Examination of Witnesses (Questions 78
WEDNESDAY 21 MAY 2003
Q78 Chairman: Good afternoon, ladies
and gentlemen. Can I call the Committee to order. The Committee
is in the midst of a European Social Fund inquiry. We are delighted
to have in front of us this afternoon three witnesses who, in
their various professional guises, work for Government Offices
in England looking after ESF. We have got Ms Jane Henderson, who
is the Regional Director at the Government Office for the South
West; Ms Alison Biddulph, who is Director of the European Secretariat
at the Government Office for Yorkshire and the Humber; and Mr
Phil McVey, Acting Director, Young People and Skills, Government
Office for the South West. You are all very welcome. It would
really be of interest, particularly to me and my Scottish colleagues
on the Committee, because we do not have practical experience
in our constituency work of Government Offices in England, if
not to the rest of my colleagues, Ms Henderson, if you could say
just a little bit about the work that the Government Offices do,
and then we can look at what specific role they play in distribution,
administration and implementation of ESF programmes?
Ms Henderson: Certainly. Thank
you very much. Government Offices, as you imply, Chairman, are
in the nine regions of England, not in Wales and Scotland where
there are devolved administrations, and we represent, I think,
nine Whitehall departments in miniature, doing different pieces
of work for each of those departments but with a general remit
to draw things together, join them up and work with partners in
the region to secure the prosperity and welfare of the region.
So where does ESF fit in well, we administer the European Social
Fund on behalf of the Government in its capacity as managing authority
for the Fund in the UK. It is our job to put in place a regional
management structure for the Fund, and that includes key decision-making
bodies, foremost the Regional Committee for Objective 3, or the
Programme Monitoring Committee, as it is called, for Objective
1 or 2. These committees embody the partnership approach to the
Funds, and the Government Office chairs these committees. Also,
we provide the secretariat function for managing the whole project
selection and monitoring process, taking decisions or issuing
grant letters, and so on; we process grant claims, we monitor
expenditure, we inspect projects in accordance with the regulations.
But over and above all this we have an important function working
in partnership, facilitation and brokering, with all the regional
partners: that is the Regional Development Agencies (RDAs), Learning
and Skills Councils (LSCs), further and higher education, local
authorities and other regional partners, to make sure the programmes
have a strategic focus and are benefitting the region. And that
would include, for example, encouraging bodies to bring forward
bids for technical assistance to help build capacity and bring
a clear focus for the programmes in the region. That might be
enough by way of introduction; I will be very happy to elaborate
on what it means in practice.
Q79 Chairman: Help me to understand
how the ESF funds fit into your Government work, because, if I
understand it, the purpose of ESF funds really is to underpin
and support European employment policy, which is dictated not
from His Master's Voice in Whitehall, but from Brussels. And you
are a Government Office and you are taking your instructions,
as you have explained to us, as regional versions of government
departments, to what extent does that mean that you are operating
with somebody else's policy, and to what extent does that produce
tensions in the implementation?
Ms Henderson: I think the word
I would use is, it all "nests" nicely, you have got
the European Framework, and the National Employment Plan which
fits within that, and at regional level we have a Regional Development
Plan, which expresses what this means for our region. So it would
look at the conditions in the region and in my region, for example,
you would look at things like rurality and sparsity of population
you look then at how that fits into the Employment Plan and derive
from that a set of regional priorities, down to thematic level,
like what are we going to do in rural areas, and indeed sub-regional
level as well, what particular priorities are; so it is a natural
hierarchy. But, of course, it also fits into the wider economic
strategy of the Regional Development Agencies, and one of the
activities all the regions will be doing over the next few months
is seeing how they can integrate the FRESAs, the Frameworks for
Employment and Skills Action, that the RDAs have led on, with
the ESF Regional Development Plans.
Q80 Chairman: So that all sounds
Ms Henderson: It is not something
where there are going to be massive conflicts, it is a question
of checking that in all cases the FRESA has taken into account
what partners are trying to deliver under ESF and vice versa;
and in my region, for example, we are likely to do that, coming
up in the autumn, as part of our annual review of the Regional
Q81 Chairman: Are there any circumstances
where you could contemplate an underspend on Objective 3 ESF funds
in the region?
