European Funding special

European Funding special

Contents Page 3 Foreword Page 4 Who s in the EU List of member states What s what in the EU - The institutions North East MEPs Page 7 European Structural and Investment Funds Strategy (ESIFS) for Tees Valley Page 8 European Structural and Investment Funds Strategy (ESIFS) - North East Local Enterprise Partnership (NELEP) Page 11 Presenting the Business case for VCSE involvement in European Structural Funds Page 18 Case studies Page 20 Community Led Local Development (CLLD) Page 22 The Big Lottery Match Funding Offer for Social Inclusion Page 23 Next steps

Foreword Since July 2010, VONNE has supported VCSE organisations across the North East to access European funding. The direct support includes 48 organisations receiving one to one mentoring, such as advice on where to look for opportunities, guidance on budgeting, such as establishing unit costs and cash flowing, and access to finance. This individual support has been complimented by workshops, meetings and events, such as meet the primes and meet the co-financers. In this State of the Union Edition, we will explore the European Union through the lens of the VCSE in the North East. We will examine Who s Who and what the current programme has amounted to. We will set out the business case for the VCSEs involvement in future European funded programmes and we will look at the draft plans that both of the Local Enterprise Partnerships submitted to Government in October 2013. Finally we will set out the timetable of what to expect next. As the current European funded programmes enter their final stages of commissioning, it is important to reflect on the major contribution that European Funded programmes play in the economic regeneration of the North East of England. Under the 2007-13 programme the region attracted around 196m in ESF and 319m in ERDF. We hope that you enjoy it, and find it informative. As always we are interested in your feedback. We will of course make sure that you are aware of any and every opportunity to influence the European Strategies that are being developed in the region and that you are aware of the opportunities that become available from mid 2014, to deliver on European funded programmes. Jo Curry Chief Executive, VONNE Page 3

Who s Who in the EU Date refers to when they joined the EU Austria (1995) Belgium (1952) Bulgaria (2007) Croatia (2013) Cyprus (2004) Czech Republic (2004) Denmark (1973) Estonia (2004) Finland (1995) France (1952) Germany (1952) Greece (1981) Hungary (2004) Ireland (1973) Italy (1952) Latvia (2004) Lithuania (2004) Luxembourg (1952) Malta (2004) Netherlands (1952) Poland (2004) Portugal (1986) Romania (2007) Slovakia (2004) Slovenia (2004) Spain (1986) Sweden (1995) United Kingdom (1973) Page 4

What s What in the EU The institutions The European Parliament European Parliament is one of the EU s main law-making institutions. The European Parliament debates and passes laws, scrutinizes the other EU institutions, and debates and adopts the EU budget with the Council. The 736 members of the European Parliament are directly elected by EU voters every 5 years. The next European Parliamentary elections will take place in 2014. 73 MEPs are elected from the UK. The Parliament s President is Martin Schulz who was elected from the Parliament s members in 2012. The European Council The European Council is the group of heads of state or government of the EU member states. It meets four times a year to define the EU s policy agenda and give impetus to integration. The President of the European Council is the person responsible for chairing and driving forward the work of the institution. The current president is Herman Van Rompuy. The European Commission The European Commission represents and upholds the interests of the EU as a whole. It drafts proposals for new European laws, it manages the day-to-day business of implementing EU policies and spending EU funds. It acts as the executive arm of the Union. It is a body composed of one appointee from each state, but is designed to be independent of national interests. The Commission is led by a President who is nominated by the Council and approved by Parliament. The remaining 27 Commissioners are nominated by member-states. The current President is José Manuel Barroso. Baroness Catherine Ashton is the Commissioner from the UK. The Court of Justice of the European Union The Court of Justice of the European Union is the EU s judicial branch. It is responsible for interpreting EU law and treaties. Council of the European Union The Council of the European Union (informally known as the Council of Ministers or just the Council) is the main decision making body of the Union as it holds legislative and some limited executive powers. Its Presidency rotates between the states every six months. The Council is composed of twentyeight national ministers (one per state). However the Council meets in various forms depending upon the topic. For example, if agriculture is being discussed, the Council will be composed of each national minister for agriculture. The Council passes EU laws. It coordinates the broad economic policies of EU member countries, signs agreements between the EU and other countries, approves the annual EU budget, develops the EU s foreign and defence policies, and coordinates cooperation between courts and police forces of member countries. The presidency is held by Lithuania until 31 December 2013, when it will be replaced by Greece and then Italy. The European Central Bank The European Central Bank manages the Euro and safeguards price stability in the EU. It is also responsible for framing and implementing the EU s economic and monetary policy. The current president is Mario Draghi. Page 5

