Flexible Support Fund Guidance for District Managers

Transcription

1 Flexible Support Fund Guidance for District Managers Guidance Queries and Help 1. If you are unable to find an answer to a particular question regarding the policy within this guide you should contact the DWP Advice Line. Do not give the Advice Line number to claimants or outside bodies under any circumstances, it is for the use of Jobcentre Plus staff only. 2. Please do not use the page owner and Page information links at the bottom of each page of guidance to raise policy queries, these should only be used to report broken hypertext links. The Flexible Support Fund 3. The purpose of this guidance is to support local decision making, enabling District Managers to manage, deploy and account for expenditure from the Flexible Support Fund (FSF). Case for Change and Background 4. The Jobcentre Plus Pre Work Programme (offer) including the FSF have been created to respond to the Government s plans to reform the welfare system as outlined in the Get Britain Working publication 2010, to deliver the back to work support model and provide appropriate support to maximise the number of customers entering work rather than the Work Programme. 5. The Jobcentre Plus offer made to working age customers is driven by flexibility, freeing Advisers to make better decisions more tailored to individual customers. This refreshed approach to delivery will ensure Jobcentre Plus maintains its impetus to not only focus on maximising off flows into employment from benefits at the earliest possible opportunity, with the associated effect on public finances and the wider economy; it will also use its increased flexibility to ensure it effectively contributes to the delivery of wider Government objectives, such as improved partnership working and social justice for those who have historically been left on the fringes of our society. 6. The overall objective of the Pre Work Programme approach is to maximise off flows into work and deliver value for money, supported by a menu of flexible support, which includes FSF. 7. The other key objective is to ensure that those customers who are not yet ready to return to employment receive the appropriate level of support to ensure they remain as close to the labour market as possible with minimal cost. Primary Strategy - To maximise employment opportunity for all to support economic growth. Secondary Strategy - To support the Government s child poverty aims. Purpose of the Flexible Support Fund 8. As part of the Jobcentre Plus Offer menu of support, FSF is a key enabler for Jobcentre Plus Districts because it provides an opportunity to support the

2 delivery of locally identified customer needs, and help to address the requirements of the local labour market. 9. In the first instance, advice should be sought from the guidance supporting the Jobcentre Plus Offer. FSF can be used to support all Jobcentre Plus customers, including 16/17year olds, who are not participating in existing contracted provision. This includes the Work Programme, Work Choice or Community Action Programme. Where District Managers decide that it is appropriate to meet local objectives, FSF may also be used for Jobcentre Plus customers who are not claiming benefits. 10. Created by pooling a number of different pre-existing budgets, Districts have the flexibility to target the fund on what type of support is required locally to support the needs of the customer and local environment. For example the required support may be: mentoring, qualifications or supporting travel. 11. District Managers should also consider whether any of the existing provision can be used to deliver the required support before accessing FSF funding. This will include provision supplied by the Skills Funding Agency in England, the Devolved Administrations in Scotland and Wales; or via variation of the Jobcentre Plus Support Contract (JCPSC) see Annex Also, within the fund there are a number of mandatory requirements and asks of FSF that Districts must meet. This will be highlighted in the guidance for the relevant process i.e. Get Britain Working Measures. One key requirement is delivery arrangements via Rapid Response Service (RRS). 13. The fund should only be used to fill gaps and add support where non- Jobcentre Plus provision, for example partner provision or contracted provision are not sufficient to meet local needs. 14. Districts do not have the flexibility to independently choose how the local requirements are delivered without adherence to DWP Regularity, propriety and procurement rules. Guidance can be found at the appropriate link below. 15. Finding the most appropriate solution to deliver the requirements can be assisted by using the Decision Tree document in Annex 1 and consultation with the relevant expert domain. 16. For further information on propriety, and rules that apply before making any commitment to use any funding mechanism, please see: Government Funding Regime Funding Definitions. Please see links to the relevant guidance on DWP Regularity and Propriety Framework Get Britain Working Measures 17. Get Britain Working (GBW) Measures funding ceased on 31 March From 1 April there is no further GBW funding available for start up costs for both Work Clubs and Enterprise Clubs. 19. Work Clubs and Enterprise Clubs should seek in the first instance to make the most of local resources available through alternative funding streams that may be available in the area. 20. If District Managers wish to fund start-up costs for Work Clubs and/or Enterprise Clubs, FSF funding may be used at their discretion.

3 Local Partnerships 21. Working with new and existing partners provides Districts with an opportunity to identify potential gaps in provision and specific support needed for customers. Utilising these relationships and assessing against existing contracted or non-contracted provision can support Districts identifying what is needed. This could be supported by publicising a particular need i.e. to support a particular customer group, to generate local ideas and opportunities. 22. Once the gap and opportunity to support your customers has been identified the most appropriate solution can then be found as outlined in Using the Fund within this guidance. 23. The policy intent for partnership working in the FSF is to support DWP s objectives and to help maximise off-flow into employment and reduce economic inactivity. It provides the opportunity to tackle persistent worklessness and multiple barriers to employment in a holistic and joined up way with local partners. The FSF allows District Managers additional scope to influence local priorities to include a worklessness theme, and to engage with local partners in practical ways. 24. It is important that during discussions with partners and providers there are no commercial commitments or promises made. See Commercial Compliance for further information on the implications of not adhering to commercial processes. 25. There are various types of partnerships that you will need to consider within your district as well as wider national partners and stakeholders from Public, Private and Voluntary Sectors. The following illustrates the different types of partnerships and stakeholder relations that you should bear in mind: Strategic and Business Partners are external organisations with whom we increasingly need to work closer, both operationally and physically, as colocated working becomes more established. These partners possess expertise and resources which make a direct positive contribution to our customers experience; business objectives, off flows and purpose contributing to the Departmental Strategic Objectives. Key External Strategic Partnerships - Jobcentre Plus will be working closely with key external partners, including in some localities through Community Budgets, as part of the localism agenda and the Government s drive to increase efficiency, reduce costs and provide a better, more joined up service to customers. We need to view our relationships as mutually beneficial something for something relationships. We need to actively promote Jobcentre Plus objectives to partners in order to achieve the best results for our customers whilst also looking wider at how we can help our partners achieve their objectives. Local Strategic Partnership (LSP) An LSP is a single body that:

4 brings together at a local level the different parts of the public sector as well as the private, business, community and voluntary sectors so that different initiatives and services support each other and work together provides a single overarching local co-ordination framework within which other partnerships can operate is responsible for developing and driving the implementation of Strategic Community Strategies and Local Area Agreements. Local Enterprise Partnerships (LEP) are led by local authorities and businesses across natural economic areas. They provide the vision, knowledge and strategic leadership needed to drive sustainable private sector growth and job creation in their area. Jobcentre Plus is committed to working with LEPs to benefit the aims of both the Partnerships and our customers. Jobcentre Plus aims to be a key partner of LEPs, so that we can: actively support LEPs through advice and guidance on the labour market and joint work with Work Programme providers, colleges and others work with LEPs to align opportunities under Get Britain Working measures and agree action for the most disadvantaged communities help the LEP to identify skills deficiencies and work with relevant partners to influence the Skills Strategy for the area. Employer Partners - Building partnerships with employers remains important to support recruitment needs and to secure opportunities for our customers. The Employer Operating Model sets out in more detail, how we work in partnership with employers. In particular we need clear evidence of the contribution to Jobcentre Plus performance from partnership working and improvements in the reputation of Jobcentre Plus with external organisations. This applies equally with employer organisation. In non-contractual partnerships, both parties aim to add value to their respective businesses through engagement and/or joint working. This means being focused from the outset on where and how partnership working can help Jobcentre Plus meet its objectives and priorities. In order to assess and review the value of a partnership we need to define its purpose and success criteria. Stakeholder Partners The term stakeholder can apply to a wide range of organisations and individuals who, put simply, have an interest in what we do and how we do it, and/or in which we have a similar interest. The key group of stakeholders for Jobcentre Plus in terms of our customer service generally cover those organisations who offer advice on benefits and employment to our customers. They include welfare rights organisations, advice centres and disability charities. In Jobcentre Plus we refer to them as Customer Representative Groups.

5 We also use the term partner extensively in Jobcentre Plus. They are also stakeholders but are generally organisations or people whose freedom to act independently is restricted by their relationship with us, for example because of contractual arrangements. 26. Our key stakeholders generally possess: valuable insight on our services principally through their contacts with our customers the capacity to help us deliver our services to customers an ability to influence Jobcentre Plus s reputation, both through the media and with Ministers the potential for their business to be affected by the way we deliver our services our approach to engaging with them recognises these features and is aimed primarily at building positive relationships which are based on mutual trust open and honest communications two way information sharing a focus on improving customer service. 27. Stakeholders could include, but are not limited to: local authorities charities voluntary sector organisations Primary Care Trusts community groups Social Enterprises Children s centres local employers Police, health and fire authorities. 28. Funding decisions should be responsive to local priorities, as determined with partners and, in line with Government policy and legal requirements, e.g. Equality Impact Assessments, and must be transparent to the local community. 29. Particular consideration should be given to tackling persistent concentrations of worklessness (where they exist) and underlying challenges to employment in the most disadvantaged communities, where a multi-agency partnership approach could be most beneficial, and where more could be achieved with limited public resources. 30. Where appropriate, consideration should be given to supporting DWP s contribution to wider Government initiatives (such as Community Budgets) where working with public and voluntary sector partners can maximise the

6 effectiveness of public money through improved coordination and reductions in duplicated or disconnected activity. This also presents a real opportunity to influence the inclusion of a worklessness theme as part of the wider local plans for these initiatives. 31. Subject to the rules governing the use of the FSF, District Managers are free to use their budget in any way that contributes to effective local solutions for tackling these issues. This may include pooling funds with strategic partners, and especially in these circumstances, the funding does not have to be tied to clearly identified job outcomes. Strategy confirms that the ability to put money on the table for Community Budget initiatives significantly increases the ability of the District Manager to influence other partners, which is difficult to quantify in absolute value for money terms; but clear aims and objectives, describing what success looks like, must be articulated in the Business Case. 32. There are many ways in which funding could be used, for example: as a strategic catalyst to stimulate, encourage or engage with effective local partnerships to develop and implement collective solutions for improving employment outcomes to make effective links between public services, e.g. health, housing, transport, employment and skills, and organisations including related support to clients, particularly the voluntary and community sector to make grants to local organisations and partnerships, including voluntary and community sector organisations, e.g. to contribute or influence existing activities, support new initiatives to purchase provision, e.g. outreach services, that aligns with inter-related provision from other local partners to tackle common priorities to achieve greater effect (where appropriate) by aligning or pooling money with funding from local partners for common purposes with identifiable employment gains, e.g. in community budgets to engage locally with wider government initiatives whose outcomes contribute to DWP objectives. 33. This is not an exhaustive checklist for action and should not constrain your thinking with partners on how the fund could help increase the effectiveness of solutions and the efficient use of public funding to meet employment priorities in your locality. 34. The process for making grant awards for the Community Budgets initiative is the same process as that for awarding grant funding generally (see Annex 3); however, the standard FSF grant forms and approval templates can be adapted locally to match the local Community Budget circumstances. Further guidance can be found in Annex 10 Community Budgets Process. 35. Grant funding is one mechanism open to District Managers to support local partnership working. Guidance on how to administer grant funding is available below. 36. Useful links: Localism: Working with Local Partners (DWP internal policy briefing document) Jobcentre Plus Approach to Partnerships

7 Using the Fund 37. In deciding how best to use the fund, Districts first need to identify and assess the requirements of the local labour market to effectively target support that meets the needs of the customer. Districts should take advice from their Commercial Business Partner and Financial Business Partner to consider due commercial process and financial probity, but the District Manager / Work Services Director ultimately has the authority to decide how the funds can be spent. 38. Districts will have different ways to plan and assess the local gaps, but a District provision planning tool has been developed and is available for use. This also helps Commercial Directorate colleagues build a national picture of demand to ensure that resources are available to deliver the right type of provision within the required timescales. Where you decide not to use the District provision planning tool you will still be required to provide the required information. 39. Flexibility in the fund enables spend to be targeted in support of specific customers and local requirements e.g. a district with high levels of youth unemployment may choose to target support to 16/17 year olds to help them move into education, training or work with training. 40. In delivering the local requirements, based on key criteria, there are a number of routes for districts to take to deliver the most appropriate support. In all cases, prior to undertaking commissioning activity, Districts must firstly contact their Commercial Business Partner (CBP) to discuss the feasibility of their proposal. The CBP will offer advice and guidance as to the most appropriate way forward following the Decision Tree in Annex 1. The Finance Business Partner should also be involved in this process from the outset. 41. Commercial Business Partners cover all Groups. Their contact details are Group CBP Telephone North East England Detail redacted under S40(2) Detail redacted under S40(2) London & Home Counties Detail redacted under S40(2) Detail redacted under S40(2) Central England Detail redacted under S40(2) Detail redacted under S40(2) North West England Detail redacted under S40(2) Detail redacted under S40(2) Scotland Detail redacted under S40(2) Detail redacted under S40(2)