Ms Henderson: It is certainly
logically possible. In my region, at the moment, that is not seen
as an immediate threat, Objective 3 is spending well. I do not
know, Phil, if you want to add anything to that.
Mr McVey: Thank you, if I may.
At the moment, I think, in common with most other regions, on
the Objective 3 programme, we are spending very well, as a consequence
of having got off very well at the beginning of the programme
and having worked with regional partners to put the programme
together, therefore we know that what is being delivered is what
the region needs, at the same time, as Jane mentioned, fitting
together with the European and national context, and there is
every sign that that good spend will continue.
Ms Biddulph: I would echo that
for Yorkshire and the Humber region as well. We are 95% towards
meeting our 2003 targets, which is very good progress at this
stage in the calendar year, and we are confident that we will
achieve and meet the N+2 target, and we are working very hard
to ensure that we are well positioned to meet it next year as
Q82 Andrew Selous: Ms Henderson,
just very briefly, when you talk about sub-regional level, what
area of geography are we talking about; is that a county, or what
Ms Henderson: The Learning and
Skills Council in my region broadly follows county boundaries.
It varies slightly in different places, if you have got a conurbation
it might be a clutch of unitary authorities, for example.
Q83 Miss Begg: I have got a few questions
about how your organisation works. Can you describe briefly the
process whereby Government Offices decide how much of the Structural
Funds to allocate to the various activities within the region?
Mr McVey: I will give the answer
in relation to the Objective 3 programme, because I think that
captures the sort of process that takes place. Jane has mentioned
already that we have a Regional Development Plan that sets out
the conditions in the region and also takes account of the European
and the national context as well. That then leads you to draw
conclusions about the various activities that you might want to
carry out within the already pre-set policy fields within the
programme and, in discussion with regional partners, draw conclusions,
as I say, about the precise activities you would want to carry
out, and also try to do some analysis of how the expenditure ought
to be spread across the region, to what sort of degree you should
drill down to sub-regional level. So that analysis of the regional
conditions enables the sorts of activities you should carry out,
and sub-regional conditions follow through into some estimates
of how expenditure might pan out across the programme.
Q84 Miss Begg: It is different in
Scotland, I know, and different presumably in Wales, because of,
obviously, the Scottish Executive, and the Welsh Executive too;
what are the differences there, how do they operate, do you know?
Mr McVey: I am sorry, I am not
able to answer that.
Ms Henderson: I am afraid not,
Q85 Miss Begg: So we are going to
have to ask those questions elsewhere; but what about the co-ordination
between yourselves and the DWP, how do you ensure that the DWP
is aware of what you are doing and how do you feed back through
Ms Henderson: The DWP does chair
the National Programming Committee for Objective 3, on which all
the regions are represented, along with social and economic partners,
but beyond those formal meetings there is a great deal of networking
at all levels, from strategic level, practitioner level, by theme,
by different and all sorts of levels of networking, so very frequent
meetings, in fact, to share good practice and make sure we are
all in line.
Ms Biddulph: In a recent audit
of the Government Office, Yorkshire and the Humber, the audit
team felt that the DWP provided very strong and positive support
to regions in helping them to carry out their implementation of
Q86 Miss Begg: So you do get the
chance, as regional bodies, to meet and to share good practice.
What about a chance to go abroad and see what is happening in
other European countries, to find out what they are doing with
Mr McVey: We do get the opportunity
to do that, and it is always a valuable experience, obviously.
I think I would say, very often, that is done actually through
exchanges of information at meetings in Brussels, rather than
necessarily visiting particular projects in other countries, but
it is the same opportunity.
Q87 Miss Begg: And how much have
we learned from them or have they learned from us; is it a bit
of both, or are we at the forefront of this? Are we the ones that
are actually setting the pace with regard to good practice, or
any particular, good countries that perhaps are doing it differently?
Ms Biddulph: Can I say that actually
it is a mixture. One example was a conference around equal opportunities,
which actually was for the UK, that was held in May 2002, which
looked at issues around gender mainstreaming, and indeed the European
Commission has done a lot of work and sets high store by gender
mainstreaming in its policies, so there is an opportunity to learn
from them. But, equally, I think, the Commission can learn from
a lot of the policies that operate within Great Britain as well;
indeed, some of our policies are better advanced in particular
Q88 Miss Begg: And one of those policies
actually is the fact of partnership with Co-Financing Organisations
(CFOs). Do the Government Offices and CFOs experiment in the ways
that you manage your European Social Fund responsibilities, or
basically is there a standardised `one size fits all' across all
of the nine regions?