The North East MEPs Stephen Hughes (Labour) Room 38/4 County Hall Durham DH1 5UR 0191 384 9371 stephen-hughes@ btconnect.com Martin Callanan (Conservative) Aston House Redburn Road Newcastle NE5 1NB 0191 214 6744 martin.callanan@ europarl.europa.eu Fiona Hall (Liberal Democrat) 5a Old Elvett Durham DH1 3HN 0191 383 0119 Fiona@fionahallmep.co.uk Page 6

European Structural and Investment Funds Strategy (ESIFS) for Tees Valley Tees Valley Unlimited Hartlepool Sandy Anderson Chair Redcar and Cleveland Darlington Stockton Middlesbrough Guisborough Stephen Catchpole CEO (standing down end of 2013, replacement being recruited) Linda Edworthy EU Lead Area Covered: The 5 Local Authority areas: Darlington, Hartlepool, Middlesbrough, Redcar and Cleaveland, Stockton. Population size: 663,000 Notional allocation: 202.6 Million Euros Main Contact: Linda Edworthy Linda.edworthy@teesvalleyunlimited.gov.uk Website: www.teesvalleyunlimited.gov.uk Tees Valley Unlimited - Statement of Ambition The Tees Valley Unlimited Statement of Ambition sets out the Vision for the Tees Valley over the next 15 years. Ambition 1: Drive the Transition to a High Value Low Carbon Economy Ambition 2: Create a more diversified and Inclusive Economy. The Vision is to create 25,000 net new jobs over the next decade, grow the SME base, up skill the workforce and young people, and create 1 of the 5 or 6 leading integrated carbon efficient industrial hubs in the world, attracting investment in green industries. Tees Valley makes a significant contribution to the UK economy with over 10bn annual contribution to GDP and is part of the only area in the UK with a positive balance of trade. With 424,000 working age population but only 281,000 jobs and unemployment of 41,000 with youth employment at 32% the area needs to create 25,000 jobs over the next decade. Building on existing economic strategies for the area, our strategy places SMEs, innovation and individuals at the centre of our growth ambitions. Sandy Anderson Chair Tees Valley Page 7

173m (total structural fund allocation for Tees Valley) ERDF 104.08m (60% of total structural fund allocation) ERDF Theme % ERDF allocation Total ERDF allocation 1 Research & Development and Innovation 24 % 25m 3 SME Competitiveness 47% 48.47m 4 Low Carbon 24% 24.62m 2 ICT 3% 3m 5 Climate Change Adaptation 2% 2m 7 Sustainable Transport 1% 1m ESF 69.39m (40% of total structural fund allocation) ESF Theme % ESF allocation Total ESF allocation 8 Employment 46% 32.05m 10 Skills 34% 23.46m 9 Social Inclusion 20% 13.88m What Does the Tees Valley plan say about Social Inclusion and Combating Poverty? Helping Tees Valley residents to gain access to the workplace alongside tackling other inherent challenges such as social mobility and inequality is critical to the ambition for a more inclusive economy. Tees Valley is committing 20% of ESF ( 13.88m) to Social Inclusion and Combating Poverty. This recognises that in Tees Valley we see high levels of unemployment and benefit dependency (unemployment at 6.1% compared to 3.3% nationally); high numbers of people with significant barriers to work, and some of the highest levels of deprivation in the UK. Tees Valley accounts for 18% of the 5% most deprived areas in England and a quarter of the population live in the 10% most deprived wards in England. EU resources will be targeted to help to deal with the culture of benefit dependency in Tees Valley and the number of people with significant barriers to work. The aim will be to improve economic prospects and social mobility of those who are disadvantaged/furthest away from the Page 8 labour market. The Tees Valley wants to move towards a more inclusive and balanced economy and society, reducing levels of deprivation, benefit dependency and poverty and giving a boost to employment levels, social mobility, social coherence and economic competitiveness. Noone should be excluded from the opportunities that the Tees Valley will offer in the future. New opportunities should be accessible to all in an equitable manner. Broadband connectivity and digital inclusion is a crucial part of this, as is the contribution of rural areas to the lowcarbon economy through district heating, microgeneration and other opportunities for the agro-economy. The vision is of a Tees Valley as a place where communities are vibrant; using their local assets to their full potential, engaging local people and providing an infrastructure of support and facilities. These will include financial support mechanisms. There is equality of opportunity and, in a buoyant labour market with jobs across all sectors, clear pathways to employment for young people and adults including those with significant barriers to employment.

