Select Committee on Work and Pensions Minutes of Evidence


Memorandum submitted by the Government Office for Yorkshire and the Humber (ESF 09)

1.  SUMMARY

  1.1  Government Offices (GOs) play a key role at regional level in managing the implementation and delivery of European Social Fund in:

    —  areas that are lagging behind (Objective 1);

    —  areas facing structural difficulties (Objective 2); and

    —  supporting education/ training & employment systems (Objective 3).

  1.2  Responsibilities are wide and range from setting up regional committees with partnership representation, managing the project selection process through to financial stewardship and payment of ESF grant to projects. The Objective 1 and 2 Programmes are regionally focused, giving GOs a strong policy role in shaping Programmes to meet regional priorities. Although the Objective 3 Programme is run nationally, GOs have some degree of autonomy in carrying out their roles and responsibilities.

  1.3  From 2001 Government Offices have been instrumental in working with partners, to implement co-financing arrangements in the Objective 3 Programme. This has marked a departure from the traditional practice of direct bidding into the Programme. Funding is channelled to providers through organisations such as Learning and Skills Councils (LSCs) and Jobcentre Plus.

  1.4  Early independent evaluation commissioned by West Yorkshire LSC suggests that the approach has strengthened coherence with regional strategies such as the ESF Regional Development Plan. High satisfaction rates with the management of the process are reported. In rural areas such as North Yorkshire, the Learning and Skills Council co-financing arrangements have attracted a wider range of providers to apply for funding.

  1.5  Whilst co-financing has helped to streamline access to ESF match funding, only GO London has implemented full co-financing arrangements with partners. For many regions, there will remain a small element of direct bidding into the Programme for measures relating to research and high-level skills training (NVQ 4 and above).

  1.6  The scale of ESF resources available in Objective 1 Programmes has assisted the development of co-financing in these areas. It is an effective means of channelling large amounts of funding to help deliver transformational change in regions that are lagging behind. Large, high impact projects are being developed, that might not be so manageable under a direct bidding approach.

  1.7  Implementation of ESF activity in Objective 2 is more challenging,. Government Offices are networking to share best practice, and introduce co-financing and pro-active commissioning of projects to improve performance.

2.  INTRODUCTION

  2.1  This memorandum provides evidence from Government Office for Yorkshire and the Humber to inform the Work and Pensions Select Committee inquiry into the European Social Fund (ESF).

  2.2  Government Offices (GOs) have the delegated authority from the Department of Work and Pensions to manage regional budgets, work with key partners to monitor the implementation of ESF activity, sign contracts with project sponsors and make payments of ESF grant.

  2.3  ESF is allocated through 3 Structural Fund Objectives. ESF spending is targeted on specific regions—known as Objective 1 and 2 regions. There are separate national Objective 3 programmes in England, Wales, Scotland and Northern Ireland. For the new round of 2000-2006 programmes the following table shows the ESF financial allocation for each English region—

Region
Objective 1
Objective 2
Objective 3
TOTAL
London
£0
£19m
£420m
£439m
South East
£0
£0
£226.4m
£226.4m
North East
£0
£90m
£122.7m
£212.7m
South West
£62.6m
£21.7m
£135.9m
£220.2m
North West
£269m
£0
£248.3m
£517.3m
West Mids
£0
£87.5m
£300m
£387.5m
East Mids
£0
£20m
£184.7m
£204.7m
Eastern
£0
£9m
£194.25m
£203.25m
Yorks Humb
£216m
£42.5m
£184.4m
£442.9m
TOTAL
£547.6m
£289.7m
£2016.65m
£2853.95m



European Structural Funds

  2.4  Objective 1 is the highest level of regional funding available from the European Union (EU) . It s aimed at promoting the development and structural adjustment of the EU regions most lagging behind in development. Eligible areas are those, which have less than 75% of EU average GDP

  2.5  Objective 2 is the second highest level of EU regional funding available and aims to support the economic and social conversion of areas needing to adjust the existing structure of their economies.

  2.6  Objective 3 involves only ESF and operates in every UK area except the Objective 1 areas. It is a national Programme and aims to develop labour markets and human resources by helping employers and workers adapt to new challenges and so compete more effectively in global labour markets. It is directed at the long-term unemployed and those facing particular barriers to finding fulfilling employment because of their disability, racial origin or sex.

