Opinion on the role of regional and local authorities in the partnership principle of the Structural Funds (96/C 100/17)

On 5 December 1994, the Bureau of the Committee of the Regions, referring to Article 198c of the Treaty establishing the European Community, decided to draw up an Own-initiative Opinion on the above-mentioned subject.

According to Article 9 of the Rules of Procedure of the Committee of the Regions, the matter was referred to Commission 1 for Regional Development, Economic Development, Local and Regional Finances.

In the meeting of Commission 1 on 19 January 1995, Mr Brian Meek and Mr Bent Hansen were appointed Rapporteurs.

Introduction

In its 8th Plenary Session on 19 and 20 July 1995 (meeting of 20 July) the Committee of the Regions, referring to

- the Delors White Paper on growth, competitiveness and employment (COM(93) 700 final), in which a more decentralized economy is advocated and growing importance is given to the local and regional level,

- the European Commission's fifth annual report on the implementation of the reform of the Structural Funds 1993 (COM(95) 30 final),

- the Opinion on revision of the Maastricht Treaty adopted by the Committee of the Regions on 21 April 1995, in which the Committee calls for a wider definition of subsidiarity,

adopted the following Opinion.

The Structural Fund Regulations

1. The 1988 reform of the Structural Funds introduced four guiding principles; partnership, concentration, programming, and additionality. These principles were reinforced when the Regulations of the Structural Funds were reviewed in 1993.

2. The partnership principle is outlined in Article 4 (1) of the Regulation governing the Structural Funds. It states:

'Community operations shall be such as to complement and contribute to corresponding national operations. They shall be established through close consultations between the Commission, the Member States concerned, and competent authorities and bodies - including within the framework of each Member State's national rules and current practices, the economic and social partners - designated by the Member State at national, regional, local or other level, with all parties acting as partners in pursuit of a common goal. These consultations shall hereinafter be referred to as the "partnership". The partnership shall cover the preparation and financing, as well as the ex ante appraisal, monitoring and ex poste evaluation of operations.

The partnership shall be conducted in full compliance with the respective institutional, legal, and financial powers of each of the partners.`3. Partnerships were originally established to introduce a decentralized approach to the structural funds. However, the partnership provisions under the current Regulations are vague. This has lead to different interpretations of the partnership principle and discussions about the roles of partners.

4. At present, the Regulations do not define the partnership as a 'vertical` and hierarchical or as a 'horizontal` partnership and a partnership of equals. The current formulation also does not clearly define the function of partnerships.

Aims, objectives and methodology of the Opinion

5. The objective of the Own-initiative Opinion of the Committee of the Regions is to demonstrate how the partnership principle is carried out under the present regulations and to assess the role of the democratically elected regional and local authorities in them. The objective is not to produce a blueprint for the ideal partnership because these partnerships must reflect local and regional economic conditions and be adapted to different models of subnational government. However, the Opinion suggests ways in which the regional and local authorities' role can be strengthened within the partnership principle.

6. As a basis for the Opinion, the Rapporteurs have requested the members of the Commission 1 to assess how the partnership is carried out in the members' own regions. Based on the results of the survey, the Committee of the Regions highlights a number of general problems within the structure and function of the partnerships.

7. When the survey was under elaboration, only the programmes within the first four objectives were operational. Not all of the objective 5b and 6 programmes were operational. The Opinion has not examined the partnership arrangements for the new EU-initiatives. The slow progress in adoption of the Regulations and the delay in the implementation of the programmes has hampered the fieldwork associated with this Opinion. This is particularly disappointing because the programmes should have been in operation for more than a year.

8. The Opinion begins by outlining the importance of local and regional government to the partnerships. It then looks at the problems of the partnerships as they are defined by the answers to the survey, and suggestions as to the ways in which effective partnerships can be developed.

The key role of the local and regional authorities in the partnerships of the Structural Funds

9. The partnership principle is important since active and efficient partnerships will lead to the creation of effective programmes and the effective use of Structural Funds at a local and regional level. The partnerships assemble the important actors, both regionally and locally, who have a detailed knowledge of their area and can identify the strengths and weaknesses in economic terms. Moreover, partnerships embody subsidiarity and give a sense of joint ownership of the programme.

10. Throughout the European Union, local and regional authorities are responsible for a wide range of activities including the development of economic strategies and initiatives: providing business support, improving the physical environment and infrastructure and removing barriers to economic development, supporting people entering the labour market or preparing for a new and better job, assisting areas and people in their participation in the wider economic development. They are also the main actors in attracting external resources to the area.

