MINISTERS ASKED TO PROTECT CORNWALL’S EUROPEAN FUNDS
At approximately 11:45am today St Ives MP, Andrew George, took part in Business Questions in Parliament to ask the Leader of the House of Commons to call on Ministers to address concerns that essential European Convergence Funding has been halted for Cornwall.
Mr George asked the Leader of the House, the Rt Hon Sir George Young MP, to call Ministers from the Treasury and the Department for Business, Innovation and Skill to the Commons to answer urgent questions on the impact of this week’s decision by the South West Regional Development Agency (which is itself being abolished by the Government) to halt vital economic development projects under Cornwall’s European Convergence Programme, especially those which do not require any UK Exchequer contribution.
In his response the Leader of the House said that he was concerned by the possible impacts of the RDA’s decision, particularly in those cases where UK Exchequer contributions were not required and that he would look into the matter further.
Mr George will be having further conversations with Ministers today. The discussions so far between Mr George, his Cornish Liberal Democrat Parliamentary colleagues Dan Rogerson (MP for North Cornwall) and Stephen Gilbert (MP for St Austell & Newquay), and Government Ministers indicate that none of the previously approved schemes should be in any doubt.
Thursday 15 July 2010
Andrew George MP Raises Convergence Issue in Parliament
Press release from Andrew George MP (Lib Dem, St Ives):
Convergence Freeze: Updates 15th July
Today's round-up of news on the Convergence freeze:
Convergence Office
The Convergence Office in Cornwall has updated its statement from yesterday - read its current statement here. Some salient quotes:
"On Friday 9th July central Government extended its instruction to halt new investments by the South West RDA to include both ERDF Convergence and Competitiveness. This includes ERDF investments matched entirely by the private sector. At present it is unclear as to the length of the embargo." (my emphasis)
"The partnership led by Cornwall Council, the South West RDA and Government Office for the South West will be seeking urgent clarification from Government. Our understanding is that neither the UK Representation nor DG Regional Policy were aware of this step by Government and await with interest the rationale."
So essentially there has been no clarification yet from the Treasury or BIS on how long the freeze is in place or the reasoning behind it. In fact no one seems to have heard from Central Government at all on this issue.
Media Coverage
The Western Morning News again devotes a front-page story to the Treasury/BIS moratorium on EU funding allocations. I'll link to it when it's online but it includes the views of several local politicians and business leaders, see quotes below.
Business Cornwall reports that three Cornish Lib Dem MPs, Dan Rogerson, Stephen Gilbert and Andrew George, have appealed to Vince Cable to intervene to stop the funding freeze. Read the full article.
Social Media
Kernowpods has a great podcast featuring an interview with George Le Hunte, leader of the Camborne Chamber of Commerce. Le Hunte fears that uncertainty over the scale and duration of the freeze will negatively affect economic activity in Camborne, and says that David Cameron should have informed local MPs and businesses about the freeze when he was visiting Cornwall last week. He singles out the £100m next-generation broadband rollout as particularly important project that may be at risk. Listen to the podcast (4 minutes)
Facebook Group: The Save Convergence Funding for Cornwall Facebook group now has more than 300 members. Join it here.
Twitter: Don't forget to follow @SaveConvergence on Twitter for all the latest updates - and use the #saveconvergence hashtag when tweeting about this issue.
Cornwall's Response - Politicians
The following politicians were quoted in the Western Morning News today:
Jude Robinson, Labour Party chair in Cornwall: "Jobs, industry and our economic future are at risk from these mean and almost criminally wrong-headed, savage cuts." (Read Jude's blog post on the freeze)
Julie Girling, Conservative MEP for the South-West: "It is not unusual for money to go unspent. It is unusual in the UK for that to happen. But these are exceptional circumstances."
Councillor Dick Cole, leader of Mebyon Kernow: "It is a disgrace that central government appears unwilling to match-fund EU structural funding which we only receive because of our poor economic performance and our poverty. This lack of investment could cost hundreds of jobs in Cornwall and see many businesses fail."
