Preparing structural funds programmes
for 2007-2013
Presentation: Felicia DARELL
(felicia.darell@midi-pyrenees.pref.gouv.fr)
Tel : 05 34 45 33 12 – Fax: 05 34 45 33 04
Prefecture of Midi-Pyrenees region - Europe department - control unit
Contact:
Secretary General: Didier FRANCOIS
Control Service: Head of Unit: Claude SAINT-MICHEL
Prefecture of Midi-Pyrenees Region
SGAR, Europe Service
1, place Saint-Etienne
31038 Toulouse cedex
FRANCE
Website: http://haute-garonne.pref.gouv.fr
Introduction: Practice of structural funds in Midi-Pyrenees:
Presentation of the particularities of the region and the management of structural funds in 2000-2006 programming area
§ Managing structural funds in France
Level 1: European Commission
Level 2: Member State/National level
Level 3: Local Governement/Prefecture of Midi-Pyrénées: Mananing authority/control unit/Partnership regional and local partners
The organisation of the partnership differs according to the implementation stages:
• Objective 2 programme /managing authority: the Prefet’s responsibility
partnership with a regional authority, the regional council at different stages (from the preparation, to the management and the global grant procedure).
• INTERREG III A and B/managing authority: Regional council
French-Spanish cross-border programme: management/the Regional council of Aquitaine/role and responsibility of the Spanish authorities/the local government/the Prefet of Midi-Pyrenees, co-ordination role
Trans-national programme “SUDOE”: managing authority: Spanish authority of Cantabria partnership with the Regional council of Midi-Pyrenees for France and representatives of Portugal and United-Kingdom
Development of positive aspects and improvements to be made for the future generation
Tendency for 2007-2013 programming area: decentralisation and member states’ responsibility: an active control and audit system
1. Preparing structural funds programmes: Practice in Midi-Pyrenees
§ Positive aspects and improvements to be made for the future generation: necessity to co-ordinate structural funds policy with the framework of the state-region planning contracts
A stronger role for the regions and Partnership
shared management between the European, national, regional involving regional, urban, local and other authorities, economic and social partners and civil society, environmental organisations.
Decentralisation
The management of programmes being financed by structural funds is the responsibility of the member state. In France, we are in the second phase of decentralisation and the new legislation has mentioned the possibility of transferring the management of structural funds to the regions to the local or regional authorities for the next generation of programmes.
Audit system (2000-2006)
EUROPEAN LEVEL : European Commission DG REGIO
NATIONAL LEVEL : CICC (commission in charge of the co-ordination of all the verifications
LOCAL LEVEL : Prefecture of Midi-Pyrenees (SGAR : general secretariat for regional affairs)
At the local level, there are divisions:
· The managing authority in charge of the Objective 2 programme
· The payment authority responsible for certifying statements of expenditure
· The independent control division : This control authority is composed of 4 civil servants with specific missions (to control operations: 5% of total eligible expenditure):
The Member’s State responsibility/example of INTERREG III A audit system
2. AGENDA
September 2004 - March 2005: strategic study group working on the national strategic reference framework (national level: DATAR)
May - June 2005: regional debate involving the partnership principle
June 2005: regional contributions sent to the national level
September 2005: National presentation
November 2005: DATAR
December 2005: final version
End 2005: decision by Council and European commission
Beginning of 2006: Council adopts community strategic guidelines on cohesion
2006: preparation of programmes for period 2007-2013
1st January 2007: Implementation begins
3. MIDI-PYRENEES CONTRIBUTION TO THE REGIONAL DEBATE
METHODOLOGY
DATAR prepared an introductive document (preparation for the national strategic reference framework) and at regional level: regional debate on the 8th June with 4 workshops:
“ Innovation and entrepreneurship ”
“ access to transport services of general economic interest ”
“ environment and risk prevention ”
“cross-border, transnational, interregional ”
The Prefet invited the State services, local and regional partnership the 8th June 2005 for their contribution to the national strategic reference framework. Over 100 people, participated and were present at the seminar.
