Final Report: Case Study Świętokrzyskie Region, Poland Work Package 9: Rural Development
Ex post evaluation of Cohesion policy programmes 2000-2006 co-financed by the European Fund for Regional Development (Objective 1 and 2)
Core team: Herta Tödtling-Schönhofer (Project Director, metis) Erich Dallhammer (Project Leader, ÖIR) Isabel Naylon (metis) Bernd Schuh (ÖIR) metis GmbH (former ÖIR-Managementdienste GmbH) A-1220 Wien, Donau-City-Straße 6 Tel.: +43 1 997 15 70, Fax: +43 1 997 15 70-66 │ http://www.metis-vienna.eu
National expert for Poland: Janusz Dabrowski Adresse ul. Witolinska 6/47 04-185 Warsaw, Poland E-mail: [email protected] Phone: +48602723229
Vienna, May 2009 Commissioned by: EURpean Commission, DG Regional Policy
Final Report: Case Study Świętokrzyskie Region, Poland Work Package 9: Rural Development
Ex post evaluation of Cohesion policy programmes 2000-2006 co-financed by the European Fund for Regional Development (Objective 1 and 2)
WP 9: Rural Development – Final Report Content
1 Profile of the Objective 1 Świętokrzyskie Region...... 5 1.1 European and national context of the region...... 5 1.2 Population development and settlement patterns ...... 7 1.3 Rural areas in Świętokrzyskie ...... 9 2 The role of EU Funds in rural development in the Świętokrzyskie Region ...... 10 2.1 General framework of the ERDF and the other funds ...... 10 2.1.1 Coordination with national / regional development strategies...... 10 2.2 The roles of the funds ...... 12 2.2.1 The role of the ERDF...... 13 2.2.2 The role of the ESF...... 15 2.2.3 The role of the EAGGF ...... 15 2.3 Thematic focus of the analysis...... 16 2.4 The role of the ERDF in helping rural areas facing economic challenges...... 17 2.5 The role of the ERDF in increasing accessibility ...... 21 2.5.1 Transport infrastructure...... 21 2.5.2 Energy infrastructure ...... 24 2.5.3 Telecommunications infrastructure ...... 25 2.6 The role of the ERDF in increasing regional productivity, growth and quality of life...... 25 2.6.1 Support for regional initiatives...... 25 2.6.2 Environmental measures and land improvement...... 27 2.6.3 Improving socio-economic viability and the quality of life...... 27 2.7 The role of the ERDF in increasing the use of regional resources and strengthening regional self-confidence ...... 29 3 Case study conclusions: The impact of ERDF interventions on rural development...... 31 4 Bibliography ...... 34
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Tables, Figures and Maps
Table 1. Population development in rural areas in Świętokrzyskie region 2000-2006...... 7 Table 2. Population of the region between 2000-2009...... 8 Table 3. Registered migration from the region abroad 2005-2007...... 8 Table 4. List of operational programmes funded by the EU Structural Fund in the Świętorzyskie region in the 2004-06 period...... 12 Table 5. ERDF expenditures according to project types in the Świętokrzyskie region 2004-06...... 13 Table 6. Change in contribution to the regional GDP generation per sector in the years 1993-2000-2006 in percent ...... 17 Table 7. Structure of private businesses by selected counties of the Świętokrzyskie region on 31 December 2006...... 18 Table 8. Distribution of investment in projects in the Świętokrzyskie region according to the ERDF funded Operational Programmes...... 19 Table 9. ERDF funded projects to support business with growth potential ...... 20 Table 10. Distribution of investment projects in rural areas funded by the IROP measure 3.4 in the Świętokrzyskie region...... 20 Table 11. Paved public roads in the Świętokrzyskie region on 31.12.06...... 21 Table 12. Public roads managed by gmina /community local government on 31.12.06...... 22 Table 13. Railway lines operated in the Świętokrzyskie region on 31.12.06 ...... 22 Table 14. Resources and number of projects implemented under the IROP Priorities 1 and 3 in Świętorzyskie ...... 23 Table 15. Resources and number of projects implemented under the IROP Sub-measure 1.1.1 in Świętorzyskie ...... 24 Table 16. Basic data on gas line network on 31.12.06...... 24 Table 17. Structure of educational levels in the Świętokrzyskie region and in Poland in 2002 in percentage of total population ...... 28
Figure 1. ERDF expenditures according to project types in the Świętokrzyskie region 2004-06...... 14
Map 1. Map of Poland with Świętokrzyskie highlighted...... 5 Map 2. Population density in Świętokrzyskie 2006...... 7 Map 3. Map of the Świętokrzyskie region/voivodship...... 9
page 4 WP 9: Rural Development – Final Report 1 Profile of the Objective 1 Świętokrzyskie Region
1.1 European and national context of the region
The Świętokrzyskie region is one of the poorest regions in Poland and the EU. The region is situated in the central and southern part of Poland, between six regions (Mazowieckie, Lubelskie, Podkarpacke, Malopolskie, Slaskie and Lódzkie) and Poland's largest cities (Warsaw, Krakow, Katowice and Łódź).
Map 1. Map of Poland with Świętokrzyskie highlighted
Of all 16 Polish voivodships, Świętokrzyskie is one of the smallest ones (11,710 km2, 3.7% of the country's total area). According to recent data, the region has a population of 1.291,600 (3.37% of the total population of Poland). At 110 people per km2, population density is lower than Poland’s average of 122 per km2 (the EU average is 112.2 per km2).
In terms of administrative structures, the region (voivodship) is divided into 14 counties (poviats), including the town of Kielce as the seat of self-government of the Swietokrzyskie region, and 102 communities (gmina), the lowest level of local government structures.
According to the national typology of rural communities (all areas outside urban areas are classified as rural), 72 communities are defined as rural, 25 as urban-rural and five as urban. Just 45.5% of the population of the region live in urban municipalities with a clear dominance of Kielce (16.4% of the total population of the region) as a growth centre. The dominance of the rural population is further emphasized by the structure of settlements.
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Public administration management at regional (voivodship) level is carried out through:
• The central government level - The Voivod as a representative of the government at regional level is responsible for managing units of governmental administration operating at regional level. During the implementation of the Integrated Regional Operational Programme (IROP), the Voivod office acted as Intermediate body. • Regional self-government structures – The Marshal is head of regional local government, elected by regional counsellors elected in the regional elections. His or her tasks are focused on the overall management of regional social and economic development at regional level. The Marshal is supported through the staff at the Marshal Office. With respect to regional development, the Marshal and the Marshal Office are responsible for drawing up and implementing regional development policy, including participating in the IROP 2004-06 management in the Świętokrzyskie region. • County (poviat) self-government structures – These are responsible for so called county roads, secondary vocational schools and economic development policy at county level. There are 14 counties in the Świętokrzyskie region, including the town of Kielce as a separate town county. The other 13 counties consist of local towns with surrounding rural areas. • Community self-government structures – These are responsible for community roads (majority of local roads in rural areas), the educational system and economic development policy at community level.
All levels of local government are independent within the scope of their competences. According to the EU Nomenclature of Territorial Units for Statistics (NUTS), Świętokrzyskie fully represents a NUTS 2 region covered by Objective 1 support.
From the point of view of rural development throughout the last twenty years, the following development trends are important:
• After 1989, the regional economy shifted from an industrially oriented area (northern part) towards the service sector and a growing role of selected industries (mineral, machinery and construction). • The reduction of the number of jobs in traditional industrial centres (Kielce, Ostrowiec, Starachowice, Skarżysko-Kamienna, Końskie) had a strong negative impact on the rural population. This trend forced the traditionally oriented rural population (owners of small agricultural holdings combining incomes from farm activities with additional salaries from jobs in local industrial centres) to substantially reorient their life strategy. In the process of reduction of employment in industrial companies at the beginning of the transformation process after 1989, workers with small agricultural holdings were the first to be laid off on the assumption that, unlike urban workers, they had some additional source of income from agricultural activities. However, throughout the nineties, this group of the regional population did not have many real opportunities for effective long term reorientation due to the macro-economic situation in Poland (high unemployment and low demand limiting business activities). Polish accession to the EU substantially speeded up the process of social and economic adjustment at three levels (regional, rural families, individual). At the individual level, opportunities created by opening labour markets in certain EU Member States (UK, Ireland) provided individuals with new strategies for dealing with the adjustment to the changed social and economic regional and national context. • As a side-effect of the deindustrialisation of the northern part of the region, local towns (Końskie, Skarżysko-Kamienna-Starachowice-Ostrowiec) lost their role of growth centres to Kielce as a single dominant regional driving force.
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1.2 Population development and settlement patterns
In Świętokrzyskie there are 30 urban centres and 2,560 rural settlements. About 55 % of the population lives in these rural settlements. The proportion between urban and rural population has stabilized at 45 % urban - 55 rural % in recent years.
Table 1. Population development in rural areas in Świętokrzyskie region 2000-2006
Population 2000 2005 2006 Rural areas of Świętokrzyskie region 703292 701519 700006 In % of total population 54 54.6 54.7
Source: Kielce Voivodship Statistical Office
The capital of the region, Kielce, plays the role of the regional growth centre with a population of 202 415 (2006, 16% of the total regional population).
