European Regional Development Fund

1
European Regional Development Fund

• Understanding the programme
• Fitting the project to the programme
• Making the best case
• Optimising the score
• Ensuring the project can be delivered

2
ERDF Capital and Revenue (Business Support
Measure) projects

• Capital Projects involve investment in property
  or other fixed assets and provide the
  infrastructure for existing and future industry
  and commerce. Examples of these projects include
  transport facilities, environmental improvements
  and industrial sites and factory units

• Revenue projects provide support services to
  business, salaries and other running costs,
  promotional activities and research. Examples
  include business development advice to various
  small and medium sized business, tourism
  promotion and participation in research and
  development (promotion of new technology)
  initiatives.

Note Projects involving the replacement of
existing activities, facilities or works of
essential repair or maintenance are not normally
eligible for ERDF grant aid
3
Description and Objectives

• Outline project and benefits provided
• A short project description of project and its
  objectives
• The definition of project objectives should
  clearly relate to underlying and stated policies
  of the SPD
• Links with other strategies, such as the local
  development strategy, TEC/Business Link
  Strategies (Prosper), Regional and
  Competitiveness strategies.
• Tourism and Business projects should be endorsed
  by regional bodies producing the strategy.
  Written evidence of such endorsement should be
  provided.
• Evidence should be provided that all the main
  options for meeting the objectives have been
  considered and that the project submitted is the
  best choice of option. The options considered
  should include doing nothing and taking minimal
  action.
• State how project meets Priority(ies)
  Measure(s) of the SPD/Community Initiative

4
Key Programme Outputs

• Forecast Outputs
• Number of direct permanent jobs created
• Number of direct temporary jobs created
• Number of SMEs assisted
• Number of day visitors to new attractions
• Number of overnight visitors to new attractions

• Achievement Date
• Net / improved business space (Sq. m)
• Derelict land improved (hectares)
• Private sector contributions (s)
• Private sector leverage (s)
• How calculated Duplication
• How Monitored (During / After)

5
ERDF Form

• Programme Name
• Priority Measure(s)
• Project Name and Location
• Geographical coverage
• Organisation (Name)

• Location (Address)
• Contact name / Project Manager
• Type of organisation (legal status)
• Copy of most recent audited accounts
• Copy of Articles of Association/Memorandum

6
Business Plan

• Summary
• A short summary of the project, stating what it
  is and what it seeks to achieve.
• Project Description
• A full description of the project, covering
• what it is
• where it will operate
• who will deliver it, and how it will be delivered
  / operated
• how it will be promoted / advertised / marketed
• how it relates to other regional activities e.g.
  Business Links for Business projects and regional
  tourist boards for tourism projects, etc
• private sector involvement
• delivery risks

7
Business Plan

• Aims and Objectives
• This section should include a mission statement,
  define the strategic aim(s) of the project,
• and its specific objectives
• The Market
• This should include an explanation of the need
  and justification for the project, with the
• problems it seeks to address, assessed in both
  quantifiable and qualitative terms.
• Details of any market research or feasibility
  studies carried out and an analysis of existing
• provision should also be provided

8
Business Plan

• Large infrastructure projects
• Definition TOTAL GROSS COSTS gt 25m ECU
• EC Structural Funds regulations require a full
  socio-economic cost benefit assessment of the
  project. The assessment should cover
• analysis of the costs and socio-economic benefits
  of the project, including an indication of the
  expected rate of use.
• The expected impact on the development of the
  region concerned
• an indication of the consequences that Community
  participation will have for the completion of the
  project

9
Business Plan

• Productive investment projects
• Definition Revenue generating projects
• TOTAL GROSS PROJECT COSTS gt15m ECU
• The following information is required
• - an indication of the market outlook for the
  sector concerned
• - the effects on employment
• - an analysis of the expected profitability of
  the project

10
Business Plan

• Project Management
• Details of how the project will be managed and
  monitored, by whom, and a summary of their
  experience of running similar projects is
  required
• Explain how the effectiveness of the project and
  quality of service provided will be assessed.
• All the tasks to be undertaken, key milestones,
  deliverables, timing of project outputs and any
  other quantifiable benefits of the project should
  be described.
• Project Work-plan
• A detailed project work-plan should be provided
  and key milestones identified
• Project Outputs
• This section should provide details of what the
  project is intended to achieve, including timing
  of all project deliverables and performance
  outputs.
• EXIT Strategy Plan
• Details of how the project will continue after
  ERDF funding has ceased should be given.