European Structural and Investment Funds Strategy (ESIFS) - North East Local Enterprise Partnership (NELEP) Tees Valley Unlimited Paul Woolston Chair Ed Twiddy CEO James Davies EU Lead Northumberland Area Covered: The 7 Local Authority areas: Durham, Gateshead, Newcastle, North Tyneside, Northumberland, South Tyneside, Sunderland. Population size: Almost 2 million Notional allocation: 539.6Million Euros Main Contact: James Davies james.davies@nelep.co.uk Website: www.nelep.co.uk Durham Tyne & Wear Vision and Objectives The over arching vision for North East LEP area, can be summarised as: More and better jobs through making, trading and innovating enabled by connectivity, skills and community. 5 key objectives have been set out for developing programmes and matching funds: 1. Increase levels of research and development, and improve the commercialisation of innovation with particular focus on areas of smart specialisation. This will be supported by building the networks and environment for social and open innovation. 2. Increase entrepreneurship, the number of start-ups and business growth and trading. This will include improving access to finance and business support. Growth in under-represented groups and places with high deprivation will be targeted, alongside high-value and strategically important businesses and sectors. 3. Increase the role of the low carbon economy and energy generation sector. To support this, the North East will be an exemplar of low carbon, environmental sustainability, resource efficiency and sustainable transport systems to drive company growth. Page 9

4. Improve employability and skills to overcome barriers preventing access to the labour market. In particular, we aim to enable more people to move towards employment or self-employment and to enhance aspiration and participation in under-represented groups. 5. Improve skills provision to better meet the needs of business and match economic opportunities. This will enable more people to enter the workforce and progress their career and enhance the North East as a place to invest and start and grow a business. Proposed allocations under ESIF thematic objectives Thematic More Developed More Developed Transition Transition Scope for Objective ERDF ESF ERDF ESF EAFRD Alignment 1. Innovation 23% 2. ICT Use of RDPE to fund Rural access to Broadband 3. SMEs 45% 48% 4. Low Carbon 20% 15% 5. Climate Change Adaption 4% 6. Environmental Protection 4% 7. Sustainable Transport 4% 8. Employment 25% 25% 9. Social Inclusion 20% 20% 10. Skills 55% 55% 11. Institutional Capacity We will need to fill a shortfall of 60,000 private sector jobs, including 34,000 high skilled roles, as well as create 27,000 new businesses and increase the area s GVA by 2.8bn to reach a par position against the national average outside London. Our ESIF strategy will play a crucial part in addressing those structural weaknesses, and enable the area s full potential to be fulfilled. Page 10 Paul Woolston NELEP chair What does the NELEP plan say about Inclusive Growth? Given the size of the North East LEP area population and highly contained workforce. It is crucial to make the most of the capacity and capabilities of all people in the LEP area. This also has a clear benefit in terms of social inclusion and poverty reduction. Our approach is to focus on employment as the route out of disadvantage, isolation and poverty. Interventions will therefore be targeted at achieving progress towards employment and improving employability and skills to progress in employment. Activities include targeted recruitment and bespoke training and apprenticeships.

Presenting the Business case for VCSE involvement in European Structural Funds About the VCSE in the North East The VCSE in the North East is an important contributor to the economy as an employer in its own right, as well as in terms of the wider economic and social benefits it delivers. Research undertaken on behalf of the Northern Rock Foundation estimated that across the North East in 2008, the total combined income of VCSE organisations was 1.54 billion p.a, with the sector spending a total of 1.50 billion pa across the regional and UK economy. The sector provided paid employment for around 37,000 individuals, equivalent to around 3.4% of the region s workforce. In addition to these important employment and spending benefits, VCSE organisations deliver significant economic and social impacts Reducing worklessness especially among young people and those excluded long-term from the labour market because of multiple personal and social barriers. Creating and growing social enterprises, as a means of creating new jobs and delivering socially useful services. This includes investing in social enterprises. Supporting entrepreneurship and the start-up and growth of businesses among deprived communities, as a route out of unemployment and a way of creating local wealth. Developing skills as a means of improving organisational performance and productivity, and enabling people to overcome barriers to work, developing their careers and income prospects. Engaging with community led local development initiatives in remote or deprived communities, to support sustainable economic growth, and reduce social and economic isolation and exclusion. Promoting social innovation as a means of developing new and more effective ways of delivering socially useful services (such as health and social care), with potential spin-off job creation benefits. Accelerating the adoption of low carbon technologies by VCSE organisations (including social housing providers), as a way of improving efficiency and reducing carbon footprint. Page 11