Ms Henderson: What is in common
across all the regions is that there will be a project appraisal
mechanism which will involve the social and economic partners;
now in my region we do it by having independent panels of appraisers
of projects, in other regions they might co-opt partners into
their secretariat, but that is a common feature. And another feature
would be the setting up of co-financing arrangements, and the
way that those are consulted on and agreed within the region.
I know you have heard about co-financing in a previous evidence
session, but at regional level an organisation wishing to become
a co-financer has first to apply for a licence to the Regional
Committee; if the Regional Committee is satisfied that they will
do a good job, they next bring forward a plan of broadly how they
will set about the task, and once that is agreed it is up to the
co-financer to apply at measure level for the activities they
want to deliver, and that goes through the appraisal process.
That is more or less the same, barring the detail, in all the
Government Offices, for example.
Q89 Miss Begg: The whole idea of
co-financing is quite a new one, to what extent are you able to
think of new ways of putting these packages together? Is there
flexibility in the system to have that kind of experimentation?
Mr McVey: I think one of the great
strengths actually is that flexibility; so, although the system
itself has a national framework which we all work to, the real
way it is working on the ground does allow the local co-financing
organisations to tailor what they are doing with ESF to the specific
needs of their local communities, to individuals in their area,
and to the general labour market make-up of their locality.
Ms Biddulph: And if I can just
back that up with the experience of West Yorkshire Learning and
Skills Council, which, in its recent bidding round, determined,
with its local and sub-regional partners, that it wanted to do
something to improve the level of basic skills across the sub-region,
actually it was able to reflect that in some of the themes against
which it commissioned bids for co-financing.
Q90 Miss Begg: I take it you are
all very positive about co-financing. Obviously in Scotland they
have not gone down that route; have you got any criticisms at
all about co-financing?
Ms Henderson: We think it is working
well; it is very early days. I am not saying everything necessarily
is perfect, things are still settling down; indeed, we are still
rolling out co-financing. And it may be that when the evaluation
that is going on reports this summer there is some adjustment
that needs to be made, but, broadly speaking, it has brought about
a welcome sea change in the programme. It used to be a programme
where you would have hundreds of projects, each bidding separately
into the funds, each separately being appraised, having to find
their own match funding, without any particular strategic drive.
Now, instead, we are moving towards looking at the main themes,
the strategic drivers. What we are finding is that co-financing
is bringing in not only new providers to the market, very often
grass roots community organisations, but also extending to individuals
that have not been accessed before. So a lot of benefits emerging,
plus, of course, the fact that if you are a bidder now you complete
only one application of six pages, rather than several of 60 pages.
Q91 Andrew Selous: Ms Biddulph, before
I go on to what I was going to ask, I suspect I may not be the
only person who reads the transcript who is not entirely clear
what `gender mainstreaming' is; can you just explain?
Ms Biddulph: It is about making
sure that the policies and practices that are run by organisations
reflect the needs of women as well as men.
Q92 Andrew Selous: That is very helpful,
thank you. I would like to ask about the monitoring work which
you have to do to ensure that this money complies with the European
Union's Regulations. I think, if you do not comply, the money
can actually be called back, can it not, ultimately, so I assume
this is fairly important for you to do properly. How do you ensure
that you are complying with the relevant Structural Fund Regulations?
Ms Henderson: I will start and
then I will pass on to Phil. We exercise financial stewardship
at every stage in the process. It starts with, is this project
potentially eligible at all for ESF, right through the project
appraisal, and I have described the part peer appraisal mechanisms
we use, through to checking expenditure is properly delivered,
and a final 5% check. In all of that, in my region, we apply a
risk assessment framework to any newly-approved project, so that
we can reach a view on how deep and how frequent the monitoring
should be for that project. We take into account how much money
was involved, whether it was a completely novel type of project,
for example, in which case we might visit it more often and see
more of it. In other cases it will be a lighter touch so that
we do not burden people unnecessarily. The other thing I should
say is that all Government Offices have a separate financial monitoring
team which does an inspection of the 5% of projects, as required
under the ESF regulations, and that is an independent team from
the day-to-day contract management. Phil, you might want to fill
in a bit more.
