Future of EU regional policy

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Future of EU regional policy

• David Rawlins
• DTI

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Developing a UK position

• Governments proposed approach
• UK-wide consultation, organised by the nations
  and regions runs until 4 July
• Responses inform Ministers views on the UK
  position
• Ongoing discussions with Commission and Member
  States

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• EU post-2006
• Objectives of EU cohesion policy
• UK contribution to EU cohesion policy objectives
• Structural Funds in the UK
• Proposed UK approach
• Win-win for the UK and the EU

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EU post-2006
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GDP/head in the EU ( of EU-25 average 2000
data)
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Total Unemployment (2001)
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Objectives of future EU cohesion policy
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Objectives

• An outcome which supports and adds value to
  Member States existing policies
• An outcome supporting Lisbon objectives
• Concentration of support on the less prosperous
  Member States
• A significantly simpler system of support
• A fair deal in budgetary terms
• Overall budget for SF is constrained and focused
  on value for money

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UK contribution to EU cohesion policy objectives
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A modern regional policy for the UK

• Macro-economic stability
• Micro-economic reforms
• Tackling market failures
• Regional policy framework of devolution and
  decentralisation
• Locally-led policies

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A great deal still to do
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Disparities remain between and within regions

• Berks, Bucks, Oxon (144)
• NE Scotland (135)
• E Anglia (120)
• N Yorks (103)
• Outer London (96)
• W Wales and Valleys (78)
• Cornwall (72)

(GDP/head as EU-25 average)
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Public Service Agreement target for England

• Make sustainable improvements in the economic
  performance of all English regions and over the
  long term reduce the persistent gap in growth
  rates between the regions

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Structural Funds in the UK

• High profile projects- visible benefit of EU
  membership
• Partnership working multi-annual funding
  catalytic effect cross-border co-operation
  sharing best practice
• Lack of flexibility evidence of added value
  limited bureaucratic

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UK SF post-2006

• Continuing with current system in an enlarged EU
• Most parts of UK not eligible for O1 Cornwall
  allocation estimated at a fifth of current level
• Most parts of UK not eligible for O2
• Estimated one third O3 funding lost due to good
  employment record
• The UK would receive significantly less
  Structural Fund receipts than now under current
  system
• or any other likely scenario

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Proposed UK approach
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EU Framework for devolved regional policy

• Principles of cohesion policy agreed at EU level
  and based on Lisbon objectives
• Richer MS (gt90 EU average GNP) use national
  policies and national funding to address EU
  principles
• Poorer MS use mix of national and EU policies and
  funding to address EU principles

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Win-win for the UK and the EU
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Advantages UK stakeholders

• Commitment to long-term Government support for
  improving regional performance
• Keeping the best of the SF processes
• Supporting the same policies as now
• More flexibility
• Multi-annual budget
• Decision-making devolved/decentralised nations,
  regions and areas
• EU badging

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Advantages UK stakeholders

• Government commitment for increased domestic
  spending so that nations and regions will not
  lose out financially as a result of these
  proposals
• 3/4 of regional spending already comes from
  national sources
• Reduced bureaucracy compared to SF

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Advantages EU stakeholders

• Maintains a single policy framework across the EU
• More flexibility for MS to act (needs State Aid
  reform)
• SF budget and Commission resources focused on the
  new MS
• Less recycling of funds between richer MS
  overall SF budget and MS contributions kept down

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The debate
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Other approaches

• Commission and some other MS favour maintaining
  EU funding in all MS
• Dutch Government favours renationalisation
• EU Framework a middle way
• Time for debate

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Your views

• Advantages and disadvantages of Governments
  proposal
• EU Framework objectives and mechanisms
• Joining up regional development with other
  policies
• Delivering additional regional domestic spending
• What to keep and what to discard from SF?

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Further details
www.dti.gov.uk/europe/consultation.pdf