These activities: support and enable economically inactive people to become employed, boosting economic activity rates, regional productivity and incomes, and reducing spending on benefits; promote the start-up and growth of traditional enterprises, including self-employment as a route out of worklessness; support and invest in the start-up and growth of social enterprises; support job creation through the adoption of low carbon technologies; and encourage innovation in the delivery of services with a social benefit. All of these activities and impacts map across directly to the thematic objectives and priorities of the new EU SIF Programme, highlighting the significant opportunities for VCSE organisations to contribute to a successful, high impact Programme. Proposed allocations under ESIF thematic objectives Services / activities Skills and employability support Enterprise and entrepreneurship services Social enterprise development Social investment Community led local development Energy efficiency and green technologies Social innovation Economic impacts Improving skills for employability, and overcoming personal barriers to work (e.g. homelessness, health, addictions). This allows more economically inactive people to become employed, boosting economic activity rates, regional productivity and incomes, and reducing spending on benefits. Supporting the start-up and growth of traditional enterprises, including self-employment as a route out of unemployment. Again, this creates jobs and wealth. Start-up and growth of social enterprises, creating jobs and wealth By providing loans / grants / equity to social enterprises, social investors help to create jobs and wealth Engaging with remote and deprived communities to support sustainable economic growth and reduce social exclusion Housing associations are involved in installing energy efficiency technologies in their housing stock, creating jobs and Apprenticeship opportunities. Social care providers working with research institutes on the development of new technologies for healthcare and ageing. The production and sale of these technologies creates jobs and wealth. There is a clear rationale for VCSE organisations to make an even greater contribution to economic growth in the NE in future First of all, VCSE is an important economic and employment sector in its own right, supporting thousands of local jobs in social enterprises, charities and other VCSE organisations, and creating new employment opportunities through business growth and the start-up of new enterprises. There is a strong case to support and invest in job creation among social enterprises and VCSE organisations in a similar way that LEPs are seeking to promote jobs growth in the private sector. Page 12

Many VCSE organisations are specialists in providing services that deliver direct economic impacts. Through enterprise and entrepreneurship, social enterprise development, social investment, and employability and skills services, VCSE organisations help businesses to start-up and grow, create new jobs and wealth in the local economy, and contribute to increased economic activity rates, productivity and wealth by improving skills and reducing labour market exclusion. Many VCSE organisations are experienced providers of services with a proven track record of delivering economic impacts, offering value for money, and reaching and supporting people and organisations in excluded and remote communities. In this way, VCSE organisations are well placed to contribute to the collective vision of creating an additional 85000 jobs in the region. For the VCSE sector, social inclusion is core business. Whether supporting people with addiction problems into work, guiding local residents of deprived communities through the process of becoming self-employed, or helping to create new social enterprises delivering social care services and creating jobs, VCSE organisations deliver economic outcomes with simultaneous social inclusion benefits. This strengthens the economy at the same time as supporting inclusive growth, from which all businesses, organisations, communities and people can benefit. As important contributors to inclusive economic growth, it is important that the expertise and resources of VCSE organisations are fully harnessed in shaping and delivering economic development strategies and programmes, including EU SIF and the wider Strategic Economic Plans. VCSE organisations want the EU SIF Programmes to deliver: The maximum impact on inclusive economic growth: Achieving inclusive growth involves extending opportunities and economic benefits to all people and communities in the region. The VCSE sector believes that reducing social and labour market exclusion is an essential element of a well rounded economic policy and that the EU SIF Programme offers a unique opportunity to focus much needed investment on activities to boost economic participation. Sustainable and smart growth: Some VCSE organisations deliver activities that boost environmental sustainability, such as housing associations retro-fitting low carbon energy measures to improve efficiency and reduce carbon footprint, while others provide low carbon, sustainable transport services. Other VCSE organisations are involved in social innovation projects with universities and research institutes, developing new ways of delivering socially useful services (such as health and social care), with potential spin-off job creation benefits. It is important that the potential contribution of VCSE organisations in these aspects of EU SIF is understood and capitalised upon. VCSE organisations can make a significant contribution to delivering a high impact EU SIF Programme, across many of the thematic priorities VCSE organisations have a particularly strong track record in making an impact in the areas of social inclusion, employment and skills, which are compulsory EU SIF activities as set out by the EU Commission. The sector sees itself as an essential partner in these aspects of the Programme. Page 13

