[pic] | COMMISSION OF THE EUROPEAN COMMUNITIES |

Brussels, 9.4.2008

SEC(2008) 447/2 Annule et remplace le SEC(2007)447

COMMISSION STAFF WORKING DOCUMENT

on the Report of the Northern Ireland Task Force

{COM(2008)186}

TABLE OF CONTENTS

Part One: A socio-economic profile of Northern Ireland in the EU 5

Chapter 1: Economy 7

Chapter 2: Demography 13

Chapter 3: Territorial characteristics and infrastructure 14

Chapter 4: Comparing northern ireland to five similar regions 19

Part Two: Northern Ireland achievements in the framework of EU policies (2000-2006)- Suggestions and recommendations 22

Chapter 1: Agriculture and rural development 23

I. EU policy and perspectives 23

II. Agriculture and agricultural policy in Northern Ireland, 2000-2006 24

III. Northern Ireland's priorities for 2007-2013 26

IV. Suggestions and recommendations 30

V. For further information 34

Annex 35

Chapter 2: Education &Training. 37

I. EU policy and perspectives 37

II. Northern Ireland's achievements in period 2000-2006 38

III. Northern Ireland's priorities for 2007-2013 40

IV. Suggestions and recommendations 41

V. For further information 43

Annex 44

Chapter 3. Employment and Social Policy 50

I. EU policy and perspectives 50

II. Northern Ireland's achievements under EU interventions, 2000-2006 51

III. Northern Ireland's priorities for 2007-2013 54

IV. Suggestions and recommendations 55

V. For further information 57

Annex 58

Chapter 4: Enterprise 62

I. EU policy and perspectives 62

II. Northern Ireland's achievements under the EU interventions 2000-2006 6623

III. Northern Ireland's priorities for 2007-2013 66

IV. Suggestions and recommendations: 66

V. For further information 68

Chapter 5: Environment 69

I. EU policy and perspectives 69

II. Northern Ireland's achievements under the EU interventions 2000-2006 69

III. Northern Ireland's priorities for 2007-2013 73

IV. Suggestions and recommendations 74

V. For further information 75

Chapter 6: Fisheries 76

I. EU policy and perspectives 76

II. Northern Ireland's achievements under the EU interventions 2000-2006 77

III. Northern Ireland's priorities for 2007-2013 79

IV. Suggestions and recommendations: 80

V. Further information 81

Annex: 82

Chapter 7: Regional development 83

I. EU policy and perspectives for 2007-2013 83

II. Northern Ireland's achievements under the EU interventions 2000-2006 83

III. Northern Ireland's priorities for 2007-2013 88

IV. Suggestions and recommendations 90

V. Further information 92

Annex 93

Chapter 8: Research 95

I. EU policy and perspectives 95

II. Northern Ireland's achievements under EU RDT policy, 2000-2006 96

III. Northern Ireland's priorities for 2007-2013 98

IV. Suggestions and recommendations 99

V. For further information 100

Annex 101

Chapter 9: Transport and Energy 102

I. EU policy and perspectives 102

II. Northern Ireland's achievements in period 2000-2006 105

III. Northern Ireland's priorities for 2007-2013 109

IV. Suggestions and recommendations 112

V. For further information 113

Annex 115

Chapter 10: The European Investment Bank 116

Annex 118

Part One: A socio-economic PROFILE OF NORTHERN IRELAND IN THE EU |

Tab. 1 – Northern Ireland performance in comparison with the UK, the Republic of Ireland, EU-15 and EU-27 [pic]

Chapter 1: Economy

1.1. Northern Ireland in the twenty first century appears to be on a rising trend of prosperity and economic stability. An attractive natural environment, a young and well-educated population and a robust economic performance over the recent past are illustrative of a change of fortune for a region whose economic performance, and image, has been adversely affected by the long period of social and political conflict.

With a population of 1.7 million inhabitants[1] and an area of some 14,000 km², the region is the smallest in the UK's regions. NI has traditionally lagged behind the rest of UK with respect to GDP/per head but the figure has risen in recent years to a level on a par with Wales and the North East. Northern Ireland’s share of the UK GDP is 2.3%, somewhat under its share of population.

NI established an industrial economy in the nineteenth century, most notably in shipbuilding, engineering and textiles. Heavy industry has since been replaced by services which today account for the majority of employment (78%) and output (70%).

1.2. Public sector expenditure has reached a level equivalent to 63% of the country's GDP (substantially higher than 43% of the UK as a whole, although it is true that there are wide regional variations). This is in part explained by the fact that the regional budget (the NI block) covers certain public services such as health and education provided in other regions under the central budget.

In total, central government expenditure totals EUR 7,500 million (£5,000 million), equivalent to 20% of NI economic output[2]. Employment in the industrial sector represents 24% and remains still above the UK share (21.9%) while in the agricultural sector, employment remains relatively important (3.7% of total employment) when considered in UK terms (1.3%).

1.3. Manufacturing industries are concentrated in and around Belfast, although other urban centres have industrial activities. Aerospace, machinery and equipment manufacturing, food processing, textiles (linen) and electronics constitute the main activities in the industrial base of the province with papermaking, furniture and shipbuilding of lesser importance. Although its share of economic output has declined, manufacturing output in NI has remained almost unchanged in the 5-year period to 2005[3]. A major shift has been in progress in the manufacturing sector, with the decline of traditional industries, such as textiles and shipbuilding, and the increase of high-tech and capital-intensive industries. In 2005, chemicals and engineering were the only two manufacturing sub-sectors to record output growth, while the output of textiles alone fell by 18%[4].

1.4. Engineering is the largest manufacturing sub-sector in NI, particularly in the fields of aerospace and heavy machinery. Bombardier Aerospace is the province's largest industrial employer, with 5,400 workers at five sites in the Greater Belfast area. Reflecting the region's relatively high dependence on foreign direct investment (FDI)[5], other major engineering employers include international companies such as Caterpillar, DuPont, Emerson Electric, Nortel, Northbrook Technology, Seagate and NACCO. Many of these companies engage in product and process development and enjoy close academic and business links with Queen's University Belfast, which has a favourable position among UK universities in engineering[6].

1.5. In terms of GDP trends , throughout the 1990s (though particularly so in the early-90s), the economy grew faster than the economy of the rest of the UK and that of EU-27, due in part to some overspill from rapid growth in the economy of the Republic of Ireland and the increasing confidence deriving from the moves towards a political solution (the 'peace dividend').

In 2005, the economy is estimated to have grown by a further 3.2%, almost twice as fast as the UK as a whole and subsequent growth is expected to be stronger than that of the rest of the UK and the European Union, though lower than that of the Republic of Ireland[7].

Graph 1: Evolution of GDP per capita (in PPS)

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Source: Eurostat (regional accounts)

1.6. In terms of productivity, while GDP/person employed was 15% above the EU-27 average in 2004, NI productivity levels tend to be considerably lower (6%) than the UK average (which itself is at 123% of EU average), with NI having the lowest productivity among the four principal territories of the UK (Wales 116%, Scotland 120% England 129%).

The difference between NI and UK productivity rates partly reflects higher growth rates in hours worked and employee jobs, as well as differences in the composition of the local economy compared to other UK regions. Workers in NI continue to work longer hours on average and the gap with the rest of the UK is widening. One consequence is that GVA in NI has not grown in proportion to the rise in the total workforce hours worked in the region. This suggests that recent employment growth has been primarily in lower added value sectors[8].

The large differential in productivity between NI and the UK can be traced to a number of factors including innovation, entrepreneurship, skills and infrastructure.

Graph 2: Economic indicators

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Source: Eurostat

1.7. With regard to Innovation, including R&D and knowledge economy, in 2006, total expenditure on R&D in NI amounted to EUR 423.5 million (£ 319.2 million). Expenditure by the business sector accounted for the highest proportion of R&D expenditure, amounting for 48.7% of total R&D expenditure.

Expenditure by Higher Education amounted to 47% of total R&D expenditure with the remainder accounted for by other government expenditure. NI has considerably lower levels of spending on R&D as a % of GDP compared with the rest of the UK, the Republic of Ireland, the EU-15 and the EU-27. It is also well below the Lisbon target of investing 3.0% of GDP in R&D by 2010.

Graph 3: Innovation, R&D investment

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Source: Eurostat

The lack of financial capacity on the part of many NI firms constrains R&D investment. In a tightening economic environment, small businesses tend to be less inclined to dedicate funding and resources to areas they may regard as non-essential, including R&D. This represents a particular challenge for NI, as the private economy consists of a large number of small and very small businesses.

NI scores 0.41 on Regional Innovation Performance Index (RIPI[9]), suggesting a below average score in R&D and high-tech domains.

Compared to other UK regions, NI records low performance in European Patent office applications (37 per million inhabitants, in a situation where the UK average is 127 and the average for the Republic of Ireland is 80) and in employment in high-tech sectors (6.9%) compared to 9.1% in the Republic of Ireland, 9.8% in the EU-27, and 10.2% in the EU-15.

1.8. With regard to Enterprise, measuring of entrepreneurial activity in NI suggests that, although increasing, the level remains lower than in the UK. However, comparisons with EU countries highlight that entrepreneurial activity in NI is relatively higher than in some Member States, for example Belgium and the Netherlands. In an EU context, NI ranks alongside Finland and Italy.

Evidence from the Global Entrepreneurship Monitor Survey (2006) suggests that, culturally, entrepreneurship in NI is important relative to other UK regions. However, people generally appear more negative about their own entrepreneurial capacity than their counterparts in the UK. Fear of debt and fear of failure are particular barriers and fewer people feel they have the skills to set up in business. This negative self perception is felt most strongly by women and the gap between female and male entrepreneurship is one of the widest in the UK.

1.9. NI has consistently performed strongly in UK in the field of educational performance . However, it has a disproportionately high level of working age people with no qualifications. Lower educational achievement amongst the older age groups in the workforce and outward migration of qualified people are likely to be important factors in explaining this.

