Tuesday, June 28, 2016

News: EU funds key to LEP's growth plan

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A number of key regeneration and business support projects in the Sheffield city region face a funding black hole if European Union (EU) structural funding allocated to the region is not replaced.

Over €200m in EU funding was expected to be used to support businesses, inward investment, infrastructure, innovation and social inclusion in the Sheffield city region (SCR) until 2020.

LEPs were charged by the Government with putting together local growth plans that are the basis on which the Government negotiates deals with each LEP for new levers, resources, funding and flexibility over them.

The Sheffield city region LEP's Growth Plan, which set an ambitious target of creating 70,000 new jobs in the Sheffield city region (SCR) by 2023, was submitted to the Government in 2013. Currently being refreshed, the use of structural funding from the EU is integral to meeting the targets.

The LEP's EU Structural Investment Fund Strategy was only updated this year and sets out how €203m (£175m) of funding would be used, based around six main priorities: supporting and creating new businesses; growing existing businesses; attracting incoming businesses; increasing exporting; developing the skills base and labour mobility; improving and enhancing infrastructure.

With the historic result of the EU Referendum, it is not yet clear how the UK Government will react to the apparent loss of the structural funding that is designed to strengthen economic and social cohesion in the European Union by correcting imbalances between its regions.

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Following the EU referendum vote, Sir Nigel Knowles, chairman of the Sheffield City Region Local Enterprise Partnership (SCR LEP), said: "The focus of the SCR LEP remains the same as it was before the referendum, which is to do everything in its power to continue to deliver the devolution deal it secured, with localised investment and power to the region.

"The strength and potential of this region is in no way diminished by the result today. The north of England has led and fostered many changes in its history and centuries have confirmed that when it focuses on getting things done, pragmatically and tenaciously, it is successful. We are here to ensure that promises made in Westminster are kept, that the region hits its strategic targets and that in the coming years we are not distracted from our task.

"No doubt there will be changes in the economic and political landscape in the UK and opportunities will arise. We will be vigilant and ready to take advantage of such opportunities that will benefit the Sheffield City Region. Our job is unchanged, and we will continue to do that for every resident and business here today and in the future."

Six calls were made by the SCR via the Government last year in a bid to secure £17m in EU funds for support in relation to international trade, investment into Enterprise Zones and innovation capital. Calls to secure £12m have been made this year to support SME's, self-employment, renewable energy projects, and improve access to IT.

Through its devolution deals, the Combined Authority was pushing to be given Intermediate Body status and more control over how European funding was spent.

The SCR Growth Hub, the model that coordinates and simplifies business support so that it joins up national, local, public and private business provisions across the city region, has core funding of £4.82m. It estimated that it would bring together a £22m Business Investment Fund, a Skills Bank fund of more than £17m and "access to the Sheffield City Region European Structural Funds of approximately £90m."
Other key investments are the Sheffield City Region Investment Fund (SCRIF) which matches EU funds to other funds and private sector investment in order to deliver infrastructure solutions. A £51m property investment fund was being finalised to help kick-start development. It was set to use £23m in European funds, £18m from the city region's allocation of the Growing Places Fund (GPF) and £10m from the SCRIF.

The Sheffield city region was also expected to be part of the new £400m Northern Powerhouse Investment Fund (NPIF) that was set to launch later this year. Tendering is underway for specialist fund managers, who would make the individual investments in smaller businesses.

The NPIF was announced in the Autumn Statement 2015. The British Business Bank is all set to invest £50m of its own capital, matched by an additional £50m from the European Investment Bank. LEPs, including Sheffield, are working with the British Business Bank and Department for Communities and Local Government to aggregate the European money they were allocated into a combined fund.

The UK has a 16.11% shareholding in the European Investment Bank and is one of the four main shareholders. The bank said in a statement: "It is premature to speculate on the impact of the referendum result on the EIB, including the Bank's future relationship with the UK government and its future engagement to support long-term investment in the UK without clarity on the timing, circumstances and conditions of a withdrawal settlement."

The SCR was part of a legal battle over the how the coalition Government allocated the funds. In the previous settlement, South Yorkshire received €410m. It was allocated €180m for 2014-2020.

SCR LEP website

Images: European Commission / SCR LEP

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