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A1: The European Regional Development Fund was set up 1975 to stimulate economic development in the least prosperous regions of the European Union (EU). As EU membership has grown, ERDF has developed into a major instrument for helping to redress regional imbalances. The Department for Communities and Local Government manages ERDF in England.
The EU has three other structural instruments (funds to develop different economic sectors and regions). In the UK the Department for Work and Pensions manages the European Social Fund (ESF). The Department for Environment, Food and Rural Affairs manages both the European Agricultural Guidance and Guarantee Fund and Financial Instrument for Fisheries Guidance. This text focuses on the ERDF.
The current Structural Funds Regulations, which came in to effect from 1 January 2000, have three objectives (listed in table 1). Two of these are relevant to ERDF.
In addition to these, the regulations also established four Community Initiatives. ERDF supports two:
INTERREG - concerned with international co-operative projects
URBAN - concerned with urban regeneration.
Q2: How much is available through ERDF?
A2: £1.2 billion* is available for English Objective 1 areas.
£2.2 billion* is available for English Objective 2 areas (including £300million for transitional areas).
The INTERREG and URBAN Community Initiatives are worth £300 million* between them.
A3: ERDF is targeted at those regions which are most in need of help in order to meet the first two objectives set out in table 1. Objective 3 is funded solely from the ESF and is available in all parts of England outside the Objective 1 areas. The European Commission has designated the eligible Objective 1 and 2 regions for 2000-06.
Q4: What are transitional areas?
A4: These areas qualified for funding under Objective 2 (urban and industrial) or 5b (rural) in the programming period 1994-99, but did not qualify for new Objective 2 status. They are eligible for special transitional funds between 2000-05, to help them complete their restructuring.
A5: ERDF is aimed at economic regeneration projects promoted by the public sector. This involves:
- government departments
- regional development agencies (RDAs)
- local authorities
- further and higher education establishments
- other public bodies
- and voluntary sector organisations.
This by no means excludes the private sector, which promotes and helps to fund high quality projects that meet ERDF objectives.
Generally, we do not pay ERDF grants direct to profit-making private sector companies. But in certain circumstances, the fund can help to develop small and medium-sized enterprises (SMEs). We encourage private sector companies to present applications in partnership with a public sector body.
More detailed guidance on the involvement of private sector bodies is in the Structural Funds Manual available on the DTi Website
Q6: How do you apply for ERDF?
A6: The first step is to approach the Government Office for your region. The Government Office can advise you on potential projects. They can also provide application forms and information packs.
A7: Help from ERDF is limited to projects offering substantial benefits which meet the needs of an area and which would not take place without a grant.
The sort of measures that we generally support include:
1. investment in sites and facilities for industry and business, help for SMEs, and support for research and development and capital works associated with vocational training. These are all designed to encourage permanent jobs in regions with high unemployment
2. infrastructure projects which aid a region's economic development
3. local initiatives to promote regional economic development
4. tourism and cultural projects
5. environmental protection and improvement measures which are linked to economic development.
Q8: How much ERDF can projects receive?
A8: ERDF is used to provide help in the form of grants towards the project costs. These grants are set at the minimum level required to allow the project to go ahead. As a general rule, however, the EU contributes no more than 50 per cent of the eligible cost, although it can be as much as 75 per cent for projects in Objective 1 regions.
The rest of the funding, known as 'match funding' comes from other sources such as:
- Regional Development Agencies (RDAs)
- local authorities
- Government schemes including the single regeneration budget
- other public bodies
- the private sector.
You can find a guide to potential sources of match funding at the DTi website
How are projects chosen?
Projects must satisfy a number of criteria to qualify for ERDF help. They must match one or more of the priorities for support in a regional single programming document (SPD), agreed with the EC. This document draws on and complements the relevant RDA's regional strategy. The SPD sets out the region's overall policy for:
- economic development and regeneration
- promoting competitiveness
- enhancing and developing skills
- contributing to sustainable development.
The SPD sets out the objectives, levels of funding, types of activity that the ERDF can support. It also sets out the conditions of grant.
Projects must also have clear and attainable targets and offer additional and sustainable advantages to the economic development of the area. Organisers must show that, without ERDF support, a project would either not go ahead, or proceed in a reduced form or at a reduced pace.