The introductive document from the DATAR was sent to all the participants a month before the seminar, the proposals for the Structural Funds regulations for the period 2007-2013 were distributed on the 8th June.
The following seminar is taking place in Toulouse the 20th September 2005
ORGANISATION
• Introduction and presentation by the Prefet, the vice-president of the regional authority (Regional Council), the DATAR and DG REGIO, European Commission
• 4 workshops: Innovation and entrepreneurship, access to transport services of general economic interest, environment and risk prevention, cross-border, transnational, interregional.
Innovation and entrepreneurship
- Reinforce research and technological development
- Themes such as R&D and innovation and direct aids to SMEs
Transport
Reinforce accessibility to competitive and economic sectors: rail for instance/priority could be given to connections with other regions and with Spain (transport in the Pyrenees, over 800 lorries per day, rail could be part of the strategy) - line Narbonne-Toulouse-Bordeaux or Toulouse-Limoges-Orleans-Paris/Sustainable development with emphasis on rail is a priority
Environment and risk prevention
Risk prevention: the notion of risk can be extended to climate risks, pollution risks (air... )
Midi-Pyrénées region : - major flood risk
- mountain zone/vulnerable areas
Cross-border, transnational, interregional
INTERREG IIIA accessibility (experimentations of rail: Latour-de-Carol), cultural theme : strong preoccupation
INTERREG III B: discussions about the SUDOE zonage
INTERREGIONAL co-operation INTERREG 3 C : Emphasis on co-operation economic sector (ex aeronautic sector /co-operation with Hamburg and Seville …)
Concerning the management aspect the division of responsibility must clear between the Member State, the region and the implementation bodies. In Midi-Pyrenees, no decision has been taken in this matter.
7.21.2006
The Experience of Integrated Projects (Ips) for the renewed Community Structural Funds (CSFs)
The Experience of Integrated Projects (Ips) for the renewed Community Structural Funds (CSFs)
Abstract
The Campania Operational Programme shares the Community Structural Fund’s objectives to provide incentives for development throught a radical change in the programming and management of actions and stakeholder practices through Integrated Projects.
The Campania Region proposes its experience as an EU best practice. The added value of its Integrated Projects is:
a) balance between governance and government;
b) integration between funds (European Regional Development Fund – ERDF and European Social Fund – ESF) anticipating the machanisms for the new Structural Funds;
c) partnership process with local stakeholders, capacity building and transfer of know-how.
Weaknesses to be addressed are:
a) political orientation of partnerships;
b) difficulties in harmonising the timing of individual operations with the financial programming of the Operational Programme measures.
In this framework, the Campania Region will concentrate on defining technical requirements and democratic legitimacy for the management of local development interventions directly through Global Subventions. Moreover, without the limits of measures, the Campania Region will experiment mechanisms and structures to facilitate flexibility.
Abstract
The Campania Operational Programme shares the Community Structural Fund’s objectives to provide incentives for development throught a radical change in the programming and management of actions and stakeholder practices through Integrated Projects.
The Campania Region proposes its experience as an EU best practice. The added value of its Integrated Projects is:
a) balance between governance and government;
b) integration between funds (European Regional Development Fund – ERDF and European Social Fund – ESF) anticipating the machanisms for the new Structural Funds;
c) partnership process with local stakeholders, capacity building and transfer of know-how.
Weaknesses to be addressed are:
a) political orientation of partnerships;
b) difficulties in harmonising the timing of individual operations with the financial programming of the Operational Programme measures.
In this framework, the Campania Region will concentrate on defining technical requirements and democratic legitimacy for the management of local development interventions directly through Global Subventions. Moreover, without the limits of measures, the Campania Region will experiment mechanisms and structures to facilitate flexibility.