Estimations (by DG REGIO) of the development of attainment levels, crossed with population projections for 2020, indicate that while the region will perform well in terms of its share of high achievers, the pattern of polarisation is likely to persist to a certain degree.

1.10. In terms of employment , NI has experienced a period of sustained job growth. From March 1990 to March 2006, employee jobs in NI increased by 30.6% compared to 10.5% for the UK as a whole[10]. Much of this increase reflects of a growth in the service sector and the construction sector - increases of 48% and 35% respectively compared with an increase of 27% and a slight decrease of 0.47% respectively for the UK. Growth in jobs within these industries has more than compensated for the reduction in employment experienced within the region manufacturing sectors. Between 1998 and 2006, manufacturing jobs fell by almost 20% (107,690 to 86,180).

In terms of the employment rate of the population aged 15 –64 years, NI is in a favourable position for both males and females, with the employment rate at 66.6%. This is below the UK (71.9%) and the Republic of Ireland rate (68.8%), but 2.9% points higher than the average EU-27 employment rate (63.7%) and 1.5% points above the EU-15 (65.1%). This means that the region’s employment rate is currently above the Lisbon target rate of 65% (by 2005), although more effort will be needed to reach the Lisbon Strategy target of a 70% employment rate by 2010.

A new feature has been the increase from 2000/01 in the number of migrant workers moving to NI[11]. The arrival of workers from outside can be viewed as positive for the economy because they fill vacancies and help to bridge skills gaps, although the inflow also has implications for current and future educational provision and, in particular, in the area of language support.

1.11. In terms of unemployment, between 1995 and 2005 there was a more than halving of the absolute number of people unemployed in NI, from 77,000 to 36,000. This decrease has continued up to the present (35,000 at the beginning of 2007). This represents an unemployment rate of 4.4% for males and 4.2% for females with the total unemployment rate for being 4.3% (2007 UK data). NI currently has the second lowest rate of unemployment within the UK, after the South West region. There are intra-regional variations within NI. In 2004 unemployment stood at only 3.2% in the East of the region, whereas the rate was much higher in the North at 8.3%. In European terms, in 2005, NI unemployment rate (4.7%) was significantly below the EU-27 average of 9.0% and the EU-15 average of 8.2%.

In NI, just under one third (32.7%) of the unemployed (11.000 people) have been unemployed for 1 year or more. Much of this unemployment is long-term in nature and geographically concentrated. Following the general trend in the UK, long-term unemployment has declined considerably in NI. As a result, its relative position has improved over the last decade. The region has had much higher long-term unemployment rates (40.7%) compared to the Republic of Ireland and the rest of the UK (21.1%) over the period 2000-2004. However, in comparison with the EU-27 (46.0%), it had a lower long-term unemployment rate and a similar rate to the EU-15 (41.8%).

1.12. Regarding levels of economic inactivity , this remains a persistent problem within NI labour market, which has been increasing over the last decade. In the period October-December 2007, the seasonally adjusted number of economically inactive persons was estimated at 547,000, unchanged over the quarter. The working age economic inactivity rate for NI is 27.1%. This is significantly higher than the UK average rate (21%) and is the highest of the twelve UK regions[12]. Within a wider context, NI inactivity rate is higher than the EU average (2006 Q3) by 4% points.

Graph 4: Unemployment and educational attainment levels

[pic] Source: Eurostat

Chapter 2: Demography

2.1. The population of Northern Ireland is currently estimated at just over 1.7 million, 35% of which lives in areas defined as "rural". The population is projected to increase by about 40,000 (2.3%) by 2013 and reach 1.83 million by 2020[13]. Longer-term projections suggest the population will peak at first under 1.9 million in the early 2030s and then begin to fall gradually. Average population growth is currently running at twice the EU-27 rate and, unusually in the EU, is characterized by a very high rate of natural increase (birth rates minus death rates).

Graph 5: Demography

[pic]

Source: Eurostat

2.2. These features give rise to a favourable demographic structure in European term, with 20.6% of the population aged less than 15 years compared to 18.0% of the UK population and well above the EU-27 average of 16.3%. Over-65s, at 13.4% of the population compare with 16.0% for the UK as a whole and 16.4% for EU-27 (2004).

A youthful population is one of the factors that contribute to the relatively high dependency rate. This situation is unlikely to continue in the future, with dependency ratio expected to decline from 2011 as the currently youthful population moves into the working age population while birth rates also decline. This future increase in the supply of labour should have a positive impact on the economic growth of the region and act as a factor to attract investment from outside.

CHAPTER 3: TERRITORIAL CHARACTERISTICS AND INFRASTRUCTURE

3.1. Northern Ireland is a region of 14.160 km² (representing 5.8% of the national territory, 17% of the island territory and 0.3% of EU-27). It is situated on the periphery of the EU (the distance from Belfast to London is 700km, to Dublin 170 km and to Brussels 1000 km.).

Graph 6: Territory

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Sources: Eurostat, EEAUMZ = Urban Morphological Zones (i.e. main morphological agglomerations)+ The map of Northern Ireland+ 5 similar small regions (Poitou-Charrentes, Sardegna etc, see below Chapter 4 )

NI has three main cities: Belfast, the capital city, with 269,000 inhabitants. Lisburn, the second city, with a population of 110,000 and is located just outside Belfast. Belfast and Lisburn are both part of the larger Belfast Metropolitan area which has a total population of 579,000 inhabitants. The third city is Londonderry in the North of NI with 105,000 inhabitants.

NI has five sub-regions (defined as level 3 in the EU regional classification system NUTS): Belfast, Outer Belfast, East of Northern Ireland, North of Northern Ireland and West and South of Northern Ireland. The five regions cover the three territorial types developed by the OECD: predominantly rural (West and South), intermediate (East and North) and predominantly urban (Belfast and Outer Belfast).

3.2. It is widely acknowledged that NI has suffered from underinvestment in public transport and compares unfavourably to levels of transport investment in England, Scotland and Wales. The population makes significantly less use of public transport that their UK counterparts. In autumn 2004, 4% of workers used the bus and only 0.8% travelled by train. The equivalent UK proportions were 7.6% and 3.9% respectively.

3.3. NI has well-developed road infrastructure with a total of 24,820 km of roads, or 1 km for each 68 people, i.e. considerably more than in the UK as a whole (1 km per 162 people)). However, in comparison to EU-27, NI has an underdeveloped motorway network. There are seven motorways, extending radially from Belfast, connecting to Antrim, Dungannon, Lisburn, Newtownabbey, and Portadown (see the map below).

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Source: http://www.wesleyjohnston.com/roads/networkmap.html

The most important trans-European road connection linking Belfast and Dublin (A1) is currently being upgraded and the opening of the section Beech Hill to Cloghogue scheduled for 2010, should complete the dualling of this route.

3.4. In common with the rest of the UK, much of the railway network was removed in the 1950s and 1960s, declining from 1,500 km to 330 km at present.

At present, the railway network is concentrated around the Greater Belfast area, with the only significant "inter-city" route being the Belfast- Londonderry line. Northern Ireland Railways (NIR), the railway operator in NI, maintains the lines connecting Belfast with Dublin (from the border to Belfast), Bangor, Larne, Derry, Newry as well as lines Coleraine-Portrush (north) and Lisburn-Antrim (line maintained although passenger operations ceased in 2003). It is possible that the Lisburn-Antrim route, which passes very close to Belfast International Airport, could one day re-open and also serve the airport. The Airport has earmarked the building of a new station in its list of future plans.

NIR operates fast trains on the cross-border route between Belfast and Dublin, in conjunction with the national railway company of the Republic of Ireland This service, while having modern intercity rolling stock, has experienced problems over ten years such as security alerts and lack of punctuality. The latter is due to the fact that the route, while only double-track, is shared with the suburban services outside both Belfast and Dublin.

On the positive side, new investment in the railways is ongoing. The Central Station in Belfast has been redesigned, while a more direct route out of Belfast was reopened for trains to Derry. The line to Bangor was re-laid. A new railcar fleet has entered service. Further investment leading to the reopening of existing but closed infrastructure (most notably the Lisburn-Antrim line), improvement of the infrastructure on the Belfast-Derry line (installation of passing loops to allow for service frequency increase, further upgrading of the track including re-laying the track between Coleraine and Derry) and renewal of rolling stock, are programmed. A Position Report on the Current Investment needs of NI Railways was issued in May 2004[14].

3.5. NI is home to three civilian airports :

- George Best Belfast City: 2.1 million passengers in 2006 (up 41% over the past five years). The airport has 24 scheduled and 4 charter destinations;

- Belfast International: 5 million passengers in 2006 (up 28% over 5 years). The airport has 40 scheduled and 29 charter destinations;

- City of Derry: 342000 passengers in 2006 (up 45% over 5 years). The airport has 2 companies serving 8 destinations.

3.6. There are five commercial ports (Belfast, Larne, Londonderry, Warrenpoint and Coleraine). With the exception of Larne (which is privately owned by P&O) they are all public trust ports. The total tonnage through NI ports in 2005 was 24 million tonnes. This comprised 16.5 million tonnes of inward traffic and 7.5 million tonnes of outward traffic. Almost 60% of inward traffic in goods passes through Belfast Port, with 18% through Larne Port, 10% through Warrenpoint. More than 500 thousand tourist vehicles passed through NI ports in 2005.

3.7. In terms of IT infrastructure , NI has achieved 100% broadband availability. Every household, business, school and library is able to access broadband regardless of location. The latest industry figures for 2006 show 230,000 broadband users –up from 60,000 in 2004. However, within the wider context, comparative broadband penetration rates show that NI is significantly below the rate for the UK and the EU-15 average. It is currently only slightly below the rate for the EU-27 average.

3.8. With regard to energy, the NI administration has fully devolved powers, including legislative powers. NI also has separate electricity and gas regulation arrangements, including its own Regulator. Energy policy comes under the NI Department of Enterprise, Trade and Investment (DETI). Energy mix is split fairly evenly between oil, gas and coal.

