Understanding European Structural Investment Funds: a resource for councils

How the data has been interpreted

The data that has informed our analysis is taken from the UK Government records on the 2014-2020 European Structural Investment Funds (ESIF) England programme only. The beneficiaries data in this project reflects the position up to October 2020. ESIF funding will continue to be spent until 2023. This project is therefore a snapshot of how much had been received from the beginning of the programme up to October 2020 and will not reflect the final programme total.

The data used in this project is publicly available on the UK Government website. As the programme has not been fully completed, the data differs from the EU website due to reporting differences. The UK Government data has therefore been used because it provides greater geographical and thematic detail.

Several projects have a crossover between England and Wales, the location data on these projects has been updated to correspond with the England-based LEP.

The ESIF Programme is a ‘shared management’ programme with the EU and the UK Government.

The UK Government is responsible for negotiating funding distribution across the devolved administrations, and managing the UK’s participation and spend.

For England, Department for Levelling Up, Housing and Communities (DLUHC) and Department for Work and Pesions (DWP) act as the managing authority.

It is not possible to identify the exact exchange rate on every funded project, so a single exchange rate per year has been applied:

Year Euro to Pound exchange rate
2014 1 = 0.8364
2015 1 = 0.7823
2016 1 = 0.73799
2017 1 = 0.853
2018 1 = 0.888768
2019 1 = 0.90273
2020 1 = 0.85208
2021 1 = 0.90307

 

A comparison of ESIF versus UKSPF

ESIF funding distribution

The analysis in our research focuses on the England European Regional Development Fund (ERDF) and European Structural Fund (ESF) programmes and includes the Youth Employment Initiative (YEI).

Due to lack of available data we have not been able to include detailed analysis of the European Agricultural Fund for Rural Development (EAFRD) and European Maritime and Fisheries Fund (EMFF) programmes.

Use of ‘the ESIF programme’ in the analysis is used to explain the findings under both ERDF and ESF together. This is also known as the ‘England Growth Programme’.

The ESIF Programme is a shared management programme with the EU and the UK Government is responsible for managing the UK’s participation in the 2014-20 programme. The UK Government negotiated funding distribution across the devolved administrations.

In England, DLUHC and DWP are the managing authorities and directed funding to Local Enterprise Partnership areas (“LEP areas”) and some combined authorities to deliver projects on social, economic and environmental priorities.

Diagram1: ESIF
Diagram showing ESIF funding distribution

 

Quantum

ESIF headline figures

ESIF

Under the ESIF programme England received just under £7.7 billion in funding in the 2014-2020 period. Funding under the ESIF programme was a combination of investment from the EU and match funding from the UK government and private sources. The total EU investment received up to October 2020 is just over £3.9 billion. The total England match funding generated up to October 2020 is just under £3.8 billion.

Breakdown

The ESIF budget was allocated between the ERDF and ESF programmes.

● England received just over £4.8 billion under ERDF up to October 2020.
● England received just over £2.8 billion under ESF up to October 2020.
 
Caveats: Match funding includes public and private sources.
 

Quantum of funding

In 2014 England was provisionally allocated 6,937.2 million (£5.3 billion) (at 2014 prices) of EU funding for the 2014-20 ESIF Programme.

As of October 2020

  • Just over £3.9 billion was funded via EU funding
  • Just under £3.8 billion was funded via domestic match funding 
  • Total spent was just under £7.7 billion (including match funding)

The average per year (over the seven year period):

  • £628,296,632.17 of domestic match funding
  • £652,494,904.83 of EU funding

Side-by-side

This chart compares the total funding received by October 2020 under ESIF in England compared to the proposed funding allocation under the UK wide SPF is more.

The complementary domestic funds will operate alongside the UK Shared Prosperity Fund (UKSPF) to help support the Government’s levelling up agenda. These programmes are allocated by competitive bidding processes and will run over a period of up to five years. The length of the UKSPF programme is yet to be determined.

ESIF Programme up to October 2020 (England only) UKSPF (UK wide)
Match + EU funding (England)
Total: just under £7.7bn
Annual: just over £1.2bn

UKSPF funding (UK wide)
£1.5bn per year from 2022 for the UK

£2.6bn in total up to 2024/25

Match funding only (England)
Total: just over £3.9bn
Annual: just over £628m
Examples of complementary domestic funds (2021-2025):
£4.8bn Levelling Up
£3.6bn Towns Fund
£7.1bn National Home Building Fund Freeports

More information on the latest figures can be found on the GOV.UK website.


Mapping council funding

In the resources provided we have created a map of council projects across England.

Key

- The red lines determine local authority boundary lines.
 