In addition, VCSE organisations have an important contribution to make across other thematic areas which have been prioritised for investment including, SME competitiveness (incorporating enterprise, business start-up and growth, social enterprise development and social investment), innovation, low carbon, and skills. It is important that the expertise, resources and track record of VCSE organisations are fully harnessed, and that opportunities are extended to ensure their potential contribution is maximised across all of these themes. VCSE organisations work in multisector partnerships to deliver economic and social benefits VCSE organisations have developed partnerships and consortia through which they work with public and private sector organisations alike to deliver economic and social benefits. VCSE organisations do not wish to operate in isolation, and have strengthened their track record as strategic partners, delivery providers and sub-contractors of local and central government, private businesses, and education institutions. VCSE organisations contribute to economic growth and social inclusion as equal partners with these other sectors. VCSE organisations can deliver a range of practical activities that would make a significant impact across the EU SIF Programme VCSE organisations in the region are currently both delivering and developing programmes and activities that could make a significant impact across EU SIF priority areas, and the sector would like to see these types of programmes prioritised for investment in the EU SIF Strategy. Some key examples are provided here, although there are others. Examples of activities to prioritise for investment Employability and skills for young people: Talent Match is a multi-million pound Big Lottery funded programme aimed at supporting into work young people who are not in employment, education or training (NEET). Across England, the programme is led by VCSE organisations, with The Wise Group taking on this role in the NELEP area, and The Princes Trust in Middlesbrough. There could be potential to use the Big Lottery Talent Match funding to lever in additional EU SIF resources to expand the scale and impact of the programme. Supporting 25+ long-term unemployed adults: Many of the Government s current mainstream programmes are focusing investment on tackling youth unemployment. However, in the region there is a significant cohort of unemployed adults who are excluded long-term from the labour market, damaging their own economic prospects as well as undermining regional prosperity. This under-used resource has a significant impact on regional productivity and economic capacity, helps to hold down wealth and local incomes, and impedes the economy s potential for growth. There is also a real cost to the public purse, in terms of poor mental and physical health, and high welfare benefits. The well publicised difficulties faced by the Work Programme suggest that more needs to be done to tackle economic exclusion among this large group of adults, enabling them to progress into sustainable employment. Many VCSE organisations provide support to this group, but the current approach is generally piecemeal and smallscale due to a lack of funding. The VCSE sector believes this area of activity should be a priority for future EU SIF investment. Investment in social enterprise growth: The Northern Rock Foundation is currently at an advanced stage in exploring proposals to establish a significant new social investment fund, targeted at VCSE organisations in the North East of England. Backed with investment from the Big Society Bank, the fund is expected to invest in the growth of social enterprises with sustainable and large-scale business models. This could potentially form part of a wider suite of investment funds for SME s in the region, it could provide a model upon which a separate EU SIF social investment fund could be developed. Page 14

VCSE organisations play a very important role in EU programmes, but there are some key barriers preventing them from making a fuller contribution Some VCSE organisations have a long track record in the successful delivery and management of EU Programmes, including ESF, ERDF, EAFRD, LEADER, transnational programmes, and Technical Assistance services, among others. As well as being equipped to deliver highly effective economic growth and social inclusion services, some VCSE organisations are also well placed to provide technical support and advice on project and programme strategy, design and delivery to funding partners across all sectors. However, the current design and administration of ESF and ERDF in particular prevent some VCSE organisations, as well as many small independent organisations in other sectors, from making a fuller contribution. In developing the EU SIF Strategy and delivery arrangements, it will be important the LEPs to put in place practical measures to overcome these barriers, enabling organisations of all sectors and sizes to contribute, where they have the expertise to do so. Some key actions would include: Reducing minimum grant levels / project values below current levels (e.g. 500,000 for ERDF). Accepting programme bids involving several partners each delivering projects below the minimum grant level but which, in aggregate, meet the minimum contract value. Where projects are led by a prime contractor with a supply chain, setting explicit guidance about the maximum management fee payable (e.g. no more than 10% of the contract value) to ensure that the majority of funding is targeted on delivery, and providers are paid a viable rate. Setting aside 10% of resources from each thematic priority (SME competitiveness, low carbon, skills) to support smaller value projects. Shifting the balance between outcome-based and ongoing programme payments, enabling smaller organisations to effectively cash-flow the costs of project delivery. Simplifying procurement processes in a way that avoids favouring large organisations, such as reducing the financial capacity requirement on bidders, and publishing forward guidance to allow time for the development of partnership bids involving multiple providers. Page 15