Three major power stations provide 97% of power supplies: gas-fired Ballylumford power station, Coolkeeragh, (a new CCGT plant replaced the old oil-powered plant in 2005), and coal/oil-fired Kilroot power station (with some biomass co-firing). There are plans to add a gas-powered extension at Kilroot.

The electricity grid is connected to that of the Republic of Ireland by three cross-border interconnectors. The main interconnector, between Tandragee and Louth has a capacity of 1,200 MW. Two back-up interconnectors have a combined capacity of 240 MW. This combined all-island grid is connected to the National Grid on the island of Great Britain by the 500 MW Moyle interconnector. In practice, NI imports power from the UK mainland, and exports power to the Republic of Ireland. Finalised in 2002, the Moyle Interconnector was supported through an EU grant of EUR 81 million.

There is no nuclear production. Northern Ireland is developing an "all island" energy market with the Republic of Ireland. Priority is given to North-South cooperation and, in this framework, EU has provided substantial support.

NI is not part of the British Energy Transmission and Trading Arrangements (BETTA), which covers mainland UK. NI Electricity (NIE) (part of the Viridian Group, the major Irish energy company) is the former monopoly company and still the major electricity producer and supplier, owning and operating the electricity network in NI.

With regard to natural gas and oil, Northern Ireland, as well as the Republic of Ireland, is totally dependent on imports from the UK and mainland Europe. Gas comes via pipeline, oil via the sea. Phoenix Natural Gas is the principal gas supplier. NI Energy Holdings owns and manages the Moyle Interconnector and SNIP. The potential for natural gas storage in the Permian and Triassic salt strata in County Antrim is being studied.

NI no longer produces coal . Lignite reserves are available but no agreement over their exploitation has been reached due to environmental concerns. There are currently no plans to develop a "clean" coal industry (Carbon Capture and Sequestration).

Wind is currently the predominant renewable energy source . Nevertheless, non-wind sources of renewable energy for electricity generation are emerging. The major biomass CHP plant opened by Balcas in Enniskillen in November 2005 produces both electricity and heat as well as wood pellets for energy production. Tidal power pilot projects are in development. There are two small hydropower plants.

There is a strong commitment to increase the use of renewable energies and to reducing CO2 emissions. The aim is to promote the development of indigenous renewable energy generation to the extent that it will be capable of providing 12% of the electricity consumed by 2012 and requiring that from 2007 overall consumption of electricity is reduced by 1% per year until 2012[15]. In April 2005, DETI introduced the "Northern Ireland Renewables Obligation" (NIRO) as the main mechanism for stimulating renewable energy deployment. The NIRO places a legal requirement on electricity suppliers to provide evidence that a specified and annually increasing proportion of their electricity supplied to final customers has been generated from renewable sources, or to pay a buy-out fee that is proportionate to any shortfall. For 2006-2008, a funding package of EUR 77.3 million (£ 59.2 million) has been allocated for renewable energy programmes in research and demonstration, building market capacity through infrastructure and supply chain development, commercial deployment of renewable energy and raising awareness activities[16].

Finally, a Renewable Transport Fuel Obligation (RTFO) is being developed on a UK-wide basis by the national administration in liaison with the NI Executive.

With regard to the social dimension of the energy supply, there is an important issue of fuel poverty . It is estimated that 170,000 households (25% of the total NI households) experience fuel poverty owing to low incomes, high fuel prices, little fuel choice and an inability to afford energy efficiency measures.

chapter 4: comparing northern ireland to five similar regions

4.1. For illustrative purposes, the NITF has undertaken a comparison of Northern Ireland to five regions with similar level population: Jihovýchod (CZ), Mittelfranken (DE), Poitou-Charentes (FR), Sardegna (IT), Västsverige (SE). These regions have been selected primarily on the basis that their population is in the range 1.6 to 1.8 million, similar to NI.

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Tab. 2 – Northern Ireland performance in comparison with the five regions with similar population

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4.2. In terms of GDP per head, NI has a central position compared to the five regions: similar to that of Poitou-Charentes, significantly lower than that of Västsverige and Mittelfranken, but significantly higher than that of Sardegna and Jihovýchod.

Between 1995 and 2004, NI experienced a GDP and employment growth which was the highest among the six regions. As a result, in 2004 its employment rate was above the EU average. Only two other regions had higher employment rates: Västsverige and Mittelfranken. The unemployment rate and the youth unemployment rate in NI are low compared to the EU average and significantly lower than in the other regions.

4.3. Its population growth was the highest among these regions, which is entirely due to a high natural population growth. NI also experienced a net outmigration, while all other regions with the exception of Jihovýchod had a positive migration balance.

4.4. Of particular interest is performance in the knowledge economy in the light of the Lisbon target of achieving R&D expenditure in the Union of 3% of GDP. NI's position in terms of R&D expenditure is very weak, at less than half the EU average. In the other regions, it is higher than NI, in Jihovýchod, Mittelfranken and, especially, in Västsverige, the same in Poitou-Charentes and lower in Sardegna (2004 data). R&D investment by the business sector is very low in NI. This low share is also reflected in the low share of employment in high technology sectors and relatively few patent applications per inhabitant.

4.5. NI, however, does have a high share of residents aged 25 to 64 with a high educational attainment. It is above the EU-27 average and among the other regions, only Västsverige scores higher. This may also explain why its share of human resources in science and technology is above the EU average.

The Lisbon composite indicator takes into account regional productivity, employment rates, general R&D expenditure, long-term unemployment and educational attainment of young people. On this indicator, NI scores close to the EU average. Again Mittelfranken and Västsverige score higher, Poitou-Charentes and Jihovýchod are similar and Sardegna scores much lower.

4.6. In conclusion, looking at the position of other small regions in the EU, NI demonstrates certain key strengths in terms of economic growth, employment, population growth and the educational attainment of its labour force. Of particular interest in this framework are the performances of Västsverige and Mittelfranken, which outperform Northern Ireland in R&D and in high-tech employment and, possibly as a direct consequence, in levels of GDP per head.

PART TWO: NORTHERN IRELAND ACHIEVEMENTS IN THE FRAMEWORK OF EU POLICIES (2000-2006)- SUGGESTIONS AND RECOMMENDATIONS

CHAPTER 1: AGRICULTURE AND RURAL DEVELOPMENT

I. EU policy and perspectives

1.1. During the last 15 years, the common agricultural policy (CAP) has changed radically in response to pressures from European society and its evolving economy. The 2003/2004 reforms marked a new phase in this process, introducing decoupled direct payments via the Single Payment Scheme (SPS) in most sectors of the so-called first pillar of the CAP, while strengthening Rural Development (RD) policy as its second pillar. This process continued with reforms in the sugar sector (2006) and the fruit, vegetables and wine sectors (2007), as well as in the general movement towards CAP simplification.

Producer support is now to a large extent decoupled from production decisions, allowing EU farmers to make their choices based on market signals, the capacity of the farm and their preferred method of adapting to economic changes, thereby contributing to the improvement of the competitiveness of the agricultural sector.

These CAP reforms seem to have delivered as expected and price support, widely viewed as the principal cause of the surplus problems of the past, has been reduced. EU support prices are by now close to those of the world markets. The competitiveness of EU agriculture is increasing in key sectors, despite the decline of the EU share of most commodity markets, and the EU is already the largest agricultural exporter, mainly of high value products. It is also the biggest agricultural importer in the world, remaining by far the largest market for developing countries.

In addition, the CAP increasingly helps to attenuate the risks of environmental degradation and delivers many of the public goods that modern society has come to expect. Support for producers is now only available if they adhere to national and European standards relating to the environment, food safety and quality and animal welfare.

1.2. Following the different CAP reforms, rural development has become a key means for the restructuring of the agricultural sector and for the encouragement of diversification and innovation in rural areas. The modern approach is therefore to combine a market-orientation in agricultural production with innovative rural development measures[17].

This strengthened rural development policy supports the protection of the environment and rural landscapes, as well as creating helping to promote growth, new jobs and innovation in rural areas.

EU rural development policy is today focused on three fields:

- increasing the competitiveness of the agricultural sector;

- enhancing the environment and countryside through support for land management;

- promoting the diversification of economic activities and enhancing the quality of life in rural areas, favouring in particular the so-called "Leader method" (in its essence, a bottom-up approach driven by local groups).

1.3. The implementation of the interventions co-financed by the European Agricultural Fund for Rural Development[18] is based on the strategic guidelines for rural development agreed by the 27 Member States, on the basis of which each national authority prepares its national rural development strategy and national or regional rural development programme or programmes[19]. The latter is presented by the authorities for final approval by the Commission.

1.4. On 20 November 2007, the Commission formally launched the CAP "health check". This examines both the production and rural development aspects of the CAP and seeks to address three key questions:

- how to make the direct-aid system simpler and more effective;

- how to make market-support instruments relevant in the new context;

- how to address new challenges such as climate change, water conservation, biodiversity and bio-fuels.

After the completion of the consultation process, the Commission intends to present legislative proposals by the end of 2008.

II. Agriculture and agricultural policy in Northern Ireland, 2000-2006

1.5. Agriculture is much more important in NI than in the rest of the UK. It represents 3.9% of civil employment and produces 1.1% of the GVA. It is characterised by a decreasing number of farms (from 42,000 in 1980 to 26,700 in 2006) with an average size of 38.5 hectares (small in relation to the UK average of 54 hectares, but about double the EU-15 average of 20.7 hectares). Some 25% of the NI population lives in areas defined as rural.

Areas meeting the definition of "less-favoured" when it comes to competitive agricultural production constitute 70% of the agricultural land. The nature of the land and the climate have produced a reliance on grass-based production, with the main farming activities being rearing of beef cattle and sheep, together with dairying on the better quality land. Crop production accounts for only 5% of agricultural land use.

