South East England's View on the Future Of
FEBRUARY 2003 FEBRUARY EuropeBUILDING A BIGGER
SOUTH EAST ENGLAND’S view on the future of EU cohesion policy SUMMARY
» South East England is a large and relatively affluent border region within the EU. But it also has pockets of deprivation, places with high levels of unemployment, homelessness, weak economic prospects and a degraded environment. Future EU cohesion policy should similarly reflect the region’s dual approach in both tackling remaining disparities, as well as pursuing an outward and more forward looking approach. This includes redressing long-term under-investment in the region’s infrastructure and business support, but also moving from traditional manufacturing to a knowledge-based high technology future and the development of leading-edge sectors in the region. « EuropeBUILDING A BIGGER
Designed and produced by Jackson Lowe Marketing www.jacksonlowe.com 1 Role of Cohesion Policy » a re-defined European Social Fund focused on innovative actions and support for disadvantaged South East England has a key contribution to groups and the organisations which work with them; make to overall cohesion in an enlarged Union in » reform of the Common Agricultural Policy (CAP) promoting issues such as governance, economic alongside that of regional policy, with any redirected development, environmental policy and research monies allocated to a more effective and equitable and development.This approach also requires: rural policy. » improving the effectiveness of the structural instruments rather than necessarily increasing the 3 Principles of Cohesion Policy EU’s budget; Our experience of Structural Funds in the South » tackling the remaining areas of deprivation within East suggests that a degree of flexibility in some otherwise prosperous ‘intermediate’ regions of the aspects could lead to increased effectiveness by: current EU; » moving from map-based targeting as a means of » capitalising on the positive characteristics and concentrating resources to one which takes more opportunities of such regions, especially to support account of the situation on the ground; those still catching up; » reviewing the match-funding principle in the light of » the continued support for cohesion through the adverse effects arising from its current application. Structural Funds programmes and more effective support and resources from the UK Government to encourage participation in such programmes; 4 Delivery of Cohesion Policy » support for the transfer of regional and local The South East supports the need for further authority expertise to Central and Eastern European decentralisation to regional and local level to Countries (CEECs). ensure the effective delivery of EU support whereby: 2 Priorities » regional and local players have a key role in future in deciding and managing appropriate interventions in Aspects of cohesion policy that are of key line with EU priorities which also add value to importance to the region include Trans-European regional and local strategies; Co-operation, Regeneration,Training and » a single framework is developed for the distribution Employment and Rural Development, where our of resources – one model is that of the Area experience of EU programmes provides lessons for Investment Framework (AIF) currently being piloted the future. In particular, the South East supports: in the South East which could be scaled up to an » the continuation and strengthening of the INTERREG appropriate size for the delivery of EU support. initiative, including a greater focus on larger scale strategic initiatives and rationalisation of the current different INTERREG strands; » a future EU regeneration initiative focused on potential, innovation and opportunities, including increased provision for exchange of information and experience at European level;
BUILDING A BIGGER EUROPE 3 INTRODUCTION »
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4 BUILDING A BIGGER EUROPE SOUTH EAST ENGLAND’S VIEW ON THE include major shortages in basic key skills, ongoing restructuring (70,000 manufacturing jobs will be shed by FUTURE OF EU COHESION POLICY 2005) and congested road and rail infrastructure. In order for its regional economy to prosper in this South East England is the tenth largest EU region in terms context, the South East is seeking to make good the of population with more inhabitants than Finland and a few long-term under-investment in the region’s infrastructure less than Austria. Despite its image of prosperity the and business support. At the same time, it is also region is also one of great contrasts, with areas of relative pursuing an outward and forward-looking approach, for affluence certainly but also places with high levels of example, in the transition from traditional manufacturing unemployment, homelessness, weak economic prospects into a knowledge-based high technology future which and a degraded environment. Measured in Gross Domestic has seen the development of leading-edge sectors in the nd Product (GDP) per head, the South East is 22 out of 77 region, such as biotechnology, healthcare, marine regions in the European league table (Eurostat 1997). In technologies and multimedia. It is this dual approach recognition of this situation, parts of the region are which the South East would also like to see reflected in currently beneficiaries of a number of major EU funding the EU’s future cohesion policy. programmes for 2000 -2006, including Objective 2, INTERREG, URBAN, LEADER and EQUAL.The entire region of the South East is eligible for funds from the European Social Fund and also received allocations amounting to some £770 million (1994 -1997) under the Common Agricultural Policy (CAP).
