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The European Commission yesterday approved a seven-year programme for regional development in the United Kingdom wo...
The European Commission yesterday approved a seven-year programme for regional development in the United Kingdom worth (euro) 4,857m (approx£2.9bn) of EU financing. The 'draft single programming documents' approved on Monday concern four 'Objective 1' areas in the UK: Merseyside, Cornwall and the Isles of Scilly, South Yorkshire and West Wales and the Valleys. Altogether, this EU funding will mobilise over 11,454m in investment, of which about 20% will be co-financed from the private sector. Together, it is estimated that they will bring the equivalent of 154,000 new jobs and provide training in new skills for 420,000 people. They are only the first in a series of development programmes for UK regions that will be decided by the commission over the coming weeks.

Welcoming the decision, Michel Barnier, member of the European Commission responsible for regional policy, said: 'Today's decision is good news for Wales, Merseyside, South Yorkshire, Cornwall and the Isles of Scilly. The commission is renewing its commitment to regional growth in the UK with the approval of these ambitious economic development programmes'.

The Structural Funds will enhance the competitiveness of these regions - modernising the industrial base, encouraging high growth sectors, improving skills and promoting the information society.

Commissioner Barnier added: 'I am also pleased by the new initiative taken by the four regions to establish, in common format, loan and equity funds for small and medium-sized enterprises (SMEs). This will allow many companies which would not otherwise benefit from loan or equity finance to develop their businesses and create jobs. The programmes are the outcome of an exemplary partnership between the commission, the national government and the regions and reflect the commission's confidence in the capabilities of the regional and local partners to deliver economic growth'.

The UK is the only member state in the union to experience a significant increase in the number of regions covered by Objective 1, the top priority under the Structural Funds.

The spending priorities for each region take into account the specific characteristics of each one and can be summarised as follow:

South Yorkshire

The region, which is eligible under Objective 1 for the first time, will benefit from European funds totalling over euro 1,172m (approx.£700m) over the coming seven years. The funds are aimed at arresting the decline of the region, laying the foundation for substantial and lasting economic development. The six main priorities of the programme will seek to promote a restructuring of the regional economy away from its dependence on traditional sectors towards high growth sectors that can provide sustainable job opportunities. Efforts will be concentrated on creating an environment for successful businesses, encouraging innovation, harnessing the benefits of information technology and developing the culture of the 'learning region'.

Cornwalland the Isles of Scilly

Also new to Objective 1, EU funding for the programme is over euro 497m (approx.£300m) over the period 2000-2006. Building on the recognised successes of the previous European-funded rural development programme, the Cornwall and the Isles of Scilly Objective 1 programme sets out to address the continuing weaknesses of a predominantly rural and tourist economy, such as low wages, seasonal employment and a peripheral location. The programme will support investment in developing SMEs and in strategic infrastructures. This will be accompanied by efforts to enhance the skills of the population while supporting community and rural development. The programme will also seek to promote the identity of the region as one of its key economic assets.

West Wales and the Valleys

The third new Objective 1 region in the UK, West Wales and the Valleys will benefit from EU structural funds totalling some euro 1,853m (approx£1.1bn). The region faces a great diversity of industrial, rural and social problems. The new programme will seek to contribute to long term growth in its rural communities, coastal and industrial towns. Again, much of the new strategy will attempt to promote the growth of the SME sector and to encourage innovation. This will be supported by actions to raise the level of qualifications of the workforce and promote employability. Community economic regeneration, rural development and the sustainable use of natural resources will also be targeted.


EU support for Merseyside will be continued for the next seven years where high levels of unemployment, low activity rates and low educational attainment have led to one of the lowest levels of GDP in the UK. Structural Funds totalling over euro 1,333m (approx.£800m) are allocated to the region. Developing businesses and investing in skills are key priorities in order to generate economic growth in the region. EU funds will focus on developing small and medium sized enterprises and niche sector activities. The coming programme will see the continuation of the successful 'Pathways' approach, pioneered in the Objective 1 programme of 1994-1999, which directly involves local communities in the process of economic regeneration.

For all of the Objective 1 regions, there are certain themes that run through each of the programmes that are intended to lay the foundations for sustainable and equitable long term growth: the promotion of equal opportunities between men and women, protection and improvements of the environment and support - where the UK has agreed to ensure that its obligations under the NATURA 2000 directives will be respected - and for the development of the Information Society.

The programmes will be financed by the four Structural funds: the European Regional Development Fund (ERDF), under the responsibility of Mr Barnier, the European Agricultural Guidance and Guarantee Fund (EAGGF) and the Financial Instrument for Fisheries Guidance (FIFG), under the responsibility of Mr Fischler, commissioner for agriculture and fisheries, and the European Social Fund (ESF), under the responsibility of Ms Diamantopoulou, commissioner for employment and social affairs. The ERDF covers approximately 63.7% of the funding, investing mainly in business support; the ESF share is 30.7% to co-finance the development of human resources, the EAGGF will contribute 5% for agricultural and other rural development projects and the FIFG will provide the remaining 0.6%.

The final decision on these programming documents will be taken by the commission after they have been considered by the four advisory committees (1) concerned.

Further information can be found at:

(1) The commission's decision in principle must be sent for an opinion to the advisory committees made up of member states representatives: the Committee on the Development and the Conversion of Regions, the Committee pursuant to Article 147 of the EC Treaty (ESF), the Committee on Agricultural Structures and Rural Development and the Committee for Fisheries and Aquaculture.

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