Practical guide for Structural Funds interventions
Practical guide for Structural Funds interventions
Background
Many memberstates have experience with Structural Funds operations. Yet this experience is not always in a practical way available for others nor is it transferred to other memberstates. This was the main reason to start a project to establish a practical guide. EIPA, the European institute for public administration and ERAC a specialised consultant in the Netherlands for structural funds interventions therefore took the initiative. This was made possible by the Dutch government in view of the exchange of experience to new memberstates.
Content
The guide provides practical step-by-step guidelines about all aspects of dealing with the Structural Funds on the programme as well as the project level, including tips and ways of dealing with the different issues:
- Structures and Principles
- Plans and programming (from the first step until drafting the programme documents)
- Organisation and programme bodies (description of tasks and responsibilities)
- Financial management and control
- Project development
- Project management
- Project monitoring
- Programme monitoring and
- Evaluation
The information is based on practical experience using the official guidelines. It goes beyond the guidelines and should make management in practice more simple.
Target audience
This presentation is interesting for people from the recently accessed countries (learning from best practice as well as for people working longer with the Structural Funds ( thinking about the methods used and possible improvements). It gives an overview of all important aspects and directions for the best way of dealing with these aspects. The guidelines are based on experience gained by developing, writing, managing and monitoring European funded programmes and projects.
Presentation
Luc Broos , director of ERAC will present the Guide during the session of the Open Days. He will go into detail with regard to the content , the use and the impact of the guide. A copy of the Guide is available for the participants on request.
During the presentation we expect a feedback and a lively discussion with the participants.
Luc Broos September 2005-09-08
IPM 440126
Background
Many memberstates have experience with Structural Funds operations. Yet this experience is not always in a practical way available for others nor is it transferred to other memberstates. This was the main reason to start a project to establish a practical guide. EIPA, the European institute for public administration and ERAC a specialised consultant in the Netherlands for structural funds interventions therefore took the initiative. This was made possible by the Dutch government in view of the exchange of experience to new memberstates.
Content
The guide provides practical step-by-step guidelines about all aspects of dealing with the Structural Funds on the programme as well as the project level, including tips and ways of dealing with the different issues:
- Structures and Principles
- Plans and programming (from the first step until drafting the programme documents)
- Organisation and programme bodies (description of tasks and responsibilities)
- Financial management and control
- Project development
- Project management
- Project monitoring
- Programme monitoring and
- Evaluation
The information is based on practical experience using the official guidelines. It goes beyond the guidelines and should make management in practice more simple.
Target audience
This presentation is interesting for people from the recently accessed countries (learning from best practice as well as for people working longer with the Structural Funds ( thinking about the methods used and possible improvements). It gives an overview of all important aspects and directions for the best way of dealing with these aspects. The guidelines are based on experience gained by developing, writing, managing and monitoring European funded programmes and projects.
Presentation
Luc Broos , director of ERAC will present the Guide during the session of the Open Days. He will go into detail with regard to the content , the use and the impact of the guide. A copy of the Guide is available for the participants on request.
During the presentation we expect a feedback and a lively discussion with the participants.
Luc Broos September 2005-09-08
IPM 440126
Decentralising Structural Funds' management to the regional level
Decentralising Structural Funds' management to the regional level
Decentralised programming = Decentralised implementation? Or, Why (further) decentralisation of implementation is a bad idea
Since programming will focus on the NUTS 2 level in the future, there will be a tendency to decentralise management of Structural Funds and Instruments to this level. This paper problematises the management side of this issue, arguing that decentralised programming need not automatically mean decentralised management of the programmes, and indeed that there are many reasons why, particularly in the new Member states, any (further) decentralisation of management is likely to have negative consequences. These conclusions are based on the findings of an institutional capacity measurement recently undertaken at 4 implementing agencies in one new member state (to ensure confidentiality, the results will be presented generically and anonymously). Ten criteria were used to measure capacity at existing institutions; these criteria were adapted for relevance in light of structural funds implementation requirements, and were: Governance; Management practices; Financial resources; Service delivery; Human resources; External resources; Monitoring of projects & programmes; Programme management; Administrative capacity for formulation; Management and Control of Programmes. In addition, an assessment was made of the structures for implementation of structural funds, with comparisons to EU member state institutions, on five criteria: structures for management; structures for programming; structures for implementation; structures for monitoring and evaluation; structures for financial management & control. The presentation concludes with some thoughts and recommendations for future institutional structures for implementation of structural funds.