11. The Committee of the Regions believes that the democratically elected regional and local authorities should have a key role in the partnerships of the Structural Funds because:

- the regional and local authorities are responsible for the social and economic welfare in their area and are as democratically elected bodies accountable to local and regional communities and add a democratical legitimacy to the programmes as well as nearness to the citizens;

- the regional and local authorities co-finance large parts of the programmes under the Structural Funds;

- being responsible for the economic development of the local communities and being the focal point of the regional and local business life, the regional and local authorities ensure a coordination and integration between the measures within the Structural Funds for instance in the areas of economic development, physical infrastructure, and education. Thus, the coordination of the Structural Funds will become more efficient and based on long-term strategies.

The problems of partnership, based on local and regional experiences

12. The answers to the survey represent a wide spectrum of partnerships. This spectrum covers well-functioning partnerships with a constructive dialogue and thorough involvement of local and regional authorities - via partnerships under construction - to those situations where the partnership is only vaguely developed.

13. This diversity can to a great extent be caused by national differences in administrative structures and the tradition of dialogue between levels of government. The size and membership of the partnership is a recurring problem since, in most cases, the responsibility for the appointment of partners rests with the Member States.

14. The survey does not aim at giving a comprehensive picture of the administration of the Structural Funds in the Member States. However, the examples shown in the answers do give an impression of the administration by highlighting some tendencies in the functioning of the partnerships.

15. Based on the survey, this chapter explains a series of problems in the construction and functioning of partnerships, particularly in relation to the influence of local and regional authorities.

16. The problems described are not occurring in all partnerships. As described in the report there are several examples of 'good practice`. These examples are not described or commented on individually, but their characteristics often appear in the possible solutions mentioned in the answers to the survey. This confirms the necessity of a further exchange of experience on the subject.

Construction of the programming document

17. The programmes are in most cases constructed by central government. This is often also the case in the regional programme. Local and regional views are involved to different degrees, e.g. by consultation of the authorities. With a few exceptions local and regional authorities are more involved at present than in the last programme period.

18. In general, local and regional authorities demand a greater influence on the programming. The development of the programme should attain a 'bottom-up` approach and thus become more rooted in local and regional government. These authorities should have a key position in the partnerships as they are elected by the local population and co-finance the programme actions. Elected members should play a role in the management committees. Existing documents should be incorporated as much as possible in the programme document.

19. This view is not only expressed where local government is less developed and where the programming is initiated and coordinated by regionally-based central government bodies. It is also seen in cases where local government is developed to a higher degree.

20. In some countries there is a development trend towards creating national programmes, or bigger programmes for bigger areas at the expense of smaller programmes for regions or subregions. It is recommended that programmes are constructed more as regional programmes. This is crucial for the legitimacy and sustainability of regional partnerships.

21. There is concern that national programmes seem remote from the regional and local level. In some cases, national responsibility for Structural Fund administration is divided between different national government ministries and this structure can impede the development of coherent programmes. It is argued that regional programmes are more responsive to local and regional needs than national programmes.

22. Formal direct contact between the European Commission and local and regional authorities during negotiations of the programming documents only exists in a small number of cases. In general, partners are not officially informed of the progress of these discussions until the programming document has been agreed.

23. The need for a more direct dialogue with the European Commission is emphasized by the answers pertaining to the role of the European Union. This is reflected in the suggestions for the European Union to define a more important role for local and regional authorities in the construction of the programme and in demanding the set of rules for the Structural Funds to be less complicated. Also, in some cases, the relatively short programme periods, the current limitation of the time available for project implementation and the late decisions on funds available may lead to a discontinuity in the programme implementation.

24. Central government is not always responsive to local and regional needs and there is a danger that the construction and management of programmes becomes a bureaucratic and policy neutral exercise. By adding a large local and regional input to the Structural Fund programmes they become policy driven and more able to stimulate regional and local debate.

25. It is suggested that, in some cases where regional authorities are responsible for constructing the programme, there may be reasons for strengthening the influence of local authorities. In cases where local authorities are responsible for local development policies these should be more reflected in and coordinated with the regional programme. In such cases, the programme should also reflect existing regional level intervention mechanisms which may be employed to implement the programme itself.

26. It is also suggested in the answers that the role of local and regional authorities can be strengthened by a better dialogue between levels of local government through a regular, common evaluation of process and results in view of programme strategies and objectives, or by improving local professional expertise.

Implementation of the programme

27. The impression is given that local and regional authorities in general have a growing influence on the programme administration, selection of projects and financial decisions.

