PAPER C
Purpose : for Decision
REPORT TO THE EXECUTIVE
Date
: 11 AUGUST 2004
Title
: A PROGRAMME OF ACTION – EU EXPANSION AND COHESION POST 2006
REPORT OF THE PORTFOLIO HOLDER FOR ECONOMIC
DEVELOPMENT, UK AND EU, REGIONAL ISSUES
IMPLEMENTATION DATE :23 August 2004
PURPOSE
1. This report summarises:
·
The
objectives of the Lisbon Strategy and additions to this agreed agenda in
Gothenburg
·
The
current proposals for the way in which European Funding will operate post 2006 to
work towards the Lisbon agenda
·
The actions the Isle of
Wight Council has taken to maximise any potential benefits for the Island
2. The report also proposes:
·
A
small number of immediate actions
·
A
further report in September 2004 setting out some objectives to be pursued in
the light of the information contained in this report and a programme of action
for the next 12 months.
BACKGROUND
What is The Lisbon Strategy?
3. The Lisbon Strategy was adopted by the European Council in March
2000, with the key objective that the EU should “become the most competitive
and dynamic knowledge based economy in the world, capable of sustainable
economic growth with more and better jobs and greater social cohesion”. This addressed the issues of economic and
social cohesion, and was completed a year later, in 2001, by the Gothenburg
European Council on sustainable development with the addition of a “third
pillar” – the environmental dimension.
4. Sustainable development can be defined as “development that
meets the needs of the present without compromising the ability of future
generations to meet their own needs”, and increasingly environmental
implications have to be addressed in conjunction with economic and social ones.
5.
Both
European and Member States’ policies since then have been working towards these
main objectives, which provide the driving force behind both policies and the
targeting of related funding. Progress
reports are made to the European Council in spring each year against targets
that are set and reviewed on a regular basis.
European Funding Proposals After 2006
6. Aside from the Common Agricultural Policy funds (CAP), the biggest source of funding from Europe comes through a programme of “Structural Funds”, which provide funds and guidance on economic development for regions across the EU, and emanate from EU regional policy. Structural Funds structures are set for a period of time – the current one from 2000 to 2006, and the European Commission is in the process of developing proposals for the period 2007 – 2013, taking into account the enlargement of the European Union from 15 to 25 Member States, and the tenets set by the Lisbon Agenda. The main proposals will be laid out in the following:
·
The Third Report on Economic and Social Cohesion – released February 2004 and
outlining proposals for future Structural Funding.
·
Proposals for future rural development funding – due out July 2004
·
Proposals on Regional State Aid – sent for consultation with Member States in January
2004. The UK Government has now put
this out for general consultation within the UK, together with the UK proposals
for amendments.
The Third Report on Economic and Social Cohesion
7. The Third Report on Economic
and Social Cohesion outlines the European
Commission’s proposals for regional policy and the related development funding
(ERDF) post 2006. The rationale and
criteria for these are summarised in Appendix 1, but it should be noted
that after considerable lobbying, the concept of “territorial cohesion” as well
as economic and social cohesion permeates the document.
8. This was something of particular relevance to the Isle of Wight and which the UK Government was resistant to, as it did not agree that EU funding should be used to address problems associated with “permanent physical disadvantage” (eg insularity). The acknowledgement that territorial cohesion needs to be addressed is a big step forward in the Island’s quest for recognition of issues specific to islands and the need to find resourced solutions.
9. Within these proposals the Isle of Wight would have ample scope for the development of suitable projects for funding under Objective 2 and, to a lesser extent, under Objective 3 strand 2.
10. However, these proposals have some way to go before they
become reality on the ground. The first
hurdle is the need for an adequate budget to enable them to be
implemented. As they stand it would
require a contribution of 1.24% of GNI (Gross National Income) by each Member
State, but the UK Government, together with 5 other countries, want to restrict
their contribution to 1% GNI. This
could result in the Objs 2 and 3 disappearing.
