal Panel, which plays an

important role in independently reviewing and appraising projects prior to them

being submitted to the Delivery Boards, with formal recommendations.

Monitoring and evaluation: Members of the SCR Executive Team within the

assurance and performance directorate will manage the monitoring and

evaluation framework on an individual project basis, providing reports and

updates to the Delivery Boards and CA / LEP Boards.

Programme monitoring: Members of the SCR Executive Team within the

assurance and performance directorate will provide overall programme

monitoring. Collating details of the performance of the component elements of the

Single Pot (e.g. LGF) and communicating this to CLG as per the Government’s

requirements, and to the CA and LEP Boards.

Administration of the SCR decision-making processes: The SCR Executive

Team is the backbone of the administrative structure that ensures meetings are

planned and arranged in a timely fashion and that the inputs to and outcomes of

these meetings are communicated. It is also the job of the SCR Executive Team

to ensure that minutes and agendas of the meetings of the LEP, CA Board, and

Audit and Scrutiny Committees are published online in a prompt manner, as are

key reports that are required for public transparency and accountability.

3.8.4. The structure of the SCR Executive Team contains a number of important ‘Chinese

walls’ that ensure that there are no conflicts of interest between the different roles

noted above. Most importantly, commissioning is entirely separate from Programme

Assurance and Performance. This clear distinction between the directorates means

that there is a distinct separation between scheme promotion and appraisal, to

ensure that impartial advice is provided to the LEP and CA.

3.8.5. The structure of the SCR Executive Team is set out below

Figure 4: SCR Executive Team Structure

21

Resolving potential conflict between the CA, as the

accountable body, and the LEP

3.9.1. The configuration and membership of the SCR LEP Board and SCR CA is designed

such that they have mutually supportive roles as detailed earlier in this chapter and

such that there is a strong overlap in membership in order to facilitate communication

and reduce the potential for conflict.

3.9.2. The supporting governance structures of the Delivery Boards, which are co-chaired

by a LEP Board Private Sector Member and a Leader, and have the remit for

enacting the approved economic policy of the SCR LEP, and operating programmes

in accordance with the operational policies of the SCR CA.

3.9.3. The potential for conflict is further mitigated by the operational structures of the SCR

CA where the Executive Team, whilst employed by the SCR CA, also serves the LEP

Board and is responsible for operating the LEP programme.

3.9.4. Given these strong controls and clarity in remit, there are minimal circumstances

where the CA would not comply with a LEP decision, however potentially this could

occur if:

The LEP Board is seeking to influence a decision of the SCR CA which is within

the remit of the Accountable Body i.e. an operational decision as opposed to a

strategic decision regarding the economic strategy;

The LEP Board is seeking to influence a decision which is non-compliant with

public accountability and processes for making spending decisions, or does not

offer value for money.

The CA is refusing to operationalise a policy directive of the LEP in accordance

with the SEP.

3.9.5. In such circumstances conflicts would be escalated to the Head of Paid Service,

Section 73 Officer or Monitoring Officer to resolve outside of a formal process and

with the agreement of the Chairs of the LEP Board and CA. Should the conflict not be

resolved and depending upon the nature of the conflict this would be formally

escalated to either the LEP Board (i.e. if the SCR CA would not operationalise a

policy of the LEP Board), or to the SCR CA (i.e. if the CA were being asked to

operationalise a policy / programme which was non-compliant with approved public

accountable practices).

22

4. Ensuring Openness and

Transparency

Conflicts of Interest

4.1.1. The SCR CA has a conflict of interest policy set out within its constitution. This is

available online at:

http://meetings.southyorks.gov.uk/documents/s35243/SCR%20Combined%20Authori

ty%20Constitution%20updated%2030th%20July%202015.pdf?zTS=B

This policy will apply to the SCR LEP, to the Delivery Boards, sub boards with

delegated authority and to the SCR Executive Team.

4.1.2. Each member of the SCR CA and the LEP is required to make a declaration of

interest for the purposes of their individual organisations (e.g. Local Authority and

LEP declarations of interest). Individual declarations of interest forms and the register

of interests are published by the South Yorkshire Joint Governance Unit on its web

page below. Declarations of interest declared are recorded within the minutes of each

CA and LEP meeting. The declarations of interests will be updated, as appropriate,

following each CA and LEP meeting:

LEP declarations of interest –

http://www.southyorks.gov.uk/JAGUHome/LocalEnterprisePartnership/lEPLibra

ry.aspx

LEP register of interests -

http://www.southyorks.gov.uk/JAGUHome/LocalEnterprisePartnership/LEPMembers.

aspx

CA register of interests -

http://meetings.southyorks.gov.uk/mgMemberIndexGroup.aspx?bcr=1&G=MEMBER

SB&M=MEMBERSB&zTS=B

4.1.3. Members of the SCR CA and LEP are expected to act in the interests of the Sheffield

City Region as a whole when making investment decisions on its LGF allocation. As

discussed in Section 5, decision making will be undertaken to ensure that decisions

are appropriate and free from bias or perception of bias. Controls to ensure this

include:

An open strategic process led by the LEP to be ultimately signed off by the CA.

A proactive External Capital Team within the SCR Executive Team to help identify

and advance project ideas on a City Region basis in line with the City Region’s

strategic priorities.

