ERDF Operational Programme : Summary of consultation responses. A Draft Report by Regeneris Consulting

Transcription

1 ERDF Operational Programme : Summary of consultation responses A Draft Report by Regeneris Consulting

2 ERDF Operational Programme : Summary of consultation responses 13 June 2014 Regeneris Consulting Ltd

3 Contents Page Executive Summary i 1. Introduction 1 2. Question Question Question Question Question 5 41

4 Executive Summary i. The European Regional Development Fund (ERDF) is one of the three separate funds, alongside the European Social Fund (ESF) and Part of the European Agricultural Fund for Rural development (EAFRD), which form the single European Structural and Investment Funds (ERDF) Growth Programme for the funding period. Each of the three European Funds will have a separate national programme document which sets out the priorities and activities each fund will support. These documents and priorities are known as Operational Programmes, which have to be agreed with the European Commission. ii. iii. Prior to submitting the European Regional Development Operational Programme, government is running a public consultation to invite views in response to the consultation questions on how to make the most effective use of the ERDF in achieving its purpose of driving growth and jobs. The consultation document explains the key elements of the ERDF Operational Programme that will be submitted to the European commission. The responses to the consultation will inform the Operational Programme that will be submitted to the European Commission in July Overall Summary of Consultation response exercise In total there were 50 responses across a range of sectors and a total of eight group discussion notes from the consultation event that were merged into the consultation response questions where appropriate. There was a particularly large number of responses from Local Enterprise Partnerships and Local Authorities, and overall the responses were fairly equally dispersed across England regions. 1.1 The following are the common themes that were identified with regards to question one of the consultation response exercise: There was overall a request for greater flexibility within the Operational Programme to provide the opportunity to shape development locally and target intervention to better meet local needs. Respondents also requested greater flexibility to enable support across different sectors and ERDF funded interventions to draw funding from more than one Thematic Objective (TO)/ priority. The need for greater flexibility was also expressed by respondents in defining the geographical boundaries of particular interventions (such as CLLD) that acknowledge the pockets of deprivation that exist in some rural communities. Many respondents expressed the need for the ERDF OP to enable cross-cutting linkages, particularly in the horizontal sustainability theme where linked to on-site development, which requires single application under different TOs to include both flood alleviation and green infrastructure. A number of respondents requested the use of targeted Green Infrastructure based on local priorities to support in reducing the barriers to investment such as flood risk and poor environmental quality, including the restoration of derelict land. A number of respondents requested the inclusion of actions to support investment in cultural heritage and to recognise the importance of the tourism sector in many local economies. i

5 Some respondents felt the document did not adequately cover the needs and challenges of social economics and also requested reference to the wider forms of finance that support the social economy. There was an overall desire to recognise the significance of problems associated with water quality such as contamination from phosphate and nitrogen, which was seen as a method for supporting wider local economic development objectives. Overall greater clarity was requested with regards to the type of activity that is eligible and some respondents asked for clarification that eligible activity will be based upon Commission regulations and ESIF priorities. There was a general perception that the administrative aspects of ERDF projects negatively impact on the effectiveness and efficiency of project delivery. The respondents view the inconsistent interpretation and changing guidance as a considerable risk and cost to engaging with ERDF funding. 1.2 The following are the common themes that were identified with regards to question two of the consultation response exercise: Overall respondents reiterated the need for greater flexibility within the Operational Programme to better meet local needs and in particular that sufficient flexibility was needed to enable LEPs to respond to changes in the local context. Many respondents expressed a desire for the ERDF Operation plan to enable cross-cutting linkages and to provide a strategic approach and the structure required to support this activity. They asked for a more joined up approach both across and within LEP areas to encourage integrated projects and so that initiatives can come forward. A desire that opportunities for cross LEP collaboration are highlighted, particularly for the use of financial instruments and opportunities for match funding that need to operate at significant scale. A number of respondents requested that ERDF could be used as a source of match funding for some projects which LEPs propose to fund through the local growth fund. A reoccurring theme was for widened activity under a number of the TOs so the type of activities they were able to provide were not restricted e.g. incubation space under TO3 broadened to cover business space. A number of respondents felt that with regards to CLLD resources should be focused on areas of greatest need to assist lifting communities out of deprivation and helping them access job and career development opportunities. There was a desire for further clarification on the nature and scale of technical assistance and programme management functions that are expected of the LEPs, and some respondents requested that Technical Assistance is available to both local and national partners. 1.3 The following are the common themes that were identified with regards to question three of the consultation response exercise: There was a general desire for better alignment of ERDF, ESF and EAFRD, as well as the Local Growth Fund. Although various views were expressed, this integration covered aspects of programme design (eg outputs and results), bidding and selection (eg aligning calls and bidding processes) and delivery (eg combining different funds to deliver specific activities). ii

6 However, various respondents were concerned that the consultation documents did not provide enough information to enable them to assess the opportunities to align different funding sources and that this was delaying the progress which they can make with their planning activity. A request for more guidance and support in developing FEIs, including working with potential partners such as the EIB. A desire for more information on the manner in which the opt-ins will work as part of ERDF and alongside other sources of funding. A need to examination the opportunities and challenges further of aligning ERDF with particular sources of EU and national funding which might be particularly important to sectors (eg skills an education funding) or areas (coastal community funding). A wide range of specific recommendations made by the respondents are presented below, although many of these were fairly general in their nature. 1.4 The following are the common themes that were identified with regards to question four of the consultation response exercise: A desire for more guidance on suitable benchmarks/unit costs for the full range of outputs, in order to help project sponsors to develop their projects. An approach to evaluation of the project which enables the emerging lessons to inform the delivery of the programme on an on-going basis. A request for a more rigorous and comprehensive approach to the measurement of economic impact, including both gross and net additional measures, both as part of the appraisal and evaluation of projects and programmes. In addition, a desire for more qualitative assessment of project progress, the learning of lessons and assessment of impacts which are harder to measure qualitatively. This should provide information on an on-going basis, to help ensure it is factored into the on-going design of projects and changes to the programmes. The use of Technical Assistance by a range of stakeholder groups to enable them to promote the programme to their target groups, in order to ensure high levels of participation. Various methods of doing this in an effective way were suggested. The following are the common themes that were identified with regards to question five of the consultation response exercise: A desire for clearer guidance to project applicants and consistency in the interpretation of this advice amongst the Local Delivery Teams. A request for training in the implementation of the cross-cutting themes to project applicants. A desire for fuller information to be included in the Operational Programme on the specific actions which were being proposed under the cross-cutting themes. iii

7 2. Introduction 2.1 The consultation response exercise sought the views of public and private sector organisations on the contents of the draft operational programme for European Regional Development Funds (ERDF) as part of the 2014 to 2020 European Structural and Investment Funds Growth Programme in England. The European Regional Development Fund Operational Programme is the main document for setting out the strategy and priorities for use of the fund to support the Europe 2020 strategy for smart, sustainable growth. It also contains high level information on how the fund will be delivered, managed and evaluated including partnership arrangements. 2.2 The consultation ran from 1 st May 2014 to the 28 th May 2014 and a total of 50 organisations responded in the consultation response exercise. As part of the Consultation response exercise DCLG held two events with partners to discuss and seek views on the ERDF Operational Programme. From the event there were eight group discussion notes in addition to the 50 respondents from the consultation response exercise. The consultation response exercise and event provided partners with the opportunity to comment on and provide views on the Operational Programme prior to submission of the draft Operational Programme for the ERDF to the European Commission. 2.3 The proposed activities that are being supported by the ERDF are set out in accordance with the policy objectives defined by the European Union and as set out in the European Structural and Investment Funds (ESIF) UK Partnership Agreement. In total there are eight separate policy objectives, known as Thematic Objectives (TOs). These are listed below: Thematic Objective 1: Strengthening research, technological development and innovation Thematic Objective 2: Enhancing access to, and use and quality of, Information Communication and Technology Thematic Objective 3: Enhancing the competitiveness of Small and Medium-size Enterprises (SMEs) Thematic Objective 4: Supporting the shift towards a low carbon economy in all sectors Thematic Objective 5: Promoting climate change adaption, risk prevention and management Thematic Objective 6: Preserving and protecting the environment and promoting resource efficiency Thematic Objective 7: Promoting sustainable transport and removing bottlenecks in key network infrastructures Thematic Objective 9: Promoting social inclusion, combating poverty and discrimination. 2.4 The following report provides a summary of the key messages that came out of the questions which were asked during the consultation response exercise and the consultation event. These will be used by DCLG in making decisions on what changes may want to be made and in taking the Operational Programme forward. DCLG sought views from partners under the following questions: Question 1: What priorities and activities should the European Region Development Funds focus on to deliver local growth and jobs? Question 2: What are the key needs and opportunities that should underpin the Operational Programme to meet what is needed locally? 1

8 Question 3: How can the European Regional Development Fund be used alongside other European and national funds to achieve economic growth? Question 4: How do you think we could effectively promote and demonstrate the performance of the Programme and impact of the European Regional Development Funds? Question 5: How do you envisage implementing the cross cutting themes locally? 2.5 All of the key messages from the consultation response exercise questions have been summarised and categorised by question and under the following types of organisations: Local Enterprise Partnership (LEP) 2.6 A total of 19 LEPs responded to the consultation response exercise and overall provided useful and thorough responses to the questions posed. The LEPs that responded were geographically dispersed and shared a number of key perceived concerns and priorities. Local Authority 2.7 A total of 11 Local Authorities responded to the consultation response exercise and overall fairly geographically dispersed across the country. Environment Sector 2.8 Responses from Environment Partners and Nature Partnerships have been grouped together due to the limited number of responses from both organisations. The environment sector also includes the two statutory bodies the Environment Agency and Natural England. In total there were seven environment sector respondents. Third Sector 2.9 In total five charities responded to the consultation exercise, which were a mix of disability, employment support, nature and environmental charities. Although the charity responses provide enough detail to draw on some key messages, overall they were somewhat limited in content. Education Sector 2.10 Education sector organisations that responded include two further education institutions and one higher education institution, as well as HEFCE (Higher Education Funding Council for England). In total there were four education sector respondents. Other 2.11 Other sector organisations covers all organisations that do not fall into any of the sectors described above. In total there were four organisations that fall into this categorisation Figure 2.1 provides a summary of the number of consultation responses by type of organisation. In total there were 50 consultation responses. As well as these responses there were a total of eight group discussion notes from both of the Operational Programme consultation events. 2

9 Figure 2.1 Consultation Responses by Type of Organisation LEP Local Authority 7 19 Environment Sector Third Sector Education Sector 11 Other Source: DCLG consultation response exercise 2.13 Figure 2.2 illustrates the spatial distribution of consultation responses. Overall, with the exception of a cluster of responses in London and the East of England, the responses were greater in the North and Western areas of England, with fewer responses in the East and South East regions. Figure 2.2 Spatial distribution of consultation responses Source: Ordinance survey data. Note: The current map only includes 35 of the responses and will be updated for the final version. 3

10 3. Question 1 What Priorities and activities should the ERDF focus on to deliver local growth and jobs? 3.1 In general, the respondents were supportive of the proposed approach to the use of ERDF to support local growth and jobs. However, there were many and wide ranging responses. In so far as it is possible to identify common themes these were: There was overall a request for greater flexibility within the Operational Programme to provide the opportunity to shape development locally and target intervention to better meet local needs. Respondents also requested greater flexibility to enable support across different sectors and ERDF funded interventions to draw funding from more than one TO/ priority. The need for greater flexibility was also expressed by respondents in defining the geographical boundaries of particular interventions (such as CLLD) that acknowledge the pockets of deprivation that exist in some rural communities. Many respondents expressed the need for the ERDF OP to enable cross-cutting linkages particularly in the horizontal sustainability theme where linked to on-site development, which requires single application under different TOs to include both flood alleviation and green infrastructure. A number of respondents requested the use of targeted Green Infrastructure based on local priorities to support in reducing the barriers to investment such as flood risk and poor environmental quality, including the restoration of derelict land. A number of respondents requested the inclusion of actions to support investment in cultural heritage and to recognise the importance of the tourism sector in many local economies. Some respondents felt the document did not adequately cover the needs and challenges of social economics and also request reference to the wider forms of finance that support the social economy. There was an overall desire to recognise the significance of problems associated with water quality such as contamination from phosphate and nitrogen, which was seen as a method for supporting wider local economic development objectives. Overall greater clarity was requested with regards to the type of activity that is eligible and some respondents asked for clarification that eligible activity will be based upon Commission regulations and ESIF priorities. There was a general perception that the administrative aspects of ERDF projects negatively impact on the effectiveness and efficiency of project delivery. The respondents view the inconsistent interpretation and changing guidance as a considerable risk and cost to engaging with ERDF funding. 4