8 Southern England Detail redacted under S40(2) Detail redacted under S40(2) Wales Detail redacted under S40(2) Detail redacted under S40(2) 42. In deciding the most effective way of delivering the support, the first step is to ensure that districts utilise existing contracts and provision to ensure decisions are in line with procurement rules. Even if the support you identify is not is not currently delivered locally, this still be explored with your Commercial Business Partner as existing contracts may be varied accordingly. 43. FSF policy precludes running Provision the same as that offered by national mainstream contracts. In the event of a District delivering provision through an FSF Grant or an FSF ad hoc contract where either the customer group or the Provision type or both subsequently become part of the mainstream DWP offer then the assumption is the grant would be terminated. This would be achieved through Partnership discussion and the issue of a formal notification of award termination NOTE - this policy is currently being reviewed and in the interim you are advised to contact the Skills and Provision team in Operational Excellence Directorate, Service Integration Division for further advice if this situation occurs 44. The decision hierarchy to identify the most suitable route to meet requirements is as follows: Provision delivered by working in partnership with the Skills Funding Agency in England, and the Devolved Administrations in Scotland and Wales; Adviser Spend to procure goods and / or services that remove an immediate barrier to enable a customer to move closer to or into employment e.g. clothing to attend a job interview. This is a locally determined authority in line with DWP DFA processes. Advisers have the flexibility to target the fund on the type of support to meet the needs of the customer whilst maximising off flows into employment. However procurement rules exist to safeguard the integrity of DWP regulations and these are not discretionary. Information about restrictions on buying training can be found in Payments to Remove Customer s Barriers to Work guidance Existing contracted and non contracted provision JCP Support Contract Low Value Procurement for one off individual training under 10k or multiple client training under 50k Ad Hoc Procurement for specific services required where there is a market. Districts should follow guidance on what actions they must take to commission an ad-hoc request.

9 Grant Funding and community budgets, subject to State Aid rules. 45. District Managers should ensure their External Relations and Advisory Service teams are updated about the provision available through the deployment of FSF and also how advisors can access support. The District Provision Tool should be updated timeously to maintain an accurate database of local information at all times. 46. How Customers and Advisors use and set up the opportunities generated by the FSF is at the discretion of districts and local offices to decide. An outline of things to consider can be found at Start up and Implementation. 47. Using the Flexible Support Fund DWP Policy and Financial rules must be adhered to, and the fund cannot be used to purchase or fund specific activities. For further detail and advice of what it can and cannot be used for refer to Annex Staff who engage directly with third party providers need to be aware that: Where, in the course of their work, they become aware of any investigation or allegation of fraud or irregularity within a provider, they should immediately make a relevant senior official aware as outlined in the guidance below. Staff are reminded that Internal Investigations guidance is provided on the intranet on the reporting of suspected contractor fraud including: examples of frauds investigated, key contact points and how to raise suspicions directly or via the dedicated Whistleblowers Hotline. 49. For further information visit the Risk Assurance Division investigations intranet page. Commercial compliance 50. Your Commercial Business Partner should be the first point of contact in relation to any commercial issues or queries. 51. It is important that during discussions with partners and providers you do not enter into commercial discussions which might put the Department in breach of its legal obligations or compromise its negotiating position. 52. It is possible to have without prejudice discussions with a provider but these must remain informal and no promises made until discussions have taken place with your Commercial Business Partner. 53. You should not make any commercial agreements, either verbally or in writing, which could form a legally binding contract. 54. Failure to keep to this commercial compliance policy could result in disciplinary for policy breach or legal challenge on the grounds that the supplier or service provider has an unfair commercial advantage. 55. Commercial Policy Guidelines for Non-Commercial Staff can be found on the Commercial Directorate intranet pages.

10 Audit Requirements 56. Auditing the local steps taken for the FSF is required to show how and why local decision making has been made in line with DWP Regularity, propriety and procurement rules. 57. This can be used for a number of reasons including to support potential internal and external reviews on FSF delivery. 58. Importantly it can also be used to inform future decision making building a picture of key lessons learned and successful initiatives. 59. Retaining information will therefore enable District Managers to record the decisions they make in planning the deployment of their resource to support their management of the funding; enable responses to queries from Directors, Finance, or Audit; or in response to a PQ or Freedom of Information (FOI) request about the rationale for how they have deployed the FSF resource. 60. Therefore the following steps should be taken: District Managers should maintain an audit trail of decisions relating to how they have decided to deploy the fund for example, any local limits they decide to set for specific kinds of payments or in specific circumstances (not decisions relating to individual claimants). There is a suggested local funding decisions template indicating the type of information we recommend you retain. This should be used to record decisions against each of the categories of spend within the FSF, i.e. Partnership Initiatives, Claimant Training, Payments to remove challenges etc. This can also be used to record local policy where this varies from national policy and to record the rationale for any such variance. For example, if the District decides to have a specific policy on payments to remove Claimants Barriers to Work they might record the decision as follows: "Although national policy allows claimants to receive payments based on advisor discretion, analysis of the impact of awards on off-flows in this District indicates that these are most effective in the four to six month stage of a claim. The local policy therefore is to restrict eligibility to those unemployed for 3-6 months". District Managers should share this information with their Finance Business Partner. For FSF Grant Funding awards there is a requirement to retain records of which organisations have received Grants from the DWP, how much and when. This information needs to be retained for 10years. Further information on the departmental standards for document retention can be found on the Legal Group Information and Records Management Intranet site. 61. Finance has a central grant register which should be updated when any Grants are awarded. Minimum Standards of Monitoring FSF Grants 62. District Managers must assure themselves that the Grant award is consistent with the proper use of public funds, and that the Grant represents good value for money. Whilst FSF Grants cannot be subjected to performance

11 management criteria operating for mainstream DWP contracts, minimum standards of monitoring FSF grants have been developed to indicate the proportionate management response. Financial Monitoring 63. Expenditure will be reported and forecast against the same cost centres as other District budgets, i.e. the revised 12/13 WSD cost centres, and will form part of the routine budget monitoring at District, Group and National level. 64. In this respect District Manager s responsibilities are identical to those in respect of their staffing and non-staff budgets. Finance support will be provided, as now, by District Finance Business Partners, supported by the Group Business Support Team. 65. At this stage District Managers do not have accountability for the core JCPSC budget and so do not have a role in budget management for this contract. They are however fully accountable for expenditure on additional modules funded from the fund as outlined in Annex 9. Using Grant Funding 66. Before proceeding as a Grant, Districts must ensure that the Decision Tree has been adhered to and all existing contracted and non-contracted support has been fully explored. For further advice the relevant expert domain outlined in Annex 1 should be contacted or queries can be sent to the Flexible Support Fund team issues mail box. 67. By definition a grant is a sum of money given by a Government or Public Body for a particular purpose and differs from a contract which is an agreement that commits an entity to a course of action in exchange for money. It is important to ensure that Grants are not used to circumvent procurement processes. In particular, if a contractor should fail to deliver on the conditions of a contract, the Department has some recourse. However the relationship with a partner (Lead Accountable Body) isn t so straightforward in the case of a grant. Details on how to recover a Grant can be found in Recovery of Flexible Support Grant Funding awards. 68. The Grant funding process is only intended as guidelines to support the awarding of Grants and delivery of the support. Some of the steps, that are outlined in Annex 3, can be delivered proportionally to the level of funding being provided in the grant and should be considered locally. 69. District Employer and Partnership teams should engage with local authorities, voluntary sector organisations, community groups, Social Enterprises, local employers, Skills Funding Agency providers and colleges and others. The objective should be to encourage partnership working to deliver efficient and high quality claimant service, support for claimants to overcome the challenges to employment and to increase employment outcomes. 70. District Managers, in line with EU and procurement law, can use the FSF to support working with local partners to addresses local labour market conditions and needs, including tackling persistent worklessness and complex challenges to employment, by using grant funding.

12 71. It is for individual District Managers to determine how much of their funding is allocated to partnership working through the award a Grant. The total amount of funding awarded must not exceed the Districts total funding allocation. Lead Accountable Bodies 72. A grant must be made to a recognised Lead Accountable Body (LAB) who will manage and be accountable for the money on behalf of the partnership. A LAB must be a legal entity with auditable accounts and must be determined as eligible based on the Departments Financial Viability and Risk assessment. Further information on how to engage with, assess and appoint a LAB can be found in the Grant Funding Process section of this guidance. 73. The grant funding relationship will be between Jobcentre Plus and the LAB. The LAB will be responsible for working with other identified partners with whom they will disperse funding accordingly. 74. To be eligible for funding the LAB should have existing relationships, or seek to establish relationships, with key local stakeholders such as those listed in the Local Partnerships section of this guidance. Management of Public Funds concerning Grant Funding 75. The District Manager, supported by their Finance Business Partners, must assure themselves that the award is consistent with guidelines around the use of public funds and that the grant would represent: prudent management of the funding value for money for example comparable to possible market costs or comparable to cost of Work Programme appropriate use of the funding for example has clear deliverables, and provide reasonable flexibility for recipients to make their own decisions. 76. District Managers should establish a system of controls that provide them with reasonable assurance that the award is spent for the purpose it was intended and that the expected benefits are realised as agreed with the LAB in the Terms and Conditions. This would generally include systems for ensuring that: the LAB is an eligible body the LAB is financially viable the opportunity is adequately defined and communicated (including expected deliverables and performance measures) the opportunity supports local district and DWP objectives to maximise off flows and support individuals to move closer to employment; costs are controlled, and evidence that payments are valid based on deliverables being achieved. 77. The decision maker also needs to be sure that providing funding to a single lead body/partner organisation would not: represent a conflict of interest

13 be novel and contentious be an inappropriate use of funding be deemed discriminatory. The Grant Funding Process steps to take 78. Your District Finance Business Partner must be engaged with from the outset to support you through the grant funding process. All queries must be directed in the first instance through your Finance Business Partner. Annex 3 provides a simplified guide of the steps to follow. To note this is a guide to support delivery of FSF and not a standard operating process. It can be used proportionately to the type of partnership opportunity and its value. Being Open and Fair 79. There is no legal requirement to publicise the availability of funding opportunities and it is not a requirement for districts to undertake a full publicising exercise as part of the FSF. However when awarding grant funding to an organisation to support partnership working, it must be seen to be fair, transparent and open to all prospective local partners. 80. To mitigate this risk Jobcentre Plus would recommend to publicise grant funding opportunities locally through existing networks or forums that have been developed, and for larger values of grants you may also use the DWP Internet as deemed appropriate locally (further details available in Annex 11). In all cases you need to ensure that you have taken reasonable measures proportionate to the value of the grant. 81. In circumstances where an appropriate partner has already been identified or where an existing or potential partner has made an approach to the district it is recommended that the District Manager notifies other prospective partners that there is an opportunity to work within that partnership arrangement. 82. It should be noted that publicising the availability of grant funding is not a competitive process or to be used as an alternative to a formal commercial tendering process. It is intended to identify potential new opportunities in the local area and publicise the availability of funds available to support local initiatives, making potential partners aware of existing partnership arrangements that they could become involved in. 83. In some cases when a partner has been identified, as outlined in Using the Fund, it may not always be appropriate to deliver through grant funding and all existing frameworks and provision should be explored. Where the prospective partner is not already on the procurement frameworks, you should contact the Customer Support Services Category Team (CSSCT) team and your Commercial Business Partner for advice on the most appropriate steps to take. Application Packs 84. To be considered for an award the prospective LAB or LABs must complete an application form, providing sufficient information around their aims and objectives. The LABs should describe how they will support delivery of

