GLA ESF/ERDF Consultation event 2 Oct 2012


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GLA ESF/ERDF Consultation event 2 Oct 2012

  1. 1. Subheadline European Structural Funds in London 2014-2020 Pre-consultation Event 2 October 2012
  2. 2. GLA PRE-CONSULTATION EVENT 2 October 2012 STRUCTURAL FUNDS IN THE UK 2014-2020 SUE BAXTER Dept Business, Innovation & Skills
  3. 3. €147.2 billion = 1.12% of EU gross national income Citizens, freedom, security and justice 1% Administration 6% Sustainable growth: Jobs, competitiveness, regional development 46%: of which STRUCTURAL FUNDS 36% (€53 bn) London: £545m The EU as a global player: including development aid 6% Natural resources: Agriculture & environment 41% LONDON IN CONTEXT OF EU BUDGET (2012 commitments)
  4. 4. EU NEGOTIATING CONTEXT Economic landscape : recession & Eurozone crisis EU budget & Structural Funds in particular : more focussed on driving the EU forward vs global competitors / EU 2020 (external) Concentration of EU investment on top drivers of EU growth & delivering UK National Reform Programme More flexibility to align EU funds to increase impact (regional, social, rural and fisheries) Streamlining red tape
  5. 5. EU ‘COMMON STRATEGIC FRAMEWORK’ INVESTMENT THEMES 1. Innovation and R&D 2. ICT: Improving access; quality and usage 3. SMEs: Improving competitiveness, incl. in the agricultural and aquaculture sectors 4. Shift to low carbon economy 5. Climate change adaptation and risk management 6. Environmental protection & resource efficiency 7. Sustainable transport and unblocking key networks 8. Employment and labour mobility 9. Social inclusion and fighting poverty 10.Education, skills and lifelong learning 11.Improving institutional capacity for efficient public administration
  6. 6. EUROPEAN COMMISSION’s UK PRIORITIES SO FAR…. Increasing R&D spend & ‘localising’ impact of national investment Improving access to finance for SMEs More renewable energy NEETS / youth unemployment; marginalised groups into employment Intermediate & higher level skills What else?....
  7. 7. OPERATIONAL CHALLENGES EU requirements: Stronger performance management & accountability – money tied to targets for first time Greater combined impact for CSF fund investments (to deliver strategic national / EU2020 targets) UK ambitions: Less red tape Reduced cost & risk Improved value for money Empowered delivery partners to play a strong role
  8. 8. ‘LONDON: A ‘MORE DEVELOPED’ REGION GDP/head more than 90% EU27 average 50% EU co-financing At least 52% spend must be from European Social Fund, of which 80% of each programme must focus on only 3 (possibly 4?) priorities at national level only At least 20% ESF to focus on social exclusion at national level (although ERDF spend might also count towards the 20%) 80% ERDF to focus on only 3 (possibly 4) priorities: Innovation SME competitiveness Low carbon and energy efficiency (at least 20%) ICT ??
  9. 9. More integrated programmes / geographic flexibility Integrated Territorial Investments (all 4 funds) Urban development or Territorial strategy drawing on a multiplicity of programme strands and programmes. Aspects of management can be delegated to a city or NGO. Community-led local development (all 4 funds) ‘Local Action Groups’ able to draw on all 4 Strategic Framework funds according to an integrated plan. Joint Action Plans (ERDF & ESF only) Lump sum payments to a single beneficiary more than €10m or 20% of an Operational Programme (whichever is lower) to manage a group of projects aimed at a specific purpose (but not for major infrastructure) NEW PROGRAMMING FLEXIBILITIES
  10. 10. A FEW KEY QUESTIONS What key technologies will need to be pulled through over next 10 years to drive lower carbon growth? What key interventions will drive SME growth in next 10 years? What renewable energy investments are required and what will they deliver? How best to deliver higher level skills? Where, when & how much? How can London contribute to NRP targets?
