Session 4/2

The Future of Structural Funds

2014-2020

Patrick Willcocks Visiting Teaching Fellow

School of Business

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ObjectivesBy the end of this session you should understand

– The lead up to the new programme– The focus of the new Programme 2014-2020– The main geographical foci– Including Resources– Strategic Direction– The UK direction

• The Barca Report 2009

● EU2020 launch 2010

● 5th Cohesion Report 2010

KEY BACKGROUND WORK

The Barca Report 2009

need for significant change- primarily place based- more strategic direction- concentration of limited priorities- more evaluation/output related- transitional regions

Fifth report on economic, social and territorial cohesion

‘Cohesion policy should continue to playa critical role in these difficult times, in order to deliver smart, sustainable and inclusivegrowth, while promoting harmonious development of the Union and its regionsby reducing regional disparities.’

Fifth report on economic, social and territorial cohesion

KEY RESULTS Reinforcing Strategic Programming Increasing thematic concentration Strengthening performance through

conditionality Improving evaluation New financial instruments

Fifth report on economic, social and territorial cohesion

KEY RESULTS

Reinforcing partnership

Reducing Administrative burden

Architecture of Cohesion Policy

LOBBYING

LOBBYING

r

1. Compulsory urban earmarking in the mainstream programmes.2. Tackling the realities in all our cities3. Cities at the table: strengthening multi-level governance beyond the regions4. Thematic concentration supporting new partnerships5. Financial engineering to design instruments with direct access for cities6. Conditionality: keeping it urban and integrated

THE NEW PROGRAMME

Agreed budget

Regulations for the whole programme

Regulations for ERDF

Regulations for ESF

Regulations for the Cohesion Fund

THE NEW PROGRAMME – How the Commission Sees it – 10 key elements

1. Appropriate levels of investment in the regions

2. Targeted growth

3. Accountability and results

4. Pre-conditions for funding

5. Coordinated action

6. Simplification of procedures

7. Expanded urban dimension

8. Cross-border cooperation

9. Consistency and coherence

10. Financial instruments

THE NEW PROGRAMME

THE NEW PROGRAMME

Three main geographies

Less Developed Regions – equivalent to Convergence Transition Regions – these are NEW More Developed Regions – equivalent to Competitiveness

Plus Cohesion Fund Territorial Co-operation

How will funding be allocated?

The New Progamme – ERDF and ESF Allocations

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More coherent use of available EU fundsThe Golden Thread

2007-2013 2014-2020

Lisbon Agenda EU2020

Regulations Regulations

Community Strategic Guidelines Common Strategic Framework

National Strategic Ref Frame Partnership Contract

Operational Programmes Operational Programmes

WHAT IS THE DIFFERENCE?

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The Golden Thread

WHAT IS THE DIFFERENCE?

EU2020

Far more detailed than Lisbon strategy – 7 flagship programmes underneath each with targets

Common Strategic Framework

Co-ordinates ERDF, ESF EAGFF etc – one set of rules

Partnership Contract

Much more detailed than the NSRF,. With national targets and meeting key areas as outlined in the National Reform Programme

Operational Programmes

More focussed, ex ante conditions – e.g.need smart specialisation strategy

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A menu of thematic objectives1. Research & innovation

2. Information and communication technologies (ICT)

3. Competitiveness of Small and Medium-sized Enterprises (SMEs)

4. Shift towards a low-carbon economy

5. Climate change adaptation & risk prevention and management

A menu of thematic objectives cont.6. Environmental protection & resource

efficiency7. Sustainable transport & removing

bottlenecks in key network infrastructures

8. Employment & supporting labour mobility

9. Social inclusion & combating poverty10.Education, skills & lifelong learning11. Institutional capacity building & efficient

public administrations

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Concentrating resources to maximise impactConcentration of ERDF and ESF

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European Social Fund (ESF)

25%22%

Share of ESF within Cohesion Policy budget

2014-20202007-2013

Of total Structural Fund support (ERDF & ESF), ESF will represent: 25 % in less developed regions 40 % in transition regions 52 % in more developed regions

Ex Ante Conditionality - Smart Specialisation – new mantra

Smart Specialisation – new mantra

The European Commission wants national and regional authorities across Europe to draw up research and innovation strategies for smart specialisation.

Smart specialisation means identifying the unique characteristics and assets of each country and region, highlighting each region’s competitive advantages, and rallying regional stakeholders and resources around an excellence-driven vision of their future.

It also means strengthening regional innovation systems, maximising knowledge flows and spreading the benefits of innovation throughout the entire regional economy.

Smart Specialisation – new mantra

RATIONALE To develop and implement strategies for economic

transformation To respond to economic and societal challenges To make regions more visible to international investors To improve a region’s internal and external connections To avoid overlaps and replication in development strategies To accumulate a ‘critical mass’ of resources To promote knowledge spillover and technological

diversification

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European Social Fund (ESF)

Fully in line with the Europe 2020 strategy Promoting employment & supporting labour

mobility Investing in education, skills & life-long learning Promoting social inclusion & combating poverty Enhancing institutional capacity & efficient public

administration

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European Social Fund (ESF)

Reinforced social dimension 20 % of ESF allocations for social inclusion Greater emphasis on fighting youth

unemployment Mainstreaming & specific support for gender

equality & non-discrimination

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SimplificationCommon rules - funds covered by Common

