EU COMMON STRATEGIC FRAMEWORK FUNDS 2014-2020

1. EU COMMON STRATEGIC FRAMEWORK FUNDS 2014-2020 CEDOS 15 February 2013

2. - CSF FUNDS ‘ALLOCATED’ TO THE UK -STRUCTURAL FUNDS, RURAL DEVELOPMENT & FISHERIES FUNDS EUROPEAN REGIONAL DEVELOPMENT FUND(£2.8 bn 2007-2013 England) • Innovation and knowledge based economy (incl commercialisation of research and technology transfer) • Stimulating enterprise and supporting SMEs • Sustainable Development & low carbon technologies • Building sustainable communities – incl regeneration 10 programmes in England managed by DCLG (previously RDAs) EUROPEAN SOCIAL FUND(£2.5 bn 2007-2013 for England) • Helping unemployed and inactive people into work (especially disadvantaged groups such as ex-offenders, young people NEET and unskilled people) • Improving workforce skills and redundancy support 1 English programme managed by DWP

3. - CSF FUNDS ‘ALLOCATED’ TO THE UK (continued) -STRUCTURAL FUNDS, RURAL DEVELOPMENT & FISHERIES FUNDS EUROPEAN AGRICULTURAL FUND FOR RURAL DEVELOPMENT (£3.7bn 2007-2013 for England) • Improving the environment and countryside; Improving the competitiveness of the agricultural and forestry sector ; Quality of life in rural areas and diversification of the rural economy. One English programme / DEFRA. EUROPEAN FISHERIES FUND (£40m for England in 2007-2013) • Smart, green fisheries (to address discards); aquaculture businesses ; coastal communities dependent on fishing. 1 UK programme / DEFRA.

4. CURRENT DELIVERY ARRANGEMENTS

5. WHAT DELIVERY PARTNERS TOLD US • No regional boundaries / new chances to collaborate • Harmonised and simplified administrative procedures • More consistent and co-ordinated approach & advice from managing authorities • Clarified arrangements for city deals / ITIs • Broader range of partners locked in (esp SMEs) • Pooled knowledge & lessons learned • Better co-ordinated approach to HMG match-funding • Transparent allocations

6. Co-financing Organisations CSF Growth Teams LEPs / ITIs PROPOSED DELIVERY ARRANGEMENTS 2014-2020 Growth Programme (ERDF, ESF & EAFRD) Maritime and Fisheries Programme (EMFF) Rural Development Programme (EAFRD) Community Led Local Development, including Leader and FLAGs Projects

7. GROWTH PROGRAMME • An “EU Growth Programme” to be financed by ERDF and ESF with a contribution from EAFRD • A single “EU Growth Programme Board” incorporating a joint Programme Managing Committee for ESF and ERDF • LEPs to be the fundamental building blocks receiving a 7 year notional allocation subject to periodic performance reviews • LEPs to identify their preferred EU investment prospectus as part of their wider growth strategy, for agreement by the Growth Board. LEPs will not take on project delivery accountabilities, however but retain a strategic oversight role in cooperation with local partners. • Government departmental teams to work as “CSF Area Growth Teams” to support LEPs in their strategic role. All final funding decisions to be dependant upon due diligence by fund Managing Authorities. • National co-financing initiatives to take account of local needs • ‘ITIs’ may be an option in a limited number of places - where this arrangement will deliver better value, higher impact results.

8. GROWTH PROGRAMME ORGANISING PRINCIPLES Variable geographies Complex EU funds packaged as a coherent and consistent programme National and local priorities aligned Local decision making and drive BETTER FOCUS HIGHER IMPACT INCREASED GROWTH A single set of targets and milestones across England Common standards and transparent accountabilities EU regulatory requirements met and financial risk minimised Lower cost & simplifies administration

9. GROWTH PROGRAMME THEMES Top priorities • Research, technological development and innovation – esp. commercialisation • Raising SME competitiveness – esp re exports • Shift to low-carbon economy – esp energy efficiency & renewable technologies • Employment & skills (inc. social inclusion) Other objectives • Climate change adaptation, risk prevention & management • Environmental protection & resource efficiency • Sustainable transport and removing network bottlenecks • Access to & use of ICT