An Appraisal Panel consisting of representatives of the three statutory officers of

the CA, and officers from the SCR Executive Team able to apply a Green Book

five cases methodology to project proposals.

A Central Independent Appraisal Team (CIAT) a framework of independent

external specialists with the expertise to technically appraise business case

submissions. CIAT are appointed by and report to the Programme Assurance and

23

Performance Directorate to ensure that independence is maintained.

The FLUTE model which enables an independent and consistent perspective on

economic impact of infrastructure projects.

Distinct Directorates in place within the SCR Executive to distinguish between

programme and project commissioning and Performance and Assurance.

Gifts and Hospitality

4.2.1. The SCR LEP has a published policy on gifts and hospitality, available online at:

http://www.southyorks.gov.uk/JAGUHome/LocalEnterprisePartnership/lEPLibrary.asp

x

4.2.2. The SCR LEP policy on the acceptance and declaration of gifts and hospitality aligns

with those of the existing Local Authority systems and standards. It also applies to the

SCR Executive and any sub-groups and officer functions involved in advice or

decision making regarding its Growth Deal. These policies include clear processes to

facilitate ethical governance.

4.2.3. The SCR CA has an approved code of conduct for members. In accordance with this

code of conduct a Member must within 28 days of receiving any gift or hospitality over

the value of £100, provide written notification to the Monitoring Officer of the

existence and nature of that gift or hospitality.

Support and Administration Arrangements

4.3.1. The SCR Executive Team will undertake the administrative role required to support

the SCR CA. This role includes publishing SCR CA processes and outcomes; and

preparation, circulation and publication of meeting minutes and agendas. It also

includes ensuring that CA and LEP members have correctly complied with the

relevant public declaration of interests.

4.3.2. Technical functions related to business case appraisal across workstreams will be

managed by a central independent appraisal Team (see paragraph 4.1.2) located as

a separate function within the SCR Executive Team, with appropriate ethical walls in

place. The principal responsibility of this team will be independent scrutiny and advice

to the relevant Delivery Board and subsequently the SCR CA and LEP on scheme

business cases. Where the necessary technical expertise does not exist within this

team to fulfil this responsibility, external support will be commissioned and managed

by this team.

4.3.3. Note that in addition to the above functions, the SCR Executive team will also provide

advice on strategy and policy to the SCR CA and LEP, ensuring that there is

consistency in advice on strategic economic and related issues.

Working Arrangements and Meeting Frequency

4.4.1. The SCR CA meets approximately every six weeks in public, but additional meetings

may take place should the need arise. The SCR LEP also meets every six weeks, on

the same day as the meeting of the CA to allow for in-depth discussion of issues in a

single forum.

24

4.4.2. The Delivery Boards meet every six weeks, with their meetings staggered so that

they occur three weeks prior to the CA and LEP meetings. In support of the SCR CA

and LEP the SCR Chief Executives group meets approximately every three weeks.

The SCR Appraisal Panel meets every two weeks, or more frequently if necessary, to

ensure the pipeline of project proposals continues at the required pace.

4.4.3. The meeting schedule ensures appropriate timing for key decisions on all Single Pot

allocations. SCR CA meetings will be open to the public, with notice of the meeting

and agenda items provided at least five clear working days in advance of the

meeting.

Transparency and Local Engagement

4.5.1. Core information regarding activity being undertaken by the SCR LEP and CA is

available on its incorporated website4. This includes the publication of key documents

such as the SCR Strategic Economic Plan and Assurance Framework, as well as

details of a regular programme of events to provide ongoing engagement with public

and private partners across the City Region. Regular news updates on activity

underway are also provided through dedicated pages on social media outlets

including Twitter and Facebook.

4.5.2. The SCR LEP has developed a robust, but proportionate, approach to sharing and

publishing information to engage with public and private partners. This includes:

Being incorporated in the Sheffield City Region website, which includes a specific

section on its Growth Deal and SEP and progress being made in implementing

these Deals - http://sheffieldcityregion.org.uk/about/growthplan/;

From March 2017, making sure all meeting agendas, papers (when not exempt

for some reason), and minutes are published in line with existing local authority

rules and regulations. For example, papers and agenda being published five days

in advance. As with existing local authority rules and regulations where papers

contain commercially sensitive information they may be considered as a private

item. Decisions on if individual agenda items are private items will be made by the

LEP Chair in consultation with the SCR’s Head of Paid Service and Monitoring

Officer using existing local authority regulations. This will serve as the official

record of LEP proceeding; and

Having a published conflicts of interest policy, register of interests (described

above) and a published complaints policy5.

Undertaking a regular programme of engagement events with public and private

partners across the City Region to feedback on activity being undertaken by LEP,

including strategy development and progress in delivering the SEP. These events

are advertised on the City Region’s website as well as via social media channels.

Having commenced a process of regular update meetings between the LEP and

business representative organisations, including the Chambers of Commerce,

Federation of Small Business, Institute of Directors and the EEF.

4.5.3. The SCR CA is subject to a robust transparency and local engagement regime

aligned to that of its constituent Local Authorities. The SCR CA’s constitution includes

4 http://sheffieldcityregion.org.uk 5 See section 4.6 below and http://www.southyorks.gov.uk/SYJSHome/SCR/CombinedAuthorityStandardsandEthics.aspx

25

a publication scheme, which sets out how agendas, minutes and papers will be made

available to the public and when. It also set out any exceptions to the standard

scheme.