11 Local Enterprise Partnerships 3.2 Due to the detail and general structure of the LEP responses for consultation question one, the LEP responses have been structured by thematic objective. 3.3 Overall there is strong level of support for the priorities and activities set out in the Operational Programme consultation which have which clearly link strongly with the LEP s priorities in their ESIF strategies. There is particularly strong support for the priorities and actions outlined in thematic objective one, three and four. 3.4 However, there is disappointment amongst many LEPs that the draft Operational Programme was not circulated which has reduced the specificity of response on how the proposals relate to the delivery of the ERDF. There are also some comments that reducing the scope for activity which can be supported by ERDF within silo thematic areas could make it difficult to deliver in a more efficient and cost effective manner. Some LEPs also express a general concern that there is sufficient flexibility within the programme in meeting local needs and aligning with all 39 LEPs local strategies. General comments: 3.5 The following are comments made by LEPs are not specific to a particular TO however relate to views on the overall consultation document/ process. The views expressed are those of individual respondents, unless otherwise stated. Most respondents express support for the proposed ERDF actions/ interventions which are seen to be fairly well aligned with the objectives and priorities of their ESIF, and welcome the non-prescriptive nature of the ERDF OP, which enables flexibility and to allow ESIF to have primacy in determining EU investment priorities, which allow local needs and priorities to be supported Numerous respondents express the need for the ERDF OP to enable cross-cutting linkages. A particular example is on site development focus: interventions across T3 where it is focussed on site development, T5 (flooding) where linked to site development and T6 Green Infrastructure where linked to site development very disparate A respondent stated that the extensive nature of their partnership network could mean that without a clear leadership role for LEPs in ERDF, they may not be able to achieve the maximum impact. Without a clear decision-making mandate and sufficient resources to support the amount of work involved, it could be difficult for them to discharge their role effectively There was a request for added certainty to the deliverability of the OP through clarifying and strengthening the commitment of technical assistance in delivering ESIFs from numerous respondents Cornwall and Isles of Scilly (C&IoS) LEP reported that the lack of focus on C&IoS as the only Less Developed Region (LDR) is further evidence that the current proposal to have only one ERDF OP will lead to a sub optimal programme. The C&IoS LEP is concerned current proposals will not be fully integrated and delivered according to local needs and believe that a separate OP for ERDF and ESF for C&IoS would present a better mechanism to drive growth and create jobs A desire from a few respondents that given the EDIF is based around broad investment priorities which will support integrated activity that meet more than one of the TOs, the OP enables ERDF funded interventions to draw funding from more than one TO/ priority 5

12 A general desire for the programme to support investment in site and property development and supporting infrastructure to underpin business development, not just incubation centres Concern that full integration of ERDF, ESF and other government funding programmes will be limited given the varying timescales and requirements imposed on each source of funding It was implied the proposal that the PMC is supported by 39 local sub committees (one in parallel to each LEP) will add confusion to an existing complex landscape and counters the Government s drive for effectiveness and efficiency and the avoidance of duplication. The respondent requested for LEPs to establish a LSC as a Sub Group within the LEP governance arrangements A view that the proposal for a separate bureaucracy for operational programmes counters the Governments own commitment to devolution through its endorsement of the LEP role, remit, budgets, decision-making and genuine inclusive partnership engagement. It was expressed as absolutely vital that the ERDF and ESF operational arrangements do not create new barriers to local economic growth TO1 3.6 Nearly all of the LEPs which responded to the consultation exercise expressed strong support for the priorities and actions outlined in the TO which largely align with the LEP priorities set out in their ESIF strategy. Particular support under this TO for investment in related infrastructure development such as innovation hubs/ centres. There was also a handful of LEPs that expressed a desire for a published Smart Specialisation Strategy for England to align effectively to the EU s concept of Smart Specialisation. 3.7 Key issues highlighted in particular responses were: The need for a strong focus on the commercialisation of innovation and research. Funding needs to be clearly available for existing SMEs, networks and Knowledge Transfer Networks, start-ups, plus provision of support for the development of new products/ services A suggestion that the coverage of capital investments is too narrow (incubation space). The respondent would welcome expansion of the coverage of capital investments, including in site development and the refurbishment of existing public buildings to bring them back in for commercial use for R&I The need to recognise within the OP that the needs and priorities for R&I will differ between local areas and the national priorities. There needs to be flexibility to allow different solutions A view that the definition of innovation activity too narrow, with a desire for a reference in the OP to open innovation 1 A desire for the published Smart Specialisation Strategy for England to align effectively to the EU s concept of Smart Specialisation. 1 Innovating in partnership with those outside your company by sharing the risks and rewards of the outcome and process. 6

13 TO2 3.8 Less than half of the LEPs which responded to the consultation exercise mention specific actions and/ or objectives related to this TO. Amongst those that did respond, there was general support for its role in supporting aspects of business competitiveness such as business efficiency and optimising the use of ICT for enhanced business innovation and competiveness. 3.9 Key issues highlighted in particular responses were: TO3 A view of one respondent that the TO does not currently reference to connectivity benefits of the investment (e.g. potential for investment to benefit connectivity and business growth). Also the need for clarification on the eligibility or otherwise of proposed investment under this priority needed The suggestion that there is still a need for continued investment in Broadband infrastructure in hard to reach areas where costs are too high and unattractive for commercial investors Inadequate coverage of wider issues around digital inclusion and service migration that can have a negative impact on economic development The majority of LEPs which responded to the consultation response exercise refer specifically to this TO and overall express support for the priorities and objectives outlined under this TO. However, there are a number of concerns surrounding the potential for the effectiveness of the TO to be constrained by factors such as inflexibility and lack of clarity Key issues highlighted in particular responses were: DCLG, BIS and LEPs should ensure national and local SME support and programmes are complementary and that duplication is minimised. There is scope to minimise duplication of ERDF funded activities between LEPs, through forums to enable LEPs to discuss the nature of projects A view that there had not been enough information provided on the proposed opt-in arrangements. With regards to BIS sponsored ERDF Opt-Ins, there is uncertainty surrounding the availability of match funding from UKTI, MAS and Growth Accelerator for proposed SME competitiveness investment The consultation document needs to acknowledge of the role of larger businesses role in supporting SME development e.g. supply chain development, peer to peer support A view that the consultation document is unclear on capital expenditure due to the absence of output and activity information, a more flexible approach would fully enable all areas to benefit from investment A desire to find ways to encourage companies to focus on making use of the local labour force such as in areas where there is a high level of out commuting of highly skilled professionals A desire for the OP to support a sector-based approached to supporting SME growth, with individuals LEPs playing a central role in deciding the sectoral focus of their ERDF programmes. SME support activities should also prioritise the development of exportable products and services 7

14 A desire for strong linkages to be fostered between TO3 and TO1, including cross-referral mechanisms (to e.g. catapult centres, universities) in place to ensure SMEs are able to access the most appropriate forms of support A desire for a strong focus on growing the green economy through TO3, with the focus on achieving a green economy through investment in resource, process and energy efficiency should be re-introduced. TO The majority of LEP respondents indicated show strong support for the priorities and activities outlined within this TO, however a number noted the limited detail presented within this TO and the absence of specific reference to a number of priorities that LEPs feel should be part of the Growth programme A desire amongst a number of respondents was for coverage of specific interventions: Reference to support for green supply chains A strong commitment to local renewable energy capacity Low carbon and environmental goods and services The development of low carbon demonstrators in both the public and private sectors Support for resource efficiency in SMEs, including demonstration projects linked to premises Key issues highlighted in particular responses were: TO5 A desire that the focus should be equally on rural areas as urban areas A request for more information on the types of low carbon transport projects which the TO is intending to support and a concern that the programme funding may be insufficient to make a meaningful contribution A query from a respondent concerning the scope to support business resource efficiency under TO4 as opposed to TO6 (it notes that the supplementary guidance suggests that the associated output (number of companies supported with business resource efficiency) is only suitable for ERDF expenditure under Thematic Objective 6) A need to avoid a consistent approach for all projects to benchmark, report and compare their contribution to reducing carbon and improving resource efficiency (achieving this has proved difficult under previous ERDF programmes) Fewer LEP respondents provided specific comments on this TO and there is limited evidence on which in concluding whether they support the propose use of resource in achieving local growth and jobs. A number of LEPs indicated a need to identify the effectiveness of investment in flood alleviation measures and the need to ensure these schemes have strong links with strategic economic development objectives (e.g. strategic and other significant sites) Key issues highlighted in particular responses were: A desire for flood alleviation schemes to be designed in order to also meet the cross cutting sustainability theme of the OP, in particular in developing blue and green infrastructure 8

15 and establishing eco system services. Investing in green infrastructure in flood risk areas could also be an effective way of developing the green tourism industry while tackling flood risk. Managed woodlands could also be a source of biofuel (carbon negative if well managed) while also acting as a carbon sink and improving air quality One respondent noted that the OP concentrates on bringing derelict and brownfield land back into economic use whilst also tackling flood risk, but fails to recognise the significant problems associated with water quality such as contamination from phosphate and nitrogen A request for the OP to explicitly allow the enhancement and environmental protection of existing sites, not just facilitating the development of news sites. TO A large number of LEPs highlighted a number of gaps in the priorities and objectives of the thematic objective, with some particular mentions of the need to recognise factors such as water quality and priorities that have been agreed locally Key issues highlighted in particular responses were: TO7 A desire for a stronger focus the treatment and redevelopment of brownfield land, including the scope to support demolishing existing structures and investments in related site infrastructure and sustainable transport links A desire for both large and small scale renewable energy to be supported through the ERDF programme, in particular where it aligns with UK Government strategy A failure to recognise the significance of problems associated with water quality such as contamination from phosphate and nitrogen, which can support wider local economic development objectives One LEP requested inclusion of actions to improve water quality and investment in cultural heritage and tourism infrastructure, in order to promote their local tourism offer (and to maintain consistency with ESIF programme guidance) One LEP respondent felt that product and service innovation related to resource efficiency are not well supported in the TO, not the related supply chain opportunities. They would also like to see greater emphasis on developing business models that prevent limited resources being sent to landfill One LEP is seeking the OP to encourage a more holistic view of how all natural resources should be used, re-used or replenished The ERDF OP should encourage stronger linkages and the horizontal sustainability theme where linked to site development, including single application under different TOs, for example including site preparation, build, flood alleviation and green infrastructure The responses from LEPs make limited reference to TO7, with neither particular support nor concern about the focus of the TO and its support for local growth One respondent suggested the Operational Programme should outline the importance of a modal shift as a means to drive growth and support urban mobility. They also suggested that the exclusion of significant infrastructure investment in more developed LEP areas would result in a suboptimal outcome excluding major hub sites from investment to form a sustainable network. 9

