5 Repatriating regional policy |
81. We considered whether regional policy in
the UK should be entirely managed and funded by the UK itself
with the UK's contribution to EU Structural and Cohesion funds
going only to the poorer Member States. Open Europe suggested
that regional funding from Brussels should be replaced by an equal
level of ring-fenced funding from Westminster. The UK could also
choose to spend the money it would save, from not funding Member
States above the 90% threshold, on its own regional policy:
Devolving regional policy should involve the Coalition
promising to ring-fence the £8.7bn that it currently receives
via the EU's structural funds for continued regional and regeneration
spending around Britain. In addition, it could pledge to re-invest
its projected saving of up to £4.2bn under the 90% threshold
back into regional development. This would mean that virtually
all UK regions would experience a rise in the amount of subsidies
they receive by around 45%.
82. Open Europe proposed that, under this model,
regional funding could be channelled more effectively to national,
rather than EU, priorities. It could afford greater flexibility
to respond to changing economic priorities, rather than be constrained
by a set of objectives fixed for a seven year period.
We also heard that removing the involvement of the EU would reduce
some of the bureaucracy, administration and audit requirements
that some witnesses commented on.
The Government has indicated that it wants wealthier states, such
as the UK, to stop receiving Structural Funds after 2020.
This would mean that responsibility for all aspects of regional
policy, and its funding, would return to the UK.
83. As we have noted, this policy of repatriation
was not supported by other Member States during negotiations for
the 2007-13 period, and is opposed by the Welsh Assembly Government,
which receives by far the most Convergence funding in the UK for
the West Wales and the Valleys region (1.3 billion).
It is also opposed by many organisations that submitted written
evidence, who value the long-term nature and focus of the funding
streams. CEDOS/ADEPT said that:
The seven year programming cycle provides continuity
and facilitates strategic programming and the development time
required for large-scale projects. It avoids the precipitous 'dash
for cash' that can be the case with shorter lived funds or those
whose lifetime is uncertain.
84. Cornwall Council noted that "Seven year
European funding programmes are outside of political timescales".
We note that it would be difficult to ring-fence money for any
period longer than a UK public spending round (three or four years)
or the five year electoral cycle, but since the EU Multiannual
Financial Framework already sets the UK's regional funding on
a seven year basis it follows that in certain circumstances special
arrangements could be made. The current ERDF arrangement effectively
removes this part of regional funding from the UK spending round
cycle and so the change proposed would not alter that. There is
therefore a solid basis for HM Treasury to maintain a seven year
cycle, and to secure a formal agreement with the EU to set funding
levels in line with what would have been agreed under the EU system.
The Government will need to think creatively and take the lead
in driving this agenda forward to negotiate a successful outcome
with the Commission and other Member States.
85. We support the principle
of repatriating regional policy funding, provided funding could
be protected and ring-fenced over the long-term to ensure that
the poorest English regions continued to receive the same level
of support they would have received under the current system.
The mechanism for achieving this objective will require the consent
of other Member States and the Commission, as well as agreement
with HM Treasury that the funding be guaranteed for the same seven
95 Ev 38 Back
Open Europe, Off Target: The case for bringing regional policy
back home, January 2012, p 18 Back
For example, Ev w94 [Centre for Process Innovation], para 184.108.40.206 Back
Ev 46, para 34 Back
House of Commons Library Standard Note, SN/EP/5636, p 5; "ERDF
Convergence Operational Programme" at http://wefo.wales.gov.uk Back
Ev 33, para 12 Back
Ev w47 Back