The South East supports the enlargement of the EU but suggests that maximising commitment to this process also depends on tackling remaining problems within the present Member States. In particular, future cohesion policy needs increasingly to aim at reducing disparities within regions as well as between existing regions of the EU. Hidden pockets of deprivation are a feature of the region’s economic profile and are found, for example, in the heart of the vibrant M4 corridor (wards in Slough and Reading rank 100 and 112 most deprived of UK wards respectively). Using 1998 figures, the most deprived districts in the South East are all coastal areas (or an island in the case of the Isle of Wight).These feature poor infrastructure and declining seasonal trade.
The South East region, as part of an island, can also be described as an outer region of North West Europe which can potentially become isolated from its » continental counterparts. On the other hand, the region’s proximity to London also places the South East under strain, with the capital acting as a drain on economic opportunities and labour markets with negative impacts on urban and rural environments.These
5 » » » ONE ROLE OF COHESION POLICY
The South East supports the enlargement of the EU and the trade and other opportunities this will bring.With the right EU and Government support, the region has a lot to give in a differently balanced and evolving Union. The role of regions such as ours will be key in terms, for example, of promoting issues such as governance, economic development, environmental policy and research and development. The region therefore supports a future cohesion policy which tackles need but also encompasses change and opportunity, enabling different parts of the Union to contribute as appropriate to cohesion. Support is, however, needed to encourage and facilitate positive engagement in this process, particularly by South East local authorities, to help meet the aims of the ‘Lisbon Agenda’ of March 2000 for the European Union ‘to become the most competitive and dynamic knowledge-based economy in the world, capable of sustainable 1economic growth and social cohesion’.
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6 BUILDING A BIGGER EUROPE The South East considers that: » more effective support and resource is also needed from the UK Government (particularly compared to » the enlargement of the EU is to be welcomed, that provided at present by some other Member including the resulting increase in trade opportunities States) to encourage participation in the EU from an expanded market; programmes of the future; » the primary need is to target aid on new Member » the Commission’s aim of linking existing EU regions States after 2006, and support the development of a to those in Central and Eastern European Countries strengthened and effective cohesion policy to (CEECs) should be supported in order to facilitate encompass enlargement. However, this should firstly transfer of knowledge and experience. But the be through improving the effectiveness of the expressed need of the CEECs for regional and local structural instruments rather than necessarily authority expertise, including in managing the increasing the EU’s budget; Structural Funds, should also be more fully » this shift in emphasis only increases the importance recognised within future programme criteria or to overall EU cohesion of involving other parts of the through a specific new EU initiative. Union in cohesion actions, including tackling the remaining areas of deprivation within otherwise prosperous ‘intermediate’ regions. This is best undertaken at regional and local level, building on the partnership working that already exists between local authorities and regional agencies; » a key role for cohesion policy in intermediate regions should also be to capitalise on their positive characteristics and opportunities, especially to support those still catching up; » the continued support for cohesion through the structural funds is crucial; a purely domestic regional policy is unlikely to provide the opportunities provided by cohesion programmes for innovation, exchange of trans-national experience and the forging of strong regional and sub-regional partnerships, including at European level;
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7 » » TWO PRIORITIES
As well as the least developed areas, the Commission’s Second Cohesion Report identified trans-european co-operation, urban and rural areas, those undergoing restructuring or with geographical or natural handicaps, amongst its priorities for economic and social cohesion.As a border region (and despite the Tunnel, the Channel remains a significant natural barrier to communication and operation of the Single Market) and with areas of significant urban deprivation and poor infrastructure as well as high quality landscapes (32% of the region falls within Areas of Outstanding Natural Beauty), the South East reflects many, perhaps all, of these aspects. The region has derived a number of lessons from its tackling of these issues, including through its experience of relevant structural funds support.
i Trans-European Co-operation
The South East is the nation’s principal international 2 gateway – taken together, Heathrow (although just outside the region’s boundary) and Gatwick account for over 60% of the UK’s total passenger volume. The Channel Tunnel Rail Link (CTRL) is the major transport priority for the South East and provides the only rail link with continental Europe in the UK. Despite these transport links, barriers remain to the creation of a genuine cross-border space and movement on a regular basis between the UK and France. The South East regards the continuation and strengthening of cross-border co-operation programmes such as INTERREG as crucial to the breaking down of both physical and psychological barriers. Future EU support for trans-national and interregional co-operation is of particular importance to regions such as the South East as a means of exploring ways in which sub-regional economies can avoid being overshadowed by the world cities in their proximity.
