Policy paper

European funds (European Structural and Investment Funds)

Published 13 May 2015

1. About the funds

The European Structural and Investment Funds (ESIF) are the EU’s main funding programmes for supporting growth and jobs across the EU.

In the UK, the ESIF are made up of the:

• European Regional Development Fund (ERDF)
• European Social Fund (ESF)
• European Agricultural Fund for Rural Development (EAFRD)
• European Maritime and Fisheries Fund (EMFF)

In the EU’s funding round for 2014 to 2020, we want the funds to:

• be easier to access
• go further
• be even better value for money for the UK taxpayer

2. Government role

The Department for Business,Energy and Industrial Strategy (BEIS) leads for the UK government on policy for the European Structural Funds (ERDF and ESF) and on the UK Partnership Agreement. The Department for the Environment, Food and Rural Affairs (Defra) has the policy lead for EAFRD and EMFF.

The Scottish and Welsh governments and the Northern Ireland Executive are responsible for delivery of the ESIF in their own nations. In England, ERDF, ESF and an element of EAFRD have been grouped together under one jobs and growth focused programme – the ESIF Growth Programme.

View further information and guidance.

3. EU regulations

In December 2013, the EU regulations governing the use of the ERDF, ESF and EAFRD were finalised. View the EU regulations for ESI Funds 2014 to 2020.

3.1 Allocations of ERDF, ESF and EAFRD 2014 to 2020

On 17 April 2014 we announced the breakdown of the UK’s allocations of ERDF and ESF over the next 6 years. A letter from the Secretary of State for Business provides information on how the funds breakdown across the UK. An equality impact assessment that underpins this decision has also been published. On 19 December 2013 we announced the EAFRD allocations including by LEP area within England.

3.2 Youth Employment Initiative

On 16 April 2014 the government also announced the areas that will gain from the £170 million allocation for the ‘Youth Employment Initiative’.

3.3 UK Partnership Agreement

The UK Partnership Agreement sets out the government’s plans, priorities and management arrangements for the ESIF across the UK for 2014 to 2020. All EU member states have to produce a Partnership Agreement before they can start spending their allocations of the funds. The Partnership Agreement was formally submitted to the European Commission on 17 April 2014. It was adopted by the Commission on 29 October 2014. View the Partnership Agreement.

3.4 Balance of competences

On 22 July 2014 the ‘Balance of competences review on cohesion policy’ was published. The review was launched on 12 July 2012 by the Foreign Secretary to examine the balance of competences between the UK and the European Union, and to provide an analysis of what the UK’s membership of the EU means for the UK national interest.

4. Provision arrangements in England

4.1 Managing Authorities

Responsibility for managing the delivery of funding within England currently rests with Managing Authorities; there is one for each fund. Each Managing Authority produces an operational programme which contains further detail on what the fund will support, and how we will provide, manage and assess funding.

In England the Managing Authorities are:

• Department for Communities and Local Government (DCLG) for ERDF
• Department for Work and Pensions (DWP) for ESF
• Department for Environment, Food and Rural Affairs for EAFRD

The ERDF Operational Programme was adopted in June 2015. The ESF Operational Programme was adopted in September 2015.

The EAFRD Programme has been agreed with the Commission - find out how to access funding.

The Rural Development Programme for England was formally adopted by the Commission in February 2015.

European Structural and Investment Funds Growth Programme for England

We announced that:

• we will bring ERDF, ESF and part of EAFRD together into a single ‘EU Structural and Investment Funds (ESIF) Growth Programme’
• we will align the EMFF with the Growth Programme, and make it available to Local Enterprise Partnerships (LEPs) on a competitive basis
• we will make the ESIF Growth Programme’s top priorities:
  • innovation and research and development
  • support for small and medium-sized businesses
  • low carbon
  • skills
  • employment and social inclusion

The large majority of the funds in the ESIF Growth Programme have been notionally allocated to LEPs areas. LEPs have been working with local partners, to set out their priorities for the EU Growth Programme Funds in their area.

Further detail on the ESI Funds Growth Programe for England and how to access funding.

4.2 Smart Specialisation Strategy

Smart Specialisation is an approach which relies on an evidence-based understanding of the strengths of a given area. It expects investment to be integrated in the local economy and its value chains and helps to build links with similar activities elsewhere. It also promotes the use of enabling technologies that can transfer and add value between related sectors. Use of Smart Specialisation, or a similar approach, was a precondition for spending European Regional Development Funds on research and innovation.

The Smart Specialisation Strategy for England, which was presented to the European Commission on 17 July 2014, informs the government’s approach to innovation policy and is therefore an important reference point in the development of innovation projects using European Structural and Investment Funds.

The draft Smart Specialisation Strategy for England was submitted to the European Commission on 17 July 2014. A revised version was submitted to the European Commission in April 2015.

Consultations carried out

In April 2012 we conducted an informal written consultation on how the ESIF Growth Programme should be delivered in England.

At the end of 2012 over 1,000 people took part in 12 consultative events across England on the government’s proposed approach.