16 TO There is general support for the Community Led Local Development approach as a means of reach disadvantaged groups that need a more intensive form of support alongside mainstream services. Many LEPs request greater flexibility in delivering the TO to better meet local needs and in defining the geographical boundaries in acknowledging pockets of deprivation Key issues highlighted in particular responses were: A number of LEPs requested that a wider range of innovative interventions with flexible levels of investment was implemented in the OP. One respondent suggested this would allow access for smaller groups with less capacity to manage large projects or strategies A request that grant mechanisms should be available so there is an alternative to the community led local development approach The provision of guidance would help communities shape their local development schemes The need for more flexibility in defining the geographical boundaries and acknowledgement of the pockets of deprivation that exist in some rural communities was requested by a number of LEPs. We would also ask for greater flexibility in the CLLD approach to be applied so that it can be tailored to meet local needs and circumstances A request for a more targeted CLLD approach so these areas don t miss out on funding and activity through the other strategic activities. We propose that LEPs should be given the flexibility to choose the best approach to deliver this thematic objective. Local Authority 3.23 Due to the detail and general structure of the Local Authority responses for consultation question one, the Local Authority responses have also been structured by thematic objective. General comments 3.24 The following comments made by Local Authorities are not specific to a TO however are views on the overall consultation document/ process. The views expressed are those of individual respondents, unless otherwise stated. A general comment on the consultation was that only a summary and a technical annex had been made available for comment. A number noted that it has made it difficult to respond in any meaningful manner as the full content of the proposed Operational Programme has not been made available A strong desire for the final version of this OP to make much greater synergy with the individual cases for ERDF investment made by the 39 ESIF strategies. The final ERDF OP needs to include a clearer representation of the roles and responsibilities and levels of accountability between local partnerships, the managing authority and the Programme Monitoring Committee A desire to strengthen strategic connections between thematic objectives Whilst the technical report effectively identified the key economic and labour markets challenges and opportunities facing England some felt that the technical annex focused too much on the City Regions with little reference to other urban and rural areas The Technical Annex did not include a framework of Programme impact targets, which one respondent felt was a strategically important issue and which needed to be addressed 10

17 Likewise, a respondent expressed the need to carefully consider the appropriateness of key performance indicators to ensure their fitness for purpose under the new programme, as well as the inherent challenges of securing match funding, which should be aligned to the ERDF programme. The respondent felt the consultation did not adequately address these points Respondents requested that the population threshold for Sustainable Urban Development (SUD) should be relative to the population of the respected LEP area. TO Key issues highlighted in particular responses were: TO2 A that initiatives targeted at business formation are inclusive of one to one consultancy support and underlying structures that enable SMEs to introduce new products and services to the market and to re-engineer their businesses for greater profitability and resource savings A desire for recognition that it is not only universities that can provide support to SMEs in respect of innovation and R&D A desire for the intervention activity to not only provide business support for new high tech business start-ups but include pre-start support for businesses that could fall outside the current coverage The suggestion to include specialist infrastructure and ecosystems that support innovation activity to enable local areas to effectively capitalise on competitive advantages Key issues highlighted in particular responses were: TO3 A view that investment in broadband infrastructure should be included as an eligible activity to provide ongoing opportunities to enhance the BD-UK programme More specifically, the roll of broadband infrastructure to those areas where neither the market nor existing public interventions will deliver Superfast Broadband In general the respondents found the thematic objective broad enough to cover most elements of ESIF priorities and agree with the emphasis on the demand-led and market-driven shift in England s industrial mix and the focus on growth and creation of small and medium-sized businesses Key issues highlighted in particular responses were: A respondent questioned the focus of investment in property to business incubator space, suggesting that this could exclude initiatives that will deliver local growth and jobs through follow-on or general business space. Related to this, there was a desire for the continued support for the gap funding for property based schemes, including urban development initiatives such as JESSICA. A request for the promotion of inward investment to be specifically highlighted as a priority action under TO3 Confirmation from one local authority that ERDF should have a strong focus on supporting SMEs to access new markets and export activities. 11

18 TO A number of respondents asked for greater clarification of what units costs and associated value for money to be expected from different types of resource efficiency and carbon reduction measures. Should there be an emission reduction value based around the predicted carbon savings Key issues highlighted in particular responses were: TO5 One respondent expressed a concern that the lack of detail under the TO could undermine confidence as to whether the priorities and activities will align well with those in LEP s ESIF strategies. In particular, they note a concern that the objective appears to be more focused on urban rather than rural areas A number of respondents asked for greater clarification of what units costs and associated value for money to be expected from different types of resource efficiency and carbon reduction measures. Should there be an emission reduction value based around the predicted carbon savings A suggestion that the TO shouldn t be seen in isolation of a number of other TO as there are strong linkages with TO1 and TO3 in particular. These linkages should be emphasised within the OP document A desire for the objective to make the reduction of emissions from transport a priority. The suggestion that TO4 needs to deliver activity similar but more targeted than those in TO5, 6 and 7. The provision of Whole Place Solutions 2 should be central The inclusion the nuclear sector and supply chain in the definition of low carbon Key issues highlighted in particular responses were: TO6 A request for the thematic objective to provide support for communities affected by flooding incidents, in particular to address economic consequences of these events The suggestion that whilst investment in green and blue infrastructure is beneficial, a more sustainable environment can provide value for money in terms of the protection, resilience and confidence of business and investment communities. This should be noted and accounted for One respondent notes that green infrastructure and strategically important tourist projects are not mentioned in the OP Key issues highlighted in a number of responses were: Desire for a clear focus on supporting investment in high quality public realm and related sire infrastructure to attract SMEs to the UK and localities, not just the focus on the use of brownfield land remediation 2 Re-wiring services around people and places 12

19 Endorsement of the focus on securing environmental benefits through the remediation of brownfield land, but a need to recognise that these sites may not be suitable for location of every type of business A prompt for CLG to recognise that the focus of the TO and the horizontal theme suggests a need to retain the flexibility to address the full range of interventions, including investing in waste efficiency and the recycling sector, investing in water quality and efficiency, developing and conserving the natural and cultural heritage, and protecting and restoring biodiversity. TO Key issues highlighted in a number of responses were: TO9 A number of respondent noted that poor transport links continue to adversely impact economic development potential in many parts of the transitional and less developed areas in particular, particularly Cornwall and the Isles of Scilly. They stress that these and can be key to unlocking economic growth in both urban and rural areas and need to be supported by the ERDFF programme A number of the respondents have requested more information on the range of sustainable transport schemes which will be supported and also suggested the level of funding for the thematic objective is likely to be inadequate for meaningful transport schemes Key issues highlighted in a number of responses were: A number of respondents noted that activity must not only cover investment under CLLD but also a range of bottom up interventions such as Community Grant programmes. Other investment priorities listed were investment in health and social infrastructure, and support for economic and social regeneration in deprived urban and rural communities The respondents seek more flexibility in defining geographical boundaries for CLLD and would also like greater acknowledgement that pockets of deprivation exist in some smaller urban areas and rural communities and that without a targeted approach this is unlikely to change Respondents would like clarity as to why the guidance referred to 1m as the public sector investment over the term of the programme and the OP Technical Annex suggests that this should be 3m Other approaches such as community grants could be effective in achieving the objective of TO9 and LEP areas should be given the flexibility to choose the best approach to deliver this thematic objective. Environment Sector 3.35 Most of the environment sector organisations that responded expressed a level of support for the chosen thematic objectives and priorities set out in the consultation documentation. In line with the environment focus of these organisations, emphasis on support for TO4 is particularly prevalent, with them seeking sustainable development at the heart of economic growth objectives. However, Natural England stated that they thought the proposed focus of ERDF activity to be insufficiently broad. 13

20 3.36 The following are the key priorities and issues that environment sector organisations from the consultation process would like DCLG to respond to in developing the Operational Programme. The views are those of individual respondents, unless otherwise stated. Key priorities were to ensure scope within the programme to: Certify that TO4 remains a key priority and ensure sustainable growth is implemented throughout the programme The preservation of heritage assets as a source for generating economic growth and employment Focus on large scale projects (greater than 5m) which have the greatest potential to be transformational and to have significant net impact for a region. The respondents noted that business hubs, incubation hubs and centres of excellence also provide critical mass to ensure ERDF money is transformational A desire to ensure a focus on securing the business benefits from greater broadband access, e.g. use business hubs to demonstrate, share the risk and then stimulate the rollout of key business benefits to SME s of superfast broadband enabled technologies Funding directed to the restoration of the natural environment was reported as essential to economic development and could help provide new jobs in the growing sectors such as for 'Payment for Ecosystem Services' (PES) A request to use targeted Green Infrastructure (TO5-6) based on local priorities to support in reducing the barriers to investment such as flood risk and poor environmental quality, including the restoration of derelict land Expressed strong support for the emphasis on TO1, TO3 and TO4 and would welcome the recognition that in specific geographic circumstances ERDF will respond to investment needs that LEPs have identified in relation to objectives TO5 and TO6 as an essential means to enable a more effective implementation of these core objectives Key issues highlighted in particular responses were: Action on health and wellbeing was reported to not specifically feature in the priorities and activities outlined (Important aspect for realising high levels of productivity) A desire that broadband priorities are more focussed on the business benefits from broadband e.g. cloud technologies, dispersed/ big data solutions A preference for LEPs to adopt an integrated approach to sustainable growth that for example aligns activities across TOs Requested a specific reference to be made to energy efficiency and low carbon innovation with regards to water management in TO4 One respondent commented that focus of ERDF activity is considerably narrower than what they felt was required, and it is neither consistent with what is outlined in the Partnership Agreement or in the guidance provided to LEPs A request that sufficient funds are allocated to environmental priorities and activities to ensure England s natural capital is not eroded as a consequence of delivering growth from the ERSIF. The respondent also felt support for Green Infrastructure under TO5 and 6 would be particularly appropriate. 14

21 Third Sector 3.38 Of the five charities which responded to the consultation response exercise, four provided a response to this question. The charities that responded generally expressed particular support for thematic objectives of relevance to their own individual goals, such as TO6 and TO9. There was some specific focus on addressing environmental issues and the significance of sustainable development in achieving growth objectives. Some comments from the consultation response were not of particular relevance to the consultation questions and overall the responses were brief and limited in detail The following are the key priorities and issues that charities from the consultation process would like DCLG to respond to in developing the Operational Programme. The views are those of individual respondents, unless otherwise stated. Key priorities were to ensure scope within the programme to: Support unemployed people in becoming work-ready and connecting disadvantaged groups to local jobs through greater access to jobs and promoting growth in sectors/ industries where entry level jobs are available Improvements to local infrastructure where needed, particularly electricity grid and roads to improve the attractiveness of local areas Focus on TO6 and the refurbishment and reuse of historic buildings and areas in creating jobs and investment whilst minimising the consumption of finite resources Improving the long-term competitiveness of local economies through more sustainable economic development such as green infrastructure, enhancing (local) natural assets and making communities more attractive places to live and work. Local decision makers should have the scope to invest/ prioritise TO4-6 depending on local strengths and weaknesses Ensure there is State Aid clearance for all projects to deliver public goods through EU and government funding, to ensure these funds can be used to create attractive, resilient areas Key issues highlighted in particular responses were: A view that whilst there needs to be a focus on creating high skilled employment, it is necessary to ensure there is focus on job creation in lower skilled positions and that the ERDF and ESF support them in gaining long term employment opportunities Poor infrastructure means wind farms in rural areas are only benefiting landowners and limited road networks cuts off areas from employment and growth opportunities TO6 needs to be comprehensive in its definition of the environment, with the historic environment playing a full and effective role in achieving sustainable development. Education Sector 3.41 All education sector organisations responded to the question and largely expressed support for the ERDF priorities/ activities included in the Technical Annex, which tend to be sufficiently broad and reflect the objectives set out in the individual ESIF. There was particularly strong support for TO1. A key theme is the perceived levels of bureaucracy and administrative burden around the delivery of the programme The following are the key priorities and issues that education sector organisations from the consultation process would like DCLG to respond to in developing the Operational Programme. The views are those of individual respondents, unless otherwise stated. Key priorities were to ensure scope within the programme to: 15