8 BUILDING A BIGGER EUROPE The South East supports the continuation and ii Regeneration strengthening of the INTERREG initiative and proposes that a future programme should: Future cohesion policy needs to consider the emerging » be better able to help fund adequate infrastructure needs and opportunities of today’s Europe rather than investment in those cross-border areas in danger of the Europe coping with the industrial decline of previous being by-passed by transport corridors; decades.This has been the approach to the targeting of Objective 2 funds in eligible wards of the South East to » focus on larger-scale strategic initiatives than have encourage the establishment of high tech, high value generally been undertaken to date, in particular companies, particularly SMEs. The focus of the Thames where they have scope for meaningful sustainable Gateway URBAN II programme is also to address not development. These could include, for example, cross- only the significant problems of deprivation in ten wards border regeneration strategies or genuine cross- of Dartford and Gravesham but also the future border institutions and structures in the health or opportunities afforded by the planned international education sectors. A balance will, however, also need passenger station at Ebbsfleet and other major to be struck between the latter and other projects developments in the area. aimed at engaging the citizen in the cohesion effort; For the future, the South East therefore advocates: » have more scope to be extended geographically, especially where wider sub-regional issues need to » an EU regeneration initiative focused on potential, be addressed; innovation and opportunities; » be rationalised to clarify the scope and relationship » significantly increased provision for exchange of of the current different INTERREG strands; in information and experience at European level – in particular to distinguish between Strand A and B and this regard, the South East welcomes the recent simplify the operation of interregional cooperation launch of the Commission’s URBACT initiative aimed under Strand C’s mix of Regional Framework at EU urban networks; Operations (RFOs); projects and networks. » greater recognition, particularly in funding criteria, of the urban-rural interface, including the role of market towns and other conurbations acting as essential service centres for the surrounding rural areas; » a more integrated approach to regeneration, for example, through Area Investment Frameworks (see page 15) in order to maximise impact by targeting zones in most need.
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9 » iii Training and Employment The entire region of the South East is eligible for support from the European Social Fund (ESF) aimed at providing training, securing and keeping a job, the level of support over the seven year period 2000 -2006 being around £25-30 million per annum, in line with the previous programming period. The ESF has been effective in enabling many organisations in the region, especially in the voluntary sector, to develop innovative projects to help genuinely disadvantaged groups to participate in the labour market. However, our experience indicates that the ‘added-value’ of ESF is difficult to identify because: » ESF operates in areas where national funding arrangements already exist; » there is widespread practice of using most ESF funds .cont to matchfund mainstream domestic provision such as New Deal; » of the perception of ESF as a complex programme which is difficult to access and which has deterred many organisations from applying; » individual projects have tended to be small, locally 2 based and lacking in synergy with wider projects or strategies; » projects have often only been funded for 12-18 months with little continuity of support thereafter.
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10 BUILDING A BIGGER EUROPE The South East suggests that: The South East supports reform of the CAP alongside that of regional policy and proposes that: » ESF should not be a substitute for national funding but focus on innovative actions which national » there should be increased emphasis on supporting programmes have ignored; regionally identified rural development and diversification priorities; » future ESF programmes should continue to operate within an EU framework but with flexibility ensured » any modulation of CAP support should be in their development and implementation at a undertaken at regional level; regional/local level; » re-directed CAP monies should be allocated to a » ESF should focus more fully on disadvantaged groups more effective and equitable rural policy which takes and the organisations that work with them; particular account of: » a regionally based ESF programme should be › the links of rural to other areas, notably towns established, following the pattern established by the and cities, to assist diversification and exchange of EQUAL (combating labour market discrimination) best practice; initiative, as this would both respond to local need › the coastal dimension; and add value at EU level; › the introduction of new businesses and ICT » enhanced evaluation and strategic direction is infrastructure to offset the effects of changes in required at regional level, including better labour the agricultural sector. market information to ensure equilibrium between supply and demand. iv Rural Development
The European Union’s effect on the rural economy of its Member States is highly significant – in the South East, around three-quarters of all Structural Funds receipts come from the Common Agricultural Policy (CAP). The rural-based LEADER+ initiative is also funding five areas of the South East in support of activities ranging, for example, from the promotion of local produce and the utilisation of rural resources (Mid Kent) to improving rural access to heath, welfare and rights and to address the decline in rural services (West Oxfordshire).
