Slides from the online session

1. European Structural & Investment Funds
Lead Partner Online Session
Thursday 27 August, 14:00

2. Welcome
Patrick Douglas-Early
Communications & Engagement Manager
Managing Authority

3. Housekeeping
• Use the Instant Messaging chat
• Automatically muted – but unmute for questions later
• This is a test (your feedback is welcome)

4. Agenda
 Welcome – Patrick Douglas-Early
 Overview – Hilary Pearce
 COVID-19 – Susan Tamburrini
 Suspension – Cathy Cacace
 Future Funding – Karen McAvenue
 Closing remarks & final questions – Hilary Pearce

5. Overview
Hilary Pearce
Head of Managing Authority

6. Since we last met in October 2019
• How we all work has changed
• COVID-19 disruption to MA: redeployments & retirements
• Thank you for ongoing cooperation

7. Plus ça change…
• No change to European Commission (EC) deadlines &
regulations
• ESF & ERDF programmes remain in suspension
• Annual audit cycles continue

8. But progress continues
• Susan to provide info on COVID-19
• Cathy to update on suspension position
• Karen to discuss our actions on replacement funding

9. Looking at wider context
Planning for closure of programmes in uniquely difficult
circumstances:
• Global pandemic affecting all “normal” working practices
• Suspension causing continued risk and considerable extra work
• EU Exit – so no seamless move to the 2021-27 programmes
• No clear steer regarding replacement funding from UK Gov

10. Challenges present opportunities
• How can we meet these challenges together?
• Over to Susan and others to go into more detail…

11. COVID-19
Susan Tamburrini
Head of Performance & Governance
Managing Authority

12. Effects on delivery
• Working to provide assurance for repurposing funds to
support business survival and job protection
• COVID-19 Q&A (reviewed fortnightly) to answer all general
Lead Partner queries
• There are different/reduced programme activities, delivery
models and working arrangements due to COVID-19.

13. Keeping things moving
• Portfolio & Compliance Manager is first port of call to discuss
changes
• Agree by email first - formal change request at a later date
• We continue to pay and verify claims

14. CRII and CRII+
• EC’s Coronavirus Response Investment Initiatives (CRII and
CRII+) provide some flexibilities to use ESIF to respond to
COVID-19
• However, so far the EC has not relaxed any compliance
requirements
• We all have to ensure that activity and expenditure is eligible
and can be evidenced with a full and robust audit trail.

15. COVID-19 Response Fund
• We have uncommitted funding – upwards of £19m
• We are discussing proposals with the EC
• But details remain high-level
• As soon as details are confirmed, we will keep you informed

16. Changes to finances and activities of
operations
• 29 June letter asked Lead Partners for required changes to
expenditure and activity of approved operations as a result
of Covid-19.
• We will be in touch directly to ensure accuracy.
• Your speedy cooperation and response is key to determining
COVID-19 response.

17. Any questions?

18. Suspensions
Cathy Cacace
Head of Structural Funding Programmes
Managing Authority

19. Liaison with the EC
• We continue to liaise with EC auditors and desk officers to
clarify issues and process for lifting the suspension of ESF and
ERDF programmes.
• They have confirmed that they want evidence to
demonstrate compliance and improvements to be sent in
two batches.

20. Liaison with the EC
• Batch 1. Unit Cost Evidence – methodology, process, analysis
of operations including operations that cannot be converted,
full audit trail for claim 1
• Batch 2. Evidence for both ESF and ERDF – satisfactory
compliance with the Management Control System,
improvements with the National rules, improvements in
training and improvements in verification procedures.

21. Next Steps
• Batch 1 – Evidence to be assembled and sent to senior
Officials for approval before being sent to the EC.
• Our aim is to deliver this to the EC by the end of
September.

22. Next Steps
• Batch 2 – We are prioritising the retrospective verification
exercise and working closely with the Audit Authority (AA)
to address their findings.
• Batches of evidence – made up of documents and
spreadsheets containing hundreds of detailed information
prepared by the MA and the AA, including responses to
EPSA recommendation and system audits.

23. Workstreams of evidence continue to be
actioned
• Unit Cost Claims
• Article 125 (a)
• Article 125 (b)
• System Audits & EPSA recommendations

24. Unit Cost Claims (ESF Only)
• Claim 1 – No of operations: 17. Fully completed and has been
declared to the European Commission.
• Claim 2 – No of operations: 15. In progress and the AA have started
their checks on the first 4 fully completed operations. The remaining
11 operations require further information from Lead Partners.
• Claim 3 and 4 – in progress and currently Claim 4 is slightly more
advanced than claim 3.

25. System Audit Article 125 (a) Pre Payment
Verification Check
• AA have completed initial findings on the original sample and the MA
are working to respond to the issues and recommendations made.
• Given the sample size and to ensure evidence is fully robust, we will
undertake a retrospective exercise to check on previously paid claims
and bring these into line with the improved Management Control
System (MCS).
• Those Lead Partners who are part of this retrospective exercise have
and will be contacted directly.

26. System Audit Article 125 (b) Visits (On the spot)
Stage 2
• Phase 6 visits commenced on 11 February and concluded on
18 March 2020.
• The impact of Covid-19 lockdown meant that further
evidence could not be submitted for some operations.

