Can the private sector benefit from ERDF?

April 28, 2008

A surprising number of golf clubs in the EU have received European Regional Development Fund (ERDF) grants in the past – some very high profile – eg Carnoustie, Scotland (host of the 2007 Open) and The K Club, Ireland (host of the 2006 Ryder Club). Ireland allocated grants of €20 million in the 1990s to build and upgrade golf courses. Portugal approved grants up to €3 million per golf project – the high profile Vilamoura development was a major beneficiary.

However, some golf operators across Europe have tried and failed to access ERDF grants. Why?

The answer is that the rules on who can benefit from ERDF vary across Europe.

It is important to remember that the rules on ERDF funding are set at a variety of levels: European, national and regional. National governments have quite a lot of flexibility to fix their own rules and priorities for ERDF.

Some of the new Member State governments, eg Czech Republic, have identified golf tourism as a priority for ERDF funding. Others have not – but that’s not necessarily the end of the story. There are large pots of ERDF and other Structural Funds to be used by 2013 (eg Romania €20 billion) and money unused after 2013 has to be handed back to Brussels. Spending priorities can change over the lifetime of a programming period. If your national and regional authorities have not yet identified golf tourism as a priority, then consider making representations, ideally not as one individual but as a group or sector.

The rules at European level do allow the private sector to benefit from ERDF. An important decision was taken by the EU Council of Ministers in December 2005 that private costs are eligible for ERDF grant support “but only for Member States with a GDP below 85% of the EU27 average and East German Lander”. The Council Regulation (EC) No 1083/2006 laying down the general provisions on ERDF and other Structural Funds defines a “beneficiary” as: “an operator, body or firm, whether public or private …”.

The aim of the European Regional Development Fund (ERDF) is to use public money to stimulate economic development and create jobs in the poorer European regions. Clearly, private sector involvement is crucial if regional economic development is to be successful and sustainable in the long-term.

The issue of private sector involvement in ERDF, however, is a perennial grey area. In some Member States, private sector access to ERDF is restricted. In others, definitions such as “normal profits” can cause much confusion.

In the UK, ERDF rules generally do not exclude the private sector but ERDF grants are not paid directly to profit-making private sector companies. But in certain circumstances, the fund can help the development of small and medium-sized enterprises (SMEs). Private sector companies are encouraged to present applications in partnership with a public sector body.

Going back to the examples quoted above, Carnoustie and The K Club qualified for ERDF grant aid because their applications were linked with the local authority (Carnoustie) or the national tourism agency (The K Club).

The key message to all private sector golf operators across Europe is don’t be put off – golf development has the potential to be considered eligible for ERDF support provided you identify and communicate how your project meets your regional development priorities. Your chances of success are likely to increase if you work in partnership with your relevant public sector bodies and with others in the golf industry in your region.


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