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What next for EU funding in the North East - all change or more of the same?
What next for EU funding in the North East - all change or more of the same?

19th Mar 2013

New Skills' MD Peter Graham offers his views and insights into the future of EU funding in the North East.

While the pockets of the European Union may no longer be as deep as they once were, the EU-wide Structural Funds allocation of €325bn for 2014 to 2020 remains one of the single biggest budget lines for the EU, retaining the capacity to make a huge impact on boosting growth in regions like the North East through the economic development projects they support. The direct injection of cash into the regional economy will be very welcome too. The good news at this stage is that the North East will continue to receive a significant Structural Funds allocation in the years 2014 to 2020, an outcome that has not always been certain during the tenure of the Coalition Government.


As the current NE Competitiveness and Employment Programme begins to draw to an end, attention is now turning to the future of EU funds in the North East, and what will happen when the new programme launches from 2014. While the key questions remain unanswered (how much funding will the region get, and what can it be spent on?) the new programme is beginning slowly to take shape.


For hardened economic development hacks, the programme has a very familiar ring at first glance, with a continued focus on boosting SME competitiveness, innovation and R&D, and improving skills and productivity, alongside the (very) long trailed transition to a low carbon economy.


But look more closely and you’ll see some important changes. And they could affect whether or not organisations with a past track record of delivering Structural Funds projects can continue to do so in the future.


First and foremost, in an attempt to achieve ‘more bang for the Euro’, funds that have for decades been managed separately (ERDF, ESF, some rural development funds, and others) will be included in a single programme, with the snappy moniker of ‘Common Strategic Framework (CSF)’. The idea is to save some money by streamlining bureaucracy, while improving synergy between the various funds and the activities they support.


While EU leaders haggle over the final budget numbers, we can all begin to look ahead to the future of EU funding with a few changes in mind. If you’re likely to be bidding to the new programme, some of this will influence how you need to position yourself.


    Leading role for LEPs- Under the new CSF, notional allocations of Structural Funds monies will be made to each LEP area within the target regions. This means separate allocations for the North East and Tees Valley LEPs and, while the detail is still being worked out, it’s clear the LEPs will play a leading role in allocating the funds. They’ve just begun the process of developing ‘EU Investment Strategies’ to guide the prioritisation of the money which, no doubt, will align closely to their respective Economic Strategies. The outcomes of the North East Economic Review, due for publication in April 2013, are likely to provide an early guide to EU investment priorities in the north of the region. The Tees Valley Unlimited Business Plan will provide a similar function in the south of the region. Hopefully, this is a healthy sign that the strategic vacuum left by the abolition of the RDAs is beginning to be plugged. Keep a close eye over the coming months on how your LEP’s economic priorities and EU Investment Strategies are shaping up. They may start in late 2013 the process of developing a pipeline of potential projects for future EU funding.

    Varied funding levels across the North East - The early signs are that Tees Valley and County Durham are likely to receive a greater allocation of funding aid than Tyne & Wear and Northumberland. The number crunchers have defined the former as ‘transition regions’ on the basis that average GDP per head is lower in those areas. The scale of the differences in funding is unknown at this stage, but it could mark a shift in investment towards projects in the south of the region.

    Fewer, bigger investments - As is the fashion, the EU wants the regions to achieve greater impact with fewer resources. This could mean focusing EU funds on a small number of priority, transformational projects. While it’s too early to tell, the days of hundreds of separate ERDF and ESF projects in the region may be drawing to an end. This points perhaps towards more strategic partnerships between collaborators (and competitors?), working together to deliver large, strategic projects. Clearly, this approach lends itself to larger institutions, and may present challenges for smaller organisations, including some in the third sector.

    Demonstrating impact and performance-based funding - There’s strong rhetoric that the culture of EU spending must change. In the future, it won’t be about how good you are at spending the money; projects will be judged much more on the impacts and results they achieve. In fact, some of the funding may be paid only on the achievement of results, familiar to many ESF providers, but very new to ERDF. You could start preparing now by ensuring you have strong evaluation evidence and systems in place to demonstrate the difference you’re making.

    Tackling youth unemployment - Expect tackling youth unemployment to be a major feature of the new programme, an issue the EU is pressing all regions to get on top of, and rightly so. In addition to the new CSF programme, a €6bn pan-EU Youth Employment Initiative has been established, targeting regions with youth unemployment above 25%. Thankfully, the North East hasn’t reached this level, but we aren’t too far off.


So, while the Structural Funds are changing in some important ways, take comfort from those aspects that will never change. There’s no real sign of a loosening of the bureaucracy, so we can all continue to look forward to more grey hairs and furrowed brows, thanks to ERDF and ESF.


The New Skills team would be pleased to hear from you if you’d like to discuss the future of the EU Structural Funds - 0191 233 6333.