4.5.4. In particular, the SCR CA:

is subject to the Transparency Code applied to local authorities;

is incorporated in the Sheffield City Region website, which includes a specific

section on its Growth Deal and SEP -

http://sheffieldcityregion.org.uk/about/growthplan/;

will ensure all meetings of the SCR CA are open to the public and appropriately

accessible;

will make sure all meeting agendas, papers (when not exempt for some reason),

and minutes are published on the South Yorkshire Joint Authorities Governance

Unit website, within the minimum timescale standards, set out in the paragraph

below;

will make clear the approach to making investment decisions on the SCR CA

website;

will make clear all decisions made (including levels of funding), including those

undertaken by the Delivery Boards, and make clear the rational for decision

making, including the expected outcomes of decisions;

will receive at each meeting the Resolution Record from each Delivery Board

meeting;

will publish online all funding decisions, including funding levels;

will receive regular dedicated updates on programme performance, which be

published as dedicated papers for CA meetings; and

as the accountable body for LEP funding will hold a record of all relevant

documentation relating to this Government funding allocated to the area.

4.5.5. SCR CA and LEP meeting agendas are made available to the public at least five

clear working days in advance of the meeting. All CA minutes will be signed at the

same or next suitable meeting of the Authority. All meeting papers and the results of

the SCR CA6 and the LEP’s7 decision making are published online here:

http://meetings.southyorks.gov.uk/ieListMeetings.aspx?CId=366&Year=0&zTS=B.

4.5.6. Details of any scheme approvals made in accordance with delegations and a

resolution record for each of the Delivery Boards will form standing agenda items at

each CA meeting. These will be published as part of the standard process for CA

papers. Resolution records will also be considered at each LEP meeting.

4.5.7. Likewise, details of project progress – with links to the key documents for each

project, will be made available in an easily accessible / searchable way on the SCR

website. Additionally, regular quarterly updates will be provided at CA meetings on

the performance of the programme.

4.5.8. Members of the public have the ability to provide feedback via email and in writing to

the CA. The public can also submit questions to CA meetings via an online form

available here:

6 Available from April 2014 when the CA was formed 7 Meeting agendas and papers for the LEP will be published from March 2017, minutes are available on line dating back to 2011

26

http://www.southyorks.gov.uk/SYJSHome/SCR/CombinedAuthorityChair.aspx

4.5.9. The SCR CA is subject to the Freedom of Information Act 2005 and the

Environmental Impact Regulations 2004. As Accountable Body the CA will also fulfil

these functions on behalf of the LEP. Within these Accountable Body functions BMBC

(on behalf of the CA) holds records and will be the focal point for statutory information

requests. Any applicants for information will be made aware of their right to access

information through the SCR CA, which will deal with the request in accordance with

the relevant legislation. As set out in this section, the emphasis within SCR CA

processes is on publishing material so that FOI requests are less necessary.

Complaints, Appeals and Whistleblowing Policy

4.6.1. In any case where it is alleged that the SCR CA or LEP is (a) acting in breach of the

law, (b) failing to adhere to its framework, or (c) failing to safeguard public funds,

complaints (from stakeholders, members of the public or internal whistleblowers) are

to be directed to the CA’s Monitoring Officer or their deputy. They will address the

allegation following the protocols set out in the CA’s constitution, which is aligned to

those of constituent Local Authority members.

4.6.2. Where the SCR CA or LEP cannot resolve locally to the complainant’s satisfaction

and the matter relates to the City Region’s Single Pot funding, the issue may be

passed to the Department for Communities and Local Government or other relevant

departments, such as the Department for Transport, as appropriate to the complaint

in question.

4.6.3. All applicants for funding will be made aware of the recommendations made by the

respective Delivery Board / Appraisal Panel on allocations and the rationale for these.

Unsuccessful applicants are able to appeal any recommendations made by Delivery

Boards prior to their consideration for decision by the CA.

4.6.4. Subsequent decisions of the CA and LEP will be scrutinised by the SCR Overview

and Scrutiny Committee. In addition, if a complaint is made about a CA or LEP

decision the CA Chair and Monitoring Officer will convene an independent committee

to review the issue and make a recommendation back to the CA / LEP Boards as

appropriate. The above complaints policy is set out on the SCR’s and Joint

Authorities Governance Unit’s websites8.

8See http://www.southyorks.gov.uk/SYJSHome/SCR/CombinedAuthorityStandardsandEthics.aspx and https://sheffieldcityregion.org.uk/about/freedom-of-information/

27

5. Making Robust Decisions

Principles

5.1.1. The framework outlined in this section is intended to achieve the following key

principles:

Achieving best value in spending of public money, recognising that sometimes the

best investments offer long-term outcomes, but with the expectation that only in

exceptional circumstances will proposed investments not offer at least ‘good’

value for money – i.e. a benefit cost ratio (BCR) of at least 2 for transport

schemes or appropriate public sector cost per job / GVA and in all cases the

benefits exceed the cost of intervention over the projected timeframe.

