CHAPTER 5: Summary of Conclusions
91. We start this report from the stance of agreement
with the European Union's Treaty-based aims to increase growth
and to reduce disparities between regions, and we support the
use of economic and knowledge transfer from rich to poor regions
as a means to undertake this. EU economic growth is not a zero-sum
game: the stronger and more competitive the EU economy as a whole,
the better for all Member States. But the benefits and costs of
the single market are not distributed evenly and we support intervention
in the market to counter both unemployment and under-utilisation
of resources in poorer regions, and costs arising from issues
such as congestion and over-population in richer regions. (paragraph
6)
92. We would welcome increased use of loans and
invite the Government, in their response, to outline what steps
they are taking to encourage their use. (paragraph 37)
93. We agree with those witnesses who argue that
the Funds have helped to reduce disparities in Europe. We welcome
work to measure the impact of European regional policy on levels
of private inward investment. (paragraph 47)
94. We believe that allowing the regions to draw
up regional spending plans, emphasising local infrastructure or
education priorities, reflects the fact that one policy does not
fit all. (paragraph 51)
95. While the reduction in discrepancies in citizens'
prosperity should be the policy's primary focus, we welcome integration
with the Lisbon Strategy. Given the importance of innovation and
human capital in the knowledge economy, if lagging regions and
Member States are to accelerate their growth, improvements in
these areas will be important. We are encouraged to learn that
new Member States are also taking account of the strategy in their
regional plans. However, the major impetus for the implementation
of the Lisbon Agenda must come at the Member State level—the
contribution to the Agenda under the Competitiveness Objective
is marginal when compared with national public expenditure but
can attract project finance from other sources. The problem of
increasing the competitiveness of the European Union is of course
greater than can be addressed solely by regional policy. (paragraph
52)
96. On broader issues such as climate change,
we agree with the Government that the Structural and Cohesion
Funds should not be used other than for reducing regional disparities.
(paragraph 53)
97. We support assistance with, and expenditure
on, raising administrative capacity which will lead to long-term
benefits. (paragraph 58)
98. We agree that co-financing should continue.
(paragraph 59)
99. We consider that no pressure should be placed
on the Own Resources or the budget ceiling. (paragraph 62)
100. We hope that the 2008/09 Budget Review will
result in a reduction of spending on agricultural price support
and increased support for the EAFRD, and at the same time increased
coordination between European regional policy and rural development
policy. (paragraph 64)
101. The cost of administering Structural Funds
in the richer countries is not by itself a compelling argument
in favour of ending Structural Fund programmes in richer Member
States. (paragraph 69)
102. The political reasons advanced are not by
themselves compelling enough to agree with the concept of distributing
EU funds within Member Sates which are net contributors to the
EU budget. In principle, we agree with the Government: funding
should be concentrated in the poorest regions and should reflect
the principle of subsidiarity. The sums involved in the Competitiveness
Objective are too small to have significant behavioural and financial
leverage effects. (paragraph 75)
103. We recognise that some Member States, including
the United Kingdom, would as a consequence lose much of their
income from the Structural and Cohesion Funds. Such a significant
change would arouse opposition even in the wealthier Member states
but it is a change that should be explored in the context of a
satisfactory outcome (involving substantial CAP Reform) to the
imminent strategic review of the EU Budget and of EU policies
on Economic and Social Cohesion. (paragraph 76)
104. The eligibility criterion for the convergence
objective is suitable and the overall split in funding between
the objectives is, on balance, appropriate. We continue to expect
that richer Member States should remain responsible for the majority
of their own regional funding. In addition, as we have already
outlined, an expanded EAFRD could work alongside the Structural
and Cohesion funds to tackle deprivation in rural areas in all
Member States. (paragraph 77)
105. We support continuation of the principle
of phasing in and phasing out payments for regions around the
boundary rather than a simple line between full eligibility and
none. (paragraph 78)
106. Some redesignation is needed in the definition
of regions to ensure, as far as possible, that regions at each
level of the NUTS hierarchy have broadly similar characteristics.
When the quality of the statistics allows, we would support an
improvement in the methodology used for calculating a region's
prosperity in order better to reflect the impact of the funds.
We do not support the creation of additional levels of bureaucracy,
but we recognise the need for enhanced cooperation between urban
areas and their rural peripheries to promote sustainable and balanced
economic growth. (paragraph 81)
107. An underlying theme in the evidence we received
was the tension between reducing administrative cost, and maintaining
high quality financial management. The evidence we received did
not demonstrate that the cost of administration, relative to the
total size of the budget, is significant in the United Kingdom.
Extrapolation to countries receiving larger contributions from
the funds might suggest further efficiencies and we dismiss witnesses'
claims that the regional policies are beset by a costly bureaucracy.
(paragraph 89)
108. We welcome the trend towards the Commission
taking a strategic view of policy and the regions drawing up the
local spending plans. There does appear to be significant bureaucracy
for applicants to the funds; while some clarification is needed,
we are content that it is not excessive. We note that the Commission
is aware of the balance it needs to strike between control and
ease of distribution and that it is actively seeking ways to address
the bureaucracy. We support their invitation for suggestions of
how the administrative burden can be alleviated, at each of the
EU, national and regional level. (paragraph 90)
| 
