Proposal for a Council Regulation (EC) on Community financial contributions to the International Fund for Ireland
Date: 1997-03-25
Institutions: European Commission
Subjects: EU financing, Ireland, United Kingdom, activity report, cross-border cooperation

COMMISSION OF THE EUROPEAN  COMMUNITIES 

Brussels, 25.03.1997 
COM(97) 130  final 

97/0116 (CNS) 

Proposal for a 
COUNCIL REGULATION (EC) 

on Community financial contributions to the 
International Fund for Ireland 

THE INTERNATIONAL FUND FOR IRELAND 

An evaluation report pursuant to the provisions contained in 
Council Regulation (EC) No 2687/94 

(presented by the Commission) 

EXPLANATORY MEMORANDUM 

The International Fund for Ireland was established in 1986 in order to contribute to the work 
envisaged  in  Article  10(a)  of  the  Anglo-Irish  Agreement  of  15  November  1985  which 
provides  that  "The two governments  shall cooperate  to promote the economic  and social 
development of those areas of both parts of Ireland which ha\>e suffered most severely from 
the consequences  of  the instability  of  recent years,  and  shall  consider the possibility of 
securing international support for  this work". 

The objectives  of the Fund  are to promote  economic and  social  advance and  to  encourage 
contact, dialogue and reconciliation between nationalists and unionists throughout Ireland. 

The EC, recognizing that the objectives  of the Fund were  a reflection  of those  pursued by 
itself, wished to give practical support to the initiative. From  1989 until  1995, this has taken 
the form of an annual contribution of  ECU 15 million which was written into the budget and 
implemented by the Commission. 

The Commission has been represented by an observer at Board meetings since the beginning 
of 1989 and has thus been able to monitor the progress of the Fund. 

The Commission has always insisted that the Community's contribution be used as a priority 
for  cross-community  projects,  thereby  encouraging  dialogue  and  reconciliation,  and  that  it 
have a genuine additional impact in the areas concerned,  i.e. that it should not be used  as a 
substitute for other public or private expenditure. 

The  Fund  is  a  particular  example  of  successful  Anglo-Irish  cooperation  in  promoting 
reconciliation between the two communities and their economic and social progress. 

Since  its  inception,  the  Fund  has  supported  some  3 500  projects  to  the  benefit  of 
both communities. 

The  Joint  Declaration  by  the  Taoiseach  Mr.  Reynolds  and  Prime  Minister  Major  of 
14 December 1993 has given new impetus to the reconciliation process.  It was welcomed by 
the Commission in a statement issued on  16 December  1993 indicating that the achievement 
of peace would bring many social and  economic benefits  to the region, the Member  States 
concerned  and  the European  Union  as  a whole,  and  expressing  the  wish  to  give practical 
support to the process. 

The Joint Declaration was also welcomed in a statement issued by the General Affairs Council 
on 20 December 1993. 

On  31  October  1994  the  Council  adopted  Regulation  (EC)  No  2687/94  on  Community 
Financial Contributions to the International Fund for Ireland relating to  1995, 1996 and 1997. 
For  each  of  those  years  ECU 20  million  has  been  provided  as  part  of  the  annual 
budgetary procedure. 

Pursuant to Article 3 of the above Regulation, an annual survey and list of projects which have 
received  aid  has  been  made,  as  well  as  an  assessment  of  the  nature  and  impact  of  the 
interventions, with particular regard to the objectives of the Fund and the criteria set out in the 
first  and second paragraphs of Article 2 of the Regulation. 

Pursuant to Article 5 of the Regulation, an evaluation has been drawn up by the Commission 
for the European Parliament and the Council assessing the need for  continuing contributions 
beyond 1997. 

On the basis of those evaluations  and the  Commission's  ongoing  monitoring  of the Fund's 
activities, notwithstanding the major Community structural Fund commitment for the whole of 
the Island of Ireland, and the considerable effort  made under the Special Programme for Peace 
and  Reconciliation  in  Northern  Ireland,  continuation  of  financial  contributions  to  the 
International Fund is recommended  as an effective  complement to other Community  support 
for the peace process. 

Since the present arrangement for Community contributions expires on 31 December 1997, it 
is proposed that the Council adopt the attached Regulation. 

In view of the funding already provided, and in order to allow for the fact that the still volatile 
situation in the region must improve, it is suggested to limit the term of the support to two 
years. In the Commission's view the annual contribution for each of the years 1998, and 1999 
should be ECU 17 million. A review of the performance of the Fund and the need for  further 
support will be made by the Commission before  1  April 1999. 

It is further proposed that the following conditions shall apply in respect of this contribution: 

priority  shall  be  given  to  projects  which  have  a  strong  reconciliation  and 
cross-community element; 

it shall be ensured that it has a genuine additional impact in the areas concerned and not 
therefore be used as a substitute for other public or private expenditure. 