Mr McVey: Thank you. There is
not a tremendous amount to add, really. Yes, it is useful to think
of it in two halves, there is the 5% inspection that we are carrying
out, we have a separate team to do that, then there is the monitoring
of all projects that is being carried out. And, as Jane said quite
rightly, right at the outset, when a project is first being approved,
we will carry out a risk assessment exercise that bands it as
being low, medium or high risk, based on a number of factors,
then that leads us to make conclusions about how often we might
want to visit a project and how much intensive scrutiny that particular
project might be subject to. And I would like just to add about
that aspect of the monitoring that we do take the view, that it
is not inspectorial only, that it is very much about working with
the individual project promoter to help them deliver their project
in the best possible way, so it is a support mechanism as well
as a monitoring function.
Q93 Andrew Selous: The Learning and
Skills Councils, when they came before us a few weeks ago, mentioned
they thought there was a lack of consistency between what the
Government Offices in the different regions were saying to the
different Learning and Skills Councils; is that something we should
be concerned about, or is that degree of freedom actually good
and that you are applying what works in different areas?
Ms Henderson: I cannot remember
that part of the evidence, but what certainly is true is each
region will have slightly different priorities, I do not know
whether that is inconsistent, if so, it is a beneficial and virtuous
inconsistency. But, as the Learning and Skills Council itself
said, its own readiness to take on co-financing responsibilities
has varied according to the stage of maturity of the local Learning
and Skills Councils, so it is not surprising that they have been
taken on at different points in the cycle. But I may not have
understood your question.
Mr McVey: I think I referred earlier
on to working with regional partners, and the fact that we do
work with our framework for co-financing, but each region will
have a different set of regional partners who have different priorities
for the region.
Q94 Andrew Selous: I am very keen
that we do not have too much jargon here, because I do not think
we will understand it; so what are regional partners?
Mr McVey: Yes, regional partners,
for example the Regional Committee for the Objective 3 programme,
which would consist of statutory bodies, public organisations,
local authorities, the LSC, social partners.
Q95 Andrew Selous: Are there other
Mr McVey: The community sector,
for example, would be regional partners. So that Regional Committee,
when it is looking at the needs of the region and how co-financing
should operate, and maybe the sorts of features that we might
like to see in co-financing bids from the LSC and others, that,
quite rightly, I guess, could result in different statements being
made to the LSC in different regions, but they would be a reflection
of regional circumstances.
Q96 Andrew Selous: When you look
at a region, I represent a constituency which is right on the
edge of a region, so you have probably guessed the direction I
am coming from with this question, I have a lurking suspicion
that when regions are looked at it is probably the bigger conurbations
that get most of the focus, and if you are near the edge and perhaps
you are smaller market towns, dare I say, rather than big cities,
you might be a bit overlooked. Is there anything you can do to
reassure me that that is not the case?
Ms Henderson: Coming from a very
rural region, we are certainly not all focused on conurbations,
and we have got quite a lot of experience running Structural Funds
in Devon and Cornwall, for example, so we often think rural first
in the South West, and I think we may have some examples.
Q97 Andrew Selous: My question really
is about the edge, actually, rather than the reality of what happened?
Ms Henderson: About the edge,
sorry, I misunderstood.
Q98 Andrew Selous: It is the edge
of your region?
Ms Henderson: Some of my edges
are against the sea, and others, like Bournemouth and Poole and
Swindon and Gloucester and Cheltenham, do abut other regions;
but, curiously, we have quite large towns on the edge of some
of our region, so that it is very difficult for us to ignore them.
And, in fact, in Dorset LSC, we have one of the, I think, most
active Learning and Skills Councils, who are doing quite innovative
Mr McVey: I was going to quote
Bournemouth, Dorset and Poole LSC as a good example of the fact,
yes, it is on the periphery of our region.
Q99 Andrew Selous: Every region is
Mr McVey: Exactly, and they have
been working with Hampshire Learning and Skills Council, and seeking
to work together on joint initiatives and joint projects, so that
we pick up those issues.