The experience of the Management Organisation Unit of the CSF
STRUCTURAL FUNDS MANAGEMENT IN GREECE:
The experience of the Management Organisation Unit
of the CSF
Presented by:
Dex. Agourides
Director General
M.O.U. S.A.
http://www.mou.gr/ mailto:dagourides@mou.gr
EU Structural Funds in Greece
Greece is a peripheral EU country with no common land borders with other Member States. The major weaknesses of the Greek economy are infrastructure deficits, unemployment rate above the EU average, high share of employment in agriculture, low productivity (deficits in R&D, skilled workforce and business investment) and a lagging behind telecommunications sector.
The whole of the Greek territory qualifies as Objective 1 Region under the Structural Funds. There are currently 7 areas of intervention and 24 Operational Programmes (11 national and 13 regional). Key priorities:
Ø Infrastructure 56,5%
Ø Support to the private sector 21,9%
Ø Human resources development 19%
For the period 2000-2006, EU structural assistance to Greece amounts to a total of EUR 28 billion (Objective 1, Community Initiatives, Cohesion Fund).
Overall, under the regulations governing the 2000-2006 Structural Funds, there was a major transfer of responsibility to the Member States, while stricter conditions for financial management were put in place. This new regulatory framework was designed to improve effectiveness and transparency. In practice, however, the new system encountered a number of difficulties in Member States.
Implementing CSF Interventions
In Greece, CSF interventions and the tight regulatory framework required the establishment of efficient implementing bodies together with sound financial management at every level of Government. Therefore, a series of reforms in public expenditure management was introduced by law, incorporating detailed implementation procedures. Despite these reforms, several difficulties were encountered in the process of adopting the new implementation and monitoring system, mainly due to:
Ø Incompatible national systems with Community regulations
Ø Serious inflexibilities and inefficiencies in the civil service structure
Ø Inadequate coordination between government departments
Ø Lack of specialised human resources and know-how
Ø Multitude of weak and inefficient Final Beneficiaries
Ø Technological gaps
Ø Cumbersome procedures delaying implementation
Enhancing the management capacity of the Greek Civil Service
The Management Organisation Unit (M.O.U.) was established under the Community Support Framework in order to strengthen the management capacity of the CSF implementing bodies.
It is a non-profit making institution, operating under the auspices of the Ministry of Economy and Finance, but is placed outside the civil service. The Unit’s legal status (Societe Anonyme) allows it to bypass the rigid administrative procedures and inflexibilities characterising the Greek civil service. It is governed by a nine-member Board of Directors and its workforce is made up of highly qualified staff, recruited from both the private and public sector.
The MOU has played a vital role in the setting up of the CSF management structure. MOU provided the following:
Ø Selection and recruitment from the private sector of a total 830 specialists for the staffing of 40 Managing Authorities and other administrative bodies.
Ø Deployment of five Expert Teams to support final beneficiaries with management weaknesses (“flying consultants”)
Ø Elaboration of numerous management systems and tools
Ø Implementation of intensive training programmes for staff involved in the implementation of the CSF
Ø Procurement of state-of-the-art office equipment and modern infrastructure facilities for the Managing Authorities
Ø Introduction of modern information technology systems
Ø Study and preparation of innovative management systems in view of the next programming period
Conclusions
The MOU is a unique experience of administrative structure for Greece. It combines staff from both the private and public sector and provides modern infrastructure facilities and high quality services to public authorities. It is a flexible and efficient unit, with high levels of performance, able to respond immediately to a number of urgent needs and requests. Its role is to complement and not to substitute the civil service by providing efficient technical assistance to the CSF implementing authorities.
