Executive Council Confidential
Total Page：16
File Type：pdf, Size：1020Kb
EXECUTIVE COUNCIL CONFIDENTIAL Title: European Union EDF 10 Funding Paper No: 73/13 Date: 24 th April 2013 Report of: Head of Policy 1. Purpose 1.1 To seek Honourable Members approval of the Single Programming Document (SPD) setting out how funding under the 10 th European Development Fund (EDF10) will be used. 2. Recommendations 2.1 It is recommended that Honourable Members: • Approve the 10 th EDF SPD; and • Approve the formal submission of the document to the European Commission. 3. Summary of Financial Implications 3.1 None. All EDF funding to be received is already included in the FIG budget, though will need to be re-profiled. 4. Background 4.1 The Falkland Islands have been assigned €4.13m (c£3.5m) under the 10 th round of the European Development Fund (EDF). The EDF is an extra-budgetary fund funded by EU Member States specifically to fund economic and social development programmes in Overseas Countries and Territories (OCTs). The Falkland Islands have previously received EDF funds in the 9 th EDF between 2006 and 2009. 4.2 In order to be able to draw down these funds we are required to submit a Single Programming Document (SPD) to the European Commission. The SPD summarises the current social and economic conditions of the Islands and identifies how funding shall be utilised. 1 4.3 The document attached is the latest iteration of the SPD following protracted discussions with the European Commission. The process began in 2009 with several iterations of the SPD having been prepared – none of which met with the Commission’s approval. Progress was later delayed due to staff changes in FIG and was re-started in 2012. 4.4 In order to expedite the process, the EU commissioned consultants (Transtec) to work with the Policy Unit in preparing the SPD. The consultants visited the Islands in April 2012 as part of a fact-finding mission. The collaboration has resulted in the final SPD attached to this paper. 4.5 The document has gone through several iterations following feedback from FIG and the EU Commission. It was intended that the document would be submitted for formal approval in December 2012, however the EU Commission chose to delay the process by 3 months as they re-considered the mode of funding that would be permissible. 5. 10 th EDF SPD 5.1 The structure and content of the SPD reflects the EU’s requirements, and the document contains terminology and phrasing familiar to those in Brussels but which is perhaps not always the most accessible to others. This is an unfortunate necessity of the process. The SPD is in two parts: • Part A presents an overview of the Falkland Islands, the economy, society and the institutional processes within FIG; • Part B details how funding from the 10 th EDF will be utilised, and the performance criteria that will be used to assess progress. 5.2 In line with the Commission’s eligibility requirements for support under the 10 th EDF, the programme is targeted on achieving sustainable growth through diversification and rural development (consistent with the Islands Plan and Economic Development Strategy). 5.3 The budget modality will be a Good Governance Development Contract (GGDC), which is a new form of support broadly equivalent to General Budget Support (GBS) that was the basis of funding received under the 9 th EDF. 5.4 The SPD details the specific areas to which funds will be allocated and against which progress will be assessed in releasing funding. It is important to note that the programme contains both fixed and variable tranches of funding: 2 • An initial fixed tranche of €1.03m (£0.875m 1), based on establishing eligibility (following a disbursement process during which we will be provided with further assistance from the consultants retained by the Commission); • Three variable tranches of €1.0million (£0.85m) in 2013/14, 2014/15 and 2015/16. Within these variable tranches: Fulfilment of general eligibility criteria will trigger release of 60% of the funds; The fulfilment of specific conditions will trigger release of the remaining 40%. The SPD contains a range of indicators against which progress will be assessed – related to tourism development, rural development, and completion of the current immigration review ( Note : the indicator only relates to completing the review and does not pre-suppose that any of its recommendations will be adopted as that can only be determined by ExCo once the review is complete i.e. it is an indicator of process, not final outcome. The same is true of the indicator related to airlinks – this will be achieved as long as the stated process is completed, regardless of the final decision on whether or not to progress with a new airlink which cannot be predicted at the current time. This was a deliberate measure to avoid making commitments to outcomes which have yet to receive ExCo approval). • In 2015/16, a tranche of €0.1million (£0.085m) will be released to fund an evaluation of the 10th EDF programme. 6. Financial Implications 6.1 The financial implications are positive in that approval of the SPD will ultimately lead to release of the €4.13million (subject to signing a Financing Agreement and completing the necessary disbursement requests in due course). 6.2 As noted above funding will be released in four tranches 2012/13 2013/14 2014/15 2015/16 Total EDF Disbursements (€m) 1.03 1.0 1.0 1.1 4.13 Estimate in £m2 0.875 0.85 0.85 0.935 3.51 6.3 As detailed in Appendix IX of the SPD, this funding is allocated to already agreed budgetary items throughout the funding period. In this sense the 10 th EDF is contributing towards agreed policy objectives and strategies and should not be viewed as separate funding for new projects and initiatives. 1 Note: All figures in £ sterling are shown at the exchange rate of 04/04/2013. Actual amounts may vary depending on the prevailing exchange rate when funds are received. 2 Note: All figures in £ sterling are shown at the exchange rate of 04/04/2013. Actual amounts may vary depending on the prevailing exchange rate when funds are received. 3 7. Legal Implications 7.1 None arising directly from this paper. 8. Human Resources Implications 8.1 None. There will be future demands on the Policy Unit to prepare progress reports and provide evidence in support of funding disbursements however this is manageable within the existing establishment. 4 Single Programming Document of Falkland Islands th 10 European Development Fund 5 Final, April 2013 Table of Contents LIST OF ABBREVIATIONS ....................................................................................................................................................8 EXCHANGE RATES /C URRENCIES .....................................................................................................................................9 PART A: COOPERATION STRATEGY 10 Executive Summary 10 Chapter 1: EU – Falkland Islands Cooperation Objectives 13 Chapter 2: Assessment of the Political, Economic, Social and Environmental Situation 15 2.1 INSTITUTIONAL AND POLITICAL SITUATION .............................................................................................. 15 2.2 ECONOMIC SITUATION ......................................................................................................................................... 15 2.3 EXTERNAL ENVIRONMENT AND REGIONAL INTEGRATION .................................................................. 20 2.4 SOCIAL SITUATION ................................................................................................................................................ 21 2.5 HEALTH , EDUCATION AND SOCIAL SERVICES ........................................................................................... 21 2.6 ENVIRONMENT ........................................................................................................................................................ 22 Chapter 3: Policy Agenda of the OCT 25 Chapter 4: Assessment of past and on-going cooperation between the Falklands and the European Union 31 Chapter 5: Response Strategy 34 Part B: Action Fiche, Falkland Islands (UK Overseas Territory) 36 6. Territorial Programme Falkland Islands 36 6.1. IDENTIFICATION ...................................................................................................................................................... 36 6.2. RATIONALE AND COUNTRY CONTEXT ........................................................................................................... 36 6.2.1. Country Context .............................................................................................................................................37 6.2.2. Eligibility for budget support ...................................................................................................................39 6.2.3. Lessons learnt .................................................................................................................................................44 6.2.4. Complementary Actions ..............................................................................................................................44 6.2.5. Risk Management Framework .................................................................................................................44 6.3. DESCRIPTION OF THE BUDGET SUPPORT CONTRACT .............................................................................. 47 6.3.1. Objectives .........................................................................................................................................................47