ESFVON
European Social Fund Voluntary Organisations Northern
APRIL 2003
OBJECTIVE 2 BULLETIN
EDITORS NOTES
Since the last ESFVON Objective 2 Bulletin published in December there have
been a considerable number of changes to the Programme. As you will read
elsewhere in this Bulletin the North East Objective 2 Programme has made a
concerted effort to improve. These changes have enabled the Programme to
start realising some of its potential as projects are being approved much
quicker than was the case a few months ago.
What does this mean for you, the voluntary and community sector organisation?
The simple truth is the North East is in danger of losing significant
amounts of Objective 2 funding from the second half of the current Programme
(2004-2006). How does this impact on your organisation? It can have a range
of impacts. If you have any kind of project idea it should not be ignored
as a potential Objective 2 application.
Many organisations think this involves completing at least two separate
applications, one for European funding the other for at least one match
funder. This is not always the case. You may already have resources within
your organisation that could be included as match funding for a potential
Objective 2 application. This could include Management or Financial
Management time, trainers/deliverers time and rent. These costs headings
could be part of earlier applications to funders or funds from your own
reserves. The underachievement of the Objective 2 Programme to date is
crucial. This is because the financial allocations for the remaining years
of the Programme (2004-6) will be determined by what the Programme achieves
by the end of 2003. ESFVON hopes you can give due consideration to the above
and information contained in this Bulletin. As there is plenty of resources
available then perhaps now is a good opportunity to access Objective 2 funding
to further advance your organisation's activities.
On a lighter note please don't ignore the section on delegated grants. It
may be a way, for you, with little to no match funding to access Objective 2
Priority 4 resources quickly and with the minimum fuss.
ESFVON are happy to discuss any of the above information. Please don't forget
the services are free of charge. Why not contact ESFVON to discuss any ideas
you may have. It might only cost you a telephone call, a stamp or the cost
of sending an e-mail. This may just be the resource you have been looking for.
OBJECTIVE 2 PROGRAMME UPDATE
As mentioned above there have been considerable developments and willingness
to be flexible in recent months by all involved in the process.
Package Allocations Removed
At the start of the Objective 2 Programme each package was given an indicative
allocation of resources. Recently the Government Office for the North East
(GO-NE) has removed the ruling that stated a package could not over-allocate
resources in any Measure. For Priority 4, in particular this has changed.
Whilst packages still have their indicative allocations for each Measure,
each package is now able to over-allocate (known as over-programme) in any
Measure providing this is agreed by GO-NE. This means that if your local
package had allocated all of its resources previously for a particular
Measure, they can now select more projects to take up under-demand in other
package areas. At this stage, however, it is unlikely actual resources will
be removed from a particular package. This would only happen at this stage
where a package offers to give up resources. Please note as this applies to
all Priority 4 Measures this includes Physical Capacity Building activities
funded through Priority 4 Measure 1 for community resource/training facilities
and childcare facilities.
Greater Flexibility
For several months criticism of the Programme was focussed strongly on the
lack of flexible interpretation of the eligible activities and the consequential
restrictive nature of some of the Performance Indicators contained within
Measures. Following acknowledgement of project sponsors concerns, the work
of EKOS, the mid-term evaluators of the Objective 2 Programme and the looming
consequences of Programme underachievement, the Programme now has increased
flexibility.
For those of you with some experience of the Programme to date, some brief
examples of where greater flexibility have taken place include:
- Priority 4 Measure 1 - Organisational Capacity Building. Previously the average financial value per organisation assisted of £38,500 per organisation was very problematic. More recently the average has been loosened to enable lower average cost projects to receive support. An example is an approved project with an average cost of approximately £20,000 per organisation assisted. However projects who only provide mailshots or non-intensive support will still be ineligible.
- The inclusion of revenue in Priority 4 Measure 3. Previously only capital had been eligible.
- Removed strict interpretation and cost assumptions used for the Performance Indicators on ESF projects. It should be noted this also applies to some ERDF Performance Indicators
Spend Projection
As a Programme, Objective 2 needs to spend (not merely allocate) approximately
£100m of ERDF and ESF in total by the end of September 2003. The exact figure
fluctuates with exchange rates. Recent information presented to the Regional
Executive Group (REG) projected that by the end of September the Programme is
likely to have spent only £33m. Due to auto-decommitment we as a region stand
to lose the difference for the remainder of the Programme (2004-2006).