22 Ensure there is a good fit between the priorities and the HE sector s own priorities, with particular reference to support of TO1 (collaborative research and commercialisation of research) Facilitate focus on low carbon economic growth, stimulating the regional "bio-economy and encouraging SME engagement with the Knowledge Base, as well as supporting opportunities for cross LEP-working Support an innovative culture that would improve innovation capacity, develop the ability of local businesses to sell into the supply chains of larger regional and national organisations and support business growth and start-ups through graduate placement programmes. Give strong support for the concept of social innovation Key issues highlighted in particular responses were: Concern that desired outcomes will not be achieved without a strategic approach to cross- LEP working and the structures required to support this activity. A clear mechanism for the development of projects with a national/multi-lep reach would achieve a greater impact The perception that the administrative aspects of ERDF projects negatively impact on the effectiveness and efficiency of project delivery. This includes the audit functions, inconsistency in the interpretation of eligibility criteria and the risk averse approach of the Local Delivery Teams. The respondents view the inconsistent interpretation and changing guidance as a considerable risk and cost to engaging with ERDF funding Especially in terms of TO1, the respondents thought it important to ensure their continued participation in European Structural Funds and recognise that they have a wider role to play in other types of interventions other than consultancy and research The concept of social innovation should be applied in a practical and meaningful way across all of the TOs, not just in TO1 and TO9 (social inclusion). Other Respondents General comments 3.44 The following comments made by other sector organisations are not specific to any of the TOs however are views on the overall consultation document/ process. The views expressed are those of individual respondents, unless otherwise stated. A need for the key objective to make sure that the ESIF delivery mechanism via the Local Enterprise Partnerships is robust, representative, accountable, and transparent Respondents are unclear on what will be covered by the technical assistance priority A respondent proposed that the OP should encompass all Simplified Cost Options A request for overall flexibility within the Operational Programme which would enable support for different sectors, both higher value and core sectors, was seen as an important factor in promoting sustainable growth for the future Key issues highlighted in particular responses were: 3 Social innovation are new ideas (products, services and models) that simultaneously meet social needs (more effectively than alternatives) and create new social relationships or collaborations. 16

23 A request that each LEP has an effective means for feeding SME/MSE priorities into board level decision making Under TO3 it was noted that new ESIF financial instruments should only be set up where there is no existing legacy i.e. ESIF financial support schemes funded by previous programmes. The administration of these schemes was reported as complex and the skills sets needed were seen to be in short supply With regards to business support under TO3, one respondent stressed the importance of personal support that is provided and delivered by experienced entrepreneurs. Where single large contracts are issued the respondent stated that these must be subject to an open and transparent procurement processes that provide opportunity for smaller suppliers to compete successfully for delivery contracts Seek to continue access to finance programmes under the programme, including investor readiness business support programme and support to encourage exports, such as export networks linking with UKTI Respondents express the need for purpose built industrial and office space to overcome the market failure from unwillingness from developers to build and SMEs who are not in a position to build their own space Business incubator space bought with ESIF monies was stated to need a caveat that ensures it remains contractually available ad incubator space for a lengthy period of time so ESIF funds are not used to create space for other purposes Greater recognition of the proposed link between the Operational Programme and Smart Specialisation strategies prepared by LEPS was requested, and development of enabling technologies which will support growth in Smart Specialisation areas. It was stated activity descriptions around clean technologies and potential for jobs growth in renewable energy projects and businesses should be clearer Support for the current catapult model was expressed, however utilisation by SMEs could be limited by the distance required to access specialist support. To address this the respondent suggested a network of specialist innovation hubs or catapult centres, linked to larger centres, but enabling areas to develop local specialisms It was reported that our Universities have an excellent research record, however opportunities for commercialising this research are not always obvious to SMEs and they go unexploited A desire for a clear statement of intent to utilise Social Innovation in the new programme and in particular to give details of how Social Innovation projects can be funded on a small scale and then scaled up A view that TO2 would benefit from extending its focus beyond broadband, to including other critical IT areas to business. For example the application of informatics and cyber physical systems is relevant to indigenous UK manufacturing business The need to continue the roll-out of superfast broadband infrastructure to rural areas unlikely to be reached through commercial roll-outs was seen as a withstanding need A view that support for more traditional industries to innovate and make better use of ICT and social media is needed, such as business within the tourism and leisure sector A request for reference to wider forms of finance for the Social Enterprise sector such as Big Society Capital and SIB Group and a stronger statement about the governments support for social economy is needed 17

24 Reference to the EU s Social Business Initiative and of the many development around the social economy in England including funding in the programme and the development of this activity in the programme, and not least the support for Local Impact Funds, are viewed as important factors to be considered A respondent expressed the need to address areas of deprivation where growth is slow, but where intervention will have greater impact. Similarly, they asked the OP to recognise the opportunity for smart, sustainable growth in some of the more traditional industries (e.g. retail and tourism) and the difference investing in these could make. Relevant Consultation Event Responses 3.46 There was a general consensus that the OP provides sufficient flexibility to deliver the priorities set out in the ESIF and overall strong support for the mechanism of Community Led Local Development (CLLD) The following are the key priorities and issues that particular discussion groups from the Operational Programme consultation event would like DCLG to respond to in developing the Operational Programme. Key priorities were to ensure scope within the programme to: Ensure there was sufficient flexibility to provide the opportunity to shape development locally and to target intervention to meet local needs. The group however expressed some concern that the opt-in service offers had not provided the level of shift that had been hoped for Acknowledge that dialogue between the MA and local partners is key in agreeing the fit and eligibility of proposed activity. The respondents expressed a need to acknowledge that there will inevitably be some constraints and that it might be necessary to provide challenge about what it is that local partners want to achieve and how they might do that Support the mechanism of CLLD. It was noted as the only way to put funds together on a local basis and enables double devolution which in itself adds value and can lead to giving the local community tremendous capacity building not possible through mainstream programmes. The respondents highlighted a number of perceived issues: The challenge for LEPs was seen as the need to identify perceived gaps and to design complementary activity and wrap around support to fill those gaps One of the discussion groups felt it was a little disingenuous to say that 70% of LEPs favoured Opt Ins many felt that this was the only game in town especially regarding ESF and might have wanted to take a different approach if match funding was available The discussion group wanted to understand the logic for excluding TO11 given that developing capacity should be a key consideration if partners are to play a full part in both supporting and delivering the Programmes The group requested guidance on which SMEs are eligible for investment and which sectors The group sought Information about the performance of the current pilot Local Impact Funds as soon as available There was concern from the private sector that the new funds will be nothing new and to how DCLG will ensure that new ideas come forward The group expressed concern that EU policy seems to be shifting away from implementing CLLD and that a minimum 3m budget will be too large for some communities 18

25 Discussion from the consultation event suggested many LEPs were seeking further advice as to how to join together to have large funds and take advantage of economies of scale A desire for more detailed guidance on CLLD and in particular added value was requested as soon as possible. Some respondents were unclear about the potential partners from LEP down and what the functions of an accountable body will be. There were also some concerns on the enormous resource implications for both bodies delivering CLLD and the Managing Authority The group felt that community grants should also be provided under TO9 as it does not cross over with CLLD. 19

26 4. Question 2 What are the key needs and opportunities that should underpin the Operational Programme to meet what is needed locally? 4.1 A wide range of responses were provided across the fifty respondents and the consultation events. The key points are summarised briefly below: Overall respondents reiterated the need for greater flexibility within the Operational Programme to better meet local needs and in particular that sufficient flexibility was needed to enable LEPs to respond to changes in the local context. Many respondents expressed a desire for the ERDF Operation plan to enable cross-cutting linkages and to provide a strategic approach and the structure required to support this activity. They asked for a more joined up approach both across and within LEP areas to encourage integrated projects and so that initiatives can come forward. A desire that opportunities for cross LEP collaboration are highlighted, particularly for the use of financial instruments and opportunities for match funding that need to operate at significant scale. A number of respondents requested that ERDF could be used as a source of match funding for some projects which LEPs propose to fund through local growth fund. A reoccurring theme was for widened activity under numerous TOs so the type of activities they were able to provide were not restricted under the TO e.g. incubation space under TO3 broadened to cover business space. A number of respondents felt that with regards to CLLD, resources should be focused on areas of greatest need to assist lifting communities out of deprivation and helping them access job and career development opportunities. There was a desire for further clarification on the nature and scale of technical assistance and programme management functions that are expected of the LEPs, and some respondents requested that Technical Assistance is available to both local and national partners. 4.2 Summaries of the responses received, grouped by sector, are outlined below in turn. Local Enterprise Partnerships 4.3 Overall LEPs felt the key needs and opportunities in the OP aligned with their ESIF strategies, however a number of LEPs felt there was a number of activities missing or that hooks under the OP s broad outline of activities were not presented in a clear enough manner which raised uncertainty on the type of activity deemed eligible. There was also a general consensus that sufficient flexibility in the OP was needed to enable LEPs to respond to changes in the local context. 4.4 A reoccurring message was also the importance of cross-lep/ Pan LEP collaboration and the need to widen the scope under TO3 so that ERDF is not restricted to incubation space, but could also support other forms of business space. 20

27 4.5 The following are the key priorities and issues that the LEPs would like DCLG to respond to in developing the Operational Programme. The views are those of individual respondents, unless otherwise stated. Key priorities were to ensure scope within the programme to: Give flexibility for the use of ERDF funding to deliver more wide spread innovative sustainable urban development projects which will respond to changes to the local context, open up new sites for development, facilitate job creation and support local residents to access new employment opportunities Enable locally driven decision-making and project selection to allow the programme to be responsive to specific local needs and support localised development. This was viewed as critical in achieving the aim of an accessible, participatory programme that attracts applications from all sectors and enables a range of local partners to engage with the process, including those new to European funding but with specific and appropriate skills Support infrastructure (including transport facilities to enable access to employment sites), flood risk mitigation (the high standards required for ERDF-supported capital proposals are warmly welcomed), housing and place development, business support (enhancing the overall competiveness of SMES in particular their ability to participate in low carbon and renewable energy industries was seen as key in supporting a number of LEPs priority sectors) A desire to ensure the prospects and aspirations of local communities are raised through CLLD. A number of respondents felt resources should be focused on areas of greatest need to assist lifting communities out of deprivation and helping them access job and career development opportunities Ensure that the LEP and local partners have a meaningful role in programme management including design of calls, approval of interventions, and monitoring of delivery Facilitate a more joined up approach both across and within LEP areas to encourage integrated projects and initiatives can come forward. 4.6 Key issues highlighted in particular responses were: A desire to set out in more detail the nature of the partnership that will operate between the LEPs, local partners and DCLG to deliver the ESIF One respondent felt the Operational Programme appeared broad enough to cover all priorities in the ESIF, however greater clarity as to the type of activity that is eligible is required in the final document. They asked for clarification that eligible activity will be based upon Commission regulations and ESIF priorities A view that more information is needed at an early stage to assist LEPs in the development of their ESIFs and Annual Implementation Plans. The respondent noted that this should be included in the full OP, including basic information such as financial allocations to TOs and further details on the national or ESIF approach to smart specialisation A request for evidence that the OP clearly supports and strengthens the role of LEP ESIFs Clarity was sought on how TOs will be deployed across those ESIFs which have chosen to focus on a selective number of TOs A respondent expressed concern that ERDF funding to deliver sustainable urban development projects is restricted to major urban areas. The respondent felt that non-core cities should have the flexibility to use up to 10% of their ERDF budget on delivering sustainable urban development activities 21