ERDF is awarded to projects that will do most to achieve the objectives and offer the best value for the funds available. We also take the likely environmental effects into account.
For more information on regional SPDs, contact the relevant Government Office direct or visit their website.
Q9: How are the funds administered?
A9: Although the structure and management arrangements vary in detail, each region has a monitoring committee and a secretariat to administer the ERDF.
The monitoring committees are chaired by the Regional Director of the Government Office, and draw their membership from government departments and a wide range of regional partners. These usually include:
- Regional Development Agencies
- local authorities
- higher and further education institutions
- environmental bodies
- the voluntary and private sectors
- members of the business community.
The committees guide the programme for their region and monitor and assess its implementation.
The secretariats in the Government Offices for the regions give administrative support to the monitoring committees. They also assess all grant applications, except action plans which a partnership approves.
Q11: How are ERDF projects publicised?
A11: An EU regulation requires successful applicants to publicise ERDF-aided projects. This is so that the general public, businesses and trade organisations are aware of the opportunities the projects offer and the role of the EU through the ERDF. This publicity may take the form of billboards on project sites or commemorative plaques at sites accessible to the public.
All contracts worth five million euro (about £3.1 million) and above are advertised in the Official Journal of the European Communities in line with the Commission's practice on tendering.
Q12: What has ERDF achieved in England?
A12: A new EU regulation makes it clear that ERDF-aided projects must be given sufficient publicity so that the general public, businesses and trade organisations are aware of the opportunities the project offers and the role played by the EC through the ERDF. This may take the form, for example, of billboards on project sites or commemorative plaques at sites accessible to the general public.
All contracts worth five million Euro (about £3.5 million) and above are advertised in the Official Journal of the European Communities in line with the Commission's practice on tendering.
How are ERDF projects publicised?
An EU regulation requires successful applicants to publicise ERDF-aided projects. This is so that the general public, businesses and trade organisations are aware of the opportunities the projects offer and the role of the EU through ERDF. This publicity may take the form of billboards on project sites or commemorative plaques at sites accessible to the public.
All contracts worth five million euro (about £3.1 million) and above are advertised in the Official Journal of the European Communities in line with the Commission's practice on tendering.
What has ERDF achieved in England?
ERDF has helped a wide variety of projects - from large public works to small local initiatives. All are designed to benefit the local economy. ERDF-aided projects have:
- encouraged industrial development and provided workplaces by reclaiming land, refurbishing buildings and providing services to open up sites
- improved public transport access as well as road, rail and inland waterway networks, to support business and tourism
- encouraged the setting up and growth of SMEs
- encourage tourism by improving or developing attractions and providing facilities for tourists themselves
- improved the local environment to make areas more attractive to business and visitors
- supported local communities in developing economic strategies.
The new Structural Fund Objectives
Objective 1: Promoting the development and structural adjustment of regions whose development is lagging behind.
Objective 2: Supporting the economic and social conversion of industrial, rural, urban and fisheries areas facing structural difficulties.
Objective 3: Supporting the adaptation and modernisation of policies and systems of education, training and employment.
ERDF in England 2000-06
Objective 1
£M*
Merseyside
565
South Yorkshire
497
Cornwall
190
Objective 2
Core £M*
Transⁿ £M*
North East
343
24
North West
409
102
Yorks. and the Humber
247
35
East of England
83
11
East Midlands
191
26
West Midlands
365
84
London
150
3
South East
17
6
South West
88
9
Community Initiatives supported by ERDF 2000-06 (figures for UK).
Initiative
£M*
INTERREG
230
URBAN
75
*All figures calculated at a conversion rate of €1.58 to £1.
ⁿFunding from 2000-05 only
Q13: What will happen after 2006?
A13: With the enlargement of the EU from 15 to 25 Member States, and since so many of the newcomers have GDPs lower than the current EU average, it is inevitable that after 2006 we will receive a lower proportion of the Structural Funds than previously.
The Government is developing its proposals for the future of the Structural Funds, which (among other matters) involve distinguishing policy from funding. As part of this exercise the DTI, the Treasury and the DCLG have produced a consultation document "A Modern Regional Policy for the United Kingdom". An electronic copy of the document is available from:
www.dti.gov.uk/europe/consultation.pdf
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