10. WHAT’S NEW: ‘LESS DEVELOPED’ REGIONS 2014-2020 GDP/head below 75% EU27 average 80% EU co-financing available for wider range of activities Safety net” of 2/3 of previous allocation for regions moving ‘up’ and out of this category At least 25% spend must be from European Social Fund West Wales and the Valleys Cornwall and Isles of Scilly

11. WHAT’S NEW?: ‘TRANSITION’ REGIONS 2014-2020 GDP/head between 75% and 90% of EU27 average 60% EU co-financing OVERALL Safety net” of 2/3 of previous allocation for regions moving ‘upwards’ into this category At least 40% spend must be from European Social Fund, of which 70% likely to focus on only 4 employment-related priorities, with up to 20% for tackling social exclusion at national level (although the 20% can include a proportion of ERDF). 80% ERDF likely to focus on only 4 priorities - Cumbria (89.5% of EU average) Devon (88.1%) Northern Ireland (86.4%) East Yorkshire & N. Lincolnshire (85.8%) Lancashire (84.9%) South Yorkshire (84.5%) Highlands & Islands (84.1%) Shropshire & Staffs (83.9%) Merseyside (80.2%) Lincolnshire (79.8%) Tees Valley & Durham (78.5%)

12. ‘MORE DEVELOPED’ REGIONS 2014-2020 GDP/head more than 90% EU27 average 50% EU co-financing At least 52% spend must be from European Social Fund, of which 80% of each programme must focus on only 4 priorities At least 20% of value of ESF likely to focus on social exclusion at national level (but can include ERDF) 80% ERDF to focus on only 4 priorities: Innovation SME competitiveness Low carbon and energy efficiency (at least 20%) A N other?

13. WHERE ARE WE NOW? Go live Mid 2014 Ministers agree domestic delivery HMG develops EU Growth Programme;LEPs develop EU investment portfolio Informal consultation Develop UK CSF negotiating positions Identify, develop and test policy options; Negotiate UK Partnership Agreement EU Commission tests & launches proposals UK negotiates with other EU countries, European Parliament and Commission Develop UK EU budget negotiating positions UK negotiates EU budget EU - Eurozone crisis; downward pressure on EU budget; upward pressure on CSF funds to deliver results UK – pressure to drive high impact growth; localism; city deals; CSR; ministerial change & elections

14. NEXT STEPS : EUROPE • EU 7 year budget deal agreed by Member States 7 Feb • Financial allocations to countries; to special status areas (eg transition) & confirmation of funding priorities • Swift approval by EP? • Then CSF regulations negotiations with European Parliament (4 months + ?), then back to governments (4 months + ?) • Then UK business plan negotiated with Commission, followed by programme proposals (4 months + ?) • Earliest likely start : Q2 2014

15. NEXT STEPS - ENGLAND • Spring Budget: Outline LEP guidance published on EU investment strategies (alongside outline response to Lord Heseltine review) • From Spring 2013: LEPs to identify and prioritise EU pipeline investments, with advice from local EU teams • Summer: more detailed LEP guidance once EU negotiations with EP further developed & final response to Lord Heseltine review complete (+ EU allocations?) • Autumn: LEPs submit first cut strategic plans incl emerging EU pipeline to HMG for agreement / steer • Winter: LEP / HMG agree targets, milestones. Plans consolidated • Spring 2014: UK business plan (incorporating LEPs’ proposals) agreed with European Commission • Summer 2014: Start spending?!

16. GUIDANCE TO LEPs IN AN UNCERTAIN LANDSCAPE • How do LEP strategic plans map onto EU funding priorities? • What are the top priority transformational investments needed to drive jobs and growth which can be EU funded? • What local ‘reach’ is needed : who to involve and how? • Who else beyond the LEP do you need to work with to strengthen your strategic advantages? • What wider funding packages need to be put in place?