Proposal for a 
COUNCIL REGULATION  (EC) 

on Community financial  contributions to the 
International Fund for Ireland 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article 235 thereof, 

Having regard to the proposal from the Commission1, 

Having regard to the opinion of the European Parliament2, 

Whereas  the  programmes  of  the  International  Fund  for  Ireland  (hereinafter  "the  Fund") 
encourage cross-border and cross-community cooperation and thereby promote dialogue and 
reconciliation between nationalists and unionists; 

Whereas  the  Fund  is  an  example  of  successful  Anglo-Irish  cooperation  in  promoting 
reconciliation between the two communities and their economic and social progress; 

Whereas ECU 15 million a year has been provided from the Community budget from 1989 
until  1995 to  support  projects  of the  Fund  which  have  a  genuine  additional  impact  in the 
areas concerned; 

Whereas  pursuant  to  Council  Regulation  (EC)  No 2687/94  of  31 October 1994  on 
Community financial contributions to the International Fund for Ireland3, for  1995,  1996 and 
1997, the amount established as part  of the budgetary procedure for each of these years has 
been ECU 20 million; 

Whereas the assessments carried out in accordance with Articles 3 and 5 of Regulation (EC) 
No 2687/94 have confirmed  that the Community's contribution has been used in accordance 
with the objectives of the Fund and the criteria laid down in the first and second paragraphs of 
Article 2 of the above Regulation; 

Whereas Regulation (EC) No 2687/94 expires on 31 December 1997; 

Whersas the peace process in Northern Ireland requires a continuation of Community support 
beyond that date; 

Whereas  the  Commission  adopted  on  28  July  1995  a  decision  granting  Structural  Funds 
assistance to the Special Support Programme for Peace and Reconciliation in Northern Ireland 
and in the Border Counties of Ireland; 

1 
2 
3 

OJ No C 
Opinion delivered on 
OJNoL286,  5.11.1994, p. 5. 

Whereas the Community contribution should be used by the Fund in priority for projects that 
are  consistent  with  the  activities  funded  by  the  Special  Support  Programme  for  Peace 
and Reconciliation; 

Whereas  such  support  should  take  the  form  of financial contributions  for  a period  of  two 
more years; 

Whereas an assessment reviewing the Fund's  performance  and the need  for  further  support 
should be drawn up before  1  April 1999; 

Whereas  the  amount  deemed  necessary  for  the  Community  contribution  to  the  Fund  is 
ECU 17 million for each of the years 1998 and 1999, expressed in current values; 

Whereas this support will contribute to reinforcing the solidarity between the Member  States 
and between their peoples; 

Whereas the Treaty provides no powers other than those in Article 235 for the adoption of 
this Regulation, 

HAS ADOPTED THIS REGULATION: 

Article 1 

An annual contribution shall be made to the International Fund for Ireland (hereinafter  called 
"the Fund") for  each of the years  1998 and  1999. The amount  of this contribution  shall be 
established as part of the annual budgetary procedure. 

Article 2 

The  contribution  shall  be  used  by  the  Fund  in  priority  for  projects  of  a  cross-border  or 
cross-community  nature,  in  partiailar  those  consistent  with  the  objectives  of  the 
Special Support Programme for Peace and Reconciliation. 

The contribution  shall be used  in such a way that  it has a genuine additional  impact  on the 
areas concerned  and  should  not  therefore  be  used  as  a  substitute  for  other  public  and 
private expenditure. 

The Commission shall be represented by an observer at the Board meetings of the Fund. 

Article  3 

The Commission  shall administer the contributions.  The Commission  shall  submit,  not  later 
than  1  April  1999,  a  report  to  the  budgetary  authority  covering  inter  alia  the 
following matters: 

a survey of the Fund's activities; 

a list of projects which have received aid; 

an assessment of the nature and impact of the interventions, in respect, notably, of the 
objectives of the Fund and the criteria laid down in the first and second paragraphs of 
Article 2; 

an  annex  containing  the  results  of  the  verifications  and  controls  carried  out  by  the 
Commission representative or its agents. 

The annual contribution shall be paid in two parts as follows: 

Article 4 

(a) 

an advance of 80% will be paid after the chairman of the Board of the Fund has signed 
the Commission's standard undertaking relating to grants and has undertaken to use the 
contribution  in accordance with  Article 2 and after  the Commission has received and 
accepted the beneficiary's  annual activity report  and audited  accounts in respect of the 
previous year; 

(b) 

the  remaining  20% will be  paid  after  the  Commission  has  received  and  accepted the 
beneficiary's  annual activity report and audited  accounts relating to the year for which 
the Community contribution was made. 

Article 5 

Before  1  April  1999,  the  Commission  shall  present  an  evaluation  report  to  the 
European  Parliament  and  the  Council  assessing  the  need  for  continuing  contributions 
beyond 1999. 

Article 6 

This Regulation shall enter into force on 1 January 1998. 

It shall apply until 31 December 1999. 

This Regulation shall be binding in its entirety and directly applicable in all Member States. 

Done at Brussels, 

For the Council 
The President 

FINANCIAL  STATEMENT 

1 

TITLE OF OPERATION: 

COMMUNITY  CONTRIBUTIONS  TO  THE  INTERNATIONAL  FUND  FOR 
IRELAND. 

2. 

3. 

4. 

BUDGET HEADING INVOLVED: B2-604 

LEGAL BASIS: 

Draft Proposal for a Council Regulation under Article 235 

DESCRIPTION OF OPERATION 

4.1.  General  objective:  to  encourage  contact,  dialogue  and  reconciliation  between 
nationalists and unionists throughout Ireland by promoting the economic and social 
advance of the two communities. 

4.2. 

Period covered and arrangements for renewal or extension: 
1998,  1999. 

5. 

CLASSIFICATION OF EXPENDITURE OR REVENUE 

5.1.  Non-compulsory expenditure 

5.2.  Differentiated  appropriations 

6. 

