European Regional Development Fund (Revised Management Arrangements)

Lord Stunell Excerpts

Thursday 3rd February 2011 Written Statements

[The Parliamentary Under-Secretary of State for Communities and Local Government (Andrew Stunell)]

My hon. Friend the Parliamentary Under-Secretary of State, Baroness Hanham, has made the following written ministerial statement:

I am today announcing a series of changes I will be making to the operation and delivery of the European Regional Development Fund (ERDF) in England.

ERDF is a key driver for economic growth and the sub-national agenda and I have seen for myself some of the benefits it has brought to local communities. The operation of ERDF is governed by complex European regulations and comes with stringent penalties if those are not met. As the Secretary of State outlined in a departmental press notice of 7 July 2010, the new Government inherited up to £150 million of potential liabilities from the previous Government due to financial and administrative irregularities. It is vital that taxpayers have confidence that their money is not being wasted.

ERDF is currently delivered by teams in the regional development agencies. Following our decision to abolish these agencies and encourage local communities to come together to form economic partnerships that make sense for them, I have concluded that in order to maintain compliance with the regulations and spending momentum, we should transfer the existing ERDF staff and functions into my Department by the beginning of July.

In London, the Greater London Authority is establishing a housing and regeneration division from parts of the London Development Agency and the London elements of the Homes and Communities Agency. So I have concluded that, in line with the steps we are taking in the Localism Bill to transfer power and functions to the Mayor of London, the Greater London Authority is well placed to continue to operate ERDF in the capital.

We want to encourage local communities to make use of ERDF. This is more likely to happen if ERDF teams continue to be located close to the places they serve so they are on hand to offer support and advice to projects. So I have decided that we must aim to locate the ERDF teams as far as possible in their existing towns or cities.

We are committed to giving localities and communities greater control and greater influence over the programmes and services delivered in their areas. To help achieve this, I have decided that we should restructure existing Programme Monitoring Committees as Local Management Committees which can ensure that, within the parameters already agreed with the EU, local people and businesses can influence the shape of the programme. These Committees give strategic direction to the operational programmes and ensure that they are delivered compliantly and that outputs are delivered. I will be looking to ensure that the local representatives from across the public, private, voluntary and community and local authority sectors are represented on the Local Management Committees.

I am committed to ensuring my Department plays a key role in ensuring that the delivery of ERDF remains compliant with EU regulations. To deliver that, I have decided that a DCLG director will chair the Local Management Committees. But to underline our commitment to localism, I have also decided that a significant figure from the local community should be appointed as a deputy chair of the Local Management Committee, to ensure that the ERDF programmes are overseen and shaped by local people. We will work with local communities to determine who should occupy this role.

We will be working closely with the existing membership of the Programme Monitoring Committees and other local representatives to determine the practical details of the changes I want to make. That will include the role of the Local Management Committees, how the deputy chair and membership will be selected and what underpinning arrangements they will need.

Finally, as we said in the “Local Growth” White Paper, we want to make it easier for local communities to access all elements of regeneration funding, so my Department is working with the Department for Business, Innovation and Skills to determine the scope to align the application processes for ERDF and the regional growth fund. We will also be looking to ensure that this new process delivers greater efficiency through limiting duplication.