Agenda item

Report of the Cabinet Member for Economic Growth

The Select Committee received a report and presentation on the work and progress of the Stoke on Trent and Staffordshire LEP (SSLEP) EU Funding programme.  

The SSLEP EU Funding programme formed an important and integral part of the County Council’s Economic Growth Programme.  The County Council was a key stakeholder in the EU Funding programme through the delivery of its own funded projects and programmes and also working with key external partners such as District Councils, Keele and Staffordshire Universities, FE Colleges, the Chamber of Commerce, business support and training providers, private sector businesses and a wide range of other partners from the private and voluntary sector.  The EU Funding programme was managed, on behalf of the SSLEP, on a day to day basis by the County Council’s External Funding Manager, in partnership with Stoke on Trent City Council, working closely with the Department for Communities and Local Government, the Department for Work and Pensions (DWP) and the Department for Environment, Food and Rural Affairs.  The governance of the EU Funding programme was provided via the SSLEP ESIF Committee which tracked the progress of key projects, oversees the financial and outcome progress of the programme overall and provides a view of the local strategic fit of all applications submitted at each bidding call.   The Economic, Infrastructure and Skills Management Team received monthly updates on progress on the EU Funding programme and considered any matters of importance, by exception, that require attention and direction.  This information was then summarised to the Senior Leadership Team and Cabinet on a monthly basis through the Transformation Programme and any issues escalated as and when necessary to corporate management and executive level for resolution.

Although EU Funding had been contributing to economic development and skills projects and programmes in Staffordshire for over 35 years, at nearly £137m the current level of EU Funding was by far the largest amount the area had ever seen.  The European Regional Development Fund (ERDF) funding of £77m focused on business support, infrastructure and Low carbon.  The (ESF) funding of £55m on skills, employment support and inclusion, and the European Agricultural Fund for Rural Development (EAFRD) and LEADER funding of £5m on support for rural businesses.  Despite BREXIT, all EU funding would still be contributing to the Economic Growth Programme beyond the date that the UK leaves the EU provided funding contracts are in place, even  as far ahead as December 2023.  Current levels of commitment of EU Funding in Stoke on Trent and Staffordshire were among the highest across the UK.  Currently 73% or £99m was committed across all funds and there was confidence that the remaining £38m would be allocated, 12 months ahead of the BREXIT date (March 2019), with projects and programmes ready to come forward during 2018.  Although commitment levels were high, spend and output profiles at a project and programme level must be maintained to ensure that EU Funding was retained.  To date, just £7m of the £99m committed had been claimed.  However, a number of significant grant claims were due this quarter and into 2018 from major EU supported projects including Keele University that would boost the amount of grant claimed and would help to keep the EU Funding programme on profile. 

In relation to ERDF, this included a £17m investment at Keele University on the Smart Innovation Hub, Smart Energy Demonstrator and Research and Development Gateway.  It also included a £10m investment in the Midlands Engine Investment Fund, and £8m being invested through business support and grant schemes including the Growth Hub, that will support over 4,300 businesses to start and grow.

Members were informed that £37m of ESF was contributing to skills and employment support programmes being delivered by the DWP, Skills Funding Agency and the Big Lottery.  To date, over 8,000 beneficiaries across all areas of Stoke on Trent and Staffordshire had benefited from these programmes.  A further £8m was supporting the Skills Hub proposal led by the Chamber of Commerce and Higher Skills Programme, to be delivered through Staffordshire and Keele Universities.

Under the EAFRD £1.9m had been made available in small grants supporting 26 rural businesses, and a further £30m was being made available for the EAFRD Rural Broadband Infrastructure Fund. 

Members were informed that Stoke on Trent and Staffordshire’s performance so far in committing and delivering EU Funding activities would place them well in preparing for future funding arrangements.  Beyond the current programme one of the options to replace EU Funding was the government’s plan for a UK Prosperity Fund.  Stoke on Trent and Staffordshire partners would need to be ready and prepared for new funding opportunities to build upon the success of its EU programme track record.  The government’s recently published Industrial Strategy had made some references to future funding arrangements beyond BREXIT and a Green Paper on the Shared Prosperity Fund was to be published early in 2018.

Members raised a number of questions around the level of rigour which was applied to applications for funding, and stressed the importance of the need for measurable outcomes.  They were informed that the process was underpinned by the LEP Strategic Plan and criteria, it was heavily regulated, and that the ultimate penalty was that the funding would be clawed back.  Applicants were required to provide robust business cases.  It was queried how the process did not contravene competition law, and members were assured that an important consideration of applications was the displacement effect.  Members also questioned whether any County Council taxpayers money was at risk, and were informed that the County Council’s contribution to the process was in staff time.

It was suggested that it would be helpful for a further report to be brought back to the Committee around specific case studies, with details of the investment made and the benefits which this had brought about.  Similarly, it would be helpful to look at an example of where an investment had been unsuccessful and the reasons for this.

RESOLVED – That:

a)    The Committee note the progress to date with committing EU Funding to support the Economic Growth Programme;

b)    That further updates be brought to the Committee on progress with the EU Funding programme, together with  details of the preparations for continuing support from UK growth programmes once EU Funding is no longer available; and

c)     That case studies be brought to the meeting of the Select Committee to be held on 4 April 2018.