The big towns of the region are located in the northern part and were the local industrialised growth centres before 1989 (Ostrowiec 79,000, Starachowice 57,000 and Skarżysko-Kamienna 51,000). In the southern agriculture-oriented part of the region, the towns are smaller (below 20,000 inhabitants). This trend is clearly visible in population density which is much higher than the regional average in Kielce, Skarżysko-Kamienna, Starachowice and Ostrowiec, towns with a long industrial tradition.
Świetokrzyskie is a region with a dispersed settlement structure. The regional commuting system is adjusted to the settlement pattern through a relatively well developed network of private and public transport services. The dominant role of regional capital of Kielce is mirrored in the commuting system which is focused around the capital at the expense of southern, more rural part of the region. However, in practice, access to Kielce from the majority of the region meets regional demand. Commuting between rural towns in the region is not fully developed as result of low demand for such services.
Map 2. Population density in Świętokrzyskie 2006
Source: Kielce Voivodship Statistical Office
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Over the last few years there has been a decrease in the number of inhabitants. According to forecasts, the trend will be continued in the future. As a result of this demographic trend the density of the population in the region will steadily decrease (2000 -111, 2005 -110, 2008 – 109).
Table 2. Population of the region between 2000-2009
Population 2000 2005 2006 2007 Swietokrzyskie region total in thousand 13034.90 1285.0 12817.96 1275.6
Source: Kielce Voivodship Statistical Office
One of the key factors influencing this long-term trend was the growing unemployment since the beginning of the transition period which forced the labour force to migrate out of the region. Before 2004, migration was mostly focused on the main Polish growth centres (i.e. Mazowsze – Warsaw, Małopolska), but after accession to the EU in May 2004, a growing number of the region’s inhabitants migrated to the EU Member States (mainly UK, Ireland, Italy). Thus, the negative net migration in the region has continued in recent years in Świętokrzyskie (-2629 in 2007).
Table 3. Registered migration from the region abroad 2005-2007
Year Migration out of the Migration out the Migration out of the region total region – urban region – rural population population 2005 128 107 21 2006 904 659 245 2007 633 414 219
Source: Kielce Voivodship Statistical Office
According to data of the Voivodship Statistical Office in Kielce in 2007, 47% of registered migrants were 20-29 years old. However, it should be taken into account that the real number of temporary migrants to EU Member States is much higher and cannot be calculated due to the fact that the majority of them are still registered in the region despite working outside Poland for a long time (over 2 years).
Population growth in selected rural areas (Kielce rural county, the counties of Opatów, Ostrowiec and Starachowice) is a relatively new factor in the region. It seems that like in other regions, the urban population is moving towards the surrounding rural areas. (In 2004, the town of Kielce had a negative migration ratio -6.7, while in the Kielce rural county covering rural areas around Kielce the ratio was 5.0). Therefore, a process of inter-regional diversification has been initiated. Part of the rural areas around Kielce and larger urban regional centres are under direct urban influence. As a result of the improvement of the regional road system, a growing number of people decide to live in rural areas while working in Kielce and other urban centres. The increased population provided a demand for additional services and job creation in rural areas. At the same time, other parts of the rural territory are under threat of even more marginalisation due to the decline in the transport system in favour of better developed parts of the region and, subsequently, poorer access to job opportunities.
Another negative demographic factor in the region is the aging of the population. The share of people over 64 years increased from 13.6% in 2000 to 14.6% in 2006, whereas the share of the people between 0 and 14 sharply decreased from 19.5% in 2000 to 16.1% in 2006.
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1.3 Rural areas in Świętokrzyskie
The Świętokrzyskie region in the 2004-06 Programme Period was classified as NUTS 2 and NUTS 3 level simultaneously.
The Świętokrzyskie region according to WP9 typology belongs to the weak rural regions. According to the Polish definition of rurality, all areas outside the urban administrative borders of towns are treated as rural areas. Therefore the substantial majority of the region is defined as rural.
Map 3. Map of the Świętokrzyskie region/voivodship
However, closer analyses of intra-regional differences at county level indicates clear divisions within the region according to the WP9 typology: Whereas the northern part of the region (counties Konecki, Kielecki, Skarżyski, Starachowicki, Ostrowiecki) are classified as urban areas, other counties of the Świętokrzyskie belong to the weak rural type.
Counties located in the North (Konecki, Kielce, Skarżyski, Starachowicki and Ostrowiecki) are defined as urban regions with all the problems related to the dominance of heavy industries in the past. These counties have higher population density, higher unemployment levels but also better developed local labour markets.
Other counties of the region meet the criteria of weak rural regions. The diminishing role of agriculture and weak local labour markets create obstacles for social and economic development.
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2 The role of EU Funds in rural development in the Świętokrzyskie Region
2.1 General framework of the ERDF and the other funds
2.1.1 Coordination with national / regional development strategies
From the Świętokrzyskie region’s point of view, two main aspects of the ERDF funded programmes were crucial: improvement of regional competitiveness and development of the regional absorption capacity amongst all actors involved in the implementation of regional policy implemented in the framework of the EU supported programmes.
As far as competitiveness is concerned, it is worthwhile focusing on the role of the poor technical and social infrastructure in the Świętokrzyskie region. The dominance of Kielce, the regional capital, at the expense of other regional urban centres (Ostrowiec Świętokrzyski, Starachowice, Skarżysko-Kamienna) led to an unbalanced regional social and economic development. A side effect of this dominance was that some rural areas were threatened by a process of marginalisation. Two priorities of the ‘Strategy for the Świętokrzyskie development till 2020’ are focused on overcoming this barrier: Objective 5: Development of regional technical and social infrastructure systems and Objective 6: Activation of the farm sector and rural development (particularly Priority 1: Rural area diversification aimed at transferring the population dependent on farming towards non-farming activities).
Additional tools in respect of supporting the competitiveness of the region are the facilitation of entrepreneurship and innovation development. In the specific context of the Świętorzyskie region, two aspects shall be particularly considered: • The weak position of the case study region compared to other Polish regions in terms of innovativeness. The inadequate level of innovativeness of projects in the Świętokrzyskie region in the programme period 2004-06 lead to a relatively low share of projects funded under the Competitiveness of Enterprises Operational Programme (ICE), • Internal regional diversification (post-industrial north against more rural oriented south) as an important factor for certain types of businesses development is taken into account in SME support programmes.
Within the ‘Strategy for the Świętokrzyskie development till 2020’, the Objective 1 (Speeding up the development of the economic base and growth of innovativeness in the region) includes the development of entrepreneurship and support for innovation. The ERDF funded IROP 2004-06 was effectively the main vehicle for the implementation of the regional strategy. The IROP 2004- 06 Measure 3.4. delivered direct support for regional micro-enterprises. Indirect support for the economic base and growth for innovativeness were provided by measures aimed at technical and social infrastructure improvement. Due to limited financial resources available for public and private regional stakeholders and the priority given to investment projects with co-financing from the EU funded programmes (reduction of investment cost thanks to the EU support), the role of other regional activities in the regional strategy implementation (apart from the EU programmes) were rather limited.
Regarding the second area (regional capacity building), ensuring skills development for the effective utilisation of the EU funded programme was important at two levels: • Capacity for the effective application of procedural requirements as a relatively new lesson to be learned by both potential beneficiaries and public actors involved in the EU measures implementation. • Capacity for the strategic selection of projects/investments as those projects will assist regional/local development in a wider strategic perspective. In view of the poor regional technical and social infrastructure it seemed of key importance to support a strategic approach, both at regional and local levels.
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According to the ‘Strategy for the Świętokrzyskie development till 2020’ the whole Objective 4 (Strengthening of institutional capacity of the region) was concentrated on activities aimed at, inter alia, supporting institutional capacities for regional policy delivery at regional and local levels.
Council Regulation 1260/1999 defines the financial rules applied to the ERDF co-financed Operational Programmes implemented in Poland in the 2004-06 programme period. The contribution of the Structural Funds was set at a maximum of 75% of the total eligible cost and, as a general rule, at least 50% of eligible public expenditure in the case of Objective 1.
Due to the Polish currency appreciation after enlargement, the value of assistance for Poland was substantially reduced. In the case of the total budget of the multi-funded IROP (funded both by the ERDF and the ESF), the allocated amount 497 248 383 PLN/133 078 133 EUR was diminished by 140 116 027 PLN (rate of exchange as of 27/06/2008: 1 EUR = 3.3671 PLN).
Public administration management in Poland at regional level is carried out through the regional state administration managed by wojewoda (viovod), the regional self-government structures headed by marszałek (marshal), the county self-government structures and the community self- government structures.
The structure of public administration and the relationship between all levels of self-government had substantial impact on the ERDF measure implementation:
• Regional level government (Voivodship office) and self-government (Marshal office) structures played a role in the management of the IROP at regional level. • Both regional level units (self-government and government) perceived the IROP 2004-06 as vehicle for the implementation the objectives of the regional strategy (‘Strategy for the Świętokrzyskie development till 2020’). • The lack of a formal relationship between units of local self-government created a real problem for the coordination of the development of activities between local self- governments operating in territories with similar problems. Some local governments in the case study region established community associations to coordinate and implement jointly designed development policies. Others still prefer to carry out their development policies without any attempt at coordination with neighbouring local self-governments.