11. The regulations relating to these funding proposals are
expected mid July, but will still be dependent on agreement over the
budget. The process then develops with
further consultations and discussions between the Commission and Member States
prior to guidelines being developed. Members States then have to agree with the
Commission how these will be implemented in each country, and eventually they
appear as programmes of funding on the ground.
Proposals for Rural
Development Funding
12. Unlike past funding programmes, the bulk of funding specifically for rural development post 2006 will come under DG Agriculture (DG Agri), and is not covered in the Third Cohesion Report. There has been considerable concern that this will focus on on-farm development and diversification and will not be integrated with the regional development proposals laid out in the Cohesion Report. The proposals for this are not due out until July 2004, but some basic principals are being considered and these are summarised in Appendix 2.
13. There will still be significant involvement by national governments in planning Rural Development Programmes, as unlike the regional development programme which has had considerable input from local and regional authority through ongoing consultation.
14. This area is important to the Island and the Portfolio Holder and officers have taken every opportunity to influence them. For example the opportunity was taken to feed into DG Agri at a very early stage through a conference in April run by CPMR. This was the first time that DG Agri had sat alongside DG Regio and listened to what local and regional authorities had to say. There have also been opportunities to see early drafts of relevant documents which have been obtained through our Brussels Office, thereby giving us early warning of what is being proposed and consequently an opportunity for early intervention. Further input also via South East Rural Affairs Forum (GOSE Appointments) LGA Rural and Urban Commission.
Proposals for Regional State Aid Regulations
15. State Aid regulations govern the ability to provide investment
aid within regions and are not directly linked to EU monies. They regulate the way funding can be used
from public sources even when this may be from the Member State. The regulations govern the type and level of
investment aid permitted and the geographic areas where aid can be given. However, they sit alongside the regulations
governing the use of EU money and are directly influenced by policy, as they
are one of the mechanisms through which regional policy can be
implemented. A brief summary of current
regulations is given in Appendix 3.
16. The European Commission has now issued proposals for regional state aid for the period 2007 – 2013. The general objectives, which have been endorsed by Member States in successive European Councils, are
·
Lesser and better targeted State aid
·
Tackling real market failure
·
Promoting entrepreneurship
17. The aim is to enable a better concentration of regional aid investment in lagging regions, while at the same time increasing the flexibility for other member states and regions to pursue local development policies that address specific regional problems or opportunities. The Commission is looking at a thematic analysis in future rather than a full map based approach in an effort to ensure greater coherence between the EU’s regional / cohesion policies and the EU’s competitive / state aid policies.
18. The impact on the UK will be:
·
a
significant reduction in regional aid map coverage,
·
a
limit on the scope of aid for large companies
·
it
will affect some of the DTI’s schemes, eg Selective Finance for Investment in
England
·
it
will affect more generous aid ceilings for horizontal schemes
currently available is assisted areas.
19. The UK Government is not entirely in agreement with the
Commission’s proposals and careful consideration will be required by the
Council in responding to the current consultation – deadline date 6
September 2004.
Maximising benefits for the Island
20. It is vital that the Council monitors these processes
carefully and uses every intervention opportunity available to ensure that any
potential benefit for the Island is not lost. Indeed, by working through groups
of common interest, this may be strengthened as this protracted and complex
process proceeds. To this end the
Council works through a range of networks and partnerships to help deliver
influence, some of which require membership by the Council eg. The following
are the main bodies the Isle of Wight works with:
The Local Government
Association (LGA) The Local Government
International Bureau (LGIB)
Islands Commission /
Conference of Peripheral and Maritime Regions (CPMR)
South East England House Partners
and the Dynamo Regions
Our partners in the Brussels
Office – Hampshire and West Sussex County Councils
South East England European
Officers Group, and through that to the SEEDA / SEERA Joint Europe Committee
(JEC)
LGA Rural and Urban Commissions
South East, Rural Affairs Forum
21. In addition to arrangements through the Council the Leader and
the Portfolio Holder for Economic Development, European and Regional Affairs
hold political appointments on the following bodies, which provide the Isle of
Wight Council with a valuable platform for promoting the Island’s interests:
Leader
·
Member
of the Economic and Social Committee (ECOS) of the Committee of the Regions
(CoR). This is of particular value as the
CoR is one of the official institutions, representing local and regional
authorities, which has to be consulted by the European Commission on a range of
topics, and which can also put forward Opinions on other matters if it wishes
to do so.
