Agenda item

Report of the Corporate Director of Regeneration and Economic Development – Head of Strategy, Programmes and Performance, Regeneration and Economic Development.

The Chairman introduced the Strategy and Partnerships Team Leader, Regeneration and Economic Development, Heather Orton who was in attendance to give an update as regards the EU Funding Programme (for copy see file of minutes).

The Strategy and Partnerships Team Leader noted that the EU Programme was not at the operational stage yet, reminding Members that the 2014-2020 programme had allocated €537 million to the NELEP, with €157 million being allocated to Durham itself as a Transition Region.   

Members were informed that the European Rural Development Fund (ERDF) programme was signed off, with the Government and EU negotiating in respect of the Operational Programme (OP) for the ESF.  It was explained that the Rural Framework had been agreed and informed the development of the LEADER programme for County Durham, with further resources agreed through the European Agricultural Fund for Rural Development (EAFRD), to be distributed via the NELEP.

Councillors were reminded that since February 2015, EU governance arrangements had been confirmed, with “Open Calls” for funding having been released by the Managing Authorities, an example being for the YEI.  It was added that while waiting for the agreement as regards the OP, DCC and partners were working together to develop various projects.     

The Strategy and Partnerships Team Leader explained that the OP would contain the rules and outputs required.  Members learned that Durham, as a Transition Region, would have ERDF resources (business support focus), being approximately 64% of the programme, and ESF resources (supports skills and social inclusion), being 34% of the programme.  It was noted that the funding was not provided to the Council, rather DCC with the CDEP would have an advisory role, with ESIF sub-committees advising the DCLG who are the “Managing Authority”.  It was noted the North East ESIF Sub-Committee would be chaired by Paul Woolston, who is also Chairman of the NELEP.  The Committee were asked to note that issues to note included: match funding and co-financing, currently awaiting guidance; delays to the ESF OP; looking again at ESIF strategies on the basis of shifting economic priorities, noting the CDEP would look at this in January 2016; and fluctuating exchange rates, with the delays experienced resulting in effectively an 18% reduction for the region, based upon 6 month reviews.

Members were referred to Appendix 2, which set out the schedule of existing and emerging funding calls with the NELEP and County Durham.  Councillors noted national local open calls would be linked to innovation, business support and low carbon, and Members noted the more detailed report concerning YEI that had already been received.  Councillors noted “Building Better Opportunities” with the Big Lottery matching funds from ESF to tackle poverty and social inclusion, with the NELEP and Big Lottery being supported by Voluntary Organisations Network North East (VONNE).  It was added that the first tranche had made £2.4 million available for activity in County Durham, with 4 potential lead partners from the voluntary and community sectors (VCS).

The Committee noted that there were now two local groups for County Durham in respect of the LEADER programme, with Durham Coast and Lowlands having an allocation of £2.1 million, and the North Pennie Dales having an allocation of £1.5 million.  It was added that County Durham was taking a lead in respect of EAFRD, in developing a specific programme to support rural businesses and key tourism projects.  It was noted that Community-led Local Development (CLLD) was a specific tool for managing ERDF and ESF for smaller community led interventions.

The Strategy and Partnerships Team Leader noted that governance arrangements within the Council, in respect of EU Funds, involved Members and Senior Officers and proposals would be worked up once the OP was signed off, with delivery to commence early next year.

The Chairman thanked the Strategy and Partnerships Team Leader, asked Members for their questions on the report.  The Chairman noted that he felt uneasy as regards some of the issues yet to be resolved, such as co-financing arrangements; the Department of Communities and Local Government (DCLG) as Managing Authority; and the reductions as reported from currency fluctuations, a consequence of the delays in agreeing the OP.

The Strategy and Partnerships Team Leader noted that Durham, as a Transition Region, had its allocation fixed at €157 million. 

Councillor J Armstrong noted that he agreed with the Chairman in respect of delays and DCLG involvement.

Mr T Batson asked whether there would be any repercussions in terms of this particular funding should any referendum on EU Membership in the UK return a result backing an EU exit.  Councillor H Nicholson noted as he understood, any funds that were allocated would be paid and added that he felt any “exit” would take a number of years, and potentially put at risk 140,000 jobs in the region.  The Strategy and Partnerships Team Leader noted that there would be no impact on the current programme and the future management of the European Programme is being considered as part of devolution discussions, within the North East Combined Authority (NECA) area. 

Councillor J Clare noted he was keen to have information on how the programme would be delivered once the OP was known and asked whether information on delivery plans would be brought forward in due course.  The Strategy and Partnerships Team Leader noted updates would be provided to the Committee as appropriate.

Resolved:   

(i)              That the report be noted.

(ii)             That the Economy and Enterprise Overview and Scrutiny Committee receive further reports as the programme progresses.