Article 9 of the ERDF regulation included a tantalising reference to a budget of 0.2% of ERDF for new actions to be directly managed by the European Commission. This amounts to about 371miilion Euro over the programme period starting in 2015 and running through to 2020. The idea behind it is to test new approaches to the challenges faced by urban local authorities. Projects have a maximum size of Euro 5m, run for up to three years and are funded at 80% by ERDF.
The secretariat for the UIA is based alongside several Interreg secretariats at the Hauts de France in the ‘Entrusted Entity’ the region of Nord Pas de Calais – Picardie in Lille. The head of secretariat is Tim Caulfield, with a background in Interreg, and the team includes urban specialist Raffaele Barbato last seen in the URBACT secretariat.
The first call announced in 2015 allocated EUR 80 Mio to be focused on four topics. The four topics have a strong social innovation flavour – especially urban poverty, and integration of migrants and refugees.
By the closing date of 31st March 2016, 378 bids had been received in total from 24 of the Member States including 14 capitals. Italy with 104 cities and Spain with 72 led the bidding. The majority of bidders were medium sized cities between 50 and 250k (47%), while a further 17% were large cities of more than 250k. 38% were small cities of less than 50k which were obliged to combine with other authorities to make their population up to the 50k threshold.
Since bids arrived they have been checked for eligibility before being analysed by an External Assessment Panel for quality. 40% of the score is allocated to innovation
On 18th July the secretariat announced that 27 bids were retained by the assessment panel. These are now assessed in Lille to test them for operational assessment with a further 20% of scores to be awarded. The final decision will be taken by a joint meeting of the Commission and the ‘Entrusted entity’, which in this case is the region. They anticipate awarding funding between 18 and 20 projects. The final announcement of the selection will be made at the political event on the Urban Agenda for the EU on 12 October at the European Week of Regions and Cities in Brussels.
The three topics for the next call have already been announced and include a repeat of Integration of migrants and refugees, with two new topics: Circular economy and Sustainable urban mobility.
Issues with UIA
There are a range of issues already emerging in relation to the design and construction of the Urban Innovative Actions.
How can you measure innovation in a project bid?
Assessment raises the key question of what is innovative at EU level and how can you measure it? According to the European Commission an innovative action is something that has never been seen in Europe before which given the range of local authorities, NGOs and businesses active in social and policy innovation is a very high bar. What is clear is that it does not refer to an initiative that is merely new in a particular country. Raffaele Barbato in a presentation at the Urban Development Network in February 2016 drew the distinction between evolutionary innovations – those that represent a small step forward and revolutionary innovations – those that are a radical departure from previous practice or engage with a relatively new policy field – refugees being the obvious example in this round. However, it is a serious challenge for the assessors who are charged with applying a score to the level of innovation. Not least because if a project is judged to be a ‘40%’ and new to Europe it is likely that the next week someone will show you a project that does the same thing that no one knew about.
The bigger issue is over the extent to which project types which are innovations in one country will be accepted when the practice already exists in Europe. Taking a doctrinaire line on this factor is likely to rule out many bids from less developed regions and specifically from cities in the Southern periphery and from Central and Eastern Europe. If UIA follows the Horizon 2020 research programme and rewards the more advanced parts of Europe for being more advanced the Parliament and other parties are likely to be critical of the whole venture and may block funds for the next period. While geographical balance should not be a criterion, there needs to be some recognition that what is innovative in one part of Europe matters to those communities even if it is not so innovative at EU level. Perhaps in future some weighting of scores by type of region could help in this regard.
The curate’s egg was ‘good in parts’
The problem may turn out to be the size of the budget. According to the UIA website the bids have come in at an average of 3.7million ERDF contribution which is near the upper end of the range. To achieve this budget many cities will have included a package of projects in their bid rather than a single action. It follows that not all the elements will be equally innovative, instead they will be ‘innovative in parts’ especially when local infrastructures are part of the package. One can imagine cash-strapped cities including community centres, fashionable co-working spaces and incubators in bids that are otherwise innovative and focus on the four topics of refugees, jobs, low carbon or poverty.
What will be the results?
