PHILOSOPHY: THE FOUR PRINCIPLES
37. The Structural Funds
are operated in accordance with the four principles of concentration,
programming, additionality and partnership. We consider for each
principle in turn the effects of its application and whether it
is conducive to achieving the reduction of disparities in development.
PROGRAMMING AND PARTNERSHIP
38. We consider these
two principles first and together because their important effects
are so closely intertwined. One serious administrative obstacle
to the preparation of regional strategic programmes was seen by
some witnesses to be the delays in reaching agreement at national
government level with the Commission. Single Programme Documents
(SPDs) might not be agreed until well into the time period of
the programme. As a result programmes had to be pushed together
quickly so as to "mop up the money" (Q 106). More fundamental
difficulties arise from the manner in which regional economic
statistics (Q 104) are used to designate areas for assistance
under the Structural Funds. There is also a problem in the United
Kingdom with the patchiness of the survival of the practice of
strategic regional planning.
39. In our evidence
we heard no complaint about the emphasis now given to programming
as a concept. Multi-annual programming was accepted as more conducive
to efficient and effective planning than annual "wish-lists".
However, there was some suggestion that in the United Kingdom
the outcome of the process of putting together programmes was
excessively influenced by the dominant partners in the process-the
national government and the Commission-at the expense of lower
level interests: local authorities, local business interests and
voluntary bodies (QQ 290, 295, p 161). There was also some
indication that those organisations already in receipt of funding
could exercise influence on the drawing up of programmes to continue
their own funding to the detriment of genuinely innovative measures
(p 52).
40. At a yet more local
level we received some evidence that the weaker chambers of commerce
may effectively be blocked out of bidding for Structural Funds:
they felt "crowded out" by Business Link, the TEC and
the local authority whom they saw as a dominant force (Q 87).
It was acknowledged that the parish-pump mentality was strong
(Q 386): local bodies, whether elected councils, TECs, chambers
of commerce or voluntary organisations, often took narrow views
arguing, like the Dodo, that "all must have prizes"[9].
On a more positive note, Sir Alan Cockshaw, chairman of AMEC
plc, drew our attention to the north-west of England where a Business
Leadership Team, consisting of the chairmen or chief executives
of the largest companies, linked with the North West Regional
Association of local authorities to form the North West Partnership
to take a strategic view of the development needs of the region
(Q 390). The degree of local harmony and cooperation between
the multitude of possible participating organisations evidently
varied considerably, at least within England.
41. In Scotland we found
that the sense of partnership between the Scottish Office and
the local organisations was appreciated and was contributing to
a sense of local ownership of the projects and programmes. This
sense of partnership was reflected and strengthened by providing
the Monitoring Committees with independent secretariats. The
British Chambers of Commerce, however, wished to take this development
further and suggested that Monitoring Committees should be chaired
by an "impartial" person and not by a Government official
(p 19). We found no comparable sense of partnership in England
where Whitehall was more likely to be seen as both dominant and
remote (pp 224, 227). A DTI official noted that "the Scottish
Office, Welsh Office and the Northern Ireland Office combine within
themselves a great range of powers which are distributed between
government departments in England . . . in many ways the administrative
issues are simpler there than they are in England" (Q 27).
42. The introduction
of Government Offices for Regions (GOR) was too new at the time
of our enquiry for the relationships between Whitehall, GORs and
local authorities and partners to have settled down. Our impression
was that GORs can, with the right people in post, produce an improvement
in the coordination between the various Government departments
involved and, consequently, a better relationship between the
national government and the local partners. However, we also
met some worrying signs that civil servants in the regions and
those in Whitehall did not always have a common understanding
of what could be done or of what had been agreed should be done
under the programmes (p 205). The spokesman for the local authority
associations in England hoped that GORs could be "more offices
for the regions and less offices in the regions for the government"
(Q 290).
43. There were signs
that the elected members of local authorities, whether in Scotland
or in England, resented their virtual exclusion, (Merseyside excepted),
from the Monitoring Committees which oversee and steer the implementation
of programmes. One academic observer noted that "lower levels
of government have often perceived the Structural Funds as an
opportunity to gain more autonomy with regard to their economic
development responsibilities and resources, (especially in unitary
states such as the UK)" (p 186). Commissioner Wulf-Mathies
told us that she welcomed a shift in the Government's position
on this issue, of which she had just been told by the Minister
concerned (Q 518), so that it would be for the local partnership
to decide whether elected local councillors should sit on the
Monitoring Committees. It subsequently appeared that the Government
position on this had not been finalised in continuing negotiations
with the Commission (p 238).
