COLUMN: Neil Warwick - How can EU work for firms?

THE pattern of funding for small and medium-sized enterprises (SMEs) is set to change in 2013.

THE pattern of funding for small and medium-sized enterprises (SMEs) is set to change in 2013.

Throughout the recession there has been money available for SMEs through various European Structural Funds. These funds are set up on a six-year basis to assist areas throughout Europe that potentially face deprivation. The calculation of what makes an area deprived is based on the amount of GVA per head of population. While this is a complex calculation in basic terms if the amount of gross value added in a region drops below 90% per head of population, it's likely that the region will be entitled to receive some European Structural Funding. For the past two decades the North East has been, effectively, entitled to the second highest amount of structural aid.

The money is usually allocated by way of national programmes and until 2010, One North East was responsible for overseeing the programme in the North East. This has led to the accusation that the North East has developed a grant dependency culture sometimes referred to in the national press as a begging-bowl mentality.

While it is true that there have been a number of grant initiatives aimed at SMEs, it is a gross over-simplification to suggest that this is all European funding has provided for the region.

Some of the most iconic landmarks in the North East have benefited from European Structural Funds such as the Sage, the Angel of the North, the Stadium of Light, as well as many other infrastructure projects.

The current European Funding Programme will come to an end in 2013. It will be replaced by another six-year programme which will run from 2014 to 2020 but the structure of the new programme will be different.

As is always the way with new programmes there will be a high level aim to focus on certain common themes. These will be low carbon, skills, innovation and SME competitiveness. It is up to each member state to interpret how to implement these themes.

However, there are certain facets which could badly affect the North East unless we begin co-ordinating these issues properly.

Provided there is real co-ordination in the region this could be an opportunity as well as a threat.

:: Neil Warwick is a partner and head of EU & Competition at the region's leading law firm, Dickinson Dees


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