ESIF Programme Monitoring Committee lead partner financial forecast paper: May 2021

Purpose of paper

To provide members with an update on the Lead Partner (LP) financial forecast currently being collated by the Managing Authority (MA).

Linked to the financial performance of the programme, the paper will also provide members with an opportunity to reflect and consider how best to utilise the remaining funds for the final delivery year of the programme, 2023.

Background

Following a meeting between the MA and European Commission (EC), the EC requested financial data forecasting future claims scheduled to be submitted by the MA. The MA has contacted all LPs requesting data detailing the proposed financial forecast and claim schedule between April 2021 and December 2022.

This forecast will provide a focal point and encourage on-going dialogue between the MA and LPs, particularly around the continued monitoring and financial governance of the European Social Fund (ESF) and European Regional Development Fund (ERDF) programmes.

Summary

We sent a letter to LPs on 29 March to request this information and asked for returns by 23 April. We have received 22 responses to the request, with 21 responses still outstanding. The information and detail listed below will therefore continue to evolve as further detail becomes available. Taking the current financial position into account the main findings of this exercise provide the following forecasts:

ESF

• total forecast for claims (April 21 to December 22) - £161,042,679.22
• total grant claims to date (2014 to present day) - £67,536,681
• total projected claim (2014 to December 22) - £228,579,360.22

ERDF

• total forecast for claims (April 21 to December 22) - £83,183,764.21
• total grant claims to date (2014 to present day) - £65,197,512
• total projected claim (2014 to December 22) - £148,381,276.21

Total (ESF & ERDF)

• £376,960,636.43

Risk

Against the current total programme value (£701,227,432), this would leave a significant financial shortfall in the final year of the programme (2023) of £324,266,795.57 i.e. outstanding claims from LPs. This shortfall will impact significantly on the N+3 target for the final year of the programme with the full impact not yet fully assessed.

It will take a significant effort from all involved in the delivery and governance of the programme to reduce this figure. As detailed in operational programme (OP) paper, there is no further flexibility within the programme to absorb future de-commitment of funds without reducing funding currently allocated to delivering activities and projects within the Priority Axes (PA).

To mitigate for the risk of future potential de-commitment, it is essential that all LPs submit their outstanding claims forecast and prepare for the submission of fully complaint claims in line with the dates detailed in their forecast working with the MA to improve the rate of claims.

Next steps

The MA will continue to work with all LPs and members to ensure that all fully compliant claims are submitted in accordance with the dates detailed in the forecast and progress against the N+3 target is monitored and appropriate measures taken to ensure that targets are met.