Agenda item

Report of the Corporate Director of Regeneration and Economic   Development.

The Chairman thanked the Head of Strategy, Programmes and Performance, Regeneration and Economic Development, Andy Palmer who was in attendance to give an update to Members in relation to the EU Funding Programme (for copy see file of minutes).

The Head of Strategy, Programmes and Performance reminded Members that there were various strands to the EU Structural Funds Programme and that the programme for 2014-2020 had yet to be approved. 

Members noted that the programme was in effect a national one and the UK Government was in negotiation with the EU Commission regarding the English Operational Programme (OP).  Councillors noted that the position had not advanced significantly since the last report to Committee in October 2014 and there had been a number of delays.  It was explained that while the Programme was delayed, there would be a 3 year period at the end of the Programme to be able to complete projects, with allocations having to be made before the end of 2020. 

Councillors noted that the NELEP had been allocated £450 Million and Members were reminded that as County Durham was a “Transition Region”, it was unique within the NELEP area, having a ring-fenced allocation amount of £135 Million.

The Committee noted that OPs for Scotland, Northern Ireland and Wales had been agreed, however, the English OP had not yet been signed off by the EU as they did not formally recognise the LEPs in this context.  It was explained that Government had noted the OP should be agreed by the end of March 2015, however if it was not then the current year EU funding cycle would be missed and projects would need to be re-profiled.  Councillors were reminded that there were 5 strategic objectives in relation to the European Structural Investment Fund Strategy (ESIF) those being: Innovation; Business Growth; Low Carbon; Inclusive Growth; and Skills.

Members learned that the County Durham Economic Partnership (CDEP) had a role in coordinating, as Durham was a Transition Region and a number of work streams had been established in line with the CDEP/Altogether Wealthier strategic priorities.  It was noted that the work streams were: innovation; enterprise and business support; access to finance (JEREMIE), capital infrastructure; youth unemployment; social inclusion; adult skills and employability; and low carbon/sustainability.  Councillors noted that those work streams would inform the “Open Calls” for project applications, with the Council providing support to the CDEP, and there being a number of criteria a proposed project must meet to be eligible for EU Funding.  The Committee was reminded that as the English OP had not yet been agreed it would only be possible to work through the process up to a point, then the finalised OP would be required. 

The Head of Strategy, Programmes and Performance explained that the National Governance Board for the OP would have a number of sub-committees that operation within LEP areas, the area sub-committee for the NELEP area being referred to as the “European Investment Group”, with the DCLG acting as a “Managing Authority”.  It was reiterated that the European Investment Group was not a sub-committee of the NELEP, rather of the National Governance Board.   It was noted that the Group had met in shadow form and agreed terms of reference, and would operate in full after the OP was confirmed.  Members were referred to a governance structure diagram and noted that the CDEP was considered as the “County Durham Advisory Group” feeding into the sub-committee.

The Committee noted that there were several current issues, including the issue of match funding or co-financing.  It was explained that in the past local partners were able to put in their EU funds to “buy services” from Government Departments and those Departments would match fund at source. 

It was noted that this was not the case now, an example being the SFA no longer matching EU funds in terms of the Youth Employment Initiative (YEI), and given the removal of a range of Government grants and reductions in Council expenditure the sourcing of match funding could become an inhibiting factor for the Programme.

Members noted that issues included the delays to the OP as described and the rejection by the Department for Environment, Food and Rural Affairs (DEFRA) of an application for a £2.4 Million Leader Programme by the North Pennine Dales.  It was added that the Local Action Group had submitted an appeal and that the result of the appeal had not yet been announced.

It was explained that the emerging Durham Programme was coordinated by the CDEP, and areas the Council could be involved in delivery of included: business support to Small and Medium Sized Enterprises (SMEs); Capital Infrastructure to support business development; employability/apprentice support/youth employment; support to the voluntary and community sectors following the transfer of assets; and low carbon initiatives/Green Deal.  Members were referred to a list of emerging projects appended to the Committee report.

The Head of Strategy, Programmes and Performance concluded by explaining that the loss of manufacturing in general and reduced Government allocation was balanced by current levels of EU funding.

The Chairman thanked the Head of Strategy, Programmes and Performance and asked Members for their questions on the report.

Members asked questions in respect of: Members being made aware of the outcome of the North Pennine Dales Leader appeal; the Programme being “Council-centric” and whether there was a conflict of interest if the Council was bidding for funding and also charged with publicising the process of applying for EU funds; and whether businesses and the voluntary sector were fully aware of the EU Programme.

The Head of Strategy, Programmes and Performance noted that Members could be made aware once the outcome of the North Pennine Dales Leader appeal was known.  It was explained that the Council was not involved in a programme management role, that was for Government, though the Council did have a role in terms of community leadership and the danger was that potential funding may be lost as there was less ability to match fund projects.  Councillor J Clare noted that at a recent conference regarding the European Social Fund (ESF) there was a large number of third sector groups in attendance who were keen to access funding where they could and added that he felt the business community may not be as aware, or as keen to “jump through the hoops”. 

The Head of Strategy, Programmes and Performance added that once Open Calls were active, they would be heavily promoted from that point.  It was added that there would be a need to manage expectations in the context of the reduced ability to source match funding and the Council could provide support in terms of applications.

Resolved:

(i)              That the Economy and Enterprise Overview and Scrutiny Committee note the update report.

(ii)             That the Economy and Enterprise Overview and Scrutiny Committee receive further progress reports at future meetings of the Committee.