44. At present Objective
4 is not in operation in the United Kingdom: there has been no
agreement between the principal partners-the Commission and the
Government-on this issue. We were told by a DTI official that
the Government had objected to Objective 4 because it had feared
that "it would be used or could be used as a form of industrial
subsidy" rather than for training for employment (Q 57).
Commissioner Flynn saw the Government's objection as stemming
from their belief that employers alone should be responsible for
in-company training. He took the view that "retraining people
is more effective if it is undertaken while those people are still
in employment" (Q 486). The TEC National Council was "disappointed"
that Objective 4 was not implemented in the United Kingdom (p
228). Nissan told us that "there should be more influence
to determine at a regional level the priorities. For instance
Objective 4 is not given sufficient weight...although we believe
it could play a significant part in creating prosperity by the
existing embedded firms in a region" (p 212). Mr Lang told
us that the Department for Education and Employment were working
on a possible implementation plan and they would be consulting
on it "possibly before the end of this year" (Q 569).
Opinion: programming and partnership
45. We welcome the
emphasis attached to devising programmes and to the longer time-scale
afforded for planning by multi-annual programming. We are concerned
that the machinery at regional or local level, certainly in England,
for preparing a plan that is strategic and based on accurate regional
economic statistics is lacking or rudimentary. We were impressed
by the care with which the Irish authorities seem to have prepared
at national level-but, we were assured, after exhaustive consultation
across the country-their plans which addressed in a strategic
way the needs of the country for the years of the next structural
funds planning period. Ireland is, of course, a small country
in terms of population (roughly comparable to the population of
Greater Manchester) so that strategic planning with local consultation
is feasible and acceptable. The structure of local government
and its relationship to national government work against the development
of strategic overviews in the English regions.
46. These considerations
add, we believe, to the importance of the recommendation we make,
namely, that the Government should further improve the analysis
of economic and social needs based on local area statistics.
The Government and the Commission should be alert to the inconsistencies
that arise where areas are inappropriately aggregated. We have
in mind, for example, that the grouping of Devon with Cornwall
as one area may mask the particular needs of Cornwall.
47. The arrangements
for strategic planning of programmes, selecting projects and monitoring
their implementation vary widely. Below central government level,
in England there is a mish-mash of local authorities, semi-government
bodies, academic bodies and purely voluntary bodies each with
a finger in the pie and seeking, like Little Jack Horner, to pull
out a plum. We are aware of the beneficial effect that the existence
of the Funds has in bringing together parties not inclined to
work together. We return to this topic later in paragraphs 74-75
and 83-88. We see no virtue in seeking to impose a uniform pattern
across the country but we do see a need for a high standard of
strategic coordination and effective delivery in all regions,
such as we believe exists in Ireland. We are not convinced that
this is attained in the United Kingdom at present. We recommend
that each GOR be charged with producing, by mid-1998, after full
consultation with local authorities, including elected members,
and the relevant private organisations, a locally agreed structure
for this purpose. This should allow the first generation of post-1999
programmes to be planned under the new arrangements.
48. We also recommend
that the arrangements for coordination between Whitehall departments
in handling Structural Funds should be further improved so that
the position in England is at least as good as in Scotland.
We welcome the recent Government announcements[10]
about the administration of the Structural Funds in England and
the plans to establish a single Vote for the ERDF in England as
signs of recognition that there is need for improvement. We are
convinced that devolution to regional level of decisions about
structural policies and their funding will need to be carried
further if the potential benefits of the Structural Funds are
to be maximised.
49. We regret that
elected councillors are generally excluded from Monitoring Committees.
Elected councillors are legitimate democratic representatives
of their communities. It should be for councillors to decide
for themselves whether it is more appropriate for their council
to be represented by an officer or a member. We are pleased that
intervention by the Commission has produced signs of a more sensible
approach. This matter should now be settled amicably and promptly.
50. We see little
sense of urgency in the United Kingdom's further consideration
of an Objective 4 programme which aims to adapt the workforce
to industrial change. We recommend prompt action to formulate
an Objective 4 programme, agree it with the Commission and implement
it.
9
Alice's Adventures in Wonderland,
Lewis Carroll. Back
10
Announcement made by the Regeneration Minister, Mr David Curry
on 3 December 1996. Back
