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REGIONAL AND SOCIAL SPENDING IN THE UK

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Suddenly, the British election campaign was high on the agenda of this night session, when rapporteur Arlene McCart...
Suddenly, the British election campaign was high on the agenda of this night session, when rapporteur Arlene McCarthy (UK, PES) and other socialist members accused the Conservative government of incompetence in handling the EU's regional and social spending.

In return, Mr Giles Chicester (UK, EPP) said that the rapporteur 'was letting her Old Labour instincts loose by attacking and knocking her own country and that she was exploiting the EP for electoral reasons'.

Mrs McCarthy, reporting on the commission decision approving the single programming document for Community structural measures in the UK, felt that 'EU projects are plagued by bureaucracy and delays and that there is a complete absence of regional strategic planning'.

She added that the EU funds play a vital role as a boost to local economic development. Some 240.000 jobs were created or maintained between 1989 and 1993. 'But British ministers have failed completely to take up funds that the EU was prepared to make available. And the government has also caused delays in payments that threatenend to shut down projects'.

Mr Chicester deplored 'the partisan and party political nature' of the report and accused the Mrs McCarthy of breaking the EP consensus that a MEP should not report on his or her own member state. He added that the report does not give full recognition to growth rates and productivity increases in the UK economy as a whole.

Commissioner Monika Wulf-Matthies said that the report rightly criticizes the UK government and regional and local authorities. She stressed that structural fund allocations to Merseyside and the EU peace projects in Northern Ireland are not only of importance to the UK, but to the whole Community. Mrs Wulf admitted that delays in making payments currently are a problem. She could take on board the draft resolution calling for improvements in the decision-making involving the commission and the UK with a view to reducing delays, for better evaluation of projects and for a greater role of local authorities.

European Parliament Briefing Regional and Social spending in the UK (A4-126/97 - McCarthy)

EU regional and social spending in the UK was responsible for the creation or maintenance of some 240,000 jobs between 1989 and 1993 and allocations for the 1994-1999 period amount to some ECU 7.8bn out of a total investment of ECU 19.2bn.

Success stories include:

-- The European Microelectronics Institute - Centre for Advanced Industries (EMI-CAI). A centre of excellence, training and applied research for the micro-electronic and advanced engineering sectors. It is estimated that the project will create 370 new jobs, safeguard 348 existing jobs and assist 117 SMEs.

-- The Real Service Centre (RSC) and Industrial Clustering Projects: researching the potential for and developing clusters of competitive advantage, an innovative approach to business development and a model of good practice.

-- The Glasgow Regeneration Fund: a business loan/grant fund set up to finance start-up businesses and small businesses in eight regeneration areas and aims to generate or underpin employment opportunities. Has created up to 484 full-time jobs.

-- Eastern Scotland: Priority Areas capacity building project: to support community capacity building and increase community confidence by enabling local people to play a full role in the regeneration of their community with the overall aim of creating job and training opportunities.

-- Merseyside Special Investment Fund (MSIF): a six-year programme using European funding to lever£50 million into Merseyside small businesses in investments and thus create more than 2,500 jobs. It will provide fixed rate, low interest loans to SMEs.

-- The three towns economic development infrastructure project: an economic regeneration project providing capacity building in the three Ayrshire coast towns which are areas of high deprivation, high unemployment, industrial decline and social exclusion.

However, reporting for the regional policy committee, Arlene McCarthy (Peak District, PES) considers that despite some decentralisation of decision-making, there are problems with administration and bureaucracy deterring the voluntary and private sectors from submitting applications for programme assistance.

She takes the view that the funds could be more effective if consideration was given to dividing allocations by region and simplifying application forms. Multi-annual programming would also help with delays over payments for social fund projects. In one programme for the North-West, for example, although the£584m project was approved on 6 December 1994, the finance did not appear until 10 October 1996.

Similar delays elsewhere mean that there is a considerable backlog with programmes and even a risk that some will not go ahead. The requirement to find matching funds is also a problem while Mrs McCarthy takes the view that the privatisation of public utilities such as electricity and water, which received some£435m in ERDF, did in fact lead to a reduction in jobs.

Another bone of contention is the 'Regional Challenge' initiative which hives off some 12% of ERDF expenditure for competitive bidding by different regions for projects and is not considered particularly effective by Mrs McCarthy.

Another long-running dispute between parliament and national governments is over 'additionality' or the suspicions that EU funding was merely paying for national programmes that had already been agreed. This has now been partly resolved through improved transparency but with the pressure on national budgets of meeting the criteria for a single currency, Mrs McCarthy emphasises the need for a more flexible approach to matching funding and involving the private sector.

The draft resolution calls for improvements in the decision-making structure involving the commission and the British government with a view to reducing delays, proposes better evaluation of projects and calls on the UK to strengthen the roleof local authorities.

It also 'regrets the UK's decision not to participate in Objective 4 funding for the readaptation of workers to industrial change'. It makes the point that there is a need for more publicity for EU projects. For the future, the commission is called upon to take into account industrial change when defining the criteria on structural fund aid. Environmental Impact Assessment studies should also be obligatory before projects are approved.

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