Ensuring transparency and accountability in decision making and allocation of

available funding;

Ensuring that the money spent results in delivery of outcomes to each area in a

timely fashion, and in accordance with the conditions placed on each grant, by

actively managing the devolved budget and programme to respond to changed

circumstance (for example, scheme slippage, scheme alteration, cost increases

etc.);

Appraising projects in a way which is consistent with the Green Book ‘five cases’

model and proportionate to the funding ask in terms of processes required;

Avoiding conflicts of interest within organisations, particularly with regard to the

division between commissioning and delivery / promotion elements within the

SCR Executive Team;

Ensuring an appropriate division of labour between the CA Board and the Delivery

Boards, in that the CA remains responsible for accepting a project onto the

programme and where required due to scale, complexity or risk signing off each

project’s funding approval whilst the intermediate stages between these points or

for smaller and simpler schemes can be delegated to Delivery Boards where

appropriate;

Implementing effective evaluation to indicate where the project has achieved its

stated aims, and using feedback appropriately to refine the decision making

process.

That the use of resources is subject to the usual local authority checks and

balances as well as normal local government audit accounting and scrutiny

requirements.

5.1.2. The City Region has developed a common approach to programme and thus project

management for the delivery of its Single Pot programme. Founded upon a single

end-to-end process the Sheffield City Region is seeking to utilise a holistic approach

for all types of investment made. Inherently our approach to prioritisation is to identify

those schemes which can contribute to the growth of the economy and provide good

value for money and to do this in a way that is objective, consistent and transparent.

5.1.3. The process is founded on the principles of HM Government Green Book and

prevailing guidance for the type of investment that SCR is seeking to make, for

example the Skills Funding Agency’s approach for skills capital.

28

Project prioritisation and assessment resources

5.2.1. The SCR Executive team utilise a range of tools and processes for assessing and

prioritising projects. The most significant of these are:

The SCR Appraisal Panel is a panel including representatives of the three

statutory officers of the CA and officers from the Executive Team able to provide

coverage of each of the Green Book five cases. This Panel reviews all business

cases, including the technical analysis undertaken by CIAT and prepares a

recommendation to the appropriate Boards to approve, defer for further work or

reject business cases. Generally, the team meets every two weeks, with

additional meetings taking place as and when these are necessary.

The Central Independent Appraisal Team (CIAT), a framework of independent

external specialists with the expertise to technically appraise business case

submissions. The aim of the CIAT is to ensure there is clear distinction and

adequate separation between the scheme promoters and the decision makers.

CIAT are appointed by and report to the Programme Assurance and Performance

directorate to ensure full independence is maintained.

The FLUTE model (where FLUTE stands for Forecast the impact between Land-

Use, Transport, and the Economy). This is a tool for understanding the economic

impact of a programme of capital infrastructure projects; and,

webTAG (Web Based Transport Appraisal Guide), used for modelling and

appraisal of schemes based on the guidance set out in the HM Treasury Green

Book. WebTAG provides a comprehensive approach to consider the positive and

negative impacts of transport proposals.

5.2.2. The SCR Executive Team is establishing an External Capital Funding Team; a team

of experts and ‘project managers’ employed by the SCR and contracted out to project

promoters to assist with the delivery process, particularly with regard to the

development of the business cases. The intention is that these would alleviate the

burden of the process on the limited resources of promoters which may lack the

capacity to complete the stages unassisted. This team works independently of the

Programme, Assurance and Performance Directorate.

Process

5.3.1. An outline of the process to be followed in making decisions about the allocation of

available funds is indicated in Figure 5 below.

5.3.2. The following sections of this report will set out the steps involved in this process in

greater detail.

29

Figure 5: Overall Process for developing and appraising projects

Strategy and Objective Setting

5.4.1. The SCR has robust processes in place for developing overarching strategy and

investment prioritisation processes. This is set out in the Strategic Economic Plan

(SEP) which is being refreshed to take into account current evidence from various

sources including; economic analysis, SCR Integrated Infrastructure plan, Area

Based Review and other local and national intelligence.

5.4.2. The SCR places emphasis on evidencing strategic propositions and priorities. The

SEP and other strategies are supported by a wealth of evidence and data which are

referenced in these strategies. Strategies are also based on an inclusive process

which includes consultation with relevant stakeholders as appropriate. The SCR is

also exploring the potential for a data observatory to provide regular economic

intelligence on the City Region for the benefit of the CA, LEP and member authorities.

5.4.3. The refreshed SEP will be accompanied high level delivery investment plans to

prioritise programme investment based on need and opportunity to utilise best

30

practice and maximise the return the on investment across each of the thematic

areas. These investment plans will help inform the work of the SCR Programme

Commissioning team and subsequent commissioning calls. Figure 6 below outlines

the SCR SEP development process.

5.4.4. Inherently our approach to prioritisation is to identify those schemes which can

contribute to the growth of the economy and provide good value for money and to do

this in a way that is objective, consistent and transparent.

31

Figure 6 Developing the SCR SEP

32

Allocating Budgets to Strategic Priorities

5.5.1. Based on the strategy work encompassed in the SEP and the resulting delivery

investment plans, available funding will be allocated to each of the five Delivery

Boards for project delivery and commissioning.

