European Growth Programmes

1

EU Structural Funds

- What ERDF is for and how it works -

The European Regional Development Fund (ERDF) is one of the Structural Funds

financed by the EU with the aim to reduce the economic disparities between and

within Member States.

ERDF core themes: supporting research, innovation and business

development, low carbon economy

• Contributes to DCLG’s priority for supporting businesses to grow and

support jobs.

• Support limited to projects offering substantial benefits which meet the

needs of an area and which would not take place without a grant.

• Managed in tranches: 2000-2006, 2007-2013 and 2014-2020.

• DCLG acts as Managing Authority overseeing the management of ERDF

in England

The 2007-13 ERDF programmes have generated 90,000 jobs and helped more

than 21,000 businesses across England.

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North West: National Graphene Institute

• Opened in March 2015

• 7,626 m2 of new and upgraded floorspace created

• National base for research into graphene, the world's

thinnest, strongest and most conductive material

West Midlands - Entrepreneurs for the Future

• Highly successful and unique programme offering office

space, funding, expert advice and mentoring to the next

generation of West Midlands technology entrepreneurs

looking to get a successful businesses idea off the

ground

• Since its launch the project has provided support to 95

local businesses

Past project examples 2007-13

3

European Structural and Investment

Funds 2014-2020

Linked local

investments

European

Growth Programme

in England

€7.2bn (£5.2bn)

95% allocated

to LEP areas

ERDF (DCLG)

€3.6bn (£2.6bn)

EAFRD (Defra)

€215m

(£156m)

ESF (DWP)

€3.3bn

(£2.4bn)

YEI (DWP)

€159m

(£114m)

4

2021-27 ERDF programme

20 separate programmes,

Government Offices plus

other local programmes

Closure

to be completed 2026+

Final projects

completing

2023

ERDF Programmes Cycle Overlap

2000-2006 ERDF

programmes

£3.7bn

2014-2020 single ERDF

programme

£2.5bn

Final projects

completed 2008

Closure to be

completed 2015

Closure to be

completed 2018+

10 separate programmes,

Regional Development

Agencies +separate

programme for Cornwall

ONE single programme, 39 local

flavours

Final projects

completing

2015

2007-2013 ERDF

programmes

£2.7bn

Early design work and

preparation to 2021 -27

programme 5

Differences in focus between 2007-13

and 2014-20

The 2014-2020 ERDF programme differs from previous programmes

because it has:

• A flexible, single programme across England – rather than 10 programmes

• A highly localised model built around functional geographies (LEP areas)

• Stronger focus on results rather than just spend

• Financial focus on top priorities – SMEs, innovation and low carbon economy

• More segmented menu of policy priorities such as environment, flood

prevention and broadband

• A stronger geographic agenda with an emphasis on cities and local

communities (e.g. Sustainable Urban Development)

6

7

39 Local

Enterprise

Partnerships

Designing the 2014-2020 ERDF

programme

• The UK “Partnership Agreement” (agreed by EU October

2014) - described the economic situation in the UK as a

whole and principles for using all European funds

• The ERDF “Operational Programme” – (expected EU

agreement in June) - identifies the areas in the English

economy where ERDF could have the biggest impact on

growth, and explains what will be spent, how and what it will

deliver.

8

EU intervention rate across regions in England

Less Developed

region

Transition regions

More Developed

regions

Cornwall and the Isles of Scilly is the

only less developed region in England.

There are 9 in England: Cumbria,

Tees Valley and Durham, Lancashire,

Lincolnshire, East Yorkshire and North

Lincolnshire, Shropshire and

Staffordshire, Merseyside, South

Yorkshire and Devon.

Accounts for the remainder of England

EU funds up

to 80% of

project

costs

EU funds

up to 60%

of project

costs

EU funds up

to 50% of

project costs 9

Priorities for ERDF spending in 2014-20

1. Research & Innovation – 21%

2. ICT - 3.4 %

3. SME Competitiveness - 40%

4. Low Carbon economy - 22%

• 95% of ERDF will be spent across 8 objectives

• 5% on Technical Assistance

• 80% of investments will support objectives 1 to 4

Financial Instruments (FIs) are business loans and equities finance

available under ERDF.

There are 4 FI models supporting objectives across 3 of the 8 priority areas: innovation,

SMEs and low carbon economy.