3.  GOVERNMENT OFFICE ROLES AND RESPONSIBILITIES

  3.1  Whilst the Government Office involvement in administering ESF may vary across the Objectives 1, 2 and 3, there is a core set of responsibilities that includes:

    —  Establishing regional management structures ie convene, Chair, and provide a Secretariat for key decision making bodies, such as Regional Committees, Programme Monitoring Committees;

    —  Monitoring performance and maintaining programme management information at all stages;

    —  Implementing advice and guidance to sponsors on these programmes;

    —  Managing the project selection process;

    —  Taking forward decisions on individual bids—including production of the offer letter;

    —  Processing grant claims and monitoring financial expenditure;

    —  Monitoring, and inspecting projects in accordance with EU regulations;

    —  Ensuring that EU and UK regulations are respected throughout the process;

    —  Co-ordinating the programme's publicity and communications activity;

    —  Appraising all Technical Assistance[1] bids.

  3.2  GOs also carry out an important partnership and facilitation role, working with Regional Development Agencies and other partners to ensure that the partnership works effectively and is focused on strategy and delivery. This is fundamental to the successful implementation of ESF and requires a pro-active approach from GOs.

  3.3  Objective 1 and Objective 2 Programmes are regionally targeted. The Office of the Deputy Prime Minister, (ODPM) co-ordinates the management and implementation of these Programmes. However, Government Offices and partners, including Regional Development Agencies, and Local Authorities negotiate directly with the Commission to agree the Priorities and content of the Programme. Government Offices therefore have a key policy development as well as implementation role. In the Objective 3 Programme, the Department for Work and Pensions (DWP) retains a policy a strong policy lead, with GOs managing the implementation of the Programme at regional level.

  3.4  Even within the nationally run Objective 3 Programme, Government Offices have within the framework of European Commission and national rules and regulations, some degree of autonomy in carrying out these roles and responsibilities. For example, Government Office Yorkshire & the Humber has:—

    —  Written regional guidance (revised for each round) for Objective 3 direct bidders that includes details of the scoring and selection process. The aim always is to ensure that all processes are open and transparent.

    —  For "direct bids", devised a project selection process. This involves the participation of local partners on a voluntary basis to act as a "scoring panel", including the development of scoring guidance. The aim is to have a process that is clear to all those involved, is agreed by all those involved and takes all possible care to avoid bias or unreasonableness

    —  Developed a regional monitoring process. The aim is to develop a process that is non confrontational, facilitates sharing of information on performance and develops a good, trusting working relationship between Government Office and the provider.

    —  Worked with partners to develop programmes that are funded through Technical Assistance to help those organisations with little experience of ESF to successfully access funds and manage the project and associated paperwork.

    —  Introduced a Global Grants scheme to the Objective 3 programme—a small project fund with minimal bureaucracy, to enable groups and individuals to pursue training/capacity building ambitions. The aim is to make these small grants available to as wide a community as possible.

Financial Management and Control

  3.5  Government Offices have a stewardship responsibility to ensure financial propriety of the Programmes. Payments are made on a quarterly basis and paid through a three-stage claims payment process. Each claim is checked, certified and authorised by a different member of staff, in line with clear, delegated authority limits appropriate to the staff grade. Where the approvals process and payments process takes place within an integrated team there is a clear separation of duties .

  3.6  Government Offices must make payments promptly, monitor project performance to ensure that funds are being used effectively. A Financial Control Team inspects a sample of projects that up to 5% of ESF "spend". This team is separate from to the contract management functions of the European Secretariat.

  3.7  The Separate administrative, management and payment arrangements for European Social Fund, European Regional Development Fund (ERDF), European Agricultural Guidance and Guarantee Fund (EAGGF) and Financial Instrument for Fisheries Guidance (FIFG)[2] reflect the different requirements of each fund.

4.TARGETING AND ALLOCATION OF RESOURCES

  4.1  Priorities and allocations for the period 2000-2006 and activities eligible for project funding are set out in Regional Development Plans (RDPs) in Objective 3 ESF regions, and Single Programming Documents and Programme Complements for Objective 1 and 2 areas. Objective 3 RDPs have a single ESF focus. However, in Objective 1 and 2 areas, the Single Programming documents and Programme Complements provide holistic strategies for the implementation of assistance in these areas. ESF measures form part of an integrated package of funding, and are closely linked to wider actions funded through ERDF.

