Frequently Asked Questions on European Funding
Provided by Euclid Network Adviser Andy ChurchillWhat is ESF? European Social Fund (ESF) is one of the main European Structural Funds. It covers revenue costs of training and job subsidy. Each of the European Member States will have one or more Operational Programmes for ESF, covering the current programming period 2007-13. Involvement of NGOs varies in the different countries. In some cases they are able to bid directly for funding, in others they have to go through Government Departments or through intermediary bodies. European monies do not pay for all of the costs, so an amount (often called match funding) has to be identified from the country where the training is operated. Training can be for unemployed and for employed people and can cover a variety of activities, including moving people towards the labour market, as well as vocational training and upskilling. There istargetting on excluded groups, and support for gender equality and diversity. Ideally, ESF projects will link to projects funded through ERDF (Regional Development). It is also possible to fund small grants to NGOs for the development of Social Capital.
European Regional Development Fund (ERDF) is one of the main European Structural Funds. It covers revenue, capital, or both. Although it was often used to fund large capital items (roads, bridges, sports stadia) it is now used for a much wider range, including revenue costs of business support, loan funds, and of course support for Social Business. Each of the European Member States will have one or more ERDF Operational Programmes, covering the current programming period 2007-13. Involvement of NGOs varies - in some countries they bid directly, while in others it is more difficult, although this can change in the next programme. Europe do not provide all the costs, so an amount (often called match funding) has to be identified from the country where the project takes place.
What is Match Funding?
Projects using Structural Fund monies, such as ESF and ERDF have to provide some of the money from the country itself (not from Europe). This is often referred to as match funding. It can come from central government departments or local government, but often there are ways to use NGO or Private Sector monies, and in some cases bank loans. The intention is to encourage local involvement, rather than just funding everything from Europe (and it makes the money go further). The percentage is usually referred to as the intervention rate, so a 50% intervention rate means that the European and Member State amounts will be the same, while an 80% intervention rate means Europe will conribute 8 euros for every two euros from the Member State. Operational Programmes will generally have several Priorities, and in the current programming period, the financial tables will show how much match funding will be required. Projects can be approved at higher or lower amounts, provided the average for the Priority as a whole is correct.
The complete project (including the match) has to be approved, so the whole spend has to be eligible, and the whole activities have to be auditable.
What is ORI?
European Projects use a methodology where Inputs (money) lead to Outputs, which lead to Results, and finally to Impact. There is a great deal of information and research as to how this brings about structural change, and different ways of measuring this effectively and efficiently, including the use of proxies.
Outputs are what are directly deliver by the project, for example kilometres of road, training places, numbers of businesses supported. Results are what happens following on from the outputs - for example shorter journey times, jobs, or increased business turnover. Impact happens later, it is often difficult to identify what has caused it. So it could be better links between towns, reduced unemployment, more businesses.
Can volunteering be included as match funding?
All funding must have a clear audit trail, to measure the amount and show what it has been used for. It staff from another organisation spend time on the project, then it can be possible to use their time as match, providing this is part of their normal hours of work, and their salary, and the amount of time on the project can be proved. It is also possible to use volunteer time as match. This may or may not be implemented in different member states. Where it is implemented, one mechanism is to have several chargeable rates (office, trainer, administrator etc) and allocate time at this notional rate.
What is so important about "post-2013"?
European Programming periods generally last about six or seven years. For example the current one is 2007-13 and the next one will be 2014-20. The budget and details of the programmes, including the Structural Funds are agreed for a seven year period (it can take several years to reach agreement). This means that there is a seven year budget and seven year strategy in place for the Operational Programmes. This encourages long term strategic planning, and the development of long term partnerships. In practice programmes are often not in place at the beginning of the programming period, so for 2007-13, Operational Programmes were being agreed throughout 2007. Programmes generally have up to two years to complete spending (so spend could be possible in this programme until 2015).