Strategic Framework Cohesion Policy, rural development and maritime &

fisheries policy

Option of multi-fund programmes ERDF, ESF and Cohesion Fund

Streamlined delivery system Harmonised rules on eligibility and durability Greater use of simplified costs Linking payments with results e-Cohesion: “one stop shop” for beneficiaries Proportional approach to control

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Reinforcing Territorial CohesionFocus on sustainable urban development At least 5 % of ERDF resources – expectation that

decision making is devolved down

Creation of urban development platform Networking between cities and exchanges on urban

policy

Innovative actions for sustainable urban development

Subject to a ceiling of 0.2 % of the annual funding

Areas with specific natural or demographic features Additional allocation for outermost & sparsely

populated regions

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An investment-oriented policy

Promoting the use of innovative financing instruments Extending scope to all areas of investment Clearer regulatory framework 10 % bonus for innovative financing instruments &

community-led development A range of options offering flexibility to programme

managers

Maximum co-financing rates 75-85 % in less developed and outermost regions 60 % in transition regions 50 % in more developed regions

New Partnership Delivery Mechanisms

‘The multiple challenges confronting Europe – economic, environmental and social – show the need for an integrated and territorial place-based approach to deliver an effective response.’

Integrated Territorial Investment

Community-Led Local Development

New Partnership Delivery Mechanisms – Integrated Territorial Investment

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Cohesion Fund – much the sameSupports Member States with GNI/capita < 90 % of EU27

average

Investing in environment Climate change adaptation and risk prevention Water and waste sectors Biodiversity including through green infrastructures Urban environment Low carbon economy

Investing in transport Trans-European Transport Networks (TEN-T) Low-carbon transport systems and urban transport

The New Progamme – Cohesion Fund Allocations

Role of Partnership Contract/AgreementAn Agreement between member state and EC Outlining the issues that need tackling The number of Operational Programmes

(regional/National) The broad types of intervention The governance arrangements (including

delegation) Ex ante Conditions The outputs/targets

Draft Bulgarian Partnership Agreement

What’s the Impact in the UK Less Developed Regions €2,4bn

Transition Regions € 2.6bn

More Developed regions € 5.8bn

Cross Border Co-operation € 0.6bn Transnational Co-operation € 0.25bn Youth Employment Initiative € 0.2bn Total € 11,8bn

UK REGIONS

What’s the UK’s thoughts Consultation on developing ideas Working on the draft partnership contract at

the moment – been ongoing for over 12 months

Are refusing to consult on draft partnership contract document

Will be consulting on the Operational Programmes (OPs)

Will be England ERDF and ESF OPs

HMG’s GROWTH PROGRAMME ORGANISING PRINCIPLES

National and local priorities

aligned

Variable geographies

Local decision making and

drive

Complex EU funds packaged as a coherent and

consistent programme

Common standards and

transparent accountabilities

Lower cost & simplifies

administration

A single set of targets and milestones

across England

EU regulatory requirements

met and financial risk minimised

BETTER FOCUS

HIGHER IMPACT

INCREASED GROWTH

INITIAL DELIVERY ARRANGEMENTS THOUGHTS

Projects

Community Led Local Development, including Leader and

FLAGs

Maritime and Fisheries

Programme(EMFF)

RuralDevelopmentProgramme

(EAFRD)

Growth Programme(ERDF, ESF & EAFRD)

Local Growth Teams

Co-financing Organisations

LEPs

NOTE THIS IS ENGLAND ONLY

Role of Local Enterprise Partnerships

There are no regional organisations left to deliver the funds (except London)

So national ERDF and ESF programmes are proposed

Every LEP is putting forward its overall strategy and its European funding strategy

Some LEP’s might want ITI’s but CLG against Namely Core Cities, London and Cornwall?

Timetable from Now

Draft Partnership Agreement submitted to EC Hopefully to be agreed shortly Drafting Operational programmes –

Consulting in April 2014 Hope to be agreed autumn of 2014 But currently behind schedule

Greater Birmingham and Solihull Local Enterprise Partnership

Draft submitted October 7th 2013Final version January 31st 2014Awaiting comments from BIS/DCLG

£238m allocation (plus £19m YEI)Chosen 6 priorities

• Innovation and R&D £30m

• Stimulating Business and Enterprise£45m

• Low Carbon and Resilient Places£35m

• Promoting Employment and Mobility£36.5m

• Promoting Social Inclusion and Employability£36.5m

• Skills for Growth and Entrepreneurship £36,5m

Greater Birmingham and Solihull Local Enterprise Partnership

GREATER BIRMINGHAM AND SOLIHULL LEPISSUES

A Complicated Picture• Straddling a transition and a

more developed region• A young partnership with

little history of working together

• Want an ITI –i.e. delegated powers but CLG not keen

• Trying to co-ordinated with neighbouring LEPS

• Overlap LEP issues

Role of LEPs - Issues

Role of Local Enterprise PartnershipsIssues

Many more LEPs than regions so may be difficult to deliver – might not be cheaper

These are not full partnerships – made up of businesses and local authorities – will need to bring in further partners – partnership principle

Seeking to write the national Ops on the basis of 39 LEP plans – how is this possible

• Co-ordination of national policy say on Smart Specialisation with LEP based work will be problematic

• Disagreement with the Commission over LEPs – over the issue of delegated powers.

• Many LEPs lacking in expertise and resources to deliver these programmes

Role of Local Enterprise PartnershipsIssues

Conclusions

Clear that new funding programmes offers– Greater Simplification– Greater focus on key priorities– Greater co-ordination between funds– Still significant funds for the UK– More devolved delivery proposed – but

uncertain how it will work in the UK