TYPE OF EXPENDITURE 

Subsidy for joint financing with other sources in the public and/or private sector. 

7. 

FINANCIAL IMPACT 

7.1. 

Indicative schedule of appropriations 

7.1.1.  Schedule for proposed new operation 

ECU million 
(in current prices) 

1998 

1999 

TOTAL 

17 

17 

17 

17 

34 

34 

Commitment 
appropriations 

Payment 
appropriations 

8. 

FRAUD PREVENTION MEASURES: the Commission is represented on the Board of the 
Fund and the final annual contribution is only paid over after receipt and acceptance of the 
Fund's annual report and audited accounts. 

9. 

SPECIFIC OBJECTIVE 

9.1. 

Through economic  and  social  development  to  promote  reconciliation between the 
two  communities  in both parts of Ireland which have  suffered  most  severely from 
the consequences of the instability of recent years. 

9.2.  Grounds for the operation 

The Community, recognizing that the objectives of the Fund are a reflection of those 
pursued  by  itseh;  has  given  practical  backing  (ECU  15  million  pa.  since  1989; 
ECU 20  million  for  each  of  the  years  1995,  1996,  1997).  Continuation  of 
this contribution  for  another  two  years  would  provide  a  clear 
indication 
of Community  support  for  the  peace  process  in  Northern  Ireland,  which  is  at  a 
highly critical juncture. 

9.3.  Monitoring and evaluation of the operation 

The Commission  will  monitor the Fund's activities through its continuing presence 
on  the  Board  as  an  observer.  It  is  informed  of  all  the  Fund's  proposed  decisions 
before  they  are  put  to  the  Board.  All  Fund-supported  projects  are  moreover 
monitored  by  staff  responsible  for  Structural  Fund  policy  implementation  to 
avoid overlap. 

THE INTERNATIONAL FUND FOR IRELAND 

An evaluation report pursuant to the provisions contained in 
Council Regulation (EC) No 2687/94 

Introduction 

1. 

Background 

2. 

Assessment of the Work of the International Fund for Ireland 

2.1  Leverage of Other Funds 

2.2  The Fund's activities in relation to contact, dialogue and reconciliation 

2.2.1  Number of Groups and Board Members 

2.2.2  Beneficiaries of Programmes 

2.3  Independent Evaluations of the Impact of the IFI 

2.3.1  The KPMG Report 

2.3.2  The British-Irish Inter-Parliamentary Body 

2.4  Distribution of the Fund's Resources 

2.5  The Fund's Employment Impact to September 1995 

3. 

The Commission's Conclusions 

H 

12 

15 

15 

15 

15 

16 

17 

17 

19 

20 

21 

21 

Annexes:  Fund annual reports for 1995 and 1996 
N.B. 

All amounts are quoted in Pounds Sterling rather than ECU. This has been done to 
facilitate comparison with figures given in the Fund' annual reports. 

10 

INTRODUCTION 

The International Fund for  Ireland is a body established by treaty between the Governments of 
the United Kingdom and of Ireland 

"to promote  economic  and  social  advance,  and  to  encourage  contact,  dialogue  and 
reconciliation between nationalists and unionists throughout Ireland". 

The  International  Fund  for  Ireland  (IFI)  was  established  in  1987.  It  is  supported  by 
contributions from the European Union, the United  States of America, Canada, New  Zealand 
and  Australia.  EU  contributions  commenced  in  1989  and  are  now  the  largest  single  annual 
contribution to the development budget of the International Fund. 

In the years  1989-1994 the Community contribution  amounted to ECU  15 million per annum. 
Council  Regulation  No  2687/94  on  Community  Financial  Contributions  to  the  International 
Fund for  Ireland established  a continuing framework  for  EU  contributions to the work  of the 
IFI. The annual contribution for  1995, 1996 and  1997 was raised to ECU 20 million. 

The  Regulation  provided  that  the  Community  contribution  should  be  used  "in priority  for 
projects  of a cross border or cross- community nature" and  "in a way which has a genuine 
additional impact on the areas  concerned and... not...  as  a  substitute for  other public  and 
private  expenditure,A  The  Regulation  also  provided  that  the  Commission  should  make  an 
annual  report  on  the  International  Fund's  activities5  and,  in  addition,  should  draw  up  an 
evaluation  report  for  the  European  Parliament  and  the  Council  assessing  the  need  for 
continuing contributions beyond  19976. 

For technical reasons it is deemed more practical to merge the two exercises, particularly since 
the annual reports published by the Fund (and which are examined in detail by the Commission 
before publication) contain exhaustive information  on projects  and finance - which it would be 
inappropriate to  duplicate.  The Fund's  annual  report  for  1995 has been  published.  The  1996 
report will be available shortly. 

The  present  report  provides  the  Commission's  evaluation  of  the  activities  of  the  IFI  and  its 
assessment of the need for continuing contributions. 

Section  1 gives a general background  and appreciation of how the Fund operates and a broad 
assessment of the degree to which its modus operandi is in line with its objectives. 

Section 2 sets out a variety of indicators of the activities undertaken by the IFI and reports the 
findings  of independent evaluations of the work of the Fund. 

Section 3 sets out the Commission's  conclusions  on the work  of the fund  and on the issue of 
continuing support by the European Union. 