  11. 11. STAKEHOLDER CONSULTATION 200 responses to online / email consultation in April 77 local government; 14 LEPs Key messages to Government Reduce administrative burden Support integrated programmes Flexible programme boundaries Fresh thinking on match funding NEXT STEPS - London event : 7 December @ BIS
  12. 12. EU Commission tests & launches proposals Back to Member States / Commission Ministers agree domestic delivery IDEAS INTO REALITY : CSF NEGOTIATIONS PROCESS Identify, develop and test policy options Agree- ment & go live European Parliament UK consultation Develop UK EU budget negotiating positions Develop UK CSF negotiating positions UK negotiates EU budget UK negotiates with Commission & other EU countries Develop programmes Identify, develop and test policy options EU - Eurozone crisis; downward pressure on EU budget; upward pressure on CSF funds to deliver results UK – pressure to drive high impact growth; CSR; ministerial changes & elections UK consultation
  13. 13. Subheadline European Structural Funds in London 2014-2020 Pre-consultation Event 2 October 2012
  14. 14. ERDF 2014-2020
  15. 15. A COMMON STRATEGIC APPROACH Europe 2020: EU drive for greater impact, better alignment & stronger accountability Improved focus and prioritisation to drive faster economic growth Better co-ordination and integration between EU programmes Programmes focussed on delivering results and impact More transparent, efficient, streamlined and simplified delivery systems for beneficiaries
  16. 16. COMMON STRATEGIC FRAMEWORK Opportunity to align substantial investments: Regional economic development (ERDF) Skills, employment & pre-employment (ESF) And also: Rural development (EAFRD – currently part of the CAP) Fisheries (EMFF – currently part of the CFP)
  17. 17. ‘LESS DEVELOPED’ REGIONS 2014-2020 GDP/head below 75% EU27 average 75%-85% EU co-financing available for wider range of activities Safety net” of 2/3 of previous allocation for regions moving ‘up’ and out of this category At least 25% spend must be from European Social Fund Likely to be West Wales and the Valleys + Cornwall and Scilly Isles
  18. 18. ‘TRANSITION’ REGIONS 2014-2020 GDP/head between 75% and 90% of EU27 average 60% EU co-financing Safety net” of 2/3 of previous allocation for regions moving ‘upwards’ into this category At least 40% spend must be from European Social Fund, of which 70% of each programme must focus on only 4 priorities, with 20% earmarked for tackling social exclusion at national level 80% ERDF to focus on only 3 priorities Likely to include : – Devon – Lincolnshire – East Yorkshire & N. Lincolnshire – Shropshire & Staffordshire – South Yorkshire – Merseyside – Lancashire – Tees Valley & Durham – Highlands & Islands – Cumbria – Northern Ireland
  19. 19. ‘MORE DEVELOPED’ REGIONS 2014-2020 GDP/head more than 90% EU27 average 50% EU co-financing At least 52% spend must be from European Social Fund, of which 80% of each programme must focus on only 4 priorities At least 20% ESF to focus on social exclusion at national level 80% ERDF to focus on only 3 priorities: Innovation SME competitiveness Low carbon and energy efficiency (at least 20%)
  20. 20. ERDF - key to local growth LOCALISM - what do we mean by local areas & what are the building blocks?- Local leadership and decision-making Role of role of Local Enterprise Partnerships – organising programmes according to larger functional economic areas Cities – as key drivers within programme areas utilising scale and flexibilities, eg City Deals Programmes that are consistent with national strategic priorities and can lever public/private sector match funding Should London be an MA in its own right? ERDF in England - 2014-2020
  21. 21. ERDF AND THE OTHER EU FUNDS- What are the opportunities and what do we mean by alignment? ERDF & ESF - joint support for SMEs/entrepreneurship /self-employment ERDF and EAFRD and EMFF - building rural and coastal economies Mechanisms - mono/dual fund programmes; ITI/JAP/CLLD LIABILITIES -how much responsibility and whose? Administrative options that: maximise local relevance and minimise budget risk Commission parameters & drivers - Managing Authority/Intermediary Body/NUTS2/Cities and Functional Urban Areas/Fund alignment
  22. 22. Subheadline European Structural Funds in London 2014-2020 Pre-consultation Event 2 October 2012
  23. 23. EUROPEAN SOCIAL FUND Angus Gray Head of European Social Fund Division
  24. 24. Draft EU Recommendations to the UK Commission has indicated that the UK should focus ESF on: • Continuing to improve the employability of young people, in particular those NEET, building on the Youth Contract. • Ensuring apprenticeship schemes are taken up by more young people, with sufficient focus on advanced and higher-level skills, and involvement of more SMEs. • Taking measures to reduce the high proportion of young people with very poor basic skills, and the rate of early school leaving. • Stepping up measures to facilitate the labour market integration of people from jobless households. • Fully implementing measures for facilitating access to childcare.