The experience of the Management Organisation Unit
of the CSF
Presented by:
Dex. Agourides
Director General
M.O.U. S.A.
http://www.mou.gr/ mailto:dagourides@mou.gr
EU Structural Funds in Greece
Greece is a peripheral EU country with no common land borders with other Member States. The major weaknesses of the Greek economy are infrastructure deficits, unemployment rate above the EU average, high share of employment in agriculture, low productivity (deficits in R&D, skilled workforce and business investment) and a lagging behind telecommunications sector.
The whole of the Greek territory qualifies as Objective 1 Region under the Structural Funds. There are currently 7 areas of intervention and 24 Operational Programmes (11 national and 13 regional). Key priorities:
Ø Infrastructure 56,5%
Ø Support to the private sector 21,9%
Ø Human resources development 19%
For the period 2000-2006, EU structural assistance to Greece amounts to a total of EUR 28 billion (Objective 1, Community Initiatives, Cohesion Fund).
Overall, under the regulations governing the 2000-2006 Structural Funds, there was a major transfer of responsibility to the Member States, while stricter conditions for financial management were put in place. This new regulatory framework was designed to improve effectiveness and transparency. In practice, however, the new system encountered a number of difficulties in Member States.
Implementing CSF Interventions
In Greece, CSF interventions and the tight regulatory framework required the establishment of efficient implementing bodies together with sound financial management at every level of Government. Therefore, a series of reforms in public expenditure management was introduced by law, incorporating detailed implementation procedures. Despite these reforms, several difficulties were encountered in the process of adopting the new implementation and monitoring system, mainly due to:
Ø Incompatible national systems with Community regulations
Ø Serious inflexibilities and inefficiencies in the civil service structure
Ø Inadequate coordination between government departments
Ø Lack of specialised human resources and know-how
Ø Multitude of weak and inefficient Final Beneficiaries
Ø Technological gaps
Ø Cumbersome procedures delaying implementation
Enhancing the management capacity of the Greek Civil Service
The Management Organisation Unit (M.O.U.) was established under the Community Support Framework in order to strengthen the management capacity of the CSF implementing bodies.
It is a non-profit making institution, operating under the auspices of the Ministry of Economy and Finance, but is placed outside the civil service. The Unit’s legal status (Societe Anonyme) allows it to bypass the rigid administrative procedures and inflexibilities characterising the Greek civil service. It is governed by a nine-member Board of Directors and its workforce is made up of highly qualified staff, recruited from both the private and public sector.
The MOU has played a vital role in the setting up of the CSF management structure. MOU provided the following:
Ø Selection and recruitment from the private sector of a total 830 specialists for the staffing of 40 Managing Authorities and other administrative bodies.
Ø Deployment of five Expert Teams to support final beneficiaries with management weaknesses (“flying consultants”)
Ø Elaboration of numerous management systems and tools
Ø Implementation of intensive training programmes for staff involved in the implementation of the CSF
Ø Procurement of state-of-the-art office equipment and modern infrastructure facilities for the Managing Authorities
Ø Introduction of modern information technology systems
Ø Study and preparation of innovative management systems in view of the next programming period
Conclusions
The MOU is a unique experience of administrative structure for Greece. It combines staff from both the private and public sector and provides modern infrastructure facilities and high quality services to public authorities. It is a flexible and efficient unit, with high levels of performance, able to respond immediately to a number of urgent needs and requests. Its role is to complement and not to substitute the civil service by providing efficient technical assistance to the CSF implementing authorities.