28 A desire to ensure there are good opportunities to join up ERDF-funded activities with those funded through Local Growth Fund, particularly the opportunity to align infrastructure improvement projects with SME support projects was needed. They were eager for these opportunities to be encouraged and not constrained A respondent sought further clarification on the nature and scale of technical assistance and programme management functions that are expected of the LEPs A broader list of examples under TO1 (such as reference to specialist facilities linked to smart specialisation) and TO3 (such as investment readiness support and a broader range of types of enterprise space) was requested, or alternatively they sought assurance that the existing wording is broad enough to enable the proposed activities of LEPs The Heart of the South West LEP requested specific reference under TO7 to recognise their faster journey time strategy which will address the vulnerability of strategic transport routes in Devon and even Somerset, which will enable benefits also in Cornwall A desire for the expansion of activities under TO9 to include enterprise as a route out of worklessness and hence social enterprise support and development Respondents requested that transition regions were to be treated differently to more developed regions and given more flexibility on infrastructure spending in order to support their particular priorities in thematic objectives that they felt were being treated as of secondary importance in the OP A desire to recognise the need for physical and softer infrastructure support across a range of sectors, such as Manufacturing and the Visitor Economy, which was seen as important in ensuring that local opportunities and needs can be addressed. The visitor economy sector is noted as a key omission in the OP and it is requested that the OP will also cover marketing related to specific business opportunities A suggestion that data within the evidence base of the LEPs European Strategies could add strength to the justification for investment in areas, particularly those which the EC do not see as a priority, but which may be more pertinent to some LEP areas A suggestion from a respondent that the consultation document does not adequately cover the needs and challenges of social economics, of poorly performing areas, including educational and skills attainment, low innovation rates, poor GVA, the natural environment and ICT access A desire for greater clarity sought on what the roles and responsibilities of the different bodies will be and the scope and level of accountability of LEPs, the managing authority and the Programme Monitoring Committee (both local and national) A request for greater clarity to whether the proposed competitive process in allocating Technical Assistance funding to the LEPs is in accordance with the EC regulation One respondent felt that simplification is essential for attracting match-funding. They implied this should include: assessing conditionalities and initiatives on the basis of whether they focus on improving effectiveness in Structural Fund delivery and support national investment priorities; greater flexibility in policy architecture to enable funds to respond more quickly to local changes; strategic coherence and programming to provide flexibility on implementation One respondent felt there was a strong need for flexibility to review and update ESIF plans during the life of the programme, based on progress made and new opportunities identified. 22

29 A number of respondents expressed concern that the OP proposals for Sustainable Urban Development (SUD) are only for urban authorities with a population in excess of 600,000. They felt this would constrain areas in establishing themselves as a core city A request for more emphasis to be placed upon encouraging enterprise and entrepreneurialism alongside business support for new start-ups. They also felt innovative approaches jointly using ERDF and ESF to foster a culture of enterprise should be encouraged A respondent suggested that there is a gap in funding for undertaking large scale external wall insulation schemes which are more costly but also more effective than other energy efficiency measures. It was viewed that support for energy efficiency schemes which include the retrofit of private houses should also be recognised. These should be included as indicative actions A respondent noted a gap existed in the provision of independent advice and guidance to businesses to assist them to improve their resource use, increase energy efficiency, and install renewable energy Clarity was sought on whether waste to provide heat rather than power would fall under the actions of a decentralised energy schemes (eg through district heating schemes) Further clarity was requested to what this particular action covers: the main focus of the European Regional Development Funds should be on smaller-scale investments focussed on needs and opportunities addressed by whole place energy solutions A request for clarity was sought around the type of energy efficiency and renewable schemes the European Investment Bank might provide match funding for A respondent raised concern about the potential restrictions which would be placed on Urban Development Fund proposals, which they viewed as potentially damaging in delivering their financial instrument proposals if the proposed TOs are used A number of respondents requested confirmation that they can use TO9 ERDF outside the geographical restrictions of a formal CLLD programme. Local Authorities There was a balanced view on whether the activities under the TO were sufficient for the effective delivery of LEP ESIF local strategies to meet what is needed locally. Some respondents felt the current format does not provide a sufficiently nuanced recognition of individual LEP ESIF Strategies level data or indeed highlight local challenges, and were concerned that the scope of activities under TO were too narrow under the silo approach. 4.7 The following are the key priorities and issues that Local Authorities from the consultation process would like DCLG to respond to in developing the Operational Programme. The views are those of individual respondents, unless otherwise stated. Key priorities were to ensure scope within the programme to: Facilitate the ability and flexibility to commission eligible local activity where there is a clear and evidenced need Provide resource efficiency support for businesses to reduce their carbon footprint Support sustainable transport measures that improve access to employment and reduce the environmental impact of travel 23

30 Enable the use of Sustainable Urban Development funds to support core city development and enable access to the EU Urban Development Network Allow LEPs and partners to have an active role in writing the project call specifications to ensure that these reflect local needs and deliver the objectives of the LEP ESIFs Facilitate the allocation of half of the technical assistance funding to the LEPs and partners. 4.8 The respondents highlighted a number of perceived issues: A number of respondents felt that it is essential that interventions will be able to contribute to multiple TOs. A silo approach whereby interventions fall between two stools will damage local prospects for growth Numerous respondents sought recognition of the importance for using ERDF to fill the gaps in superfast broadband as a vital contributor to growth (TO2), and the need to enhance high speed broadband access to boost business development A view that strategic improvements to connectivity in and around market towns and urban areas was particularly necessary to underpin long term growth in those areas (TO7) A request for improved clarity that the infrastructure elements of TO 2, 5 and 7 may be more important in some LEP areas than others. The respondent felt that in rural and coastal areas infrastructure investment will act as a catalyst for growth One respondent felt there was a need for increased support for SMEs to access export markets and for inward investment through the development of international linkages A number of respondents felt the OP does not sufficiently acknowledge the key role urban areas play with regards to generating new and significant growth and jobs. Likewise, one particular respondent felt the OP does not acknowledge the role of middlesized cities and their role for the economy. They felt Sustainable Urban Development is restricted to urban areas with a population in excess of 600,000 and given that the underlying ERDF regulations do not define urban areas, the restriction by size is unjustified A view that Article 5 of the ERDF Regulation provides a far broader range of investment activity under each TO than indicated within the Operational Programme and they felt there would appear to be no reason to restrict the ability of local ESIFs to take full advantage of the Investment Priorities identified in the article A number of respondents felt that flexibility must be built into the OP so that changes of proposals or unforeseen events can be managed without having constraints imposed by a rigidly imposed OP Clarity was sought on the roles and responsibilities of the different bodies and the scope and level of accountability of LEPs, the managing authority and the Programme Monitoring Committee (both local and national). Environment Sector 4.9 Numerous respondents welcome the opportunity to use ESIF funds to address market failure and assist in bringing derelict and brown field sites back into productive use, and welcome the requirement that green Infrastructure projects need to be supportive of other strategic economic development activity e.g. site development) The following are the key priorities and issues that environment sector organisations would like DCLG to respond to in developing the Operational Programme. The views are those of individual 24

31 respondents, unless otherwise stated. Key priorities were to ensure scope within the programme to: Invest in ecosystem services to deliver the win-win of natural solutions to reducing flood risks whilst boosting biodiversity and facilitating brownfield development Invest in sustainable biomass and biogas innovations that the respondent felt enables ancient woodlands to thrive ecologically and deliver organic mass for renewable energy use Investment in the elimination of barriers to the uptake of brownfield land Innovations that facilitate the sensitive retrofitting of heritage buildings and structures. This was viewed as a way of increasing energy efficiency and incorporating renewable energy installations into the economic use of heritage buildings Provide business support including advice services and training to better enable sustainable commercialisation of built heritage assets Support the development of hubs as centres of excellence to promote and support best practice in land and built heritage management Enable multi partnership working to harness local knowledge, skills and enthusiasm Align local allocations of ERDF with domestic Flood and Coastal Risk Management funding. The respondent felt this would enable efficient delivery of projects that produce both flood protection and sustainable growth outcomes for communities Use Community Led local Development activities to address multiple barriers to growth and to deliver long lasting socio economic and environmental benefits Support the maintenance of natural capital in underpinning the OP to ensure sustainable growth Use Green Infrastructure to provide the opportunity to mitigate the risk to economic growth, especially in urban areas A small number of respondents also highlighted a number of specific issues: A respondent felt that TO5, TO6 and TO9 have little justification in the technical annex relating to needs and opportunities and that these sections as well as all other TOs should be expanded upon A desire that opportunities for cross LEP collaboration are highlighted, particularly for the use of financial instruments and opportunities for match funding that need to operate at significant scale (eg for resource efficiency measures) Expanding the priority for using brownfield land was requested to include finding economic uses for historic buildings which was viewed as a key fabric of national identity and heritage A respondent expressed concern that the proposed approach for TO6 does not fully address needs and opportunities with regards to business resource efficiency (and climate change resilience), other than in relation to site development One respondent felt TO6 has adopted a too narrow focus on site development. They felt this would deny LEPs the opportunity to invest in the protection and enhancement of green and blue infrastructure, and the ecosystem services that it provides A request that the intervention logic produced by DEFRA to support the Partnership Agreement is reflected stronger in TO6 25

32 A view that TO6 should not undermine the polluter pays principle and a request that recommendations from the 2012 European Court of Auditors report on EU structural measures to support the regeneration of brown field sites is used to inform this investment strategy Recognition that the use of local Impact Bonds could also achieve outcomes in relation to Thematic Objectives 5 and 6 Respondents requested specific reference to the link between poor and economically deprived environments and vulnerability to climate change notably flood risk, which often occurs A respondent felt that measures to reduce the energy consumption of social housing should include retro fitting for water resource efficiency Clarity was sought to how the cross cutting commitment to sustainable development will be embedded into the assessment and delivery of programme activities across all Thematic Objectives Elaboration was sought with regards to how the requirement, that CLLD proposals must identify how they have integrated adaptation and local resilience to climate change, will be applied to TO9. Third Sector 4.12 Overall third sector responses were limited in detail and consequently provided minimal evidence on the key underpinning needs and opportunities of the Operational Programme to meet what is needed locally The following are the key priorities and issues that charities from the consultation process would like DCLG to respond to in developing the Operational Programme. The views are those of individual respondents, unless otherwise stated. Key priorities were to ensure scope within the programme to: Give local areas the scope to allocate funding on the basis of environmental, social and economic challenges and opportunities. They felt all of these factors should contribute to sustainable development in the area Enable place based funding which was noted as vital in challenging preconceptions about specific locations and creating the right kind of conditions and confidence that then draws in further investment Make Technical Assistance available to both local and national partners, which was viewed as a way of enabling all sectors to engage with the ESIF programme and the LEPs. Respondents noted that this should include national support for the Voluntary & Community Sector, who are stakeholders across all the ESIF funds, as well as for others who will be supporting and engaging with the work of the LEPs A number of respondents highlighted a number of more specific issues: The view that particular communities face additional barriers to gaining business start-up and development advice. The respondent suggested a possible solution could be to commission national business advice agencies with particular specialist expertise for groups such as disabled entrepreneurs. 26

33 Education Sector 4.15 The following are the key priorities and issues that education sector organisations would like DCLG to respond to in developing the Operational Programme. The views are those of individual respondents, unless otherwise stated. Key priorities were to ensure scope within the programme to: Have sufficient flexibility to enable cross-lep activity and collaboration, including the funding of projects across TOs where they contribute to multiple objectives Stimulate new ideas and opportunities for future collaborations between business and universities, particularly investments supporting the intensive use of knowledge-exchange, innovation and incubation space Develop initiatives that could promote the economic potential of an area and enable recognition of existing high-tech and cutting edge business potential. The respondent also felt this would increase the number of internationally- competitive companies and level of inward investment locally Enable businesses as well as universities or other centres of research have a leading role in supporting LEPs to identify and examine future opportunities for investment, and to ensure that these plans are tested systematically against a fuller understanding of how technologies and markets are evolving across the globe Support the Advisory Hub for Smart Specialisation. It was viewed that this would ensure locally led plans for innovation are based both upon sound evidence and an ever deepening understanding of global challenges The respondents highlighted a number of specific issues: The respondent felt various aspects of physical transport infrastructure is severely disadvantaged in some areas across the region, such as the Cornwall and IoS region. They also expressed a need to develop their workforce at the intermediate and higher skilled level, partly through the provision of facilities and equipment to support effective workforce development training A respondent felt that Technical Assistance provision is needed, that is cross-lep to align with Higher Education Institutions which are not confined to LEP boundaries. Technical Assistance funding is requested to be available to other suitable experiences intermediaries, not just LEPs, to provide needed support The default approach for all indirect costs (via the simplified cost approach i.e. 15% of eligible direct staff costs) is stated to be a potential major barrier for the engagement of the HE sector. The adopted proposed rate is reported to be far too low to cover HEI costs and will raise the financial viability of engaging with the programme. The respondent states the importance that the HE sector retains the option of deploying a calculated apportionment methodology where appropriate A respondent expressed strong concern that adoption of the flat rate method would take potential projects further away from the internal audit and financial systems in place within HEIs, and in turn increases risk and diminishes transparency and management control A different approach in setting ESIF priorities across different LEPs was requested so that integrated activity could meet more than one of the Thematic Objectives (TO). A view that there was a need to be able to drawdown funding from more than one TO, and a similar scenario in respect of cross-lep activity/ collaboration 27

