ESIF Programme Monitoring Committee financial/operational performance update paper: October 2022

Purpose

To provide members of the Programme Monitoring Committee (PMC) with a summary of the financial performance of the programmes in delivering the financial targets, outputs and results of those operations supported through the approved Operational Programme (OP).

Summary

Following de-commitment for 2021, the figures for which were confirmed at the last meeting of May 2022, the allocations per priority within the OPs for both the European Social Fund (ESF) and the European Regional Development Fund (ERDF) have now been revised.

The revised allocations are detailed within Table 1 for ESF and Table 2 for ERDF below, along with the current level of committed funding and spend to date.

Table 1 – ESF

Region and priority	Programme value (€)	Committed (€)	Percentage of programme committed	Paid claims (€)	Percentage of programme claimed
Highlands and Islands	57,810,661	47,085,101.91	81%	16,579,769.43	29%
8	17,852,370	16,551,255.96	93%	7,512,851.31	42%
9	9,991,929	9,506,613.53	95%	1,507,071.29	15%
10	27,376,378	18,902,623.07	69%	6,035,583.40	22%
12	2,589,984	2,124,609.35	82%	1,524,263.43	59%
Lowlands and Uplands (LUPS)	309,859,319	318,549,867.39	103%	121,608,410.42	39%
8	116,336,456	124,158,126.85	107%	52,435,016.67	45%
8a (Youth Employment Initiative)	51,014,110	50,291,196.82	99%	40,974,402.51	80%
9	26,147,527	28,313,727.00	108%	6,292,464.22	24%
10	105,653,014	109,587,015.71	104%	17,455,457.11	17%
12	10,708,212	6,199,801.01	58%	4,451,069.91	42%
ESF total	367,669,980	365,634,969.30	99%	138,188,179.85	38%

Table 2 - ERDF

Region and priority	Programme value (€)	Committed (€)	Percentage of programme committed	Paid claims (€)	Percentage of programme claimed
Highlands and Islands	101,308,164	85,322,198.19	84%	26,353,508.85	26%
1	24,865,348	16,216,966.08	65%	3,797,089.44	15%
2	13,039,352	13,039,351.85	100%	6,846,911.64	53%
3	26,948,434	26,704,216.81	99%	9,632,827.27	36%
4	14,896,284	10,304,746.35	69%	1,924,484.71	13%
6	17,343,515	16,759,293.18	97%	2,498,671.32	14%
12	4,215,231	2,297,623.92	55%	1,653,524.47	39%
Lowlands and Uplands (LUPS)	323,791,191	283,516,620.56	88%	116,873,816.73	36%
1	101,204,692	91,801,138.14	91%	58,860,788.57	58%
3	109,612,872	105,390,629.16	96%	24,368,393.94	22%
4	66,811,663	49,684,247.80	74%	19,287,993.90	29%
6	32,898,512	29,559,805.58	90%	9,264,410.62	28%
12	13,263,452	7,080,799.88	53%	5,092,229.70	38%
ERDF total	425,099,355	368,838,818.75	87%	143,227,325.58	34%

Spend to date

Table 3, details the spend to date for the ESF and ERDF programmes and the current levels of committed operations up to the closure of the 2014-2020 Programme.

Table 3

Programme	Committed operations	Spend	Forecast claims	Shortfall
ESF	£313,598,301	£158,145,821	£133,064,714	£22,387,766
ERDF	£316,341,883	£153,334,618	£146,165,538	£16,841,727

Total: £39,229,493

In order to reduce any financial risk to Scottish Ministers, it is essential that Lead Partners (LP) continue to identify and confirm future potential savings, particularly in the ESF programme which is close to full commitment.

To support LPs in this process, the Managing Authority (MA) have been holding MA Approval Panel meetings every 6 weeks throughout 2022 with the last one of 2022 scheduled for 16 November. We ask that LPs notify their relevant growth teams of their plans to submit change requests to formalise any potential saving.

Claims performance

There has been an increase in the claims performance since the last meeting of the PMC working group in July. Of the 48 claims forecast to be submitted by LPs between July and September (ESF: 26, ERDF: 22) totalling £47.3m (ESF: £19.9m, ERDF: £27.4m) the MA only received 9 ESF claims valued at £7.1m and 6 ERDF claims valued at £9.7m.

We have also provided a table detailing the claims performance of the programme since 2016 to 2022.

January to December

Year	Average turnaround (days)	Claims paid	Claims received during previous year	Claims received during this period	Claims paid (£)
2016	35	1	0	1	956,303.74
2017	49	79	1	78	28,232,054.83
2018	88	136	27	109	49,474,437.48
2019	92	64	19	45	27,721,149.19
2020	213	49	30	19	22,285,576.43
2021	192	47	17	30	69,218,434.06
2022	261	48	29	19	45,506,690.18

N.B. 2022 shows claims activity from January to September. Current days for claims only received and paid this year is 123 days.

Performance towards N+3 (2022)

In the context of achieving our N+3 target for 2022 which is £394,496,521, we still require a significant number of verified claims required to achieve the N+3 2022 target (ESF: £21.2m, ERDF: £60.8m).

These figures take into account the declaration submitted in July, however at this stage does not estimate any values for the declaration due to be submitted in December as these are currently unknown. We expect the de-commitment figures to reduce significantly once the values are known for these declarations, however, further work is required by the collective to ensure we minimise any future de-commitment of funds in 2022.

There are various work streams ongoing within the MA to accelerate progress towards achieving N+3 for 2022 (e.g. re-introduction exercise, claims prioritisation, etc.) but it is also important that claims are submitted as per forecasts, where possible, to minimise any de-commitment this year. As detailed in the earlier tables, a significant number of claims have not been submitted in accordance with claims forecast.

The MA will prioritise and allocate appropriate resource to the verification of claims and maintain regular contact with LPs on the submission, payment and progress of their claims.