Despite relative under-investment which has delayed the speed of modernisation in the agriculture sector, the evidence suggests that productivity has improved over recent years in the dairy and cereal sectors. For example, the productivity of dairy cows has grown steadily over the past 20 years, increasing by 45% in terms of average milk yield per cow. This has been achieved through improved cow genetics and livestock management practices. Similarly, there has been a steady increase in cereal yields. In contrast, beef and sheep production has remained relatively small scale, with many part-time producers at the margins of viability. They have relied significantly on EU support through the CAP.

1.6. On the other hand, in the pursuit of higher productivity has consequences for natural habitats, and for maintaining biodiversity and the quality of the landscape. The historically high quality achieved in the water supply in the region seems now to be in decline. In the framework of the action programme introduced to implement European nitrates directive[20] which is designed to reduce water pollution by nitrates from agricultural sources and to prevent such pollution occurring in the future. A financial commitment of around EUR 200 million has been made by the NI Authorities to support investment by farmers in increased slurry storage to meet the nitrates requirements (see below Chapter 5 "Environment").

1.7. To address the biodiversity and landscape issues, farmers have been encouraged to enter agri-environmental scheme agreements. These schemes (now operating for 20 years) are designed to support farmers and other land managers introducing or continuing to apply agricultural production methods compatible with the protection and improvement of the environment, the farmed landscape and its features, natural resources, the soil and genetic diversity. By 2006, around 40% of NI farmland (approximately 400,000 hectares) was under agri-environment scheme agreements. The agri-environment schemes in NI have led to-date to a reduction of overgrazing, retention of some threatened grassland habitat species, an overall increase in farm woodland habitats and the retention and improvement of heath and upland habitats.

1.8. In NI, agricultural and rural development policy lies within the responsibility of the Department of Agriculture and Rural Development (DARD) and, in the environmental area , of the Department of Environment (DoE).

1.9. For 2000-2006 the NI rural sector is set to receive from the EU budget some EUR 602 million, of which EUR 268 million is under four EU programmes: the multi-fund "Building sustainable prosperity" programme (EUR 78 million), the PEACE II programme (EUR 44 million), the Leader+ (EUR 16 million) and the Rural Development programme (EUR 130 million). Moreover, under the Single Payment Scheme[21], NI farmers receive in the region of EUR 334 million each year, an average of EUR 12.900 per farm. The programmed support contributed to the implementation of a wide range of projects, from processing and marketing, tourist investments and cross-border cooperation, to micro-enterprise and forestry (for more details see table 1 in the Annex). The closure of these programmes is ongoing. Preliminary evaluations suggest that, in general, the quality of projects implemented has been high.

1.10. Regarding the Leader+ programme in particular, while it has been successful in general, there has been a rather narrow focus on micro-enterprise development in the private sector which has made it difficult for NI Local Action Groups to find suitable partners elsewhere. The narrow focus has also meant that the benefits deriving from participation in the UK Leader Network have also been limited.

1.11. In the field of the promotion of agricultural products[22], following the launch by the Livestock and Meat Commission of Northern Ireland of a competitive procedure, Northern Ireland was successful in being awarded EUR 203.862 for the promotion of beef which is produced under the "Farm Quality Assurance" scheme. This scheme is concerned with giving assurances to farmers' customers (abattoirs, wholesalers, retailers and consumers) about the quality of the farm on which their beef has been produced. Farm quality refers to the scrupulous production methods that are used to ensure uncompromising food safety, high animal welfare and care for the environment. This demonstrates to the consumer that the beef produced is wholesome and free of unnatural substances.

III. Northern Ireland's priorities for 2007-2013

1.12. Under the new NI Rural Development Programme (2007-2013) which was agreed on 27 September 2007, the priorities initially established under the UK national strategy plan are translated in three axes:

- improving the competitiveness of the agricultural and forestry sector (axis 1);

- protecting the environment and countryside (axis 2);

- raising the quality of life in rural areas and promoting diversification (axis 3). This axis will be implemented by the NI Local Councils and Local action Groups following the Leader method, in other words, enabling the development of local strategies, partnership, co-operation, networking and acquisition of skills by local action groups through the so-called "bottom-up" approach.

The total level of financial support for the programme amounts to some EUR 322 million of which EUR 171 million is from the EU. In terms of the three priority axes referred to above, the aid is distributed so that environmental measures will receive 60% of the total, followed by the quality of life measures which will receive 29% and competitiveness which will receive 10% (see table 2 of the Annex).

The main priorities of the programme are the following:

For axis 1:

A more competitive agricultural industry achieved through:

- Increased business and technical competence

- Improved market focus

- A dynamic approach to innovation and uptake of new technologies

- Improved physical capital

A more competitive food processing industry achieved through:

- Increased added value processing

- Better product development

- More effective marketing

For axis 2:

Delivering environmentally sustainable land management through:

Appropriate management of Natura 2000 areas:

- Increasing biodiversity by farmland habitat preservation and creation including investing in High Nature Value farming systems

- Appropriate management of the environment to ensure an improvement in water quality and a reduction in the emission of greenhouse gases

- Conserving and enhancing the character of the farmed landscape through appropriate land management practices, particularly in more marginal areas

- Promoting alternative land use options through

- Increased conversion of farmland to woodland

- Increased exploitation of renewable energy opportunities

For axis 3:

Greater economic opportunities in rural areas through:

- Supporting the creation and development of micro-businesses

- Development of innovative products and services

- Encouraging farm households to diversify into non-agricultural activities to increase their incomes

- Encouraging the development of activity tourism

- Sustainable development of the natural and built environment

- Encouraging greater usage of ICT (Information Communications Technology) and broadband

- Improving the quality of life and creating strong and vibrant rural communities and community infrastructure through:

- Engaging with rural communities to identify and address problems and opportunities

- Building community capacity and leadership

- Social and economic regeneration of rural villages and their surrounding areas

- Improving access to basic services by rural dwellers

In taking these priorities forward, the programme emphasises support for vocational training, farm modernisation and supply-chain development. It will also support the less-favoured areas, agri-environment schemes and forestry environment measures. In seeking to diversify the rural economy to promote new activities, preserving the cultural heritage and promoting tourism, the projects will be developed by the local communities themselves.

In addition, as a result of close cooperation between the UK authorities and the Commission the legislation relating to the implementation of a new system for "voluntary modulation"[23] was quickly approved, increasing the resources allocated to rural development. As a result, an additional amount of EUR 157 million will be transferred from pillar I of the CAP in NI to the new rural development programme. This transfer will be formalised through a decision to modify the programme in 2008.

1.13. The approved rural development Programme contains all the measures foreseen in the National Strategy Plan. The forthcoming modification to the programme will therefore be used simply to adjust the financial allocations and targets to show the correct position for these measures. It is not planned to use voluntary modulation to introduce additional measures or to refocus existing measures. As stated above, voluntary modulation was factored into the design of the programme from the beginning.

Within the confines of the criteria to be applied to the use of voluntary modulation, where possible voluntary modulation will fund measures which are of direct benefit to farmers. These are:

Measure 1.1: Vocational Training and Information Actions

Measure 1.3: Modernisation of Agricultural Holdings

Measure 2.1: Less Favoured Areas Compensatory Allowances Scheme

Measure 2.2: Agri-Environment Programme

Measure 2.3: First Afforestation

Measure 2.4: Forest Environments

Measure 3.1: Diversification into non-agricultural activities

1.14. For the future, a major challenge for NI agriculture is linked to the need to adapt the production, manufacture and distribution of products to the requirements of EU and international markets. Two sectors facing particular challenges in NI are the red meat and dairy sectors.

1.15. The red meat industry has been facing particularly serious problems. Although NI has been successful in building its market share in Great Britain, currently the sector is generating an estimated loss of over EUR 350 million per year.

In response to the challenges, the NI Department of Agriculture and Rural Development (DARD) joined with industry representatives to form a Task Force. After a broad consultation (a survey of over 1000 producers and over 100 in-depth interviews with stakeholders and experts) and an investigation of the issues and options, facilitated by international consultants the Task Force submitted its recommendations[24] (October 2007) which were endorsed by the DARD and, subsequently, the Commission. It suggested that NI producers should:

- engage with core customers (e.g. serve the UK mass market sector as its core customer and test the interest of retail customers in maintaining a commercially viable local supply base);

- build efficient and commercially viable supply chains for dairy-origin beef and upland-lowland (grassland) sheep production;

- in the event that the necessary, substantial “farm-gate prices”[25] increases are achieved, build efficient and commercially viable supply chains for suckler-origin beef and/or hill sheep;

- in the absence of a sufficient rise in “farm-gate price”, facilitate the anticipated decline of the suckler-origin beef herd and the hill sheep flock.

The Red meat Task Force is now working to implement these recommendations and, in this perspective, the possibilities offered by Rural Development Operational Programme, where appropriate, can also be examined.

The dairy sector, currently focused on exports to third countries and on fresh milk supply to the Republic of Ireland, needs to respond to the challenge of the removal of the CAP quota system by 2014/2015. It will face increased competition and will need to develop new product ranges. The restructuring of the sector seems inevitable, so it is necessary to anticipate and prepare for the impact this will have on the livelihoods of farmers and their families by the promotion of alternative activities.

1.16. In parallel, registration under the appropriate EU quality schemes (the "Protected Designation of Origin", "Protected Geographical Indicator" and "Traditional Speciality Guaranteed"[26]) would enormously facilitate the distribution of certain NI products with clear benefits for these sectors and the rural economy. At this stage, the likely products to be covered are NI beef and lamb, Comber potatoes and Armagh Bramley apples. Other opportunities could be explored, for example in the dairy sector, such as cheeses.

1.17. In order to streamline agricultural support and regulation and to make it more user-friendly for agricultural producers and the rural economy, an in-depth review is being undertaken by DARD and DoE to simplify procedures. This exercise aims to achieve an overall reduction in the administrative cost to the agri-food sector of implementing agricultural rules and regulation of at least 25% over 5 years, in line with the approach adopted in Great Britain, while maintaining existing policy objectives and effectiveness[27].