34 A respondent stated that the higher education sector seeks assurance from DCLG that the Operational Programme is written, managed and supported by systems in such a way that it is both simple and practical for ERDF funded interventions to draw funding from more than one LEP, but also across different Thematic Objectives / Priorities where necessary/appropriate. Other Respondents 4.17 The following are the key priorities and issues that the other respondents noted included above identified in response to question 2: Ensure full and authenticated representation of all local interests within all the 39 LEPs to make sure that ESIF is targeted at projects that will truly support and develop SMEs/MSEs in all categories of endeavour and of all sizes A request for manufacturing businesses in localities to access national innovation resources. The respondent felt that any investments in physical infrastructure for innovation should account for existing capability in order to avoid duplication of provision and this should be considered on a national basis rather than just considering duplication locally A desire for greater support for core economies and recognition of the perceived need to extend the tourism season (to address the seasonal unemployment issues) and diversify activity within the sector using ICT. Relevant Consultation Event Responses 4.18 The following are the key priorities and issues that a group of attendees from the Operational Programme consultation event would like DCLG to respond to in developing the Operational Programme. The views are those of individual respondents, unless otherwise stated. Key priorities were to ensure scope within the programme to: Enable sufficient flexibility to allow LEPs to deliver their ESIF local strategies in a way that meets local needs Support all types of innovation, particularly in SMEs (not just technological innovation The respondents highlighted a number of perceived issues: One respondent felt that skills training needs to be focussed on available jobs, not just training to fill places. The respondent requested that local strategies identify how ESF will add value and not displace employer or individual investment in higher skills A view that there is a strong need to invest in leadership skills for SMEs. The respondent felt addressing basic skills would contribute to social inclusion and reduce scarring in young people. They requested a focus on tackling entrenched worklessness in a way that complements national programmes A respondent noted that use of ERDF for flood defences or land mediation needs to be fully justified (as national funding is already being used and employers should contribute to protecting their businesses) One respondent felt that access to broadband is an issue for rural business, but the case for ERDF intervention needs to be significantly strengthened. 28

35 5. Question 3 How can the European Regional Development Fund be used alongside other European and national funds to achieve economic growth? 5.1 A wide range of responses were also provided to this question, in particular from the LEPs and Local Authorities, which tend to have a greater understanding of the opportunities and constraints presented by using ERDF alongside other funding streams. The key points are summarised briefly below: There was a general desire for better alignment of ERDF, ESF and EAFRD, as well as the Local Growth Fund. Although various views were expressed, this integration covered aspects of programme design (eg outputs and results), bidding and selection (eg aligning calls and bidding processes) and delivery (eg combining different funds to deliver specific activities). However, various respondents were concerned that the consultation documents did not provide enough information to enable them to assess the opportunities to align different funding sources and that this was delaying the progress which they can make with their planning activity. A request for more guidance and support in developing FEIs, including working with potential partners such as the EIB. A desire for more information on the manner in which the opt-ins will work as part of ERDF and alongside other sources of funding. A need to examine the opportunities and challenges further of aligning ERDF with particular sources of EU and national funding which might be particularly important to sectors (eg skills an education funding) or areas (coastal community funding). A wide range of specific recommendations made by the respondents are presented below, although many of these were fairly general in their nature. Local Enterprise Partnerships (LEPs) 5.2 There was general support for greater alignment of funds and the development of common procedures to enable this alignment to occur in an efficient and effective manner. A common message was that greater alignment between different European, national and local funds is dependent on a clear and consistent approach to guidance, elements of flexibility in their use and better aligning of timescales. There was a suggestion of using both ERDF and ESF Technical Assistance to facilitate access to other EU funds. 5.3 The following are a number of suggestions that LEPs The respondents highlighted a number of key requests: A number of respondents requested that EU funds were fully incorporated into their wider Growth Plans and emerging single appraisal/prioritisation framework Due to the perceived practical difficulties of aligning calls for projects in the ERDF and ESF programmes with others, particularly in the earlier phases of both types of funding 29

36 programmes, it was suggested that LEPs could work with the managing authority to look at how wider EU funding can be better aligned with wider ESIF interventions A desire to facilitate strategic co-operation through LEP ESIF sub-committees to allow for a greater co-ordination between projects that that align ESF, ERDF and EAFRD A number of respondents requested that ERDF could be used as a source of match funding for some projects which LEPs propose to fund through local growth fund. In particular they requested that UKTI, MAS and Growth Accelerator could be used as sources of match funding from Government for proposed SME competitiveness investments A view that a combination of funds to provide holistic support should be feasible, such as a mixture of ERDF and ESF to fund a route out of worklessness and for business start-up coaching support and potentially small grants Greater clarity was requested that ERDF activity, and its delivery mechanisms, support and add to ESF/EAFRD activity, this is expressed as paramount to ensure the maximum impact of investment A request to allow ERDF and ESF Technical Assistance funding to be used to encourage and facilitate access to other EU funds, as set out in their ESIF A number of respondents stated a desire to align the processes and timescales between ERDF with other EU funds and domestic funds from Central Government and Opt In organisations as far as possible. However, one respondent noted that in practice it may be problematic to seek greater integration given that each source of funding will be subject to different rules and regulations A number of respondents pointed to the scope to align the application process and outputs and results being measured across different economic development programmes in order to avoid duplication The Humber LEP stated that it was particularly important for them that Local Growth Fund, Regional Growth Fund and DEFRA-funding is brought together with ERDF, in order to address the flood risks which relate specifically to employment sites (existing and planned) It was stated that EAFRD should not be seen as separate to ERDF and ESF investments, and the OP should allow rural issues to be fully integrated in to local investment plans for growth A desire for a common definition and understanding of outputs/outcomes/results across the various funding streams, alongside a clear methodology of apportioning (to avoid double counting and potential audit issues) A respondent expressed a need to develop a hierarchy of risk and allocation priority across the funds, to avoid the scenario in which each fund wants to be both funder of last resort and to have first call on any returns or claw back A request for clear guidance on where and how EAFRD through the LEP allocation and national programmes can work with the ERDF OP is needed One respondent stated it was vital that CLG provide adequate support to LEPs who are working together on creating FEI s for the new programme. They noted that it will need to include advice on how the FEI s relate to the Government s Business Bank and represent the LEPs combined interests in putting the case for investment to the EIB A desire that the SFA and Big Lottery Fund, through its opt-in proposals, works with each LEP to ensure that the tender specs reflect their ERDF priorities e.g. around key sector skills 30

37 It was stated equally important that BIG Lottery, through its opt-in proposals must consider how it must reflect the areas of opportunity that exist in LEPs to connect economic growth with employment opportunities for local people A request for better coordination between INTERREG and ERDF in linking the delivery of Smart Specialisation to INTERREG EUROPE programme, the development of transnational partnerships to exchange S3 expertise and good practice around different sectors Further involvement of the LEPs on how to align the Local Impact Funds with ERDF and ESF was sought One respondent felt the consultation document did not provide the full information required to ensure alignment with key sources of funding. In particular they noted that the timescale for accessing ERDF and ESF are likely to slip providing additional challenges in matching to the Local Growth Fund proposals for 2015/16 which provide a core element of the proposals A desire that there is further work on the opt-in process and more information given to establish the process for finalising opt-in arrangements and ensuring that opportunities are integrated. Local Authorities 5.4 There is a need to align the processes and timescales between ERDF with other EU funds and domestic funds from Central Government and opt-iin organisations as far as possible, e.g. by running bidding rounds together. However, it would be problematic to seek greater integration given that each source of funding will be subject to different rules and regulations 5.5 A number of respondents noted that there was no discussion in the consultation document of how they will align and integrate the Local Impact Funds with ERDF and ESF. 5.6 The respondents highlighted a number of key requests: A desire for pipeline projects / operations identified in LEP ESIF strategies to be multifunded to support infrastructure, jobs and skills using ESF, other ESIFs and domestic public and private funding One respondent requested that there will be sufficient flexibility to enable processes and timescales between ERDF with other EU funds and domestic funds from Central Government and Opt In organisations to be aligned as far as possible Support for coordination and linkages on the EU s Horizon 2020 and the thematic priority on strengthening research, technological development and innovation was expressed A view that there is a lack of sufficient emphasis on the requirement for added value in ESIF funds. In particular the respondent noted that this will apply to opt-ins where LEPs are aiming to focus national as well as local funding on growth and rebalancing investment in the country It was perceived necessary that the administrative process must practically support the alignment of ERDF with other EU and domestic streams. This was seen as disappointing, as ESF experience suggests that building in Government match funding from the start leads to a successful and less complex programme It was seen as essential that the OP allows transnational activities and aligns its eligibility rules as much as possible with the ones of the other EU funds, in particular the most relevant ones like Horizon The respondent also felt that the MA should also be open 31

38 to discuss contractual changes to projects if opportunities to add value to the project through synergies with other EU funding becomes available Technical Assistance (TA) was requested to be used to support ESIF projects to identify, other EU funding programmes that they could consider applying for in the latter stages of a project. It was wanted that the MA remains constantly aware of EU funding calls and alerts the relevant ESIF projects and /or LEPs when these opportunities are particularly relevant One respondent stated that in the absence of one integrated OP, ERDF and ESF programme management needs to be flexible enough to enable activity to flow, and both OPs must have maximum read across with one another to ensure pipeline projects are multi-funded to support infrastructure, jobs and skills Greater certainty was requested with regards to the provision of Opt-ins, in particular: a clear desire to co-design interventions to meet local needs; a better indication of the amount and timescale of match funding; certainty that all Opt-Ins are compliant with the EU regulations It was viewed critical that the Local Growth Fund (as an important source of national match funding) becomes more flexible and that greater certainty is given around timescale and quantity of funding A desire for clear guidance on where and how EAFRD through the LEP allocation and national programmes can work with the ERDF OP A desire for adequate support from government for LEPs who are working together on creating FEI s for the new programme. It was stated that advice on how the FEI s relate to the Government s Business Bank and represent the LEPs combined interests in putting the case for investment to the EIB is particularly needed A view that there should be better coordination between INTERREG and ERDF linking the delivery of Smart Specialisation to INTERREG EUROPE programme, the development of transnational partnerships to exchange S3 expertise and good practice around different sectors. Environment Sector 5.7 The following are a number of suggestions that environment sector organisations from the consultation process would like DCLG to respond to with regards to how the European Regional Development Fund can be used alongside other European and national funds to achieve economic growth. The views are those of individual respondents, unless otherwise stated. 5.8 The respondents highlighted a number of key requests: To make use of funding, it was viewed that support and signposting services to assist smaller LEPs and partners that do not hold significant resources to develop funding searches and bids was needed A desire to align ERDF funds with other EU funds such as Creative Europe It was viewed necessary that to achieve strong alignment of funds, strong communication and dissemination between the funds and local advisors or brokers to bring together partners from disparate disciplines was needed. It was also noted that local management teams and Local Partnership Committees embracing representatives from all sectors are a good means of facilitating this coordination 32