  4.2  Structural Funds Programmes are subject to an independent mid-term review. This provides opportunity to examine the effectiveness of the implementation, and if needed, adjust programmes in the light of the findings.

  4.3  Many Regional Development Plans are also being reviewed to take account of newly published Framework for Employment and Skills Action (FRESA). The FRESA for the region has been developed by Regional Development Agency and partners. It provides a single framework to match skilled people to good jobs, and is based on coherent, valid and accessible labour market and skills intelligence. It gives a focus of what needs to happen in the region to maintain and grow a healthy labour market. As such it can guide the priorities of RDPs.

5.  MANAGEMENT STRUCTURES

Objective 1 and 2 Programmes

  5.1  In Objective 1 and 2 Programmes, the implementation of European Assistance is overseen by Programme Monitoring Committees (PMCs), chaired by the Government Office. Membership is inclusive and drawn from regional stakeholders including the Regional Development Agencies, Regional Assemblies, local authorities, representatives from the voluntary and community sector and business. PMCs' responsibilities include:

    —  Reviewing progress towards Programme targets.

    —  Ensuring action is taken to keep programmes on track.

    —  Agreeing the project selection framework.

    —  Examining the results and effectiveness of implementation as set out for the different measures in the Programme and for the mid term evaluation of performance.

    —  Agreeing any changes to the Programme for subsequent consideration and approval by the European Commission.

  5.2  Some regions in receipt of both Objective 2 and 3 funding, combine their Committees eg West Midlands, North-West. These Committees are often supported by an ESF sub-group to provide a clear focus on skills and employment issues.

Objective 3 Programme

  5.3  For Objective 3, management of the regional element of the Programme is the responsibility of Regional Committees. Regions, such as Yorkshire and the Humber and the North East maintain a separate Committee for Objective 3 ESF.

  5.4  Regional Committees are responsible for all decisions relating to the regional implementation of the programme. Each Government Office is represented on the national ESF Programme Monitoring Committee. This ensures that ESF activity contributes fully to the achievement of regional goals as set out in Regional Economic Strategies, the Skills Action Plan and the National Action Plan for Employment.

  5.5  Regional Committees bring together a diverse range of interests to direct the management and allocation of ESF resources in the region. They provide a valuable forum for exchanging views about the direction of ESF resources in the region, and resolving potential and differences surrounding the key developments such as the move towards co-financing. Detailed responsibilities include:

    —  Approving the Regional Priorities as set out in the Regional Development Plan;

    —  Agreeing the regional guidance for bidding rounds;

    —  Endorsing and overseeing project selection process and endorsing project recommendations for approval;

    —  Ensuring that the regional budget is used effectively to meet regional targets in order to achieve best value for money;

    —  Establishing effective linkages with the delivery of ESF across Objective 2 and 3 to ensure complementarity and avoid duplication;

    —  Agreeing and monitoring the implementation of Technical Assistance;

    —  Promoting and applying the principles of Equal opportunities throughout the programme;

    —  Monitoring and evaluating programme performance against the regional Development Plan's objectives;

    —  Agreeing the regional publicity strategy and overseeing its implementation, promoting good practice and effective dissemination and networking between partnerships.

  5.6  Regional Committees can be supported by a range of sub-groups and task forces. The structure and management of these will vary depending on regional circumstances. In Yorkshire and the Humber, a standing Co-financing Monitoring sub Committee has been formed to deal with the detail of co-financing. This committee has a maximum of five members of (or nominated by) the Regional Committee. To maintain impartiality, the sub-committee does not include those project organisations that benefit directly from co-financed ESF support.

6.  OBJECTIVE 3: DIRECT BIDDING

  6.1  The management and implementation of the Objective 3 Programme has undergone radical change since the start of the Programme. At the outset, providers had to bid directly to Government Offices for ESF funding. GOs arranged the process of appraising and selecting projects. Independent panels were set up by Government Offices to score applications and make recommendations to the Regional Committee on the applications that should be supported. The Committees would then have the final decision on approval of projects Government Office would subsequently contract with the successful providers.

  6.2  The system generated a large number of successful but small- scale projects. Management and administration requirements were seen as onerous. Other than the very smallest projects (less than £10,000[3]), providers had to complete the same amount of paperwork, regardless of the project size. Strategically, the Objective 3 Programme was being "atomised" into a large numbers of small projects, making it difficult to focus on the overall strategy and direction of the Programme.