In preparing  this Report,  the  Commission  had  access to  a number  of  case  studies  illustrating 
aspects of the work of the IFI and reports of interviews with a number of community workers, 
commentators and public officials  in relation to the impact of the IFI and the challenges which 
it faces  in the future.  The case  studies  and  the  interviews  were  undertaken  independently  on 

Council Regulation (EC) No 2687/94, Article 2. 
Council Regulation (EC) No 2687/94, Article 3. 
Council Regulation (EC) No 2687/94, Article 5. 

11 

behalf of  the  Commission  to  assist  in the  preparation  of  this  Report.  They  were  influential  in 
the conclusions which the Commission has reached on the work of the IFI. 

1. 

BACKGROUND 

The Fund's twin  objectives  concern  economic  and social  advance and the promotion  of 
dialogue  and reconciliation  between  the  communities  in Northern  Ireland  and  between 
Northern Ireland and the  South. 

It pursues these aims through a clearly defined  set of sub-programmes, each of which has its 
own allocation within the IFI budget. 

The  table  below  indicates  the  actual  commitments  arising  from  offers  of  assistance 
approved  by  the  IFI  in  relation  to  approximately  630  projects  during  the  period 
October  1994 to December  1996. 

The information  in the table reflects  the emphasis which the Fund places  on  supporting 
community-led  initiatives  across  its  various  Programmes,  particularly  in  disadvantaged 
areas  and  also  marks  the  introduction  of  new  initiatives  and  schemes,  such  as  the 
Communities  Initiative.  Programmes  1-5  are  wholly  community  led  in  their  nature, 
while Programmes 6 and 7 have significant  elements of community led provision.  These 
programmes accounted for 84% of the Fund's commitments  over the period. 

Programme or Initiative 

Funds committed 
UKL million 

1. 
2. 
3. 
4. 
5. 
6. 
7. 
8. 
9. 

Community Economic Regeneration & Special Projects 
Communities Initiative 
Rural Development 
Wider Horizons 
Flagship Projects 
Business Enterprise 
Urban Development 
Tourism 
Science & Technology 

10 416 
4 874 
5 401 
8 720 
7 260 
11299 
9107 
8 321 
2 734 

1 

TOTAL 

| 

68 132 

In addition, there is a Communities in Action Initiative which addresses the problem of social 
exclusion  in  the  most  disadvantaged  communities,  as  well  as  a  number  of  investment 
companies  which  have  been  set  up  in  Northern  Ireland  and  in  the  Border  Counties  of 
the South. 

12 

list 

the 

only 

includes 

as 
one 
Although 
"Communities Initiative", this does not,  in the  Commission's view,  give  a true picture  of the 
scope of the Fund's activities and impact in terms of reconciliation;  all the Fund's programmes 
clearly seek to pursue the same aim of promoting reconciliation through economic  and social 
advance in such a way as to involve representatives from divided communities and enable them 
to help themselves. 

programme 

identified 

explicitly 

The  fundamental  principle  underlying  the  Fund's  approach  can  be  roughly  summarized  as 
follows:  increased  contact  between  members  of  opposing  communities  is  essential  for  the 
removal of prejudice but it is not enough in itself to  reconcile or integrate those communities. 
This requires the joint  striving towards common goals and shared interests.  The  cooperation 
this  involves  leads  to  confidence-building  and  the  emergence  of  an  equal-status-mentality 
between the representatives of the groups. 

Cross-Border  Aspects 

The  Commission  is  satisfied  that  the  Fund  does  effectively  apply  the  principle  whereby 
economic  development  activities,  especially  those  at  local  level,  are  carried  through  by 
organizations representing both communities. 

The effect  is being felt in particular at the level  of public agencies and departments North and 
South of the Border. In most cases there had been little previous cooperation on a continuing 
basis between the two  public  administrations  on the  island.  The  Commission's  assessment  -
based on regular on-the-spot  monitoring -  is that the Fund has made a major contribution to 
changing  this  situation  by  contributing  to  the  development  of  networks  of  working 
relationships between officials of public agencies and administrations in both parts of the island 
participating in the management  and delivery of Fund-supported  projects.  The significance  of 
this development for the future of the island of Ireland, and for the relations between the two 
Member States, is hard to overestimate. 

Specific examples of innovative cross-border programmes include the following: 

- 

- 

- 

- 

the joint marketing of Irish products abroad; 

joint  training  programmes  within  the  context  of  the  Enterprise  and  Wider  Horizons 
programmes; 

joint marketing of the island of Ireland as a tourist destination; 

joint research and development projects involving universities from North and South. 

It must be said, however, that a large proportion of the cross-border projects which the IFI has 
supported  have  been  projects  to  support  cooperation  between  government  agencies  or 
professional  organizations.  The  number  of  community-based  cross-border  projects  that  has 
been  funded  is  smaller  in  relative  terms.  The  problem  in finding a  satisfactory  operational 
approach  for  cross-border  projects  -  particularly  on  a  longer  term  basis  -  has  been 
encountered by the Structural Funds also in other parts of Europe. 

13 

Cross-Community  Aspects 

Although numbers do not reflect  the essence  of reconciliation  and bridge-building work,  one 
indicator is the number of cross-community groups set up as a direct result of the existence of 
the  IFI  (see  table  under  2.2.1  below).  The  Commission  is  satisfied  that  the  Fund  pays 
particular attention to  a balanced representation of the communities involved in these groups 
and that it does not provide funding if it feels that this criterion has not been met. 

