ESFVON
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 European Structural Funds Voluntary Organisations Northern

OCTOBER 2004
OBJECTIVE 2
BULLETIN

EUROPEAN FUNDING IN THE NORTH EAST POST 2006

As many of you will be aware the end of 2006 will see the conclusion of the current Objective 2 application processes and indeed other European Structural Funds. The 2007-2013 period will for the first time include the new Member States, primarily in Eastern Europe, who joined the European Union in May this year. The proposals for regulations for this next period of funding are starting to be published by the European Commission. These can be accessed via the Internet at:

http://europa.eu.int/comm/regional_policy/sources/docoffic/official/regulation/newregl0713_en.htm

Although much of the detail is still to be determined over the forthcoming months, the basic structure has been set out in the regulations above.

In brief, the draft Regulations state envisage that there will be a reduction in the number of Objectives/Initiatives from 9 to 3:

  1. Convergence

    This strand takes approximately 78% of the total Structural Fund budget for the period 2007-2013 and is similar to the current Objective 1 and the Cohesion Fund, with particular emphasis on modernising and diversifying the economic structure, extending and upgrading basic infrastructure, protecting the environment, reinforcing administrative capacity, improving the quality of labour market institutions, education and training systems and increasing human capital.

    The Convergence strand will be for those least developed Member States and Regions with eligibility of GDP less than 75% of the Community average and is therefore not considered to cover the North East.

  2. Regional Competitiveness & Employment

    The Regional Competitiveness & Employment Strand will receive around 18% of funding and will be used, like the present Objective 2 and Objective 3 to address problems relating to economic restructuring and to fund labour market programmes.

  3. Territorial Co-operation

    Territorial co-operation is the strand akin to transnational Community Initiative, INTERREG and will involve approximately 4% of the budget. This strand will focus on encouraging entrepreneurship and development of SMEs, tourism, culture & cross border trade.

    If the Commission's proposals are implemented in full, the North East could expect to benefit from the Competitiveness and Co-operation Programmes. Eligibility under the Convergence Priority will be given to regions where average GDP for the period 2001-2003 is lower than 75% of the Community average. In the North East this would be:

    • Durham & Tees Valley (2001 GDP 76.1% of EU15 average)
    • Tyne and Wear & Northumberland (2001 GDP 83.7% of EU average)

PRIORITY 4 PERFORMANCE INDICATOR GAP ANALYSIS

The Priority 4 part of the Objective 2 Programme had been on hold between the start of this year and early May. Following much discussion surrounding the future for the second phase of the Programme most of the issues were resolved. Until recently one issue remained unresolved. Due to a fault on the ESF IT system, it has been extremely problematic to aggregate ESF Performance Indicators. As a result GO-NE produced a summary of the key Priority 4 Performance Indicators the Programme still has to achieve with the remaining resources.

As you may be aware for the second phase of the Programme, Measures 4.1, 4.2 and 4.3 have been merged together into one ERDF Measure, 4.1. Similarly, ESF Measures 4.4 and 4.5 have been merged into one Measure (4.4) for the second phase. Below is the list of Performance Indicators identified by the Gap Analysis.
Measure 4.1 - Establishing Capacity in Target Wards (ERDF)

  • Standard Outputs for 4.1, organisations assisted (O22) and community facilities created (O24) are no longer actively being sort.
  • Output RR19 for temporary jobs created for target community residents still needs considerable progress (i.e. 79% is still to be allocated). Therefore, the Programme may still approve a limited number of O22 and O24 projects that include RR19.

Overall gaps in Performance Indicators for Measure 4.1 are:

  • RR19 - years of temporary employment for target ward residents
  • RO37 - environmental improvements linked to training and employment
  • RO38 - community safety schemes
  • RO39 - Community Re-cycling initiatives
  • RO29 - community transport schemes

Measure 4.4 - Pathways to Work (ESF)

  • Oversubscribed on Intensive support to Individuals and Advice/Guidance output RO43. Unlikely GO-NE will approve any more of these.
  • Output RO40 working with excluded school children completely subscribed.
  • Main output still to be achieved is RO8 - Jobless people training towards successfully achieving full NVQs at Level 1, 2 or 3 or equivalents. The other gaps in this Measure are RR27 and RR17, which relate to beneficiaries getting into employment.
  • Finally, RO7 for employed people trained is still largely unfilled. One possible project idea to address this gap would be training people who work/volunteer in voluntary and community organisations.

Overall gaps in Performance Indicators for Measure 4.4 are:

  • RO7 - number of employed people trained
  • RO8 - number of jobless trained
  • RR6 - number obtaining full NVQ 1 or equivalents
  • RR7 - number obtaining full NVQ 2 or equivalents
  • RR8 - number obtaining full NVQ 3 or equivalents
  • RR27 - number obtaining employment related to training

OBJECTIVE 2 PROGRAMME SPEND UPDATE

As outlined above, the Programme is now in its second phase. Whilst approximately 75% of the Programme's ESF and ERDF resources have been allocated to projects, an issue has emerged. This is that a significant number of these approved projects have underspends amounting to millions of pounds. From now until the end of the Objective 2 Programme there is spending targets to achieve at the end of each year. These targets are known as n+2 and are for each of the two separate funds within the Programme (European Social Fund and European Regional Development Fund). The targets for 2004 will be achieved for ERDF but the Programme is currently forecast to be short by approximately £1m for the ESF target of £34m. This is an issue because if the £1m shortfall does actually happen then the Programme stands to loose the £1m in subsequent years.

