Guidance

089/22 Final PCR Dates and Underperformance Action reminder

Updated 16 August 2024

Date Issued

08/09/2022

Review Date

31/12/2023

Who should read

All ESF Direct Bid Beneficiary Organisations, the Greater London Authority and the ESF Managing Authority.

Purpose

This Action Note is an update to Action Note 087-22, to include significant updates for Grant Recipients (GR).

Background

As the 2014 to 2020 ESF Programme is nearing its end, a key priority for the Managing Authority (MA) is to focus on projects to ensure they are spending their grant in time and in line with their financial and participant profiles.

Due to the timescales involved, existing ESF Direct Bid projects that are not currently delivering to the level detailed within their Funding Agreement, or within the established 15% variance expenditure and or total participants, will be contacted by their Contract Manager (CM) and asked to submit a Project Change Request (PCR).

CMs will contact the GRs by adopting a tranche-based approach with tranche timings being determined by project financial completion dates. Therefore, those projects with earlier financial completion dates will be in the earlier tranches and contacted in the first instance.

The tranches will be defined as follows:

• Tranche 1 – PCR will need to be submitted between 01/09/2022 and 09/09/2022

• Tranche 2 – PCR will need to be submitted between 03/10/2022 and 11/10/2022

• Tranche 3 – PCR will need to be submitted between 01/11/2022 and 09/11/2022

• Tranche 4 – PCR will need to be submitted between 01/12/2022 and 09/12/2022

Action

Following contact from the CM, the GR will need to submit a robust PCR with robust, realistic, achievable profiles that the project is confident it can deliver. GRs are reminded that:

• All PCRs must be submitted within the relevant tranche. No re-profiling PCRs will be accepted outside of the notified tranche dates.

• GRs need to ensure that if their project has a PCR currently with the MA, that the profiles provided as part of that PCR are robust, accurate, realistic and reflect their current status, as this information will form the basis of the Funding Agreement Variation and any further action required regarding Underperformance.

• Any concerns should be raised with the CM or Appraisal Team dependant on current status of the PCR as there will be no further opportunity for GRs to submit a PCR to re-profile. This does not preclude the MA instigating re-profile PCR action should this be required.

• Performance must be robustly managed, and GRs should understand that future underperformance could result in early project closure and or claw back.

As part of the PCR, the projects will need to fully explain:

• What challenges the project has faced (including the impact of COVID-19)

• What mitigation/measures the project put in place and whether this was successful

• What plans the project has in place for the future to improve performance to project activity end date

• Any other detail the project feels relevant to the PCR

It is essential that projects submit realistic, achievable PCRs as the Appraisal Team will consider approval based only on the initial PCR received.

Where the MA considers the justification supporting the PCR is robust and reasonable, given the circumstances of COVID (if appropriate) and where performance is improving as a result of moving back to business as usual, and includes realistic proposed profiles through to the end of the project, the MA may approve the PCR. The subsequent re-profiled performance will then be closely monitored to ensure delivery against the Funding Agreement Variation.

Should project performance start to exceed the 15% tolerance already established in the Programme, formal underperformance will commence.

• As mentioned above, due to the timescales involved, it should be noted by all GRs, that once PCRs are approved, if performance slips again (beyond the 15% tolerance), the MA will immediately move to Stage 2 of the Underperformance Methodology. The MA will not therefore be issuing the ‘Stage 1’ letter and will request a formal recovery plan with immediate effect.

Where the MA considers the justification supporting the PCR is not robust or not reasonable, taking into account the project circumstances, the PCR will not be approved by the MA. Based on the original profiles prior to the rejected PCR, the project will move into formal underperformance action, with the possibility of early project closure and or claw back.

GRs must notify the CM via email once the PCR has been submitted on ECLAIMS.

Please note, as stated above, PCRs that are submitted outside the relevant tranche dates or without agreement with the CM will be rejected.

Business As Usual PCRs – such as those not addressing Underperformance.

Unless instigated by the MA, no ‘business as usual’ PCRs will be accepted within five months of the project’s activity end date. This is to ensure that any changes to projects are feasible based on remaining delivery time. GRs will still be required to inform the MA, as per their Funding Agreement, of any changes to their project; their Contract Manager will let them know if a PCR is required.

Contact

If you have any queries about this Action Note please email esf.2014-2020@dwp.gov.uk.