IV. Suggestions and recommendations

1.18. With regard to the new rural development programme, the use of the voluntary modulation allocation referred to above will provide additional resources on a significant scale compared to the initial allocation, with the overall resources increasing by about 50%. Although NI does not intend to use Voluntary Modulation to introduce additional measures or to refocus existing measures (see above 1.12 and 1.13), it would seem important to consider the strategy of the programme for review and possible redesign. This might make it possible to seize additional opportunities and reap greater benefits from the programme.

NI aims to promote environmentally sustainable and responsible development in rural areas, as of course do the other Member States and regions of Europe. NI could explore the possibility of drawing lessons from successful projects and approaches to rural development elsewhere.

To take on board good practice from other counties or regions in the EU, and adapt it top its own situation, NI should promote a comparative exercise using for example the EU rural development network which will be set up in 2008/09.

In addition, given the relatively small size of the region, all opportunities should be exploited to develop synergies with the other areas, and most notably the Republic of Ireland and Scotland. To this end, greater use could be made of the programmes specifically targeting cooperation across European regions.

1.19. Given the importance of the agricultural sector for the regional economy and in the light of the process of CAP reform, it would be advisable for the NI authorities to take as pro-active a stance as possible, bearing in mind the broader UK context. This would include participation in the dialogue on the future shape of the CAP at the appropriate national and European levels, as well as maintaining close contact with the Commission services to gain a detailed understanding of the issues at stake and to be able to take more effective anticipatory measures in advance of change. As indicated, this would seem particularly important for the dairy sector, in the light of the future removal of quotas. In this context, the Office of the NI Executive in Brussels could play a particularly important role as intermediary.

1.20. Support for the modernisation of the red meat and the dairy sector is possible under the programme. Actions that could be undertaken include:

- a benchmarking exercise based on the accurate collection and collation of farm business data. Such benchmarking is intended to allow comparison of the efficiency and/or effectiveness of farms. It could for example compare production costs/100kg milk, feeding costs/100kg milk, capital costs/100kg milk, labour use/100 kg milk, etc. The best performing farms in this way would become the point of reference for other farms. Alternatively, it could be decided to use a non-NI farm as a reference .

- a marketing development support scheme aiming to add value to agricultural products through the application of high-tech processes, to produce high value added products such as dairy products for specific needs, for example, for children or other consumer groups.

- a supply chain development programme to improve logistics from "farm to fork". The challenge is to deliver the right products at the right time or to improve quality of products or to improve the product range of a given supplier. For example, a better planning of the marketing of milk could be established. This means that processing facilities would be upgraded. Current practice in the dairy sector appears to be to seek to fill gaps between demand and supply on a somewhat ad hoc basis. If there is excess demand, profit can be made (as in 2007), but if there is excess supply, then the prices received tend to fall. In short, the sector is de-stabilised.

- farm modernisation measures to encourage greater integration and cooperation, including those addressing the concerns expressed in the Red Meat Task Force report.

Regarding the dairy sector, its importance for agricultural incomes in NI means that its future is of a priority concern. Northern Ireland could look at the Danish example based on a single co-operative, where farmers own the processing capacity. This is a good example of integration, cooperation, supply chain management and the creation of value added products. In the rural development programme, the level of support to increase the competitiveness of both the beef and dairy sector is certainly too low. This could be an example of where some of the money resulting from voluntary modulation may be allocated.

By way of comparison, the Republic of Ireland designed a programme valued at EUR 300 million (through state aids) to improve some of these aspects of the dairy sector, mainly by supporting new, added value products.

1.21. The promotion of exports both within the EU internal market and in third countries needs to be supported by measures available under Article 2 of Council Regulation (EC) No 3/2008[28], in particular highlighting the advantages of EU products, especially in terms of quality, hygiene, food safety, nutrition, labelling, animal welfare or environment-friendliness of their production in accordance with the guidelines of annex II of Commission Regulation (EC) No 1071/2005[29] and Commission Regulation (EC) No 1346/2005[30].

These measures can also cover participation at events, fairs, information campaigns as described in article 2 of Council Regulation (EC) No 3/2008 organised by professional or inter-professional organisations or the competent authorities under the rules described in aforementioned Regulations. In particular, with regard to promoting NI quality food within the EU and for export, the available Community instruments of Protected Designation of Origin (PDO), Protected Geographical Indication (PGI) and Traditional Speciality Guarantee (TSG) should be exploited as far as possible.

The NITF has encouraged the NI Authorities to apply for registration under the EU quality food schemes for the selected food specialities (NI beef and lamb, Comber potatoes, Bramley apples). The NI authorities could learn from neighbouring Scotland, adopting a similar product quality approach. The Republic of Ireland also has considerable experience in quality food schemes.

1.22. As regards the marketing/promotion of agricultural products, NI could encourage organisations to organise information and promotional campaigns within the framework of Council Regulation (EC) No 3/2008. The NI Authorities (possibly jointly with Scotland and/or the Republic of Ireland) could envisage common actions on the basis of multinational or national promotion programmes based on the rules of the aforementioned Council Regulation.

For the UK as the whole, the 12 already approved promotion programmes (2000 schemes) concern milk and milk products, ornamental horticulture and quality meat for a total budget of EUR 18 million, co-financed by the EU at 50%. Northern Ireland needs to continue developing such programmes.

1.23. State aid can be granted with varying aid intensities for investments into undertakings of different sizes active in the food processing sector. If the end product falls under Annex I of the EC Treaty support should be in line with the Community Guidelines for State aid in the agriculture and forestry sector 2007 to 2013[31]. If the end product does not fall under Annex I of the EC Treaty, regional aid can be granted in accordance with the Guidelines on National Regional Aid for 2007-2013[32] or in accordance with Commission Regulation (EC) No 1628/2006 on the application of Articles 87 and 88 of the Treaty to national regional investment aid[33] . Regardless of the end product, the possibility of granting de minimis aid in the value of EUR 200 000 per beneficiary and per three fiscal years remains available for the whole food processing sector under the conditions of the Commission Regulation (EC) NO 1998/2006.[34]

1.24. Animal and plant health should also be considered on the basis of an all-island approach in particular when activities are in place across the border to harmonise monitoring and control strategies for animal and plant health diseases. Mutual advantages for farmers across the border would derive, for example, from a reduction of the risk of exposure to pathogens such as bovine brucellosis. Efforts to harmonise the compatibility of animal identification and registration databases improving traceability would also be useful. Trans-border cooperation of phyto-sanitary services will improve the effectiveness of the selection of plant protection products in particular when pest resistance is detected.

1.25. Regarding the streamlining of policy implementation, the NI Authorities could take as their lead the orientations and findings of the Health Check. Certain aspects of the single payment scheme that seem to be somewhat rigid and complex may be simplified. Cross-compliance may also be adapted in terms of scope and better targeting. Market challenges will be better addressed by adapting some supply control instruments, such as the phasing out of dairy quotas, whilst at same time looking at measures to attenuate impacts in fragile areas. This will be important for the dairy sector and its adaptation to new market demands. The Health Check will also address the new challenges the CAP is facing through the reinforcement of Pillar II (Rural Development).

1.26. Alongside the actions supported under the rural development programme, the development of a competitive agriculture sector itself provides many opportunities to embed high environmental standards and other public goods into the industry: the use of good farming practices (and beyond), measures ensuring bio-diversity, integrated farming management, organic agriculture, the sustainable use of genetic resources, soil and water protection, the improvement of irrigation infrastructures and irrigation techniques, the use of agri-environmental indicators and the conversion of agricultural land to woodland.

V. For further information

Directorate General for Agriculture and Rural Development:

http://ec.europa.eu/agriculture/rurdev/index_en.htm

LEADER+:

http://ec.europa.eu/agriculture/rur/leaderplus/index_en.htm

Environmental measures:

http://ec.europa.eu/agriculture/envir/index_en.htm#measures

PDO, PGI, TSG: http://ec.europa.eu/agriculture/quali/en.htm

Success stories:

http://ec.europa.eu/agriculture/publi/newsletter/lisbon/special_en.pdf

Annex

Table 1: 2000-2006 EU allocation for Structural interventions in Northern Ireland

Programme | EAGGF | Type of projects |

Building sustainable prosperity | EUR 78 million | Processing and marketing (52%); rural heritage (10%) , training, farm relief services, marketing of quality products, basic services, diversification (38%). |

PEACE II | EUR 44 million | Training (36%), diversification, investment on agricultural holdings, basic services, renovation of villages, tourist and craft activities (32%), cross border cooperation (9%) and locally strategy in the border region (managed by IRL) (23%). |

Leader + | EUR 16 million | Micro-enterprise development |

Rural Development Programme | EUR 130 million | Agri-environment, forestry, less favoured areas. |

Single Payment Scheme | EUR 334 million (annual) |

Table 2: EU allocation for rural development 2007-2013 (excluding the new Voluntary Modulation)

Measure/Axis | Title | Public expenditure | Private expenditure expenditure | Total Cost |

111 | Vocational training and information actions | 1,000 | 0 | 1,000 |

121 | Modernisation of agricultural holdings | 359,600 | 0 | 359,600 |

123 | Adding value to agric and forestry products | 31,440,716 | 47,161,074 | 78,601,790 |

124 | New products, processes and technologies | 3,674,554 | 145,000 | 3,819,554 |

Total Axis 1 | Competitiveness | 35,475,870 | 47,306,074 | 82,781,944 |

212 | LFA other than mountain areas | 50,626,682 | 0 | 50,626,682 |

214 | Agri-environment payments | 134,670,471 | 0 | 134,670,471 |

221 | First afforestation of agricultural land | 1,638,818 | 0 | 1,638,818 |

225 | Forest environment payments | 565,182 | 0 | 565,182 |

Total Axis 2 | Improving the environment and the countryside | 187,501,153 | 0 | 187,501,153 |

Total Axis 3 (*) | 0 | 0 | 0 |

413 | Quality of life/diversification | 94,923,932 | 37,969,973 | 132,893,905 |

421 | Co-operation | 4,996,050 | 1,998,420 | 6,994,470 |

431 | Running costs, skills acquisition, animation | 1,000 | 0 | 1,000 |

Total Axis 4 | 99,920,982 | 39,968,393 | 139,889,375 |

511 | Technical Assistance | 0 | 0 | 0 |

GRAND TOTAL | 322,898,005 | 87,274,467 | 410,172,472 |

Additionally, a nationally funded top up of EUR 85 million is planned to support the less favoured areas.

