17. STRUCTURAL FUNDS
(23972)
13133/02
COM(02) 591
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Commission Report: Thirteenth Annual Report on the Structural Funds (2001).
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| Legal base: | —
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| Document originated: | 30 October 2002
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| Deposited in Parliament: | 18 November 2002
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| Department: | Trade and Industry
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| Basis of consideration: | EM of 4 December 2002
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| Previous Committee Report: | None
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| To be discussed in Council: | Not known
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| Committee's assessment: | Politically important
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| Committee's decision: | Cleared, but relevant to the debate recommended on the 2001 Annual Report on the fight against fraud[51]
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Background
17.1 EU aid to combat regional disparities within the
Union is channelled largely through a series of inter-related
funds, collectively known as the Structural Funds, of which there
are four main ones:
— European Regional Development Fund (ERDF)
Provides assistance, in particular, for investment to create or
maintain jobs, especially in environmental, transport and telecommunications
and energy infrastructure projects, tourism and development of
local businesses.
— European Social Fund (ESF)
Provides assistance to the long-term unemployed, young jobseekers
and people excluded from the labour market, and to promote equal
opportunities and adaptation to changes in industry.
— Financial Instrument for Fisheries Guidance (FIFG)
Provides assistance to fishermen to modernise vessels, develop
fish farming, protect certain fishing areas, develop port facilities
and promote the processing and marketing of fisheries products.
— European Agricultural Guidance and Guarantee Fund (EAGGF)
Provides assistance for new young farmers, hill farms, rural infrastructure,
diversification of land use and improvements, investment in tourism
and woodland protection.
17.2 All four funds are co-ordinated in a series of programmes
and can be used in a variety of combinations to fulfil approved
projects. There are also separate Community Initiatives which
are also part of the Structural Funds. These target deprivation
caused by more specific factors. They are:-
URBAN — to support the economic and social regeneration
of cities and neighbourhoods in crisis;
EQUAL — to promote equality between men and
women and to combat all forms of discrimination and the inequalities
in the labour market;
LEADER — to encourage and support rural areas and sustainable
development which enhances the natural and cultural heritage as
well as contributing to job creation; and
INTERREG — to support cross-border co-operation between
neighbouring authorities and to develop cross-border economic
and social centres.
17.3 The Structural Funds form part of the Structural
Operations category in the Communities' Budget, which also covers
the Cohesion Fund for the four most disadvantaged Member States
(Ireland, Spain, Portugal and Greece). In 2001 Structural Operations,
with commitment appropriations of €33,562 million (about
£20,946 million), represented about 36% of the Budget, of
which the vast bulk was spent through the Structural Funds.
The document
17.4 The document is the Commission's annual report on
the structural Funds and describes how the Structural Fund Regulations,
particularly in relation to Objectives 1, 2, and 3[52]
and to the Community Initiatives, were implemented during 2001.
It centres on three main topics:
- major events in the work of the Funds and other instruments;
- coordination with other Community policies and instruments;
and
- evaluation of implementation.
17.5 The report includes chapters on:
- implementation of programmes, including sections on each Member
State;
- evaluation and financial control; and
- dialogue and information.
17.6 In the chapter on the main events of 2001 the document
reports the Commission's negotiations with Member States about
Objective 1 programmes; the second report on Economic and Social
Cohesion and the Cohesion Forum, which looked at the results of
the cohesion policy since 1989; and the launching of innovative
actions under the ERDF.
17.7 In the chapter on programme implementation the document
discusses implementation of Objectives 1, 2, and 3 and the Community
Initiatives; has a section on implementation in each Member State;
reports on coordination with other financial instruments —
the Cohesion Fund, the European Investment Bank and the European
Investment Fund — and on financial assistance to Trans-European
Networks; and examines the relation of the Funds with other Community
policies.
17.8 In the chapter on evaluation and financial control
the Commission describes both its own evaluation and checking
activities and inspections by the European Anti-Fraud Office (OLAF).
OLAF opened 65 new enquiries into cases of fraud or suspected
fraud (26 for the ERDF, 29 for the ESF, 5 for the EAGGF Guidance
Section and 5 for the FIFG) and carried out 23 inspections related
to structural measures. These inspections uncovered cases with
a range of problems such as the failure of beneficiaries to provide
part-finance, non-compliance with the rules on public procurement,
ineligible expenditures and declarations of expenditure predating
the actual expenditure. During the year Member States notified
1,190 cases of irregularity or fraud involving a total of €199,120
000. The number of cases of irregularities notified appeared to
stabilise compared with 2000 but the amount involved was greater.
17.9 The chapter on dialogue and information reports
on the Commission's discussions and consultations with the European
Parliament, the Fund Committees, the Economic and Social Committee,
the Committee of the Regions and social partners, and on its information
activities.
17.10 The report shows Objectives 1-3 commitments of
€4,784.06 million (£2,985.73 million) for the UK in
the period 2000-06 and €206 million (£128.56 million)
for the Northern Ireland/Ireland border PEACE 2 Programme and
payments in 2001 of €501.26 million (£312.84 million)
for the UK and €37.17 million (£23.2 million) for PEACE
2. In the section on activity in the UK the report notes:
- five Objective 1 programmes approved in 2000 being implemented
in 2001;
- approval in 2001 of five Objective 1 programmes or major projects;
- FIFG activity in Objective 1 and non-Objective 1 regions;
approval and implementation of 14 Objective 2 programmes in 2001;
- plans for a mid-term evaluation of Objectives 1 and 2 programmes;
and
- implementation of the 2000-06 Objective 3 programme through
a Community Support Framework with separate operational programmes
for England, Scotland and Wales (Northern Ireland is covered by
transitional Objective 1 funding).
The Government's view
17.11 Whilst telling us there are no new policy issues
arising from this document the Minister of State for Employment
Relations, Industry and the Regions, Department of Trade and Industry
(Alan Johnson) says the report is both substantial and detailed.
Conclusion
17.12 This document provides a long and comprehensive
account of various aspects of Structural Funds activity in 2001.
We have no questions to raise and clear the document accordingly.
However, we regard it as relevant to the debate in European Standing
Committee B we have recommended on the Commission's 2001 report
on sound financial management and fighting fraud.[53]
51
See (23669) 10625/1/02: HC 152-xxxix (2001-02), paragraph 2 (23
October 2002). Back
52 The
Structural Funds consist of three Objectives: Objective 1 - promoting
the development and structural adjustments of regions whose development
is lagging behind; Objective 2 - supporting the economic and social
conversion of areas facing structural difficulties; Objective
3 - supporting the adaption and modernisations of policies and
systems of education, training and employment. In general, the
EU provides up to 50% of the funding under Objectives 2 and 3
and up to 75% under Objective 1. Back
53
See footnote 51. Back
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