14 Jobcentre Plus objectives and partnership priorities that meet the needs you have identified. This application should provide assurance that the LAB has viable plans to support the specified objectives through delivery of an effective partnership arrangement. 85. The nominated District contact will be responsible for issuing application packs and guidance to prospective partners. 86. Application packs should be customised to the District s requirements before being issued to prospective partners. The forms are intended as a template to ensure that key requirements and information are gathered to support the decision making process. The forms and guidance are in Word format and can be saved from the links below, and can be tailored as deemed appropriate: FSF - Grant Funding Application Form FSF - Grant Funding Guidance for applicants HSQ1 Health and Safety Questionnaire. 87. Annex 12 provides supporting guidance to assist in populating the application form and guidance for applicants. 88. Note that FSF Grant opportunities are published on the DWP website under the heading Local Partnership Opportunities. Receiving and logging Applications 89. For the purposes of audit it is essential that all applications received are logged in the Application Log Sheet. 90. This is an important part of the audit trail for the FSF and can be used in the event of a legal challenge on the Department or Audit from the National Audit Office. Jobcentre Plus must be able to demonstrate that the correct procedures have been followed. 91. Applications received by will need to be checked for an electronic signature. Where this is not available a signed hard copy must follow through the post. National Register of FSF Grants 92. The National Grants Register is an electronic database that has been set up to record all Partnership Grants made through FSF. 93. The aim of the register is to ensure that DWP does not breach EU Commission State Aid limits when paying FSF Partnership Grants. 94. Direct access to the Register is restricted. Districts staff with approved access will access and update data in the Register via the FSF Database Tool which is an excel interface. 95. When logging applications it is important that you check the application for compliance with State Aid Regulations, and in particular, the de minimis exemption outlined in State Aid Compliance. It is particularly important that checks are carried out to track applications for the same organisation that

15 have been recorded by other Districts within a timeframe of the past three fiscal years. 96. The main purposes of the Register is: to provide a complete record of all FSF Grant applications received by Districts to provide information on the current status / stage of those applications to record the outcomes of those applications whether positive or negative to record the amount of State Aid awarded by DWP under any of the regulations and/or declared as having been received from other public bodies by FSF Grant Funding applicants to allow Districts and others to review all Grants recorded for any organisation and establish their current status in relation to State Aid. to act as a vehicle to provide Management Information on the volumes / values and, potentially, the purpose of Grants awarded and refused. 97. Guidance on when and how to register Grants can be found in FSF Grant Funding Register guidance. State Aid Compliance 98. The Jobcentre Plus decision maker and the District Manager must take steps to provide assurance regarding state aid compliance when awarding FSF Grants, as well as DWP Commercial and Financial policy. 99. The Treaty on the Functioning of the European Union contains State Aid requirements which apply to DWP Each award must be assessed on a case by case basis with regards to compliance and in line with the guidance provided by BIS - The State Aid Guide To receive a grant, all prospective LABs must certify that they are compliant with EU state aid and procurement regulations This evidence should be returned as part of documentation required for the Financial Viability and Risk Assessment (FVRA) It is important to consider: who the Grant is given to i.e. the Legal status of the organisation, and whether they are entitled to receive the funds in their own right the requirement for the LAB to sign the appropriate State Aid declaration compliance in the event that the Grant has been given inappropriately is the responsibility of the organisation receiving the Grant who is ultimately responsible for paying back that Grant, with interest, as set out by the European Commission the grant award being claimed back is likely to lead to the removal of the support Jobcentre Plus were getting as part of the partnership arrangement.

16 104. For DWP, it is important to be compliant as this could not only have a reputational impact but also detrimentally impact Jobcentre Plus customer support and existing commercial arrangements Broadly speaking, State Aid arises where funding is provided by a public body, in this case Jobcentre Plus, to organisations engaged in economic activity and putting commercial services onto a market in competition with others who do not/will not have the benefit of state funds The status of the organisation does not automatically exempt the Grant from State Aid regulation, and consideration of the activity is the determining factor. Therefore grants to other public body needs similar considerations. It therefore does not matter if they are Charitable or non-profit making organisations provided that they are engaged in economic activity. If they are receiving FSF Grant funds, they are receiving money through state resources ; and therefore such Grants have the potential to distort competition; therefore State Aid, and appropriate exemptions must be considered for every FSF Grant An economic activity is an activity for which there is a market in comparable goods or services. It can include voluntary and non profit-making public or private bodies such as charities or universities when they engage in activities which have commercial competitors Whilst assessing the applications, consideration must be given to State Aid compliance and each award must be assessed on a case by case basis with regards to compliance and in line with the guidance provided by BIS - The State Aid Guide. Is it State Aid? 109. In assessing whether the grant award constitutes state aid the following 4 conditions need to be satisfied. Annex 4 provides more detail when considering each question. Is the aid granted by a Member State or through state resources? Does the aid favour certain undertakings, or the production of certain goods? Does it distort the (or threaten to distort) competition? Does the aid/support affect trade between Member States? 110. This is a particularly complex area, subject to Legal interpretation, and it is recommended that where there is doubt, District Managers should refer to the Financial Business Partner and/or the Commercial Business Partner for further advice In determining what steps to take and under what rules to award the Grant, The Grant State Aid Decision Tree in Annex 5 outlines the process to follow. To ensure that District Managers protect themselves and prospective partners from breaching European State Aid regulations no grant should be awarded over the General de minimis amount of 200,000 euros without further consultation with the Commercial Directorate.

17 112. The general de minimis limit of 200,000 euros takes into account any State Aid funding received from any public sector organisation in the previous three fiscal years. It is the prospective partners responsibility to declare any funding received as part of their grant application The Europe Exchange Rate calculator must be used to calculate whether grants are within State Aid de minimis limits of 200, 000 where the prospective partner has had other grants. The relevant rate is determined by the date(s) of the written offer letter(s) received, the date(s) should be included within the declaration of the application. Amounts declared must be converted to Euros to determine the remaining scope. This can be undertaken as part of the application assessment In live running, some partner organisations have stated that after taking their own independent Legal advice, they are not willing to sign the de minimis declaration, because in their opinion, the FSF Grant does not constitute State Aid. However the DWP view is that FSF Grants will always operate in the field of assisting jobseekers / eligible customers to find a job, or make them job ready, and this activity operates in a market place served by the public sector. In these circumstances, we must seek full reasons why the organisation have declined to sign the Annex J declaration, and if necessary access to the legal advice that they have obtained. If they refuse to disclose this advice, then their application cannot proceed any further. Where the organisation does share their Legal advice, this should be escalated to the DWP Legal department for advice via the Commercial Business partner. Services of General Economic Interest (SGEI) 115. European State Aid regulations also allow grants to be awarded up to a value of 500,000 in respect of Services of General Economic Interest. This exemption was confirmed by a decision of the EU Commission on 20 December Services of General Economic Interest are services where it is in the general interest they are provided. Of particular note, are services for access to and re-integration in to the labour market which would not be provided without state intervention e.g. because a provider would not be able to make a profit out of them or recover its costs However Districts should not award any grants under the SGEI criteria without consultation and agreement of their Commercial Business Partners Grants to other public bodies and State aid 118. FSF includes the scope to support local public body partnerships, including in some districts Community Budgets. While this is not mandatory requirement District Managers are encouraged to use this where they believe it would benefit DWP s objectives and where multi agency approach would be most be most beneficial. Annex 10 provides the Community Budget process where appropriate However, a public body is no different to any other entity when it comes to State aid and the rules that apply to them are exactly the same as they are for

18 any other entity. Therefore if the local authority is acting as an undertaking i.e. it is providing goods or services on a market, then any grant given to it can amount to State aid. That aid will be unlawful unless it is aid that falls within an exemption e.g. it is De Minimis In view of this when giving a grant to a local authority or other public body it is extremely important to find out what it is going to do with the grant If the public body is: not going to provide any goods or services itself then the grant is not State Aid, but going to provide goods or services itself on a market the grant may be State aid, or going to pass the grant onto another person who will provide goods and services on a market then at that point state aid could arise. In this case the DWP will be involved because the grant came from it originally. Assessment of Applications 122. To be open and fair, consistent and auditable decisions are required when awarding Grant Funding. This process outlines the recommended steps to be taken when assessing Grant Applications Consideration is also needed of the Equality Act Further details are provided in Annex In all cases, to meet financial probity, justification for the funding is required, i.e. what is being delivered for the grant, and how does this support local and DWP objectives, but can be flexible to meet the needs of the proposed arrangement. Because labour market and social and economic conditions will affect partnership activity the assessment criteria for each award will therefore vary Each application to the fund must be assessed using consistent criteria to avoid potential legal challenge. Therefore, as a minimum applications should demonstrate: that the proposal/application can deliver the specific partnership activity required to meet the locally identified need and Jobcentre Plus requirements details of the proposed partnership, including members and the financial viability of the lead body costs - details of how the grant will be used/disbursed and evidence that value for money has been considered knowledge of the local area and services available for jobseekers The following main activities must be undertaken before the assessment of applications taking place: the setting up of a log to record requests to purchase fixed assets and the decisions made The District Manager must include, where needed, any additional minimum requirements in the Application Assessors Guide that the application must

19 meet. Please note that these are assessed as pass or fail questions when scoring. If no further requirements are specified this bullet should be deleted The Evaluation Template Pass or Fail questions at bullet 5 must be specified by the District Manager if required, this should match the additional minimum requirements in the Assessors Guide. If there are no additional requirements specified this should be deleted Applications do not necessarily have to be assessed together and can be assessed individually as they are received. When assessing bids identification of three people to assess the bids is required. As a minimum - the District Finance Business Partner and the Commercial Business Partner should be involved, with the remaining individuals no lower than Band C/EO. There should also be appropriate separation of duties between those involved in working with partners and those involved in the assessment and authorisation process, e.g. if a partnership manager has been working with a range of partners who have applied for opportunities that partnership manager must not be involved in the assessment process Those undertaking any assessment of the bids should familiarise themselves with the Application Assessors Guide There are other administrative tasks associated with the assessment process, details of these can be found in the Grant Funding for Partnerships Checklist 128. When assessing the applications use the Evaluation Template when scoring applications must be used. Approving Successful Applications 129. If the Assessment determines the award is successful and can go ahead the results must be forwarded to the District Manager There is a set process for completion of the FSF approval process that must be followed ensuring that key actions have been taken locally and key criteria is considered when approving the Grant. The following table outlines the steps to take District managers must refer to the guidance attached to the Financial Approval Stencil for the considerations required. Stage Responsible What 1 District Employer and Complete Partnership Team Reference Information Summary of requirement Benefits and Value for Money Additional Information/Annexes 2 District Finance Business Review Stencil Partner Complete DFBP section

20 3 Commercial Business Partner Review stencil Complete CBP section 4 District Manager Review Stencil Complete DM section 5 Senior Finance Business Review Stencil Partner Complete SFBP section 6 Work Service Director Review Stencil Complete WSD section 7 Senior Finance Business Review Stencil Partner for Director of Work Complete SFBP for DW section 8 Director of Work Review Stencil Complete DW section 9 District Finance Business Partner or Commercial Directorate Complete FVRA section 10 Band F/Grade 7 or above with appropriate DFA Complete Authorising Manager Financial approval section 132. It is important that all action is completed without delay to aid successful grant approval Where approval is given for amounts up to 50,000 the District Manager must complete and sign the Financial Approval Stencil to be endorsed by the DFBP For amounts over 50,000 and up to 500,000 District Managers must complete the Financial Approval Stencil and send to the Group Senior Finance Business Partner [SFBP]. The SFBP will endorse or identify any concerns for consideration by the Work Services Director who will approve or request additional information to support the application. It is important that all action is completed without delay to aid successful grant approval For amounts over 500,000 and up to 25m District Managers must complete the Financial Approval Stencil and send to the Group Senior Finance Business Partner [SFBP]. The Group SFBP will endorse or identify any concerns for consideration by the Work Services Director who will then forward to the Director of Work for final approval, also to be endorsed by their Senior Financial Business Partner, at this stage approval should be made within 3 days if evidence is complete or within 5 days if any further investigation is necessary To note the SFBP for Director to complete required action within 3 days if they are content with evidence provided, 5 days if further investigation is required Revised Financial Approval Sign Off Levels for 13/14 : Up to 50,000 District Manager

21 Up to 500,000 Work Services Director Up to 25m Director of Work 138. The Minister for Employment requires all contracts let in connection with FSF which have a value in excess of 1m to be subject to the Ministerial Contract Approval Process (MCAP). Full details of the process can be found on the Commercial Directorate intranet site. Notifying Applicants of the Results Approved Applications in Principle 139. Where a LAB is a Public Sector Organisation, for example, a Local Authority the financial risk is rated as low and they will automatically be approved. There is no requirement to take any FVRA action The approach for Higher Education Institutions (HEIs) differs from that of Public Sector Organisations for example Local Authorities though they will generally still be viewed as presenting a lower risk than other commercial organisations. Due to changes in regulations and legal obligations, all but 19 HEIs are now subject to the powers of the Charities Commission as exempt charities. All exempt HEIs are required to publish a pre-defined set of information on their web sites including constitutional documents and financial accounts, these documents should be sufficient to inform the FVRA for that organisation Where an application is approved in principle a Grant Funding Notification Letter - Successful will be issued to the preferred applicant(s). The letter confirms that the application has been accepted subject to further FVRA and the provision of the following information: confirmation that they will deliver the minimum requirements as set out in your application including any profile/volume information such as profile of starts Financial Accounts / Statements for the most recent two years of trading including, as a minimum, Profit and Loss Account and Balance Sheets. The most recent years accounts should not be older than two years Certificate of Incorporation, Charities Registration certificate or alternate form of incorporation documentation (or if these cannot be provided, a VAT registration certificate) Memorandum and Articles of Association or statement of your organisation s constitution, (including detail of the constitution where you are proposing to establish a Community Interest Company (CIC), a Special Purpose Vehicle (SPV), or an equivalent model) There is no predefined wording contained in an organisations Memorandum and Articles of Association that supports its status as a not for profit organisation, however the following wording is commonly used: The income and property of the Company shall be applied solely towards the promotion of its objectives as set forth in this Memorandum of Company and no portion thereof shall be paid or transferred, directly or indirectly, by way of