The important Operational Programmes for Świętokrzyskie region were the Integrated Operational Programme 2004-06 (IROP) and the Improvement of the Competitiveness of Enterprises (ICE). The IROP measures were implemented as follows:
• Ministry of Regional Development (founded in October 2005): national coordination and ensuring a unified national approach to the implementation process. Other tasks were delegated to regional self-government and government units of the public administration. • The Świętokrzyski Regional Marshal Office as body participating in the IROP implementation in the Świętokrzyskie region was responsible for project identification. • The Świętokrzyski Regional Voivod Office as an Intermediate Body was responsible for audit, monitoring, payment, verification and certification.
The ICE Operational Programme was focused on the enhancement of the knowledge based economy business environment (Priority 1) and measures for direct support for enterprises (Priority 2). Both priorities were implemented from a central level with national institutions or a department of the Ministry of Economy as implementing institution.
However, Measures 2.1 (Improvement of the competitiveness of SMEs through advice), 2.2.1 (Support for entrepreneurs undertaking initial investments) and 2.3 (Improvement of the
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competitiveness of SMEs through investment) were implemented with the partial involvement of regional partners. The network of 16 Regional Financing Institutions (RFI) was responsible for providing information on available programmes and eligibility criteria, administrative servicing of implemented measures/programmes, cooperation with the implementing institution (The Polish Agency for Enterprise Development), managing the data base of regional beneficiaries.
In the case study region, the role of the Regional Financing Institution (RFI) was played by Staropolska Izba Przemysłowo-Handlowa (the Regional Chamber of Industry and Trade). The RFI’s task was limited to administrative support without any involvement in the process of project appraisal.
In view of the ERDF impact on rural areas in Świętokrzyskie region, the IROP 2004-06 was the real instrument for regional authorities for effective intervention due to the following factors:
• Amount of available funding; • Decentralised mode of implementation. The Marshal Office in Świętorzyskie Świętorzyskie was directly involved in the implementation of the IROP 2004-06 measures, including the Measure 3.4 which in other regions was delegated to other organisations operating at regional level (i.e. special regional development agencies). • Involvement of the regional RFI (Staropolska Izba Przemysłowo-Handlowa/Regional Chamber of Industry and Trade) in the selected ICE OP measures was limited to administrative support without the possibility of influencing the decision-making process for project selection. The RFI according to procedure was involved in reviewing the completeness of applications in respect of formal requirements while the final technical and financial appraisal was carried out in Warsaw without any RFI involvement.
2.2 The roles of the funds
Between 2004 and 2006, the Świętokrzyskie region received support from the ERDF as well as from the European Social Fund (ESF) and the European Agriculture and Guidance Fund (EAGGF).
Table 4. List of operational programmes funded by the EU Structural Fund in the Świętorzyskie region in the 2004-06 period
Fund Operational Programme Project types ERDF Integrated Regional Environmental infrastructure, Energy infrastructure, Operational Programme Telecommunication, Transport infrastructure, Tourism, Social and 2004-06 – priority 1 and 3 health infrastructure, Planning and rehabilitation, Research, technological development and innovation (RTDI) ERDF Improvement of the Assisting large business organizations, Assisting SMEs and the craft Competitiveness of sector, Research, technological development and innovation (RTDI) Enterprises ESF Integrated Operational Labour market, social inclusion development educational and Programme 2004-06I – vocational training priority 2 ESF Human resource Labour market, social inclusion, development educational and development (HRD) vocational training EAGGF SOP Agriculture and Agriculture, rural development, forestry Rural Development 2004- 06 (SOP Agriculture)
Source: The Structural Funds funded Operational Programmes for Poland 2004-06
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2.2.1 The role of the ERDF
The two ERDF funded programmes played an important role in meeting the specific regional needs:
• The multi-funded Integrated Regional Operational Programme (IROP): It was managed at regional level and recognised as the main instrument for implementing regional policy. • Improvement of the Competitiveness of Enterprises Operational Programme (ICE). It was managed at the central level, without any influence on the project selection decision making process at regional level. It was acknowledged as less important from a regional perspective.
The task of the IROP Priority 1 ‘Development and modernisation of the infrastructure to enhance the competitiveness of regions’ was to support the development of technical and social infrastructure important for regional development as a whole. The effective coordination of technical infrastructure projects at regional level was crucial to avoid the fragmentation of the process of project selection as much as possible in view of wider strategic impact. In its IROP management role, the Świętokrzyski Marshal Office applied some managerial approaches at regional level to facilitate coordination between implemented projects. For example, as part of the road infrastructure projects selection process, the Marshal Office carried out an analysis of the coordination of road projects with a view to improving the regional road system. vet
The IROP Priority 3 ‘Local development’ was envisaged to support local activities for technical and social infrastructure projects initiated by local governments and under Measure 3.4 to support regional entrepreneurs. Two measures were of particular importance for rural areas: 3.1 ‘Support for infrastructure projects in rural areas’ and 3.5 ‘Local social infrastructure’.
As the Świętokrzyskie region was classified as NUTS 2 and NUTS 3 level simultaneously in the 2004-06 programme period, the analysis of projects types is carried out at both NUTS levels without intra-regional flow of funds.
Table 5. ERDF expenditures according to project types in the Świętokrzyskie region 2004-06
Project type Expenditure in Świętokrzyskie % in MEUR Agriculture, forestry, fisheries 0 0,0% Investments into business units 29.368.684 21,1% Support R&D 1.009.844 0,7% Transport infrastructure 42.767.330 30,8% Telecommunications infrastructure 4.879.946 3,5% Energy infrastructure 52.458 0,0% Environmental measures 25.886.131 18,6% Land improvement 10.443.852 7,5% Social infrastructure 21.609.968 15,5% Tech. Assistance 2.991.065 2,2% Total 139.009.278 100%
Source: European Commission, DG REGIO (2008): Study on regional expenditures.
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The analysis of expenditures indicates a dominance of projects related to traditional infrastructure (transport, environmental, social and public health infrastructure). This reflects the regional needs for transport and environmental projects aimed at upgrading technical infrastructure as a precondition for full utilisation of regional resources and raising competitiveness.
Figure 1. ERDF expenditures according to project types in the Świętokrzyskie region 2004-06 social tech. Assistance investments into infrastructure 2,2% 15,5% business units 21,1% support R&D Land improvement 0,7% 7,5%
environmental measures transport 18,6% infrastructure energy telecommunication 30,8% infrastructure infrastructure 0,0% 3,5% Source: European Commission, DG REGIO (2008): Study on regional expenditures.
It is worthwhile emphasising the relatively high position of social and public health infrastructure in the regional ERDF expenditures. This is due to the recognition by national and regional decision makers of the importance of improving the standards of living by providing high quality public services as a crucial element of regional competitiveness.
The rural areas in the case study region benefited from the infrastructural projects directly and indirectly. Some measures were targeted directly at rural communities and local communities located in rural areas initiated their own, locally identified (mostly infrastructural) projects. The majority of projects of regional importance also had an impact on rural areas in terms of a safer road system facilitating the accessibility of rural areas. Similarly, better public services in social and health sectors were available for rural inhabitants as well.
Concerning the structure of expenditures on business development, the two main types of beneficiaries were large business organisations and SMEs. For rural areas in the region only the second project type was in reality available. This reflects the structure of the business units in the region: there is a dominance of small firms in rural areas and of large business units in the Kielce area and in the northern part of the region.
The relatively small amount of expenditure on research, technological development and innovation (RTDI) confirmed the lack of a tradition of innovation and the poor infrastructure for innovation in the Świętokrzyskie region.
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The key findings regarding role of the ERDF funded measures for rural development in the case study region were:
• Importance of the IROP as the main vehicle for the ERDF in the Świętokrzyskie region/voivodship. This applies both to the amount of resources and to the system of implementation allowing for a real involvement of the regional authorities in the IROP disbursement. • The importance of the ERDF funded measures as an incentive for all eligible local actors to build up skills for the effective utilisation of the EU assistance. Taking into account regional investment needs, these skills are crucial for speeding up the regional development process with EU assistance in the foreseeable future.
2.2.2 The role of the ESF
According to data provided by the Świętokrzyskie Voivodship Office, ESF support within the framework of the IROP was 79 913 383 PLN (23 733 613 EUR, rate of exchange: 1 EUR= 3.3671 as of 27/06/2008). The support was provided under Priority 2 of Strengthening human resource development in regions.
Direct support to the rural population was delivered under Measure 2.3. Vocational reorientation of persons leaving the agriculture sector. Under this measure, vocational training was organised for inhabitants of rural areas aimed at developing new skills. It is important to emphasise that many of these training activities provided certificates for the new skills/profession gained by the beneficiaries which were recognised by potential employers. This is of key importance for inhabitants of rural areas who tend to have many practical skills without any certificates confirming skills attainment. Due to the system of certificates, part of the rural labour force gained access to the wider labour market (regional, domestic, EU).
The other priority 2 of the IROP priority measures provided training for all unemployed and working population of the region, including the inhabitants of rural areas.
