Post 2006

Structural Fund Programmes are cyclical in nature. They have a start and end date and usually last about seven years. The current Programmes come to an end in December 2006 and the debate about what the next Programmes will look like is gathering pace. At the heart of the debate is the issue of enlargement which took place in May 2004 and increased the size of the European Union from fifteen to twenty five Member States. This substantial growth means that eligibility criteria and funding levels will have to change and the debate over the next funding period will answer the question of how much money each region will qualify for. The status of being an eligible area for EUⁱ funding brings with it many benefits, including exemption from state aid rules, giving the potential of greater scope for public investment.

The European Commission has already outlined its thinking about the future structure of European Funds in its Third Report on Economic and Social Cohesion, which was published in February 2004. The Report sets out in detail its proposals on how cohesion policy should evolve for the next Programming period and is an important starting point for shaping policy discussions on cohesion and regional policy development issues. The European Commission’s formal regulation proposals for the reform of Structural Fundsⁱ were published in July 2004.

Where we are now
On 16 December 2005 the European Council finally agreed the Financial Perspectives for 2007-13 setting the overall financial framework for the period at €862 billion. Of this overall financial framework, €307,619 billion will be assigned to the EU Structural Funds through the three new objectives of Convergence, Competitiveness and Territorial Cooperation. The UK element of these funds will amount to a total of approximately €9.4 Billion or £6.7 Billion. It is important to note that the figures given are only initial estimates. The precise figures will depend on final calculations that will be carried out by the European Commission once the Council and Parliament have reached a final Inter-Institutional Agreement on the budget.

How these totals break down
Under the Convergence objective, the UK will receive approximately £1.9 Billion. These funds will go to West Wales and Cornwall with a ‘phasing out’ element also going to the Scottish Highlands and Islands.

Under the Competitiveness objective approximately £4.4 Billion will be allocated to the UK of which approximately £1.26 Billion will go to South Yorkshire and Merseyside, with half of remaining amount going to Regional Employment Programmes across the UK.

The Territorial Cooperation budget for the UK will amount to approximately £0.43 Billion.

The division between ERDFⁱ and ESFⁱ
The Financial Perspectives state that ‘The respective contribution of the ERDF and ESF shall be fixed by Member States in consultation with the Commission.’

Currently the programme in the region is split 70/30 in favour of ERDF and future programmes will probably follow this allocation whilst still recognising that sufficient ESF is needed to add value to skills training and encourage a competitive economy.

Clarity will be sought from the UK Government on how they intend to proceed with this together with the option for regional flexibility to be taken into account when deciding the appropriate weightings of the funds.

At North West Network we will be watching developments closely and will keep you informed through this section of the website, the Newsletter and through our e-mail bulletin. We would also like to hear from you - what do you think is going to happen post 2006 and what would you like to happen. We would also like to know how your organisation is responding to the changes which will inevitably occur when the current programme ends. Please send any comments or views to john@nwnetwork.org.uk

The debate is open – join in!