And these two MPs quoted in Business Cornwall:
Andrew George MP (Lib Dem, St Ives): "This affects the £100 million New Generation Broadband project which is acknowledged to be vital and transformational for Cornwall's future. The project would be funded by European and UK public sector match contributions and should not be stopped pending the Comprehensive Spending Review which is planned to be published on 20th October. Delays to this and other projects could prove fatal."
Dan Rogerson MP (Lib Dem, North Cornwall): "This brake on spending seems to have originated with officials in Government departments who do not understand what is at stake. Vital schemes which are so crucial to the economic development of Cornwall cannot be held up in this way. Of course the Government needs to review its own spending, but it must not delay European and private investment in our region."
Meanwhile Alec Robertson, Leader of Cornwall Council, has this message:
"It’s important not to over-react in this situation despite unhelpful remarks from some commentators. At worst, this is a postponement of decisions on funding, not a cancellation of projects in Cornwall. This action, which mirrors the previous announcement on funding for major transport projects, is a sensible measure to be taken ahead of the Comprehensive Spending Review in the autumn.
"The fact that our match funding draws in a great deal of European money will be one of the key criteria considered by the government when allocating funds. We will continue to work with our MPs to lobby strongly for funding and we have every confidence that we will be successful."
Cornwall's Response - Business Leaders
James Staughton, MD, St Austell Brewery (quoted in Western Morning News): "With this funding tied to a strict timetable, any delay risks jeopardising important projects and raises the frankly dreadful prospect of this much-needed European Union investment having to be returned unspent."
Your Views
Here's a sample of what people are saying about the freeze on Facebook and Twitter:
"Government has pledged to make UK fastest broadband nation in Europe" http://bit.ly/arRugF Great start in Cornwall then - @L00karound
It's important to overreact. Now, is the time to pressure, push and cajole - @mywoisme
Time for all businesses to identify what they want from new Local Enterprise Partnerships.there needs to be consultation. - @EnterpriseIain
Even a delay until the spending review could cause havoc - what if this leads to (for example) private sector broadband providers pulling out in the face of of what appears to be a government wobble? NB Convergence has a deadline that won't change - putting things on hold could kill off invetsments that were already tight on timing. - Tim Dwelly
I will almost certainly lose my job if this is not sorted out soon - thanks David Cameron!! - Tom Lal
The funding has been administrated by SWERDA and don't let's forget that abolishing the RDAs was one of the Conservative party's objectives. It might just be that they are looking for another way to administrate it. But cynically, I'm not holding my breath. I gather that convergence funding was conditional on the Government providing something too, and I suppose that they could withold that part so that the European money couldn't come through. - Caroline White
Convergence Office
The Convergence Office in Cornwall has updated its statement from yesterday - read its current statement here. Some salient quotes:
"On Friday 9th July central Government extended its instruction to halt new investments by the South West RDA to include both ERDF Convergence and Competitiveness. This includes ERDF investments matched entirely by the private sector. At present it is unclear as to the length of the embargo." (my emphasis)
"The partnership led by Cornwall Council, the South West RDA and Government Office for the South West will be seeking urgent clarification from Government. Our understanding is that neither the UK Representation nor DG Regional Policy were aware of this step by Government and await with interest the rationale."
So essentially there has been no clarification yet from the Treasury or BIS on how long the freeze is in place or the reasoning behind it. In fact no one seems to have heard from Central Government at all on this issue.
Media Coverage
The Western Morning News again devotes a front-page story to the Treasury/BIS moratorium on EU funding allocations. I'll link to it when it's online but it includes the views of several local politicians and business leaders, see quotes below.
Business Cornwall reports that three Cornish Lib Dem MPs, Dan Rogerson, Stephen Gilbert and Andrew George, have appealed to Vince Cable to intervene to stop the funding freeze. Read the full article.
