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£10BN FUNDING TO REGENERATE BRITAIN'S NEEDIEST AREAS

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The government today unveiled its proposed map for the second tier of ...
The government today unveiled its proposed map for the second tier of

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

European Structural Funds to boost industry and enterprise.

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.

Notes

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

funding.

Breakdown of theUK allocation as announced by the Commission on

1 July 1999 is:

UK allocation 2000 - 06 Bn euros Bn£s population

coverage

million

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

the UK

is eligible

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

Objectives:

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

http://www.dti.gov.uk/objective2

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.

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