11
Project Funding

• Project Funding
• A full breakdown of all costs for each of the
  project activities required.
• A description of how the project will be funded
  should be provided, supported by cash flow
• forecasts as well as details of any charging
  policy and assumptions used to forecast project
• income and any profits.
• If overheads are included a description of how
  they are calculated is also required.
• Where a project is co-funded by contributions
  from both the public and private sector,
• details of the distribution of any profits should
  be explained in detail.

12
Estimated Timetable

• Project Start date
• Estimated date for main contract to be let
• Estimated date of practical completion
• Estimated date of financial completion
• Date by which project outputs will be fully
  achieved

13
Links Synergies

• The nature and status of links between projects
  or other approved strategies and other EC
  Structural Funds should be clearly stated (inc.
  projects funded by national or local government
  and business support organisations).
• Details of any overlap of physical works or costs
  between projects should be included.
• Details of follow on projects funded by
  private-sector leverage

14
Partnership

• Working arrangements
• Organisations working on, making payments for, or
  owning the assets of the project.
• Lead organisations are expected to in the public
  or voluntary sector.
• If ownership or control is vested in another
  body, explain why this is necessary and specify
  the relationship with the organisation in the
  project Business Plan

15
Environment

• Does the project location fall within the
  boundary of A National Park, an Area of
  Outstanding Natural Beauty or Other designated
  environmentally sensitive area?
• Does applicant have an Environmental policy?
• If so, please describe how the project complies
  with the policy.
• This may be an existing statement of
  environmental objectives that is regularly and
  actively appraised

16
Environment

• Does the proposed project fall under the remit of
  Planning Act (Assessment of Environmental Effects
  Regulations)?
• If YES, has an Environmental Impact Assessment
  been undertaken or will one be undertaken?
• Is planning permission required?
• Has planning permission been obtained? Date
  permission expected
• Confirm that all conditions can be complied with
  on time and that these cannot stop or delay
  implementation

17
Environment

• Will the project have any adverse effects on the
  environment during and after its implementation?
• acidification and air quality, habitats and
  wildlife, bio-diversity, water resources, urban
  environment, coastal zones and waste management.
• If YES provide details of methods to be employed
  to monitor environmental effects and the measures
  that will be taken to minimise their impact.
• Specific conditions attached to a planning
  permission
• Will the project have any positive effects on the
  environment during or after its implementation?

18
Project Expenditure

• Capital Expenditure
• Land Acquisition
• Building Acquisition
• Site investigation
• Site preparation
• Building Construction
• Plant Machinery
• Fees
• Other (Specify)

• Revenue Expenditure
• Specify

19
Sources of Finance

• Applicants own Funds
• (Public, Private or Voluntary)
• Public Funds
• Other European Community Funds
• Other Public Funding
• Private Sector Funding
• Voluntary Sector Funding

• Contributions-in-Kind
• Project Income
• ERDF requested
• Total Project Cost
• Intervention Rate

20
Need for Grant, Tendering Arrangements, Publicity
Certification

• Need for Grant
• Would the project Proceed?, Proceed in reduced
  form?, Proceed at reduced pace?
• Tendering Arrangements
• Has the project gone out to tender?
• If YES, have the contracts been advertised in
  the Official Journal of the European
  Communities? (Advertisement Number)
• If NO, give reasons
• Procurement Questionnaire
• Declaration that contracts are less than
  threshold
• Publicity Certification

21
Assessment

• Projects are assessed against the selection or
  value for money criteria of the relevant SPD and
  if it is considered appropriate for approval,
  grant aid will be offered by an offer letter
  setting out the level of grant aid approved and
  the terms and conditions for assistance.
• On acceptance of the terms and conditions by the
  applicant, grant claims will only be considered
  for payment providing satisfactory progress has
  been reported on the ERDF Claim Form
• Site visits may be made to ensure sufficient
  progress is being made in line with the grant
  offer letter

22
Scoring Process Criteria

• 9 priority criteria apply to Objective 1
  programme projects
• Maximum score is 200 points. Separately weighted
  as follows
• Job creation 40pts.
• Value for money 30pts.
• Private sector investment 30pts.
• Economic benefit 30pts.
• Market need 30pts.
• Strategic importance 15pts
• Integration 10pts.
• Innovation 10pts.
• Environmental contribution 15pts