27. System Audit Article 125 (b) Visits (On the spot)
Stage 2
• Of the 18 operations visited:
• 11 have been fully completed
• 7 are still in progress and may not conclude until lockdown
measures ease sufficiently to allow access to information.
• Planning for Phase 7 has commenced and Lead Partners
selected have been notified. These visits will be undertaken
as a desk-based exercise.

28. System Audit & EPSA recommendations
• We are continuing to work through these
• Some of the issues within these reports have crossover with
Unit Costs, Article 125 (a) and (b).
• Being resolved in tandem.

29. Key aims
• To successfully convert as many ESF operations to unit
costs.
• To ensure we can demonstrate full compliance with
Management Control System that will satisfy the EC’s key
requirements.
• To lift both programmes out of suspension.

30. Any questions?

31. Future Funding
Karen McAvenue
Head of Structural Funding Programmes
Managing Authority

32. Background
• Only four months away from closure of the current programmes – still
no news from the UK Government on replacement.
• Ministry for Housing, Communities and Local Government continue to
advise that we will find out more through Comprehensive Spending
Review this Autumn.
• The Future Fund team continues to engage regularly with both the UK
Government and other Devolved Administrations.

33. Consultation
• Launched by Ivan McKee, Minister
for Trade, Investment and
Innovation, on 5 November 2019
and ran until 12 February 2020.
• 8 stakeholder engagement events -
Orkney, Glasgow, Edinburgh,
Aberdeen, Inverness, Dundee,
Stornoway and Dumfries.

34. Consultation
• 3 Academic engagement sessions:
• 2 round table discussions at the Royal Society of Edinburgh on skills and
innovation
• An academic conference at the University of Strathclyde which focussed on
the place of the Shared Prosperity Fund in a wider discussion on regional
policy post-Brexit.
• Lead Partners session to hear views on their experience of delivering
projects and thoughts on future objectives and governance and with
policy colleagues from across Scottish Government.

35. Results
• 155 consultation responses received
both electronically and online.
• 171 unique organisations involved in
workshop events and/or consultation
response.
• An analysis report was published in June
2020 which will act as the basis for the
development of any Scottish position.

36. Key findings
Strategic Aims:
• Continued engagement with stakeholders
• Core principles, aims and objectives should be broadly similar to
previous ESIF programmes, expanded to include wider social objectives
• Additionality should remain a core principle of the successor fund
• The focus of the UKSPF on addressing disparities in regional economic
performance was supported for Scotland

37. Strategic Aims (continued):
• Related European funds that target rural development were felt to be
relevant when considering the strategic aims of a new fund
• Geography was a consistent theme throughout the consultation
responses – general agreement that some form of national framework
would be needed but no consistent view on how “regional”, “sub-
regional” or “local” should be defined in a geographic sense.
Key findings

38. Governance Structures:
• Support for a local focus, devolved responsibility, and for funding to be
allocated using a fair, flexible and transparent methodology, with clear
and objective criteria
• Near universal support for longer-term funding to enable sustainable
change to be planned, programmed, achieved and evaluated
Key findings

39. Governance Structures (continued):
• Support for partnership and governance structures to be prioritised to
minimise any delays and allow timely and effective delivery.
Very strong support for governance arrangements to be based on a
principle of subsidiarity, and using existing partnership structures
operating at a regional and local level where possible
Key findings

40. Governance Structures (continued):
• There was strong support for regional/local accountability and
management of funding and local priority setting within a broad national
framework
• New fund should be significantly less bureaucratic and burdensome, and
more proportionate to the level of investment sought.
Key findings

41. 1. Funding and Allocation Models
2. Governance and Delivery
3. Policy Alignment
4. Monitoring and Evaluation
Thematic Groups

42. 1. Funding and Allocation Models
To consider options for how funding should be apportioned across the
country.
Recommendations should focus on the definition of geographies, the
definition of place and methodologies to for determining funding splits.
This will be linked to and influenced by the key outcomes for fund and
should take account of fit with national priorities.
Thematic Groups

43. 2. Governance and Delivery
To consider which mechanisms we might use to distribute funding and to
recommend a preferred model.
It should address issues of subsidiarity, additionality and governance.
Proposals will include consideration of how we might use or learn from
existing funding structures Monitoring and evaluation elements will also
have to be considered and developed.
Thematic Groups

44. 3. Policy Alignment
To look at the fits between the SPF and other funding streams, other EU
Programmes including cross-border support as well as considering post
COVID recovery plans.
The group may also consider how the SPF might address lateral themes,
such as climate change and wellbeing.
Thematic Groups

45. 4. Monitoring and Evaluation
To develop key success criteria and a logic model for determining the
impact of the funds.
Thematic Groups

46. • Develop papers and submit outline plan to Ministers early to
mid September
• Continue engagement – Mr McKee meeting UK Gov Minister
Simon Clarke on 1 Sept and Ministers from other DAs on 2 Sept
• Set out draft plans prior to Comprehensive Spending Review
Next steps

47. Any questions?

48. Closing remarks & final questions
Hilary Pearce
Head of the Managing Authority

49. Thank you!
Keep an eye out for a feedback survey…