RENATIONALISING
THE
FUNDS
57. The Committee discussed
with several witnesses the question of whether the Structural
Funds delivered sufficient "added value" to compensate
for the bureaucracy involved. There was general agreement that
there was. COSLA said that the Structural Funds were worth about
£200 million a year to Scotland, which was less than the
funding received from the Common Agricultural Policy but this
money would be difficult to raise domestically. It added that
"European funds have allowed a great degree of flexibility.
They have allowed additionality, they have allowed complementarity
so that what we were able to bring from local government sources
and indeed sometimes from private sources were matched against
European funds. It enabled projects to take place at local level
that would not necessarily always be that easy when central Government
was directing the show" (Q 94).
58. The Alliance for
Regional Aid said that "the worst of all worlds but undoubtedly
the simplest system would be for the Commission to hand over a
very large blank cheque to the UK Government and the UK Government
simply put in whatever receipts it wished to put in. That, though
a simple system, would not really be an effective one at delivering
the sorts of development we all want to see" (Q 173).
59. Mr Marc Vanheukelen
said that a number of people had criticised the Commission for
"pumping around money", and had proposed instead a net
fund where the Structural Funds would operate only in poor countries,
rather than in poor regions. He responded to this suggestion:
"As an economist I have
some sympathy with that point of view but then politically and
legally the Council should start changing Article 130a of the
Treaty which says since 1957 that it is an explicit task of the
European Union to look after the economic fate of the regions
in the Union, it does not say regions in poor countries or at
the exclusion of regions in rich countries. We have the regional
task that was given to us by the founding fathers that has been
reconfirmed three or four times at revisions of the Treaty and
the only thing we are doing is to carry out our obligations under
the Treaty" (Q 277).
60. He added: "one
ought not to under-estimate the political visibility of the Structural
Funds" (Q 278).
URBAN
ISSUES
61. Leeds City Council
(LCC), representing an area which is currently excluded from Objective
2, supported the Eurocities organisation's proposal that a minimum
of 5 per cent of the EU population should be eligible for the
Urban Areas strand of Objective 2, a share equivalent to that
proposed for rural areas. It argued that the United Kingdom should
attract at least double the average EU share under this strand,
on the grounds that the United Kingdom is the second most urbanised
Member State, it has the second highest EU share of urban population
in cities over 500,000 population (where concentrations of deprivation
are particularly acute), and a high incidence of relative poverty.
Leeds City Council also drew attention to the fact that unemployment
in Leeds inner wards had exceeded the EU average by 50 per cent
for a considerable period (p 117).
62. Leeds City Council said that
the Commission's proposal to make Structural Fund and State Aid
areas coincide threatened to undermine the Commission's acceptance
of the need to tackle social cohesion problems in urban areas
in difficulty, which would not necessarily be defined as Assisted
Areas. LCC considered that the two sets of policies had different
objectives and procedures, and it therefore strongly opposed the
proposal that areas should only be eligible for Objective 2 status
if they were also eligible for state aids (p 118).[14]
63. COSLA expressed even stronger
opposition to the Commission's proposed definition of urban areas.
"They do not reflect the Commission's own thinking in the
document Towards an Urban Agenda, which they adopted a year or
so ago. We would argue that a couple of the indicators proposed
are not actually capable of measurement. If they are not capable
of measurement, I think that starts questioning the validity of
what the proposals actually are" (Q 101).
10 The CBI expressed a similar view (p 100). Back
11
Cornwall and Devon are currently grouped together as a NUTS 2
region. (NUTS is an acronym for the "Nomenclature of territorial
statistical units"-see Appendix 4 for further details.)
On 29 June 1998 a new classification of United Kingdom areas for
European purposes was agreed with Eurostat, the Statistical Office
of the European Union. The major changes agreed include the separation
of Cornwall and Devon into two separate areas and changes to boundaries
in Scotland to recognise the area represented by Highlands and
Islands Enterprise. The separation of East and West Wales for
statistical purposes is also likely to have a significant impact. Back
12
The German Government's position is that 0.46 per cent "is
a ceiling which should not be exhausted" (Q 371). Back
13
The United Kingdom has recently adopted the ILO definition of
unemployment. It is also worth noting that income benefit as well
as sickness benefit can conceal high levels of unemployment. Back
14
See COM(98) 131 Final, p 15. Back