28. Regional partnerships appear to be most highly developed and well functioning in the implementing stages of the programmes. The cooperation is differently organized, but in many cases the administrative responsibility is placed in management committee at regional level. Local and regional authorities and other relevant local and regional partners are represented variously in such cooperation bodies.

29. However, the management committee does not necessarily possess its own decision-making competence; often it only has a consulting function or the right to put forward proposals, whereas the final decisions are made by central government. The regional cooperation bodies must include the relevant interests, and must have their own administrative structures and the autonomy to decide financially on the projects.

30. Many partnerships are dominated by central government. In some cases the elected local and regional authorities are only indirectly represented or not represented at all. In some cases central government representatives participate at the expense of local and regional authorities. This is regrettable particularly since local and regional authorities have the general view of local needs and are therefore able to set the priorities of projects with direct implications for the local communities.

31. In cases where there is a development towards larger programmes the answers suggest that this has lead to a reduced representation of local and regional authorities in the programme administration.

32. In general the local authorities regard their influence on the programme implementation as being less than that of the regional authorities. Various actions are suggested, e.g. a larger local representation in the responsible bodies, a higher level of information, direct participation in selecting the projects, extended hearings and a strengthening of local authority expertise and education.

Monitoring and evaluation of the programmes

33. Local and regional authorities are often involved, in varying degrees, in the monitoring and evaluation of the programme, e.g. by direct or indirect participation in monitoring committees or similar bodies.

34. Much is however still to be improved in the dialogue; in some countries local and regional authorities only play a very limited role. In particular the evaluation of the programmes are often solely undertaken by central government.

35. The view is expressed that the monitoring of regional programmes should be fully dealt with by regional committees. These are important because the local and regional partners co-finance the projects and have the local knowledge needed for an effective monitoring and evaluation.

Towards effective partnerships

36. The Committee of the Regions believes that successful partnerships are formed when there is a political will to implement the partnership principle and when the benefits flowing from the close involvement of the partners are appreciated. This is most often achieved where there is already a culture of participation and dialogue based on decentralized political and administrative structures which wield significant powers and resources. It is important that the principle of partnership is used also where political and administrative structures are not fully developed.

Construction of the programming document

37. The construction of the programming document is the key stage in the production of an effective strategy which has the broad support of the partnership. The Committee of the Regions argues that local and regional authorities have a pivotal role to play in the construction of this document because they are the elected level of government closest to the citizen and local communities. Moreover it is essential that a 'bottom-up` approach is used in this process and that all partners have a sense of ownership of the final document.

38. In most Member States, local and regional authorities are not directly involved in the negotiations over the programming document with the European Commission. This can lead to key decisions and major changes being taken outside the partnership. The Committee of the Regions demands that local and regional authorities are involved in these negotiations and that their representatives are signatories of the final document. The negotiations with the Commission should be framed so as to enshrine to the greatest possible extent policies and intervention instruments already operating at regional and local level.

39. The Committee of the Regions believes that the membership of the partnership and its general roles and responsibilities should be detailed in the programming document. In view of their key democratic role, local and regional authorities must play a leading role in these partnerships.

Implementation of the programme

40. The Committee of the Regions encourages the European Commission to extend the programme periods, to ensure sufficient time, when necessary, for project implementation and a timely and stable decision-making process in order to ensure a continuous programme implementation.

41. It should be emphasized that for an effective operation of the Structural Fund programmes, there must be a regionally-based management committee with the necessary administrative resources, in which the local and regional partners are represented.

42. The management committee not only gives direction to implement the strategy in the programming document but also makes decisions on the projects which make up the programme. As indicated in the survey local and regional authorities are not always strongly represented on these committees, and the Committee of the Regions feels that this situation should be rectified in favour of local and regional authorities. The programme management committee should be responsible for decisions on implementation, including changes to the programme made necessary on account of either changed socio-economic conditions or the findings of the monitoring process.

43. Some regional programmes are operated on a large scale in geographical terms which may make them seem distant from local partners. In these cases it is important that subregional or sectoral committees are constructed to provide guidance, intelligence and information for the management committees so that all partners feel that they are involved in the implementation of the programming document.

44. The Committee of the Regions is extremely concerned that there are instances where national authorities have not allowed partnership to play a role in parts of the programme. This practice runs contrary to the spirit of partnership.

45. The Committee of the Regions feels that there is a great deal that can be learned from the different partnerships operating in the European Union, and would like the European Commission to encourage more exchange programmes on this theme. Furthermore, the Committee of the Regions will initiate and support more exchange of experience and suggests that such initiatives be encouraged in all relevant contexts.

