Sixty-eighth Report of Session 2017–19 Contents

7EU structural funds post-2020

Committee’s assessment

Politically important

Committee’s decision

Cleared from scrutiny; further information requested; drawn to the attention of the Health and Social Care Committee, the Welsh Affairs Committee, the Scottish Affairs Committee and the Northern Ireland Affairs Committee

Document details

(a) Proposal for a Regulation of the European Parliament and of the Council laying down common provisions on the European Regional Development Fund, the European Social Fund Plus, the Cohesion Fund, and the European Maritime and Fisheries Fund and financial rules for those and for the Asylum and Migration Fund, the Internal Security Fund and the Border Management and Visa Instrument; (b) Proposal for a Regulation of the European Parliament and of the Council on the European Regional Development Fund and on the Cohesion Fund; (c) Proposal for a Regulation of the European Parliament and of the Council on the European Social Fund Plus (ESF+); (d) Proposal for a Regulation of the European Parliament and of the Council on specific provisions for the European territorial cooperation goal (Interreg) supported by the European Regional Development Fund and external financing instruments.

Legal base

(a) Articles 177, 322(1)(a) and 349, TFEU (b) Articles 177, 178 and 349, TFEU (c) Articles 46(d), 149, 153(2)(a), 164, 168(5), 175(3) and 349, TFEU (d) Articles 178, 209(1), 212(2) and 349 TFEU; Ordinary legislative procedure; QMV

Department

Business, Energy and Industrial Strategy

Document Numbers

(a) (39801), 9511/18 + ADD 1, COM(18) 375; (b) (39807), 9522/18 + ADDs 1–2, COM(18) 372; (c) (39808), 9573/18 + ADDs 1–2, COM(18) 382; (d) (39811), 9536/18 + ADD 1, COM(18) 374

Summary and Committee’s conclusions

7.1The EU’s European Structural and Investment (ESI) Funds74 aim to reduce economic, social and regional disparities across the EU, and to address the impacts of migration. In line with proposals for EU financing—the Multiannual Financial Framework (MFF)—from 2021 until 2027 inclusive, the Commission has proposed revised rules governing the ESI Funds for that period.

7.2The UK does not expect to participate in the Funds over the period 2021–27, with the possible exception of the European Territorial Cooperation (ETC) programmes, health elements of the European Social Fund and the asylum and migration-related programmes.

7.3We set out further details on the proposals in our Report of 5 September75 and we reported again on the ETC programme on 17 October.76 The ETC goal of the ESI Funds (otherwise known as “Interreg”—inter-regional cooperation) is a long-established strand, designed to promote regional cooperation across borders within the EU. It includes the PEACE PLUS Programme, specifically designed to support cooperation across the Irish border.

7.4We granted a scrutiny waiver at our meeting of 21 November 2018 in order that the Government could support a partial general approach at the 30 November Council meeting. We noted that our earlier requests for information on the progress of negotiations and on progress in determining future UK engagement remained outstanding.

7.5The Parliamentary Under-Secretary of State (Lord Henley) has since written three times to update the Committee on the progress of negotiations. Discussions have taken place on the separate proposals concerning the European Regional Development Fund (ERDF), European Social Fund Plus (ESF+) and the ETC Regulation, as well as the Common Provisions Regulation (CPR)—which sets out provisions covering all of the ESI Funds. The CPR negotiation has been broken down into seven blocks.

7.6In his letter of 12 January, he explained that agreement was reached on two elements of the CPR: Block 1 (Programming and Strategic Planning); and Block 5 (Management and Control). The Government supported the partial general approach in order to send a positive signal to other Member States regarding the UK’s continued commitment to the PEACE PLUS Programme under the next MFF.

7.7In his most recent update,77 of 5 June 2019 (which supersedes that of 29 April), he requests that the Committee waive the scrutiny reserve in advance of agreement at the 25 June General Affairs Council.

7.8The Minister summarises the negotiations thus far. Since the partial general approach, Member States have agreed on Block 2 (Enabling Conditions and Performance Framework), Block 3 (Monitoring, evaluation, communication & visibility), Block 4 (Financial support from the funds) and Block 6 (Financial Management) of the CPR, as well as the fund-specific Regulations for the ERDF and ESF+.

