ERDF pipeline slips by £10m

Details of the impact of public spending cuts on the region's lucrative development pot provided by the European Regional Development Fund have been revealed in the latest board minutes of the North West Development Agency.

ERDF can be used to cover up to 50% of the cost of selected projects in the form of grant aid but this has to be matched by other funding, and the match sources have fallen away due to public spending cuts and scarcity of bank finance. In the past the NWDA often provided match funding but the cuts to regional development agency budgets last summer created a funding gap.

David Malpass, director of the European programme at the NWDA, which manages ERDF, presented a report to the February board which stated:

• Commitments had increased by £8m since October but the projected pipeline had decreased by £10m
• 2010 and 2011 spending targets – known as decommitment targets – had been met. Decommitment rules mean money not spent by year end has to be returned to Brussels
• The impact of NWDA cuts on the ERDF programme now stood at between £10m and £19m but a check of projects had revealed that, to date, all other public match in the programme was still in place.
• Output commitment levels had fallen slightly due to a number of projects being altered because of NWDA budget changes.
• After April, a senior official from the department for communities and local government would chair the ERDF programme monitoring committee.
• Management of ERDF transfers from the NWDA to DCLG on 1 July 2011.

The NWDA was allocated €755m (£657m) from ERDF to spend between 2007 and the end of 2013. The programme launched in February 2008 and the first funding application was approved in September 2008.

• Read the minutes of the February board meeting in full here