5. Environmental Protection - 3 %

6. Climate change adaptation -2 %

7. Sustainable transport in

Cornwall & Isles of Scilly – 1.6%

8. Social Inclusion – 1.4%

Technical Assistance – 5%

10

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More results and

impact focus

Supporting over 65,000

businesses by enhancing

the competitiveness of

Small and Medium Sized

Enterprises

Supporting over

2,000 businesses in

deprived areas to

overcome barriers to

growth and

employment

Enhanced 12.5 km

stretch of the A30

and improved rail

signalling for

Cornwall and the Isles

of Scilly

Over 95% superfast

broadband coverage

in England by 2023

by enhancing access

to, and use and

quality of ICT

Supporting 20,000

businesses and

creating over 1,000

research jobs by

strengthening

research,

technological

development &

innovation

1,500 hectares

becoming available

for site development

for Green

infrastructure

Over 7,000 non-

residential properties

better protected from

flood and coastal risks

Greenhouse gas

reduction of over

360,000 tonnes of CO2

by supporting the shift

towards a low carbon

economy in all sectors

Delivering results for local people

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Project calls 2014-20 programme

First round of calls launched in March 2015 95 calls worth £590 million across 38 LEP areas

Calls for innovation and SME competitiveness. We are estimating to be spending £205 million £243 million ERDF monies respectively for each priority.

Call for project proposals to enable a shift towards a low carbon economy

Calls for broadband infrastructure

Calls for technical assistance & a Smart

Specialisation Hub

Calls for transport Cornwall

Calls in 5 of 8

priority areas

and TA to

kick start 14-

20 activity

Developed by

Growth

Delivery Teams

with advice

from LEPs and

partners

Governing ERDF in 2014-20

Growth Programme Board for England (ERDF, ESF and part of EAFRD)

PROJECTS

• Single ERDF programme for

England – enables priorities and

funding to be flexed across the country

• Strong local growth delivery

network - translating local ambitions

into strong deliverable compliant

projects

• Working together with partners -

local LEP area ESIF sub-committees

provide advice/local intelligence on

local needs and opportunities and help

promote active participation

• Greater delegation of decision

making on projects in London

(through GLA) and to a lesser extent in

8 core cities (up to 10% of local ERDF

allocations)

Local Growth

Delivery Teams

covering LEP

areas

39 LEP area ESIF

sub- committees

DCLG as ERDF

Managing Authority

Single

programme

management

team

An aligned European Growth

Programme for England

13

14

2. Programme design: The Department designs the programme

2.5 years

5. Programme closure: process of closing projects

in a clean and compliant manner

6. Many years for Commission

sign off

1. At EU level: Member States

agree policy framework for

programmes and menu of options

Up to 3 years

Lifetime of a European funding programme

3. Negotiation:

The Department

agrees priorities

and operational

programme with

the European

Commission

4. Programme

management:

projects up and

running,

monitoring

spending and

outputs

9. Technical Assistance

Two specific objectives: SO 9.1: To ensure that the activities which fall within the scope of the

programme are managed, monitored and evaluated in line with the Common

Provisions Regulation, ERDF Regulation and the Commission’s delegated and

implementing regulations.

SO 9.2: To facilitate access to the programme and communicate the impact

that the ESI Funds have, including by providing robust governance support to

the PMC and sub-committees and high quality advice and information to

partners involved in the design and delivery of projects.

Actions • Programme management, development and capacity building

• Programme Analysis, Monitoring and Evaluation

• Information and Publicity

15

Community Led Local Development

(1) • Approach borrowed from the Rural Development Fund, where it is

known as LEADER.

• Communities invited to form Local Action Groups (LAGs) which are

allocated a pot of funding, typically £1-2mn to use on community

business and support.

• EU regulations for 2014-20 enable Member States to make this

approach available in non-rural areas: here it is known as CLLD

• Around one quarter of LEP areas initially expressed interest though

few have specific proposals at this stage. 16

Community Led Local Development

(2) Outline criteria for CLLD have been set in the Operational Programme

• Target use to areas in the bottom 20% IMD

• Target in Cornwall and the Isles of Scilly for the bottom 30%IMD

• Agree no overlap in activities with Leader and Flags (geographic

overlaps permitted)

• Scope to extend marginally in bordering economic hinterland where

justified

• Presumption of concentration in urban areas

• A call for Local Development Strategies will be issued later in

summer 2015

17

Sustainable urban

development • EU regulations specify that at least 5% of the UK’s ERDF must be

spent on integrated actions for sustainable urban development

• To give core city groupings intermediate body status with delegation

limited to tasks relating to the selection of operations for up to 10% of

the notional allocation to the LEP area

• DCLG are now working with cities to develop their proposals with the

European Commission.