Social Media
Kernowpods has a great podcast featuring an interview with George Le Hunte, leader of the Camborne Chamber of Commerce. Le Hunte fears that uncertainty over the scale and duration of the freeze will negatively affect economic activity in Camborne, and says that David Cameron should have informed local MPs and businesses about the freeze when he was visiting Cornwall last week. He singles out the £100m next-generation broadband rollout as particularly important project that may be at risk. Listen to the podcast (4 minutes)
Facebook Group: The Save Convergence Funding for Cornwall Facebook group now has more than 300 members. Join it here.
Twitter: Don't forget to follow @SaveConvergence on Twitter for all the latest updates - and use the #saveconvergence hashtag when tweeting about this issue.
Cornwall's Response - Politicians
The following politicians were quoted in the Western Morning News today:
Jude Robinson, Labour Party chair in Cornwall: "Jobs, industry and our economic future are at risk from these mean and almost criminally wrong-headed, savage cuts." (Read Jude's blog post on the freeze)
Julie Girling, Conservative MEP for the South-West: "It is not unusual for money to go unspent. It is unusual in the UK for that to happen. But these are exceptional circumstances."
Councillor Dick Cole, leader of Mebyon Kernow: "It is a disgrace that central government appears unwilling to match-fund EU structural funding which we only receive because of our poor economic performance and our poverty. This lack of investment could cost hundreds of jobs in Cornwall and see many businesses fail."
And these two MPs quoted in Business Cornwall:
Andrew George MP (Lib Dem, St Ives): "This affects the £100 million New Generation Broadband project which is acknowledged to be vital and transformational for Cornwall's future. The project would be funded by European and UK public sector match contributions and should not be stopped pending the Comprehensive Spending Review which is planned to be published on 20th October. Delays to this and other projects could prove fatal."
Dan Rogerson MP (Lib Dem, North Cornwall): "This brake on spending seems to have originated with officials in Government departments who do not understand what is at stake. Vital schemes which are so crucial to the economic development of Cornwall cannot be held up in this way. Of course the Government needs to review its own spending, but it must not delay European and private investment in our region."
Meanwhile Alec Robertson, Leader of Cornwall Council, has this message:
"It’s important not to over-react in this situation despite unhelpful remarks from some commentators. At worst, this is a postponement of decisions on funding, not a cancellation of projects in Cornwall. This action, which mirrors the previous announcement on funding for major transport projects, is a sensible measure to be taken ahead of the Comprehensive Spending Review in the autumn.
"The fact that our match funding draws in a great deal of European money will be one of the key criteria considered by the government when allocating funds. We will continue to work with our MPs to lobby strongly for funding and we have every confidence that we will be successful."
Cornwall's Response - Business Leaders
James Staughton, MD, St Austell Brewery (quoted in Western Morning News): "With this funding tied to a strict timetable, any delay risks jeopardising important projects and raises the frankly dreadful prospect of this much-needed European Union investment having to be returned unspent."
Your Views
Here's a sample of what people are saying about the freeze on Facebook and Twitter:
"Government has pledged to make UK fastest broadband nation in Europe" http://bit.ly/arRugF Great start in Cornwall then - @L00karound
It's important to overreact. Now, is the time to pressure, push and cajole - @mywoisme
Time for all businesses to identify what they want from new Local Enterprise Partnerships.there needs to be consultation. - @EnterpriseIain
Even a delay until the spending review could cause havoc - what if this leads to (for example) private sector broadband providers pulling out in the face of of what appears to be a government wobble? NB Convergence has a deadline that won't change - putting things on hold could kill off invetsments that were already tight on timing. - Tim Dwelly
I will almost certainly lose my job if this is not sorted out soon - thanks David Cameron!! - Tom Lal
The funding has been administrated by SWERDA and don't let's forget that abolishing the RDAs was one of the Conservative party's objectives. It might just be that they are looking for another way to administrate it. But cynically, I'm not holding my breath. I gather that convergence funding was conditional on the Government providing something too, and I suppose that they could withold that part so that the European money couldn't come through. - Caroline White
Convergence Freeze: The Story So Far...