7.9Ahead of the Council, there remain two elements of the package up for discussion: Block 7 (Subject matter and definitions & final provisions) of the CPR and the full ETC Regulation, which includes the future PEACE PLUS programme between Northern Ireland and Ireland. Agreement on these texts is expected and the UK is seeking to vote in favour of the whole ESI Funds legislative package at the Council. The Minister believes that voting in favour will send further positive signals to other Member States and the European Commission that the UK intends to honour its commitment to take part in the future PEACE PLUS programme.

7.10In addition, says the Minister, the UK has an interest in the future ETC programme as a whole, beyond PEACE PLUS. While no decisions have yet been made on the UK’s potential participation in this cross-border programme, the proposed text and the amendments which were made to it are favourable to, or have no significant impact on, the UK. As a result, the UK would also seek to support this element of the proposed legislative package.

7.11Amendments that have been made since the original ETC text that are positive for the UK include the addition of references to regional organisations, which would facilitate the participation of UK Devolved Administrations in the programme. Another positive example is that the “interregional innovation investments” strand of ETC has been opened up to third countries including the UK, thus aligning the ETC programme further with domestic priorities such as increasing support to innovation.

7.12In addition, says the Minister, the Government has continued to express an interest in continued participation in the Health strand of ESF+. The proposal for the Health strand as it stands allows for UK participation as a third country under a bilateral agreement. It is envisaged that the UK will continue to influence the Health strand while the UK remains a Member State. The UK does not expect, however, to take part in other aspects of the ESF+, nor in the ERDF.

7.13We note that the UK remains committed to post-2020 participation in the future PEACE PLUS Programme, as well as wider participation in European Territorial Cooperation and in the Health strand of the future European Social Fund Plus (ESF+). The UK does not, though, intend to participate in other aspects of either the ESF+ or the European Regional Development Fund post-2020.

7.14The Minister’s summary of the negotiation is very helpful. On future UK participation in certain aspects of these Programmes, we are aware that third country participation in all Programmes under the Multi Annual Financial Framework is being negotiated separately.

7.15We are content to clear this package of documents from scrutiny and look forward to an update on further progress after the General Affairs Council and once negotiations with the European Parliament are underway. In the meantime, we request an update by 3 July on preparations for the UK’s new Shared Prosperity Fund—the domestic replacement for the structural funds post-Brexit. Given the interest shown by the Government in future participation in the Health strand of the ESF+ and in inter-territorial cooperation, we draw this chapter to the attention of the Health and Social Care Committee, the Welsh Affairs Committee, the Scottish Affairs Committee and the Northern Ireland Affairs Committee.

Full details of the documents

(a) Proposal for a Regulation of the European Parliament and of the Council laying down common provisions on the European Regional Development Fund, the European Social Fund Plus, the Cohesion Fund, and the European Maritime and Fisheries Fund and financial rules for those and for the Asylum and Migration Fund, the Internal Security Fund and the Border Management and Visa Instrument: (39801), 9511/18 + ADD 1, COM(18) 375; (b) Proposal for a Regulation of the European Parliament and of the Council on the European Regional Development Fund and on the Cohesion Fund: (39807), 9522/18 + ADDs 1–2, COM(18) 372; (c) Proposal for a Regulation of the European Parliament and of the Council on the European Social Fund Plus (ESF+): (39808), 9573/18 + ADDs 1–2, COM(18) 382; (d) Proposal for a Regulation of the European Parliament and of the Council on specific provisions for the European territorial cooperation goal (Interreg) supported by the European Regional Development Fund and external financing instruments: (39811), 9536/18 + ADD 1, COM(18) 374.

Previous Committee Reports

Forty-fifth Report, HC 301–xliv (2017–19), chapter 2 (21 November 2018); Fortieth Report, HC 301–xxxix (2017–19), chapter 1 (17 October 2018); Thirty-seventh Report HC 301–xxxvi (2017–19), chapter 2 and chapter 3 (5 September 2018).


74 European Regional Development Fund (ERDF), European Social Fund Plus (ESF +), Cohesion Fund (CF), European Maritime and Fisheries Fund (EMFF), Asylum and Migration Fund, Internal Security Fund and the Instrument for Border Management and Visa.

75 Thirty-seventh Report HC 301–xxxvi (2017–19), chapter 2 and chapter 3 (5 September 2018).

76 Fortieth Report, HC 301–xxxix (2017–19), chapter 1 (17 October 2018).

77 Letter from Lord Henley to Sir William Cash MP, dated 5 June 2019.




Published: 25 June 2019