According to a study carried out by independent consultants, well over 7 600 individuals had 
been involved either directly or indirectly in these activities by the end of 1996. 

While  Protestant  communities  were  initially  reluctant  to  apply  to  the  Fund,  which  was 
perceived as pursuing an explicitly political agenda, this situation had clearly changed by 1995. 
It  has indeed  been  replaced  in some  areas  by  a  desire  on  the  part  of  community  leaders  to 
"catch up" with  communities  that  had gained from Fund  programmes.  Often  this  involves 
cooperation with communities perceived  as essentially nationalist  - an outcome which,  in the 
Commission's opinion, clearly demonstrates the extent to which the IFI is succeeding in getting 
the  legitimacy  of  cross-community  cooperation  accepted  in  quarters where this would  have 
been unthinkable  only  a few  years  ago.  This  must  rate  as  one  of  the  EFI's most  significant 
contributions  to  the  reconciliation  process:  it  has  succeeded  in  encouraging  the  creation  of 
bottom-up cross-community structures where official  agencies were no longer able to do so. 

Disadvantaged  areas 

The Fund operates through Programme Teams which, under the direction of the Board, draw 
upon the expertise  and administrative  structures necessary  for the effective  deployment  of its 
programmes.  Regionally-based development consultants act as an interface between the Fund 
and local  groups.  They  play  a  particularly  significant  part  in  assisting  local  communities  in 
articulating their case for funding and  developing and implementing their plans, and have thus 
become  an  important  enhancement  of  the  local  development  capacity  of  the  most 
disadvantaged communities. 

The  "Disadvantaged  Areas  Initiative"  is  the  largest  single  sub-programme  of  the  Fund. 
However, it would be accurate to say that all IFI programmes are to varying degrees designed 
to benefit disadvantaged areas. 

Additionally 

It is notoriously difficult  to give definitive  proof of additionality,  or the lack of it.  There have 
been  cases  where the  Commission  observer  on  the  Board  has  expressed  reservations  about 
spending proposals, where the project in question was deemed to be a matter for the national 
governments rather than the Fund. 

By  and  large,  however,  it  is  clear  that  the  IFI  has  an  important  pump-primer  or  leverage 
function which enables recipients of its support to gain access to other funding (see table under 
2.1. below). 

14 

2. 

ASSESSMENT OF THE WORK OF THE INTERNATIONAL FUND FOR IRELAND 

2.1 

Leverage of Other Funds 

The  ability  of  the  IFI  to  lever  other  funds  in  support  of  its  activities  varies 
between  Programmes,  reflecting  the  ability  of  the  recipients  of  IFI  support  to 
gain  access  to  other  funding.  Leverage  ratios  are  lower  in  community  based 
programmes  in  which  there  is  limited  or  no  incentive  for  the  attraction  of 
private  finance. 

Programme or  Initiative 

Community Economic 
Regeneration & Special Projects 
Communities Initiative 
Rural Development 
Wider Horizons 
Flagship Projects 
Business Enterprise 
Urban Development 
Tourism 
Science & Technology 

IFI 
Commitments 
UKL  million 
10416 

Other 
Funds 
UKL million 
8 866 

4 874 
5 401 
8 720 
7 260 
11 299 
9  107 
8 321 
2 734 

3318 
8 629 
8 721 
23 889 
15 895 
25 309 
28 289 
2 876 

TOTAL 

68 132 

125 792 

Leverage 
Ratio  (l:x) 

0.851 

0.681 
1.598 
1.000 
3.290 
1.407 
2.779 
3.400 
1.052 

1.846 

The  table  indicates  that  the  average  leverage  ratio  obtained  by  the  Fund  for 
its major  Programmes  and 
to 
December  1996  was  approximately  1.8.  The  Fund's  commitment  of 
UKL 68  132  million  has  produced  a  total  potential 
investment,  much 
concentrated in the designated disadvantaged  areas, of UKL  193 920 million. 

in  the  period  October  1994 

initiatives 

2.2.  The Fund's activities in relation to contact, dialogue and reconciliation 

This  Section  provides  a  quantified  analysis  of  the  Fund's  contribution  to 
contact,  dialogue  and  reconciliation  in  the  period  between  October  1994  and 
December  1996, and cumulatively. 

2.2.1  Number of Groups 

One  indicator  of  activity  is  the  number  of  cross-community  or  cross-border 
groups  which  have  been  stimulated.  The  table  below  sets  out  the  number  of 
cross-community  groups  formed  as  a  result  of  the  Fund's  interventions 
according  to  the  main  Programme  or  Initiative  headings.  In  the  case  of  each 
group  the  Fund  pays  particular  attention  to  a  balanced  representation  of  the 
communities involved and will not provide funding if it does not believe that this 
criterion has been met. 

15 

Number of Cross-Community  or Cross-Border Groups 
October 1994 - December 1996 and Cumulatively 

Programme or Initiative 

_____ 
Community  Economic  Regeneration  & 
Special Projects 
Wider Horizons 
Local Enterprise Agencies 
Other  community  based  development 
organizations 
Cross-border  Science  and  Technology 
groups or projects 

New Groups in 
Period 
39 

Total Number of 
Groups 
171 

79 
15 
58 

7 

301 
52 
92 

23 

Total 

I 

198 

1 

639 

In  excess  of  7 600  persons  are  directly  and  regularly  involved  in the  Boards  or 
Steering  Committees  of these  groups,  providing  experience  of  practical  working 
together  across traditional  community  divides in Northern  Ireland  and  across the 
border.  Of this total  some  1600 were directly involved  in groups which  obtained 
IFI support for the first time between October  1994 and December 1996. 