Match funding is a key challenge, but VCSE organisations can offer some unique solutions As with the current EU Programmes, it may be a challenge for partner organisations to secure sufficient match funding to draw down the full value of the ERDF and ESF allocation to the region. For instance, while the Big Lottery is offering to match fund 50% of ESF resources allocated to social inclusion, further match may be required to enable draw down of the remaining ESF resource. VCSE organisations are often able to access sources of match funding that may not be available to other sectors, and could therefore play an important role in meeting funding gaps. There may be potential for existing funders and investors active in the VCSE sector to work collaboratively, pooling their resources to match fund EU SIF in a way that could increase the scale and impact of their own funds as well as maximising the draw-down of EU funds in the region. Finally, the BIS guidance makes it clear that the use of volunteer time as a source of match funding can be considered by LEPs, and VCSE organisations are well placed to advise on how this could form part of the overall match funding package in the 2 LEP areas. There are three clear roles for VCSE organisations in the EU SIF Programme VCSE organisations want to contribute to the achievement of smart, sustainable and inclusive growth in the region and believe they can maximise their contribution to these aims by being more directly involved in shaping, managing and delivering the EU SIF Programme. VCSE organisations envisage the following three roles for the sector: Role 1 Strategic leadership, governance and representation As key economic growth and social inclusion players, it is important that the expertise and resources of VCSE organisations are fully harnessed by the LEPs and partners in developing the EU SIF Strategy, as well as in the ongoing governance and management of the Programme. Role 2 Delivery Clearly, VCSE organisations have a significant delivery role to play. In some cases, larger VCSE organisations are able to deliver activities independently, while in others groups of VCSE organisations will join together into partnerships to deliver impacts on a larger scale than would be possible if they worked independently. In designing the EU SIF Strategy and delivery arrangements, it is important that this type of programme-based activity can be supported, maximising the scale of impacts as well as delivering management and administrative efficiencies. VCSE organisations are experienced in delivering effectively through this programme-based approach, working with other VCSE organisations as well as public and private sector partners, and have developed and tested a range of partnership and consortia models in recent years. The following types of activities could be delivered by CSOs, and should be considered for inclusion in the pipeline of projects and programmes currently under development. CSO and social enterprise growth programme: A brokerage service and fund providing access to subsidised, specialist support helping social enterprises and VCSE organisations to grow. This could include advice on: access to commercial markets, trading and new income sources; delivering public contracts; asset transfer; the mutualisation of parts of the public sector; and investment readiness support before using social finance. Page 16

Similar programmes for VCSE organisations and private SME s have been shown to have a positive impact on survival, growth, and job creation & safeguarding. The delivery model would include a lead contractor responsible for administering a fund and contracting with specialist quality assured providers, who would offer the support to VCSE organisations. In addition to economic returns (increased turnover, jobs) the project would also generate social inclusion benefits, such as employment opportunities for unemployed people. Managing agent for CSO-led programmes: A large CSO could become a lead contracting body for partnerships of CSOs and organisations from other sectors delivering EU SIF funded activities. For example, a Social Inclusion Partnership could be established which would receive an allocation of EU SIF resources from the LEP. The managing agent would contract with individual CSOs and other organisations to deliver social inclusion projects, managing the effective delivery of the programme, and receiving a management fee. Each delivery partner would have an identified project, clear targets to deliver, and would provide some or all of the necessary match funding. This approach would enable CSOs and smaller organisations from other sectors to join forces to deliver programmes on a sufficiently large scale to make an impact and attract EU SIF funds. The model could be replicated in other thematic areas such as skills, employment, low carbon, developing the social enterprise sector, or social innovation. It could also be used to deliver a Community Grants type programme, enabling small VCSE organisations to contribute to EU SIF delivery, especially in the areas of social inclusion and poverty reduction. Community Led Local Development and an extension of LEADER. Role 3 Development and Support There is a need for a programme of Technical Assistance aimed specifically at enabling and supporting VCSE organisations to maximise their contribution to the EU SIF Programme. Supporting VCSE organisations of all types and sizes, the TA Programme would: provide information on the opportunities and objectives of EU SIF; actively broker / support the development of new partnerships to deliver projects and programmes; support VCSE organisations to become part of the supply chains of prime contractors or larger consortia; identify and provide support to lead contractors / managing agents; and provide technical advice and support (e.g. governance, procurement, financial management, performance monitoring). In various consultation exercises over the past few years, North East VCSE organisations have reported that they would value highly a co-ordinating organisation that brings together groups of VCSE organisations to collectively deliver services and secure contracts. As the delivery of EU funded projects can have a significant impact on organisational management, finances and operations, it is important that such a Programme is delivered by an organisation with a specialist understanding of the governance, management and finances of VCSE organisations (including charities and social enterprises). Page 17

Case studies Case Study : The North East Micro-Loan Fund Entrust, a not-for-profit enterprise agency based in the North East manages the Finance for Business North East Micro- Loan Fund. The aim of the fund is to support the creation of new enterprises and the growth of existing micro and small businesses (including VCSE organisations) across the region, helping to stimulate the creation of new business and secure jobs within the North East. Entrust manages the 5m Microloan Fund on behalf of North East Finance, providing unsecured loans of between 1,000 and 25,000 to both start-up and existing businesses who find it difficult to secure mainstream finance. Loan support is targeted at key customer groups which have been refused finance from mainstream financial institutions, including disadvantaged individuals, sole traders, partnerships, limited companies and third sector enterprises. The fund, which will be available until December 2014, has a value of 5 million and aims to create new jobs and businesses, and support existing businesses. Case Study : Ready for Work The Cyrenians Ready for Work Programme, delivered in partnership with Business in the Community, works with large employers to support service users (e.g. the homeless, people with substance misuse problems) into work. The project involves a continuous training programme with a two week work placement with an employer e.g. Carillion, Marks and Spencer, Greggs, or Sage. Since October 2010, the project has successfully helped over 100 individuals to find work. Case Study : Community Energy Fit National Energy Action (NEA), a national charity based in Newcastle, run the Community Energy Fit project in partnership with E ON to help towns and cities across England become Energy Fit through training and mentoring for unemployed people. The primary focus of the project is to provide skills training and practical work experience for unemployed people, focusing on fuel poverty reduction, to increase their chances of gaining employment. Case Study : ESF Community Grants County Durham Community Foundation, on behalf of the three Community Foundations in the region, has successfully managed the 1.4 million ESF Community Grants Programme since 2011. Grants of up to 12,000 are available to small community groups undertaking activities which support disadvantaged people to progress into sustainable employment. Activities include basic skills, work experience, training, advice and guidance, job search assistance, confidence building, personal development and support to overcome barriers to training and employment. To date, the Community Fund, which is open until December 2013, has supported 97 organisations with 111 grants across the North East, including Bright Futures in South Tyneside who help unemployed young women into work, and Castle Morpeth Disability Association to provide employability training to the over 50 s. Page 18