5.5.2. A draft budget will be prepared by the SCR Executive Team based on an analysis of

the budget split necessary to achieve the objectives in the SEP and other strategies

and the delivery timeframes of the planned projects. The CA and LEP Boards will

approve this recommendation based on normal voting procedures in line with their

respective financial responsibilities.

5.5.3. Budgets will be prepared on a yearly basis ahead of the start of the next financial

year. Clearly capital budget approvals will have allocations over multiple years and a

five-year investment programme will therefore be considered as part of the budget

setting process. This will need to be updated on a rolling annual basis such that

projects commissioned in one year will be ready for delivery in future years. Progress

against budgets will be monitored on a rolling quarterly basis.

Commissioning process

5.6.1. On a regular basis, the SCR Commissioning Team will issue open commissioning

calls for projects which will be publicised on the SCR website. Calls will have a

specific focus and will make clear the rationale for the required interventions to meet

the objectives of the Delivery Investment Plans and the SEP.

5.6.2. There are two sources of projects, which may originate from either: proactive work by

the SCR Programme Commissioning Team and Delivery Boards to identify projects

which satisfy the strategic objectives; and project promoters approaching the SCR in

response to a commissioning call publicised on the SCR website.

5.6.3. Delivery Boards will have oversight and ownership of their own commissioning plans

(i.e. IIP for infrastructure / Transport strategy etc.) and will be responsible for

achieving the conditional outcomes identified for each Board to deliver. This will be

supported by the Appraisal Panel and the SCR programme, assurance and

performance team.

5.6.4. The business case templates and guidance documents will be available via the SCR

website as appropriate to each commissioning call.

Preparation of Strategic Outline Business Case Documents

5.7.1. The production of the information to secure a Strategic Outline Business Case

(SOBC) is the first official communication to the SCR from the scheme

promoter/Delivery Partner. The SOBC will provide a first view of the ‘how, what and

when’ the project will deliver against the SEP outcomes. It will be based on a

standard template that all scheme promoters will be required to complete. The SOBC

document will include:

Project objectives and vision;

Project outputs and outcomes against the SEP;

High level timescales;

33

High level cost of project;

Initial funding required; and

Project Sponsor.

5.7.2. This information will be in line with HM Treasury Green Book guidance on presenting

appraisal results and as such will include:

Strategic case: contribution to SCR strategic objectives; contribution to national

policy objectives;

Economic case: impact on local growth, plus social, distributional and

environmental impacts, assessment of the value the project adds;

Financial case: Cost estimate and sources of funding e.g. identified scheme

promoter, private sector and other contributions;

Commercial case: proven market place for the project, certainty in outcomes,

procurement processes and commercial viability; and

Management Case: Demonstrates the project is capable of being delivered

successfully, including delivery plans, statutory processes, programme, risk

management (with appropriate mitigation plans) and benefit realisation.

5.7.3. Depending on the nature of the scheme, the SOBC document will also be required to

meet with best practice in the relevant thematic area, for example, the DCLG

Appraisal Guide for housing schemes and / or the SFA good practice for skills

projects.

5.7.4. These documents are then submitted to the SCR Appraisal Panel, which reviews the

funding source and provides an initial check as to which element of funding within the

single pot would be most appropriate. The purpose of this is to provide a check to

ensure that the funding requirements of the component elements of the Single Pot

are being met, and also to enable the effects and outcomes of the component

elements of funding within the Single Pot to be tracked.

5.7.5. Depending on the nature, size and complexity of the project, the Appraisal Panel and

Programme Assurance team may also subject the SOBC documents to independent

appraisal by the Central Independent Appraisal Team (CIAT). At this stage, FLUTE or

other testing tools may be used to better understand the outcomes of the project and

objectively appraise the SOBC.

5.7.6. Where a large number of projects are submitted in a single cycle, a balanced

scorecard approach may be used to rank these according to a variety of criteria

specific to each commissioning call such as deliverability, proportion of funding ask

from public sources, additionality and to identify projects which fall below any pre-

agreed appraisal thresholds.

5.7.7. The SCR Appraisal Panel will review the appraisal outcomes make recommendations

the Delivery Boards to, subject to funding, accept a project to the programme

pipeline, defer the project seeking further information or reject the project. The

Delivery Boards are then asked to consider and endorse the recommendation which

is then submitted to the CA for approval.

5.7.8. There may be a prudent degree of over-programming at this stage, in order to ensure

full utilisation of available funds in the event that one or more projects fails to deliver,

is delayed or cost savings are achieved. This will be agreed by the CA for each

budget / approval cycle.

5.7.9. Once a project has been accepted to the SCR programme pipeline a summary of the

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project will be published on the SCR website, this will be updated periodically to

include links to the key documents for each project and record of progress. The SCR

Executive Team will collect external comments on these schemes through its website

and will be considered as part of the appraisal process.

5.7.10. Figure 7 below shows the flow of this process in a typical case concerned with large

strategic projects.

Figure 7: Process for Preparation of SOBC Documents

Production and Appraisal of Business Case

5.8.1. Having been accepted onto the programme pipeline, the next stage is for promoters

to develop the business case. The requirements at this stage are dependent on the

nature, scale, risk and complexity of the project; smaller, simple projects are unlikely

to require outline business case in addition to a full business case. The proportionate

appraisal requirements will be agreed on a project by project basis.