2.2.2 

Beneficiaries  of Programmes 

As well as those directly involved in the management and direction of these cross-
community or cross-border  activities, a wider group can be identified  as the direct 
beneficiaries  of  the  activities  stimulated.  The  table  below  provides  some 
illustrative  estimates  of  the  numbers  involved  according  to  the  main  types 
of groups. 

16 

Number of Beneficiaries  of Initiatives: 
October 1994 - December 1996 and Cumulatively 

Type of Group 

Beneficiaries  in 
New Initiatives 
first  supported  in 
the period 

Total Number of 
Beneficiaries 

-  Local Enterprise Agencies (tenants 

of agencies, etc.) 

-  Wider Horizons Programme 
(programme participants) 

-  Community Economic Regeneration 
Scheme (participants in local actions) 

-  Science & Technology (researchers, 

etc.) 

-  Businesses participating in cross- 

border development and marketing 
schemes (e.g. Acumen, Plato, 
CBI/IBEC etc.) 

456 

2 165 

1 164 

53 

489 

2 956 

7 555 

2 893 

533 

1515 

Total 

4 327 

15 452 

I 

J 

The  data  shows  that  the  Fund  continues  to  focus  on  disadvantaged  areas  and 
communities in difficulty  and fostering  cross-community  and cross-border  contact 
and dialogue. 

2.3 

Independent Evaluations of the Impact of the IFI 

The  Board  and  observers  have  been  concerned  to  have  independent  advice  and 
evaluation of the IFI's impact.  A number of evaluations of particular schemes and 
programmes have been commissioned. The major  overall assessment of the impact 
of the Fund was undertaken by the international  accounting  and consultancy firm 
KPMGin  1994 and 1995. 

2.3.1 

The KPMG Report 

The KPMG Report7 examined the work of the IFI from its inception to  September 
1994. It undertook  a qualitative assessment  of the Fund's contribution  to  contact, 
dialogue  and  reconciliation  and  a  quantitative 
assessment  of  the  Fund's 
contribution  to  employment  creation,  taking  employment  creation  as a proxy  for 
economic and social advance. 

The International Fund for Ireland, Contribution to Contact, Dialogue and Reconciliation and to the 
Creation of Employment, KPMG Belfast,  May  1995. 

17 

The report  found  a strong  synergy between  the Fund's twin aims - economic and 
social  advance  and  contact,  dialogue  and  reconciliation  -  especially  as  the  Fund 
has  chosen  to  pursue  the  latter  aim  primarily  through  economic  regeneration 
undertaken on a cross-community  or cross-border basis. Hence, while the balance 
of  the funding  provided  by the IFI  has been provided  to  what  would broadly be 
is  at  the  heart  of  the 
described  as  "economic"  projects,  reconciliation 
Fund's activities. 

The report identified  the following  "simple indicators"  of the scale of the Fund's 
interventions in the period to September  1994: 

•  16 645  jobs  in  IFI  supported  projects  in  September  1994,  together  with  a 
further  7 142 jobs  indirect  and  construction  jobs  arising  from  IFI  supported 
projects, giving a total jobs impact of the Fund of 23 787 at September  1994; 

•  formation  of  37  Local  Enterprise  Agencies  operating  from  46  locations  in 

Northern Ireland, each under the direction of a cross-community board; 

•  441  organizations  had  been  assisted  to  promote  social  and  economic 
development, these involved  over  5 700 community leaders in their  day-to-day 
direction and management; 

• 

• 

sponsorship  of business  linkages  between  the  two  parts  of  Ireland  which  had 
involved over  1  000 businesses; 

participation  of over 5 000 people in Wider Horizons Programmes which have 
a  particular  emphasis  on  young  unemployed  people  from 
the  most 
disadvantaged  Protestant  and  Catholic  Communities  in  Northern  Ireland  and 
from disadvantaged communities in the South; 

•  allocation of over UKL 263 million of funds since 1987; 

• 

leverage of over UKL 450 million of other funds,  leading to a total  investment 
of over UKL  700 million,  much targeted  on the  specially  disadvantaged  areas 
of the region. 

It was found, in addition, that the IFI had developed a synergistic relationship with 
the Structural Funds, enabling the most  disadvantaged  communities to  participate 
in  the  benefits  of  the  Structural  Funds  by  contributing  to  the  matching 
funding required  and  had  been  instrumental  in  building  day  to  day  networks  of 
cooperation between the administrations  in Belfast  and  Dublin.  (The Commission 
for  its  part saw  to  it  that  combined  IFI/Structural  Fund  input  did  not  exceed 
EU funding thresholds). 

More  than  20  in-depth  visits  and  interviews  were  undertaken  to  explore  the 
contact,  dialogue  and  reconciliation  impacts  of  a  range  of  Fund  assisted 
projects.  Several  groups  pointed  to  the  importance  of  IFI  funds  having  been 
"the first money on  the table " enabling  them  to  approach  other  funding  sources 
with greater  confidence. 