7.  CO-FINANCING IN OBJECTIVE 3

  7.1  Co-financing was introduced gradually in 2001. It marks a clear departure from direct bidding into the Programme and selection of projects via an independent scoring panel. The co-financing approach brings together both ESF funds and the required public match funding into a single pot for providers, who can access funds as a single funding stream. In practice this means that providers do not have to search for match funding or complete more than one set of applications. Co-financing organisations are public bodies with responsibilities that embrace training, employment and ESF related issues. They must be able to act as an intermediary to fund and target ESF activity but not deliver it directly. Co-financing in practice therefore routes ESF through a fewer number of large projects managed by organisations including Learning and Skills Councils, Jobcentre Plus and some Local Authorities. The approach aims to:

    —  promote greater coordination and targeting of provision;

    —  reduce bureaucracy, and the administration burden on providers, by providing match funding at source;

    —  allow for innovation and creativity at regional and local levels;

    —  place more emphasis on the quality of provision;

    —  ensure more systematic monitoring of provision; and

    —  ensure that ESF adds more value to the delivery of Government programmes

  7.2  Government Offices have been instrumental in working with partners, to implement co-financing in the Objective 3 Programme within their regions. The proportion of programme resources committed as a percentage of allocations to date across Objective 3 regions is set out below.

TOTAL OF O3 ESF COMMITTED TO CO-FINANCING

Government Office
% Committed to Co-Financing
London
66
South East
29
South West
21
West Midlands
56.9
East Midlands
15.6
Eastern
48.6
Yorkshire and Humber
55
North East
32.5
North West
44



  7.3  The introduction has been gradual to allow co-financing organisations to re-align their processes and management arrangements, and for potential bidders adapt to the new processes. The twin track approach allowing for direct bidding to GOs and co-financing helped partners to make this adjustment without adversely affecting performance and the flow of bids coming onto the Programme. It also allowed time to for co-financing organisations to address the concerns of particular sectors, including Local Authorities, voluntary/ community organisations and higher education, that the co-financing approach could narrow access to ESF resources. Regions are currently planning that at least 80% of resources will be committed via the co-financing route in the remaining years of the Programme.

Impact of Co-financing

  7.4  Co-financing is now the main route for organisations to apply for ESF funding. The immediate impacts are in the management and administration of the fund. Bids can be more actively commissioned by the co-financing organisations in line with the Regional Development Plan and skills/employment needs in sub-regions. The Government Office and Regional Committee role is moving away from detailed bidding mechanisms, and a pre-occupation with approval of individual projects. Regional Committees can get a better focus on the performance of the Programme. There is also greater scope to share best practice, and see how ESF provision can be better aligned to meet national policy priorities such as tackling social exclusion.

ESF Co-financing—Tackling Disadvantage

The West Yorkshire Local Learning and Skills Council has Co-financed ESF to support projects that tackle social exclusion and that help young people to increase their confidence and give them the motivation to develop new skills that are relevant to a changing Job market.

Hip Hopportunity—Is a project run by Connected 2 that includes DJ workshops, drama classes and radio broadcasting for young people in Huddersfield. Thirty local disadvantaged young people between 16-25 are benefiting. It aims to provide an exciting range of learner centred activities to increase the confidence and self esteem of participants and teach them new skills. Local young people are targeted who were previously not taking up education, training and employment opportunities.

Reaching Higher—Young people affected by homelessness are being encouraged in further education with the help of an access course run buy the University of Bradford. It provides 16-25 year olds with flexible learning opportunities to give motivation and allow access to further and higher education. The one-year course covers IT, study skills, working in the knowledge economy and ethnicity.

  7.5  Only GO-London has implemented full co-financing, where there are sufficient co-financing organisations to fund activities across all areas of the Programme. In the remaining GOs, direct bidding still exists, albeit on a reduced scale. Early experience suggests that some measures eg those concerned with research, and high-level skills training (NVQ 4 and above) may be more appropriately commissioned at a regional level .

  7.6  Although an element of "direct" bidding remains in most regions, Government Offices no longer have to administer a process of inviting, selecting, contracting and paying several hundred individual ESF projects. Within Government Offices, responsibilities are now geared towards the selection of co-financing organisations (CFOs); developing working relationships with the CFOs; agreeing the distribution of resources between CFOs; approving the plans put forward by the Co-financing organisations (CFO plans) and their associated measure level bids; monitoring CFO progress and selection of projects and making payments.