- Funds have been mapped according to the post code of the organisation who is the recipient of the fund, rather than coverage of individual projects
 
- The green markers represent ERDF funding, blue ESF funding and yellow ESF in YEI funding.

Strategic priorities

ERDF priority breakdown

European Regional Development Fund (ERDF) allocations must meet at least one of the nine thematic areas (referred to as "priority axis") under the programme.

Thematic areas Priority axis for the ERDF
Research and innovation Priority 1: Research and innovation
IT and broadband Priority 2: Enhancing access to, and use and quality of, ICT
Business support Priority 3: Enhancing the competitiveness of SMEs
Low carbon Priority 4: Supporting the shift towards a low carbon economy in all sectors
Climate change Priority 5: Promoting climate change adaption, risk prevention and management
Environment Priority 6: Preserving and protecting the environment and promoting resource efficiency
Transport Priority 7: Sustainable transport in Cornwall and the Isles of Scilly
Social inclusion Priority 8: Promoting social inclusion and combating poverty and any discrimination
Technical assistance Priority 9: Technical assistance

ERDF thematic allocations

The priority axis that received the largest investment in England was enhancing the competitiveness of SMEs.

As of October 2020, PA3 has received so far £2.3 billion from programme budget.

The largest regional recipients under PA3 were the North West (£604 million), West Midlands (497 million) and North East (£311 million)

The graph shows the funding received under each priority axis ranked from highest value.

●Blue = total funding received
●Red = total EU funding received
●Yellow = total match funding received
 
Graph showing funding allocated under ERDF priority axis categories

 


ESF priority breakdown

European Social Fund (ESF) allocations must meet one of the three thematic areas (referred to as “priority axis”) under the programme.

Thematic areas Priority axis for the ESF
Access to employment Priority 1: Inclusive labour markets
Learning and skills Priority 2: Skills for growth
Technical assistance Priority 3: Technical assistance

 


ESF thematic allocations

The priority axis that received the largest investment in England was inclusive labour markets.

As of October 2020, PA1 received £1.9 billion, or 68 per cent of the programme budget.

The largest regional recipients under PA1 were the London (£283 million), North West (£302 million) and West Midlands (£323 million).

The graph shows the funding received under each priority axis ranked from highest value.

●Red = total funding received
●Blue = total EU funding received
●Yellow = total match funding received 
Graph showing funding allocated under ESF priority axis categories graph 2

Wider growth funding context

The Levelling Up Agenda

In addition to funding under the UKSPF, Government has announced a package of other funds that will also benefit local areas, including:

Levelling Up Fund
● Focus: Local infrastructure. This includes bypasses and other local road schemes, bus lanes, railway station upgrades, regenerating eyesores, upgrading town centres and community infrastructure, and local arts and culture.
● Value committed: £4.8 billion
● Term: four years, starting 2021
● Scope: UK wide
● Process: Bidding
Towns Fund
● Focus: Investment in towns. Long term economic and productivity growth through investment in connectivity, land use, economic assets including cultural assets, skills and enterprise infrastructure.
●  Value committed: £3.6 billion
Term: five years, starting 2021
● Scope: England
● Process: Bidding
National Home Building Fund
● Focus: Building more affordable, sustainable homes across England.
● Value committed: £7.1 billion
● Term: four years, starting 2021
● Scope: England

 

UK Shared Prosperity Fund Head of Terms

Investment in people

Skills tailored to local needs, such as work-based training, supplementing and tailoring national programmes (eg the Adult Education Budget); and other local support (eg for early years).

Investment in communities and places

Including cultural and sporting facilities, civic, green and rural infrastructure, community-owned assets, neighbourhood and housing improvements, town centre and transport improvements and digital connectivity.

Investment for local businesses

Including to support innovation, green and tech adoption, tailored to local needs.

Examples of complementary domestic funds (2021-2025)

£4.8 billion Levelling Up

£3.6 billion Towns Fund

£7.1 billion National Home Building Fund

Freeports

 

Scope of work

To understand how the transition to UKSPF will affect the investment into strategic priorities, it is beneficial to compare the programmes side-by-side.

In our analysis, we have identified there is relative consistency between the  thematic focus of the old programme and the new programme.

The main differences are:

● removal of IT and broadband and replacement with culture and creative industries
 
● addition of a priority on rural and coastal areas under the UKSPF
 
● emphasis on the ESIF priorities for skills and employment, previously captured under the broad category of social inclusion.
 
ESIF

- Research and innovation
- IT and broadband
- Business support
- Low carbon
- Climate change
- Environment
- Transport
- Social inclusion
- Technical assistance

UKSPF

- Research and development
- Culture and creative industries
- Growth and business support
- Energy
- Rural and coastal areas
- Environmental and climate change
- Transport
- Skills and employment