22 dividend, bonus or otherwise howsoever by way of profit to members of the company If the application included minimum requirements and/or targets these should be included in the success letter. Full Approval 144. On receipt of the detailed information requested in the notification letter for successful application the following actions need to be taken to enable full approval of the application Eligibility must be determined using the departments FVRA. Annex 7 provides a Financial Checks Process Flow detailing the routes to be taken depending on the value of the grant For all grants District Managers must assure themselves that the LAB satisfies the following criteria: they are an established entity they are a not for profit organisation they can demonstrate they have two years trading history Where an organisation is not able to satisfy all of the criteria for the FVRA it is recommended that you write to the organisation to establish if there is an organisation of sufficient financial standing who could act as a guarantor, stating that if there is the guarantor organisation will be subject to financial assessment and that two years financial accounts will be required. Assessments will be made on a case by case basis by the Commercial Business partner supported by the Finance Business Partner Where a Guarantor is available the Guarantee for the Performance of the Flexible Support Fund Grant Agreement must be completed and a signed copy returned by the Guarantor, any support on the completion of this form should be sought from the CBP and FBP If there is no guarantor available the CBP and FBP will require as a minimum: full year accounts where available year to date management accounts forecast accounts covering the delivery period of the grant any supplementary information that would support a financial assessment of the organisation e.g. confirmation of bank overdraft facility Further guidance is available to assist District Finance Business Partners in the completion of FVRA If the recipient of the grant is engaged in some economic activity and some non economic activity (see definition in State Aid Compliance) state aid can be given in respect of the non economic activity providing the funding is ring fenced to that activity. The Jobcentre Plus decision maker must be assured that the grant will be channelled through a Community Interest Company (CIC), a Special Purpose Vehicle (SPV), or an equivalent model. It

23 is important that this evidence is returned as all organisations in this position are required to provide existence of a CIC/SPV A CIC will generally be classed as a not for profit organisation for the purposes of FSF grants. For those CICs limited by share capital the view is that there is sufficient controls and limits on the distribution of dividends to satisfy a not for profit criteria Where a Grant is approved and the required information has been provided and the FRVA has been completed satisfactory the award will be made using a standard grant agreement letter template Grant Funding Agreement Terms and Conditions. For grants of 10,000 or less it is advised that the fixed assets register is removed this is because grants under 10k should not be used to purchase fixed assets This template sets out the terms and conditions of the grant, with which the lead body is required to comply. Jobcentre Plus should populate the template with the relevant details of the award. The grant recipient is required to sign up to the grant terms and conditions, the signatory should posses an appropriate level of authority, for example, the lead organisation s Chief Finance Officer Annex 13 provides a desk aid guide to support the populating of the Grant Funding Agreement Terms and Conditions Letter Successful applicants should be advised that their partnerships must remain open to new members, to ensure that the partnership operates an inclusive approach which enables organisations that wish to contribute to do so. Rejected Applications 157. Where an application is declined the assessors will provide concise written feedback it is recommended that where possible this is done within 10- working days of the issue of the rejection letter template. The template can be amended to suit your local needs. However this is not a requirement but recommended good practice Where you wish to inform the rejected organisation of potential opportunities within other partnerships this should be included as part of the communications The written feedback should include a summary from the evaluation template The successful applicant, or LAB, must ensure that their partnership remains open to new members that will add value, throughout the period of the grant award. This will ensure that unsuccessful applicants are still able to get involved in the delivery of the partnership. It will be the LABs decision as to which organisations are accepted into the partnership. Unsuccessful applicants will be notified of this opportunity in their rejection letter The assessment of the applications is not a competitive process and therefore where a number of assessments have been completed together, it

24 is not a requirement to communicate to the organisations at the same time with each application to be treated separately. Terminated Grants 162. The Grant Funding Terms and Conditions Agreement confirms the process to terminate FSF Grants FSF policy precludes running Provision the same as that offered by national mainstream contracts. In the event of a District delivering provision through an FSF Grant or an FSF ad hoc contract where either the customer group or the Provision type or both subsequently become part of the mainstream DWP offer, then the assumption is the grant would be terminated This would be achieved through Partnership discussion and the issue of a formal notification of award termination. An example template is available for a FSF Grant Termination letter, which identifies some standard phrases which may be considered alongside specific information relating to the local award NOTE - this policy is currently being reviewed and in the interim you are advised to contact the Skills and Provision team in OED Service Integration for further advice if this situation occurs. Payment of the Grant 166. Districts need to consider and specify the timing of payments and include these in the terms and conditions agreed at the approval stage and specified to the LAB in the Grant Agreement letter In line with the requirements of Managing Public Money, grant payments should only be made on evidence of need and entitlement, and ideally in arrears, based on evidence of need or qualification provided from the LAB Where possible the Grant awards should be made in regular equal monthly instalments in arrears where evidence of need/entitlement is demonstrated against the deliverables, targets or indicators agreed as part of the application process. This approach balances risk and flexibility. It requires the monitoring of evidence of entitlement to assess the extent to which the terms for the next payment have been met, but minimising the need for recovery of overpayments Under this model the District Manager needs to specify minimum requirements, deliverables and indicators the Partnership is required to meet to trigger the grant payments as part of the monitoring and performance management of the grant and as specified in the grant agreement letter If the District Manager considers that this model will constrain the delivery of the Partnership objectives they may wish to consider an alternative payment model in consultation with their Finance Business Partner. This should broadly be in line with the following criteria: payment should be on the basis of delivery of the agreed minimum requirements, deliverables, and indicators of the partnership at the end of the grant period

25 where funding is required to support the delivery of the partnership, payment should be on the evidence of delivery in arrears at an appropriate frequency e.g. monthly if the payment is as a contribution to costs this should be in arrears at the end of the grant delivery period based on the evidence of delivery start up costs or upfront payments (as a percentage of the total value of the grant award) should be made to voluntary sector/ community bodies only, where there is clear evidence of need and not doing so would impair delivery of the partnership opportunity. In these circumstances CD Strategy and Business must carry out an FVRA evaluation and give approval for upfront costs to be paid The payment process at Annex 8 assumes that Flexible Support Grant Funding awards have been agreed and approved and the appropriate grant agreement letter setting out the details of the funding award and its terms and conditions has been signed by both parties Payment will be made using the non-purchase order invoice route for both single and phased payments The invoice submitted must be generated by the LAB. The LAB must ensure that the correct Account code (outlined in the bullets below and the guidance) and the District Cost Centre details are both included in the invoice Grant Funding for Mainstream Customers Grant Funding for Carers Grant Funding for Lone Parents Grant Funding for Partners Grant Funding for Sick/Disabled If the covers multiple categories the account with the greatest volume of customers should be used. District staff should then provide the cost split to their District Finance Business Partner for them to undertake a journal adjustment on RM Please also note that the cost centre should be the local District cost centre rather than the local Jobcentre office. Start Up and Implementation 176. The following provides hints, tips and considerations for implementing grant funding opportunities in your offices The Grant Funding Terms and Conditions letter provides the agreed start date of the grant funding opportunity, Prior to this date districts should consider: Communications to relevant staff informing them of the partnership opportunity being made available, communications could include start date, customer group(s), what the opportunity offers, number of available place and where to find additional details. This list is not exhaustive and you may identify and include other information which you think is relevant.

26 Setting up a local LMS opportunity type, Adding details of the opportunity to your District Provision Tool Advisers should be encouraged to signpost customers to partnership activities/opportunities (including those funded via FSF) available where, through diagnostic interviews they identify that the support available would benefit the customer in moving closer to or into employment The Adviser should be aware if that provision includes an element of work experience, the following steps need to be taken: They should ensure the customer is aware of their responsibility to let Jobcentre Plus know when it starts. When the Adviser refers a customer to the FSF provision, they have to ensure that they have established with the customer that the provision is the best way to support them into work. Once the customer informs their Adviser (EO) they can make the decision that it is reasonable for the customer to enter into the work placement without the need to refer to a Decision Maker, as long the customer are still available and actively seeking work as per the conditions of the customers benefit. Health and Safety 180. Districts must refer to the Safety on Programmes Framework guidance to ensure that Jobcentre Plus fulfil their health and safety responsibilities when placing claimants on provider placements, including placements made available through grant funding The HSQ1 Form must be completed by the prospective partner organisation, it is suggested that this form is issued at the application stage as part of the application pack as it covers the health and safety responsibilities and requirements should the organisation be successful. It is important that this form is completed before any claimants are referred to the placements being offered as part of the grant. Assurance 182. The Lead LAB will be required to provide Jobcentre Plus with Combined Monitoring and Claim Form (CMCF) and Statement of Grant Usage (SoGU), as evidence of the delivery of the partnership aims and objectives. The CMCF will provide assurance that the LAB is delivering the required minimum requirements and outcomes, targets and indicators in line with the application and the SoGU sets out how the grant has been spent, under pre-defined categories as set out in the Grant agreement letter, to enable Jobcentre Plus to monitor and report expenditure. Flexible Support Grant funding which is not spent during the period of the award will be recoverable. Management Information Requirements 183. To provide evidence of value for money and support future decision making each Jobcentre Plus District is required to forecast and report expenditure incurred through Flexible Support Grant Funding. This is based

27 on the number of grants awarded, in line with the normal monthly reporting cycle The transfer of personal information between the Department /Jobcentre Plus and LAB must comply with the Data Protection Act. This includes ensuring secure transfer and storage and seeking the claimants consent where details of individual outcomes are required by Jobcentre Plus. The terms of the grant agreement letter sets out the data security policy and requirements Management Information may also be generated from the Combined Monitoring and Claim Form (CMCF) and Statement of Grant Usage (SoGU) returned by the LAB setting out details of delivery against the minimum requirements, outcomes, targets and indicators of the partnership as set out in the grant agreement letter Depending on the nature of the award additional information may be available from the Jobcentre Plus Labour Market System (LMS), including information on referrals / starts. This is likely to be appropriate where the aims of the partnership provide for specific provision to which claimants could be referred. Recovery of Flexible Support Grant Funding awards 187. The Grant Funding Terms and Conditions template provides the LAB with details of instances where Jobcentre Plus may reclaim, reduce, suspend or withhold grant payments Where possible Grants made to LAB should be made in arrears based on evidence of need and entitlement. Because payments are phased, the instances where recovery of funding from LABs is required are expected to be minimal. They are likely to include cases where: the grant conditions have not been met funding has been fraudulently claimed, for example where receipts are not fully reflected in the LABs auditable accounts sale proceeds of a fixed asset funded by the grant award are to be recovered Where the grant conditions have not been met or the LAB under performs against the agreed conditions the District Manager or District Employer and Partnership Manager are encouraged to work with the LAB to try to improve the results If the District Manager is still not satisfied with the results they should write formally to the LAB using the Grant Funding Recovery Letter to explain the need to recover, reduce, suspend or withhold future grant payments The Recovery letter is a template that can be amended to meet the districts requirement. Where recovery of a payment is requested the LAB must be asked for repayment to be made within 30 days in line with the Terms and Conditions. Part 1 of the Grant Funding Recovery Template must also be completed and issued with the letter.

