Select Committee on Welsh Affairs Fourth Special Report

Appendix 2

Letter to the Chairman of the Committee from the First Secretary of the National Assembly for Wales.

Thank you for your letter of 16 February with which you enclosed a copy of the Committee's Report on European Structural Funds. The Report is a very thorough examination of the financial issues and is a useful contribution to the debate about funding.

The Report identifies several points on which the Assembly has a role and it is appropriate for me to let you have our observations on those where we can provide an answer.

At paragraph 12, the Committee has recommended that the Government and the Assembly should jointly publish a simple guide to public expenditure in Wales, setting out how both UK and European funding operate.

Assembly officials are discussing this with the Office of the Secretary of State for Wales and we will respond on this point in due course.

Paragraph 14 urges the National Assembly to provide for advance payments where appropriate and to ensure that the availability of advance payments is well publicised.

As you know, the Assembly is presently responsible for payments of ERDF, EAGGF and FIFG grants. The financial arrangements which will apply to the 2000—2006 programmes will need to be considered by the respective Monitoring Committees as part of the overall implementation arrangements for these programmes. We will ensure that they have due regard to the recommendation of the Welsh Affairs Committee and the financial implications arising therefrom. Responsibility for the payment of ESF grants presently rests with the Department for Education and Employment (DfEE). We are currently negotiating with DfEE to take over the financial responsibility for ESF but if we fail to reach agreement we will ensure that they are made aware of the Committee's recommendation.

Paragraph 23 seeks clarification about how Lottery funding is treated in the estimates for match funding.

Lottery funding has been used in previous programmes as public sector match funding for European Structural Funds. However it is only secured on a project by project basis and a global total of Lottery funding cannot be guaranteed by the Assembly for the programme. The figures put to the Commission therefore do not include projections for Lottery contributions to match funding. Any such contributions will be a welcome bonus in the individual projects for which it is available.

Paragraph 33 urges the Assembly to ensure that the private sector is fully involved in the Structural Funds process.

Private sector organisations have been involved in all aspects of the development of the programme since the beginning of the process. Private sector bodies sat on the European Task Force and were members of the three regional partnerships that helped shape the Structural Funds programmes. The private sector has been involved in the teams negotiating and developing the Objective 1 document and one third of the Objective 1 Programme Monitoring Committee will come from the private sector. It has been agreed that the partnerships that deliver particular aspects of the programme will also contain one third private sector membership (alongside one third public sector and one third voluntary sector) at both regional (i.e. all Objective 1) level and local level. A number of local partnerships have been set up already which are including private sector representation to this extent.

At paragraph 34 the Committee has explained that it shares the view that the Task Force was wound up prematurely and urges the Assembly to ensure that the new structures for overseeing the implementation of the Structural Funds programme are established without delay.

The Task Force was wound up once it had completed its work of passing drafts of the National Economic Development Strategy and the Objective 1 and Objective 3 programme documents to the Assembly. Since then the Assembly has engaged with partnership groups specially drawn together to negotiate the programme documents with the Commission; these have included private and voluntary sector participants in their membership. The Objective 1 Monitoring Committee has now been appointed and will meet in shadow form for the first time on 7 March.

Work on the Objective 2 document has always been led by the East Wales partnership, working closely with the Assembly. They are continuing their work on the Single Programming Document and have just gone out to public consultation on their draft programme. The intention is to submit the document to the Assembly in April and to the Commission in May. The partnership have made good progress to date, working in an inclusive manner, and there is no evidence at all that they have been affected in any way by the disbanding of the Task Force.

In paragraph 35 you have asked us to respond to your Sixth Report which dealt with the Denbighshire County Council's Funding Legacy.

I think our response may have reached you while the current Report was at the printers! Peter Law AM responded in a letter dated 24 January and the Committee has since acknowledged that Peter's letter has been received.

Rhodri Morgan MP AM
First Secretary
The National Assembly for Wales
7 March 2000

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