39 It was suggested that joined up thinking in the agricultural and environment sector should be supported and led by a more ERDF i.e. non-farming, first perspective linked to rural colleges, universities and centres of learning to enable the protected and enhanced natural environment to be commercialised in a sustainable manner A desire to recognise the link of connecting people to the natural environment and improved Public Health. It was suggested that this area of work could be used alongside Europe 2020 targets, the European Social Fund, DEFRA funding, and the Growth and Innovation Fund It was viewed critical for the long-term viability of rural economies to protect natural capital It was suggested to use the EU s Life + programme for the Environment alongside ERDF to achieve EU2020 objectives for Sustainable Growth A view that a mechanism to secure greater impact from the funds would be through whole place solutions or more holistic support for specific sectors. Examples given were: support for the agri-food sector, ERDF providing support for local companies and ESF offering access to build relevant local business skills; Flood risk management addressed through the use of EAFRD to minimise risk through upstream activity whilst ERDF supports Green Infrastructure to reduce flood risk on sites where economic development has been inhibited by that risk A desire to align national funds to the ERDF funding requirements to ensure it is applicable as a valid source of match funding i.e. Regional Growth Fund. Opportunities for wider nonstructural funding calls were requested to be made visible at a local level One respondent requested that other national funds such as Green Deal, Local Authorities, Higher and Further Education Institutions, Private Sector, UK GIB, TSB, Research Council, UK Government Departments, were referenced in the consultation document A comment that shovel ready projects which originate from either a LEP or Lottery source should be supported and ERDF funding should be able to be matched with LEP and Lottery Funds in an unencumbered manner It was suggested that priority should be given to nationally significant projects (greater than 10m) as these were seen as likely to be of the scale to have significant net impacts for the region i.e. way beyond the local market A request that investment in agriculture subsidy regime products is matched by other funds to commercialise the resulting high quality natural environment in a sustainable manner It was stated that investments in physical infrastructures such as innovation hubs and incubator centres should be used actively to disseminate the benefits to businesses from other EU research programmes. Third Sector 5.9 The following are a number of suggestions that third sector organisations from the consultation process would like DCLG to respond to with regards to how the European Regional Development Fund can be used alongside other European and national funds to achieve economic growth. The views are those of individual respondents, unless otherwise stated The respondents highlighted a number of key requests: 33

40 A desire for investment to achieve social outcomes and economic growth. To support this it was suggested that ESF funding and ERDF should be aligned or integrated in some way so that one can help support the other It was noted that match funds from central government should be available under the ERDF OP. Education Sector 5.11 The proposal to design and manage the different ESI funds together will be far more strategically and to integrate much more closely their implementation under the direction of the Managing Authority, Growth Programme Board and the local sub committees provides an important opportunity to align both programmes much more closely together The following are a number of suggestions that education sector organisations from the consultation process would like DCLG to respond to with regards to how the European Regional Development Fund can be used alongside other European and national funds to achieve economic growth. The views are those of individual respondents, unless otherwise stated The respondents highlighted a number of key requests: A request that LEPs are able to play a role in the Programme Monitoring Committee for the Structural Funds and both further and higher education sectors are involved in the process A desire that ERDF and ESF Technical Assistance funding is to be used to encourage and facilitate access to other LEP, EU funds Managing the different ESI funds together was viewed as way to integrate their implementation more closely under the direction of the Managing Authority, Growth Programme Board and the local sub committees, and would provide an opportunity to align both programmes more closely together A desire to consider the up-skilling of the existing workforce to enable individuals to achieve their full potential and meet the business demand for higher level skills ERDF was perceived as being more effective if it appeared in a single programme alongside ESF and EAFRD. An example given was in the case of workforce development, ERDF should provide modern and world-of-work relevant facilities and equipment within which ESF funded programmes take place Respondents expressed a need to establish a common definition and understanding of outputs/outcomes/results across the various funding streams, alongside a clear methodology of apportioning these (to avoid double counting and potential audit issues). Other Respondents 5.14 The following are a number of suggestions that other sector organisations from the consultation process would like DCLG to respond to with regards to how the European Regional Development Fund can be used alongside other European and national funds to achieve economic growth. The views are those of individual respondents, unless otherwise stated The respondents highlighted a number of key requests: A request that ERDF and ESF can be used in tandem to link the capital costs of projects (ERDF) with the people costs of those same projects (ESF), and then these in turn are 34

41 coordinated with domestic funding streams such as Regional Growth Fund and the Single Local Growth Fund (SLGF) One respondent requested the use of ERDF to target key areas of need and opportunity, which they felt would enable SMEs to benefit from a combination of AA status and additional funding A request for the consideration of mechanisms that align resources for innovation infrastructure to resources for applied R&D The ERDF programme was expressed as needing to be better at connecting activity in other EU funds than the current programme. Developing links with Horizon, Erasmus+ and Intereg were funds that the respondent felt should be considered as a key area of work for the OP A view that in order to maximise the outputs from ERDF there should be alignment in timescales between ERDF calls and other national funds such as the Coastal Communities Fund and Regional Growth Fund. Relevant Consultation Event Responses 5.16 A number of themes emerged from the consultation events: A group noted that it was difficult to comment when so much was still uncertain about programmes and finances One group viewed fluidity in strategies (particularly as programmes/ Governments change) as critical and expressed a need for a clear framework for joint funding A request for clarification to how working across LEP areas can be facilitated. The respondent also felt that guidance was needed as well as greater clarity on the framework for this. A desire for greater clarity on the consequences of change to the ESIF policy and implementation; the consequences other policies bring to ESIF planning and delivery, particularly so in the case of DWP and ESF impacts; timescales (including for resource planning reasons); what can be agreed and what can t (including big ticket items); EAFRD A view that government needs to be better coordinated at the national, local and between department levels. The respondent felt that greater coordination in terms of processes for linked work e.g. SEP, growth deal and ESIF, needed to be brought closer together and different funds will need to be effectively joined up. One respondent noted that Local Nature partnerships need to be better involved throughout Greater overall clarity on timescales and process, Opt-ins, capacity in GDTs (particularly in terms of call outs and process), cross LEP working issues, was requested 35

42 6. Question 4 How do you think we could effectively promote and demonstrate the performance of the Programme and impact of the European Regional Development Funds? 6.1 A wide range of responses were also provided to this question, mainly from the LEPs and Local Authorities. The key points are summarised briefly below: A desire for more guidance on suitable benchmarks/unit costs for the full range of outputs, in order to help project sponsors to develop their projects. An approach to evaluation of the project which enables the emerging lessons to inform the delivery of the programme on an on-going basis. A request for a more rigorous and comprehensive approach to the measurement of economic impact, including both gross and net additional measures, both as part of the appraisal and evaluation of projects and programmes. In addition, a desire for more qualitative assessment of project progress, the learning of lessons and assessment of impacts which are harder to measure qualitatively. This should provide information on an on-going basis, to help ensure it is factored into the on-going design of projects and changes to the programmes. The use of Technical Assistance by a range of stakeholder groups to enable them to promote the programme to their target groups, in order to ensure high levels of participation. Various methods of doing this in an effective way were suggested. 6.2 Summaries of the responses received, grouped by sector, are outlined below in turn. Local Enterprise Partnerships 6.3 The respondents highlighted a number of key suggestions: A number argued that LEPs should have a central role in the promotion and co-ordination of ERDF at a local level, alongside their strategic roles in strategy development A number of respondents suggested the provision of metrics that would allow consistent definition and measurement of outputs for the allocated resource (i.e. units cost benchmarks) and which would allow a meaningful comparison of costs/benefits at the design and appraisal stage One respondent suggested a need for the quantitative measurement of performance to systemically include the additionally of ERDF support through the monitoring the deadweight, leakage and displacement associated with all ERDF projects, as well as understanding multiplier and supply chain impacts The opportunity to adopt more qualitative assessments of project performance, through for example case studies to highlight where ERDF funding has benefitted business and localities (illustrating softer evidence of harder to measure impacts). Another respondent also suggested the need for the Performance Management system should also be able to recognise the impact of 'soft' outcomes on individual skills and employment progression 36

43 One respondent suggested a SMART set of indicators, along with a framework for collating, analysing and reporting, with the LEP Board taking direct responsibility for evaluation, monitoring and reporting to the appropriate bodies would be an effective tool The opportunity for LEPs and Managing Authorities to work together to identify examples of good collaborative cross boundary projects and other major projects, disseminating the lessons for these to interested parties One respondent felt that the list of common output and results indicators included in the original guidance for the ESI Funds provided a good basis upon which to measure the performance of the ERDF programme Monitoring and performance management was seen to be important to be undertaken at the ESIF level. It was noted that ESIF Strategies have been designed to maximise outputs and outcomes through joint and complementary activity between ESF/ERDF/EAFRD funds A suggestion that result indicators need to be designed so that they can set out and monitor progress towards wider strategic aims set out in the Operational Programme and not just be considered under silo TOs A request that an element of Technical Assistance is devoted to providing local awareness raising, promotion and demonstration of the performance of local funds through the LEPs, which can also provide the platform for the Managing Authority to engage with local partners One respondent suggested that a detailed communications plan which sets out clear objectives around for example maximising visibility, ensuring transparency and demonstrating that the team is successful in meeting the objectives of the plan would be effective A view that regular newsletters which are shared with partners and projects in delivery which focus on promoting the Programme (e.g. highlighting projects supported) and providing information about Programme could be an effective tool One respondent suggested the use of social media and events such as awards ceremonies and dedicated websites to provide information about the programme The design and implementation of a single accessible IT system holding all relevant project information and operating on the principle of collect once, use often was viewed as an effective monitoring and promotion tool It was viewed important that the local committee has appropriate information available. The respondent asks government to learn lessons from the previous development of Information Technology Systems such as MCIS, which now works well but took time to develop during the programme. Local Authorities 6.4 A number of the responses were very similar to the LEPs and these have not been repeated. The respondents also highlighted a number of other suggestions: One respondent suggested baselines, counterfactual evaluation and trend line analysis could all be employed at the national level to understand the impact of ERDF over time and to compare performance across different economic areas to ensure ERDF contributes to balanced growth across England A well-thought out evaluation strategy was viewed as important 37

44 It was suggested that Technical Assistance funds are made available to LEPs and to local delivery partners to publicise availability of funds; work with local businesses and organisations to develop relevant and deliverable programmes of activity; support projects when active to keep them on track and deliver outputs and impact; work with projects to help promote and publicise successful outcomes and economic impact and coordinate national publicity through a network of LEP representatives One respondent suggested that performance measurement data should be collected on: Jobs created, Enterprises supported, new enterprises (start-ups) supported, Business births rate (increasing) and deaths rate (decreasing), Survival rates, growth rates, SME-University collaborations, Productivity improvements / improvements in performance in individual companies, Private sector investment, GVA growth One respondent suggested regular updates targeted at business audiences on what the overall programme is achieving would be an effective tool as well as help to generate further engagement with the business community in programme-type activities aimed at that sector One respondent suggested a detailed communications plan which sets out clear objectives around for example maximising visibility and ensuring transparency and demonstrating that the team is successful in meeting the objectives of the plan would be effective publicity Environment Sector 6.5 The following are the key suggestions that environment sector organisations from the consultation process would like DCLG to respond to in effectively promoting and demonstrating the performance of the Programme and impact of the European Regional Development Funds. The views are those of individual respondents, unless otherwise stated. 6.6 The respondents highlighted a number of key suggestions: The implementation of a consistent measurement, metrics and monitoring methodologies to allow for like for like comparisons was viewed as critical by a number of respondents for enabling the effectiveness and efficiency of spend and delivery to be gauged A suggestion was that show and tell best practices are an effective means of demonstrating how effectively ERDF and other funds have been used One respondent felt that the creation hubs, centres of excellence and joined-up national exemplars which are actively used by businesses and educational and training providers alike, was an effective way of promoting and demonstrating programme performance The introduction of transparent progress reports that accurately map successes and challenges was viewed as a successful measure and promotion tool One respondent suggested disseminating 'lessons learnt' on an on-going basis to show how projects could be replicated in an affordable and resource efficient manner. Third Sector 6.7 There were no third sector respondents under this question. 38