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11 THREE PRINCIPLES OF COHESION POLICY
The South East region considers that the starting point for a strengthened cohesion policy should be to increase the effectiveness of the structural instruments. This includes reviewing the four principles under which the Structural Funds have operated, ie partnership, programming, concentration and additionality. While these principles should be broadly maintained, our experience of Structural Funds in the South East suggests that a degree of flexibility in some aspects could lead to increased effectiveness by moving, for example, from primarily map-based targeting as a means of concentrating resources to one which takes more account of the situation on the ground.
The match-funding principle also merits at least a review in the light of a number of adverse effects arising from its application – these include disproportionate diversion of energy in obtaining match-funding resources, confusion over the interpretation of rules, subordination of EU programme priorities to those of co-financing bodies and discouragement of innovation and 3 take-up by the private sector.
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12 BUILDING A BIGGER EUROPE The South East suggests that, in targeting resources, more recognition should be given to the fact that: » in the South East and elsewhere in Europe, there are pockets of deprivation lying close to more prosperous areas, as well as more densely populated rural settlements (and their problems) which do not reflect standard definitions for EU rural programmes related to sparsely populated areas; » map-based targeting may not meet local needs unless, at the very least, composed on a sub-regional or area basis and informed by the knowledge of key stakeholders in the map area. » While some match-funding provision may be needed to demonstrate commitment to projects, we suggest that reducing this requirement (with perhaps 100% for innovative actions with high EU added-value, for example to help disadvantaged groups) will help to: » ensure the promotion of EU priorities; » promote innovation and risk-taking; » provide real EU added-value from projects; » encourage SME participation, private sector investment and leverage; » enable a higher focus on project outputs.
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13 FOUR DELIVERY OF COHESION POLICY
A comprehensive range of regional and other contributions and options has already been made in respect of the future development and delivery of Structural Funds support. The South East identifies three aspects as being of particular importance in this regard: i the further decentralisation of Structural Funds to regional and local level; ii the adherence and EU added-value of interventions to (a) a framework of EU priorities which reflect the Lisbon Agenda, and which (b) support regional and local priorities; iii a single framework for the distribution of resources.
The South East therefore agrees that: » future programmes should be established within an overall EU framework of priorities but flexibility in their development and implementation should be given to the regions concerned; 4 » one approach to the above (being considered by the Commission) could be for Member States to choose priorities from an EU-wide ‘menu’. However, such a menu would need to be confined to a limited number of priorities with clear EU added-value and determined in consultation with regional and local bodies; » regional and local players should accordingly have the key role in future in deciding appropriate interventions in line with EU priorities but which also add value to regional and local strategies; »
14 BUILDING A BIGGER EUROPE » together with greater flexibility to meet regional and Area Investment Frameworks local needs, the principle of subsidiarity should be fully Difficulties in ensuring coherence between EU cohesion and national applied to ensure that regional and local authorities policies, including the many different routes and timescales followed are both involved in managing the process; by funding sources, suggests the need for a common integrated delivery mechanism to avoid clashes of objectives, promote synergies » Structural Funds should be used to ensure that local and maximise impact within an area. One potential model which determination and bottom-up prioritisation takes develops the EU programme approach, is that of the Area Investment place, ensuring demand-led needs are addressed; Framework (AIF) currently being piloted in four locations in the South East. The purpose of an AIF is to help determine the most » to deliver support effectively, consideration should be effective way of deploying resources in a particular area. This involves given to using a comprehensive sub-regional approach looking at an area’s development priorities and, if appropriate, similar to the Area Investment Framework (AIF) identifying the gap between the two. A key feature of the approach is model (see right) currently being piloted in the South that it embraces the totality of investment from the public, private and voluntary sectors including, for example, that from the Regional East and scaled up to an appropriate size for the Development Agency (in future from its ‘Single Pot’) and EU funding, delivery of EU support. to finance physical infrastructure, business support, health, housing, community development, crime prevention etc. It brings together short and medium term funding proposals within a longer-term framework. Such a model at sub-regional level could be applicable across the EU with more effective targeting of resources in larger Objective 1 regions or to tackle the problem of isolated pockets of deprivation in more prosperous regions.
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15 Published by: South East England House, 35 Square de Meeus, B -1000 Brussels T: 00 32 25040720 F: 00 32 25040722
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