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, the ERDF has developed into a major instrument for helping to redress regional imbalances. The Department for Transport, Local Government and the Regions manages the ERDF in England.

The EU has three other structural instruments (funds to develop different economic sectors and regions). In England the Department for Education and Skills manages the European Social Fund (ESF) and the Ministry of Agriculture, Fisheries and Food manages both the European Agricultural Guidance and Guarantee Fund and Financial Instrument for Fisheries Guidance.

The new 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.

The regulations also established four Community Initiatives. ERDF supports two:

• INTERREG - concerned with international co-operative projects
• URBAN - concerned with urban regeneration.


How much is available through ERDF?

£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.

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Where does it go?

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.

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What are transitional areas?

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.

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Who can apply?

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
• 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 the development of 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 at http://www.dti.gov.uk.

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How do you apply for ERDF?

The first step is to approach the Government North West. The Government Office can advise you on potential projects. They can also provide application forms and information packs.

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How is ERDF spent?

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:

• 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
• infrastructure projects which aid the regions’ economic development
• local initiatives to promote regional economic development
• tourism and cultural projects
• environmental protection and improvement measures which are linked to regional economic development.

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How much ERDF can projects receive?

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 European Union 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
• 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 on the DTI web site at http://www.dti.gov.uk.

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How are the 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 European Commission. This document draws on and complements the relevant RDA’s regional strategy. The SPD sets out the overall regional 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, and 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.

You can get copies of regional SPDs from the Government Office (GO) for the particular region. They are also available on the respective GO websites.

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How are the funds administered?

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:

• RDAs
• 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.

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How are ERDF projects publicised?

A new 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 £3.2 million) and above are advertised in the Official Journal of the European Communities in line with the Commission's practice on tendering.

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What has the ERDF achieved in England?

The 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
• encouraged 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.

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Contacts

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