In the North West the LLSC Cumbria has supported a project through co-financing delivered by Connexions in partnership with colleges called Summer Learning and Skills Programme

During the summer of 2002 (launched in response to Foot and Mouth Disease—FMD), LSC Cumbria funded a summer learning and skills programme for young people covering a range of different short courses.

The aim of the programme was to encourage young people to participate in post 16 learning by providing them with positive experiences of college life and study. Young people were able to choose from 90 courses on offer at 5 colleges.

In 2002, some 722 learners took part in post-compulsory provision and 93% have subsequently decided to remain in/re-enter learning. Approximately 100 young people on the programme were felt to be at real risk of not entering post-16 learning and 85% of them remained in learning.

The young people attending the programme felt that the experience had been a positive one, during which they had gained both education and social skills, which would benefit them in the future.

Quote from a young person:

"I think the two weeks I was on the course ran very smoothly and I would like to thank you not only for the money but for the extra confidence it gave me and the fab new friends I have".

Objective 3 Co-financing The Yorkshire and Humber Experience

7.7  Yorkshire and the Humber is the first region in the country where an independent evaluation of co-financing has been carried out, commissioned by the West Yorkshire Learning and Skills Council. The research looked at the handling and management of the co-financing approach taken by the Learning and Skills for West Yorkshire in the early bidding rounds[4]. Views of 15 stakeholders and 100 applicants were sought through a combination of face to face and telephone interviews. The stakeholders included Local Authorities, Learning Partnerships, Business Link and the Charities Information Bureau. Applicants were stratified by district, sector and outcome (success/non success in application). The research is specific to West Yorkshire, but overall co-financing was seen as a positive move with over 70% of those questioned being satisfied with the approach. The emerging findings were:—

    —  Stakeholders and applicants surveyed were satisfied with the co-financing approach, although some concerns about the transparency of the Project Selection process were raised. This is now being addressed by the LSC;

    —  Greater access to a wider range of providers has been achieved;

    —  The thematic approach has strengthened coherence and not undermined the Regional Development Plan;

    —  Role of local Learning Partnerships is helpful;

    —  More even geographical balance of resource deployment achieved.

  7.8  An internal report produced for the Regional Committee by the North Yorkshire Learning and Skills Council showed their co-financing approach had attracted more bids for ESF support than through "direct" bidding. The LSC working closely with the North Yorkshire Partnership Unit (a support organisation partly funded by Technical Assistance), proactively promoted ESF across the sub region especially in those rural areas where a lack of "capacity" and resources made direct bidding very difficult . The table below summarises the types of organisation that made bids and their success. Voluntary and community sector organisations that have often struggled to attract matched funding, were particularly successful. Over half the bids submitted for funding were supported.

NORTH YORKSHIRE LSC: CO-FINANCING ROUND 1—SUCCESSFUL BIDS

Round 1: Jan 2002 Successful bids:
Number
Amounts
% success rate by number of bids
Further Education
1
392,922
16.7
Higher Education
1
751,806
7.7
Local Authority
2
1,376,662
14.3
National Training Organisation
0
18,000
0.0
Private
1
1,342,076
6.7
Voluntary/community
13
1,594,651
54.2
Chamber of Commerce
0
135,934
0.0
Total
18
5,612,051
  


Early Conclusions

  7.9  Implementation of co-financing has helped to deliver a more focused approach to the funding of skills provision. Learning and Skills Councils can actively seek bids that support sub-regional priorities and contribute to regional goals to improve wealth creation and economic competitiveness. This is leading to a greater focus on strategy rather than individual projects.

  7.10  Learning and Skills Councils report that many organisations have welcomed the provision of LSC matched funding at source, avoiding the need for each and every project to search for funding.

  7.11  Co-Financing is proving successful, but it is unlikely and was never intended that 100% of the ESF Objective 3 programme will be fully co-financed across all regions. With a wider coverage of co-financing organisations, only Government Office London has managed the implementation of full co-financing . For many regions, there will remain a small role for direct bidding and GO's must balance the two systems:

8.  OBJECTIVE 1 PROGRAMMES

  8.1  UK areas with Objective 1 status include Merseyside, South Yorkshire, Cornwall and the Scilly Isles and West Wales and the Valleys. In addition the UK has two transitional Objective 1 areas,—The Highlands and Islands and Northern Ireland. Objective 1 funding is the highest form of assistance from the European Commission. Each Programme area has an integrated programme of action that draws on a combination of funding from the private and public sectors in this country and from a number of different EU funds, including ESF, European Regional Development Fund(ERDF) and European Agricultural Guidance and Guarantee Fund (EAGGF). These areas do not have separate Objective 3 funding.