18 

The report  found  that  the  IFF s approach  to  contact,  dialogue  and  reconciliation 
emphasised working together at local levels to achieve a common end or goal, and 
that  it tends to  see such working together both as a pre-condition to support  and, 
in itself  as an important  outcome of the project  assisted, developing contact,  trust 
and  understanding  between  the  communities  and  acting  as  a  springboard  for 
further  cooperative  cross-community  ventures. This model in fact  corresponds  to 
best  practice  in  establishing  trust  and  development  between  communities  in 
general which, at best, are suspicious of each  other.  The IFI approach is basically 
an  example  of  what  has  been  called  "Track  Two Diplomacy"  -  under  which 
economic  development  provides  both  an  incentive  and  a higher  goal  to  building 
relationships between two communities which have been estranged. 

The  Fund's  own  estimates  of  its  employment  creation  impacts  have  also  been 
reviewed. The actual number of jobs found  "on the ground" in September  1994 in 
Fund-assisted  projects  was  16 645. Taking  account  of  multiplier  effects  and  the 
average  direct  employment  in IFI-funded  construction  projects  adds  considerably 
to  the  total  number  employed  directly  in  Fund  assisted  projects.  When  these 
effects  are taken into account the total employment  associated with the Fund rises 
to 23 787. 

The cost per job associated with the total jobs created by the IFI was calculated at 
UKL  8 700.  Adjusted  to  a cost  per job  year basis  on various  assumptions  about 
the average duration  of IFI-assisted jobs produced  estimates of cost  per job year 
for the IFI ranging  from  UKL  1  200 to UKL 2 900. When deadweight  and  local 
displacement  effects  are taken  into  account  the  average  cost  per  IFI-assisted  job 
year was estimated  as ranging from UKL 2 700 to  UKL 6 200 depending  on the 
assumed average job duration. 

The  IFI  has  been  a  distinctive  force  in  supporting  contact,  dialogue  and 
reconciliation  between  the  communities  in  Northern  Ireland  and  between 
Northern Ireland  and the  South  and  in the  creation  of  employment.  It  has  had  a 
distinctive  status  and  role  which  has  enabled  it  to  support  a  wide  variety  of 
projects, most having a mixture of community relations and economic objectives. 

The overall assessment of the Fund was, therefore,  highly positive.  Significant  and 
distinctive  contributions  were found  to  have  been  made to  contact,  dialogue  and 
reconciliation,  new  models  of  working  together  had  been  developed  and 
significant  numbers  of  additional jobs  had  been  created  at  reasonable  costs.  The 
achievements  of  the  Fund  in  a  period  of  active  inter-community  tension  and 
cross-border terrorism were regarded as being highly creditable. 

2.3.2 

The British-Irish Inter-Parliamentary Body 

A Committee  of the British-Irish  Inter-Parliamentary  Body  produced  a  report  on 
the IFI in April  19968. The Committee took written and oral evidence from a wide 
range  of  individuals  and  visited  a  number  of  IFI-supported  projects.  The 
Committee's  Report  was  in  part  concerned  with  a  number  of  political  issues 

British-Irish Inter-Parliamentary Body; Report from  Committee C on Economic and Social Affairs  on 
the International Fund for Ireland; No 42, April  1996. 

19 

reflecting  alternative distributions of the IFI resources but the Committee reached 
a number of substantive conclusions in relation to the impact of the Fund. 

The following  are some of the main points highlighted by the Committee's Report: 

• 

the Fund reaches out to and is increasingly availed  of by both the Unionist  and 
the  Nationalist  traditions  in  Northern  Ireland  and  there  is  a  large  degree  of 
cross-community involvement in, and benefit from the various programmes; 

•  North-South  business  promotion  activities  sponsored  by  the  IFI  have 
demonstrated  their  practical  benefits  to  the  business  communities  and  the 
Committee  suggested  that  there  remained  further  potential  for  larger  scale 
cross-border projects of this type; 

•  while the  Fund's  resources  are  not  very  significant  in  macro-economic  terms 
(compared,  for  example,  with  the  expenditures  of  the  two  Governments  or 
the EU),  it  is  a  significant  part  of  development  expenditure  and,  being 
mainly targeted  at  disadvantaged  areas,  its  impact  in  such  areas  is  of 
major  significance; 

•  based  on  the  evidence  presented  to  it,  the  Committee  considered  the 
IFI performance  in the area of job  creation to  have been very  satisfactory  and 
to  have  provided  a  higher  level  of  value  for  money  than  might  have 
been expected; 

• 

the Fund's capacity to lever other funding,  to pump prime and to provide seed 
funding  for  initiatives  is a  major  advantage  of the  IFI,  reflecting  its  flexibility 
and  facilitative  approach  of projects.  The Committee called  for  a even greater 
emphasis on such projects in the future. 

The Committee's general conclusion and recommendation was as follows: 

"The Committee was impressed by the operation and performance of the IFI and 
the  unique  and  distinctive  role  it  has  developed  for  itself  in  promoting 
reconciliation and regeneration  in the region.  The Committee  would encourage 
the two Governments and the donors to continue their support for  the Fund"9. 