5.8.2. The possibility of support for promoters through grants and support from the SCR

Executive Team is currently being explored though the precise form which this may

take has not yet been determined.

5.8.3. The Outline Business Case (OBC) and Full Business Case (FBC) will build upon the

foundations of the Strategic Outline Business Case and hence will continue to expand

and further detail the five cases as set out in the supplementary guidance to the HM

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Treasury Green book. The SCR Commissioning team will provide guidance to

project promoters during the development of the business case.

5.8.4. The project promoter is responsible for funding all scheme development work up to

and including OBC. Such funding could be sourced from the promoters existing

resources or through a bid for other local funds.

5.8.5. Further development beyond the OBC decision point remains the responsibility of the

promoter, though this could be sourced through LGF as part of their business case

application. As with Government practices, only bids that successfully clear the final

stage will receive such funding retrospectively.

5.8.6. It is essential that scheme promoters and the SCR CA agree the scope of appraisal

of costs and benefits before any substantive work is undertaken. Appraisal specific to

certain programme types will be utilised at this time. For example, for transport

infrastructure schemes, WebTAG9 should be applied proportionately, based on the

cost of the scheme and the scale of the impacts. To facilitate this scoping, an

Appraisal Scoping Report template should be used, comprising:

Level of analytical detail to be applied to approve a scheme against overarching

Government transport objectives (proportional to the scheme’s impact) and the

rationale for this;

Modelling tools to be applied;

Alternative interventions to be considered; and

Timescales for business case development.

5.8.7. For all transport schemes WebTAG compliant appraisal is mandatory, as

proportionate depending on the nature of the transport scheme concerned. Transport

schemes being defined as “any scheme that significantly changes the transport

network infrastructure, whatever its objectives”.

5.8.8. Modelling and appraisal of transport schemes must be in accordance with current

WebTag at the time the business case is submitted for approval. This will form an

essential part of the Appraisal Scoping Report.

5.8.9. It is expected that all transport schemes with a cost to the Public purse in excess of

£5m will use a WebTag compliant model as part of the appraisal process.

5.8.10. The five cases must ensure that all impacts of a scheme (monetised and non-

monetised) are presented for consideration, these business case templates and

guidance will set out the basis for consistent capture of impacts, this will include how

Optimism Bias will be included in the assessment.

5.8.11. When OBC and FBC business cases are fully developed, they will be submitted to

the Appraisal Panel for review. An independent assessment will be undertaken of all

business cases to quality assure and scrutinise the project.

5.8.12. Scheme promoters are required to publish a copy of the business case on their own

websites when submitted to SCR seeking approval.

5.8.13. At each stage of the business case sign off, the Appraisal Panel will produce a Value

for Money Statement (VfMS) as part of the appraisal summary, so that stakeholders

can understand the potential costs, benefits and impacts. These statements will be on

a proportionate basis relative to the level of funding sought but will be applicable to all

9 Web based transport appraisal guidance

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programmes. The appraisal summary will be included in the supporting information

for all recommendations made to Delivery Boards.

5.8.14. The s73 Officer of the SCR CA will be responsible for signing-off VfM statements as

true and accurate. This sign-off must be achieved before the project can progress. As

already described, the s73 Officer will follow the established professional codes of

practice that guide and bind the undertaking of the role. In approving the VfM

statement the s73 Officer will register any conflicts of interest. The registered conflict

of interest will be reviewed by the Executive Board and SCR CA, alongside the VfM

statement and recorded in the board’s minutes.

5.8.15. The SCR CA can decide to remove a scheme/project from the programme if the

business case does not provide the required assurance of value for money.

5.8.16. Projects must also ensure that the commercial, financial and management

arrangements are appropriate for effective delivery. Project Promoters may find the

Infrastructure and Projects Authority Project Initiation Routemap Handbook helpful

when developing these aspects of the business case.

5.8.17. The Appraisal Panel’s recommendation will be made to the SCR Delivery Board,

which may be either approved by the Delivery Board if the project is within the

threshold set out in the Combined Authority Financial Regulations and aligned to the

agreed budget, or endorsed and sent to the CA for full approval if the project exceeds

this limit or falls outside of the agreed budget.

5.8.18. The recommendations, including the appraisal summary, will be published on the

SCR website for any interested parties to comment on. The SCR Executive Team will

collect comments on these schemes through its website. The approval notice to be

published will include a brief summary of how external comments received throughout

the appraisal process have been incorporated into the decision.

5.8.19. Figure 8 indicates the process to be followed at this stage.

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Figure 8: Process for Development of Business Case and Project

Approval

Full Project Approval

5.9.1. Following approval of a Full Business Case it may be necessary to complete a range

of statutory processes to ensure the project is actually ready to start. For example,

planning permission, a Compulsory Purchase Order, or it may be necessary to satisfy

a number of conditions agreed as part of the Full Business Case. Where this is the

case, full approval to enter into a funding approval will be carried out as a separate

stage. Due diligence of such processes / conditions will then be carried out by the

Appraisal Panel with input from CIAT as required prior to making a recommendation

to the appropriate approving authority. In many cases, it will be possible to secure

approval to a full business case and full approval to enter into funding agreements at

the same time.