  8.2  ESF is closely linked with funding to support a wide range of economic development initiatives including, business support measures and community economic development.

  8.3  ODPM has overall responsibility for Objective 1 Programmes in England, working closely with the Department for Work and Pensions on the ESF elements of the Programme.

  8.4  The scale and quantum of Funds available in Objective 1 Programmes has necessitated a move towards co-financing. The management of funding in Objective 1 has closely followed the trends of Objective 3. From a reliance on small scale direct bidding, Objective 1 Programmes have moved towards large, high impact co-financing projects.

ESF—The South Yorkshire Experience

  8.5  The Objective 1 programme for South Yorkshire 2000-06 has 32 Measures across three structural funds. There is a £700m EU grant budget (£1,800m when matched) allocated between: ERDF—£470m; ESF—£216m and EAGGF—£14m.

  8.6  The ESF budget is spread across 9 Measures entitled:

    —  supporting new employment opportunities;

    —  enhancing management and workforce skills and capacity;

    —  creating a responsive training and education system;

    —  enhancing the curriculum for the world of work;

    —  developing an adaptable and entrepreneurial workforce;

    —  tackling gender imbalance in the labour market;

    —  assisting people back to work;

    —  tackling disadvantage; and

    —  tools for re-integration.

  8.7  A number of "transition" projects were agreed at the beginning of the new Programme to provide some continuation of ESF support from the previous 1997-99 Objective 2 Programme . However, in accord with the introduction of co-financing, a large part of South Yorkshire's ESF budget in now allocated to the Learning and Skills Council (a £51m ESF budget for 2001-04); the LSC is the predominant deliverer in six of the nine Measures. There are separate large contracts with the local authorities in connection with enhancing the curriculum in schools and for the implementation of enhanced IT-based teaching. There is also a sizeable (£11m) contract for the operation of an Intermediate Labour Market (ILM) project. A co-financing contract with Jobcentre Plus for the `assisting people back into work' measure commences in April 2003. To accommodate small-scale projects, there is a global grants scheme, which is able to award smaller pre-matched grants.

  8.8  Delivery to date has generally been satisfactory. Uptake of assistance for workforce development and gender equality has so far been a little slower than planned. Some of the work placement activities such as the ILM have also been affected by a falling unemployment register.

  8.9  Collection of management information has been quite a significant issue. The Objective 1 Directorate's evaluation team is keen to undertake a thorough examination of the effects of the programme. This entails work to adapt the IT systems of organisations such as the local LSC and Jobcentre Plus to fully meet these requirements.

South Yorkshire e learning

  £50m of European money through Objective 1 is being spent on a project that aims to bring South Yorkshire into the digital age.

  Objective 1 is funding a six-year program called e-sy.info, which is aimed at increasing Information Communications Technology (ICT) learning and skills in South Yorkshire by helping more people train on computers at schools, colleges, at home, at work and through the local community. Over 140 educational and training institutions will be upgraded with laptops, computers and wireless networking.

  As well as existing resources being upgraded, the project will be creating two new `Centres of Excellence,' one in Meadowhall, Sheffield the other serving Barnsley and Doncaster. There will also be computer learning centres and pods (dedicated learning modules) provided to small businesses.

  The projects website, www.e-sy.info, is designed to be a significant learning and information resource for business professionals, community groups, educational professionals and schools. This will widen access to life-long education and enables students to take control of their learning. Because the educational content is available through the Internet it can be accessed at any time, as often as it is needed.

  37,000 people should be helped by 1800 trainers to access e-learning, the Internet and to gain ICT qualifications through the project. These qualifications will make people in South Yorkshire far more employable, as computer skills are in increasing demand in the workplace. A more computer literate workforce will encourage inward investment.

Early Conclusions

  8.10  The scale of ESF resources available in Objective 1 Programmes has facilitated moves towards co-financing. It is a effective means of channelling large amounts of funding to help deliver transformational change in regions that are lagging behind. Large, high impact projects are being developed, that might not be so manageable under a direct bidding approach.