28 192. Where sale proceeds of a fixed asset funded by the grant are to be recovered, the District Manager will write formally using the Grant Funding Recovery Letter to the LAB explaining the need for recovery of payment and asking for repayment within 30 days. Part 1 of the Grant Funding Recovery Template must also be completed and issued with the letter In these cases action is required to seek recovery of funding from the LAB via BACs. This is the preferred method to handle recoveries from an information, security and segregation of duties perspective and remittance should be submitted directly to Accounting Services. Where exceptionally this method cannot be used, cheques from the LAB may be received by Districts. Recovering overpayment via BACs 194. DWP or Jobcentre Plus reserve the right to recover any Flexible Support Grant funding that has been overpaid, fraudulently claimed or which relates to sale proceeds of a fixed asset funded by the grant award An overpayment of a Grant may be identified as a result of routine checks of accounts by DWP Auditors, claimant report or complaint following signposting, or by the District Employer and Partnership Manager who has been involved in the development of the activity. Reasons for overpayment could include, but are not limited to, the: activity does not start within a reasonable timescale of the award or payment being made and the LAB has failed to provide the District Manager with a reasonable explanation for delay LAB has misinterpreted the guidance and viewed something as eligible expenditure LAB ceases to operate for any reason within a period deemed reasonable by the District Manager and proportionate to the level of funding awarded LAB is not entitled to all the funding it has received (i.e. should a payment of the grant be based on an entitlement model a reconciliation will be required to be undertaken to calculate the amount that the LAB should have earned, with the overpayment being recovered) A fraudulent claim for these purposes includes: submitting false receipts or an inaccurate combined monitoring or claim form submitting receipts or a claim for costs not falling within the definition of eligible expenditure submitting receipts that are not duly reflected on the LABs audited accounts evidence showing that funds have been used inappropriately the LAB is in breach of the de minimis requirements in that de minimis aid in excess of 200,000 Euro has been awarded in a three year period In these cases, where a potential fraudulent claim is identified, normal processes should be followed and advice sought on the referral from the Central Fraud Investigation Service (FIS) Single Point of Contact (SPOC).

29 198. If it is recognised that a non-fraudulent overpayment of a Grant funding has taken place, the Finance Business Partner will have to be notified. The Finance Business Partner should then verify such reports before considering any recovery action. A Manager within the District Management chain, who has not been involved in the authorisation process, should also then be nominated The nominated manager should write formally to the LAB explaining the need for recovery of the funding and asking for repayment within 30 calendar days of the date of the letter. A Grant Funding Recovery Template should also be sent with the letter to the LAB This stencil allows Financial Services Division (FSD) to identify the confirmation of recovery payment in the DWP bank account. The District Manager should complete Part 1 of the form with the LAB being required to complete part 2 of the stencil and make a payment to DWP via the BACs system On receipt of the recovery payment in the DWP bank account, FSD will notify Accounts Receivable of the accounting details and the District of the receipt of the recovery payment and complete Part 3 of the stencil On receipt of confirmation of payment, the District should update their budget records accordingly. Recovery of payment will appear on the transaction list as a credit entry against the Partnership Grant funding account code, (as per the cost centre and account code entries on the Recovery stencil).recovery will be credited to expenditure on the District cost centre and should be recorded as refunded for monitoring purposes. Action to take to recover an overpayment via cheque 203. The LAB should be asked to make repayments via BACs in all cases; however where the LAB does not follow instructions on the stencil and sends a cheque directly to Jobcentre Plus, the following action should be taken If the LAB sends a cheque to the Jobcentre District Office, they will need to follow normal procedures to ensure its receipt is recorded in the valuables record. If there is no cashier on site, they would complete Part 1 of the Grant Funding Recovery Template and forward to Accounting Services at Norcross, (using secure recorded delivery) If there is a cashier on site, the cashier should follow standard Finance processes in the Cashiers guide to account for the cheque. Overpayment not repaid or disputed 206. Where repayment is not made following the initial request, verbal contact should be made to try and establish any reasons why the repayment has not been received. For example, the original request may simply have been overlooked or mislaid. If repayment is disputed, then this should be investigated by a nominated independent person within the District Management chain who has not previously been involved in the case The outcome should then be communicated to the Grant recipient. If, following the investigation it is determined that the debt continues to be

30 repayable to the Department, a further request for repayment should be made. If repayment remains outstanding, then Legal Group DWP/DH Litigation team should be contacted for further advice based on the specific circumstances of the case. Community Budget/ FSF Partnership Grant Funding Process 208. All JCP Districts have the ability to pool money with Local Authorities (and other approved Lead Accountable Bodies), and the term Community Budgets is still being used to define this process, although it is more correct to call such initiatives FSF Partnership Grant Funding Annex 10 confirms that Community Budgets should follow the same procedures as for any other FSF Grant, but the forms should be adapted to suit the local requirement It is for the District Manager to satisfy themselves that each FSF Community Budget proposal is in line with their broader job entry objectives and meets the criteria in the guidance FSF Partnership Grants do not alter this - any FSF spend in the District will be at the discretion of the District Manager / WSD in line with DFA levels The Commercial Business Partner and Financial Business Partner will need to be engaged at the outset to provide advice regarding due Commercial process and financial probity and put forward proposals to develop a robust business case that will be acceptable to the DM and / or WSD. Process 213. District wishes to fund a LA/LAB initiative to ensure it can continue to deliver in local area or the LA approaches DWP, asking them to support a proposed initiative After discussions with LA and DWP finance Business Partner and Commercial Business Partner, District confirm they wish to fund a LA initiative: District and LA/partner/s agree who will be the LAB Note: refer to FSF Grant Funding: Application Guidance for a checklist regarding who is the lead partner with full eligibility / status to become a LAB. Clearly identify all Partners, and describe their role in the initiative; and confirm how much, if any, of the DWP funds they will have responsibility to spend FSF grant application is completed. The FSF Grant application is renamed FSF Partnership Grant Funding initiative. As with FSF grants, the FSF Partnership grant must also clearly demonstrate why DWP wants to support or tap in to LA funds / pooled funding arrangements. The Grant application must include: Aims and Objectives (to demonstrate VfM) Break down of costs what DWP will pay for

31 Expected outcomes either Job Entry or distance travelled Note: The Grant Agreement and Terms and Conditions will detail the agreed objectives at Annex D Clearly identify when the Grant will be paid for example, in advance of delivery; or instalments upon certain agreed trigger points The Financial Viability Risk Assessment (FVRA) process in respect of requests for advance Grant payments must be followed in all cases Next Steps The usual FSF process should be followed i.e. Assessment panel, FVRA, DM business case approval and T&C sent to LAB DWP will pay LAB via RM6 process Forms and letters 219. Below is a list of the forms and letters that are used in the Grant Funding Process: FSF Grant Funding Agreement Terms and Conditions FSF Grant Funding Application Assessors Guide FSF Grant Funding Application Feedback FSF Grant Funding Application Form FSF Grant Funding Application Log Sheet FSF Grant Funding Assessment Code of Practice FSF Grant Funding Financial Approval Stencil FSF Grant Funding Evaluation Template FSF Grant Funding Guidance for Applicants FSF Grant Funding Notification Letter - Successful FSF Grant Funding Notification Letter Unsuccessful FSF Grant Funding for Partners Checklist FSF Grant Funding Recovery Letter FSF Grant Funding Recovery Template FSF Grant Funding Template for Publicising on the DWP Internet FSF Proposals Needs Identification, WPD/Supplier Engagement and FSF Proposals Template Flow Diagram FSF Proposals Template FSF Grant Funding Termination of Grant letter Annex 1 The Decision Tree, Procurement and Grant Funding Escalation Routes. See link to the Decision Tree, Procurement and Grant Funding Escalation Routes.

32 Annex 2 What the Flexible Support Fund and Grant Funding cannot be used for Eligibility of the Fund 220. The FSF is only for customers that are not on the Work Programme, Work Choice or Community Action Programme It can be used, where the District Managers deems appropriate, customers who are not claiming benefit but are being supported by Jobcentre Plus to either move into employment or remain close to the labour market by improving skills Payments can be made to Lone Parents in Work (previously available under the In Work Emergency Discretionary Fund. See the In Work Emergency Payments for Lone Parents guidance. What all of the Flexible Support Fund cannot be used for 223. Due to the Departments Ambit of the vote and Commercial, European or Financial regulations, cannot use it: to support activity which conflicts with DWP policy objectives to duplicate existing available provision to replace income or benefit for claimants to introduce conflicting policy or previously removed policy ( in cases where Districts identify an opportunity that looks similar to a previous policy it will be for Jobcentre Plus to liaise with Strategy to agree the position ) to operate outside relevant legislation including the 2010 diversity and equality act constitute unlawful discrimination to pay for Disclosure and Barring Service (DBS) check formerly Criminal Record Bureau checks in line with the framework, however can meet the cost of enhanced DBS and Protecting Vulnerable Groups (PVG) checks in regulated sectors or jobs only, where the adviser is satisfied that all the eligibility criteria in the framework principles have been met All expenditure must be reasonable, defensible and fully aligned with existing DWP objectives What grant funding can be used for 225. In addition to the above there are further do s and don ts when considering grant funding local opportunities This section provides responses to some frequently asked questions in for what a grant may be used for: Food and drink to support the delivery of an event or opportunity could be funded but districts must be mindful of the policies impacting staff within the department to support more prudent spending. Covering staff costs for a partnership it is possible where required to cover staff costs for a partnership opportunity, consideration should be given

33 to the value of the costs in relation to the grant amount to ensure they represent good value for money. Match Funding - FSF can be used for Match Funding where it is deemed appropriate. DM s will know that awards must be appropriate, good value for tax payers money and ensure a claimant can move into work sooner than would otherwise be possible. So if, as this is all decided locally, and a DM wants to use their discretionary fund to provide support to people already receiving support via another means then they do have the flexibility to do so. However the DM must be aware that they are making this decision on behalf of Jobcentre Plus and any risks attached to it should be recognised and managed by the DM as they are ultimately accountable, as delegated budget holder. What grant funding cannot be used for 227. It is important to ensure that any proposals from applicants are free of any suggestion of conflict of interest or private gain Grants must not be awarded for any activities that discriminate in terms of eligibility and participation, or activities which bring the name of Jobcentre Plus/the Department into disrepute. However if there is clear evidence though that suggests that particular groups of claimants need extra support then these groups can be specifically targeted Grants cannot be used to fund: 230. Note: If a restriction on what the fund cannot be used for is not listed below then District Managers can use their discretion to decide whether it is appropriate to cover the spend: goods or services that should obtained through normal commercial procurement under the DWP s existing procedures mainstream provision or services delivered as standard within Jobcentre Plus Skills provision that should normally be delivered by Skills Funding Agency providers i.e. Job Seekers Allowance (JSA) and Employment Support Allowance Work Related Activity Group (ESA WRAG) claimants and others who have not yet achieved their first NVQ level 2 (level 3 if under the age of 25). Wage or recruitment subsidies to provide and incentive to employers. contributions in kind payments for activities of a political or exclusively religious nature deliberate impairment of fixed assets input VAT reclaimable by the Organisation/LAB from HM Revenue and Customs interest payments or service charge payments for finance leases; gifts Entertainment which would bring into question the use of public funds, for example corporate hospitality, launch events etc

34 to pay for rent / estates, however, short term, one off hiring of rooms to support the delivery of opportunities may be considered. statutory fines, criminal fines or penalties payments for works or activities which the Organisation/LAB, or any member of the Partnership has a statutory duty to undertake, or that are fully funded by other sources bad debts to related parties payments for unfair dismissal or other compensation working capital or be retained to cover future running costs and expenditure. activities that fall outside of the scope of the Department s Ambit of the Vote, further information can be found by referring to the DWP Guide to Funding Voluntary Organisations 231. Grants should not generally be used to purchase or improve fixed assets. Leasing items as opposed to purchasing should always be considered. Where this is not possible, the LAB will agree with Jobcentre Plus any plans to purchase or improve any fixed assets wholly or partly using the grant provided Any approved grant of 10, 000 or less can not be used to fund fixed assets A register of fixed assets which can be defined as a tangible piece of equipment such as office furniture, vehicles, improvements to existing premises etc must be maintained by the LAB, and the residual values reported. The residual value may be recovered at the end of the agreed funding period. The LAB should seek agreement from Jobcentre Plus where they propose to purchase fixed assets, either wholly or partly using the grant provided in excess of the following levels: 1,000 for Information Technology hardware and software other assets with a cost exceeding 5, Further details are set out in the Grant Letter - Grant Agreement and Terms and Conditions. Annex 3 Grant Funding Process and Financial Checks Process Flow 235. This process link should be used as a guide as the process can be tailored proportionately to the value of the grant. See link to Grant Funding Process Annex 4 - Conditions for State Aid. Question Response 2a Is the recipient of the aid (e.g. a local authority) acting as an undertaking? NB: an undertaking is defined as any entity which is engaged in economic activity and where there is a If No there is no State Aid Support in favour of non undertakings (i.e. entities

