Local enterprise partnerships (Leps) outside London were told by central government that they would not be getting Euro skills cash to dish out because of European Commission (EC) rules. Jim Sims explains the importance of this ruling for those in FE.

Regardless of your views about the reasons behind the recent announcement of changes to the way local areas and Local Enterprise Partnerships (Leps) will be involved in the delivery of the 2014-2020 European Union (EU) Growth it’s vital that managers in the FE sector understand the implications of the recent decision to ‘row back’ on a government commitment to give local areas more control over the distribution of EU funding.

Before rehearsing how the FE sector can respond to this issue, it’s probably worth explaining some of the reasons why many European specialists in the Lep Network believe that the outcome of the negotiations with the EC was inevitable and perfectly predictable.

Notwithstanding the fact the UK government appears to suggest it was the EC that railed against their plans for actively involving local areas in decisions about local investment priorities, it’s probably worth recognising that the EC has actually provided member states with some strong tools for devolving strategy formulation and decision making to local areas — in the form of Integrated Territorial Investments (ITIs) and Community-Led Local Development (CLLD).

Under these initiatives, localities are basically able to draw up Integrated Investment Strategies for local areas, nominate local bodies to be Intermediate Bodies (IBs) and then manage the dispersal of EU funding locally, in accordance with EU regulations.

What should the FE sector be doing to best utilise EU funding to deliver future skills priorities?

So, why hasn’t the UK universally taken advantage of these tools? Well, for the UK government — in common with many other member states — it’s all about risk and control. At the outset of the programme, it basically had two policy objectives which ultimately ended up being in conflict with each other. The first — more publicly-stated objective — was to try and devolve more control to local areas, by empowering Leps to have a central role in dispersing EU funding.

The second — less publicly-stated goal — was to minimise the UKs exposure to the risk of non-compliance and claw-back by the EC by effectively agreeing that devolving EU funding was a ‘red line’ not to be crossed.

Ultimately, this second objective won out, and we now find ourselves in a position that can best be characterised as European Regional Development Funding (ERDF) essentially operating to the traditional ‘open call’ model, with the majority of bidders being asked to bring match funding to the table; and European Social Funding (ESF) using a variety of ‘match at source’ models, through the Skills Funding Agency, Department for Work and Pensions (DWP) and BIG Lottery Opt-ins (with the potential for a local call model, in fairly defined areas like Youth Employment Initiative, City Deal etc.). And the European Agricultural Farming and Rural Development Funding (EAFRD) / European Maritime and Fisheries Fund (EMFF) basically uses Department for Environment Food & Rural Affairs core funding as match, but asking private sector bidders to bring additional match to the table.

That said, at the time of going to press only the EAFRD/EMFF Operational Programme has been signed off by the EC — although both the Department of Communities and Local Government (DCLG) and the DWP are hopeful theirs will be signed off soon. So much for a single European Growth Programme I hear you say.

So, given the above, what should the FE sector be doing to best utilise EU funding to deliver future skills priorities? Well, given the highly centralised (supply driven) structures that have been maintained under the ESF Operational Programme (and recognising the increasing government drive towards demand-led funding models) my own view is that the real winners in the sector are likely to be those organisations that are successful in working with Leps to make better use of ERDF and Skills Capital Funding to drive their business engagement and outreach activities.