9.  OBJECTIVE 2 PROGRAMMES

  9.1  As with Objective 1, eligible areas for Objective 2 assistance have agreed a programme of action, which targets activities within these areas and draw on a combination of funds from private and public sectors. ERDF and ESF funds are available from the EU. Objective 2 Programmes with ESF assistance include: Yorkshire and the Humber, South West, West Midlands, North East, London, South East, Eastern, East Midlands. ESF as a proportion of the overall grant available to the Programme varies from 8% in East Midlands to 20% in the North East. ODPM has overall responsibility for Objective 2 Programmes in England with support from DWP on the ESF elements of the Programme.

  9.2  It is a European Commission requirement that Objective 2 ESF provides the human resource underpinning to the other (ERDF funded) measures in the Programme. ESF grant is only available where it forms part of an integrated package of support alongside ERDF. However, separate rules of administration and management systems for ERDF and ESF do not always facilitate this integration. Sponsors delivering joined up packages of support may face two sets of procedures and administration. Government Office and local partnership staff provide advice and support to help with the administrative requirements of the different systems. Government Offices are also working to adapt monitoring systems to track performance more closely.

  9.3  In many regions, such as Yorkshire and the Humber, West Midlands, ESF implementation has been slow—mainly because of the need for ERDF projects to get underway and then spark demand for supportive training projects part funded by ESF. The Government Office and partners are urgently examining the implications of this slow start and how it impacts on progress towards the targets for commitment and expenditure set by the Commission and the implementation of overall Objective 2 strategies. A working group has been set up by ODPM, the managing Authority for regional programmes to address this issue and concerns across Structural Funds in Objective 1 and 2 Programmes

ESF Objective 2—the Yorkshire and Humber experience

  9.4  The Objective 2 Programme in Yorkshire and the Humber for 2000-06 provides up to £317 million of EU Structural Funds support, to lever in further public and private funds and deliver a total investment of £871 million in the programme area.

  9.5  £42.626 million ESF grant is available throughout the life of the Programme. This is spread across 3 ESF measures—people skills for the new Objective 2 entrepreneurship agenda (£14.173 m), people skills for adaptive businesses (£10.827m) and building community confidence and capability (£16.987m\.

  9.6  Eligibility for Objective 2 ESF funding is more geographically targeted than the Objective 3 Programme. This has meant that applications for funding have tended to be small scale and localised relating to the specific needs of neighbourhoods and communities. There are currently over 60 ESF projects funded through the Yorkshire and Humber Objective 2 Programme.

  9.7  The ESF expenditure targets represent a particular challenge. The financial profiles set by the European Commission are steep and do not reflect the interrelationship with ERDF funded projects. Failure to meet these targets will mean that unspent funds will be de-committed or lost to the Programme.

  9.8  To tackle these difficulties, Government Office has worked with a local Learning and Skills Council and Business Links to a implement a "block delivery" package of ESF funded activity that links with business support assistance and will deliver high impact. The package has taken nine months to develop but forecasts suggest will make a major impact on meeting programme targets.

  9.9  This follows many—but not all—of the principles associated with ESF co-financing in Objective 1 and 3 Programmes. In the early stages of Objective 2 implementation, there were some reservations about a formal co-financing approach across such a patchy geographical area.

Early Conclusions

  9.10  Government Office needs to work with partners to promote the benefits of co-financing ESF activity in the Objective 2 Programme. Early evidence of co-financing in Objective 3, suggests that the approach can be an effective way of brigading a wide range of projects and streamlining bureaucracy and administration.

  9.11  The complexity and diversity of Objective 2 Programme areas means that co-financing is unlikely to be the only solution to effective ESF implementation. The Government Office is planning the direct pro-active commissioning of business support projects, to stimulate more projects to come forward for funding. GOYH is also learning from the experience of other regions.

Felicity Everiss
Regional Director

March 2003





1   Technical Assistance provides ESF grant to improve the impact of the Programme by undertaking support activities not covered in the main Priorities and Measures. It improves the capacity of partners to manage the requirements of the Programme. Back

2   The Office of the Deputy Prime Minister is responsible for the ERDF in England, and the Department for the Environment Food and Rural Affairs is responsible for the EAGGF and FIFG in England. Back

3   Projects less than £10,000 can be eligible for support through the Global Grants scheme that aims to minimise administration for localised capacity building activity. Back

4   The research was undertaken by EKOS consulting and covers stakeholder and applicant perceptions of the West Yorkshire co-financing in the first 2 bidding rounds. Back


 
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