** Welcome to the blog! Please feel free to leave a comment or correct anything I've got wrong**
On Tuesday 13th July 2010 BBC Radio Cornwall carried a news report saying that the Treasury had ordered the South-West Regional Development Agency (SWRDA) not to process any new applications or issue any new funding agreements for the European Regional Development Funds (ERDF) that Cornwall receives from the European Union (EU) under the EU's Convergence programme.
The EU has allocated £371m of ERDF funding specifically to Cornwall, which has to be spent between 2007 and 2013. Cornwall qualifies for these Convergence funds on the basis of its economic performance, which is 25% lower than the EU average - putting Cornwall on a par with other economically-struggling areas of the EU such as Romania and Bulgaria.
The ERDF funds are to be used for projects that boost the Cornish economy by upgrading infrastructure, creating private sector jobs and attracting inward investment. Applications and allocations are managed by the RDA. In some cases funding allocations must be match-funded by the UK government and in other cases they can be match-funded by private investors.
ERDF Convergence Projects
The following are examples of projects that have already been approved or completed using ERDF funds (see the full list here):
The Pool Innovation Centre: high quality, flexible managed workspace for start-up businesses with potential for growth and high productivity.
The Wave Hub: a groundbreaking renewable energy project that aims to create the world’s first large scale wave energy farm by constructing an electrical ‘socket’ on the seabed off Hayle.
Truro Falmouth Branch Line Improvement: an upgrade to the Truro-Falmouth rail link at Penryn to make it easier for people to access work and education opportunities.
Cornish Crabbers: a boat building company based in Rock is receiving ERDF Convergence investment to expand the business by purchasing the premises it currently occupies and investing in production equipment.
ERDF Projects In Development
There are also a number of new ERDF projects in development which - it appears - are the projects that have now been frozen by the Treasury. These include:
Next-Generation Broadband Access for Cornwall: A £100m project to roll-out a high-speed fibre-optic network across Cornwall. £70m of funds were approved by the EU in May 2010 with match-funding agreed by BT and a £1m contribution from Cornwall Council. Described by Cornwall Council as "the single largest and most transformational Convergence project which could generate £250 million for Cornwall and the Isles of Scilly’s economies over the next 15 years."
Grants for Business Investment (GBI): a pot of money allocated under the ERDF for the RDA to invest in growth businesses in Cornwall. ERDF funds are matched by the company applying for the grant.
The Impact on Cornwall
Although there are few facts available currently about which projects have been frozen and for how long, Cornish business leaders have already been speculating about the economic impact on Cornwall of halting investment in these projects.
Convergence Freeze Will Cost Jobs, Say Winter Rule: Charted accountants Winter Rule warn that the Treasury’s moratorium on further spending by the European Convergence programme in Cornwall will hit growth businesses hard, starve them of investment and cost hundreds of jobs.
"We have five business clients with whom we are progressing GBI applications, and now they’ve been left in total limbo. If none of those projects go ahead then we calculate that £8 million of total investment and 650 potential jobs will have been lost from the Cornish economy from our clients alone," said David Bullen, Corporate Finance Manager at Winter Rule in Truro.
Companies Affected
Local media have been carrying reports of specific companies affected:
Cornwall's Response - Politicians
Cornwall's elected representatives appear to have been caught on the hop by the news, with neither the county's six MPs nor its councillors being informed in advance of the Treasury's decision - despite a visit from David Cameron to Cornwall last Friday 9th July. Since being apprised of the news MPs and councillors have had this to say:
Andrew George (LibDem, St Ives): "This aid is vital to Cornwall's economic recovery and I will be pressing Ministers to offer reassurance ahead of the announcement on the Comprehensive Spending Review on the 20th October this year." Read full post
Stephen Gilbert (LibDem, St Austell & Newquay): "Cornwall receives this European investment because it has some of the most deprived communities in the UK. Already, convergence funding has made a real difference to so many people in Cornwall, creating thousands of new jobs and providing lasting infrastructure. My message is clear, hands off Cornwall's cash. I will be using my position within the Coalition Government to make that representation to the Minister as soon as possible." Read full post
Cllr Andrew Wallis (Independent, Porthleven): "I have asked the CC Portfolio Holder for Regen for a up to date report on the current situation on Convergence Funding."