MANAGING STRUCTURAL FUNDS AND INSTRUMENTS
MANAGING STRUCTURAL FUNDS AND INSTRUMENTS
ADDRESSING THE ABSORPTION CAPACITY IN THE NEW MEMBER STATES
Mr Stephen O’Sullivan
Assistant Secretary
Banking Finance and International Division
Department of Finance, Ireland
______________________
Introduction
The enlargement of the Union to 25 members and the prospective further enlargements present unprecedented challenges for the Union as a whole and for its constituent Member States. One of these concerns the successful and productive absorption of the very considerable volume of resources to be transferred from the Member States with above average levels of development to those which are catching up.
There are many aspects to the challenge of absorption. I will say a few words about the overall level of financial commitment involved and talk about the challenges that we in Ireland had to overcome in utilising the funding placed at our disposal from the Union Budget over the years. I am fully aware of course that what may have worked reasonably well in one particular setting does not necessarily constitute a model which all will find appropriate for their particular circumstances. Nonetheless, I do hope that some of the lessons that we ourselves have drawn from our experience of planning, drawing down and implementing the Funds will resonate with you.
My main messages to you today will be
The absorption challenges facing the new Member States are greater that those which we in Ireland had to address;
We overcame our challenges by concentrating on partnerships and planning. The main focus of this paper is around these points; and
Our efforts paid off. Thanks to the structural funding transferred to us by our fellow EU Member States, Ireland’s level of GNP on a sustained basis will be 2.5% above what it would otherwise have been.
The scale of the challenge
The scale of the absorption challenge facing the newer Member States is undoubtedly greater than that which we in Ireland had to overcome. Ireland joined the Union in 1973 at a time when our per capita income was around 60% of the EU average. Between 1973 and 1986, Structural Fund receipts averaged 0.9% of GDP per year. From 1987 to 1992 and again from 1993 to 1999, the annual average level of transfers doubled to 1.9%. Since then, these receipts have fallen sharply and now run at under ½% of GDP annually. Obviously, this will decline further in the next financing round.
A few simple points emerge from these data. First, the scale of the financial challenge facing the new Member States is double that which it was for Ireland, at its peak. Second, we in Ireland moved gradually up to that peak over a number of years. The step change in the level of funding inflows for the new Member States is much steeper than that which we had to surmount. Third, the inflows to Ireland were sustained for a very long period indeed. Between 1973 and 2003, Structural and Cohesion Funds receipts averaged 1.3% of GDP. This is a considerable period of time over which to learn from mistakes and to embed the funding flows into the mainstream of annual and medium-term budgetary planning.
Ireland was fortunate in other respects also. While some of those advantages are shared by a number of the newer Member States, others are not.
First, we are small. When it comes to planning and coordination, that helps a lot. Second, ours is a relatively centralised system and that helps too. In saying that, I am fully aware that the broad trend is towards decentralisation and devolution but there is no doubt in my mind that purely in terms of the effectiveness with which plans can be drawn up and integrated with mainstream macroeconomic management, a relatively centralised system has its advantages. And when you are dealing with flows of the order of 4% of GDP annually, their integration with national economic and budgetary planning is vital. Third, in planning to absorb and apply the Structural Funds, we were from the very outset building on a system and structure which was already there and which had to be developed rather than invented. Finally, the scale of the economic development gap which we were attempting to bridge was less than that currently facing some of the new partners.
These are just some of the factors which suggest to me that the challenges facing the new Member States are greater than those which we had to surmount. They are also some of the reasons why the Irish experience is not necessarily a model which will work for all. But for what it may be worth, I will describe what I think were the main elements in our relatively successful absorption record in the hope that some of the points will be of value to you. And it has been, I would argue, a good track record. During the 1989-93 programming period, Ireland was able to absorb something of the order of 95%+ of its Structural Funds allocation. For the 1993-99 Cohesion Fund round, we claimed in excess of 99% of our allocation. Under the current round, we had claimed in excess of 93% of our allocation by the end of 2003.