CHAPTER 2: EDUCATION &TRAINING.

I. EU policy and perspectives

2.1. The EU's strategy to develop jobs and growth in the face of the challenges presented by economic globalisation, and the development of the knowledge economy, is set out in the Lisbon agenda. In realising this agenda, Europe's principal asset is its people. If we are to make the most of this asset, knowledge and skills must be kept up-to-date throughout working life. This, in turn, will provide people with greater flexibility and, therefore, the security ("flexicurity") needed to achieve more and better jobs. European education and training policy gives priority to lifelong learning, and to promoting linguistic and cultural diversity and mobility among young people. This, in turn, will help to improve levels of creativity, innovation and participation.

The Education and Training 2010 Work Programme sets out the education and training policy actions held to be required for the realisation of the Lisbon strategy. It receives financial support from the programmes on Lifelong Learning Programme, Youth in Action, and Culture and Europe for Citizens. The financial programmes cover 2007-13. While the evidence suggests that, in terms of implementation, significant progress has been achieved (joint report of the Council and the Commission of 2008)[35], yet more effort is needed from the Member States, particularly in:

(i) raising skill levels. Most Member States still have problems with early school leaving, low participation in lifelong learning by older workers and the low-skilled and poor skill achievement by migrants;

(ii) providing sustainable funding for lifelong learning strategies that can ensure high quality, efficient and equitable education and training; innovative learning partnerships have an important role to play here;

(iii) accelerating reform in higher education and in the development of business-university partnerships, so that all sectors of education and training play their full role in promoting creativity and innovation.

2.2. The combination of education, research and innovation (the pillars of the so-called, "Knowledge triangle") plays a vital role in boosting jobs and growth. The European Institute of Innovation and Technology[36] (EIT) , which will be established in summer 2008, will develop excellence-driven partnerships ( Knowledge and Innovation Communities, KICs ) between the three actors of the knowledge triangle in order to achieve commercial innovation. These KICs will generate spill-over that can contribute to regional development .

2.3. Taking forward the priorities under the renewed Lisbon Strategy, the programmes supported by the Structural Funds, 2007-13, put particular emphasis on supporting national and regional level programmes for education and training. In this way, they seek to support investment in knowledge and innovation and improve employability, consistent with the principles of "flexicurity". Further, some EUR 25.3 billion is available to support the reform of education and training systems in the Member States[37] and the Structural Funds programmes provide major support in achieving the goals of the Education and Training 2010 Work Programme.

2.4. The year 2008 is the European Year of Intercultural Dialogue. The Year aims to promote more active European citizenship and a sense of European belonging. It is targeted at European civil society, particularly young people and disadvantaged social groups. It is an instrument for mutual understanding and for exploring the benefits of cultural diversity[38].

2.5. 2009 will be the European Year of Creativity and Innovation. Year 2009 actions will be implemented by the Commission and the Member States (through a national coordinating body) in the framework of the Lifelong Learning Programme. It will provide a framework for initiatives at all levels - European, national and, importantly for Northern Ireland, regional – to promote creativity and innovation.

II. Northern Ireland's achievements in period 2000-2006

2.6. The NI Departments of Education (DE) and Employment and Learning (DELNI) address the education of young people and the promotion of learning and skills. Northern Ireland is part of the framework for qualifications in England, Wales and NI. The region has two universities (Queen's University and University of Ulster), the Open University and two University colleges: St Mary's University College and Stranmillis University College. Northern Ireland is represented at EU level by the UK authorities.

2.7. On education, NI has consistently been among the better-performing regions of the UK. The quality of its teachers has been one of its strengths[39]. However, it has areas of relative weakness. It has a relatively high share of working-age people without formal qualifications. This is partly explained by the relatively low educational attainment of older age groups and by the loss of qualified people through migration. While significant numbers participate in lifelong learning, learners are not progressing up the qualification ladder. For some, their performance is inhibited by their lack of essential skills in numeracy and literacy.

2.8. Progress towards the Lisbon objectives in education and training is measured against 5 benchmarks for:

i) early school leavers;

ii) completion of upper secondary education;

iii) adult participation in lifelong learning;

iv) low reading achievement; and

v) graduate numbers in Maths, Science and Technology (MST).

2.9. NI performance against the benchmarks since 2000 is at or above the EU average, but slightly below the UK average. It has a lower share of early school leavers and has made more progress in reducing this share than the EU average. It has also made good progress in participation in non-compulsory education (see table 1 of the Annex).

Low-achievement in reading raises certain issues. Although NI had better results than the EU average in 2000, Pisa[40] showed a deterioration of more than 5 percentage points for the period 2000-2006. Its level of low-achievement is nearly 2 percentage points above the UK average (20.9% versus 19.0%). For the reading score in PISA 2006, NI had a similar score to the UK overall and performed above the EU average.

NI has a lower share of early school leavers and made more progress than the EU average (the share dropped from 16.3 to 13% 2000-2006).

At 76.3% in 2005, NI has a level of completion of upper secondary school comparable to the EU median. It is consistently amongst the best performing regions in the UK at GCSE and A-level[41].

NI produced some 4000 MST graduates in 2005, around the UK average share, and above the EU average. However, it appears to have a problem in reaping full advantage of its MST graduates. Some 30% of them leave to take their degree outside the region and, it appears, do not return.

Participation in lifelong learning is lower than the rest of the UK, but still higher than the EU average (13.3 % in 2006 compared to 26.6% for the UK and 9.6% for the EU).

NI benefits from a relatively young population and workforce, with higher than average birth rates. This provides a stream of relatively large youth cohorts, an asset on which it could capitalise.

2.10. NI participates in all the main EU education and training programmes: Erasmus (Higher Education); Comenius (Schools); Leonardo da Vinci (Vocational Education and Training); Gruntvig (Adult Learning).

Northern Ireland, with 156 school applications in 2005, from a population of 1.6m, has higher participation in Comenius than the rest of the UK.

Participation in Erasmus is low relative to most European countries, though comparable to the rest of the UK. All 4 eligible bodies in NI participate and again, as with the UK generally, receive more Erasmus students than they send. Financial pressures and, mainly, tuition fees have a dissuasive effect in the participation of NI students in Erasmus. The recently introduced tuition fee waiver, exempting more UK Erasmus participants from fees is expected to increase the UK participation in the programme. Table 2 of the Annex summarises NI participation in Erasmus for 2004-2005.

2.11. While formal communication on these programmes is channelled through UK representatives, working-level communication also exists between the Commission services and the NI authorities, including the Office of the NI Executive in Brussels.

III. Northern Ireland's priorities for 2007-2013

2.12. The NI authorities have indicated a wish to participate more actively in European education and training initiatives. They have expressed particular interest in ways to promote language skills and to participate in peer learning initiatives. A particular concern has been to increase the numbers of graduates in technology-related disciplines including PhDs from NI or other EU universities, to raise skill levels and support social inclusion through lifelong learning[42]. The commitment of the NI Executive is to increase by 300 the number of PhD research students at local universities by 2010[43].

2.13. Efforts should certainly be made to maximise Northern Ireland's participation in the EU programmes. Education and training providers, institutions and other interested parties could be encouraged to do so. Implementation of the skills strategy should improve the level of skills[44]. The cross-border cooperation mechanisms in the field of skills already in place (Joint meetings with the Universities and Institutes of the Republic of Ireland, skills expert group from both sides of the border) can also contribute maximise the effect of this policy.

ProfitNet: Creating business-led learning networks with support from universities to maximise growth and development opportunities- South England-UK : The ProfitNet was set up by the University of Brighton. The formats used were teaching sessions, learning networks and in-company workshops to enable company owners and senior employees to use knowledge more effectively. The range of sectors supported included manufacturing, creative industries, construction, hotels, start-ups, care homes and social enterprise. Key business issues were tackled at each meeting with the help of local facilitators through action learning, business planning and creativity workshops. In-company interventions were also delivered to some businesses where a specific support was needed.

The Better Concept: Distance learning University Courses for SME Employees- West Sweden: The objective of the project was to promote further training of SME employees and to build confidence between universities and SMEs in the region. The following courses were developed by teams from the university colleges, based on need analyses with local companies: Better automation, Better economics, Better Logistics, Better Product Development and Better Total Production Management. The courses were accredited through the normal university system and the points earned would count towards a degree. Participants met once a week in a local learning centre and had to submit project work related to real issues arising in their companies. A major part of the project was the needs analysis and marketing of the courses to SMEs-to convince them of the benefits they would experience from their employees participating. Most course participants were in their 40s without university level education. Therefore, the project had to support students not used to study.

IV. Suggestions and recommendations

2.14. Clearly, the issues that NI has to address in the field of education and training fall within the set of priority issues currently being developed across the EU. As has been pointed out above, the EU offers support in policy development and in particular through the Lifelong Learning Programme and the Structural Funds programmes. The key field for future action is to ensure that NI is equipped with the best possible human resources to play its part in meeting the Lisbon goals. Achieving this requires the identification of priorities, the development of policy measures to deliver the priorities and the support of those policies with appropriate funding. A number of areas merit particular emphasis.

2.15. The main issue is to close the relatively wide educational gap between the top and bottom performers, while raising educational standards and ensuring equality of access to education. As a result of this gap, NI has a relatively high number of people of working age with poor qualifications.

