Announcement

Government welcomes Select Committee acknowledgement of improvements to management of the European Regional Development Fund

This news article was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

The Government has issued its response to the Communities and Local Government Select Committee’s report into the European Regional Development…

The Government has issued its response to the Communities and Local Government Select Committee’s report into the European Regional Development Fund.

It welcomed the Committee’s acknowledgement that this Government has done a good job of managing the European Regional Development Fund (ERDF) in England, including, in particular, the transfer of programme administration from the Regional Development Agencies to the Department for Communities and Local Government.

Although welcoming most of the findings in the report, the Government does not agree with the Committee’s view that the transfer led to delays in approving projects and that there was a lack of match funding which affected their development.

The Minister responsible for the European Regional Development Fund in England, Baroness Hanham said:

I welcome the Committee’s acknowledgement of the improvements this Government has made to the management and delivery of English European Regional Development Fund programmes, by transferring responsibilities for their management to the Department.

However, I do not believe that this led to delays in the approval of projects. All English programmes met their 2011 spend targets, which is an indication that projects were being approved and processed on time.

With regard to the issue of the availability of match funding - at present, some 98 per cent of the 2007-13 English European Regional Development Funding allocation is either contracted or waiting to be contracted, which means that there is match funding in place. Therefore the need for part of the Regional Growth Fund to be ring fenced for ERDF purposes is not at present necessary

Background

The Communities and Local Government Select Committee held an inquiry into the European Regional Development Fund earlier this year. The Government submitted written evidence to the Committee in April and Baroness Hanham subsequently gave oral evidence to the Committee on 9 May.

The Committee published its final report on 13 July. The main areas the Committee investigated were the impact and value for money of ERDF; the role of DCLG in programme management and the provision of match funding; and improvements for the future, 2014-20 programme period.

The key conclusions in the report are that:

  • ERDF is a highly valuable source of funding for local authorities and other recipients;
  • the transfer of ERDF management from the Regional Development Agencies to DCLG went well, but there were delays in project approvals and the emphasis on compliance with the EU Regulations has led to more innovative bids being rejected;
  • there is a lack of match funding for ERDF projects, so part of the Regional Growth Fund budget should be set aside to provide match funding;
  • many of the EC’s proposals for the 2014-20 programmes are welcome, notably the possibility that Local Enterprise Partnerships could take a greater role in managing ERDF; and
  • beyond 2020 the Committee would like to see repatriation of the Funds backed with a HM Treasury guarantee that there will be no loss of funding for the poorest regions.

The aim of ERDF is to reduce the economic disparities between and within Member States, by supporting economic regeneration and creating jobs. DCLG is the Managing Authority for ERDF programmes in England. It oversees 10 Operational Programmes with a total value of €3.2 billion (around £2.8 billion) in the 2007-13 programming period.

Until July 2011, the Regional Development Agencies carried out the day to day management of ERDF programmes in England. Following the decision to abolish the Regional Development Agencies, DCLG took over responsibility, whilst retaining a locally based ERDF Programme Delivery Team in each Operational Programme area.

ERDF generally pays up to 50 per cent of the eligible costs of a project. The remaining match funding must be found by the applicant and can come from a range of public and private sources, including Government funds such as the Growing Places Fund, Broadband UK and the Regional Growth Fund.

In October 2011, the European Commission published the draft Structural Funds Regulations to cover the next, 2014-20, programming period. The Regulations are currently the subject of negotiations between the European Commission and Nation-States.