Cllr Jeremy Rowe (LibDem, Egloshayle): "Party Group Leaders at Cornwall Council agree to a 'single voice' approach on Convergence."
Cornwall's Response - Residents
People living in Cornwall have been angered ans confused at the news, especially as the Treasury and the department for Business, Information and Skills (BIS) have been so unforthcoming with information about why the freeze has been instituted and how long it will last. The following actions have been taken:
Facebook Group: A Facebook Group, Save Convergence Funding for Cornwall, has been set up to discuss the issue, which has gained 288 members in two days.
Twitter Account: A Twitter account, @SaveConvergence, has been set up to distribute any updates on the situation.
Twitter Hashtag: A Twitter hashtag, #saveconvergence, has been created for all discussion around the issue.
Cornwall Social Media Café: A meeting has been convened of the Cornwall Social Media Café for Tuesday 27th July at Vertigo Bar in Truro, to discuss the situation and hopefully to get an update from MPs and/or councillors.
Blog: This blog, The Convergence Freeze Blog, has been set up to monitor the situation and to collect information and input from Cornish residents.
On Tuesday 13th July 2010 BBC Radio Cornwall carried a news report saying that the Treasury had ordered the South-West Regional Development Agency (SWRDA) not to process any new applications or issue any new funding agreements for the European Regional Development Funds (ERDF) that Cornwall receives from the European Union (EU) under the EU's Convergence programme.
The EU has allocated £371m of ERDF funding specifically to Cornwall, which has to be spent between 2007 and 2013. Cornwall qualifies for these Convergence funds on the basis of its economic performance, which is 25% lower than the EU average - putting Cornwall on a par with other economically-struggling areas of the EU such as Romania and Bulgaria.
The ERDF funds are to be used for projects that boost the Cornish economy by upgrading infrastructure, creating private sector jobs and attracting inward investment. Applications and allocations are managed by the RDA. In some cases funding allocations must be match-funded by the UK government and in other cases they can be match-funded by private investors.
ERDF Convergence Projects
The following are examples of projects that have already been approved or completed using ERDF funds (see the full list here):
The Pool Innovation Centre: high quality, flexible managed workspace for start-up businesses with potential for growth and high productivity.
The Wave Hub: a groundbreaking renewable energy project that aims to create the world’s first large scale wave energy farm by constructing an electrical ‘socket’ on the seabed off Hayle.
Truro Falmouth Branch Line Improvement: an upgrade to the Truro-Falmouth rail link at Penryn to make it easier for people to access work and education opportunities.
Cornish Crabbers: a boat building company based in Rock is receiving ERDF Convergence investment to expand the business by purchasing the premises it currently occupies and investing in production equipment.
ERDF Projects In Development
There are also a number of new ERDF projects in development which - it appears - are the projects that have now been frozen by the Treasury. These include:
Next-Generation Broadband Access for Cornwall: A £100m project to roll-out a high-speed fibre-optic network across Cornwall. £70m of funds were approved by the EU in May 2010 with match-funding agreed by BT and a £1m contribution from Cornwall Council. Described by Cornwall Council as "the single largest and most transformational Convergence project which could generate £250 million for Cornwall and the Isles of Scilly’s economies over the next 15 years."
Grants for Business Investment (GBI): a pot of money allocated under the ERDF for the RDA to invest in growth businesses in Cornwall. ERDF funds are matched by the company applying for the grant.
The Impact on Cornwall
Although there are few facts available currently about which projects have been frozen and for how long, Cornish business leaders have already been speculating about the economic impact on Cornwall of halting investment in these projects.
Convergence Freeze Will Cost Jobs, Say Winter Rule: Charted accountants Winter Rule warn that the Treasury’s moratorium on further spending by the European Convergence programme in Cornwall will hit growth businesses hard, starve them of investment and cost hundreds of jobs.