• London will also be an intermediate body for these purposes, but with

a much greater range of tasks delegated 18

Integrated Territorial Investment

• ITI is one of the new tools set out in EU regulation for 2014-20.

• It introduces a place-based approach to development that can assist in

unlocking under-utilised potential in areas.

• Includes a geographic plan that promotes an integrated approach to the way

in which separate EU Funds are planned, as a package rather than separate

Fund silos.

3 essential elements of an ITI:

• a designated territory and an integrated territorial development strategy

• governance arrangements to deliver the strategy

• a package of actions to be implemented

Cornwall and the Isles of Scilly have an ITI for 100% of the ERDF and ESF in the

area – enabling important integrated planning between the Funds and with

domestic funding

19

Financial Instruments

• DCLG Ex-ante Evaluation for Operational Programme process in 2014

• Concluded that the four FI models were appropriate:

1. Access to Finance – providing equity, loan and mixed investment to SMEs;

2. Urban Development and Energy Efficiency (non-domestic) –

creating/refurbishing urban infrastructure in targeted geographic areas;

3. Social Housing (low-carbon retrofit) – supporting energy conservation

and generation in existing social housing via a revolving loan fund; and

4. Local Impact Funds – promoting investment into the social economy

through loans to Social Sector Organisations (SSOs). 20

2014-20 ETC programme priorities

2 Seas Programme: To

improve the conditions for

delivery of technological and

social innovation, promote low

carbon technologies and

adaptation to climate change

France (Channel) England:

Promote investment in

innovation to tackle economic

and societal issues, support low

carbon economy, enhance and

promote attractiveness of

territories

North Sea Region: Support

growth in economies through

research, innovation, and

sustainable solutions, promoting

greener transport solutions

North West Europe: To

enhance innovation

performance of enterprises,

implementation of low-carbon,

energy and climate protection

strategies, to optimise (re)use of

material and resources

Interreg Europe: To promote

co-operation to improve policy

and capacity in the field of

innovation and knowledge

economy, protecting and

improving the quality of

environment

URBACT: helps cities to

develop pragmatic solutions that

are new and sustainable and

that integrate economic, social

and environmental urban topics

ESPON: Support the

reinforcement of EU cohesion

policy through the production,

dissemination , and promotion of

territorial evidence

INTERACT: Provides a hub for

exchanging information, best

practices among co-operation

programmes as a means to

promote growth and change

Atlantic Area: Promote green

economic growth, protect

biodiversity and enhance

ecosystems, and strengthen risk

management systems

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2014-20 ETC programme list

22

2014-20 ETC Programme 2014-20 Budget

(€m) Participating countries Managing Authority

Cross Border Programmes

Two Seas 257 England, France, Belgium, Netherlands Nord Pas-de Council, Lille, France

DC

LG

Le

ad

France (Channel) England 223 England, France Norfolk County Council

Trans-national Programmes

North West Europe 396 All UK, Ireland, France, Germany,

Netherlands, Belgium, Luxembourg,

Switzerland

Nord Pas-de Council, Lille, France

North Sea 167 England, Scotland, Germany,

Netherlands, Belgium, Denmark,

Sweden, Norway

Danish Business Authority, Silkenborg, Denmark

Atlantic Area 140 England, Scotland, Wales, Northern

Ireland, Ireland, France, Spain, Portugal

Regional Council for the North, Porto, France

Inter-regional Programmes

Interreg Europe 359 All EU Nord Pas-de Council, Lille, France

URBACT 74 All EU Commissariat Général à l’Egalité des Territoires

(CGET)

ESPON 41 All EU Grand Duchy of Luxembourg

INTERACT 39 All EU Bratislava Self-Governing Region, Slovenia

Ireland-Wales 79 Wales, Ireland Southern and Eastern Regional Assembly (SERA) in

Ireland

DA

/Gib

ralt

ar

Le

ad

Scotland-Northern Ireland-Ireland 240 Scotland, Northern Ireland, Ireland Special EU Programme Body(SEUPB), Ireland

PEACE programme 229 Northern Ireland, Ireland Special EU Programme Body(SEUPB), Ireland

Northern Periphery and Arctic 50 Scotland, Northern Ireland, Denmark,

Sweden, Norway, Finland

County Administrative Board of Västerbotten

SWEDEN

South West Europe 107 Gibraltar, France, Spain, Portugal Dirección General de Economía,Juan, SPAIN

Mediterranean 224 Gibraltar, France, Spain, Portugal, Italy,

Greece, Cyprus, Malta, Slovenia

Direction Générale Adjointe, MARSEILLE