Whitehall delays could cost GM £150m in EU project cash

The Government lacks the resources to make quick decisions about which projects will be approved for European Structural Investment Fund support ahead of the deadline of the Autumn Statement, according to the leaders of the Greater Manchester Combined Authority.

Greater Manchester’s 10 council leaders are seeking urgent assurances from Government that it will commit to fully fund all GM ESIF projects that are currently “under assessment, recognising the limited capacity of both Department for Communities & Local Government and Department for Work & Pensions to speedily progress projects to contract by the arbitrary deadline of the Autumn Statement.”

On 13 August, chancellor Philip Hammond issued a statement to reassure businesses and public sector organisations that “all structural and investment fund projects…signed before the Autumn Statement will be fully funded, even when these projects continue beyond the UK’s departure from the EU.”

Manchester city region’s concerns are spelled out in a report to the August GMCA board written by Cllr Kieran Quinn, leader of Tameside Council, and Eamonn Boylan, chief executive of Stockport Council, GM lead member and officer respectively for investment and finance.

The report said: “Although the [chancellor’s] statement initially appears positive, it is very concerning that Government are using the date of the Autumn Statement as an arbitrary deadline for guaranteeing ESIF projects that are contracted by that date.”

Quinn and Boylan claim the Autumn Statement deadline would limit spending at a time “when the national economy is slowing down” and a “more logical approach would be to demonstrate spend by the end of 2018/19.”

The GM ESIF allocation for the 2014-2020 programme period is £322m, split between physical investments such as commercial property and softer initiatives offering training and advice. After a typically slow start to the funding round, traditionally held back by negotiations between Government and European Commission, only 11% of the £177.5m European Regional Development Fund pot which relates to property was contracted prior to the EU referendum, leaving the remaining £157.9m at risk.

There are £115m of ERDF projects under assessment at the Department for Communities & Local Government, including funding for property instrument Evergreen 2, the Greater Manchester Low Carbon Fund and the Northern Powerhouse Investment Fund. Another £42m was expected to be subject to future funding bids.

The Evergreen fund allocated £60m under the last budget, which closed in 2013, and a second pot of £50m was planned. Evergreen 2 was discussed at the GMCA board meeting in May and was said then to be facing delays of six to 12 months due to operational issues at a national level, according to an officer’s report.

Projects funded under Evergreen 2007/13 funds included Muse Developments’ 70,000 sq ft One City Place office in Chester –  Evergreen covers the North West outside Liverpool – as well as Bruntwood’s Citylabs, Carlyle’s Soapworks office in Salford, Peel’s Protos energy park in Ince, Cheshire, Allied London’s XYZ and No.1 Spinningfields buildings, offices at MediaCityUK by Peel, and Harworth Estates sheds at Logistics North in Bolton.

Boylan and Quinn conclude that the economic challenges facing Greater Manchester “remain the same as before the EU Referendum”. The Government should fully fund the GM ESIF plan up to 2020, they argue.

The last available list of approved projects was published by DCLG in April 2016 and a spokesperson for DCLG said there were no plans to update the list soon.

Hammond said in his statement this month he would publish an update on ESIF project approval before the Autumn Statement, expected in November.

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