Portfolio Holder:
·
Deputy
Chair of the Local Government Association European and International Affairs
Panel
·
Director
of the Local Government International Bureau Board
·
Vice
Chair of the Joint European Committee SEEDA/SEERA
·
UK
representative on the Political Bureau of the Islands Commission of the Islands
Commission / Conference of Peripheral and Maritime Regions (CPMR), now interim President of the Islands
Commission – effective July 2004
In addition to the corporate activity in Europe, Council’s Coastal Management Unit plays an active role in coastal issues. It has secured considerable funding from Europe to implement a range of projects relating to climate change and coastal management. Through these activities good working relationships have been established with other European partners and the expertise the Coastal Manager and his staff provide is held in high regard by the European Commission on technical issues. The influence that this Unit has in helping guide environmental policy particularly with regard to Integrated Coastal Zone Management in Europe is something which greatly benefits the future of the Island.
Funding obtained from the UK and European
sources
EU
LIFE Environment Programme - 'Demonstration Programme on the integrated
management of coastal zones' (1996-1999) - £244,000
EU
LIFE Environment Programme - 'Coastal Change, Climate and Instability'
(1997-2000) - £867,000.
Interreg
IIC Programme - 'Eco-Enhance Project' (1998-2000) - £420,000.
Interreg
IIC Programme - 'Quality of Coastal Towns' (1997-1999) - £160,000
EU
Vth Framework Programme - 'PROTECT Project' - cliff instability (2001-2004) -
£44,000
DG
Environment EUrosion Project contract -
erosion control (2001-2004) - £60,000
EU
LIFE Environment Project - 'Response' - Responding to the impacts of climate
change (2003-2006) - £1,050,000
Interreg
IIIC Project - 'MESSINA' - Management of the shoreline (2004-2007) - £1.1
million
Interreg
IIIC Project - 'EMDI' - Management of the Channel Shores (2004-2007) -
£1,350,000
Leonardo
Da Vinci Programme - 'OIKOS' Project - Coastal education using new technology -
£350,000
Total
: £5,645,000
In addition to the above, an unsuccessful bid for the LIFE Environment Programme for 'Sustainable access within sensitive environments' provided the methodology for obtaining government funding amounting to approximately £3.6 million for the reinstatement of the A3055 Military Road. In addition to European funded projects, the Isle of Wight Centre for the Coastal Environment has attracted £24 million of government grants for coastal and geotechnical-related capital projects and has contributed to award of another £16.7 million worth of successful highway / coastal instability grant-aid applications.
Dynamo Regions
22. The Hampshire, Isle of Wight, West Sussex Brussels Office Partnership has its Brussels officers based in South East England House (SEEH) and is part of the regional SE England representation which include other sub-regional officers as well as a SEEDA / SEERA representative. Whilst primarily focused on the need of its partners, increasingly collaborative working is part of the agenda to reinforce the SE presence.
23. As part of these activities SEEH took the lead in October 2003 in starting a “Dynamo Regions” collaboration. The concept is that regions perceived as prosperous often have in common interests and a need support to address such as:
·
Most
“prosperous” regions are not homogonously wealthy, but have pockets of
deprivation which need assistance.
·
Prosperity
will generate problems related to an overheated economy:
o
Traffic
congestion
o
Lack
of affordable housing for key worker
o
Stagnation
of the economy
24. The hypothesis developed under the concept of Dynamo Regions is that unless these problems are addressed, the prosperous regions will cease to be drivers in the wider EU economy to the detriment of all.
25. At present 7 regions from 6 countries have agreed to work together to share experience and lobby the European Commission on common topics. The joint work will also provide a sound base for future joint working and hence access to funding. The activities have been extremely well received by the Commission as a refreshing change form the usual “begging bowl” of poorer regions. Many of the points raised at the inaugural conference in October 2003 have been taken on board by the Commission and are reflected in the Third Cohesion Report.