35 market in comparable goods or services. It does not have to be profit-making as long as the activity is one which has commercial competitors. It can include voluntary and non-profit making bodies, public authorities engaged in economic activity, charities, universities, social enterprises. Where a local authority is acting through a company that it has incorporated it is likely that it will be an Undertaking not involved in economic activity) is not state aid 2b Does the aid favour certain undertakings or certain goods and not others? i.e. does the aid/support target particular businesses, regions or types of firm e.g. SMEs or particular sectors and not others. Is it selective? 3 Does the aid distort or threaten to distort competition? If the aid/support has the potential to strengthen the position of the beneficiary relative to other competitors then this criterion is likely to be met. The potential to distort competition does not need to be substantial or significant and this criterion can apply to relatively small amounts of financial support and firms with little market share. 4 Does the aid/support affect trade between Member States? Commission s interpretation of this is broad it is sufficient that a product or service is tradeable between Member States, even if the undertaking does not itself export to other EU markets. This test is not met in very limited circumstances e.g. a single, small business in a very localised activity e.g. hairdressers, drycleaners. If No there is no State Aid If the aid is not given selectively, but is a general measure, it will not be State Aid. If No there is no State Aid if No there is no State Aid Annex 5 Grant State Aid Flow Chart See link to the Grant State Aid Flow Chart. Annex 6 FSF and the Equality Act The new public sector equality duty came into force on 5 April The general duty requires public bodies to have due regard to the need to: eliminate unlawful discrimination, harassment and victimisation and other conduct prohibited by the Equality Act 2010

36 advance equality of opportunity between people from different groups; and foster good relations between people There are two broad aspects to what we need to achieve: we need to understand the overall experience and impact our policies and services have on each of the protected groups (and to support that by published data); and we need to consider equality issues within individual decisions at the time we make them. What does this mean in practice? 238. Where we are making decisions that affect staff and / or claimants we need to be able to demonstrate how we have shown regard to the Equality Act s general requirements. The six key principles from case law are: organisations must understand the duty it must be applied properly, and at the right time (before decisions are made, not afterwards) genuine and open-minded considerations are given the duty is non-delegable (it remains with us even if we ask others to deliver our services) the duty is a continuing one and must take account of evolving services and functions it should be accompanied by adequate record keeping and evidence from the relevant time All employees have a duty to behave in a way that is consistent with the requirements of the Equality Act and need to comply with policies and procedures put in place to meet these legal requirements. This is particularly important for the Flexible Support Fund where decisions will be made locally and the risk of not complying with the legislation could lead to successful challenge by individuals or groups, with associated reputational damage and potential legal costs For further information please see the Diversity and Equality Intranet site or contact the Equality Business Partner in your area. Annex 7 Financial Checks Process Flow See link to the Financial Checks Process Flow. Annex 8 Payment Process See link to the Grant Funding Payment Process Annex 9 - Process for Delivering via the Jobcentre Plus Support Contract Provider The Support Contract 241. The JCPSC provides core jobsearch support for all Jobcentre Plus claimants (including Lone Parents, partners, carers and ESA/IB). Whilst you have flexibility on how you spend the core funding subject to the scope of any variations agreed (provided you target it on agreed claimant groups). The

37 JCPSC budget is ring fenced and you are not able to switch funding from the JCPSC to other activities as we are contractually committed to pay the full contract value. At present the budget for this core funding is held by Employment Group rather than Jobcentre Plus but, depending on the outcome of the JCPSC Review, this may change Before using additional funding from the FSF to top up JCPSC provision District Managers should consider whether required provision can be funded from within the overall contract, i.e. by switching contract funding between modules For further information on the delivery of the JCPSC see the Jobcentre Plus Support Contract Adviser Guidance 244. If District Managers decide to top up JCP SC provision using the FSF, they should contact the Work Programmes Division Performance Manager before doing so. Initial Considerations 245. As explained above, the FSF covers the core JCPSC activity. This guidance relates to spending you wish to introduce into the JCPSC in addition to your contracted JCPSC provision District Managers have the flexibility to open up the JCPSC to 16/17 year olds where they believe this would be an effective way of supporting this group and would be good use of their allocated fund For FSF requests to be delivered via the JCPSC, the requirement must first meet the following criteria to ensure that it doesn t breach legal single tender regulations or form a material change to contract. Early discussion with your WPD Performance Manager will assist you in this: be within the scope of the original service requirement and intent of the JCPSC not already be available, or replicate what is currently available (unless over subscribed) either through the JCPSC or any other provision being delivered in your Contract Package Area (CPA). This would include maximising capacity of existing JCPSC modules for value for money purposes be deemed an acceptable risk to challenge from the market place. Scope 248. Consideration of what is in scope of a contract is not straightforward. Here are some thoughts to consider as to what may or may not be considered in scope. More modules of the same specification as those already in the programme are likely to be in scope. This is subject to the relative value of the purchase (See below). The intent of the programme is for claimants requiring a moderate degree of additional job search related support to secure a job. JCPSC was NOT designed to include those with substantial needs.

38 JCPSC was NOT designed to include those who are likely to find a job through their own efforts and/or with support from their Jobcentre Plus Personal Adviser alone; or New Enterprise Allowance. The policy intent is that all Skills related training including Literacy / Numeracy, ESOL and vocational skills courses are normally delivered by Skills Funding Agency Colleges or Providers The JCPSC allows us the flexibility, by agreement, to add additional business for: Vocational Training Jobsearch training including the Support Centre Rapid Response Service Job Focussed Training (for 4 or more claimants at a redundancy) Pre Employment Training where Skills Funding Agency or Devolved Administrations are unable to deliver Partnership Funding in the three specified Contract Package areas (Nottingham, Manchester and Merseyside) New modules within the original scope (These were clearly set out in the specification against which the market chose to bid or not) These were clearly set out in the specification against which the market chose to bid or not Any other additional business would potentially be subject to challenge by the market, and must be properly considered before any discussions with suppliers could take place. Risk 252. There is an increasing risk of challenge from the market place in relation to changes we make to existing contracts. This means that any changes made to the original specification or scope of the contract may be closely scrutinised by organisations who were not awarded the contract(s). If DWP seek to introduce a change to an existing contract that is deemed to have denied the market an opportunity to bid there is potential for challenge from those who would have sought to acquire that business. This is dependant on the appetite of the market place to challenge and so is impossible to define The most common (but not exclusive) indicator of risk is the value of purchase request being deemed excessive, relative to the total contract value. The value of purchase is either the single proposal value, or the aggregated value of all other proposals which have been delivered through the same contract across the life of the contract. For JCPSC, the contract was let for an initial 5 years DWP will consider all FSF requests to be delivered via the JCPSC on an individual basis in relation to the needs identified by Jobcentre Plus, however close scrutiny is paid to the proposal(s) financial value and impact against the total contract value. The aggregated cost of all proposals which includes every proposal which has been previously added to and delivered via an

39 existing contract has to be considered under existing EU Procurement Regulations. Your WPD Performance Manager will be able to advise or seek advice on proposals relating to your District. Early discussion with your WPD Performance Manager is advised in all circumstances The Minister for Employment has confirmed that FSF proposals are exempt from the Ministerial Contract Approval process to improve the flexibility and efficiency of implementing the requirements of the FSF proposals. Therefore no Ministerial Contract Approval activities need to be undertaken, consequently no additional information requests will be placed on Jobcentre Plus other than those directly required by WPD to undertake the contract variation process The FSF Proposal Template must be completed in full and authorised before it is submitted to your WPD Performance Manager. It is essential that all areas of the form are completed, as any missing information will be requested at a later stage, and will impact on the processing of the proposal The FSF proposal template includes specific questions (with guidance notes) to support your completion of the form. Particular attention should be paid to the notes on the template, as supply of this information is critical to the contract variation process. Identification of Local Training Requirements 258. Once Jobcentre Plus has identified the appropriate funding stream from using the FSF Guidance, a requirement and specification can be developed The specification should include: Claimant Group and any specific needs aims of course steps to achieve aims length of course locations trainer qualifications any materials required or to be developed referrals mechanism there should be a re-iteration that payment will be on completion, and the terms on which invoices will be submitted and paid (see below) Further detailed guidance on the creation of specifications can be found in the Procurement Reference manual A central database of previously designed and agreed Specifications are available to allow standardisation and best practise Where a requirement can be delivered via an existing contract, discussions between Jobcentre Plus and the existing contractor are encouraged to be undertaken as early as possible, but must remain informal or without prejudice until a formal Contract Control Notice has been issued to the contractor by WPD.

40 263. Discussion in relation to willingness / ability to deliver is recommended, and it is pertinent to also clarify the suppliers; capacity for delivery, to ensure indicative Jobcentre Plus timescales can be achieved. The outcome of these discussions will also improve the efficiency of the later stages of the variation process Offers or assurances of business must not be made. It is crucial that your WPD Performance Manager is involved in - or made fully aware of - any communications undertaken between Jobcentre Plus and the with contractor A full process map of activities is detailed in the FSF Proposals Needs Identification, WPD/Supplier Engagement and FSF Proposals Template Flow Diagram. Any concerns or issues with any part of this process can be raised with your WPD Performance Manager in the first instance. Payment Process 266. When service delivery takes place via the JCPSC, the provider is paid via the service delivery fee payment model. This means that the total cost of the provision requirement is divided by the number of months of the provision duration. The provider will then submit monthly invoices for that amount Invoicing and payment process arrangements must be agreed prior to the submission of the FSF Proposal Form. It is the responsibility of the Single Point of Contact (SPOC) to ensure suitable arrangements are in place within the CPA or District to process invoices from the supplier on receipt The invoice must reflect the service fee amount agreed at the outset. Jobcentre Plus will validate that delivery has taken place via the standard 10% check against starts on provision recorded on LMS and the budget holder will validate the agreed cost against invoice Jobcentre Plus will add the relevant cost centre and account code details and forward the cleared invoice to Cardiff for payment where it is input on to RM. The Invoice Approver for the District cost centre will receive a request for approval via workflow. Payment is generated via BACs and will be received within 3-5 working days following approval in RM. Annex 10 - Supporting the Community Budget Process 270. The principles and processes governing the award of FSF grants allow for the pooling of FSF money in Community Budgets. Note here that the standard FSF Approval templates and documentation can be adapted locally to suit the individual requirements of the Community Budget initiative Districts have the ability to pool money with Local Authorities, and the Community Budget process in the guidance should be used even if they are not an official "Community Budget area". This is a slightly different payment process to normal Grants which removes some of the requirements i.e. invoices Ultimately, it is for the District Manager to satisfy themselves that each FSF proposal is in line with their broader objectives, and meets the criteria in the guidance, however, Community Budget initiatives do not always have to be tied to clearly identifiable job outcomes. Evidence has shown that the

41 ability to put money on the table significantly increases the DM s ability to influence other partners to support customer / claimants As this might be more difficult to quantify in absolute value for money terms, the District Manager has the authority to decide about FSF spend in the District, supported by the Commercial Business Partner and Financial Business Partner who will provide advice regarding due Commercial process and financial probity and put forward proposals to develop a business case that will be acceptable to the DM and / or WSD However, although the opportunity is likely to have been identified differently to other types of grants, it is still important to provide justification for supporting the initiative and how this supports local and DWP objectives For example: contributions to Community Budgets will most likely arise as a result of discussions between the relevant local public sector partners (including Jobcentre Plus) about tackling common priorities together; it will not therefore be necessary to apply the application process because these are deals between public sector agencies it is not necessary to publicise them as 'opportunities' (the purpose of which is to mitigate the risk of accusations of partiality); although in the interests of openness and transparency, and accountability to the local community, and maybe to broadcast a good news story, the Partnership may decide to publicise the arrangement; of course DMs are at liberty to do the same if they wish because the LAB will always be a local authority and pooled funds will be subject to the Local Authority Finance System; as local authorities are rated as a low risk and are therefore automatically approved it will not be necessary to take FVRA action DWP is party to an interdepartmental Memorandum of Understanding (MoU) which requires DCLG (Department for Communities and Local Government) to provide the Accounting Officers (Permanent Secretaries) of contributing Government Departments (as opposed to local partners) with financial assurances to fulfil their responsibilities once funding has been pooled in Community Budgets The MoU does not commit DWP to pooling funding in Community Budgets but becomes operative where and when DMs choose to contribute and transfer money to the LAB However, to support their decision and satisfy the formal approval process, DMs will be required to have: a sound business case for pooling the funds a formal agreement with the local authority The business case will need to include the aims, objectives, agreed outcomes, amounts to be pooled and the indicators and / or targets to be reported.