2.2.3 The role of the EAGGF
Some measures1 of the EAGGF Sectoral Operational Programme: Restructuring and Modernisation of the Food Sector and Rural Development 2004-06 were important as additional incentives for capacity building in rural communities.
Concerning business support measures in rural areas in the framework of the SOP Agriculture and Rural Development 2004-06, some measures implemented in the Świętokrzyskie region were complimentary to the ERDF measures. The Measure: Diversification of agricultural and agricultural related activities to provide multiple activities or alternative incomes aimed at assistance to farmers and their families in initiating alternative sources of income through various types of business activities (within the specific limits defined by the SOP Agriculture). According to data published on 31/01/2009 by the Agency of Restructuring and Modernisation of Agriculture acting as a Paying Agency under this measure in the Świętokrzyskie region, 523 applications were approved for implementation for a total value of assistance for all projects of 22 738 203,04 PLN (7,170 applications in Poland for total value of 279 190 611,51 PLN).
1 Rural renewal and the preservation and protection of cultural heritage; Diversification of agricultural activities and activities close to agriculture activities to provide multiple activities or alternative incomes; Leader+ type measures
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In the view of capacity building for bottom up activities and the development of absorption potential for EU assistance within the rural communities, special attention is given to complementary measures under SOP Agriculture: Renovation of rural areas and preservation and protection of cultural heritage and the LEADER+ Pilot Programme. Both measures required the involvement of the key decision makers and local inhabitants of the rural communities. From the point of view of future applications for funding and the management of assistance projects for rural areas, the experiences gained in the two SOP Agriculture measures are important as on- the-job training for local project management.
2.3 Thematic focus of the analysis
In order to check the impact of the ERDF on the development of rural areas, theory based hypotheses were developed under Task 1 of this evaluation. In the Świętokrzyskie region the following hypotheses were identified as most relevant.
Hypothesis 1: ERDF support for businesses with growth potential helps rural areas face economic challenges
As the Świętorzyskie region is one of the weakest in terms of the national regional ranking on innovativeness in Poland and the improvement of regional competitiveness was one of the strategic objectives of both the regional strategy and the main objectives of the ERDF supported Operational Programmes, the impact of ERDF on businesses with growth potential was considered of specific interest for rural areas.
Hypothesis 2: ERDF support for the improvement of technical infrastructure increases the accessibility of rural areas
The poorly developed technical infrastructure in Świętokrzyskie was identified by decision makers on a regional as well as on a national level as the main obstacle to speeding up the development process. Subsequently, the majority of the ERDF resources were allocated to this type of support.
Hypothesis 6: ERDF support for improving (the use of) regional resources and endogenous regional development increases regional productivity, growth and quality of life
The real challenge was to consider to what extent the ERDF served as facilitator for the better use of regional resources in rural areas and whether the ERDF funded measures were perceived by regional actors as tools for reaching their objectives or maybe just as an imposed support which had to be (with some difficulties) readjusted to real regional needs.
Hypothesis 7: ERDF support for regional governance structures increases the use of regional resources and strengthens regional self-confidence
For Poland as a new EU Member State (since 2004), the second key aspect of the ERDF intervention was to build-up absorption capacity for the EU funded assistance at national and regional levels. The programme period 2004-06 (in the case of the EU10) was the first opportunity for full utilisation of the whole spectrum of the EU support which required the very quick development of skills amongst regional decision makers involved in the implementation of the EU measures and all types of potential beneficiaries. Two further hypotheses, therefore, were focused in this area.
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The ERDF impact on regional governance at all levels (national, regional, local with particular attention to rural communities) was an interesting question. A special focus was put on the extent of the ERDF support for incentives for implementing bodies and beneficiaries to gain skills in view of: • Applying a strategic approach in project selection to enhance regional/local development in rural areas, • Attaining technical skills in project management in line with the EU requirements.
While the first two hypotheses allowed for full application of both the quantitative and qualitative research method, the last two hypotheses meant relying more on qualitative approaches, i.e. interviews, the long personal experience of the author of the Polish case study in the case study region due to many projects implemented in Świętokrzyskie since 1991.
2.4 The role of the ERDF in helping rural areas facing economic challenges
The current state of the economy of Świętokrzyskie is, to a large extent, the legacy of the transformation process since 1990 and changes in development trends from concentration on heavy industry towards an industrial and service economy. ‘Traditionally’ the region belongs to the five poorest regions out of all the sixteen regions of Poland. According to data of the Central Statistical Office of Poland in 2004, the region held the 13th place among Polish regions in terms of GDP per capita. At EU25 level in 2004, the regional GDP reached the level of 39.3% of the EU average.
As a result of the transformation process initiated in 1990, the structure of the regional economy has substantially changed.
Table 6. Change in contribution to the regional GDP generation per sector in the years 1993-2000- 2006 in percent
Contribution to GDP by sectors 1993 2000 2006 Primary sector 6.8% 7.5% 10.4% Secondary sector 51,7% 44.0% 30.7% Tertiary sector 41.5% 48.5% 58.9%
Source: Eurostat
Key trends in the restructuring of the regional economy over the 1993-2006 period are: • A substantial reduction of the number of employees in industrial companies (e.g. at the steel works in Ostrowiec, Końskie, the truck factory in Starachowice, the machinery industry in Kielce, Skarżysko-Kamienna, Końskie) led to the diminishing importance of the dominance of heavy industry, traditional in the region. • The tertiary sector became the main driver of economic development. • There was a growing role of the primary sector due to farm specialisation. • Świętokrzyskie faced a huge decline in its employment rate after the start of the transformation process, mostly in the industrial counties/poviats, where the processes of enterprise privatisation and restructuring of a variety of industrial branches resulted in job losses. In 2005, the highest unemployment rates were noted in the following industrial counties/poviats: Skarżysko (31.5%), Końskie (30.1%), Kielce (27.2%) and Ostrowiec (26.5%). After 2005, the unemployment rate in Świętokrzyskie decreased from 21.9% (126 322 unemployed) in 2004 to 15.1% (83.339 unemployed) in 2007. Unemployment in rural areas fell in numbers (2004 – 69.190 and 2007 – 46.792), but remained steady as a percentage of the total regional unemployment rate (2004 - 54.8%, 2007 - 56.1%).
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The problem of unemployment was heavily felt in rural areas due to hidden unemployment related to the surplus of labour dependent on farming in Świętokrzyskie. This issue can be perceived in view of two time periods: prior to enlargement and after enlargement in May 2004. In the period before 2004 the economic improvement was concentrated in national growth centres (Warszawa, Katowice etc.). It was characterized by the internal migration of the labour force from Świętokrzyskie to other Polish regions and, to a lesser extent, to other countries. The factors behind the improvement of the regional labour market after enlargement are related to general economic growth in Poland, including Świętokrzyskie, which led to an increase in the number of jobs at the regional level. Migration out of the region and to EU Member States after May 2004 resulted in a deficit of qualified labour on the regional/national labour market (i.e. in the construction sector). A part of the gap was filled by the rural population which traditionally worked in farming, and possessed basic construction skills necessary to build and maintain farm buildings and repair farm machinery. Therefore, rural inhabitants benefited both from the opportunity to work outside the region or even abroad and from additional job opportunities induced by the migration of skilled workers to urban areas. The real scale of this process is difficult to measure due to the lack of fully reliable data, particularly concerning the number of Polish workers in EU Member States.
The main characteristic of the region is the difference between the industrial and urban development in the central and northern part of region (Kielce - Skarżysko-Kamienna-Ostrowiec) and the agriculturally oriented south-eastern part.
The development of the region is based on mineral resources, especially concerning the deposits of gypsum rock. (100% of domestic output is produced in Świętokrzyskie.) The other key industrial sectors in the region are steel production, metallurgy, machine and precision industries, particularly in areas of manufacturing casts, pipes, fittings, rolling ball bearings and central heating boilers.
Moreover, the food industry plays an important role accounting for over 16% of the region’s industrial sales. This branch is dominated by medium-sized and large private companies. The most dynamically developing are meat, dairy, milling, confectionery and greengrocer industries.
The regional capital is home to large, nationally acknowledged private building companies such as Echo Investment S.A., Mitex S.A., Dorbud S.A., or Kielce Bridge Company (Kieleckie Przedsiębiorstwo Robót Mostowych).
Table 7. Structure of private businesses by selected counties of the Świętokrzyskie region on 31 December 2006
Poviat Total number of private Number of businesses managed businesses managed as legal by individual entrepreneurs entities (registered by individual person as form of entrepreneurship) Total regional 167 64 85 652 Kielce as towns county (poviat) 5975 22 878 Kielce as rural county (poviat) 1433 10 278 covering rural areas around Kielce Ostrowiec 1406 9006 Starachowice 1085 5601 Pińczów 413 1845 Kazimierza 308 1020 Włoszczowa 419 2595
Source: Kielce Voivodship Statistical Office
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The regional SME development pattern indicates two main trends: • Dominance of the urban and industrialised north over the agricultural south-east part of the region. • Large number of firms managed by individual entrepreneurs. • The large number of small firms managed by individual persons are the main reason for the very low level of R&D and innovative investments in the region (2004 – R&D investments amounted 0.62% of total national R&D investments).