The main factor behind the ESF shortfall is that on average ESF projects are approximately 35% underspent against their own forecasts. Whilst there may be legitimate reasons in some cases for this, it is not helping the Programme overall. GO-NE has been contacting projects sponsors directly regarding underspend and also in certain cases where project sponsors have not been submitting claims. Project sponsors need to be aware the Programme does have the discretion to withdraw projects that are not achieving Performance Indicators and/or projects that do not submit 2 consecutive quarterly claims.

The above problem is not just an issue for the 2004 targets. Forecasts recently produced by GO-NE show that the 2005 targets are also becoming a major concern. This is not just for ESF but also ERDF. ERDF is in danger as the current rate of claimed spend is reducing to dangerous levels whereby if this continues to decline the rate will be too slow to achieve the 2005 target.

All project sponsors need to be aware of the issues above and seek advice from ESFVON and others to try to alleviate any problems. They may be relatively simple answers. ESFVON have delivered many seminars on how to successfully complete all the claims forms on the Programme for both ESF and ERDF and have also visited many organisations to assist them individually to submit claims and set up appropriate systems. ESFVON would be happy to discuss any issues you may have regarding the successful operation of your Objective 2 project. Contact details are on the front of this Bulletin.

Whether you are a current project sponsor or are considering an application in the future this is a very important issue. To some it will undoubtedly have a negative impact, but for others there is the potential to develop project ideas to be able to utilise underspends from current projects. If you have got Objective 2 eligible ideas, particularly those which would be looking to Priority 4 funding, you should still be getting involved in the process. By looking to complete proformas etc you will get your interest registered and will enable your ideas to be viewed with the possibility of being allocated resources as they become available.

NEW EUROPEAN SOCIAL FUND APPLICATION AND INTERIM CLAIMS FORMS

As you may be aware from time to time the European Social Fund updates its documentation. This has recently occurred in respect of the ESF application form. This led to the publication of Version 11 of the form. Unfortunately, this version has caused considerable software problems to a number of o rganisations and consequently has been superseded by Version 12. If you have a Version 11 CD or downloaded Version 11 from the Internet you should uninstall it and then install Version 12. Don't panic, any work you have done on the Version 11 form should not be lost during this process. If you are unsure which Version you have installed the easiest way to check is to open the application form (normally found on the Desktop), click on Done and then click again on any part of the screen (this changes the menu options within the Help Menu). You should then click on the Help Menu in the top left-hand corner of the screen and then click on About ESF. A box should appear on the screen to say which Version of the Application form you have installed. If you have not installed the application form please check on either the CD or floppy disks, as the Version number should be on.

Any Objective 2 European Social Fund applications submitted to Government Office for the North East from now will not be accepted on any application form other than Version 12. If you have a version before Version 11 you need to be aware a number of changes have been incorporated into the new form. Application forms previously started on Versions before number 11 ( i.e. Versions 1-10) can be upgraded to the new form. This is achieved by clicking on the Admin Button and then Upgrade of ESF2000 interactive form EXPORT.MDB files in the new Version. It is important to note, not all information transfers, even from previously completed applications and it will still mean you will need to check closely the upgraded form for the questions which would still need completing.

Version 12 can be downloaded from the ESF Website:

http://www.esf.gov.uk/guidance/documents/interapplicationform.asp

If you are unable to download please contact ESFVON for a CD. If you are at all unsure on any of the above please contact ESFVON and we will be happy to talk you through the process and/or your concerns. There are additional safety methods you could use to ensure your original work is not lost during the processes mentioned above. Again please contact ESFVON for further details.

In addition to the above application form there is also a new ESF Interim Claims form. Please note that as with the application form there were unfortunately two errors on the form. One error is on page 2, Section 2 - Financial Summary part F Total Costs (gross). The problem is that the ERROR message does not disappear once your calculations are correct. If you have this version of the new form the ERROR message problem will not stop you submitting your claims.

The second fault is on page 5, Section 7 Summary Sheet. The Profile Period is automatically transported from another part of the form. Unfortunately it does not show the date, just a number.

A corrected version of the Claims is now available. Please contact ESFVON for a copy. If you are an ESF project sponsor and you were unaware of the changes to the Claims forms, the updated version has only minor changes to those you completed previously. The form is now more interactive and will need to be used to enable GO-NE to authorise payment of your claims from now on.

Please note, when submitting your claims they should be addressed to Jen Calvert at Government Office for the North East.

GOVERNMENT OFFICE FOR THE NORTH EAST CHANGE OF ADDRESS

Please note that from late August Government Office for the North East have a new address. The address is Citygate, Gallowgate, Newcastle upon Tyne, NE1 4WH. To the best of our knowledge all telephone numbers and other contact details remain unchanged. The new building is only on the other side of the street from Wellbar House on the site of the old Gallowgate bus station opposite the Scottish and Newcastle Brewery. It is the large new creamy coloured building.

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