The keys to success – partnerships and planning
Successful absorption is not just about pulling in the money, it is also about using it well. If I had to sum up in just two words the key to Ireland’s story, those words would be partnerships and planning.
I said just a moment ago that a relatively centralised system has been one of the factors explaining our good record. Let me now explain and qualify that. The key decisions on the application in Ireland of available Structural Funding are made by central Government on the basis of recommendations made to Government by the Department of Finance. As this Department is also responsible for economic and budgetary planning, including taxation policy, this would appear to be a very highly centralised system of decision-making. However, it is necessary to qualify that view by looking at the process by which the decisions are reached and this is where partnership comes in.
Your first partner – the European Commission
The key partnership is of course that between the Member State and the European Commission. The many legal and political responsibilities of the Commission in this domain embrace regulatory issues, the efficient and proper execution of the EU budget and the consistent pursuit of an economic development agenda in individual Member States which is consistent with the overall goals which the Union sets for itself. This gives the Commission a central role from the highest political level down to desk officer level in influencing programme design, monitoring execution, evaluating the results and achieving financial closure at the end of the funding round. Furthermore, aside entirely from the legal rights and responsibilities of the Commission in this process, individual officers within the Commission are a rich and helpful resource and, in our experience, are of particular value to smaller Member States. So my first recommendation when it comes to successful absorption would be to establish and nurture a genuine working partnership at all levels with the Commission. There will be many occasions when views will diverge and when you may feel, sometimes rightly, that the Commission has got it wrong or is being unnecessarily inflexible but the core point here is that the Commission fundamentally shares your interests in terms of an efficient and effective application of the available funding. It is your first partner in this process. While the final sign off domestically on the National Plan is obviously made by the national Government, the Commission will have been a key partner at all stages in the development of the proposal put to Government.
Domestic partnership – the central Government sector
So also will the domestic actors in the process. The quality of the domestic partnership process is of prime importance in ensuring successful absorption. While the partnership with the Commission is a factor common to all Member States, the nature of the domestic partnership process will differ from country to country.
Domestic partnership starts within the central Government sector. In Ireland, the Department of Finance carries out many of the coordination functions at central level. We do not have a separate Ministry dedicated wholly to regional policy including Structural and Cohesion Fund matters. There may well be disadvantages to this, of course, but one of the advantages of Ireland’s set-up is that centralisation facilitates the integration of the Structural Funds with the domestic budgetary forecasting decision-making process. There is in my view a lot to be said for relatively centralised arrangements for drawdown, accounting, application and monitoring but of course systems of government differ and one size will not always fit all. However, in countries where the functions are dispersed across more than one Government Department, effective coordination along agreed policy lines is clearly vital especially at the planning stage.
Wider Social Partnership
The partnership between central Government and the regional actors can be seen as a special case of the wider process by which decisions are reached on the domestic economic development agenda. In Ireland’s case, that wider process is quite formalised. There has been in Ireland since 1987 a structured partnership encompassing Government and the representatives of the main economic and social interest groups. Originally conceived in the context of arriving at a national consensus on pay developments, the remit of this partnership soon expanded to include discussions across the broad spectrum of economic and social development priorities. Since 1987, six three year agreements have emerged from this process. This social partnership has made a significant contribution to our economic development. It has been used as a forum wherein opinions can be expressed on the development priorities which should be addressed in the National Development Plan and on results obtained. It has contributed to the building of a consensus on the contents of the Plan and has thereby facilitated the absorption of available Union funding.
PLANNING AND Implementation
Developing and perfecting the overall strategy is not sufficient in itself. Delivery structures play a major role in assuring a high level of absorption. I would see the important issues as these:
Early political agreement and broad consultation
I have already mentioned the quality of the partnership at domestic and EU level. In addition, I would emphasise the need for early political agreement for both the content and process of the planning procedure. This is particularly necessary to strengthen the ability of the key officials to deliver on the chosen strategy. Our experience is that political agreement should be concerned with the over arching issues and not with the detail of programme.