ERDF support for business units at regional level
The main measures aimed at direct support for business development: • the IROP Measure 3.4 ‘Direct support for micro-enterprises’ and • the ICE Measure 2.3: ‘Improvement of competitiveness of SME through investment’
For both measures, information with a specific break-down for rural and urban beneficiaries was available. However, while all the required information was available for the IROP Measure 3.4 - provided by regional authorities (Świętokrzyski Regional Marshal Office, Świętokrzyski Regional Voivod Office), data for the ICE measures (provided by the Polish Agency for Enterprise Development - PAED) was more limited.
In the Świętokrzyskie region a total of 195 projects were funded under the above mentioned measures.
Table 8. Distribution of investment in projects in the Świętokrzyskie region according to the ERDF funded Operational Programmes.
Operational Programme Number of Total value of the projects projects (including ERDF) Integrated Regional Operational Programme 2004-06 *) 129 34 080 000 PLN Improvement of the Competitiveness of Enterprises **) 66 38 174 107,39 PLN Total number of projects 195 76 254 107,39 PLN
Source: *) Świętokrzyski Regional Marshal Office, **) PAED list of signed contracts with beneficiaries as for 20/03/2007
It seems worthwhile to emphasize differences between the IROP 2004-06 and the ICE measures in view of their impact on potential beneficiaries from rural areas:
The IROP Measure 3.4 focused on support for ‘the competitiveness of micro-enterprises by making specialist consultancy easier to access and by increasing the investment capabilities at the initial stages of the enterprises’ activities’.
The ICE Measure 2.3 aimed at the ‘improvement of competitiveness of Polish SMEs through the modernisation of their products and technological offers’ with an emphasis on innovativeness.
As a result of the ICE concentration on innovativeness, the funds benefited the regional industry in urban areas more than that in rural areas. Access of the generally smaller and less innovative rural enterprises was more difficult than in the case of the IROP Measure 3.4. The data on number of projects implemented in rural areas under both Operational Programmes seems to confirm the general feeling as expressed by participants of regional interviews.
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Table 9. ERDF funded projects to support business with growth potential
Operational Programme Total number Project in Value of projects in rural areas of projects rural areas I Integrated Regional Operational 129 43 11804150.82 PLN Programme 2004-06 *) (measure 3.4) (ERDF support: 3112438,09) I Improvement of the Competitiveness 66 6 n.a. of Enterprises **) (measure 2.3)
Source: *) Świętokrzyski Regional Marshal Office, **) PAED list of signed contracts with beneficiaries as for 20/03/2007
The value of investment for projects under the IROP 2004-06 aimed at rural areas reached the level of 34.6% of the total support for SME in the case study region. A key factor influencing this pattern of resources distribution was the designation of micro-enterprises as target beneficiary for the IROP 2004-06 Measure 3.4. In line with the assumption taken in the programming phase, this measure met the regional needs. Concerning the Improvement of the ICE measures, interviewees stated that in view of the low regional competitiveness of the Świętokrzyskie region, a relatively small number of projects from this region were approved.
In terms of job creation, out of a total number of 380 jobs created in rural areas in Świętokrzyskie with the support of the ERDF, 138 were created under the IROP2 and 242 under the ICE Measure 2.33. The difference between the two OPs can be explained through the type of beneficiaries. While the IROP Measure 3.4 focused on micro-enterprises – which in many case were small family managed firms – the ICE Measure 2.3 was addressed to larger business units. Additionally, some jobs reported as created in urban areas due to the project location are in fact jobs taken by the rural population.
Table 10. Distribution of investment projects in rural areas funded by the IROP measure 3.4 in the Świętokrzyskie region
County/poviat Number of projects Kielce county/powiat Kielce rural county/powiat 16 Kielce urban county 1 Industrial counties/powiats Końskie 3 Skarżysko-Kamienna 4 Starachowice 3 Ostrowiec 2 Selected rural counties/powiats Busko 2 Jędrzejów 2 Pińczów 1 Staszów 1 Włoszczowa 1 Total number of projects in rural areas in the Świętokrzyskie region 43 under the IROP 3.4 measure
Source: Świętokrzyski Regional Marshal Office, Świętokrzyski Regional Voivod Office
2 source: Świętokrzyski Regional Marshal Office 3 source: Evaluation of the ICE measures 2.1 and 2.3 results after eighteen months covering 1198 beneficiaries out of a total of 2862 beneficiaries as of 31/01/2008
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The territorial distribution of projects implemented in rural areas according to counties mirrors the overall dominance of Kielce as the driving force of the regional economy. Moreover, the analysis of the regional project distribution shows stronger business development in the northern, industrial part of the region. The potential of rural counties was also inhibited by the migration of significant parts of the labour force from Poland to the EU15. At local level (particularly in rural areas), economic growth after 2004 was less visible than in Kielce as the most populated part of the Świętokrzyskie region.
The effect of ERDF support for business units in rural areas within the region shows the following pattern: • The experience of the 2004-06 programme period seems to suggest that in view of the relatively weak position of the region in terms of competitiveness and regional diversification, two patterns of support were effectively applied. Assistance to micro- enterprises proved to be an effective tool for small firms in rural areas. However, support for innovativeness in the context of putting the regional projects in open competition with other Polish regions (with a more competitive infrastructure) at national level, did not fully work at regional level. Taking into account regional diversification it is not surprising. • Territorial distribution of investment projects in the rural areas of the Świętokrzyskie region reflects the map of economic activities in the region. Considering regional diversification it was to be expected.
2.5 The role of the ERDF in increasing accessibility
2.5.1 Transport infrastructure
The region is located between the four urban centres in Poland (Warsaw 180 km north, Kraków 100 km south, Katowice 150 km south-west and Łódż 150 km west). Despite substantial improvements after 2000 in the Świętokrzyskie region, transport infrastructure still leaves much room for further improvement. While the upgraded infrastructure concerns national roads where real positive change is visible, many local roads still require additional funding.
Roads
The region is excluded from the national plan of motorway development. However, two fast roads run through Świętokrzyskie (7 – north-south, 74 – east-west). The regional road system in 2006 consisted of 12,189 km of paved roads.
Table 11. Paved public roads in the Świętokrzyskie region on 31.12.06
Specification 2000 2005 2006 in km Total 11 332 12 084 12 189 Urban 1 342 1 475 1 482 Out-of-town 9 990 10 609 10 707
Source: Voivodship Statistical Office, Kielce
Considering rural aspects of the current road system, two points should be highlighted: • The substantial activity of the local community governments in the field of out-of-town public roads improvement after 2000. This is related to the availability of EU funded programmes (PHARE, SAPARD, IROP after 2004) which provided strong incentives to active local governments.
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• The centralisation of public transport (provided both by the Polish Communication Company – PKS and private firms) towards Kielce as the regional growth centre. A network of private firms established a well functioning system of mini-buses to and from Kielce. However, this network does not cover communication between the major regional centres. To a large extent this is the result of low economic activities in other regional towns apart from Kielce.
Table 12. Public roads managed by gmina /community local government on 31.12.06
Specification 2000 2005 2006 in km Total 3969 4650 4730 Urban 673 772 782 Out-of-town 3296 3878 3948
Source: data of the General Directorate of Domestic Roads and Motorways.
Railways
The railway system lost its importance after the transformation process starting in 1990, partly due to the diminishing economic and social activities of regional towns (except Kielce). The north-south railway line, as a part of the national railway network (Warsaw-Kraków) is fully operational. However, many local connections, particularly in the northern part of the region (Końskie, Skarżysko-Kamienna, Starachowice, Ostrowiec) are underutilised or have even closed.
Table 13. Railway lines operated in the Świętokrzyskie region on 31.12.06
Specification 2000 2005 2006 in km Total 752 707 707 Per 100 km² of total area 6.4 6.0 6.0
Source: Voivodship Statistical Office, Kielce
Airports
The closest airports are located in Kraków and Warsaw. Regional authorities are considering the development of a local airport near Kielce (Masłów), but so far these plans are not specified in terms of funding. Therefore the regional transport relies on road and railway systems.
The role of the ERDF
Infrastructure projects were supported in the Świętorzyskie region by the IROP Priorities 1 and 3. Priority I was focused on important projects from a regional perspective, while Priority 3 was aimed at so called ‘small infrastructure’ projects (to support local development). According to the regional expenditure study 42.767.330 € ERDF funding was invested in transport infrastructure in the Świętokrzyskie region, making up 30.8% of the total ERDF funds 2004-06.4
4 European Commission, DG REGIO (2008): Study on regional expenditures.
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Table 14. Resources and number of projects implemented under the IROP Priorities 1 and 3 in Świętorzyskie
Priority Amount of money Number of projects (ERDF/national input) Priority 1: Development and modernisation of 73 965 645.4 € 74 infrastructure to enhance competitiveness of regions Priority 3: Local development 38 149 073.4 € 129 Total 125 479 335.4 € 203
Source: Świętokrzyski Regional Marshal Office, Świętokrzyski Regional Voivod Office, rate of exchange as of 27/06/2008 1€ = 3.3671 PLN
In terms of impact on rural development of the ERDF funded measures supporting infrastructure projects in the Świętokrzyskie region, the analysis is based on two levels: indirect (impact of regional projects on rural areas), and direct (projects initiated directly by rural and small towns).
