EUROPEAN STRUCTURAL & INVESTMENT FUNDS COAST TO CAPITAL WORKSHOP 25 July 2013 Sue Baxter & Tim Courtney Department of Business, Innovation & Skills

THE STORY SO FAR ….. April 2012 Government consultation – which way forward? April – Sept ‘12 Workshops & sectoral events Autumn 2012 New delivery model developed – a single EU SIF “Growth Programme” for England Developed in response to stakeholder demands for  Place based programmes  Improved responsiveness to local differences  Simplified management arrangements & more integrated programming Nov–Dec ‘12Road testing new delivery model – 13 ‘roadshows’ Feb 2013 EU Budget Settlement Mar 2013 UK SCF settlements: England €6.2bn; Scotland €800m; N. Ireland €460m; Wales €2.15m; Apr 2013 Outline guidance to LEPs from Government May 2013 LEP initial feedback to HMG on priorities and requirements Jun 2013Financial allocations to LEPs

CURRENT ENGLAND STRUCTURAL FUNDS PROGRAMMES : PROLIFERATION, DUPLICATION, FRAGMENTATION

PROPOSED ENGLAND EU PROGRAMME : STREAMLINED & INTEGRATED PROJECT PROPOSALS Community Led Local Development, Maritime and Fisheries Programme (EMFF) Rural Development Programme (EAFRD) SINGLE EU GROWTH PROGRAMME: > €6.2bn (ERDF, ESF & part of EAFRD) LEPs MA Local Teams

NEW vs OLD : RINGING THE CHANGES Consistent approach to using EU ESI funds in a combined and complementary way under a single national programme (vs current disconnect between complementary EU funds channelled through 11 separate programmes) Allocations geared to functional economic areas but with freedom to be shared and ‘pooled’ if desired (vs current regionalised / less accessible programming for ERDF which confines investments to regional administrative boundaries) >95% allocated for determination at local level, with minimal ‘top slicing’ to finance Government initiatives (vs <50% Government ‘top slice’ in current programmes) More equalised proportions ERDF and ESF (vs acute ‘skewing’ of ERDF to the north in current programmes) Coherent, up front, national match funding ‘opt-in offers’ to alleviate financial pressures for project sponsors & encourage strategic investments (vs current ad hoc / non-existent national match funding arrangements)

strategies Local Growth Fund (LGF) ESI funds Summer: Confirmation of design & scope of the SGLF Publication of guidance December : LEPs produce draft strategic economic plans March: Final Strategic Economic Plans to Government July: Local Growth Deal negotiations completed LGF goes live mid 2015 Aligned spending :LGF & ESI funds Summer: Guidance & indicative allocations ESF/ERDF to LEPs. EAFRD allocation later. 7 October: LEPs submit ESI funds Oct – Dec: LEPs discuss & agree ESI strategies with HMG Early 2014: Minimal time for local preparation; Mid 2014: ESI funds ‘go live’ Delivery starts TIMELINES Jan: HMG negotiates England plans with EU. LEPs finalise ESI strategies

ESI CORE FUNDING THEMES Innovation and R&D (esp commercialisation) ICT: Improving access; quality and usage SMEs: Improving competitiveness (incl. in the agricultural & aquaculture sectors) Shift to low carbon economy Climate change adaptation and risk management (low priority) Environmental protection & resource efficiency (low priority) Sustainable transport and unblocking key networks (low priority) Employment and labour mobility Social inclusion and fighting poverty Education, skills and lifelong learning Improving institutional capacity for efficient public administration (not for UK)

ESI RINGFENCING REQUIREMENTS ESI CORE THEMES COAST TO CAPITAL LEP Innovation At least 80% ERDF must be spent on these 4 themes, of which at least 20% (tbc) on low carbon SME Competitiveness Low Carbon (high priority) ICT Climate Change Adaptation Lower priority Environmental Protection Lower priority Sustainable Transport Lower priority Employment At least 80% ESF must be spent on up to 4 sub-priorities 1) Unemployed people into employment 2) Young unemployed / not in training into employment 3) Upskilling: Access to lifelong learning; upskilling employed workers; increasing the labour market relevance of education and training systems, incl apprenticeships 4) Social Inclusion: with a view to improving employability Skills Social Inclusion (at least 20% value of ESF) Institutional Capacity

DEVELOPING STRONG PROJECTS Alignment with programme theme Innovation SME Competitiveness Low Carbon ICT Climate Change Adaptation Environmental Protection Sustainable Transport Employment Skills Social Inclusion Institutional Capacity Your Project Proposal Indicative Checklist Policy fit EU vision: EU 2020 UK vision: national policy & programmes C2C LEP vision Business case Evidence of need Rationale for intervention & use of public funds Outputs, Impact & Outcomes VFM Deliverability Match funding Risk management assurance Timeframe Compliance Eligibility with funding rules Audit trail Endorsement from key partners

‘OPT IN’ OFFERS OF HMG MATCH FUNDING Organisation / programmeESI Theme Growth Accelerator Enhancing the competitiveness of SMEs (ERDF) The Manufacturing Advisory Service UK Trade & Investment European Investment Bank (for a social housing financial instrument) Supporting the shift towards a low carbon economy (ERDF) BIG Lottery Fund Promoting social inclusion & combating poverty (ESF) Skills Funding AgencyEducation, skills & lifelong learning (ESF)

ESI ACCOUNTABILITIES July 2013!)  BIS: UK co-ordination & Structural Funds policy chair of management board; performance management oversight; reporting to European Commission; negotiation of legal regulations.  DCLG: English ERDF Managing Authority - accountable for management of ERDF to European Commission.  DWP: English ESF Managing Authority - accountable for management of ESF to European Commission.  DEFRA: English EAFRD (RDPE) Managing Authority - accountable for management of EAFRD to European Commission.  Watch out for new Local Growth Teams……  LEPs are responsible for the strategic direction of their ESI allocations – NOT for operational management or shouldering liabilities  Individual ESI grant or loan beneficiaries are accountable for compliant delivery of their own project / contract. Non compliance with EU rules can result in grant / loan ‘clawback’ by Managing Authorities or the EU after the money has been spent!

CONTENTS OF YOUR ESI FUNDS STRATEGY  The local area (evidence base, market failures, SWOT, growth vision  ESI Funds Priorities (strategic-level activities)  Distribution of ESI Funds across EU thematic objectives  Match-funding (and the “opt-in” model)  Outputs and results  Delivery arrangements  Local governance arrangements  Cross-cutting themes

EVALUATION OF ESI FUNDS STRATEGIES Strategies to be evaluated at local and national level against the following criteria: Rationale for intervention and selection of activities (evidence base, value for money, outputs/results, alignment with national priorities where appropriate) Partnership, delivery and risk (local governance, capacity, delivery routes, match-funding, spending profile) Eligibility and compliance with EU rules and priorities Distribution of ESI Funds across thematic objectives (and ERDF/ESF split)

GET A PIECE OF THE ACTION ESI funds are complex and bureaucratic but will enable C2C delivery partners to Develop transformative interventions in key places ‘Stretch’ the reach of existing actions Leverage wider investments for key programmes / projects Breathe new life into SMEs, community groups & innovative ideas to drive economic growth