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This report on the government fund to support private sector jobs and growth in places that rely on the public sector, the Regional Growth Fund, finds that the initial £1.4 billion investment could result in some 41,000 more full-time-equivalent private sector jobs in the economy than without the Fund. However, there was scope to have generated more jobs relative to the amount of grant awarded. The Fund has not optimised value for money because a significant proportion of the funds were allocated to projects that offer relatively few jobs for the money invested. The report concludes that applying tighter controls over the value for money offered by individual bids and then allocating funding across more bidding rounds could have created thousands more jobs from the same resources. Rigorous evaluation will be required to quantify precisely the Fund's overall employment impact. More than two thirds (28,000) of the 41,000 additional jobs are expected to be delivered indirectly, for example through knock-on effects in companies' supply chains or the wider economy. The average project will last at least seven years. However, it is not clear how much of the Fund's boost to the private sector will be sustained in the longer term. It has also taken longer than expected to turn conditional offers of grants for projects into final offers. Therefore, despite the government's intention to get projects up and running quickly, only around a third have so far received final offers of funding
The Government established the Regional Growth Fund in June 2010 to support projects with the potential to deliver economic growth and additional, sustainable private-sector jobs, particularly in areas that rely more on the public sector for employment. £1.4 billion was allocated during 2011. The Permanent Secretary for the Department for Communities and Local Government has overall accountability and the Secretary of State for Business Innovation and Skills has ministerial accountability. A further £1 billion has been made available for future rounds, for which accountability is likely to be shared between the Accounting Officers of the CLG and BIS. The Committee was highly disappointed to find that so few final approvals had been given and so few projects had actually started. Of the £470 million so far paid out by Government, £364 million has been parked with intermediary bodies via endowments and a further £57 million paid to other intermediaries. Only £60 million has been spent on front-line projects. As a result only 5,200 jobs can be claimed as having been created or safeguarded against targets of 36,800 over the lifetime of these projects. The Fund's threshold for acceptable value for money was far too low. Nor was it clear that the departments took sufficient account of local expertise in deciding which projects would most benefit particular areas. Despite decades of experience in delivering similar programmes, BIS and CLG still do not know what works best in fostering private sector growth. Witnesses had not prepared plans on how they will evaluate whether the Fund actually delivers the jobs and growth predicted
The abolition of the Regional Development Agencies removed the main source of match funding for ERDF sponsored projects, and the economic downturn has curbed alternative options for match funding even further. There is a pressing need to spend each region's ERDF allocation before 2015, but unless ministers take urgent steps to deliver on the Government's promise to make it easier for projects to secure match funding through the Regional Growth Fund, there is a significant risk that value for money will suffer and ERDF will not make the impact it could to help rebalance the UK's economy. The Committee endorses a number of sensible rule changes that will govern the next ERDF round (2014-20) currently proposed and related proposals to give Member States the power to tailor the size of their Operational Programme areas - which could permit Local Economic Partnerships in England to take responsibility for managing EU funds. MPs also challenge the current allocation system where even the wealthiest Member States receive some ERDF funding when a portion of what they pay in originally gets recycled back to them. The cross party group of MPs calls for this 'circular money flow' to end, and for England to retain this portion of funding to deliver its own regional policy. The Government would have to guarantee the same level of funding across the EU's 7 year funding cycle. This change would not affect the Government's contribution to ERDF for the poorer Member States. Lastly, MPs challenge the Government to evaluate the value for money of ERDF funded projects
The Open Access version of this book, available at http://www.tandfebooks.com/doi/view/10.4324/9781315401867, has been made available under a Creative Commons Attribution-Non Commercial-No Derivatives 3.0 license. This book brings together academics, members of European institutions, and regional and national level policymakers in order to assess the performance and direction of EU Cohesion policy against the background of the most significant reforms to the policy in a generation. Responding to past criticisms of the effectiveness of the policy, the policy changes introduced in 2013 have aligned European Structural and Investment Funds with the Europe 2020 strategy and introduced measures to improve strategic coherence, performance and integrated development. EU Cohesion Policy: Reassessing performance and direction argues that policy can only be successfully developed and implemented if there is input from both academics and practitioners. The chapters in the book address four important issues: the effectiveness and impact of Cohesion policy at European, national and regional levels; the contribution of Cohesion policy to the Europe 2020 strategy of smart, sustainable and inclusive growth; the importance of quality of government and administrative capacity for the effective management of the Funds; and the inter-relationships between institutions, territory and place-based policies. The volume will be an invaluable resource to students, academics and policymakers across economics, regional studies, European studies and international relations.