Following this, overlapping and completing it, is the need for a fully developed approach to lifelong learning. This should include updating, up-skilling and re-skilling, across all levels of Education and Training, so that every member of the NI population is actively encouraged to participate. A qualifications framework with learning pathways that have no dead ends is a necessary part of this, for which the groundwork has been well laid.

A further issue is to increase the supply of high-level knowledge (seen in the number of PhDs available) that it is well-adapted to the needs of the regional economy. Closer co-operation between NI universities and local enterprises should help. The additional, by 2010, 300 PhDs (see above, 2.12) will be focused on areas of economic relevance to the region.

2.16. Closer engagement with the Education and Training 2010 Work Programme, in particular as regards Lifelong learning, could help address the design of policy instruments for these problems.

An effective way to do this would be through well-targeted and active participation in one or more of the 8 Commission-coordinated Peer Learning Clusters. These support Member States to implement effective reforms of their education and training systems and to learn from good practice (see table 3 of the Annex).

The 8 clusters provide the main focus of policy learning under the Education and Training 2010 Work Programme. They comprise groups of Member States, of variable size, which work together to learn on the basis of good practice. The UK is represented in 5 of these clusters: Modernising Higher Education; Recognition of Learning Outcomes; Maths, Science and Technology; Making Better Use of Resources; and Key Competences. The presence of NI officials in the UK representation in suitable clusters could provide useful policy insights. Experience suggests that it is vital that the cluster should be central to current, active domestic reform and that the officials present should be closely connected to the thinking on reform.

2.17. The NI authorities have also the possibility to use EU resources over the current programming period 2007-2013. The Structural Funds programmes are the largest source but they are not alone. Town-twinning encourages an outward-looking mentality and supports bridge-building between communities. More active participation in the Lifelong Learning Programme, for example in programmes such as Erasmus , which is now attracting more attention as a result of the work of the NITF, would be welcome. Participation by NI-based students is far too small. The Culture, Youth in Action and Europe for Citizens Programmes concern a broad range of potential beneficiaries, including cities.

2.18. The NI authorities could encourage centres of excellence to participate in setting up consortia to bid to become Knowledge and Innovation Communities under the EIT. Areas such as climate change and renewable energy will be early contenders. There may be scope for different levels of participation including close association with other key players. Above all, centres of excellence will need to network with other key players across the EU and to be prepared to integrate with them in joint activity.

2.19. The European Year of Intercultural Dialogue (2008) and the European Year of Creativity and Innovation (2009) each offers scope to give a higher profile to some of NI successes, or to draw in European interest in regional issues. For this, the NI authorities should maintain close relations with the national coordinating bodies.

V. For further information

Directorate General for Education and Culture:

http://ec.europa.eu/education/index_en.html

Lifelong Learning (and success stories by programme):

http://ec.europa.eu/programmes/llp/index_en.html

Annex

Table 1: NI achievements against the 5 EU benchmarks

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Table 2: Academic year 2004-05:

Institution Name | Incoming Erasmus | Outgoing Erasmus | Student Number | % Incoming | % Outgoing |

QUEEN'S UNIVERSITY OF BELFAST | 158 | 58 | 25540 | 0,618637 | 0,227095 |

UNIVERSITY OF ULSTER | 202 | 53 | 26,360 | 0.67 | 0.2 |

STRANMILLIS UNIVERSITY COLLEGE | 43 | 22 | 1460 | 2,945205 | 1,506849 |

ST MARY'S UNIVERSITY COLLEGE | 47 | 30 | 1135 | 4,140969 | 2,643172 |

Table 3: Overview of Peer Learning Clusters (2006-2007):

Overview of other main measures:

Clusters | Scope, transversal themes and synergies |

Modernisation of Higher Education | Scope: Increasing excellence and improve links to research and innovation Increasing the attractiveness, including through curricular reforms Increasing mobility. Transversal themes and synergies: Better models of governance and partnerships More and more efficient funding Synergies with clusters on resources and on MST. |

Teachers and Trainers | Scope: Continuing professional development Attractiveness of teaching/training professions Societal challenges facing schools. Transversal themes and synergies: Adult learning Better models of governance and leadership Synergies with the clusters on resources, MST, key competences and ICT. |

Making best use of resources | Scope: Institutional reforms and incentive mechanisms to increase efficiency and equity Transversal themes and synergies: Better models of school governance and leadership More and more efficient investment in pre-school education Reforms targeting disadvantaged learners Synergies with the clusters on access and social inclusion in LLL, teachers and trainers and higher education. |

Maths, Science and Technology | Scope: Benchmark on Maths, Science and Technology, including the gender imbalance Increase participation in MST studies and careers Improve the scientific culture of citizens. Transversal themes and synergies: Synergies with the cluster on higher education, teachers and trainers and key competences. |

Access and Social Inclusion in LLL | Scope: Benchmarks on early school leavers and on completion rates Inclusion of low skilled and disadvantaged groups in LLL Access to pre-school education. Transversal themes and synergies: Adult learning Transition key points Synergies with the cluster on resources, key competences and ICT. |

Key competences | Scope: Follow-up to the key competences framework, curricular reforms Benchmark on literacy. Transversal themes and synergies: Adult learning Synergies with the clusters on access and social inclusion, teachers and trainers and ICT. |

CT | Scope: Integration of ICT in education Increasing access to ICT Empower educational actors Transversal themes and synergies: Synergies with the clusters on teachers and trainers and on key competences. |

Recognition of learning outcomes | Scope: Recognition of formal, non-formal and informal learning in a lifelong learning perspective The shift from learning input to learning outcome in the governance of education, training and learning systems Workplace learning (including SMEs). Transversal themes and synergies: Adult learning. |

Overview of other main measures:

Indicators and Benchmarks | Standing Group on Indicators and Benchmarks Centre for research on lifelong learning (CRELL/JRC) Ensuring cooperation especially with Eurostat, Eurydice, Cedefop, ETF, OECD and IEA Taskforces of national experts i.e. on teachers’ professional development, basic competencies (learning to learn skills), adult skills and civics. Synergies: Clusters on maths, science and technology, on access and social inclusion and on key competences. |

Quality assurance for VET | Copenhagen Process European network for quality assurance in VET (systems and providers levels), with the support of Cedefop (including scientific support and virtual community) and ETF. 5 peer learning activities planned for 2006, including links between QA in VET/ HE (also the subject of an Austrian Presidency Conference). 3 thematic groups. Synergies: Cluster on making best use of resources. |

Sector-level initiatives | Copenhagen Process Cedefop support, including the mapping exercise of education and training initiatives at sectoral level, and the virtual community. Construction of a database. Ensuring close co-operation with sector level initiatives of DG Enterprise and DG Employment Synergies: EQF and the cluster on recognition of learning outcomes. |

Credit Transfer for VET | Copenhagen Process Technical working group on credit system for VET, with support of Cedefop, including scientific support, and virtual community Synergies: Cluster on recognition of learning outcomes and EQF. |

- CHAPTER 3. EMPLOYMENT AND SOCIAL POLICY

I. EU policy and perspectives

3.1. Closely linked with Education and Training initiatives set out in the previous chapter, the Commission’s Social Agenda for the period 2005-2010 has set out a roadmap for development and reform in the field of the labour market and social protection. The aim is to help citizens take full advantage of the opportunities created by international trade and technological advance, while protecting the most vulnerable in society. The agenda has two key priorities: first, employment and, second, fighting poverty and promoting equal opportunities.

For the implementation of the Social Agenda, actions take three principal forms: legislation, social dialogue and financial instruments. Of particular interest are the European Social Fund (ESF), the PROGRESS programme[45], the coordinated network of EURES (the EURopean Employment Services)[46], the EQUAL initiative etc. A new financial instrument, the European Globalisation Adjustment Fund, was put in place on 1 January 2007, in order to enable the Community to provide targeted support for the re-integration into employment of workers made redundant as a result of a major structural changes deriving from changing world trade patterns[47].

A further important instrument for the implementation of the Social Agenda is the European Employment Strategy (EES) which is also a key component of the Lisbon Strategy for Growth and Jobs. It identifies three priority areas which should be addressed by Member States in their reform programmes:

- attracting and retaining more people in employment, increasing labour supply and modernising social protection systems;

- improving adaptability of workers and enterprises; and

- increasing investment in human capital through better education and skills.

II. Northern Ireland's achievements under EU interventions, 2000-2006

3.2. As indicated in the socio-economic profile above, the labour market in Northern Ireland shows a varied picture. In terms of employment, NI has experienced a period of sustained growth and from March 1990 to March 2006, employee jobs have increased by 30.6%. The employment rate in NI at 66.3% (2006) remains, however, below the overall UK rate of 71.5% and the lowest of all the UK regions[48].

3.3. In social terms, NI is becoming more diverse with an increase in inward migration from outside the UK and the Republic of Ireland, particularly from Eastern European countries. This has had positive results for the economy, but has also led to new challenges, in particular for the housing sector, health services and education. The EURES cross-border partnership Republic of Ireland/Northern Ireland (EURES-T NI/I)[49] has likewise had the added dimension of addressing the challenges posed by migrant workers settled along the border. The partnership is organising actions involving migrant workers, seeking to assist them to settle into their chosen community and to travel to work on a daily basis. This initiative also involves the integration of the migrant workers' families.

3.4. In terms of unemployment, in 2006 data indicate that the unemployment rate in NI, at 4.4%, was lower than the equivalent rate for the UK overall (5.3%) and the lowest unemployment rate among the four UK territories, well below the EU-27 average. In terms of those not engaged in any economic activity, the working age economic inactivity rate for NI in 2006 stood at 30.7% of the total in this age group. This is significantly higher than the UK average rate (24.6% in 2006) and is the highest of the 12 UK regions.