23
Scoring Process Criteria

• Points are deducted as indicated below if there
  is inadequate justification in the project
  application for the information on which the
  score is based or if there is an unacceptable
  degree of risk attached to the project.
• All this is assessed by the secretariat
• Lowest score is 0
• For both job creation and value for money the
  score is based on a comparison of unit costs
  achieved by the project against unit costs for
  the relevant measure in the SPD.
• Unit costs are based in both cases on total
  public expenditure. Those derived from the SPD
  will be dealt with later.
• Calculated by dividing total public expenditure
  by the total number of relevant outputs.
• In cases of private sector investment, the score
  is based on a comparison of the ratio of public
  to private sector investment in a project
  compared to ratio set out in the relevant measure
  in the SPD (set out later)

24
Scoring Process Criteria

• Job Creation
• Yardstick by which project will be assessed
• Job creation unit cost
• Score
• No greater than 50 of SPD unit costs 40
• 50 - 100 of SPD unit costs 24
• 100 - 200 of SPD unit costs 8
• Greater than 200 of SPD unit costs 0

25
Scoring Process Criteria
Job scoring criteria - arithmetic

• 1. Relative weighting to be given in the scoring
  process is
• Direct created 1
• Direct safeguarded 1/3
• Indirect created 1/3
• Indirect safeguarded 0
• The unit cost will be calculated by dividing the
  total public expenditure in the project by 500.
• All jobs are full time equivalents

• Example a project creating
• 200 direct jobs
• 300 direct safeguarded jobs
• 600 indirect jobs
• 300 indirect safeguarded jobs
• Total 1400 Jobs
• will be treated as 200 direct jobs
• 100 safeguarded
• 200 indirect jobs
• Total 500 Jobs

26
Scoring Process Criteria

• Jobs - caveats and limitations
• 2. Permanent Jobs created will include
• Jobs which will occupy floor-space constructed
• Jobs engaged in running a tourism facility,
  incubator unit, community facility or training
  facility (where these are genuinely new)
• Jobs directly related to the payment of a
  business support grant.
• 3. Permanent jobs created indirectly will
  include
• Jobs in supplier industries
• Jobs created as a result of increased tourism
  expenditure
• Jobs which may move into an area as a result of
  improved access or site reclamation
• Jobs created as a result of the exploitation of
  a new technology.
• 4. Temporary jobs are not scored for these
  purposes because it is felt that only permanent
  jobs should be given priority and in any project
  where temporary jobs are created the main focus
  of it will deliver other outputs which will be
  taken into account elsewhere.
• 5. There will be a deduction of 16 for
  inadequate justification or if the majority of
  jobs are not contained within the growth
  clusters/ poles /or high GDP sectors identified
  in the MEA.

27
Scoring Process Criteria

• VALUE FOR MONEY
• Yardstick by which project will be assessed
  Possible score
• Unit cost of outputs other than job creation
• No greater than 50 of SPD unit costs 30
• 50 - 100 of SPD unit costs 18
• 100 - 200 of SPD unit costs 6
• Greater than 200 of SPD unit costs 0
• Unit costs will be calculated on the basis of
  total eligible public expenditure.
• Projects with a capital cost over 100,000 are
  also submitted to a quantity surveyor to review
  the reasonableness of the project specification
  and the costing.
• There will be a deduction of 12 for inadequate
  justification or high risk

28
Scoring Process Criteria

• Value for money on different outputs
• Where there are a number of outputs a weighted
  position will be reflected in the score. An
  example is given as follows
• Measure 2.1 project delivering 5,000m2 of
  floor-space and 10ha of land at a total eligible
  public expenditure of 2,000,000.
• The derived SPD unit costs for this measure are
  304/m2 of floor-space and 347,517/ha of land
• Multiplying out the outputs claimed by the
  standard SPD unit cost gives costs of 1,520,000
  (304 x 5000) for floor-space and 3,475,170 (10
  x 347,517) for ha of land and a total delivered
  cost or less than 50 of the SPD average costs.
  The score is therefore 30.