Case Study : Growing Well Growing Well is a social enterprise based in Cumbria, which was established to support people recovering from mental health problems. It rents farm land to grow organic produce which is sold in the farm shop, it delivers City and Guilds accredited training in horticulture under a franchise agreement with the local college, and it also delivers a programme for school groups which is linked to the national curriculum. The organisation provides around 2,000 placements per annum, and individuals must apply to become a volunteer, rather than being referred to the project. This supports the organisation s ethos that volunteers become active members of the community rather than being patients. All volunteers must be recovering from a mental health problem and be actively considering a return to work or training. 76% of volunteers showed an increase in their wellbeing based on the Warwick Edinburgh Mental Health and Wellbeing scale. Growing Well employs 3 full-time staff and 3 part-time staff. Its annual operating costs are around 250,000, which are met by trading activities, delivering a local authority social services contract for mental health support, and charitable trust and grants. The organisation has won a number of awards, including British Rural Enterprise of the Year, Social and Community Development Award (Westmorland Gazette Business Awards) and a North West Enterprise award. Case Study : West Berkshire Training Consortium (WBTC) WBTC are a CSO, based in Reading, which delivers a range of training programmes to young people, including apprenticeships, NVQ s and Youth Contract. They successfully lead an ESF funded partnership of 12 delivery organisations (including local authorities, FE colleges, and VCSE organisations) to support NEET s into sustainable employment, training or further education. To date the partners have collectively recruited 576 learners, of which 70% have completed their programme of learning and achieved a qualification. Of those completing, 70% have progressed into employment or further education and training. Page 19

Community Led Local Development CLLD Community-led local development (CLLD) is a tool for involving citizens at local level in developing responses to the social, environmental and economic challenges we face today. CLLD is an approach that requires time and effort, but for relatively small financial investments, it can have a marked impact on people s lives and generate new ideas and the shared commitment for putting these into practice. Common guidance on Community-Led Local Development in European Structural and Investment Funds. 29th April 2013 Background CLLD has been successfully used in previous European programmes in both rural and urban settings to mobilise and involve local communities and organisations in contributing to local ambitions for smart, sustainable and inclusive growth. In the 2007-13 EU-funded rural programme it was used for delivery in rural areas through a model known as LEADER. LEADER worked through local partnerships of public, private and VCSE sectors coming together as a Local Action Group (LAG). The LAGs then develop and drive a Local Development Strategy (LDS) for addressing local socio-economic challenges. This approach to CLLD involves all local actors in the identification of local need and implementing solutions. As a result it takes some time to set up but tends to have greater impact in the longer term. Analysis of previous CLLD programmes have shown that projects which directly involve local communities in their design, planning and often delivery result in the most positive social inclusion outcomes. LEADER will remain a mandatory component of the 2014-20 Rural Development Programme for England. However, LEPs can now choose to adopt the principles of LEADER and CLLD generally in addressing locally socio-economic issues in urban areas. Benefits of CLLD in the 2014-20 EU SIF The European Commission is keen to see take up of CLLD approaches in delivering inclusive socioeconomic outcomes and enabling integration between the individual SIF streams. CLLD is said to : build community capacity and stimulates innovation (including social innovation), entrepreneurship and capacity for change by encouraging the development and discovery of untapped potential from within communities; allows access to detailed knowledge of very local challenges to be addressed; enables the mobilisation of local resources and best use of local assets; enables a coherent cluster of projects rather than creating a cluttering of local projects in target areas which may then lead to competition for clients; encourages greater sense of ownership and commitment to the projects; supports the development of trust, shared expertise and joint protocols which can endure beyond the life of the project. Page 20