As regards the indirect impact of the IROP Priority 1, the majority of people interviewed emphasised that all projects outside towns facilitated the development of rural areas. Upgrading the road system (under Priority 1, roads managed by county and regional authorities) improved the accessibility of the region from other regions (i.e. roads Warszawa-Kraków, Łódź – Kielce, Kielce - Tarnów) and the internal regional road system. Out of a total 235.93 km of modernised or newly built roads under both Priority 1 and 3, the majority of them indirectly substantially improved the accessibility of the region (source: Świętokrzyski Regional Marshal Office, Świętokrzyski Regional Voivod Office). Regarding direct support, the key criteria was eligibility of rural local authorities for funding. Within Measure 3.1 which was specifically addressed to rural areas, 79 projects with a total value of 148 500 281,10 PLN were implemented. The majority of the projects supported road, water supply and sewerage systems.
Effect of ERDF support on rural areas
The relationship between expenditures on the different IROP measures (table 14) clearly confirms the dominant role of hard infrastructure projects in the region. This reflects the need to upgrade basic infrastructure as the very first step in the improvement of regional competitiveness. This overall goal was to be achieved through the substantial improvement of standards of living of the population in the region, including rural inhabitants.
Indirect support facilitated regional infrastructure development. Rural areas, although not listed as the main beneficiary, fully benefited from upgraded facilities.
The number of projects implemented by rural local governments suggests that direct support met the needs and expectations of the rural decision makers. Similarly to the regional level, most interest was focused on hard infrastructure projects (road, sewerage, water supply). Unlike in Measure 3.4, there was not such a strong dominance of Kielce and rural communities in the Kielce area. Communities in the Kielce vicinity implemented relatively more projects: 33 in Kielce rural county against 15 in Busko county, eight in Kazimierza county, seven in Pińczów county and 13 in Jędrzejów county (all counties/powiats are located in the southern, rural part of the Świętokrzyskie region). The difference is probably related to the size of the Kielce rural county and more financial resources available in better situated local rural communities in the region.
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Table 15. Resources and number of projects implemented under the IROP Sub-measure 1.1.1 in Świętorzyskie
Priority Amount of money Number of projects (ERDF/national input) Submeasure 1.1.1. €67 068 382.3 28 Road infrastructure (regional)
Source: Świętokrzyski Regional Marshal Office, Świętokrzyski Regional Voivod Office, rate of exchange as of 27/06/2008 1€ = 3.3671 PLN
Concerning the specific impact of ERDF transport infrastructure projects on rural areas in Świętokrzyskie, the following main conclusions can be drawn:
• There was a substantial improvement of the accessibility of rural areas to main regional centres, particularly to Kielce. The road infrastructure connecting Kielce with other towns (Busko Zdrój, Końskie, Ostrowiec, Sandomierz, Nowa Słupia) facilitated better commuting allowing for shortening travelling time and upgraded safety standards.
• Urban-rural area migration trends around Kielce and some other towns (Opatów) are a result of the improved commuting system. For example, transport projects in the commune Kije (connecting commune’s road upgrading project with modernised regional road) proved to have a direct effect on the development of the commune. Between 2002 and 2007, the number of building permits issued by the commune office increased from 11 to 22. There is the shared view by commune authorities and voivodship office representatives that new inhabitants brought a demand for new services in rural areas however, specific data at regional or projects levels regarding the specific number of businesses are not available.
2.5.2 Energy infrastructure
Gas is one of the most important energy sources in Świętokrzyski. The gas network amounted to 3,580 km with 161,400 connected households in 2004. The western and southern part of the region which covers mostly rural areas was not covered by the gas supply network.
All power engineering lines in the region require substantial resources for upgrading to meet the challenge of further economic development.
During the past four years with assistance from the ERDF some progress was achieved.
Table 16. Basic data on gas line network on 31.12.06
Length of distribution system in km 2005 2007 Gas line 3624.4 3674.9
Source: Voivodship Statistical Office, Kielce
The impact of the ERDF
Due to the very limited value of supported projects (52,458 EUR), the impact of the ERDF on the energy infrastructure is rather limited. The low value of assistance is related to the fact that the main beneficiaries of infrastructural projects (local governments) are not directly involved in the provision of energy to households and businesses.
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2.5.3 Telecommunications infrastructure
Telecommunication is especially important for rural areas in linking them to the world wide data network and helping to reduce the digital gap between urban and rural areas. Especially the access to broadband connections makes it possible to overcome the accessibility problems in telecommunication infrastructure in rural areas. With respect to access to telecommunications, two points are important in the rural areas of the Świętokrzyskie region: • Stationary telephone subscription in rural areas in the region lost its position to the growing network of mobile phones replacing the old, traditional system. • In 2002, the Świętokrzyskie region ranked last regarding access to the internet among all Polish regions. • After 2004, the number of households at national level having access to the internet increased by 1.25 million households, reaching the level of 4.5 million in 2006 (national level). The same trend could be observed in the Świętokrzyskie region, thanks, inter alia, to the ERDF funded project, e-Świętokrzyskie.
The impact of the ERDF
The total value of the ERDF funds allocated for telecommunications infrastructure reached 4 879 946 EUR (3.5% of total ERDF allocation for the Świętokrzyskie region). According to monitoring data from the Świętokrzyskie Voivodship Office, three projects supporting the development of the regional E-network received support amounting to 3 412 145 EUR (rate of exchange as of 27/06/2008 1€ = 3.3671 PLN). Due to these projects, around 75% of the regional population has access to broadband internet in the counties Kielce, Końskie, Staszów, Jędrzejów, Ostrowiec and Starachowice.
2.6 The role of the ERDF in increasing regional productivity, growth and quality of life
2.6.1 Support for regional initiatives
The issue of regional needs versus the ERDF objectives can be seen in the criticism raised in Poland during the programming phase of the programme period 2004-06. The core problem was the centralisation of programming at the national level at the expense of the regional level. Some researchers agreed with the approach indicating the lack of experience in programming and implementation amongst decision makers and officials at regional level. Others believed that regional authorities had first hand knowledge of the regional needs and should therefore have more say in the programming phase. The final compromise (programming at national level with input from the regional level, decentralisation of implementation processes by delegating tasks to regional stakeholders) caused some doubts as to whether regional authorities really do have the appropriate skills to meet new challenges.
All stakeholders expressed the opinion that the ERDF measures under the IROP fully allowed for the implementation of the strategic objectives of the regional strategy. This concerns measures supporting infrastructure development and Measure 3.4 (support for micro-enterprises). However, the other ERDF Operational Programme (ICE) was not fully effective in the context of the Świętokrzyskie region. Due to its concentration on innovativeness, the ICE measures put the Świętokrzyskie region at a disadvantage compared to other regions with a better developed innovation infrastructure.
Despite the fact that the majority of the ERDF measures (with the exception of the IROP Measure 3.1 – specific support for infrastructure in rural areas) was not focused on rural
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development, due to the structure of the Świętokrzyskie region it can nevertheless be said that rural areas fully benefited from the ERDF support. ERDF measures effectively facilitated the development of rural areas in both direct and indirect ways. As regards indirect impact, the Świętokrzyski Regional Marshal Office at the Steering Committee level reviewed all road, sewerage and water supply projects in view of developing cross-connected networks. All regional stakeholders (some with reservation) agreed that this coordination really helped achieve a more strategic absorption of the EU support and the better use of regional resources.
ERDF support for local initiatives
At the level of local, rural communities, the main problem was the relationship between local resources and local strategy development and the ERDF measures as a possible vehicle for reaching local development objectives. It seems that in the Świętokrzyskie region two approaches were taken. These were:
The first was the development of rural community projects without a wider strategic perspective limiting the scope of the activities to the community level. This approach is fully justified in the case of small projects aimed at the improvement of the standard of living in rural areas e.g. through road modernisation or connecting households to the sewerage system.
The second was a more strategic approach linking regional projects with local rural initiatives. In the case study region were some examples of such a strategic approach: • Kije local community. This rural community connected to the regional road Kielce-Busko (south of Kielce) decided to apply a strategic approach by connecting projects implemented at regional level (regional road modernisation substantially improving access to the regional growth centre Kielce, modernisation of roundabouts of the regional road around Kije) with local projects. These local projects focused on connecting more rural households to the water supply and the sewerage system and building a sewerage treatment plant. According to data provided by Kije local authorities, due to the very visible improvement of the accessibility of Kije community to Kielce and of the standard of living for local inhabitants, the attractiveness of Kije as place to live increased. The number of formal approvals for building new houses issued by the Kije local government doubled from 11 in 2002 to 22 in 2007). • Nowa Słupia area. Nowa Słupia is a special tourist area around the Saint Cross pilgrimage centre located in the heart of the Świętokrzyskie mountains. The regional project aimed at the renovation of monuments and the tourist infrastructure (Measure 1.5 of the IROP: Development of tourism and culture – 5 273 855,43 PLN) was followed up by a local project initiated by rural communities under the IROP Measure 3.1 Rural development in view of the improvement of the road, water and sewerage systems. Such an approach required a common strategic vision shared by the regional stakeholders and local rural communities to implement a network of individual projects to achieve overall strategic objectives.