3.5. Employment and social policy lie within the competence of the Departments for Employment and Learning (DEL) and the Office of the First Minister and Deputy First Minister (OFMDFM). Arising from its role in the management of ESF, DEL has regular direct contacts with the geographical ESF unit in the Commission's DG for Employment and Social Affairs. For other Member State-level matters relating to employment policy, DEL liaises with the UK Department for Work and Pensions. The Equality Directorate within OFMDFM deals with, among other issues, gender equality, wider equality issues, anti-discrimination and disability and coordinates the NI strategies to combat poverty and social exclusion which correspond to core European social and equality policy areas which come under the day-to-day responsibility of DG Employment.

3.6. In the 2000-2006 period, the European Union, using the resources of the ESF, sought to contribute to employment and social policy development in NI. Under three programmes, the total contribution from the EU budget was EUR 444 million[50]. In addition, individual projects also benefited from other sources of funding, such as the diverse Community Action Programmes as well as EURES.

The projects that have been supported financially cover a broad range of activities, from projects addressing labour market needs, reducing the gender gap and facilitating cross-border cooperation to those reinforcing peace and reconciliation, reducing inequalities and combating discrimination (see table in the annex).

The Cedar Foundation (BSP OP - ESF Measure 2.3)

The Cedar Foundation Training Services provides people with physical disabilities and people with brain injuries with support to access socially inclusive training and employment opportunities and its success was recently recognised at a gala awards ceremony.

The EFQM Excellence Award is Europe’s most prestigious recognition for organisational excellence and is given to Europe’s best performing companies and not for profit organisations. This year , the Cedar Foundation, a voluntary organisation supporting people with disabilities, not only won the European Excellence Award for the public and for not profit sectors, but also picked up a Judge’s Special Award for Customer Focus. The Awards recognise organisations with an undisputable track record of progress and results.

3.7. In the fields of equal opportunities and anti-discrimination, NI has performed well. There is a positive public perception of bottom-up approaches and initiatives, in particular as developed through the PEACE programme, enabling the involvement of many small community groups.

This good performance and active participation is not limited to the programmes supported by the ESF and the EQUAL interventions but applies also to other actions such as the European Year for Equal Opportunities for All, Equal Opportunities and Antidiscrimination and the EURES-T NI/I.

3.8. The EURES-T NI/I constitutes a unique example of cooperation between NI and the Republic of Ireland. The rapid economic growth in the Republic of Ireland and the political steps taken in Northern Ireland towards a stable devolved administration have contributed significantly to the growth of employment and business activity. The EURES-T for cooperation has worked remarkably well and has paved the way for further economic and social cooperation. The partners are the public employment services (PES) and the social partners' organisations of the two border countries. Among the examples of good practice in the field of cooperation are: the sharing of job vacancy information, and the creation of an all-island jobs database, on the part of the DEL (the Employment Service of NI) and FAS (the Employment Service in the Republic of Ireland). They also advertise jointly all cross border vacancies in the local press as well as co-operating in the running of events designed to facilitate cross-border working involving the Chambers of Commerce in the major towns on each side of the border and in the move towards joint strategic initiatives in terms of policy development involving the trade union partners under the auspices of the North/South Forum.

Other areas in which EURES is involved include the holding of joint job fairs along the border involving both Public Employment Services and the private sector as well as coordinating these activities.

3.9. There is active participation by NI representatives in different fora, conferences etc. Their experience on equality legislation, data collection and positive action is unparalleled in the EU. Members of the NI equality authority are also on the steering committee for a study currently being undertaken by the Commission on multiple discrimination. NGOs from NI are also represented in the four antidiscrimination EU-co-financed NGO networks (e.g. the Northern Ireland Council for Ethnic Minorities (NICEM)).

3.10. There are policy processes or committees such as the ESF committee and working groups on thematic issues, such as evaluation, which draw participants from the national level. This is necessary to ensure that the numbers of participants on such committees and groups are kept to manageable proportions. In the case of ESF, the devolved administrations within the UK and other Member States are normally kept informed and consulted, and regular contacts with central services in the Department for Work and Pensions (DWP) are maintained. Moreover, for the first time, in June 2007, the negotiations on the UK National Reform Programme were carried out with the participation of the devolved administrations.

3.11. The relations between the Commission and the NI authorities (including the Office of the NI Executive in Brussels) are constructive. Contacts over recent years have been of a regular, but not necessarily of a systematic, nature. Usually, this would concern invitations to deliver presentations to diverse visitor groups (on ESF programmes, employment policy, etc).

Northern Ireland Union of Supported Employment

The Northern Ireland Union of Supported Employment (NIUSE) is a member based organisation representing organisations and individuals promoting employment for people with disabilities to access and stay in employment through the Supported Employment Model. The organisation has been involved in European Networks for nearly 15 years and has found them to be very beneficial both at operational level and strategic level.

NIUSE is also the lead partner in a trans-national Development Partnership (DP) under the Northern Irish ESF-funded EQUAL Community Initiative. The Development Partnership is called "Supported Employment in Action (SEA)" with a funding volume of EUR 436.000 (£ 324.779) of ESF and partners in the Czech Republic, France and Great Britain. The DP has the aim of exploring the use of the Supported Employment Model for other socially excluded groups and to explore how other EU countries have mainstreamed that model. A comparative study, a booklet on best practice and a toolkit are envisaged as concrete outcomes.

Addressing Disadvantage in the Workplace

NI Department for Employment and Employment and Learning implements programmes which train and up skill both the unemployed and employed. The European Social Fund through the Transitional Objective 1 and EQUAL 2000 – 2006 programmes has been used to train and enhance the skills of the hard to reach people, who face specific disadvantages when trying to enter the labour market. These include, among others, long-term unemployed, people with disabilities, lone parents, people with poor literacy and numeracy skills, ex-offenders. In November 2007 Northern Ireland’s EQUAL Managing Authority hosted a two-day Policy Forum in Belfast share our experience to examine means and best practices to empower people, who face disadvantages in the workplace influence regional and local employment policies. This was attended by 120 delegates, from the Commission and 24 Member States, representing Voluntary and Community sector organisations, employers and employment policy makers. The detailed findings and recommendations of the forum are in the report of this meeting that can be found on the DG EMPLOYMENT EQUAL website (http://ec.europa.eu/employment_social/equal/data/document/0802-diversity-belfastrep.pdf). NI Ireland will seek to develop and further share this work with other EU Regions during 2007- 13.

III. Northern Ireland's priorities for 2007-2013

3.12 . The over-arching aim of the NI Executive is to build a peaceful, fair and prosperous society by pursuing an innovative and productive economy and a fair society that promotes social inclusion, sustainable communities and personal health and well-being. Equality, fairness, inclusion and the promotion of good relations are keywords across all government programmes and policies and crucial to achieving the goal of a "shared and better future"[51] .

To this end, two priorities of NI for the years to come are those of, firstly, attaining a high and stable level of employment for all groups in the labour market by raising the skill levels of the workforce and, secondly, supporting social inclusion through lifelong learning. Both priorities are key parts of the European Employment Strategy[52].

The contributions received by the NITF from political and economic representative organisations in NI converge towards these points. Up-skilling the workforce is important for the economic development and the growth of the private sector. Another issue that needs to be addressed is the high inactivity rate (30.7%) that undermines the efforts for sustainable growth and employment.

3.13. This is also fully in line with major challenges identified for NI in the context of the Lisbon Agenda for Growth and Jobs and the National Reform Programme and the two priorities of the ESF programme for the period 2007-2013.

Under priority 1 of this programme, support will be granted to activities that extend employment opportunities to unemployed, long-term unemployed and inactive people. It aims to help 45.000 unemployed people, i.e. long-term unemployed (24.000), inactive people (16.500) and young people (4.500), to enter, remain and make progress in sustained employment

An additional 44.000 participants are targeted under Priority 2, with the objective being to develop a skilled and adaptable workforce by increasing the number of workers qualified to NVQ level 2 and level 3, reducing the number of workers without basic skills and reducing gender segregation in the workforce.

The programme offers also the possibility for cooperation with other partners in other Regions and Member States in the fields of mutual learning and development of innovative strategies on subjects of common interest. This would permit to satisfy the strong request for identification of other best practice in Europe involving SMEs that would permit NI enterprises to upgrade their existing workforces in terms of leadership and management skills.

The ESF competitiveness and employment programme has a total allocation of EUR 414 million, with the ESF itself contributing EUR 165.777 million and EUR 248.665 million coming from other public sources.

3.14. To mark the "European Year of Equal Opportunities for All" in 2007, which focused on the themes of Rights, Representation, Recognition and Respect, the Equality Commission for NI has continued an awareness raising campaign on this theme. The key projects to be delivered deal with: a public consultation and awareness campaign for young people on equality and anti-discrimination issues; a major EC conference on "Equal Opportunities for All in Northern Ireland"; and an annual campaign "Anti Racist Workplace Week". Alongside these actions, the Commission was also running an "Equality for All" promotional campaign during the year to reinforce the central themes and to ensure that they are widely understood.

As a follow-up to the "European Year of Equal Opportunities for All", Directorate-General for Employment, Social Affairs and Equal Opportunities is organising a conference on antidiscrimination in Belfast on 5th and 6th June 2008. The conference will bring together stakeholders in the field of equal opportunities to share plans and ambitions for the 2008 national awareness-raising projects and receive information about on-going developments on related EU policies.

3.15. Regarding a specific problem that arose at the end of 2007, the announcement of large-scale redundancies at the Seagate installation, the NI authorities are considering – subject to eligibility – the option of applying to the Commission for support under the European Globalisation Adjustment Fund.

IV. Suggestions and recommendations

3.16. In the conception and implementation of European social policy, awareness, knowledge and understanding is important for the key players at regional as well as at national level . In this field, the contribution of the voluntary and community sector constitutes an asset. While, as in the other policy fields, formal contacts are organised at national level, in the framework of the NITF, it has been agreed that a workshop on different aspects of EU employment social policy will be organised together with DEL and OFMDFM (target date: April 2008) in order to permit NI officials to establish contacts with the Commission services and to identify the relevant networks.

3.17. With a view to the often-expressed need to learn about best practice in other Member States, NI should make full use of the possibility to get engaged in transnational