Assisted Areas Map 2014-20

Michael Fallon Excerpts

Wednesday 18th December 2013 Written Statements

[The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)]

I am today launching the “2014-2020 Assisted Areas Map Consultation Stage 2: Draft Assisted Areas Map and Government’s Response to Stage 1”. This consultation will establish the map of areas in the UK in which regional aid will be available during the period 2014-20. The new map will replace the current version which expires on 30 June 2014; it will cover the period 1 July 2014 to 31 December 2020. The second stage consultation will be open from today until Friday 7 February 2014, and follows the first stage which closed on 30 September 2013. Copies of the consultation document will be placed in the House Library.

The European Commission regional aid guidelines define the parameters for assisted areas for 2014 to 2020. Under the guidelines the UK’s overall regional aid coverage may cover a maximum of 27.05% of the UK population.

Assisted area coverage permits the UK to provide additional investment to firms in the designated areas. It does not bring specific funding, instead offering eligibility for certain forms of financial support. Other forms of financial support are available inside and outside assisted areas, including aid for research and development, to improve access to venture capital and to support environmental projects. Additionally, all areas of the UK will be eligible to apply for European structural and investment (ESI) funds, particularly through the European regional development fund or the European social fund.

Working within the Commission’s guidelines, the draft map published today represents a thorough, evidence-based approach to allocating the UK’s population coverage. We have proposed assisted areas based on a combination of the potential to use regional aid to encourage economic growth in localities through levering private sector investment, as well as the economic need of the locality. A strong principle underpinning the proposed map is to use our coverage to focus on areas that are able to use the flexibility provided. There are many deprived parts of the UK that do not have the scale of industrial or development sites necessary to exploit assisted area status.

The Government are seeking to refresh the map, not simply add coverage to those places that already have it. Economic geography evolves along with the rules which dictate coverage, and assisted area status does not benefit every ward in the country that currently has designation and could be economically beneficial to many wards that currently do not. Local enterprise partnerships (LEPs) in England and local authorities (LAs) in Scotland and Wales led in responding to stage 1 of the consultation, and 41 out of 49 of their returns sought increased coverage. We have ensured that allocation is given to those areas where it can make the most difference, and difficult decisions have had to be made as to which areas are included on the draft map. We now look forward to receiving the responses which will help shape the final assisted areas map 2014-20.