Documents considered by the Committee on 7 November - European Scrutiny Committee Contents


11 The European Social Fund and European Regional Development Fund

(a)

(33218)

15247/11

+ ADDs 1-2

COM(11) 507

(b)

(33219)

15249/11

+ ADDs 1-4

COM(11) 614

(c)

(33225)

15253/11

COM(11) 611


Draft Regulation of the European Parliament and of the Council on the European Social Fund and repealing Regulation (EC) No 1081/2006


Draft Regulation of the European Parliament and the Council on specific provisions concerning the European Regional Development Fund and the Investment for growth and jobs goal and repealing Regulation (EC) No 1080/2006

Draft Regulation of the European Parliament and the Council on specific provisions for the support from the European Regional Development Fund to the European territorial cooperation goal

Legal base(a)  Article 164 TFEU; co-decision; QMV

(b)  Articles 178 and 349 TFEU; co-decision; QMV

(c)  Article 178 TFEU; co-decision; QMV

Documents originated(a) (b) and (c) 6 October 2011
Documents deposited(a) and (b) 13 October 2011; (c) 17 October 2011
Department(a)  Work and Pensions

(b)  and (c) Business, Innovation and Skills

Basis of considerationMinister's letter of 30 October 2012
Previous Committee ReportsHC 86-xiii (2012-13), chapter 16 (17 October 2012);

HC 86-v (2012-13), chapter 9 (20 June 2012);

HC 86-iv (2012-13), chapter 5 (14 June 2012);

HC 428-lvii (2010-12), chapter 8 (18 April 2012)

Discussion in Council16 October 2012
Committee's assessmentPolitically important
Committee's decisionNot cleared; further information requested

Background and previous scrutiny

11.1 The three draft Regulations concern the EU's Structural Funds which have two components: the European Social Fund (ESF) and the European Regional Development Fund (ERDF). Together with the Cohesion Fund, these Funds seek to strengthen economic, social and territorial cohesion by providing targeted financial assistance to regions across the EU to help reduce disparities in levels of social and economic development. The purpose of the draft Regulations is to identify the principal objectives underpinning ESF and ERDF support and to set out more detailed investment priorities for the next financial period from 2014-20. Our Forty-sixth and Forty-seventh Reports of 9 and 23 November 2011 provide an overview of the draft Regulations and the Government's views.

11.2 The three draft Regulations form part of a broader package of measures proposed by the Commission in October 2011, of which the most important is the draft Common Provisions Regulation. This overarching Regulation would establish a Common Strategic Framework and a set of common provisions to govern all of the EU's cohesion policy instruments, including the ESF and the ERDF.[24] The draft Common Provisions Regulation proposes a global budget of €336 billion for the EU's Structural and Cohesion Funds for the period 2014-20, of which approximately €84 billion would be allocated to the ESF and €183 billion to the ERDF, and sets out the criteria for the distribution of EU resources between regions across the EU. The draft Common Provisions Regulation was debated in European Committee C on 6 March 2012.

11.3 Since then, the General Affairs Council (GAC) has agreed two "partial general approaches" on elements of the October package. The first, in April 2012, covered strategic programming, ex-ante conditionality, management and control, monitoring and evaluation, major projects, and eligibility for funding. Most of the elements concerned Articles in the draft Common Provisions Regulation (cleared by the debate in March 2012), but some (on strategic programming, management and control, and eligibility) also concerned Articles in the draft ESF and ERDF Regulations. The second, in June 2012, covered thematic concentration, financial instruments and revenue generating projects (including public-private partnerships), as well as Articles in the draft Common Provisions Regulation establishing an overall performance framework.[25]

11.4 The Minister of State for Business and Enterprise (Michael Fallon) wrote on 8 October to inform us that the Cypriot Presidency intended to seek a further partial general approach at the General Affairs Council on 16 October. He noted that most of the elements of the proposed partial general approach concerned the draft Common Provisions Regulation and included certain financial aspects not covered by negotiations on the EU's Multiannual Financial Framework for 2014-20, information and communication, and technical assistance. He expected that agreement would also be reached on various provisions in the draft Regulation on European Territorial Cooperation (document (c)) as well as on a set of core indicators for the European Social Fund and European Regional Development Fund. As the General Affairs Council would take place immediately before the Committee's first meeting after the party conference recess, the Minister indicated that the Government might override scrutiny. Our Fifteenth Report, HC 86-xv (2012-13) (17 October 2012) describes in more detail the main elements of the proposed partial general approach.

11.5 We noted that there remained a degree of uncertainty as to the actual scope of the partial general approach and welcomed the Minister's efforts in endeavouring to identify and explain its likely content. We recognised that the partial general approach largely concerned Articles in the draft Common Provisions Regulation, which we debated in March, and that those pertaining to the three draft Regulations which remained under scrutiny raised no particular concerns. Whilst we would have been willing to consider granting a scrutiny waiver in this case, the timing of the Council made it impossible for us to do so. We therefore asked the Minister to inform us of the outcome of the Council as well as the Government's reasons for overriding scrutiny, if it so decided.

The Minister's letter of 30 October 2012

11.6 The Minister (Michael Fallon) tells us that a partial general approach was agreed at the General Affairs Council on 16 October and that it covered seven blocks:

"Information and communication; European territorial cooperation; territorial development; financial issues (not covered by the MFF negotiations); country-specific recommendations; management and control; and indicators. The agreement reached at the Council reflected the position as outlined in my letter to your Committee sent on 8 October."

11.7 He continues:

"I regret that it was necessary to override parliamentary scrutiny on this occasion. However, many of the articles considered were within the Common Provisions Regulation which has cleared scrutiny in both Houses. The articles in the other Regulations were, in my view, minor compared to issues in previous blocks and do not prejudice the position on the EU budget and multiannual financial framework. I reiterated the UK position that we only accepted the partial general approach on the basis that 'nothing is agreed until everything is agreed', including cross-cutting issues with other regulations, such as the overarching Multiannual Financial Framework.

"It is important that we move towards a conclusion of these negotiations as it is important that the start of the programmes in the next programming period are (sic) not unduly delayed. Much work remains and therefore I considered that the above, rather technical, items were ready for agreement at Council."

Conclusion

11.8 We thank the Minister for informing us of the outcome of the Council. As we have indicated previously, we appreciate that there is a need to break down complex negotiations into more manageable negotiating blocks, and we accept that the Articles in the partial general approach which pertain to the three draft Regulations under scrutiny raise no particular concerns. However, our general reservations about the use of partial general approaches remain, not least because information on their scope and content emerges at such a late stage in negotiations, making timely and effective Parliamentary scrutiny more difficult, and because the piecemeal nature of the agreements obscures the outcome of negotiations on the overall package.

11.9 We look forward to receiving further progress reports on outstanding issues in the negotiations. Meanwhile, the draft Regulations remain under scrutiny.





24   See (33217) 15243/11: HC 428-xli (2010-12), chapter 1 (9 November 2011). The draft Common Provisions Regulation also applies to the EU's Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund. Back

25   The performance framework is intended to ensure that a small proportion of funding for each Member State is set aside and allocated, following a mid-term performance review, to programmes which have successfully met their targets. Back


 
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Prepared 16 November 2012