26. As a result of this collaboration SEEH is now working with the Committee of the Regions on a series of “open days” in September 2004, which will take forward the regional policy agenda. This is a unique opportunity to develop close working links with key EU institutions and to raise awareness of the views and concerns of more prosperous regions on the reforms.
Key Dates and Activities
27. Whilst the
agenda is driven by the release of information from the European Commission, a
18-24 month period of intensive activity which will set the agenda for the
period 2006 – 2013 has been running for some time. As a result it continues to be the right time to lobby and put
forward proposals, as once the policies and funding regulations are in place,
it will be extremely difficult to change anything. The Council has already been actively involved in a range of
activities these, and the key dates for the future are outlined in Appendix 5.
STRATEGIC CONTEXT
28. The Service
Plan for Economic Development includes the Objective of “promoting the Isle of
Wight’s interests within the European union and UK Regional bodies”. This is to be achieved by playing an active
role in relevant partnerships such as the Brussels Office and the CPMR. All the activities undertaken and proposed
are working towards this end. In
particular the Business Plan for the Brussels Office partners (Hampshire, Isle
of Wight and West Sussex) identifies priority areas of work and activities for
both UK and Brussels based staff. This
was agreed by the Partners in January 2004.
Whilst the process is long and complex, without active
input and participation, the Isle of Wight cannot expect to benefit from future
policies and funding if it does not take every opportunity to try and influence
the development of these to its own benefit.
The expectation that others will do the work for the Island is
unrealistic and could result in significant loss of future opportunities. Strategically it is therefore imperative
that the Council remains as a “player at the table” when given the opportunity.
CONSULTATION
29. The above activities are a result of the European institutions
consulting with us through a range of mechanisms – conference, lobbying groups
such as the Islands Commission and the work of our Brussels Office. In these activities the Isle of Wight works
in close partnership with other bodies and is in constant communication with
our Brussels Office partners, other local authorities in the SE Region and the
Islands Commission / CPMR to ensure that we get maximum benefit from joint
working.
FINANCIAL/BUDGET IMPLICATIONS
30. The costs
relating to the above activities are covered by the existing budget. They include an annual contribution of £20,000
to the Brussels Office, membership fee for the Islands Commission / CPMR of
£7,509.86 (for current year) and the costs of staff and members attending
relevant conferences and meetings.
LEGAL IMPLICATIONS
31. Under section 2 of the Local
Government Act 2002 all local authorities are given far reaching powers to
enable them to do anything which they consider is likely to achieve the
specific objects set out in that section.
These are the promotion or improvement of the economic, social or
environmental wellbeing of the area which said powers can be exercised for the
benefit of all or any part of the local authority or any persons present or
resident in the area. There are certain exemptions but none that fall within
the ambit of the recommendations in the report
RECOMMENDATIONSi. To note the information set out in the report ii. To endorse the immediate programme of action iii. To receive a further report in October 2004 proposing objectives to be pursued in the lead in to 2006 iv. To agree a 12 month programme of action |
BACKGROUND PAPERS
·
The
Lisbon Strategy
·
The
Third Report on Economic and Social Cohesion
·
Regional
Aid 2007 – 2013, The UK Government’s Consultation on European Commission
Proposals on Regional State Aid
FURTHER INFORMATION
Appendices:
Appendix 1: Summary of criteria outlined in Third Cohesion Report for Economic and Social Cohesion
Appendix 2: Rural development regulations proposals
Appendix 3: Summary of Current State Aid Regulations
Appendix
4: The Brussels Office Partnership Business Plan
for 2004 / 05.
Appendix 5: Recent
activities
Contact Point : Lesley Williams, Principal Economic
Development Officer.
Tel: +44 (0)1983
823797
Email: [email protected]
|
Derek Rowell Strategic Director of
Environment Services |
Harry Rees Portfolio Holder for
Economic Development, UK and EU, Regional Issues |