  25. 25. ESF 2014-2020: initial policy thinking Focus on disadvantaged groups, particularly those not eligible for, or not well served by existing mainstream provision. Groups likely to include: young people not in employment, education or training; troubled families; ex-offenders; unskilled people. Should also support growth agenda through funding self- employment and entrepreneurship, and upskilling existing employees, particularly in SMEs.
  26. 26. ESF 2014-2020: delivery issues Existing arrangements are effective: coherence with national policy priorities – ensures that ESF complements and does not duplicate or support local alternatives to the Work Programme or skills strategy; match funding comes from national programmes; delivery is efficient (low national overheads); sound financial management through standardised national procurement and control systems. But they are not responsive enough to local needs, particularly given Government’s localism agenda and focus on cities.
  27. 27. ESF 2014-2020: challenges How can we get more local input into strategic planning of how the funds are spent ? What advantages could closer alignment of funds (especially ESF and ERDF) bring ? Are there arguments for different local delivery models ? Which sub-national organisations have the capacity and capability to make a difference and take on the financial risks ?
  28. 28. ESF 2014-2020: possible options Different programming arrangements for (a) Helping disadvantaged groups; and (b) Supporting Growth, aligned with ERDF. Different arrangements for engaging Voluntary and Community Sector, particularly in delivering social inclusion activities. Core cities having some level of greater local control. Improved procurement arrangements with greater local consultation, e.g. with LEPs.
  29. 29. Subheadline European Structural Funds in London 2014-2020 Pre-consultation Event 2 October 2012
  30. 30. 2007‐2013 Operational  Programme  Interim Evaluation Findings Stephen Nicol & Margaret Collins
  31. 31. Background • Commissioned by EMPU to carry out an interim  evaluation of London ERDF 2007‐2013 Operational  Programme • Focus on: › Relevance of programme strategy and focus › Progress towards OP objectives › Progress towards commitment of funds and  achievement of indicators › Quality and effectiveness of programme’s  implementation and management › Learning for 2014‐20 ERDF programme 
  32. 32. This Presentation • Purpose: identify best practice from the current  Programme and provide lessons for future 2014‐2020  ERDF Programmes  • Structure › Overview of key findings in relation to current 2007‐2013  ERDF programme › Recommendations for 2014‐20 ERDF London Programme  › Summarise possible lessons for others
  33. 33. The London Programme • Value: €181 million or £146.6 million • Vision: promoting sustainable, environmentally efficient growth,  capitalising on London’s innovation and knowledge resources  with a focus on promoting social inclusion through extending  economic opportunities to communities, in areas where it is  most needed • Priorities: › Priority 1: business innovation and research and promoting  eco‐efficiency › Priority 2: Access to new markets and finance › Priority 3: Sustainable places for business › Priority 4: Technical Assistance
  34. 34. Current Programme • Effective Operational Programme (OP) in terms of strategy • Implementation and delivery progressed largely as planned, except for  Priority 3 (green investment) where focus has evolved from what was  originally envisaged £14.5 £13.9 £6.8 £16.1 £8.7 £51.7 £12.4 £11.6 £8.0 Fullly  Committed Headroom  = £10.2m Over commitment =  £1.8m Headroom  =£3.2m £0 £10 £20 £30 £40 £50 £60 £70 Priority 1 Priority 2 Priority 3 Priority 4 £ million Defrayed Committed Pipeline Allocation
  35. 35. Current Programme • Good progress towards programme targets, except jobs • Lack of larger projects has reduced the delivery risk factors  except for  JESSICA • However, weaker strategic focus on larger projects may have impacted on  project delivery and resulted in management issues
