The Ministry of Housing, Communities and Local Government (MHCLG) recently published the final evaluation of the £3.2bn European Regional Development Fund (ERDF) for England, a study led by Wavehill and our partners, Winning Moves, Belmana, Hatch and CAG Consultants, alongside expert advisors, Neil Evans and Professor Stephen Roper.
ERDF was one of the main European Structural Funds across the UK and provided support to reduce economic and social disparities between different regions within the EU, supporting investments in areas such as research and innovation, business development and infrastructure.
This was a major piece of evaluation work, incorporating surveys of 4,700 beneficiaries, a meta-analysis of 260 project-level evaluations, extensive data review and stakeholder consultations.
So what can we learn from this funding, to help inform future local growth programmes?
It is worth noting that the evaluation work was completed in 2023, so the policy landscape for local growth has evolved since then. The UK Shared Prosperity Fund was launched, giving greater scope of interventions and more autonomy to local areas around management. Early signs from the new Government (through the Devolution White Paper) indicate that local growth investment will continue to be channelled through local, particularly combined authorities. Despite these changes though, the ERDF programme findings offer many valuable insights.
Firstly, there is a wealth of evidence highlighting what works in different fields of local growth interventions, such as business support, research and innovation, low carbon transition and climate change adaptation. One of the main outputs from the evaluation is an easy-to-read Lessons for Local Practitioners Guide. This sets out 17 different intervention types funded under the ERDF programme. In each case, the guidance outlines details of project types delivered and lessons drawn from our large-scale review of project evaluations. For many sections of the report, there are also inputs from the What Works Centre for Local Economic Growth, providing a wider context of lessons relating to that intervention type. The result provides a useful resource for practitioners developing similar interventions in their areas going forward.
Secondly, the unit cost analysis provides a valuable reference for quantifying project output targets in the future. A separate unit cost analysis paper was produced undertaking detailed analysis across a series of 12 key output indicators used under the ERDF programme. This included outputs such as enterprises supported, additional employment increase and area of land rehabilitated. The paper outlines the range of ‘cost per output’ figures achieved across a range of funded ERDF projects that used that output indicator. In each case, this shows the median, upper and lower quartiles as well as the full range of unit costs. Where possible, the paper also sets out breakdowns by project type and geography. These figures provide helpful benchmarks for practitioners seeking to develop appropriate targets for local growth projects they are looking to deliver going forward.
Thirdly, the main ERDF evaluation report includes a series of recommendations for managing local growth programmes. Local and combined authorities are increasingly taking on responsibility for managing and delivering local growth funding. The lessons learnt from our main ERDF programme evaluation report will be particularly helpful for government agencies at all tiers designing, delivering and monitoring localised projects that support local growth. The recommendations are broad ranging, but many focus on key elements of the ERDF programme that were valuable and effective.
These include:
the importance of selecting and clearly defining output and outcome indicators
developing strong data collection and monitoring tools
ensuring sufficient capacity and expertise for programme management
establishing clarity around the objectives and results that the funding is intended to achieve.
Many of these will be highly relevant to local growth programme development going forward.
Building on the foundations of the European funds
The European Structural and Investment Funds, including ERDF, ESF and RDP funds, were a longstanding pillar of local growth funding for several decades in the UK. Yet even a couple of years after their closure, they are already starting to feel like a fading memory. However, there is much that worked well under these programmes, and many high-quality and impactful projects were delivered that encouraged sustainable local-level growth.
We hope that these evaluation papers will help to make sure that these lessons are effectively taken on by local growth practitioners across the UK, and that the next tranche of local growth programmes continue to build on the lessons of what worked well in the programmes that came before.
For further information on this evaluation work, or to have a discussion on Wavehill’s work around local growth, please contact Stuart Merali-Younger or Oliver Allies.
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