European Regional Development Fund

Written evidence submitted by Derby City Council

Derby City have been/are currently in receipt of the following european assistance through ERDF Structural Funds

2000-2006 ERDF URBAN II programme - £7.3m

2000-2006 ERDF Objective 2 programme - £6.3m

2007-2013 ERDF Priority Axis 2 - £13.2m

This funding has levered around £24.4m in match funding into the city’s economy to date, and will lever in a further £10m more match funding before the end of the current programme in 2013.

How, and on what, is ERDF spent?

ERDF in the East Midlands is spent on promoting economic growth and enterprise development through the use of three Priority Axis:

Priority Axis 1 - increasing commercialisation of innovation of SME’s in the region's priority sectors. Locally this has produced some excellent innovation and knowledge transfer projects, which includes:

- Business Transformation grant programme which provides financial subsidy to assist SME’s overcome hurdles to substantially change their business, which has supported numerous businesses in Derby city to improve innovation.

- ID Centre provides a new innovation centre to enhance the University of Derby’s incubator facilities in the city with new and emerging technology enterprises, which has supported new businesses and created new jobs.

Priority Axis 2 - increasing enterprise development in disadvantaged areas, including Derby City . Locally this has produced some excellent locally prioritised projects to support disadvantaged target areas and individuals to develop their own business ideas and assist them in starting new enterprises in the city. These includes:

- Supporting new enterprise space for businesses to start-up and grow. An example of this is the proposed Cathedral Quarter Enterprise Centre which is using a currently vacant brownfield site in the City Centre to provide purpose built modern facilities for new enterprise in the city. This project will provide new jobs into the local economy, new floorspace and brownfield land reclaimed.

- Supporting enterprise development. An example of this is the Enterprise Coaching project which developed and delivered a package of targeted support to individuals located in deprived communities and under-represented groups. This project has supported more than its originally targeted individuals into starting a business.

Priority Axis 3 - technical assistance to manage the programme regionally and locally. Locally this has provided a small percentage of funding towards the actual cost of managing the local programme, which allows us to assist prospective applicants/applicants through this complex programme, which is especially of use to smaller/third sector organisations who don’t have these skills.

Is the taxpayer in England obtaining value for money from the ERDF?

ERDF supports local job creation and enterprise growth projects that would not get supported otherwise. The funding allocated and spend in our area will be doubled through match funding from both the public sector and private sectors. Locally it has been evidenced that ERDF enables projects to go ahead that wouldn’t otherwise get funded. By using small amounts of funding pump primes additional activity within disadvantaged areas, and the city as a whole.

ERDF has added value through the effective use of other locally available funding, including Derby City Council’s Regeneration Fund and Single programme as match funding to help meet local priorities.

The production of a Local Investment Plan which prioritises where and how this programmes funding should be committed this has been developed with partners through Derby’s Renaissance Board, a group of public, private and third sector organisations within the city. Through the LIP the Board is prioritising the activity that will generate local enterprise growth, and create new jobs in the city.

This programme is robustly monitored/evaluated/audited by both the UK govt and Europe, which should evidence that we are attaining value for money. Any risks the project may have must be highlighted at application stage and is assessed as part of the assessment process, prior to approval. This level of scrutiny helps to ensure projects provide the best value for money possible. Simplification of this current process, which is sometimes seen to be severe, would stop prospective delays in projects starting/delivering their activity, and increasing their costs.

Could the funds contributed to, and paid out on, regeneration through ERDF be spent more effectively by repatriating ERDF to the Government in London?

ERDF is effectively ring-fenced by being part of the EU Structural Funds, at whatever level this programme is managed the funding has to be spent on the priorities of local economic development.

Derby’s experience is that a regionally managed fund with delegation to district level has enabled greater local accountability. Local experience and knowledge has been used to inform how to make best use of ERDF in the city, which has been the case since 2000.

If programmes are managed centrally, our concern is that local priorities would be less likely to be considered. It is our experience that the most effective projects are those delivered in line with local need and Derby’s LIP has brought forward a good range of projects to support enterprise development and economic growth in our most deprived communities. This has been managed through an open and competitive process.

With the abolition of the Regional Development Agencies responsibility for ERDF in England passes to DCLG. What effects are these changes having on the administration, assessment and payment of ERDF?

When the RDA’s were abolished it did cause significant delays and confusion in the administration of the programme, particularly in the appraisal of project applications.

The transfer of the East Midlands ERDF team to DCLG has maintained continuity in managing the programme. But projects still take a long period of time to be appraised/contracted.

Changes in governance caused delays in meetings of the local Programme Monitoring Committee and the then the new Local Management Committee, which caused delays in decision making, approving projects etc. Local partners were also previously involved in Priority sub-groups which have been replaced by a single Investment sub-group with less representation.

Accurate regular reporting of ongoing project activity has been difficult to obtain due to reported DCLG ICT issues, an as the management and contracting of projects is at regional level this information cannot be obtained easily locally.

Derby City Council

April 2012