45 Education Sector 6.8 The following are the key suggestions that education sector organisations from the consultation process would like DCLG to respond to in effectively promoting and demonstrating the performance of the Programme and impact of the European Regional Development Funds. The views are those of individual respondents, unless otherwise stated. 6.9 The respondents highlighted a number of key suggestions: One respondent suggested the use of the following metrics in evidencing positive impacts from ERDF funds: funding awards achieved; incubation space taken up; presentations to/ interactions with business/ SMEs; employment statistics for graduates; post graduate research projects established; UEA consultancy services and commercial activities with businesses A more narrative case-study led approach was also suggested and viewed as potentially effective in promoting the Programme A respondent expressed the importance that metrics have a consistent definition and that there is a consistent counting of outputs in order to allow meaningful comparison of costs/ benefits One respondent felt that encouraging and supporting exchange of best practice between projects and LEP areas was an important aspect of the Programme performance A suggestion that Technical Assistance money should be available also to relevant stakeholder intermediaries so that they can assist the MA in promoting opportunities and benefits from EU funding; cross LEP engagement, dialogue and programme/project development and delivery One respondent suggested holding an annual competition for the best / most innovative EU funded project, along the lines of Regio Stars which is run by DG Regio. Other Respondents 6.10 The following are the key suggestions that other sector organisations from the consultation process would like DCLG to respond to in effectively promoting and demonstrating the performance of the Programme and impact of the European Regional Development Funds. The views are those of individual respondents, unless otherwise stated The respondents highlighted a number of key suggestions: It was viewed necessary that the performance and impact of the ERDF programme is not based exclusively on output indicators measured quantitatively, and instead should be complemented by other measures including quality of outputs/ outcome, the degree of business engagement and their level of satisfaction in the support provided and the value of their assistance The need for a consistent set of outputs across priorities and measures was viewed as critical for a consistent comparison and measurement A suggestion that extensive use of new technologies and social media to promote the benefits of the programme and share best practice was implemented It was noted that consideration should be given to some consistent inter-lep area promotion to demonstrate impact and share good practice 39

46 A respondent suggested that Technical Assistance should enable local partners to undertake sharing of best practice, information about impacts and dissemination of quality provision. Relevant Consultation Event Responses 6.12 The following points were raised at the consultations events: A view that greater clarity in the OP about what the Programme is trying to achieve at national level is first needed and local partners can then use this to build their local messages on delivery & performance One respondent suggested products and messages which support promotion of funds both separately and also as a joined-up growth agenda. The respondent noted that some areas are adopting a single front-door model where projects/businesses can find out about all funds in a single place, and there was a need to be able to support this in OP One respondent suggested the development of products which are based on previous experiences of funds enables lessons learnt to be built into the guidance, performance & promotion products and overall makes previous challenges more visible One respondent felt it was important that messages are tailored to different audiences, which would support the promotion of the Programme and raise interest from potential applicants A respondent suggested the use of Business Champions to understand, support and promote the benefits of the Programme to potential applicants Ensuring processes for performance monitoring and impact assessment include mechanisms to assess early indications of progress was viewed as an important aspect of the programme. The respondent felt this should provide feedback to LEPs & projects to confirm whether they are on the right track, and is particularly critical for projects where the actual outcomes may not come to fruition until later in the Programme A view that consistency across the Programme on how outcomes/achievements are defined and measured needs to implemented A view that the Programme needs to set out clear definitions of measures and outcomes for projects that deliver softer outcomes e.g. social impacts. The respondent felt this was particularly relevant to where the goal is to move participants closer to the labour market. Another respondent suggested that this should include participants who are in work but being supported to increase their skills, working hours or other outcomes A respondent stated that outputs/targets need to be simple and supportive of the activities being delivered, not a barrier to delivery or off-putting for beneficiaries who may benefit from ESIF funding. They suggested the use of technology to remove barriers and support outcomes/ delivery would be effective It was viewed necessary that evaluation criteria, timescales and expectations must be set out clearly from Day 1 and there needs to be easily accessible MA support for LEPs and Projects to set up the systems and processes necessary to collect the correct information from that point It was seen as important that programme level evaluation also considered the counterfactual i.e. whether outcomes would have happened anyway without ESIF intervention/funding. 40

47 7. Question 5 How do you envisage implementing the cross cutting themes locally? 7.1 In general, the respondents were supportive of the proposed approach to cross-cutting or horizontal themes. The main points raised were: A desire for clearer guidance to project applicants and consistency in the interpretation of this advice amongst the Local Delivery Teams. A request for training in the implementation of the cross-cutting themes to project applicants. A desire for fuller information to be included in the Operational Programme on the specific actions which were being proposed under the cross-cutting themes. 7.2 Summaries of the responses received, grouped by sector, are outlined below in turn. Local Enterprise Partnerships (LEPs) 7.3 The following are key points which were raised by the LEPs which responded to question 5: Cross cutting themes were requested to be genuinely built into initiatives whilst they were being developed and not just bolted on to meet appraisal requirements. A number of suggested actions to facilitate this were: include cross cutting themes as a gateway criteria and not just part of the appraisal criteria; ensure this is fully incorporated into calls and commissions; provide guidance to LEPs on a consistent approach to cross cutting themes including definition of outputs and methodology to calculate/attribute One respondent reported the following proposals to implementing the cross cutting themes locally: Set specific quantitative targets on cross cutting themes to demonstrate their importance to the programme; ensure indicators are observable, and sufficiently focused on actions to be supported; appointing cross cutting theme managers within the DCLG ERDF team to assist the LEPs; LEPs to organise and run cross cutting theme training sessions and awareness raising events across the region A respondent outlined its desire for a common and aligned process so that the delivery of projects that address a number of themes, including the cross-cutting principles, will remain manageable One respondent expressed the need to show a balance between social, economic and environment issues, including references to resource efficiency within a finite resource base, in the definition of sustainable development A respondent emphasised the importance that the cross cutting themes are not assessed on an individual project basis but seen as being delivered by a wider portfolio of activity that will deliver the cross cutting themes at an ESIF Strategy level A number of respondents noted the concept of social innovation and the contribution it can make to achieving the cross-cutting themes. It was also noted that this should be applied in a practical and meaningful way across all of the TOs Distinguishing between horizontal actions (e.g. implementation of carbon measurement tools, recording of inequalities outcomes) and vertical measures (e.g. projects which are 41

48 explicitly designed to assist in reducing carbon emissions and business support projects targeted at underrepresented groups) was stated an important aspect in delivering cross cutting themes locally. The respondent also welcomed the addition of a cross cutting theme on tackling poverty and social inclusion Ensuring cross cutting themes form part of the strategic fit assessment and monitoring of outputs and outcomes was stated an important action, as well as the requirement of project leads in providing evidence of their commitment to sustainability and equality of opportunity One respondent carried out an independent sustainability and equality impact appraisal of their ESIF, to ensure their strategy took into account both sustainable development and equality and that they are embedded within their evidence base and activities. They ensure that the principles that they set out for these cross cutting areas are embedded within the implementation plan for the funds Learning from past implementation of cross cutting themes was reported as an important action for LEPs, however they also noted that they must not hamper the delivery of local priorities or add significantly to the burden for project delivery partners. Local Authorities 7.4 The following are the main points noted by the local authority respondents: Ensuring representatives from environmental, rural and equalities stakeholders as well as the third sector was involved in project development and programme management was seen as supporting the implementation of cross cutting themes locally A suggestion from one respondent that taking account of existing relationships within local LEP areas and key delivery organisations, such as the Universities, would facilitate crosstheme working and project-level collaborations A request to strengthen the draft ERDF Operational Programme by adding more detail on cross cutting themes particularly in relation to equality issues Request that the collating and reporting of equalities data for beneficiaries should be kept to a minimum One respondent requested greater recognition in the final ERDF OP document as to how the local ESIF strategies have identified specific provision for the target client groups. Environment Sector 7.5 The following are key ways in which environment sector organisations envisage implementing cross cutting themes locally, and the key messages that they would like DCLG to respond to in implementing cross cutting themes locally: Issuing clear and appropriate guidance and better monitoring and evaluation of the crosscutting principles, which would help to improve the integration of the horizontal priorities at a local level Ensuring that guidance was clear but also consistently interpreted by Local Delivery Teams One respondent requested that all applicants include, where relevant, a description of specific actions within their project that take into account environmental protection requirements, resource-efficiency, climate change mitigation and adaptation, disaster 42

49 resilience and risk prevention and management. It was felt this would make a significant contribution to achieving greater sustainable development within the programme A respondent suggested the LEP based Local Management Committees should contain cross cutting theme champions who are well versed in equalities/ environmental sustainability issues The Environment Agency indicated a willingness on its part to contribute to the cross cutting thematic Committee for Sustainable Development, through providing advice on sustainable development mainstreaming, good practice and raising awareness A respondent requested that cross LEP cooperation is given high profile in the Operational Programme and welcomed the inclusion of cross cutting themes as a core selection criteria Strong support for including green infrastructure under TO5 and TO6 and the scope this offered for securing sustainable development in other areas of the programme (and they welcomed the intention to promote the approach set out in the draft Partnership Agreement in ERDF Operational Programme) A respondent noted that the ERDF programme should be consistent with the activities set out in the draft ESF Operational Programme to support the implementation of cross cutting themes locally. Third Sector 7.6 The following are key ways in which the third sector organisations which responded to the consultation exercise envisage implementing cross cutting themes locally, and the key messages that they would like DCLG to respond to: Education Sector One respondent suggested that local decision-makers, such as LEPs, should be required to put in place formal and robust mechanisms to support the implementation of the Sustainable Development cross-cutting theme A desire for more emphasis on the historic environment as a cross cutting sustainability theme, given the role the respondent felt it plays in a fully balanced approach to economic development locally. 7.7 The following are key ways in which education sector organisations from the consultation process envisage implementing cross cutting themes locally, and the key messages that they would like DCLG to respond to in implementing cross cutting themes locally. The following are key ways/ messages from individual respondents in the consultation process: Other HEFCE stated that it would be pleased to provide information on rates and numbers of access and participation in higher education, for inclusion in the final Operational Programme document. The organisation also stated that it would be keen to work with the Managing Authority and other relevant partners to provide wider opportunities for people from more deprived communities. 7.8 The following are key ways in which other sector organisations from the consultation process envisage implementing cross cutting themes locally, and the key messages that they would like 43

50 DCLG to respond to in implementing cross cutting themes locally. The following are key ways/ messages from individual respondents in the consultation process: A request for clear guidance from the MA to LEPs about what cross cutting themes mean for projects and how they can be implemented and measured. Making projects evidence engagement across minority and disengaged groups a requirement was reported an effective way of implementing cross cutting themes locally. Relevant Consultation Event Responses 7.9 The following are key ways in which attendees from the Operational Programme consultation event envisage implementing cross cutting themes locally, and the key messages that they would like DCLG to respond to in implementing cross cutting themes locally. The following are key ways/ messages from one group of respondents at the consultation event: Respondents emphasised the importance in integrating cross cutting themes into mainstream activity, through ensuring they are embedded into projects and applicants demonstrating how they are being implemented. They also suggested that the evaluation needs to cover how the cross cutting themes were embedded Involving equality groups in setting the project selection criteria was stated a key way to implement cross cutting themes locally. The need for clear instructions from the subcommittee so everyone is clear at the outset of the requirements and what the information will be used for was also noted as a key element The need to learn from what worked well before and carry previous lessons forward was stated as key in effective implementation by respondents The group questioned the ability to make links with the innovation and transnational activity in the current ESF Programme to provide an opportunity for various sectors to share cross border ideas and tackle shared problems The respondents emphasised the need to establish strategic priorities and specific outcomes to embed in the structures, and identify necessary expertise from the outset Suggestion that focus on sustainable development criteria rather low carbon activities would be more cross cutting. 44

51 Regeneris Consulting Ltd Manchester Office 4th Floor Faulkner House Faulkner Street, Manchester M1 4DY London Office 70 Cowcross Street London, EC1M 6EJ