5.9.2. The Appraisal Panel’s recommendation will be made to the SCR Delivery Board,

which may be either approved by the Delivery Board if the project is within the

threshold set out in the Combined Authority Financial Regulations and aligned to the

agreed budget, or endorsed and sent to the CA for full approval if the project exceeds

this limit or falls outside of the agreed budget.

5.9.3. The Programme Board, as owner of the Assurance Framework, retains the ability to

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review decisions in discharging its functions.

5.9.4. This final approval allows the SCR Programme Assurance and Performance team to

enter into a formal funding agreement with the scheme Promoter, and the project will

transition to the delivery stages outlined in the next section.

5.9.5. Figure 9 summarises all the stages in the project lifecycle.

Figure 9: Process for Development of Business Case and Project Approval

Release of Funding, Cost Control and Approval Conditions

5.10.1. Grants to scheme promoters will be capped and promoters would need to bear risk

for all overspend beyond the approved amount.

5.10.2. The SCR CA's s73 officer (or equivalent) must certify that funding can be released

under the appropriate conditions (in line with their statutory duties). Already, SCR

Treasurers work closely together to ensure standards and processes are comparable.

5.10.3. A mechanism for ‘claw-back’ provisions has been put in place to ensure funding is

only to be spent on the specified scheme and linked to delivery of outputs and

outcomes. Payment milestones will be agreed between the promoter and the SCR

CA based upon the complexity, cost and timescales of the scheme. This will form part

of the programme management role of the SCR CA, which is subject to external

audit.

5.10.4. The conditions relating to the Authority’s agreement to fund a scheme will be set out

in a Funding Agreement between the SCR CA and the scheme promoter so that the

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responsibilities of each are clear.

5.10.5. Each grant claim will be crosschecked against the approved project baseline

information as part of the quarterly reporting processes.

Managing Risk

5.11.1. The Assurance Framework includes a comprehensive issue and risk management

approach, which has been developed in accordance with Government Green Book

guidance and other project management guidance.

5.11.2. It is important that the level of risk taken on any project and programme are

understood from an early stage alongside the associated cost implications. Through a

robust approach to risk, the SCR CA will reduce the need to de-scope schemes from

the programme because of cost overruns. Promoters will be required to include

risk/contingency as part of funding requests, which should reduce as a proportion as

the project case is developed.

5.11.3. Throughout the programme management lifecycle risk will be managed in

accordance with the three-stage process set out in the figure below. A key element of

our approach is that all parties have a responsibility to contribute to the management

of risk.

Figure 10: Approach to risk management

5.11.4. Risk identification and assessment will take place through business case

development and assessment and structured risk workshops at each Key Stage or

Gateway. Risk workshops will bring together scheme promoters and the SCR

Executive programme management and performance function. In addition, regular

Risk Review meetings will be held by the promoter and agreed risk data passed to

the SCR Executive Team to consolidate this information that will then be considered

by the relevant Delivery Board and where projects are above the agreed investment

40

threshold as defined in the Combined Authority Financial Regulations or risks are

otherwise considered to be of high-level importance / impact - the CA.

5.11.5. Risk Management controls and mitigation action plans are also agreed in one to one

sessions with the risk owners. The process is linked together to enable ease of

reporting and reviewing of primary risks that affect the project. Once a risk has been

identified and evaluated it is added to the SCR risk register. A plan will then be

constructed to reduce the likelihood of the risk occurring and/or decrease the impact

of a risk, should it occur. All risks will be categorised into one of two levels:

Programme Level; and

Project (Scheme) Level.

5.11.6. If the risk has been determined to be important, based on its assessed degree of

criticality, then the general rule of escalation will apply. Updates to the risk register

will be reported to and monitored by each Delivery Board and elevated to the CA as

appropriate. Overarching risks to the delivery of the SEP Programme will be reported

to and considered by the Chairs and Vice Chairs of the CA and LEP respectively.

5.11.7. All scheme submissions at Strategic Outline Business Case and Outline Business

Case stage will need to include a project programme and a proportional assessment

of associated risks. For accounting risks, all promoters are asked to apply risk factors

and optimism bias directly in accordance with Government Green Book guidance.

5.11.8. Risk will be reviewed at each project gateway and should be reflected in the cost and

programme assumptions. Risk likelihood, severity, mitigation and cost should form

part of a risk assessment, in line with the protocols being developed. Where a project

dependency is likely to delay the start of a dependent project, this information will be

used to re-profile the spend of funds accordingly. This will ensure that delivery

remains at the heart of the SCR Assurance Framework.

5.11.9. Cost overruns will generally be the responsibility of the scheme promoter. However,

the impact of other risks such as project delays for example, may be minimised by

ensuring funding is not released until needed. The SCR’s Head of Paid Service is the

named senior officer for risk management for the CA and LEP programmes. Quarterly

project updates will include key project risks and issues along with and change

requests.

5.11.10. The SCR’s Head of Paid Service is the named senior officer for risk

management for the CA and LEP programmes.

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6. Measuring Success

The importance of Measuring Success

6.1.1. Measuring the success of projects provides important lessons which can be used to

further improve the decision-making processes outlined in the previous section. This

increases the likelihood of successful delivery of future projects.