Effect of ERDF support for regional initiatives on rural areas
The key success factors for the effective use of the ERDF funds for the improved use of regional resources were: • Coordination between regional and local levels on a voluntary basis, • The ability of local/rural governments to use the opportunity for local action in the framework of wider strategic market incentives.
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2.6.2 Environmental measures and land improvement
The Świętokrzyskie region is a region of unique natural value. The Świętokrzyskie Mountains are the main tourist attraction in the region and an area of environmental protection. Similarly, other areas with tourism potential located around the Nida river have to be treated with special care to ensure protection for the highly sensitive natural environment. Parts of the Świętokrzyskie region are included in various nature protection programmes. Legally, protected areas make up 61.9% of the total area of the region (the first place in the country). There are areas included in the European Ecological Network NATURA 2000 (four special protection of habitat areas and two special bird protection areas). Thus, the main problem for all regional stakeholders was how to reach a reasonable compromise between the need for nature protection and for economic development.
The impact of the ERDF
The ERDF funds aimed at environmental measures and land improvement reached 25 886.131 and 10 443 852 EUR respectively. The majority of projects were focused on the improvement of the sewerage network and, to a lesser extent, on sewerage treatment plants. These new infrastructure investments allowed the provision of better quality water and substantial improvement in terms of environmental protection. In view of the high percentage of protected areas in the Świętokrzyskie region, the appropriate development of the water supply and sewerage treatment was a precondition for any form of development combining two contradictory goals: environmental protection and a better standard of living for the rural population. The development of new hotels and tourist facilities in the Świętorzyskie Mountains indicated that the improvement of public services in water management allowed for a better utilisation of available regional assets. Similarly, Kije, a rural community (south of Kielce), experienced a growth in the number of cases of building permission issued from 11 in 2002 to 22 in 2007 as a result of the new sewerage network and sewerage treatment plant. New public facilities in conjunction with the upgrading of the connecting road to Kielce (30 km distance from Kije) provided incentives for increased interest in settling down in Kije community.
2.6.3 Improving socio-economic viability and the quality of life
Education
Quality of life is strongly dominated by the accessibility to social infrastructure such as educational institutions (schools, vocational training centres) and social and health care institutions. Social infrastructure creates the basic conditions for the socio-economic viability of rural areas.
The statistics show that the level of education in the Świętokrzyskie region is lower than the national average. Moreover, there exists an inner-regional trend: Similarly to other regions, the more highly educated members of the population tend to live in urban centres at the expense of rural areas.
The number of educational facilities is falling due to demographic decline leading to the reduced demand for facilities for students below 19 years of age. In 2003, the number of students in primary schools reached 98, 000, while in secondary schools it amounted to 97,300.
However, at the same time, increased interest amongst adults to improve their educational attainment allowed for the development of educational opportunities at secondary (newly operated schools for adults) and higher level. In the academic year 2004/2005 the 14 higher education schools of the region were attended by 65,134 persons, which placed the Świętokrzyskie on the fifth position at national level.
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Table 17. Structure of educational levels in the Świętokrzyskie region and in Poland in 2002 in percentage of total population
Level of education Świętokrzyskie Poland Higher/University degree 9.1 % 9.9 % College 3.3 % 3.2 % Secondary 26.9 % 28.3 % Vocational 21.8 % 23.2 % Primary completed 32.9 % 29.8 % Primary incomplete 4.8 % 3.5 % No education / undefined 1.2 % 2.0 %
Source: Central Statistical Office
Health service
Health services are provided in the Świętokrzyskie region through a network of public funded medical centres. Their task is to provide general health assistance through medical centres located in all urban centres in the region. Generally, access to health services based on a dense network of public medical centres is relatively well developed. However, access to medical specialists is much more difficult due to the underfunding of the public health sector. Specialised hospitals provide services according to their geographical coverage of the Świętokrzyskie region.
The role of the ERDF
In order to improve the situation, investment focuses on rural schools in marginalised areas. A lot was done after 2004 through the ERDF by co-financing the building or the modernisation of sports facilities in these areas. Under Measure 3.5.1 (Local education and sport infrastructure) rural and small towns located in rural areas implemented projects focused mainly on the school gyms and other buildings (21 projects, 30 746 798.7 EURO5 ). This trend was perceived in the region as upgrading the social infrastructure in rural areas.
Additionally, the modernisation of the training equipment for all types of vocational schools is considered a priority. Currently, the skills of graduates from all types of vocational schools do not always meet employers' expectations. This is, however, important for rural students as many of them will have to leave or have already left farming as the main source of income.
Moreover, under Sub-measure 1.3.2. Regional health care infrastructure, 22 projects with a total value of 10 850 722.01 EURO6) were funded. The majority of these projects funded the upgrading of the regional hospital infrastructure of so called specialised hospitals serving the whole or part of the region.
The role of the ESF
The ESF funded activities after 2004 substantially broadened the scope of professional training, both for the unemployed and for the employed to improve their skills. The main driver was the changing situation on the regional and national labour markets (migration of the regional labour force to other national labour markets and selected EU Member States). As a side effect, in
5 rate of exchange as of 27/06/2008, 1 EURO=3.3671 6 rate of exchange as of 27/06/2008, 1 EURO=3.3671
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some professions (e.g. the construction sector, bakers, butchers etc), the shortage of skilled labour was noted. The ESF funded trainings provided workers with new skills as required by the market to replace workers migrating out of region.
For the rural population, the certificate system testifying that the trainees had gained new skills was of particular importance. Many inhabitants of rural areas had appropriate professional skills as a result of their practical work on the farms but no formal certificate. Many employers in the regional, national and EU labour markets prefer to have proof of skills and the ESF played an important role in facilitating better access to the labour market for the rural population.
ERDF impact on socio-economic viability and quality of life
The ERDF support impacted on the regional socio-economic viability of the rural population through the direct improvement of the standard of living in rural areas through the better provision of services (improvement of water quality, new, modernised sewerage network with larger capacity in terms of number of served population etc.). The rural population benefited both in terms of improved services and better chances for economic development due to new job opportunities. Additionally, this new trend facilitated the migration of the urban population towards rural areas. Kije (south of Kielce) and the Świętokrzyskie Mountains are examples of rural communities in which ERDF assistance connected with local stakeholders’ activities opened new ways for the more effective utilisation of local assets.
2.7 The role of the ERDF in increasing the use of regional resources and strengthening regional self-confidence
Some concerns were raised in Poland prior to the 2004-06 programming period regarding the decision taken by the Polish government to delegate key tasks in the implementation of the largest Operational Programme, IROP, to regional self-government and regional voivodship offices. Researchers expressed the view that the lack of skills in terms of programming and project management might create serious obstacles to the absorption of the EU assistance.
A review of the experiences of the Świętokrzyskie region with respect to the skills of all stakeholders was carried out at regional and local levels. As most comments at regional level concerned the ERDF as a whole, it is impossible to make a distinction between rural and urban areas. However the following trends at regional level can be noted:
There was awareness amongst regional decision makers regarding the EU programming, programmes/project management requirements. It was a commonly shared opinion in the region that all regional stakeholders had full understanding of the needs for adjustment within both the Marshal and Voivod Offices to ensure the effective implementation of the ERDF measures. At the very beginning there were some coordination difficulties with the Managing Authority regarding the interpretation and implementation of some practical aspects of the implementation of measures and procedures but taking into account the relative novelty of the EU requirements, it seems justified to state that thanks to the previous experiences with other assistance programmes (i.e. PHARE), the process of adjustment was effective and smooth.
The process of adjustment was successful due to fully qualified, relatively young staff. The majority of people interviewed emphasised that they were employed to manage the EU programme and had the very unique opportunity to create a new system. Their statement showed their pride in participating in the successful implementation of the EU measures in Świętorzyskie . They also pointed out that work on the implementation of EU measures forced the whole administrative structure involved in this process to engage in more partnership with the beneficiaries.
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One issue raised at regional level was the relatively high staff turnover (mostly as result of non- competitive salaries for employees in some regional institutions involved in the ERDF implementation). However, the substantial majority of the staff who left joined other public bodies (mostly local governments looking for highly qualified staff as result of efforts to professionalise staff at local government level) involved in the administration of the EU assistance. The experience they gained while working in regional institutions responsible for the implementation of ERDF measures improved the quality of applications and created a better understanding amongst key decision makers within local authorities and other regional stakeholders (i.e. educational institutions) of the skills required by the ERDF project management.
There was awareness amongst rural community decision makers of the requirements of EU project management which led to the professionalisation of HRD policies. As the management of the ERDF projects required new skills, heads of local/rural governments realised that having well trained staff was a precondition for the successful application and management of the EU projects. Thus, reflecting similar trends at regional level, at local/rural community level younger, better educated staff were employed.
There was also some evidence of the ‘peer pressure syndrome’. At the beginning of the programme period, the more conservative political decision makers in the rural communities doubted the real need to apply for the EU projects. As a result of a certain ‘peer pressure’ through examples of neighbouring rural communities implementing very visible infrastructure projects which were very much appreciated by voters, even the most conservative had to accept public opinion/pressure and put in applications despite their reservations.
