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.