42 278. The business case should be assessed by at least two or three people including the Finance Business Partner as per the Grant Funding Guidance 279. A financial approval stencil will need to be completed and approved by a manager with the relevant Delegated Authority 280. The formal agreement should set out the aims, objectives, agreed outcomes, details of payments, indicators and / or targets to be reported and any other arrangements deemed necessary by the District Manager. The agreement is based on the grant funding terms and conditions Local partners will be involved in agreeing contributions, aims, objectives, outcomes and information to be reported so in most cases it is likely that the partnership will have such an agreement, but this could be supplemented by an agreement based on the terms and conditions letter if required. Worked examples of Community Budgets and the State Aid Washthrough principle 282. Local Authorities are subject to the same State Aid regulations as all other not-for-profit organisations; however, when DWP give FSF funding via a grant to a local authority as Lead Accountable body, it is important to identify at the outset who will spend that money. Will it be the Local Authority themselves, or will they engage other partners? The following worked examples attempt to describe the differences, describing the State Aid wash-through principle, and describe in outline, what the process should be in each case: Example 1 DWP give a Grant of 80k to a Local Authority, and as LAB themselves, they spend 80k on the initiative - they sign the de minimis / or SGEI declaration for 80k whichever applies. This case is straight forward; JCP District record 80k against LA on State Aid data spreadsheet. Example 2 DWP give 80k Grant to LA. They work in Partnership with a not-for-profit partner organisation, and the LA gives 40k to that body (wash-through) to carry out half of the Partnership initiative, and spend 40k themselves on delivery. LA and notfor-profit organisation both do State Aid declarations for 40k each. JCP District record 40k against both LA and not-for-profit organisation on the State Aid data spreadsheet. Under washthrough, the LA acting as LAB will be required to give assurance to DWP that they will obtain the State Aid declaration from the not-for-profit organisation for 40k; and that in default of aims and objectives, they either have a recovery procedure in place, or they will be liable themselves to repay the full 80k Grant. The LA will also be asked to agree that they are solely responsible to repay the full 80 to DWP if the Grant initiative fails entirely. BUT Example 3 DWP give 80k Grant to a LA as LAB for a Community Budget / pooled funds arrangement. LA do not spend any Grant money directly themselves. This is

43 done by various not-for-profit orgs delivering several elements of the initiative with multiple partners. So unless a process tracking the money agreed at outset, the LA as LAB might not be able to identify which not-for-profit partner delivers each element using the DWP money. Clarifying spending, like 2 above will apply (e.g. 80k Grant via 4 partners each spending 20k - they all give a State Aide declaration for 20k.) But Terms and Conditions need to clearly identify which not-for-profit will do the spending, and for small amounts, this will get very messy; but LA as LAB will give assurance to DWP that they are solely responsible as LAB to repay the 80k, or un-spent elements and carry out recovery etc themselves JCP District record 4x 20k against each not-for-profit partner on State Aid data spreadsheet; Example 4 DWP give 80k to a LA as LAB for a Community Budget initiative / pooled funds arrangement. LA do not spend any of the 80k themselves, but the LA go to the market to contract out the delivery, and private sector companies deliver all aspects of the Grant money spend. This is not classed as State Aid because the payment of Grant does not distort, or threaten to distort the market because the LAB have tested the market via open competition. JCP District register the 80k Grant on the State Aid data spreadsheet for the LA, but choose the 'not State Aid' option on the drop down. Payment Process 284. The timing of payments will have been included in the Community Budget Terms and Conditions Letter as described in the assessing and approving applications Payments do not need to be made in arrears, but ideally should be phased in case delivery costs prove lower than planned and the amount approved is not required For Community Budgets payment must be made based on the agreed terms of the claim or invoice submitted by the Local Authority via the RM6 process RM6 is the current payment mechanism for grants to OGDs (as a permissible area of non commercial spend). See RM6 payment form and process The requestor and approver completing the RM6 must ensure that the correct Account code(s) (outlined in the bullets below and guidance) is selected on the RM Local Initiatives to help JSA customers into work Local Initiatives to help Carers customers into work Local Initiatives to help Lone Parents customers into work Local Initiatives to help Partners customers into work Local Initiatives to help Sick/Disabled customers into work.

44 289. There is space on the RM6 to split the costs between up to two different customer groups, where relevant. If the Community Budget proposal covers more than two categories of customer, the account(s) with the greatest volume of customers should be used. District staff should then provide the cost split to their District Finance Business Partner for them to undertake a journal adjustment on RM. Annex 11 - Using the DWP Internet Site 290. If deemed to be the most appropriate route to publicise opportunities, Districts may wish to use the DWP website to publicise opportunities, please contact Liz Curbison from the digital media team in the first instance to discuss publication requirements, including timescales. The Digital Media Team will publish opportunities on the Gov.uk website 291. Once a date is agreed, the district must complete the Template for Publicising on the DWP Internet with details of the opportunity. The District must provide the details of a nominated contact on the template so that prospective applicants can request application forms and customised guidance The Digital Media team will check the content of the template to ensure the necessary information is included and DWP standards, such as plain English, are met. If the template does not meet the requirement, it will be returned to the District for amendment. Once it has been agreed, the team will set up a web page on a test server to allow you to check it before publishing You must also specify an end date for the item to be removed from the website Remember to allow sufficient lead time for publishing your opportunity, and discuss this with the team before setting any deadlines Annex 12 - Customising the FSF Application Form Page 1 Cover Page Insert the name of the Jobcentre Plus District. Insert the minimum requirements of the partnership. This should include delivery of the specific partnership activity required to meet the locally identified need. Insert any required outputs, targets and/or indicators. These should be quantified. Note 3: insert a contact address and the closing date for applications. Note 4: insert the return postal address for applications. Section B Detailed Proposal Box 1 - Insert headings to take into account specific minimum requirements of the partnership against which the application will be assessed. Box 2 Insert any specific cost information that is required to assess the proposal such as unit cost.

45 Section E: Profile Information Box 1 Insert any profile information required at a minimum this could include the delivery period but other items you may want to include are profile of starts, expenditure and outcomes. If payment is going to be linked to a delivery profile this information should be sought. If no profile information is required this section should be deleted. Corresponding deletions will also need to be made to the Guidance for Applicants form. Section F: De Minimis Aid Declaration Fiscal Year and date aid was granted Insert fiscal year in which the aid was granted, this should always contain the current year and the previous three fiscal years. Generally a fiscal year is defined as 06 April to 05 April. Customising the FSF Grant Funding Guide for Applicants Page 1 Cover Page Insert what the Grant Funding delivery details. Inset date the advertisement was placed. Insert details of where additional information about FSF can be found. Insert Jobcentre Plus contact address. Insert Jobcentre Plus district and the Local Authority Districts or target areas of the partnership opportunity. Section B Detailed Proposal Your proposal Insert the required detail relating to the specific partnership opportunity as specified in the minimum requirements of the application and advertisement. General Specify if the partnership is targeted at a particular client group. General - Insert any additional guidance relevant to the proposed application. Box 2 Insert any further detail required related to the specific partnership opportunity or minimum requirements Once populated and customised the application packs and guidance can be issued to the prospective applicants All applicants including existing partners must be provided with the same levels of information to take into account public law principles of fairness and equal treatment to avoid any legal challenge. Annex 13 - Flexible Support Fund: guide to the grant letter Background: 297. The grant letter forms the basis for the delivery of FSF grant funding partnerships and is the agreement between Jobcentre Plus and the LAB. Jobcentre Plus relationship is with the LAB, any discussion or negotiation regarding performance, finance or other matters in relation to the terms and conditions of the grant should be between Jobcentre Plus and the LAB only. The agreement is commercially sensitive, which means it is a confidential agreement and Jobcentre Plus should not discuss any of the detail of the

46 award or associated performance, finance or delivery issues with the LAB s partners or competitors Whilst Protective Markings do not apply outside of Government, it is the originators responsibility to assess the risk of sending information in Confirmation of Successful Application and Grant Funding Agreement & Terms & Conditions letters, outside of the department. Originators should use Protective Markings Guidance to assess on a case by case basis. Most commercially sensitive documents could be classified as PROTECT and, in the majority of cases, the letters can be issued to the LAB by . Some content may merit a RESTRICTED classification and secure post may be appropriate. It is the originators responsibility to assess each case individually to decide the transmission method. The return of the completed letter from LAB s should be by secure post The LAB is responsible for managing its partnerships ensuring its partners comply with the terms and conditions and any statutory requirements and ensuring that overall, delivery is in line with the terms and conditions of the grant, which include the application document Successful applicants, on reviewing the terms and conditions of the grant letter, may request some changes, deletions or additions to the terms and conditions. Any request to amend the terms and conditions of the grant must be declined. The grant letter is a standard document used for all FSF grants. Completing the template: 301. The grant letter template requires some manual input to tailor it to a particular grant award. This guide sets out the key input requirements and principles which must be followed. Key to ensuring the accuracy of this process is ensuring that the completed template is checked by a second person, who will be responsible for signing off that the template has been completed correctly. This reduces the risk of input or calculation errors which could lead to Jobcentre Plus awarding more funding than was intended. This is important because once signed, Jobcentre Plus are bound by the terms of the grant including the grant value, even where that is incorrect, unless the LAB agrees to accept a corrected version This guide also contains information on the action required on receipt of signed and un-signed grant letters, returned by successful applicants, and includes a summary of the key responsibilities of LABs and Jobcentre Plus Completion of the grant letter template is linked to the logging of applications. Districts should have in place a logging spreadsheet based on the template: Grant Funding Application Log Sheet. The application log provides an important part of the FSF grant funding audit trail and should be kept up to date in all cases The following is a step-by-step guide to completing the grant letter template: Note: in all cases where instructions are given in the document about required input, also delete the instruction about that input when entering the required information. The instructions will usually be within square brackets.

47 Note: keep a check on the number of pages the document has, if any input causes the number of pages to increase, the reference to length of the document on page 1, paragraph 4, will need to be amended. Page 1: The name, address telephone number and address of the Jobcentre Plus signatory must be included at the top of the letter, together with the date the template is completed. The name of the recipient should be inserted; this should be the Senior Responsible Officer from the LAB and can be found in contacts box above section A in the application document or the district s application logging spreadsheet. Paragraph 1: insert the name of the district. Paragraph 2: insert the total grant value. This should be taken from the Assessment Document. Paragraph 2: Delete requirements, outputs, targets and or indicators as appropriate based on the requirements of the partnership activity. Information on the specific requirements of the partnership can be found in the Assessment Document. Paragraph 3: insert the District Managers address and phone number. The electronic signature and name of the signatory should be inserted at the bottom of the page. Page 2: Insert the name of the LAB and the Grant Determination Number at the top of the page, both these can be found on the district application logging spreadsheet. Paragraph 2: insert the name of the LAB and Grant Determination Number. Paragraph 3: insert the name of the LAB. Paragraph 4: insert the total grant value and the name of the LAB. The electronic signature, name and address of the signatory should be inserted at the bottom of the page, and the date included underneath. Check: the date should match the date on the covering letter (page 1). Page 3: Insert the name of the LAB and the Grant Determination Number at the top of the page, both these can be found on the district application logging spreadsheet. Paragraph 1: insert the date (to match the entries on pages 1 and 2), and the name of the Partnership. If the LAB has not given the name of their partnership, insert the name of the LAB. Paragraph 2: Insert name of the LAB Paragraph 3: Insert name of the LAB Paragraph 5: insert the date (to match the entries on pages 1, 2 and 3).

48 Page 4: Insert the full postal address of the office to which the LAB should return the signed document. It would also be helpful to include a named contact and their telephone number in case of queries. Page 6: Delivery Period: Insert the date during which the LAB will operate their partnership. Grant Award Period: Insert the date during which the LAB will operate the partnership. Page 7: Paragraph 4: insert dates from which the grant support commences and ends. Page 9: Paragraph 10: Insert name and contact details of the person in the DWP district / region press off who will be responsible for clearing marketing products. Page 10: Paragraph 18, bullet point 6: insert the Grant Determination Number. Check: this should match the entries on pages 2 and 3. Page 13: Paragraph 35: insert the Jobcentre Plus and postal addresses to which the Statement of Grant Usage should be returned. Page 19: Paragraph 2: Insert the minimum requirements of the partnership, these will have been agreed by the District Manager in advance of the partnership opportunity being publicised. Paragraph 4: Insert agreed targets and outcomes where applicable. Paragraph 5: Insert primary indicators of success. Page 20 (Annex E) Paragraph 2: Insert Grant Value this should be taken from the Assessment Document. Combined monitoring and claim form reporting period: This table must be completed inserting the claim star date, claim end date, the date by which the CMCF should be returned and the value of the monthly payment. Paragraph 5: Insert Grant Value this should be taken from the Assessment Document. Annexes: Note: Do not complete any of the instruction fields in Annexes G to I because Word versions of the forms/ returns which the LAB are required to complete and submit will be sent to them separately from the district.