2.4 

Distribution of the Fund's Resources 

The  IFI  has  clearly  been  concerned  to  ensure  that  priority  is  given  to  projects 
located  in the most  disadvantaged  areas.  This aim is reflected  in the  operation  of 
the  Fund's  standard  programmes  and  through  a  series  of  special  initiatives 
targeted  solely on the most  disadvantaged  areas. Assessments  show that, to date, 
some 70% of the Fund's commitments go to these areas. 

Paragraph 7.14. 

20 

2.5 

The Fund's Employment Impact to September  1995 

Using  the  same  assumptions  in  relation  to  the  ratio  of  actual  to  potential 
employment  generated  by  previous  research  (figures  up  to  September  1996 
will be available  in  the  course  of  1997)  direct  employment  generated  by  the 
405 IFI  assisted  projects  for  the  year  ending  September  1995  is  estimated  at 
1331 jobs.  Including 
indirect  employment  (based  on  previous  multipliers 
calculated),  the  total  estimated  direct  and  indirect  employment  generated  in 
1994/95 by IFI assisted projects is 1 826 jobs. 

The total  cumulative direct employment  generated by the Fund from its inception 
to  September  1995 is estimated  to  be  17 976  over  a  nine-year  period.  Including 
indirect effects,  this increases to 25 584 jobs. 

In  total  therefore,  projects  assisted  by  the  IFI  since  the  Fund's  inception  in 
1986/87 to  1994/95 are estimated to have created 25 584 jobs. 

The  Commission  will  be  obtaining  a  further  update  of  the  Fund's  employment 
impact  in  relation  to  the  1995/96  financial  year  in  due  course.  The  Fund 
has continued  to  have  a  high  level  of  activity  in  this  period,  for  example  it 
provided assistance of UKL 33 3 million to 327 projects with a total value of over 
UKL 90 3  million  in  the  period  October  1995  to  December  1996.  It  can, 
therefore,  be expected  that  the further  update  on  the Fund's  employment  impact 
will  show  significant  further  employment  benefits  as  a  result  of  the  additional 
projects supported in the period. 

3. 

T HE  COMMISSION'S  CONCLUSIONS 

The Commission's conclusions in relation to the impact of the IFI and the need for  continuing 
assistance to the Fund from EU sources are based on: 

• 

the  activity  indicators  provided  by  the  IFI,  which  show  that  the  Fund  has  a  substantial 
impact  on  projects  of  a  cross-border  and  cross-community  nature  and  on  economic 
regeneration in Northern Ireland and in the Border Counties of Ireland; 

• 

the independent evaluations undertaken of the Fund's activities; 

• 

the synergistic relationship established  between  the activities  supported  by the IFI,  and  the 
operation of the Structural Funds in Northern  Ireland and in the Border Counties of Ireland 
by  which  the  development  capacity  established  by  the  IFI  can  target  particularly 
disadvantaged  or  otherwise  excluded  communities  and  prepare  and  resource  them  for 
participation in Structural Fund supported  projects. 

The  IFI  has  a  distinctive  role  to  play  in  cross-community  and  cross-border  development  in 
Northern  Ireland  and  in  the  Border  Counties.  The  Fund  has  shown  an  ability  to  target 
disadvantage  and  to  generate  self-sustaining  economic  activity  in  the  most  socially  excluded 
parts  of  Northern  Ireland  and  the  Border  Counties.  The  Fund  also  achieves  a  substantial 
leverage of public and private money with its funding.  If the  IFI was not  able to  contribute  to 
projects in these disadvantaged  areas, it is likely that they would not be able to draw in private 
and  public  contributions.  The  administration  of  the  Fund  has  required  continuing  close 
cooperation  between the administrations  in Belfast  and  in Dublin.  This has created  a  standing 
21 

network  of  contacts  at  a  variety  of  levels  which  has  been  of  value,  for  example,  in  the 
development  of  the  Interreg  II  Programme  for  Northern  Ireland  and  Ireland  and  in  (he 
Special Support  Programme  for  Peace  and  Reconciliation  in  Northern  Ireland  and  in  the 
Border Counties of Ireland. The Fund has been effective  in piloting innovative ideas which are 
then  suitable  in many cases  for  support  from  mainstream  public  sources.  The Fund  has been 
concerned  to give  priority to  the most  needy  areas and assessments  have  shown that to date 
some 70% of Fund resources have been committed to the most disadvantaged areas. 

The  Commission  concludes  that  the  International  Fund  for  Ireland  has  achieved  a 
considerable measure  of  success  in attaining the  objectives  set  out  in its  own  charter  and in 
Council Regulation (EC) No 2687/94. 

The  model  which  it  has  pioneered  of  improving  community  relations  through  specifically 
targeted economic development projects has proved successful  in most areas and has inspired 
procedures now being followed by some of the Structural Fund initiatives in the region. 

It occupies a distinctive position in the range of support for the regeneration of an area of the 
Union which has been beset by very particular problems. Last but not least, the work of the IFI 
has played a major role in underpinning the peace process in Northern  Ireland.  Consequently, 
the Commission recommends continuation  of support to the work of the IFI for another two 
years (1998  and  1999).  A report  similar to  this one  should then be produced by April  1999, 
evaluating further impact of the IFI and assessing the need for future funding. 

22 

ISSN 0254-1475 

COM(97)  130  final 

DOCUMENTS 

EN 

11  01 

Catalogue number  :  CB-CO-97-130-EN-C 

ISBN 92-78-17813-6 

Office  for Official  Publications of the European Communities 

L-2985 Luxembourg 

23