ESIF Programme Monitoring Committee financial/operational performance update paper: December 2021

Background

This paper provides detail of the performance of European Social Fund (ESF) and European Regional Development Fund (ERDF) programmes in delivering the financial targets, outputs and results of those operations supported through the approved Operational Programme (OP).

Recommendation

Members are invited to make observations on performance and progress of the ESF and ERDF programmes financial targets, outputs and results;

Summary

The paper provides programme level information by Priority Axis, and on extensive dialogue between the Managing Authority (MA) and Lead Partners (LP) to capture up-to-date delivery information. The following annexes are attached to the covering paper:

• annex A provides details of the financial commitments across the wider programme and expenditure to date by Priority Axis (PA) and regions
• annex B provides an additional programme level summary of performance
• annex C provides details of performance against outputs/results
• annex D provides details of pending claims
• annex E provides details of paid claims to date

Key facts

The financial performance of the programmes has improved, very slightly, since the last meeting of the PMC in May 2021. The level of commitment in each programme is high, 90% in ERDF and 101% in ESF. As of 10 November 2021 only 28% had been claimed against the total ERDF programme, an increase of 8% from May 2021 and 25% against the total ESF programme, an increase of 6% from May 2021.

As of 9 November, there were 37 claims pending on EUMIS to the value of £61.1m (£51.5m ESF and £9.6m ERDF). The table below provides a high level summary of claims by region and programme. A full list of pending claims is available in annex D.

Programme	Region	Total
ESF	Highlands and Islands - Transition	£6,301,270.95
ERDF	Highlands and Islands - Transition	£4,150,898.92
ESF	Lowlands and Uplands (LUPS) - More developed	£45,222,943.04
ERDF	Lowlands and Uplands (LUPS) - More developed	£5,508,060.87

Sum total of pending claims: £61,183,173.78

To accelerate the progress towards achieving the N+3 target for 2021, and building on the success of the force majeure application, the PMC working group, has made a number of recommendations all aimed at accelerating the claims process. The current level of de-commitment for the programmes is £22,979,857 to ESF and £23,731,541 to ERDF. If this level of de-commitment materialises, it will result in a shortfall within the programme, particularly on the ESF programme:

Financial item	ESF	ERDF
Programme value	£331,347,715	£369,879,717
N+3 target (2021)	£132,866,497	£160,427,950
Spend to date	£109,886,640	£136,696,409
Forecast de-commitment	£22,979,857	£23,731,541
Committed operations	£335,593,948	£330,952,060
Potential shortfall to the Scottish Government	£27,226,090	Nil

However, at the time of drafting this paper, the MA was still working to maximise the final declarations for December which will reduce the level of de-commitment. We will provide a verbal update on the final figures and level of de-commitment at the meeting.

The MA will continue to work with LPs to support the submission of claims detailed in their financial forecasts for 2021 and 2022. We also intend to extend the forecast exercise and financial data for claims in 2023.

Lastly, the deadline for LPs to identify and submit potential underspends, commissioned by the MA on 22 October, is due on 30 November. At present, no responses have been received but we will provide a verbal update at the meeting.

Annexes A-E

To view the annexes attached to this covering paper, please contact europeanstructuralfunds@gov.scot