What are the implications of a CLLD approach? As the CLLD strategies created by LAGs may cover one or more Funds, there needs to be consistency and coordination between the Funds. LEPs need to define the criteria for the selection of Local Development Strategies and work with the Managing Authority teams involved to hide the wiring behind this process. Tees Valleys approach to CLLD Tees Valley unlimited state that whilst they are particularly interested in taking forward community led economic development through the BIG Lottery approaches, they are not intending to pursue any formal EU CLLD areas. TVU are currently in discussions with key partners on the development of the LEADER approach in Tees Valley s rural areas. NELEP approach to CLLD NELEP state that they recognise the importance of community development and inclusion, and are investigating the best ways to achieve locally determined bottom-up transformation. The distinctive mix of rural and urban areas lends itself to varied and adaptable models for different localities. Such diversity means that channelling the involvement of local people in shaping the future of their community therefore has the potential to be particularly effective. The areas LEADER programmes, with coverage in County Durham, Northumberland and Sunderland, have demonstrated the value of sharing knowledge and building enduring local structures with the necessary experience and expertise to drive locally-informed development. LEADER will continue to be a key element of the rural strategy, funded by RDPE. Partners in the NELEP area (including VONNE, NESEP and the Local Authorities) are actively developing CLLD proposals with a primary focus on targeting deprived communities across the North East LEP area, enabling them to develop new ways of tackling ingrained problems. Provision would not clash with mainstream provision, but complement it, as a contribution to a wider aligned ESF strategy encompassing skills, employment and social inclusion. To this end, we would ensure that there is frequent and open communication between the LEP and respective local action groups (LAGS), and also between LAGs. This would also help to sustain strong relationships and ensure strong partnership working. Furthermore, endorsement of Local Development Strategies through local governance arrangements would help to ensure alignment with our overall strategy. LAGs would need to demonstrate a credible match funding pipeline. Robust arrangements for an appropriate accountable body require further consideration, and would be aligned with combined authority and local governance discussions. The NELEP suggests that an alternative model may be a Social Impact Bond or a Community Investment Fund. This could involve a 50:50 split in terms of loans and grants, to reflect the general direction of travel in striving for better value for money. Page 21

The Big Lottery Match Funding Offer for Social Inclusion Background The Big Lottery fund issued a prospectus offering a delivery and match funding service to LEPs aligned with the Social Inclusion and Combating Poverty Thematic Objective. Both LEP areas in the North East have indicated that they wish to opt in to Big Lottery s offer, thereby potentially routeing half of the required spending on this objective, for at least the first two years of the new programme through (BIG). This is subject to further discussions with Big concerning delivery arrangements. BIG is additionally offering funds to match proposals greater than 50% of allocation or for more than 2 years. The BIG Offer The Big Lottery Fund Prospectus is relatively broad and flexible to enable LEPs to seek match funding against a range of potential local priorities. BIG has acknowledged that many of the local social inclusion priorities identified by the LEP are likely to align with existing BIG investment streams. BIG s investment streams that may be applicable cover a wide range of strategic initiatives or a demand-led route (i.e. Reaching Communities ). However, BIG is not constraining their offer to these funds. BIG has already identified the following investment frameworks as potentially appropriate sources of match: BIG programmes Talent Match Improving Financial Confidence Fulfilling Lives Big Venture Challenge (UnLtd) School for Social Entrepreneurs Reaching Communities Activities supported Supporting young people to obtain employment, improve skills and confidence Improving the financial confidence and knowledge of tenants in social housing Supporting people with multiple and complex needs (homelessness, addicts, mental health) Supporting the creation and development of social enterprises and skills and confidence of social entrepreneurs Financial support and training for social entrepreneurs Demand led programme addressing barriers to social and economic inclusion within communities of both place and identity In the North East The Big Lottery contact is caroline.macdonald@biglotteryfund.org.uk Page 22

Next steps Consultations on the draft strategies will take place during Autumn 2013. Following feedback received through the consultation, TVU and NELEP will develop the draft strategies and this will be used as the basis for open discussions with Government. The final European Structural and Investment Funds Strategy will be submitted to Government in January 2014. It is anticipated Government will agree the Strategy by the end of February 2014. Subject to approvals by funding bodies, funding will be available in mid 2014. To keep up to date with developments visit VONNE s website www.vonne.org.uk/policy/europeanfunding/ Page 23

Acknowledgements Thanks to Rachel Quinn of One East Midlands for providing information relating to the Big Offer and CLLD. Thanks to New Skills Consulting for supporting VONNE to develop the VCSE business case in the North East. Registered Office: 9th floor, Cale Cross 156 Pilgrim Street Newcastle upon Tyne NE1 6SU Tel: 0191 2332000 vonne@vonne.org.uk www.vonne.org.uk Twitter: @VONNEnews Registered Charity: 1084083 Registered Company Limited by Guarantee: 4061592