There have also been some exclamations about the level of results specification. Some feel that DG Regio has been severe in forcing regions to accept narrowly defined result indicators for their specific objectives in the mainstream Operational Programmes. When it comes to its own Urban Innovative Actions a greater degree of flexibility seems to have been allowed for the indicators which appear to focus more on outputs than results. However, this may be for the best, as if the UIA is to be truly innovative, tying it to the mast of producing concrete results too soon may discourage risk taking in the selection and delivery of projects.
Is the call and bid model for projects the right approach?
Many observers were disappointed that the UIA was essentially traditional in its structure. It chose a classic model of a call for proposals, followed by project selection. The option of going for a stepped process with entry gates, project workshops or hackathons and allowing judges to engage with the projects was not chosen. The contrast is frequently drawn with the Bloomberg challenge which used labs to bring together bidders at distinct stages of the bidding process and narrowed down the selection following these workshops which judges attended. A similar process was followed in the EU’s own ‘Diogo Challenge’ for social innovation which this year focused on projects supporting refugees. It is to be hoped that aspects of this more innovative approach can be built into future rounds of bidding.
How does the programme combine with other supports for cities?
The 20 successful cities chosen in 2016 and in successive years of the UIA will be eligible to join the Urban Development Network (UDN) set up to work with the as yet unknown number cities across Europe that are implementing integrated strategies for urban development under Article 7. There are likely to be 3-500 such cities. However, in practice the UDN is not well-resourced, and has been meeting on average only once a year with additional workshops when possible. At this level of activity, opportunities for cross-fertilisation will be limited.
Links to the URBACT programme are also not yet fully developed. Clearly, there is potential for cities working in URBACT networks to experiment in the UIA. But to do this they have to get through parallel selection processes which are typically 5:1 to get into URBACT and 15:1 to get support under UIA. The combined probability of 75:1 is not encouraging. Nevertheless, both URBACT and UIA could be strengthened if there is a collaborative approach between them. There could also be a stronger connection in the next programme period particularly between the new Good practice transfer networks that URBACT will introduce and the laureates of this period of urban innovative actions.
Links to other programmes in which cities have a strong participation such as INTERREG Europe and the mainstream ERDF programmes at regional level (in which some cities may also be recipients of funding under Article 7) are also not well developed at this stage. It may be that UIA can act as a sandbox or incubator for scaled up projects towards the end of this programme period or in the next and feed into thinking on the new programmes. More innovation is needed in the main programmes but it is not clear that UIA is the vehicle to achieve this. A lot will depend on whether the generals running the main programmes stay fighting the last war or face up to new challenges.
Writing in July 2016 it is too early to judge whether UIA will act as a stimulus for social innovation in the Structural Funds. According to Director Tim Caulfield, they have set out to be ‘urban, experimental and flexible’ and on all three counts there is reason to be hopeful. More will be known about whether they are achieving this when the list of projects is announced in October.
It is evident that to a large degree the success of the UIA will depend on the extent to which capitalisation and dissemination can spread the message of how to innovate and what works to a much wider group of cities. In this regard, both URBACT and the Urban Development Network could play a major role as they work with a much wider constituency of cities. However, the two programmes are run with their own timetables and logic.
The greatest risk facing the UIA is that it is seen as rewarding the ‘Usual Suspects’, or what is known as Matthew’s law: ‘To him who hath shall be given’. More specifically, those mostly Northern European cities that are always mentioned in any discussion of urban good practices and innovation. It is easier to innovate and to make a credible bid in cities like Stockholm, Gothenburg, Turin, Amsterdam, Rotterdam or Barcelona. Not so easy if in a small or medium sized city without an already mature innovation ecosystem in a struggling part of Europe. Despite this proviso, we would urge people not to be too judgemental on this first call. There are still four or five rounds to go in this period and as cities begin to understand the rules of the game the identities of the players will change. The Urban Innovative Actions are the first step since EQUAL and URBAN to really focus on how innovation in the funds can be advanced. They are an essential part of a social innovation ecosystem linked to the Structural Funds. But they are only a part. There needs to be a wider recognition that uptake, transfer and mainstreaming is essential in the main programmes if Europe is to become a true innovation powerhouse.
 UIA website, interview with Tim Caulfield accessed 06 July 2016.