49 For the purposes of the State Aid de minimis declaration at Annex J, the Grant Funding Terms and Conditions letter should show the amount in Euros based on the exchange rate as of the date of the letter. The EU Financial Programming and Budget calculator must be used. Action on completion of the template: 305. Once the template is fully completed, log it on the district logging spreadsheet. The template should then be passed to the checker for validation of the input. Recommended checks: 306. It is recommended that the checker validates all input fields, however, as a minimum the following should be checked: the DRAFT watermark has been removed; all references to the name of the LAB are correct and match; the reference to the number of pages on page 1 matches the number of pages in the grant letter; all date entries match; all Grant Determination Numbers match; the grant value has been correctly calculated; all grant value entries match; the monthly payments have been correctly calculated; and the profile matches that agreed with the LAB. Action on completion of the checks: 307. Once the checks and any required amendments have been completed, the checker should record that the check has been undertaken on the district logging spreadsheet Once the template is fully and correctly completed, the completed template should be converted to a PDF document ready for sending to the successful applicant Record the issue of the grant letter on the district logging spreadsheet. Action on receipt of a signed grant letter: Receipt of the signed grant letter should be recorded on the logging spreadsheet on the day of receipt. The document should then be checked to ensure it is fully completed to include: page 3: ensure that all boxes are correctly completed, including a signature in the signatory box; page 4: where applicable, ensure the guarantor box on page 4 is fully completed, including a signature; page 23 (Annex E/F): ensure the bank details form is fully completed, including the signatories and sample signatures; and

50 also check that the signature at page 3 matches one of the signatures provided at Annex E/F (CLAIM1 Form). Provided all is in order, the district should instruct the LAB to send their first payment invoice to Shared Services. The CLAIM1 form, Annex E/F of the grant letter should be retained for information, including authorised signatories and sample signatures. A copy does not need to be provided to Shared Services unless specifically requested. Shared Services will check with the district to ensure the payment is due. The district will need to provide Shared Services with a named contact and may need to provide shared services with a copy of the signed grant letter this can be sent by secure courier. Action on receipt of an un-signed grant letter: If the successful applicant returns the grant letter unsigned, indicating that they do not wish to accept the terms and conditions, the date of receipt and reason, if known, should be recorded on the district logging spreadsheet. The case should then be referred to the district manager for a decision on how the district should proceed, there are two choices: contact the applicant that scored second highest and, if they remain interested, send them an offer letter; or make arrangements for a new advertisement to be run, either because there was no second applicant or the quality of the application from the applicant that scored second highest is not considered high enough. Main Lead Accountable Body (LAB) responsibilities: Summary of the key terms and conditions with which the LAB must comply (see also Annex B of the grant letter): Description of Responsibility Grant Letter Reference Eligible Expenditure: all expenditure must be eligible and fit within one of the following three criteria: start-up costs, administration and staffing costs. Keeping accurate financial records, supported by an audit trail, covering expenditure. Registering as a data controller with the Information Commissioner s Office and providing Jobcentre Plus with evidence of that registration. Annex A, para. 4 Annex A, para. 25 Annex A, para. 13 Submitting all records to the Department upon request. Annex A, para. 26 Clearing marketing materials with DWP before use. Annex A, para. 10 Complying with relevant legislation, in particular the Data Protection Act this includes ensuring their partners do the same. Annex A, para. 50

51 Seeking consent from participants to share data and enter details in the evaluation. Annex A, paras & Annex I Safeguard the grant funding against fraud and theft. Annex A, para. 21 Retaining documentation for a minimum period of 2-years after the last participant has left the scheme, unless statutory requirements require documents to be retained for longer. Submitting the monthly CMCF in line with schedule at Annex E of the grant letter, using the template provided payments are linked to these returns. Submitting two Statements of Grant Usage using the template provided. Seeking authorisation to purchase fixed assets and maintaining a register of assets purchased. Ensuring state aid compliance for the LAB, its partners and for participants commencing trading, including administering the signing of a de minimis statement to allow access to the allowance and loan for participants. Repaying funding identified as overpaid, in line with the terms of the grant. Complying with changes to the terms of the grant where Jobcentre Plus change them in line with paragraph 53 of the grant letter. Annex A, para. 25 Annex A, paras & Annex E Annex A, paras & Annex H Annex A, paras Annex A, paras Annex A, paras Annex A, para. 53 Note: the list on this page (only) can be shared with the LAB provided that it is presented as non-exhaustive and the communication makes it clear that the list should be read in conjunction with the grant letter, is presented as advice and does not replace or override the terms and conditions of the grant letter. Annex 14 - FSF Abbreviations and Glossary General terms Term Meaning / Description Barriers To Work An identified difficulty that a claimant/customer needs to overcome in order to take up a job, that can be funded from FSF. Usually goods or services such as clothing, equipment or tools, travel or specialist training/certification. Information about restrictions on buying training can be found in Payments to Remove Customer s Barriers to Work guidance Childcare / Replacement Financial help for the cost of the

52 Care claimant/customer to arrange care for their dependant when attending an employer/provider interview of event; attending adviser interview; or undertaking activities approved by the adviser. This can also include help undertaking work experience or sector based work academies as part of the Get Britain Working measures. DBS & PVG Framework The circumstances when advisers can use the FSF to reimburse the cost of enhanced Disclosure & Barring Service (DBS) or Protection of Vulnerable Groups (PVG) checks in regulated work sectors. Community Budget The facility for Districts to use their FSF to support local partnership working between public sector organisations by pooling monies into a Community Budget. This supports a multi agency approach that benefits DWP s objectives in addressing local labour market challenges. Disclosure & Barring Service (DVS) See DBS & PVG Framework Flexible Support Fund (FSF) Introduced from April 2011 by pooling a number of previously different funding streams FSF is not available to those on the Work Programme, Work Choice or participating in CAP. Grant Funding A feature of the FSF, Grant Funding can be awarded by Districts to deliver additional services via Lead Accountable Bodies. This is normally a partnership where the LAB and or other partners contribute resources or monies as well. Payments are made to approved organisations to support partnership working which addresses local labour market conditions and needs, including tackling persistent worklessness and complex challenges to employment. A Grant Register is available to record State Aid awarded through FSF Grants Lone parents with inwork emergencies Help for eligible lone parents from the FSF to overcome certain financial emergencies within the first 26 weeks of starting work that will help them retain work. (Previously the In-Work

53 Protecting Vulnerable Groups (PVG) Rapid Response Service (RRS) Retail Trade Framework (RTF) Jobcentre Plus Support Contract Travel Costs Emergency Discretion Fund) See DBS & PVG Framework RRS works in partnership at District, Group or national level, to provide appropriate goods and/or services to address the effects of job losses on individuals and local communities. RRS aims to help people secure work or move into self employment quickly, ideally without the need to claim welfare benefits. Services are funded out of Pot A of the FSF and managed nationally. A framework introduced from August 2010 by Commercial Directorate of approved suppliers who can deliver retail goods to claimants and customers eligible for support via the FSF. The main resource, available nationally, for advisers to consider using to help claimants improve job search skills & readiness for work. Funded through mandatory element of FSF, although additional capacity can be purchased from the non mandatory element FSF Payment from FSF to cover the costs for eligible claimant/customers to attend job interviews, Work Trials, adviser interviews or any other activity approved in advance by an adviser. Grant Funding terms Term Meaning / Description Assessment Two people (minimum) to assess Grant Funding applications. It is recommended that one should be the District Finance Business Partner, with the remaining members no lower than Executive Officer grade. There should be appropriate separation of duties between those involved in working with partners and those involved in the assessment and authorisation process. For example, where a partnership manager has been working with a range of partners who have applied for opportunities that manager must not be involved in the assessment process Asset Lock Ensures that assets held by the CIC or SPV (ie any grant funding provided) are dedicated to the purpose and delivery of the aims and objectives of the community interest, including the

54 Combined Monitoring and Claim Form (CMCF) Community Interest Company (CIC) objectives of the partnership activity for which grant funding may be awarded. See also: Community Interest Company Special Purpose Vehicle Evidence provided by the LAB of the delivery of the partnership aims and objectives. The CMCF provides assurance that the LAB is delivering the minimum service requirements and outcomes in line with the application. See also Statement of Grant Usage A limited company with special additional features created for the use of people who want to conduct a business or other activity for community benefit, and not purely for private advantage. This is achieved by a community interest test and asset lock which ensure that the CIC is established for community purposes and the assets and profits are dedicated to these purposes. Registration of a company as a CIC has to be approved by the Regulator who also has a continuing monitoring and enforcement role. See also: Asset Lock Special Purpose Vehicle Current Ratio Part of the FVRA as a measure of the short term liquidity of a business and its ability to meet its debts as they fall due (the ability of a business to meet short term commitments). Calculated by dividing the Current Assets by the Current Liabilities. The lower the ratio, the greater the perceived level of risk. Red = ratio of 0.8 or less. Amber = ratio between 0.8 & 1.1. Green = ratio over 1.1 See also: Financial Viability and Risk Assessment Grant Cover. De Minimis limits The minimum value of a State Aid-funded Grant that requires open tendering to all EU eligible

55 organisations (EC Commission Regulation no. 1998/2006; 15 December 2006.) Conversely, this is the maximum amount a District can award without needing to tender across the EU. The current level is 200k over a rolling 3 years. See also: Delegated Funding Authority Decision Maker The person within a District who has responsibility for awarding Grant Funding tenders. Usually the District Manager. Delegated Financial Authority (DFA) Financial Viability and Risk Assessment (FVRA). The required authorisation limits for FSF Grant funded projects: Up to 50,000 District Manager Up to 500,000 Work Services Director Up to 25m Director of Work The Minister for Employment requires all contracts let in connection with FSF which have a value in excess of 1m to be subject to the Ministerial Contract Approval Process (MCAP). The Financial Viability and Risk Assessment assesses and monitors the financial stability of DWP suppliers. The process originally covered Welfare to Work suppliers but now covers all suppliers. A full FVRA review is based upon a standard set of data provided by the prospective supplier. This is overlaid with additional intelligence and analysis produced by the wider DWP commercial teams to provide further context and assurance to the assessment. A lighter-touch review can be undertaken based purely on published financial statements if, for example, an urgent FVRA opinion was required. Ad-hoc reviews can also be requested if there are any concerns around the financial stability of an organisation or to support any action around contract novation/transfer/change of control. Grant Cover Part of the FVRA - The ability of an organisation to re-pay the grant if, for any reason, recovery is necessary. Calculated as the Net Current Assets as a percentage of the grant the organisation is applying for. The lower the percentage, the greater the perceived level of risk.

56 Red = percentage cover is less than or equal to 50%. Amber = less than or equal to 120%. Green = greater than 120% See also: Financial Viability and Risk Assessment Current Ratio. Grant Register The FSF Grants Register has been set up to maintain a record of State Aid awarded through FSF Grants and enable DWP to establish whether any organisation has reached the EU State Aid De Minimis or Services of General Economic Interest (SGEI) limits. Lead Accountable Body (LAB) Mutatis Mutandis a Latin phrase used in the de minimis declaration for Legal purposes: see Terms and Conditions Annex J. Special Purpose Vehicle (SPV). The organisation to which a FSF Grant is awarded which manages and is accountable for the money on behalf of any partnership that is delivering services for DWP. An LAB must be a legal, not-for-profit entity with auditable accounts, determined as eligible based on the Department s FVRA. An LAB should have existing relationships, or should seek to establish relationships, with key local stakeholders, where local objectives are similar or complementary to DWP s, who have the capability to help achieve mutually beneficial outcomes by working together. See also: Financial Viability and Risk Assessment Treaty on the Functioning of the European Union changing only those things which need to be changed ; or only the necessary changes having been made. The formation of a separate company established by a single company or number of companies. A Special Purpose Vehicle is formed as the entity to deliver the required service. See also Community Interest Company State Aid State Aid Compliance A company which receives government support obtains an advantage over its competitors.

57 Statement of Grant Usage (SoGU) Therefore, the EC Treaty generally prohibits State Aid unless it is justified by reasons of general economic development. To ensure that this prohibition is respected and exemptions are applied equally across the European Union, the European Commission is in charge of watching over the compliance of State Aid with EU rules. The objective of State Aid control is, as laid down in the founding Treaties of the European Communities, to ensure that government interventions do not distort competition and trade inside the EU. In this respect, State aid is defined as an advantage in any form whatsoever conferred on a selective basis to undertakings by national public authorities. Therefore, subsidies granted to individuals or general measures open to all enterprises are not covered by Article 107 of the Treaty on the Functioning of the European Union (TFEU) and do not constitute State aid See also Treaty on the Functioning of the European Union Community Interest Company Special Purpose Vehicle The SoGU sets out how the grant has been spent, under pre-defined categories as set out in the Grant agreement letter, to enable DWP to monitor and report expenditure. Flexible Support Grant funding which is not spent during the period of the award can be recovered.