The problem has been caused by several factors. The main ones are
specifically the lack of large projects such as Access to Finance for Small
and Medium Sized Enterprises and also Strategic Site (large industrial estates)
projects not being approved. This is compounded by the lack of projects
generally in the overall Programme. Indeed there is evidence that even if
every project submitted to GO-NE was approved immediately there would still
be insufficient projects to generate the required spend. The latest
information from the 17th April 2003 shows overall only 35% (£92.6m) of the
Programmes resources have been approved by GO-NE. In addition there are
projects worth another £22.5m currently under appraisal at GO-NE. This means
some £115.2m of projects have been requested (excluding those withdrawn).
This means the region is only 44% towards its target of approving £261.2m by
the end of December 2003. Below is a further breakdown of the figures (as
at 17th April 2003).
| Allocation Target By end of 2003 | Requested (exc. Withdrawn)/Target | Offered/Target |
| Priority 1 | £42.1m | 54% | 43% |
| Priority 2 | £135.2m | 41% | 34% |
| Priority 3 | £31.2m | 44% | 38% |
| Priority 4 | £50.2m | 67% | 44% |
| Allocation Target By end of 2003 | Requested (exc. Withdrawn)/Target | Offered/Target |
| ERDF | £214.0m | 43% | 35% |
| ESF | £47.3m | 73% | 53% |
There are plans in the North East to attempt to significantly reduce the
underspend. One has been the push by a Task Force to generate new Objective
2 projects. Other options are being explored. Although one project on its
own is unlikely to solve the problem, the voluntary and community sector is
in a unique position through weight of numbers to make a significant impact.
This is why every idea should be fully explored.
FEASIBILITY AND TECHNICAL STUDIES
Since the Programme Complement was published in June 2001 the additional
bullet point below has been added to most Measures within the Objective 2
Programme.
- In addition to the actions listed above, support will be available for feasibility and technical studies where such studies are necessary to develop eligible projects. The maximum grant rate will be 50% (for ERDF and 45% for ESF).
AUTOMATIC WITHDRAWAL OF PROJECTS FAILING TO SUBMIT CLAIMS FOR TWO SUCCESSIVE CLAIMS PERIODS
Due to the non-submission of claims by a number of organisations with approved
projects, and given the aforementioned consequences of not spending the
region's resources, the Programme has started to invoke automatic withdrawal
of projects not submitting claims to GO-NE for two successive claims periods.
It is important to note this, as it is a part of both ESF and ERDF Offer
Letter that project sponsors with approved projects have signed up to. Unless
a project sponsor has specific justified reasons why they have been unable
to submit claims the project(s) will be withdrawn.
MULTI PACKAGE PROJECTS
Another of the changes to Programme administration has been the ability to
now apply for a project covering more than one package area. Indeed, ESFVON
has been working closely with an organisation covering every Priority 4
package in the region (that's 27 different packages). Although it is unlikely
many organisations would want to cover such a large an area it may be that
your organisation works in several package areas covering, say, a sub region
such as Northumberland (3 packages) or County Durham (14 packages). Whatever
the coverage of your organisation there should now be scope throughout the
Programme to minimise the number of applications you would need to make. It
should be noted financial expenditure and Performance Indicators would not
need to be broken down by package or in any way beyond a single package
application. An administrative process has also been put in place and a
specific proforma for multi package applications has been produced. A lead
Package Co-ordinator is selected by the project sponsor who circulates the
proforma to all other Package Co-ordinators for consideration with each
package. This could take between 2-4 weeks for all to respond.
MULTI MEASURE AND CORE & TRANSITIONAL APPLICATIONS
Since the start of the current Objective 2 Programme applications have only
been allowed covering one Measure at a time. If an organisation wanted to
apply to different Measures then a separate application was needed for each
Measure. Similarly, with the Programme having both Core and Transitional
Areas if you wanted to work across both of the geographical areas then separate
applications were needed.