Monitoring and evaluation of the programmes

46. The Committee of the Regions believes that monitoring and evaluation of the programmes is an important element in the process. This monitoring should be carried out in cooperation with regional and local authorities instead of - as now - predominantly by national authorities.

47. It is imperative that the partnerships discuss and agree methods of monitoring and evaluation because as major project sponsors, they will be involved in gathering the detailed information associated with the exercise, and because they can ensure the utilization of these experiences in the local communities.

48. In some Member States, evaluations have been carried out and the results have not been shared with the partnership. The Committee of the Regions thinks this is an unsatisfactory way of developing partnerships and considers it important to improve programme quality by discussion based on the results of monitoring and evaluation exercises. The fundamental aim of monitoring programme implementation is to check on its specific application at regional and local level: it also represents the main basis for monitoring Committee decisions on any adjustments to the programme.

49. The Committee of the Regions believes that an improvement of local expertise and communication between the levels of government can lead to increased local influence.

Recommendations

50. The Committee of the Regions emphasizes that local and regional authorities in their capacity as democratic levels of government closest to the citizen and local communities must play a pivotal role in the Structural Fund partnership if these programmes are to be successful.

51. It points out that there are examples of local and regional government playing this role but that in a large number of programmes, local and regional authorities have inadequate influence or are not directly involved, and must be allowed to play a leading role.

52. The Committee of Regions regrets that a number of mainstream Structural Fund programmes are managed nationally. This management is remote from the local and regional level and does not encourage local and regional participation, nor an effective distribution of the funds according to local needs and priorities.

53. The Committee of the Regions finds that the current partnership provisions in the Structural Fund Regulations are vague and lead to different interpretations of the principle. It therefore demands that Article 4 of the Structural Fund Regulations be revised to formally include local and regional authorities in the Regulation text, since they are the ones with the democratic legitimacy to represent regional and local need and priorities.

54. Despite the fact that the Structural Fund Regulations call for 'close consultation`, this is a difficult phrase to determine for many partners, including local and regional authorities. Most partners feel that close consultations have not taken place. This lack of consultation often occurs because a culture of participation and dialogue has not been developed amongst different tiers of government.

55. The Committee of the Regions stresses that there is a lack of clarity about the functions of partnerships in the current Regulations, and requests that due consideration be taken to the different phases of Structural Fund management. By including local and regional authorities in the formal negotiations between the Member States and the European Commission, their representatives should be given status as equal signatories to the final programme. This should be introduced when the Objective 2 programmes are reviewed in 1996.

56. The Committee of the Regions emphasizes the importance of learning from the different partnerships operating in the European Union and asks the European Commission to arrange for exchanges of experience on this theme. The Committee of the Regions will contribute to this by initiating and supporting more exchanges of experience and suggests that such initiatives be encouraged in all relevant contexts.

57. The Committee of the Regions points out that it is necessary that influence from the European Commission and the Members States is equal, not dominating, to that of the partners, to avoid a 'top-down` approach where some parts of the programme appear to be negotiated and determined outside the regional partnership.

Construction of the programming document

58. The Committee of the Regions feels strongly that the functioning and membership of the partnership should be clearly outlined in the Single Programming Document and Community Support Frameworks. The document should not be signed by the European Commission unless local and regional authorities are satisfactorily involved in accordance with Article 4 of the Structural Fund Regulation. The Committee of the Regions suggests that the programme document should have the following signatories: the European Commission, the Member States and the representatives of local and regional authorities.

59. The Committee of the Regions strongly emphasizes that, in compliance with the principle of subsidiarity, a 'bottom-up` approach including strategies and goals set by local and regional partners must be used in the process of constructing the programming document in order for all partners to have a sense of ownership of the final document.

The implementation of the programme

60. The Committee of the Regions is concerned that there are instances where central government or other partners ring-fence parts of the programme and the partnership plays no role in the project decision making surrounding this part of the programme.

61. The Committee of the Regions stresses that for an effective operation of the Structural Fund programmes there must be a regionally-based management committee with the necessary administrative resources, in which the local and regional partners are represented. The Committee must have the competence to decide financially on the projects.

Monitoring and evaluation of the programmes

62. The Committee of the Regions emphasizes that the partnership must discuss and agree methods of monitoring and evaluation and participate actively in carrying out these processes.

63. It particularly stresses the importance of improving information to the partners and to increase their expertise in order to enhance the programme quality by discussion based on the results of monitoring and evaluation exercises. The COR considers that the monitoring of programme implementation should constitute an essential reference point for decisions on adjustment and updating taken by the monitoring committee.

Done at Brussels, 20 July 1995.

The Chairman of the Committee of the Regions

Jacques BLANC