Opinion of the Committee of the Regions on the '6th and 7th annual report on the Structural Funds - 1994 and 1995` (97/C 215/05)

THE COMMITTEE OF THE REGIONS,

having regard to the 6th and the 7th annual reports on the Structural Funds - 1994 and 1995 (COM(95) 583 final and COM(96) 502 final);

having regard to its decision of 12 June 1996, under the fourth paragraph of Article 198c of the Treaty establishing the European Community, to issue an opinion on the matter, and to direct Commission 1 'Regional Development, Economic Development and Local and Regional Finances` to draw up the opinion;

having regard to the draft opinion (CdR 355/96 rev.) adopted by Commission 1 on 14 February 1997 (rapporteur: Mr Wyn),

unanimously adopted the following opinion at its 17th plenary session on 12 and 13 March 1997 (meeting of 12 March).

1. Introduction

1.1. In accordance with the reporting requirements of the Structural Fund regulations the Commission publishes an annual report on the implementation of Structural Fund assistance. The 1994 and 1995 reports were dominated by the contribution of the European funds to combating rising unemployment and the effects of worldwide recession.

1.2. The 6th Annual Report covers the first year of a six year programming period for Structural Funding which is the most important instrument used by the EU to address social and economic cohesion. This programming period is now at the half way stage. The 7th Annual Report has now been published. That report, and more importantly the Cohesion Report recently published, will be key to defining some important strategic issues already in part raised in this opinion. For this reason this opinion also comments on the 7th annual report.

2. General observations

2.1. The key role of regional and local authorities in the context of the Structural Funds

2.1.1. The Structural Funds are clearly important to local and regional authorities for many reasons:

Local/regional government:

- has a strategic role relating to other public sectors and the community

- is an important service provider to the local community and to business

- is responsible for implementing EU funded projects and is often the largest sector in terms of European grant spending

- is the democratic voice of local people - given the importance of the European citizen and especially recent emphasis on unemployed/socially excluded

- is a very important and substantial employer, providing a forum of good practice in equal opportunities and good employer practice

- has vast expertise in developing meaningful and targeted strategies for European funding initiatives, and have staff expertise in technical funding issues of benefit to the wider community

- represents the form of public authority that can adapt most flexibly, for instance, through internal reorganisation, to the innovations triggered by civil society.

3. Specific observations

3.1. Key points

3.1.1. The local and regional authorities welcome the Commission documents and are pleased to note that both reports provide a wide ranging, detailed analysis of Structural Fund activities in 1994 and 1995.

3.1.2. As also stated by the European Parliament, it is impossible to examine in fine detail such an exhaustive analysis, but some general points can be made.

3.2. Resources

3.2.1. The Committee welcomes the increased resourcing for the Structural Funds for the 1944-1999 period. However, the way in which the budgetary allocations were made for the period 1994-1999 is typical of the lack of transparency which undermines the philosophy and spirit of the Structural Policy of the EU. The Committee of the Regions should in future be involved in such key deliberations.

3.3. Effects of delays

3.3.1. The Commission states that during the first year of the new programming period 90 % of commitments were made (in 1995 this rose to 91 %), but nevertheless there was a severe delay to implementing the first year of the new period (e.g. Objectives 2 and 3 programme applications were submitted in the UK over a year late). This delay must have impacted substantially on the quality and volume of truly additional applications, as projects most relying on additional moneys are sometimes amongst the first to suffer from any delays. In many cases, these delays have held up further funding year activities, and the entire system has still not yet returned to a normal timetable as a result even in 1996 the final year of the same programming period for Objective 3.

3.3.2. The lack of commitments under Community initiatives which were a cause for concern in 1994, improved in 1995, when most programmes were approved.

3.3.3. Given the ultimate aim to see 35 % of the EU budget spent on Structural Funds by 1999, it is vital that such large funds are made available on a reasonable timetable, to have the most effect possible.

3.3.4. In full agreement with the European Parliament conclusions on this report, procedures must be simplified as a priority. Use of single programming documents is warmly welcomed as a first step to this end, as they represent a significant step forward in the application of the partnership principle and hence much more direct and precise participation of the regions. However, the necessity of simplifying funds, objective-linked areas, procedures and instruments, as well as streamlining the red-tape involved in structural fund administration, persists. Tighter financial control - which is described in the 1995 report too as an important task - does not necessarily need to conflict with flexible arrangements to recycle unused appropriations in innovative ways according to new situations.

