How can I effectively cover my Air-Source Heat Pump without compromising efficiency?

Others may have different opinions, but I would say that the only part of the outdoor unit to cover should be the top !! You’ve blocked the airflow in and out, and I would say it’s not the required one metre from your fence, which is a requirement as @Gingernut49 has found.

This is where the installer has placed the unit. P.s the cover is larger than the unit. 

I am also considering a design change with widening the slates to allow more air flow through. 

To note the 1 meter I have had auditors comes out and they didn't comment on that. 

My auditor didn't comment at the time but has notified the installation company that it has to be moved one meter away. Mine looks as near to the fence as yours now, about a foot. (Same colour fence too.)

This is the unit without cover. Just shy I think now looking at this

Hi @juliamc thanks for that. We are doing some alterations today. One of them is making a hole for the fan. There are no slates at the back of the unit. And it's the same spacing on 3 sides. Also drainage below so water doesn't puddle. 

We are still deciding what to do for the left side. Possible doing some more opening aswell. 

I think @juliamc is correct in everything she writes here. She’s rapidly becoming the group’s expert on the right way to install Heat pumps.

It was @nealmurphy who specifically mentioned the 1-metre from the fence rule in this other topic. It can be reduced, but you first have to obtain planning consent from the local council.

As for the wooden cover…. very attractive styling!

But the distance between the rear of the Heat pump and the wall is calculated to allow sufficient air-flow to be drawn through the heat-exchanger. The cover has significantly restricted this.

The slats on this cover also impede the out-flow. Thus the line of least resistance is for the rear input port to simply suck the air from the front and push it through the heat-exchanger again. It is effectively a partial ‘short-circuit’ of airflow being recycled within the cabinet.

Hiya. 
I'm afraid my opinion on the cover is it’s going to hamper the performance of the pump quite significantly. You’ll need to make the gaps much wider and you need to get decent air flow through the system as @juliamc has said. 

You can buy heat pump covers to disguise them a bit but they are a bit like the camouflaged covers you get for wheelie bins and not as nice as the cover you’ve made. 

Hi all I have modified the wooden cover. Please note the rear has no slates. Only 3 sides. The top is also decking boards which have the grooves under. But also 5mm gaps on the top. Again to allow air flow. Thoughts? 

I just did a quick google and it looks like you aren’t far away from some designs. 
https://www.pumph.co.uk/product/wooden-guards/

From my research the key is to not have the cold air being expelled to be able to recirculate back through the heat pump, one the of the issues with the first location of my pump was it being in low point of the garden and the cold air couldn’t escape (it was also boxed in by walls and fences). If the area where the fan is blowing the cold air allows it to escape from the pump then the design should work. 

Have you also kept the side to the left of the pump free? 

Personally if I was going to box it in I’d make the slats further apart but I’ve got no idea what an optimum design is. The design on the link I shared above doesn’t specify what gap they’ve used but you might be able to find details on another website.