Read the note detailing the summary responses of those stakeholders who attended.

Stakeholders supported this approach. We announced we would take this forward in our response to Lord Heseltine’s report.

The Department for Work and Pensions consultation on the ESF Operational Programme closed on 9 May 2014.

The Department for Communities and Local Government (DCLG) consultation on the ERDF Operational Programme closed on 28 May 2014.

4.3 Arrangements in the rest of the UK

Wales

The 2014 to 2020 Structural Funds programmes in Wales have been developed in partnership with key stakeholders including the UK government, the European Commission and our Welsh partners. Under the new programmes Wales will receive £2 billion of Structural Funds to help support growth and increase jobs.

The European Regional Development (ERDF) and European Social Fund (ESF) operational programmes for the west Wales and the Valleys and the east Wales regions have been adopted by European Commission (EC). Details of these programmes are available at the Welsh European Funding Office.

Supporting EU and Welsh government strategies for growth and jobs in Wales, the programmes are focused on research and innovation, helping businesses to start up and grow, supporting renewable energy and energy efficiency, connectivity and urban development, tackling poverty through sustainable employment, increasing skills and youth employment.

Wales also benefits from the European Agricultural Food Rural Development which improves competitiveness for farming and forestry, protects the environment and improves the quality of life and diversification of rural economies.

Helping to promote a sustainable and profitable fisheries sector and supporting strong local communities is the European Fisheries Fund.

Agricultural businesses across Wales also benefit from the Direct Payments to Farmers scheme, worth around £230 million a year.

To achieve greater impact, the Structural Funds, Rural Development Plan and Fisheries programmes have been developed and will be delivered in an integrated way so that funding opportunities are maximised across the different funds.

Wales will also benefit from the European Territorial Co-operation programmes, which includes the Ireland / Wales Cross-border programme.

Northern Ireland

In Northern Ireland the ESI funds will be delivered by the following operational programmes:

• Investment for Growth and Jobs Programme (ERDF) – will concentrate on contributing to Northern Ireland’s sustainable economic growth
• Investment for Growth and Jobs Programme (ESF) – will address employment and social inclusion issues
• Rural Development Programme (EAFRD) - is aimed at improving competitiveness in the agriculture and forestry sector, safeguarding and enhancing the rural environment and fostering competitive and sustainable rural businesses and thriving rural communities
• European Territorial Cooperation Peace IV Programme – will concentrate on shared education, children and young people, shared space and services, and building positive relations at the local level
• European Territorial Cooperation Interreg VA programme – will concentrate on 4 themes: Research and Innovation, Environmental Protection and Resource Efficiency; Social Inclusion and Combating Poverty; and Sustainable Transport
• Northern Ireland will also benefit from participation in the UK EMFF Operational Programme

Draft operational programmes have been submitted to the European Commission for approval and the process of inter-service consultation and negotiation between the Commission and the Programme Managing Authorities is underway.

More details of programmes and links to Managing Authorities will be found on the Northern Ireland Department of Finance website.

Scotland

The Scottish government is the Managing Authority for European Structural and Investment Funds (ESIF) in Scotland and has overall responsibility for supervising the implementation, ongoing management and effectiveness of the funding programmes.

The new ESIF funding programmes for 2014 to 20 concentrate on the European Commission themes of creating smart, sustainable and inclusive growth across all member states.

The Scottish government is working to ensure the funds deliver on these themes, and that they contribute to Scotland’s national outcomes, providing clear benefits to the economy and to businesses, increasing employment and skills, addressing inequality and supporting environmental sustainability.

The Scottish Rural Development Programme worth over £1.3 billion, was approved by the European Commission in May 2015. The main purpose of the SRDP 2014 to 2020 is to help achieve sustainable economic growth in Scotland’s rural areas.

The European Fisheries Fund provides support for capital investment in the aquaculture, fishing and fish processing industries.

Find out more about ESIF at the Scotland government website.

Gibraltar

The Gibraltar EU Programmes Secretariat manages 2 operational programmes.

The Gibraltar ERDF Programme is worth just over €5.6 million and is dedicated to SMEs and the low–carbon economy. It will operate under thematic objectives 3 and 4.

The Gibraltar ESF Programme is worth approximately €4.8 million and is dedicated to employment and education operating under thematic objectives 8 and 10.

Gibraltar also participates under the SUDOE and MED ETC Programmes.

4.4 UK wide arrangements

EMFF

The EMFF Operational Programme covers the whole of the UK. The Department for the Environment, Food and Rural Affairs (Defra) consultation on the EMFF Operational Programme closed on 12 May 2014.

The Marine Management Organisation is the Managing Authority for EMFF. The EMFF programme was agreed with the European Commission in December 2015. The programme is due to be launched in January 2016. Information on EMFF can also be found on the EU Commission website at EMFF.

5. European Groupings of Territorial Co-operation (EGTC)

An EGTC is a legal entity formed to help and promote cross-border territorial co-operation, with the aim of improving economic, social and territorial relations within the EU. Read the guidance on EGTCs.