The Programme's administrative arrangements have recently been changed to now
enable a single application to cover more than one Measure and, also Core and
Transitional areas. It should be noted this only applies to ERDF Measures,
not ESF. There are now forms available that should enable greater flexibility
and reduce the overall amount of bureaucracy in the Programme for project
sponsors. It is expected this will mainly impact projects seeking funding
from Priorities 1 and 2 (Small & Medium Sized Enterprise creation and development)
and not so much Priority 4 where most voluntary and community organisations
seek resources from.
DELEGATED GRANTS
Delegates grants schemes are an eligible activity for Measures 4.1 (ERDF) and
4.4 (ESF). The benefits of these schemes are the opportunity to access funding
for up to 100% of project costs (i.e. no need for match funding as the scheme
is already pre-matched), greatly reduced application processes and greatly
reduced administrative burden on those applying for resources from the scheme.
After considerable delays to the implementation of any delegated grants schemes,
the region is now has a scheme approved covering the eligible Priority areas
in Tyne & Wear. These eligible areas are:
Gateshead - Bede, Felling, Bensham, High Fell, Teams, Deckham, & parts of Saltwell
Newcastle - Walker, Monkchester, Elswick, Byker, West City, Scotswood, Benwell, Moorside and parts of Woolsington, Blakelaw, Kenton, Wingrove & Walkergate
North Tyneside - Chirton, Riverside, Longbenton and parts of Howdon & Collingwood
South Tyneside - Rekendyke, Bede, Cleadon Park, Tyne Dock & Simonside, Biddick Hall, Primrose, Beacon &smp; Bents, All Saints and parts of Hebburn South
Sunderland - Southwick, Town End Farm, Thorney Close, South Hylton, Grindon, Castletown, Colliery and parts of Hendon, St Chads, Central and Thornholme
There are also another Scheme surrounding training in the sports area to assist people access training and employment related to training. This scheme will cover the whole of the region's eligible Priority 4 areas. For details on the other eligible areas in addition to those given above for Tyne & Wear please contact ESFVON.
It is also likely several other delegated grants schemes will receive approval
in the next few months.
OBJECTIVE 2 MID-TERM EVALUATION UPDATE
EKOS, the mid term evaluators of the Objective 2 Programme, are in the final
stages of their evaluation. It is expected the final report will be produced
later this summer. During the intervening period EKOS are again holding
meetings with organisations and individuals involved in the Programme to
re-assess progress since last year when the first round of meetings were held.
ESFVON will keep you informed of developments in the evaluation and in a
future Bulletin will deal in depth with the proposed changes.
ERDF & ESF CONTINUATION PROJECTS
Simplified and streamlined administrative arrangements have been put in place
to enable ESF and ERDF projects funded earlier in the Programme to continue
the project on beyond the current application with the continuing support
of Objective 2. Whilst the ESF and ERDF applications forms will still need
to be completed for the continuation project a number of the questions will
not need to be answered or in some cases only updated information will be
required. The key to the approval of a continuation project is the successful
performance of the earlier project.
A MODERN REGIONAL POLICY FOR THE UNITED KINGDOM CONSULTATION
As you may be aware, the current European Structural Funds programmes come to
an end on 31 December 2006.
With the proposed enlargement of the European Union from 15 to 27 Member
States there will be a need for changes to the Structural Funds from 2007.
The expectation is that the majority of the Funds will be directed to these
new Member States with the result that most areas of the UK will be unlikely
to be eligible for Structural Funds support.
To form a basis for a UK negotiating position on the Structural Funds post
2006, the Government has developed a proposed approach to EU regional policy
which is set out in a continuation paper "A Modern Regional Policy for the
United Kingdom"
Copies of the document can be obtained from the Public Enquiries Office at
HM Treasury tel. 020 7270 4558 or DTI Publications Orderline tel. 020 7215
0031. Alternatively, it can be accessed via the internet from:
www.dti.gov.uk/europe/consultation.pdf
Comments on the proposals are invited by Friday 4th July 2003, and ESFVON will
be consulting with organisations to provide for a regional response from the
sector.
Last Updated: 11 June 2003