Select Committee on European Union Fortieth Report

EUROPEAN STRUCTURAL FUNDS 2007-13 (7177/06, 8216/06, 8218/06)

Letter from the Chairman to Malcolm Wicks MP, Minister of State for Energy, Department of Trade and Industry

  Thank you very much for your Explanatory Memorandum of 11 April dealing with 8216/06, 7177/06 and 8218/06 which was considered by Sub-Committee A at their meeting on 25 April.

  Whilst the Committee appreciate the fast moving nature of these negotiations, there was some concern that the timing of your Explanatory Memorandum would not have allowed for proper Parliamentary scrutiny of these Proposals had they been considered, as you indicate, on 25 April. As a result, we were pleased to receive information from your officials that Council consideration had been delayed.

  On the distribution of Structural Funds between rich and poor Member States, the Committee were pleased to see the large increase in funding for the 10 new States plus the two applicant countries. We note with satisfaction that the government continued to push for such an allocation of the Funds.

  On the management of the Structural Funds, you describe some simplifications which have been achieved. We note that you did not support, and the Council has not accepted, the Commissions's proposal that, in order to improve financial control it should be given increased discretion to withhold funds in cases of doubt or suspicion. We would appreciate a fuller explanation of your rejection of tighter controls, along the lines proposed by the Commission.

  The Committee noted the dates mentioned in paragraph 44 of your Explanatory Memorandum. We assume that they are the result of an administrative oversight.

26 April 2006

Letter from Rt Hon Margaret Hodge MP, Minister of State for Industry and the Regions, Department of Trade and Industry to the Chairman

  I am writing in reply to your letter to Malcolm Wicks dated 26 April referring to the Explanatory Memorandum on the new Regulations to govern European Structural Funds over the next Financial Perspective, 2007-2013. I am most grateful for the effort made by the Committee in being able to consider the Regulations to co-ordinate with the tight negotiation scheduling. The timing of the EM was determined by the Inter-Institutional Agreement and the issue of new versions of the regulations, representing close-to-final texts.

  In your letter you ask why the UK did not support the Commission's proposal that, in order to improve financial control, the Commission should be given increased discretion to withhold funds in cases of doubt and suspicion.

  Throughout the negotiations the UK has pushed for provisions encouraging better financial management. On this point, we preferred a text that required Commission officials to identify "evidence to suggest shortcomings" before interrupting payments, rather than a text that would allow them to do so on the less substantial basis of doubts or suspicions. We do not believe that this represents a rejection of more effective controls. We and other Member States believe that basing interruption of payments on doubts and suspicions, rather than on evidence, would be arbitrary. We wish to minimise the danger of unnecessary interruption to the payment process and we believe that the agreed text establishes more appropriate and effective controls.

  You pointed out that there was an error on dates in the section of the EM on Consultation. The text erroneously confused two consultations, which was an oversight. A correction will be issued.

  I am glad to say that further progress in negotiations means there will be few further significant changes to the texts as you considered them. We will, of course, update your Committee on these changes.

9 May 2006

Letter from Rt Hon Margaret Hodge MP to the Chairman

  I am writing to update you on developments in the negotiations on the regulations to govern the European Structural Funds over the next budgetary period, 2007-2013.

  On Friday 5 May the Council approved political agreement on the Presidency compromise texts of the Structural and Cohesion Fund regulations. The Austrian Presidency now expects that the Parliament will adopt the Regulations in its plenary session in July, prior to formal Council approval, publication and entry into force of the Regulations later in the month.

  At Coreper on 26 April, after we submitted texts of the draft regulations to you, the Austrian Presidency proposed possible amendments in the General Regulation in order to secure the agreement of the European Parliament. Drafting on these points was agreed by Member States in Coreper on 3 May. These were the amendments:

    —  Article 10 now specifies the types of organisations with which partnership should be organised (where appropriate).

    —  Article 14 now gives a specific prominence throughout implementation to accessibility to Structural Funding for people with disabilities.

    —  A new Article (14 bis) makes reference to the over-arching importance of sustainable development, and of protecting and improving the environment.

    —  In Article 18 of the General Regulation a further €250 million has been added to the Structural Funds budget, to be allocated to transnational and inter-regional co-operation. There has also been some reallocation of funds within the Co-operation Objective.

  The UK has consistently sought to raise the importance of environmental considerations, so we welcome that development.

  I attach the new texts of the regulations (not printed). We expect the regulations to be published and enter into force by the end of July.

25 May 2006

Letter from Rt Hon Ian McCartney MP, Minister for Trade, Investment and Foreign Affairs, Department of Trade and Industry/Foreign and Commonwealth Office to the Chairman

  I am writing to update you on progress in the adoption of the regulations to govern the EU Structural Funds 2007-2013.

  As Margaret Hodge wrote to you on 25 May the Council had then agreed minor changes to the Regulations in order to meet the concerns of the European Parliament and to anticipate the Parliament's second reading. This proved to be successful, and at second reading the Parliament adopted the package of regulations on 5 July, by a very large majority. We expect the regulations to be published shortly.

11 August 2006

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