Agenda item

Report of the Director of Regeneration and Economy

The Cabinet considered a report of the Director of Regeneration and Economy in respect of the West Midlands Combined Authority Grant Funding to Coventry 2025/26.

The report would also be considered by Council at their meeting on 25 March 2025.

The West Midlands Trailblazer Deeper Devolution Deal (the Deal) was:

·  Agreed in principle by the West Midlands Combined Authority (WMCA) Mayor and Portfolio Leaders on 10 March 2023.

·  Announced in the Chancellor’s Budget on 15 March 2023, and

·  Adopted by Coventry City Council (the City Council) on 17 October 2023. 

One of the flagship announcements within the Deal was for the West Midlands to have a Single Settlement, whereby instead of being funded through 50+ individual grants, the WMCA would be funded by a single funding settlement covering a full Spending Review period.  This has since been rebranded as an “Integrated Settlement”, and this report seeks approval to accept the first rounds of funding for Coventry through the Integrated Settlement.

The Integrated Settlement covers five Pillars.  It was expected that a total of £19.44m would be awarded to the City Council through the first round of funding (£10.971m of which will be revenue funding and £8.469m capital funding), although there may be potential for additional in year funds in the event of strong performance or underspends elsewhere in the region. The Integrated Settlement funding being awarded to the City Council is summarised below:

·  Pillar 1: Local Growth & Place.  The City Council was expected to be allocated £4.65m of funds (£3.761m revenue and £0.889m capital) through the UK Shared Prosperity Fund for 2025/26 to deliver the City Council’s business support and grants and Job Shop “Hub & Spoke” services.

·  Pillar 2: Adult Skills & Employment Support.  The City Council expects to be awarded £6.27m of revenue funding, of which £5.52m would be from the Adult Education Budget (AEB), and up to £0.75m from the Connect to Work fund to tackle physical and mental health barriers to employment.

·  Pillar 3: Retrofit & Net Zero.  The City Council expects to be awarded £8.52m (£0.94m revenue and £7.58m capital) across two funds to improve the energy efficiency of private housing stock and the public estate.  Coventry based Registered Providers would also receive a share of the region-wide budget for the Warm Homes Social Housing Fund.

·  Pillar 4: Local Transport.  For 2025/26, much of the core transport funding for the City Council would be dealt with outside the Integrated Settlement, notably the City Region Sustainable Transport Settlement (CRSTS), and recommendations to approve acceptance of Transport Capital funding are covered in the Transport Capital Programme Cabinet Report to be tabled at this same meeting.  Much of the Transport funding through the Integrated Settlement (notably focusing on bus services) would be managed by Transport for West Midlands (TfWM).

·  Pillar 5: Housing & Regeneration.  Continuation of WMCA’s Brownfield Land & Infrastructure Fund, Brownfield Housing Fund, and Brownfield Land Release Fund.  This funding would remain open for developers to apply for, it was not expected that the City Council would receive funding directly from this Pillar.

The WMCA would be the Accountable Body for the Integrated Settlement, and for each Pillar, it would be bound by outcome indicators, to be agreed with Government. The funding this Council was seeking acceptance for is being passported to the City Council, and in awarding this money, WMCA would pass delivery risk to the City Council through formal legal Grant Aid Agreements.

The report indicated that, the City Council and other Constituent Authorities had challenged WMCA on the amount of funding that was being topsliced and retained for regional management and coordination functions. Should further funding become available as a result of reduction in WMCA central topslicing, this report requests delegated authority to accept such additional funding.

On top of the UKSPF funding, the City Council was also expecting to receive up to £2.5m in 2025/26 (£0.8m revenue and £1.7m capital) from the Department for Energy Security and Net Zero (DESNZ) funded Business Energy Assessment Service (BEAS).

This report requested authority to accept WMCA’s expected allocation to Coventry City Council of up to £19.44m of Integrated Settlement and Business Energy Assessment Service money of up to £2.5m to deliver these activities, together with delegated authority to enter into funding agreements with funders and thereafter back-to-back contracts with delivery partners, where necessary, to complete this work.

RESOLVED that Cabinet recommend that Council:

(1)  Approve the acceptance of up to £21.94m made up of the following WMCA’s Integrated Settlement Funding allocation for 2025/26 to Coventry from WMCA for up to £19.44m, split between £10.971m of revenue funding and £8.469m of capital funding, and Business Energy Assessment Service Funding allocation for 2025/26 to Coventry from Department for Energy Security & Net Zero for up to £2.5m split between £0.8m of revenue funding and £1.7m of capital funding with the capital funding element set out above being added to the City Council’s Capital Programme.

(2)  Grant delegated authority to the Director for Regeneration and Economy, following consultation with the Director of Finance and Resources, the Director of Law and Governance, and the relevant Cabinet Member(s), to undertake all necessary due diligence in relation to the funding allocation including:

a)  Securing any match funding requirement; and

b)  Entering into the appropriate funding agreements with the relevant funding body.

(3)  Grant delegated authority to the Director for Regeneration and Economy, following consultation with the Director of Finance and Resources, the Director of Law and Governance and the relevant Cabinet Member(s) to enter into back-to-back contracts with delivery partners as deemed necessary to bring into effect the recommendations set out in this report.

(4)  Grant delegated authority to the Director for Regeneration and Economy, following consultation with the Director of Finance and Resources, the Director of Law and Governance and the relevant Cabinet Member(s) to:

a)  Accept any additional funding which is made available to Coventry through the Integrated Settlement during 2025/26 and subsequent years 2026/27 and 2027/28, and

b)  Undertake all necessary due diligence in relation to any of the additional funding made available, including the authority to enter into funding agreements with the WMCA, and entry into back-to-back contracts with partners as deemed necessary.