European Regional Funding, injecting a further£3bn into the
regions. This means that over the next seven years, some of the
neediest areas in Britain will receive a total of£10bn from
The secretary of state for trade and industry, Stephen Byers, said:
'We need to ensure that all parts of the country benefit from our
increased economic prosperity and growth of the number of people in
work. That's why the package I'm announcing today is so important.
'The government has fought hard to ensure that Britain gets a good
deal from European Regional Funding. I am pleased that we have
retained a fair share of the funds available, even though the economy
is much stronger now than in previous years. More people in more
parts of the UK will benefit from European Structural Funds, together
with transitional funding than is the case at the moment.
'This£10bn cash boost underlines the government's commitment
to delivering an integrated package of support for the regions. They
represent the final piece in the jigsaw of European funding and will
work alongside other regeneration initiatives.'
Other initiatives recently announced are:
*£1bn for England under Round 5 of the Single Regeneration
Budget and£800m for the New Deal for Communities, announced
by the Deputy Prime Minister John Prescott
*£112m as part of Action Zone for Employment, announced by
secretary of state David Blunkett
*£785m of Assisted Areas funding for state aid to industry
announced by Stephen Byers
In order to identify areas of need as accurately as possible, the
government has used ward boundaries as building blocks. This allows
those areas most in need to be combined with major areas of
opportunity for employment creation, investment and regeneration.
Mr Byers added:
'This funding is good news for the regions and good news for the UK
as a whole. The government is committed to creating a modern and
competitive economy. Regional policy has a key role to play and
European funding is an important component in this policy.
'Our economic success depends not just on the areas where wealth
creation is already happening, but also on regenerating areas where
the local economies are not performing as well.'
Taken as a whole, including transitional funding, the total
population eligible for European Structural Funds in the UK is set to
increase from£24m now to£27m during 2000-2005.
1. Objective 2 funds are part of a wider package of European
Structural Funds. Agreement on the reform of the Structural Funds was
announced in March at the Berlin European Council as part of the
Agenda 2000 package. As a whole the UK has been awarded a package
worth over£10bn (15.5 bn euros) over the next 7 years. This includes
transitional funding for areas which will lose current Objective Two
Breakdown of theUK allocation as announced by the Commission on
1 July 1999 is:
UK allocation 2000 - 06 Bn euros Bn£s population
Objective 1 4.685 3.045 5.007
PEACE (Northern Ireland) 0.4 0.260 1.663
ex-Objective 1 1.167 0.759 2.035
Total Objective 1 6.252 4.064 8.705
Objective 2 3.989 2.593 13.8
ex-Objective 2 0.706 0.459 6.5
Total Objective 2 4.695 3.052 20.3
Objective 3 4.568 2.969 the whole of
Total Allocations 15.515 10.085
N.B. The Commission has yet to notify member states on allocations
for Community Initiatives.
From January 2000, the Structural Funds will consist of three
Objective 1 for areas lagging behind in the UK: Cornwall,
Merseyside and South Yorkshire, with transitional aid for
Northern Ireland and the Highlands and Islands;
Objective 2 for areas facing structural difficulties; and
Objective 3 supporting the adaptation and modernisation of
policies and systems of education, training and development.
Objectives 1 and 2 will be targeted regionally, Objective 3 will fund
measures across the UK outside of Objective 1.
2. In 1994-1999 the UK's population coverage for Objective 2 funding
was£20.5m; this was initially reduced at Berlin in March to
£6.5m for 2000-06; only a firm stance by the government
succeeded in increasing this to£13.8m. This represents a good
deal for the UK:£2.5bn for UK regions over seven years.
3. The Objective 2 map has been drawn using objective criteria in
line with the commission's requirements, and on a ward basis in line
regional wishes and to aid targeting of the funds. Our proposals must
now be submitted to the commission for approval. Under this new
approach 89% of regional requests for inclusion in areas eligible for
Objective 2 status have been met. The result is a reasonable balance
between industrial, rural, urban and fisheries areas, and a fair
distribution between the English regions, Scotland and Wales.
4. The government announced a public consultation 31 March 1999 on
Objective 2 areas and criteria with all interest parties,
particularly local regions and partners. This ended on 25 May 1999. A
total of 441 submissions were received. The map reflects these
priorities within the commission's requirement that eligible areas
are measured against objective criteria.
5. Copies of the explanatory document on the Objective 2 map, along
with lists of qualifying areas and a copy of the consultation
document are available on the internet at
6. The Structural Funds provide grants towards regional economic
infrastructure projects, vocational training, adaptation of
agricultural and fisheries structures and measures to promote
competitiveness in regions dependent on declining industries.
In particular industrial areas can spend the money on providing
facilities for small business, and building on brownfield sites, for
example the conversion of the ex-coalfield areas to other uses.
Fisheries areas can use money to improve fishing fleets and implement
modern fishing and processing techniques in supporting industries.
Agricultural areas can use the money to improve farming techniques
and food processing as well as to improve the environment. Urban
areas will be able to spend the money on measures including improving
the environment and infrastructure of deprived areas.
7. Objective 2 money is aimed at maximising the regeneration and
restructuring of areas and creating and safeguarding jobs. It can
provide up to 50% of the cost of a project. In the past funding has
been spent on projects involving business support, improving
transport and the environment, and education. For example:
* In the West Midlands, the Midland Metro line rail network has been
created to relieve congestion, encourage urban regeneration and
improve access to work and training.
* The Foxcover Enterprise zone in East Durham received Objective Two
funding and now provides speculative industrial accommodation
creating business and employment opportunities.