"We have five business clients with whom we are progressing GBI applications, and now they’ve been left in total limbo. If none of those projects go ahead then we calculate that £8 million of total investment and 650 potential jobs will have been lost from the Cornish economy from our clients alone," said David Bullen, Corporate Finance Manager at Winter Rule in Truro.
Companies Affected
Local media have been carrying reports of specific companies affected:
"One company caught out by the funding ban is Helston-based Spiral Construction, a market leader in the manufacture of spiral staircases, which employs 50 staff.
It had just been approved for £250,000 of investment towards a £500,000 factory extension that would increase its size by almost 50 per cent, create 12 new jobs and cater for the company's future growth.
Managing director Eric Nicholls said: "At a stroke of some bureaucrat's pen in Whitehall our plans for growth have been cut off at the knees. We need Ministers to be aware of how short sighted this decision is."
- Western Morning News, "County 'to miss out' on Euro millions", 14 July 2010
"One Winter Rule client caught out by the ERDF spending freeze is Clayworks on The Lizard Peninsula. The company, which specialises in eco-friendly building products, was confident of securing a £65,000 GBI investment in new machinery and to expand its product range. Clayworks, which has four staff, intends to grow this to 20 in the next five years.
Director James Bryce said: "We were hopeful of an offer letter for our grant from the South West RDA in the very near future because as far as we are concerned we had fulfilled all the criteria. As a low-carbon, eco-friendly business that derives a lot of its products from recycled materials and has ambitions for rapid growth we are just the sort of business that is being encouraged in Cornwall. But now the Government has tied the RDA’s hands we can’t get our offer letter. Unless there is a change of heart we’ll have to go back to the drawing board and risk losing our other investors who we have worked hard to assemble to match-fund the grant."
Winter Rule press release, Convergence freeze will cost jobs say Winter Rule, 13th July 2010
Cornwall's Response - Politicians
Cornwall's elected representatives appear to have been caught on the hop by the news, with neither the county's six MPs nor its councillors being informed in advance of the Treasury's decision - despite a visit from David Cameron to Cornwall last Friday 9th July. Since being apprised of the news MPs and councillors have had this to say:
Andrew George (LibDem, St Ives): "This aid is vital to Cornwall's economic recovery and I will be pressing Ministers to offer reassurance ahead of the announcement on the Comprehensive Spending Review on the 20th October this year." Read full post
Stephen Gilbert (LibDem, St Austell & Newquay): "Cornwall receives this European investment because it has some of the most deprived communities in the UK. Already, convergence funding has made a real difference to so many people in Cornwall, creating thousands of new jobs and providing lasting infrastructure. My message is clear, hands off Cornwall's cash. I will be using my position within the Coalition Government to make that representation to the Minister as soon as possible." Read full post
Cllr Andrew Wallis (Independent, Porthleven): "I have asked the CC Portfolio Holder for Regen for a up to date report on the current situation on Convergence Funding."
Cllr Jeremy Rowe (LibDem, Egloshayle): "Party Group Leaders at Cornwall Council agree to a 'single voice' approach on Convergence."
Cornwall's Response - Residents
People living in Cornwall have been angered ans confused at the news, especially as the Treasury and the department for Business, Information and Skills (BIS) have been so unforthcoming with information about why the freeze has been instituted and how long it will last. The following actions have been taken:
Facebook Group: A Facebook Group, Save Convergence Funding for Cornwall, has been set up to discuss the issue, which has gained 288 members in two days.
Twitter Account: A Twitter account, @SaveConvergence, has been set up to distribute any updates on the situation.
Twitter Hashtag: A Twitter hashtag, #saveconvergence, has been created for all discussion around the issue.
Cornwall Social Media Café: A meeting has been convened of the Cornwall Social Media Café for Tuesday 27th July at Vertigo Bar in Truro, to discuss the situation and hopefully to get an update from MPs and/or councillors.
Blog: This blog, The Convergence Freeze Blog, has been set up to monitor the situation and to collect information and input from Cornish residents.
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