6.1.2. Further, measuring the impact of a project is important to understand the outcomes

achieved by the funds available to the SCR. This information is useful both to the

funding providers, who will wish to quantify the benefits gained by the fund, and also

to the SCR in order to ensure adherence to the principles of value and efficiency in

future decisions about spending on projects.

Our logic models for understanding impact

6.2.1. Our monitoring and evaluation framework sets out several logic models which define

indicators that SCR will seek to monitor and evaluate to understand the impact in

relation to the headline outcomes of the SEP. These are set out in in Section 7

(Appendix: Monitoring and Evaluation Logic Models) for the different thematic areas.

Delivery and Monitoring

6.3.1. All scheme/project promoters seeking or in receipt of funding will be required to

provide regular financial and delivery information to the SCR CA. This will be an

integral element of the commission and delivery stage in the SCR programme

management cycle and will form the basis of the SCR CA Performance Management

and external reporting procedures.

6.3.2. Scheme promoters are responsible for informing the SCR CA of any changes to the

scope of the scheme, the costs and implementation timescales. The SCR Delivery

Boards will be responsible for assessing the impact of any changes on the overall

scheme programme and working with the promoter to address any specific issues.

The SCR CA will not guarantee that it will meet any cost increases either in full or

part.

6.3.3. As the project is underway, a continual communication process is maintained

between the SCR and the project promoters. The promoter provides quarterly reports

to the Performance Team at the SCR. The Performance Team then collates the

programme information and completes online returns to CLG and performance report

summaries to the Delivery Boards, Programme Board and the CA.

6.3.4. The SCR Commissioning and Performance Team also communicates directly with

the project promoter to address any slippages or concerns with regard to project

delivery. In these circumstances, corrective action will be taken.

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Project Evaluation and Closure

6.4.1. The SCR has in place a comprehensive monitoring and evaluation framework

designed to provide robust feedback on the lessons learned from individual projects.

At the end of the delivery stage, the Promoter is responsible for arranging a project

evaluation in line with the SCR monitoring and evaluation framework.

6.4.2. The scheme promoter will be required to ensure adequate resource is allocated to

undertake the agreed monitoring and evaluation. This could include allocating the

resource against local funds.

6.4.3. Project evaluation will not only provide accountability for the investment made but will

also improve the local evidence base to improve future bidding, assessment of value

for money and appraisal.

6.4.4. This will be reviewed by the SCR Programme Assurance and Performance Team

against the objectives of the scheme as set out in the business case and project

Funding Agreement.

6.4.5. Evaluation result in relation to all projects will be published on the SCR CA website.

6.4.6. In cases where there is variation between the project objectives and outcomes, the

SCR Programme Assurance and Performance Team will work with the promoter to

agree corrective action. If this and any further corrective action is unsuccessful,

clawback provisions may be invoked as a final resort and as a means to secure the

outcomes via alternative measures.

6.4.7. At the end of the project, the Programme Assurance and Performance Team will

make a recommendation to the Delivery Board that the project should be closed. This

recommendation is endorsed by the Delivery Board and sent to the CA which will

finally close the project.

Programme Monitoring

6.5.1. Throughout the lifespan of the programme, programme monitoring will take place.

Specifically, the Finance Team will work with the Programme Team to understand the

overall scale of investment and the fit between the capital revenue split and the

conditionality of constituent components of the funding. This ensures that there is

ongoing assessment of the effectiveness of each type of investment in line with the

expectation of funding providers. For example, the government expects the SCR to

report back as to how effective the LGF and single pot funding has been. The

programme monitoring process therefore identifies the funding of each project and

allocates the outputs achieved by each project to its contributory funds accordingly.

6.5.2. Further, in conjunction with the 8 other Combined Authorities in receipt of City /

Growth Deals/Devolution Deals the SCR have procured a panel of specialists to

develop a methodology and appropriate metrics to consistently evaluate the impact of

the financial support within the Single Pots. The proposed evaluation framework is in

two parts which together will cover all activities supported under the Single Pot and

subsequently contribute to the first five-year Gateway Review in 2020. The elements

of this are:

National Performance: Using an agreed list of metrics, the evaluation will assess

performance of SCR against key indicators, in order to assess progression; and,

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Local Performance: In order to provide ‘local granularity and assess value for

money’ the specialist panel of external evaluators, will develop a local evaluation

methodology, incorporating the national performance indicators but augmented

by outputs and impacts specific to the range of projects supported by the SCR

single pot.

6.5.3. One of the principles for prioritising projects is that there must be scope for the SCR

to invest in longer-term projects where up-front public funding is needed to catalyse

private-sector investment in the medium term to achieve economic benefits in the

long-term. An example of this is remediating contaminated sites to allow new

commercial or residential development to take place, which is unlikely to be brought

forward by the private sector except in exceptional circumstances. Given the

timescales for these investments to bear fruit it is important that the 5-year gateway

review fairly captures progress towards our strategic goals. We will engage the

Government in dialogue about how best to ensure this.

7. Appendix: Monitoring and Evaluation Logic Models

Figure 11: SCR Strategic Monitoring Priorities

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Figure 12: Business Growth Logic Model

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Figure 13: Transport and Infrastructure Logic Model

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Figure 14: Skills and Employment Logic Model