Despite the large sums available for promoting economic growth locally, little money has actually reached businesses. Of the £3.9 billion that has been allocated in total to these initiatives, only nearly £400 million had made it to local projects by the end of 2012-13. Under the Regional Growth Fund, the largest of the schemes, the Departments will need to spend £1.4 billion this year, compared to the £1.2 billion spent over the previous three years. Some £1 billion of the remaining £3.5 billion allocated to initiatives is currently parked with intermediary bodies such as local authorities, Local Enterprise Partnerships and banks - and the rest with the Departments. The Departments should introduce binding milestones for distributing funds and move quickly to claw back money not being spent - or spent disproportionately on administration - and redistribute it to better performers. Progress in creating jobs is falling well short of the Departments' initial expectations. The Departments' estimate of the cost per job created has also risen from £30,400 in Round One to £52,300 in Round Four - a 72% increase. The Departments also agreed that there is a risk of double-counting, with the same jobs scored more than once to different initiatives. The local growth initiatives have not been managed as a coordinated programme with a common strategy, objectives or plan. The recent creation by the Departments of a single growth directorate and a programme board is welcomed. Concern remains however that the Departments are not yet using the new oversight arrangements effectively.
In 2010, the Government set out a new approach for local economic growth, in the White Paper Local growth: realising every place's potential. This involved the closure of the Regional Development Agencies and their replacement with new local growth organizations and funds, such as Local Enterprise Partnerships and the Regional Growth Fund. Three years on from this initial announcement, the new Local Enterprise Partnerships and Enterprise Zones are taking shape. However, Local Enterprise Partnerships are making progress at different rates. The Growing Places Fund, Enterprise Zones and the Regional Growth Fund have also been slow to create jobs and face a significant challenge to produce the number of jobs expected. The estimate of jobs to be created by Enterprise Zones by 2015 has dropped from 54,000 to between 6,000 and 18,000. There is also no plan to measure outcomes or evaluate performance comparably across the range of different local growth programmes. Departments cannot therefore show value for money across the programme of local growth initiatives or be sure about where to direct their resources. The new local programmes were not established in time to avoid a significant dip in local growth funds and jobs created. Direct central government spending on local economic growth through the initiatives fell from £1,461 million in 2010-11 to £273 million in 2012-13, but will rise to £1,714 million in 2014-15. Central government needs to plan such reorganizations more effectively, to ensure that sufficient capacity is in place both centrally and locally to oversee initiatives and that accountability is clear
This book investigates the EU’s regional growth dynamics and, in particular, the reasons why peripheral and socio-economically disadvantaged areas have persistently failed to catch up with the rest of the Union. It shows that the capability of the knowledge-based growth model to deliver its expected benefits to these areas crucially depends on tackling a specific set of socio-institutional factors which prevents innovation from being effectively translated into economic growth. The book takes an eclectic approach to the territorial genesis of innovation and regional growth by combining different theoretical strands into one model of empirical analysis covering the whole EU-25. An in-depth comparative analysis with the United States is also included, providing significant insights into the distinctive features of the European process of innovation and its territorial determinants. The evidence produced in the book is extensively applied to the analysis of EU development policies.
Across Europe, regional development agencies (RDAs) have become a central feature of regional policy, both as innovative policy-makers and as the implementers of programmes and initiatives originating from the national or European level. By drawing on a combination of conceptual reflection, surveys, comparative research, and systematic use of critical case studies, this book provides a new point of reference by identifying key features of the current, and, indeed next, generation of regionally-based economic development organisations.
This report indicates broad support for the creation of Local Enterprise Partnerships as a way of addressing local growth. In particular the potential of LEPs to offer a greater focus on local economic needs, and build on the affinity between business, local government and other partners at a local level is recognised. Whilst it is right that LEPs should compete at certain levels it is equally important for them to collaborate, particularly with the Regional Development Agencies, where it makes economic sense. Local Enterprise Partnerships are being introduced quickly and at a time of greatly constrained public funding. There is concern that in the short term LEPs will need know how and powers and in some cases financial resources to make a positive difference. Government will need to be willing to devolve power to LEPs and in certain cases be willing to support LEPs at inception. If LEPs are to be a success, the Department's transition team will need to focus in three areas: retain RDA know-how, realising the full potential of RDA assets, and leveraging potential EU funding