Financial Instruments (FI) will be at the heart of the next Structural Funds and cities must become experts at using them. The URBACT CSI Europe network, led by Manchester City Council, is leading the way for cities by engaging in dialogue with decision makers in the European institutions who are now in the process of designing the frameworks for operation of these Funds. CSI Europe partner cities are also sharing strategies about how to set up these Funds in future to support their own local developments.
The European Commission has signalled that it intends to increase the use of these types of financial instruments, because they can potentially deliver more value for money, for instance in the case of a revolving fund where money is recycled, rather than a grant. But there is a steep learning curve for cities to be able to develop and manage this new form of investment. This was the key theme of the URBACT CSI Europe Conference held in December 2013 in The Hague that looked at the new ERDF Regulations and how they would affect FIs as tools for investing in sustainable urban development.
The event, which was attended by representatives from the European Investment Bank, The Hague’s Managing Authority and fund managers and practitioners in FIs, considered some of the key features of the new regulations.
These include:
- Separate regulations governing the use of FIs which aim to provide a simple and clear framework for their use;
- “Off the shelf” models that will be developed for the use by Managing Authorities, cities and other bodies seeking to establish an FI; and
- Technical Assistance that will be available to support the development of FIs for the next programme, such as ability to evidence market failure and preparing a pipeline of projects on the ground.
The CSI Europe partners, who have formed the network with the aim of “making financial instruments work for cities” broadly welcomed the new framework. At the conference the partners agreed a series of constructive recommendations to be sent to the Commission in advance of a series of stakeholder events being held to consider the draft regulations, emphasising the needs of cities in the process.
A number of CSI Europe partner representatives have subsequently attended the events and have reported positive progress in developing the detailed implementing regulations. It is clear that FIs will be important in delivering funding to cities’ projects in the next programme. We hope CSI Europe will be able to contribute to other URBACT networks’ understanding of FIs to help them unlock this type of funding to support their Local Action Plans in the future.
Read More:
- CSI Europe minisite
- European Commission Factsheet on Financial Instruments
- Centre for Cities report on Urban Development Funds
By Karen Findley Lead Partner, Manchester City Council and Des Gardner, Lead Expert