  36. 36. Current Programme • Key considerations for focusing remaining spend (£11m): – Factor 1: projects which make a long‐lasting contribution  to the London economy and lead to jobs creation i.e. P1,  P2. Key focus.  – Factor 2: projects which can be delivered within the  timeframes ‐committed by December 2013 and spent by  December 2015 • Factor 1 likely to be relevant for future 2014‐20 ERDF  programme……
  37. 37. Considerations for the future 2014‐20  London ERDF Programme
  38. 38. Future Strategy and Focus • Depending on funding available and future overall policy steer,  broadly retain strategy focus but ensure that there is a: – Clear rationale for all investment (market failure or equity rationale) – More forensic application of funds (e.g. Commissioning) – Better alignment of targets framework with rationale for investment – Focus on achieving biggest possible impact • Move to a more strategic approach to allocating ERDF e.g.  commissioning: ─ Fewer and bigger projects • Start planning for the 2014‐20 Programme now: – Early stage discussions with DCLG, European Commission, GLA and  LMC – Discussions with partner organisations particularly focusing on co‐ financing and possible projects which could be supported
  39. 39. Governance • Explore opportunities for the GLA to become a Managing  Authority: Strengths and opportunities  – Greater flexibility and control (including auditing) – Greater consistency in advice to projects – Potential for greater strategic alignment with GLA Weaknesses and risks – Financial risk to the GLA – Administrative costs for Programme overall – Alignment with other programmes in England  – Perceived transparency of Programme • Ensure that there are stronger links between EPMU and GLA  whilst maintaining transparency – At the start of the programme influence the focus and ensure there  are strong synergies with the Mayors EDS – During delivery identify synergies with Mayor’s programmes
  40. 40. Spend and Targets • Reduce the number of Programme targets: ─ Making it easier for projects and the programme as a whole ─ Ensuring that targets are meaningful (e.g. environmental projects  monitored by CO2) • Place stronger emphasis on achieving targets especially results  and impacts. Key considerations:  – A more sophisticated approach to global target setting at the outset  i.e. realistic unit cost per job to ensure in line with other programmes  and with support provided (e.g. CO2 reduction for environmental  projects) – Developing provisional targets at the start and then moving to  finalised targets within 12 months – Tailored approach to target setting for individual projects • Explore the potential for co‐financing to support future project  delivery
  41. 41. Key Points for 20014-2020 Programme Developing  OP document  • Clear vision, objectives and actions which are explicitly  linked to local and regional policy aspirations • Needs to reflect changing economic conditions and  emphasise economic growth and job creation Committing  Funds • Pitfalls of open bidding…a strategic approach built on a  clear strategy informed by a partnership approach • Support projects with a clear rationale (e.g. market  failure/equity) which lead to strong economic impact  Delivery • More post contract support during delivery and  particularly on collection of evidence (e.g. standardised  forms) • Consistency of advice across project managers and audit  authority Monitoring  • Greater emphasis on achieving targets and better  alignment with programme rationale  • Appropriate number of targets which are meaningful  and tailored to individual projects • A more sophisticated approach to target setting e.g.  realistic unit cost per job
  42. 42. Any Questions?
  43. 43. Contact Details Stephen Nicol ‐ Director 07818 067 309 Margaret Collins – Associate Director 07826 872 218