Effect of ERDF support on rural areas
At the regional level, the decision taken by the Polish government on the decentralisation of the EU programme implementation fully paid off. Thanks to this decision, substantial improvements in regional strategic and programme/project management skills were observed in the Świętokrzyskie region.
At the local level, in order to meet the new EU project management requirements, decision makers in rural communities were forced to hire highly professional staff and substantially change their HRD policies in the direction of professional management.
Partnership
Partnerships operated in the region at two levels: • Formal partnership – according to the EU regulation the Regional Marshal Office acting as Body participating in the IROP 2004-06 implementation involved the social partners in the monitoring of the ERDF measures implementation. Through participation in the Monitoring Committee, representatives of the social partners had the opportunity to present their comments/view/suggestions on the ERDF measures implementation, • Informal partnerships between local authorities (i.e. rural communities in Nowa Słupia area coordinating their investments in road upgrading to create a connected road system in view of facilitating a better standard of living for local population and creating a road communication network in the areas of the Świętokrzyskie Mountain which are attractive for tourism).
There were two main barriers to partnership development: • Lack of tradition of cooperation between local communities, • The relatively low financial volume of projects funded by the ERDF.
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The results of the analysis of the ERDF interventions in the Świętokrzyskie region are presented according to the importance of the different types of intervention in the region. Accordingly, first the conclusions on the support for infrastructure projects are drawn, subsequently on the support for business development and finally on the support for regional development capacity building in terms of the effective use of regional resources and capacity for the effective utilisation of the EU assistance.
Infrastructure (transport, environmental protection, social infrastructure)
The ERDF support in Świętokrzyskie, in line with the decision taken in the programming phase, played an important role in the first step of the improvement of regional competitiveness. Poorly developed technical infrastructure was seen as the main barrier to regional development, especially in rural areas. Thus, over 50% of all ERDF assistance was earmarked for transport, environmental and social infrastructure. This decision proved to meet regional players’ expectations. A big demand for infrastructural projects amongst local government confirmed the strategic approach taken at national and regional level. Priorities given to selected type of infrastructure were of particular importance for rural areas.
Transport infrastructure projects played important role in the improvement of the accessibility of rural areas and to some extent in limiting the marginalisation of some parts of rural areas in the region. The upgrading of regional roads facilitated the improvement of the network of the regionally important communication system connecting Świętokrzyskie with the neighbouring region while local projects assisted the improvement in communal and county roads. Connecting regional roads with local projects to create a better regional communication system was effective: this approach was successfully applied by some of the rural local governments (i.e. by the communes Kije, Nowa Słupia).
Environmental and educational infrastructure projects facilitated the improvement of the standard of living in rural areas and the environment. The last aspect was especially relevant for Świętokrzyskie as the region contains the largest share of legally, protected areas in Poland (61.9% of the total area of the region). Inadequate sewerage systems heavily limited tourism development in the Świętokrzyskie Mountain and the Nida river areas. Educational projects mainly focused on upgrading rural school facilities aimed at the improvement of educational capacity in rural areas (in particular in small towns).
Rural local governments showed less interest in more innovative projects (i.e. IT projects). This could be explained by the perceived need for the improvement of basic technical infrastructure as a first priority for spending the limited financial resources available to rural communes.
However, a more visible impact of infrastructural projects on regional development (including rural areas) was inhibited by the legacy of the transformation process after 1989 (closing regionally important heavy industry plants leading to high levels of unemployment) and the new options for the regional labour force of temporary migration to the EU Member States. In view of the slower economic growth in Świetokrzyskie compared with national growth centres, benefits of the ERDF infrastructural intervention will pay off over a longer period of time. The region still is behind the national average in terms of infrastructure development. Therefore, the ERDF support in the programme period 2004-2006 (in Poland) created a sound starting point. A clear, positive impact of the ERDF support can be seen in Kielce and in the rural areas around Kielce and some parts of the regional rural areas (i.e. Nowa Słupia). However, there are still rural areas which - due to their more marginalised location - will require further assistance in basic infrastructure development.
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Business development
Support for micro-enterprises was fully utilised in Świętokrzyskie. This target beneficiary group managed to effectively apply for assistance and use the funds allocated. The value of investments for projects for micro-enterprises aimed at rural areas reached the level of 34.6% of the total support for SME in the case study region. Taking into account the regional pattern of entrepreneurship development (dominance of Kielce and to a lesser extent the northern counties as the main basis for entrepreneurship in Świętokrzyskie) the ratio of rurally located companies benefiting from the ERDF support seems to be representative of rural businesses in Świętokrzyskie.
Measures aimed at innovativeness support were, in the view of the regional stakeholders, not fully utilised in the case study region as a result of a weak competitive position at the national level. This comment is particularly relevant as most of the rural enterprises in the case study region are family businesses and not explicitly oriented towards innovative approaches.
According to the local actors interviewed the implementation modes had some influence on the process of business development in Świętokrzyskie. The Operational Programme (Integrated Regional Operational Programme) implemented by regional actors (Marshal and Voivodship Offices) was better adjusted to the regional needs while the nationally managed OP (Improvement of the Competitiveness of Enterprises) forcing regional companies to compete at national level, disadvantaged potential beneficiaries from Świętokrzyskie. It seems that any further assistance focusing on innovativeness support in the case study region should consider the special circumstances in Świętokrzyskie with particular reference to rural areas and small towns located outside the field of influence of Kielce as the regional growth centre.
Regional development capacity
Regional resources utilisation
The issue of the role of the ERDF as facilitator for more the effective utilisation of regional resources is reviewed at two levels: regional (regional stakeholders: Świętokrzyski Regional Marshal Office, Świętokrzyski Regional Voivod Office) and local (rural local governments).
Regional Decisions taken during the programming phase regarding the decentralisation of the largest ERDF Operational Programme (Integrated Regional Operational Programme) implementation proved to be very successful in terms of activating key regional actors (Marshal and Voivodship Offices). First of all, their knowledge of regional needs allowed for a more effective allocation of projects taking regional circumstances into account. In the case study region, projects supporting tourism as well as the development of the road and sewerage system in the Świętokrzyskie Mountain, is an example of the well embedded approach. Similar procedures were applied at the Marshal Office regarding coordination between regional and local projects to improve the regional transport system. Interviewed regional stakeholders perceived the ERDF support as a key tool for speeding up the implementation of the regional strategy. Local At the local level, the most important aspect of the better utilisation of regional resources was the ability of local actors (mainly rural local governments) to connect local projects with local and regional strategies. This approach required some coordination efforts with neighbouring communities and the ability of the rural community decision makers to make the most of opportunities created by other regional stakeholders’ projects and market incentives. Examples of such an approach were identified in the Nowa Słupia commune, Kije, the Świętokrzyskie Communes Association, the Nida River Communes Association.
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Absorption capacity
Building absorption capacity for EU support was seen as another key element of ERDF implementation in the case study region. Despite some doubts in the programming phase, implementation practice for the period 2004-06 (in the Polish case) confirmed that all stakeholders, i.e. implementing institutions, beneficiaries and actors supporting the implementation system (i.e. consultancy companies) were aware of the issue.
Two specific aspects of absorption capacity are worthwhile emphasising: • The professionalisation and capacity of staff at regional and rural community level to apply for and manage EU programmes (at regional level) and projects (at both regional and local levels). It was particularly important for rural communities which had more limited access to a properly educated pool of potential employees. • ‘Peer pressure syndrome’ as a mechanism encouraging the involvement of more conservative local (including rural) decision makers in applying for the ERDF assistance despite their doubts and unwillingness to quickly adjust to the new EU rules. Examples of successful investment in neighbouring rural communities and the growing pressure from local voters led some decision makers to adopt a more active approach to using EU support.
Recommendations
Infrastructure
• To continue support for small, infrastructure projects aimed at rural communities as the most effective tool for upgrading the standard of living in these areas leading to an improvement in their competitiveness. • To enhance the strategic approach at rural community level by considering the adoption of additional incentives for strategic cooperation between local communities. This can be achieved by increasing the level of funding for infrastructure projects sponsored by strategic partnerships and introducing additional scores in the project selection criteria for infrastructural projects initiated by strategic partnerships among local communities.
Business development
• To maintain measures for SME support managed at regional level as the most effective in the case study region. • To consider creating special activities to support innovativeness in the case study region involving all regional stakeholders (regional government, research centres etc.). However, it seems questionable whether a substantial number of new innovative businesses might develop in rural areas in the case study region in the foreseeable future due to the structure of regional economy (i.e. the dominance of the regional capital over the regional economy).
Regional development capacity
• As part of the strategic development approach in rural communities, it seems worthwhile to encourage local decision makers to fund so called ‘soft projects’ (training, consultation, local school curricula and service development) through the ESF as a complementary activity to the ERDF ‘hard’ infrastructure’ investment. Some communities already started activities in this area, but it is still not a commonly accepted approach.
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4 Bibliography
REGIONALNA STRATEGIA INNOWACJI
WOJEWÓDZTWA SWIETOKRZYSKIEGO
NA LATA 2005 – 2013, Kielce 2004
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