10
• delays in the construction of the Cyber Threats facilities combined with lower than anticipated construction costs
• the impact of recruitment challenges on revenue spend
• the impact of the Covid-19 related restrictions (e.g. on travel / event expenses).
2.3 The operation identified a range of approaches to manage the underspend including the introduction of a new strand of activity (a ‘ Virtual LegalTech platform ’) , and changes to the staffing structure (see below for further details). However, it was also considered necessary to agree a re-profile with WEFO given the scale of the underspend. WEFO approved the re- profile in September 2021. As a result, the operation’s total ERDF capital funding commitment decreased from £1.2m to £0.75m (see Table 2-1). The revenue expenditure was not subject to re-profiling, although Swansea University’s match decreased slightly due to a reduction in the flat rate 2 .
Table 2-1: Original and re-profiled total anticipated costs Original total budget
Re-profiled total budget
ERDF
SU
Total
ERDF
SU
Total
Capital
£1.2m
-
£1.2m
£0.75m
-
£0.75m
Revenue
£2.8m
£1.6m
£4.4m
£2.60m
£1.58m
£4.18m
Total
£4.0m
£1.6m
£5.6m
£3.35m
£1.58m
£4.93m
Source: Business Plan, September 2019 and Re-profile Addendum, September 2021
2.4 By the Mid-Term Evaluation, actual expenditure (as at October 2021) was £1.6m, marginally below planned expenditure by that point (8% below re-profiled budget). At that stage, the majority of outstanding expenditure was revenue expenditure on staffing costs. 2.5 At this Final Evaluation stage, by January 2023, overall eligible expenditure was £3.7m, with an underspend of 13% against the planned expenditure of £4.26m. This is a material underspend, in aggregate terms, approximately £560k. 2.6 Table 2-2 provides a breakdown of expenditure by category. At January 2023, the underspend was pronounced in aggregate terms on professional services and ICT. The latest Progress Report (November 2022-January 2023) sets out that the main reasons for the underspend across these two categories are as follows:
• Professional services expenditure is below budget largely due to delays progressing the development of the Virtual LegalTech platform. Also, procurement and implementation
2 Note, the amount of SU match funding for staff remained unchanged, however, the flat rate (a simplified category for indirect costs at 25% on all revenue costs of the operation) commitment decreased reflecting the decrease in the total revenue budget.
Legal Innovation Lab Wales
Made with FlippingBook HTML5