3.4. Partnership

3.4.1. The Commission's report notes that some Member States were reluctant to commit themselves to a full and open partnership. The position in some parts of the UK for instance, was totally unsatisfactory, although it appears to be improving to some extent, thanks in part to the greater effectiveness of the monitoring committees. However, the European Commission is disappointingly reluctant to act where partnership is weak, and the partnership particularly needs to be reinforced at the programming stage.

3.4.2. Partnership is vital to the success of the funds and particularly needs to be reinforced at the programming stage. Programming should be based to a greater extent on a bottom-up approach and should be more firmly rooted in the local and regional authorities, as they help to finance the schemes. The COR expresses concern at the limited emphasis placed upon the grass roots/bottom-up approach within the Community initiatives and the Commission is requested to examine the extension of the Leader programme approach into other Community initiatives such as Rechar which benefit Europe's industrial communities.

3.5. Subsidiarity

3.5.1. Subsidiarity should be explicitly mentioned with regard to regional and local government in the forthcoming IGC and Structural Funds programme implementation would be a key area where decisions could be made at the most appropriate level closest to the citizen.

3.6. New priorities

3.6.1. The participation of local communities is an important consideration in the sustainability of economic development. The COR welcomes new priorities and believes that both thematic and geographical concentration should continue to focus on employment creation particularly in regions with the most acute problems. It believes that the Structural Funds should place greater emphasis on community development measures. A smooth transition from one set of priorities to another must be ensured in order to maintain continuity in the operation of the funds. The setting of new priorities should not cloud the economic situation of those regions which have not secured an adequate level of infrastructure.

3.6.2. As also stated by the European Parliament, actions aimed at SMEs including preferential EIB loans etc. still often do not in practice meet the direct needs of SMEs. Given the importance of SMEs in creating employment, the SME policy should be incorporated in regional development programmes as soon as possible. The regions should take charge of this. The European Commission can at most define the frameworks.

3.6.3. The Committee of the Regions welcomes the Commission's intention to increase experience of intervention in the cultural sector as this is a key area which, besides enriching the EU, creates an environment propitious to economic and social development. It is hoped however, that due regard is placed on respecting and supporting the diversity and promoting the quality of cultural aspects of the EU.

3.6.4. For the first time the Commission has attached greater importance to environmental issues in its reporting on structural policy. The Committee of the Regions can only welcome this, as the environment and sustainable development are essential factors in structural policy objectives, particularly in a regional context.

3.7. Dissemination of information to disadvantaged applicants and regions

3.7.1. An important step in ensuring that the funds reach the most needy, and the most deserving cases would be to disseminate more and better information on how to access the funds. Since the funds are being more directly targeted on the most disadvantaged in society, it becomes more important to ensure that information is available in a format which allows ease of access and understanding.

3.8. Increasing added value of innovative methods and actions

3.8.1. Given the constant emphasis on innovative actions across Structural Funds, and especially Community initiatives, the Committee feels that not enough is being done by the Commission to disseminate, in a meaningful way, successful innovative approaches to solving problems. Much potential added value is lost from Structural Funds expenditure, because lessons learned locally are not transferred or mainstreamed, either geographically, or sectorally.

3.9. Fraud/irregularities

3.9.1. Given the unfavourable comments from the European Court of Auditors on irregular application of procedures, especially in light of the increase of Structural Funds as an overall proportion of the Communities budget, it is vital that a major crackdown on fraud is carried through. It is a matter of particular importance for EU Member States to intensity efforts to combat fraud as part of the ongoing work of the IGC as well. Actions already being taken by the Commission and Court of Auditors are welcomed, and comments made by the European Parliament on this subject, with regard to the 6th Annual Report are fully supported.

4. Conclusion

4.1. Structural convergence both socially and economically is a long and difficult process. The Commission is asked to acknowledge that the strategic approaches adopted to help Europe's disadvantaged regions, and disadvantaged citizens will take a long time to bear fruit. Continuity and adequate resources, but avoiding any complacency, are vital to see long term objectives achieved.

4.2. Targeting of resources and policies to the most needy and the most efficient actions, as well as genuine consideration of the environmental implications of all actions is welcomed. The emphasis on unemployment is welcomed, as is emphasis on equal opportunities. Steps must be taken to ensure that neither EU nor national rules, nor over-bureaucratic application of them, be allowed to prevent the maximum benefit to ordinary people and regions from European structural funding. Local and regional government across the EU welcomes any actions by the Commission to embrace practical, cost-conscious ways of solving acute regional development problems and those of the most needy people in society.

Brussels, 12 March 1997.

The Chairman of the Committee of the Regions

Pasqual MARAGALL i MIRA