29
Scoring Process Criteria

• Private Sector
• Yardstick by which project will be assessed
• Public sector/ private sector investment ratio
  Possible Score
• Greater than 200 of SPD ratio 30
• 100 - 200 of SPD ratio 18
• 50 - 100 of SPD ratio 6
• No greater than 50 of SPD ratio 0
• Direct private sector is that which contributes
  to the eligible project cost. Anything else is
  indirect
• Direct private sector assumed to have value three
  times the of indirect/ levered private sector.
  When scoring, therefore, the value of indirect
  levered private sector will be reduced to a
  third.
• SPD ratios are set out later

30
Scoring Process Criteria

• scoring of criterion of private sector
  investment
• There will be a deduction of 12 for inadequate
  justification or high risk.
• Example
• A measure 2.1 project with 100,000 public,
  100,000 private direct, 900,000 private
• indirect (reduced to 1/3 i.e. 300,000), 100,000
  ERDL, has a ratio of
• 200,000 public400,000 private or 12
• The ratio of public to private in measure 2.1 is
  52m pub.10.5m private or 51
• The project is therefore better than 200 of the
  SPD and scores 30.

31
Scoring Process Criteria

• Economic Benefit
• Yardsticks by which project will be assessed
• Demonstrates that project will be targeted at GDP
  growth sectors identified in MEA
• Demonstrates quantified net inflow of visitors
  /or investment /or income (i.e. exports)
• Demonstrates links to the economic regeneration
  of pathways areas
• Scores
• Must show all of above 30
• 2 of the above 18
• 1 of the above 6
• None 0
• Note There will be a deduction of 12 for
  inadequate justification of high risk.

32
Scoring Process Criteria

• Market Need
• Yardstick by which project will be assessed
• Market needs with supporting evidence
• Credibility of analysis and strength of evidence
• Possible Score
• Strong 20
• Medium 12
• Weak 4
• None 0
• NOTE
• Market need assessment should be independent and
  no more than 2 years old.
• There will be a deduction of 8 for inadequate
  justification or high risk.

33
Scoring Process Criteria

• Strategic Importance
• Yardstick by which project will be
  assessed score
• Significant within terms of MEA (i.e. targets 15
• growth poles and/or clusters)
• No significance in terms of MEA 0
• There will be a deduction of 6 for inadequate
  justification or high risk

34
Scoring Process Criteria

• Integration
• Yardsticks by which project will be assessed
• Contribution to a number of different priorities
  (drivers)
• Links to other structural funds/ EC support
• backing of a number of local interests I
  partnership
• Apparent level of benefit Possible
  Score
• Strong 10
• Medium 6
• Weak 2
• None 0
• In all cases the projects must offer real not
  cosmetic benefits.
• There will be a deduction of 4 for inadequate
  justification or high risk.

35
Scoring Process Criteria

• Environmental Contribution
• All projects are scored against this criterion as
  they are for the previous 8 in this section.
  However the exact scoring system differed
  according to the type of project.
• There are 5 separate environmental themes as
  follows
• Site development/ premises
• transport/ communication
• research/ development/ technology transfer
• image/ quality/ environment
• business support
• The details of each theme are included in the
  relevant sectoral guidance. The total maximum
  score for the environmental contribution is 15.
• A deduction of 6 points is made for inadequate
  justification or high risk.

36
Technical Financial Information

• All applications are subject to a technical and
  financial appraisal, in addition to being scored
  against the project selection criteria.
• The appraisal varies according to size and nature
  of the project.
• A high score under selection criteria will not be
  sufficient for the secretariat to recommend a
  project for approval.
• A number of other detailed checks are undertaken
  alongside the scoring and ranking process. These
  include
• i) The minimum grant requires by the project and
  the grant rate, for example, to ensure that other
  sources of funding have been explore and that the
  assumed RofR on the project is reasonable. Larger
  projects (over 5m ECU eligible costs) have to
  supply a satisfactory cost - benefit analysis
  which may be referred to government economists
  for appraisal.
• ii) The reasonableness of the costs involved
  including a review by a qualified quantity
  surveyor for capital projects of over 100,000. A
  full schedule of costs will be needed with full
  applications for this purpose.
• iii) Advice from Governments Departments with
  specialist expertise and policy responsibility
  for the project.
• iv) The track record of the project management
  including their performance in delivering outputs
  on earlier projects assisted by the structural
  funds.
• v) Dead-weight and local displacement effects
• vi) Arrangements for monitoring the project by
  the applicant.