Ex-ante evaluation
A good ex-ante evaluation will help ensure that the operational elements of the programmes are consistent with the objectives. It will also improve the reliability cost and demand forecasts. Programme designers, therefore, need to fully consider the ex-ante conclusions. Despite our best attempts, it is not always possible accurately to cost schemes which will be implemented over a seven year timeframe. We have found that conditions will change with implications for the outturn on costs and demand. I am happy to see the initiative being pursued by the Commission and the EIB in this regard with their proposals for the JASPERS and JEREMY support programme for the new member states.
Delivery Structures and Administrative Capacities
Our experience suggests that it is better to build on or adapt existing delivery structures rather than to establish new ones. Inevitably, new structures take longer to develop the relationships and working modalities that are needed for effective implementation, particularly in the early years of a Plan. Existing structures, even if they have to be adapted, have operational resources and experience, and here I am speaking in organisational and human resource terms, which can be of immediate benefit to the roll out of programmes. Success lies in the effectiveness of administrators and managers. They need to have the technical skills needed to supervise programme execution. Officials should have active engagement with Commission officials.
Flexible Programming
The Commission will agree the financial plan at the CSF and operational programme level. There is little freedom on how the EU commitments are allocated across the years, as they must inevitably match with the Financial Perspectives. The programmes will take some time to get to full implementation status due to such reasons as the setting up of control arrangements, promoting schemes, and processing project applications. Therefore, in order to avoid losses under the N+2 Rule it is necessary to ensure that you have a mix of some high spending elements in the operational programmes. We have relied on some of these “winners” in the early years of implementation to ease the pressure on slower spending schemes and those that take more time to roll out.
Accessibility to Project Promotors
Too often good schemes fail because inadequate thought has gone into communication with the potential beneficiaries or the process for accessing funding is made too complex. You need to design schemes to be easily accessed by the target group for which they are intended. We have found it useful to provide resources to support the project promotor in preparing applications. This has the added advantage of ensuring an efficient project selection process by raising the quality of the applications.
Project Pipeline and Project Selection
I think Ireland has a number of useful experiences with respect to organising the project pipeline or stream. I like to describe this as parallel project development in that a number of projects are at different stages of development at the same time. In Ireland, strong central control ensured that only critically important and strategic projects were developed initially. However, given the certainty with respect to funding, we also pursued a policy of developing the next tier of projects in order to ensure no discontinuity in effort.
CONCLUSIONS
I’m aware that I have taken a broad interpretation of my brief here today. I have perhaps strayed outside the question of “Managing Structural Funds and Instruments” to consider some of the issues which arise at the macro level in tackling the question of how best to absorb available EU funding. In conclusion, let me say that
The absorption challenges facing the new Member States are greater that those which we in Ireland had to address;
The key to successful absorption is to focus on partnerships and planning;
The first partner is the European Commission whose desk officers are a rich and helpful resource, especially for smaller countries;
On the domestic scene, early political agreement is vital as are excellent relations across the main central Government agencies involved;
A relatively centralised system facilitates the integration of the Funds with decisions on the domestic public expenditure;
This has to be balanced by very broad genuine consultations with the key domestic actors;
On the planning side, good ex ante evaluation is the key;
Where possible, build on and adapt existing delivery mechanisms;
Focus on high spending elements early in the programming period;
Financial absorption is not an end in itself. What matters is physical investment and projects delivered. Project cost inflation can lead to a situation where the financial absorption record looks good but the actual content is less than planned;
Resource those seeking to access schemes, especially when it comes to smaller community-based and demand led schemes;
Do not wait until your plan is approved before you start thinking about your projects. It is essential to think of how projects will be developed at the earliest possible stage. Despite failure to agree the Financial Perspectives, all member states should be working on how to ensure a ready stream of projects for the new programming period;
Administrative capacity most be reinforced with ability, not numbers of personnel. The aim should be to use modern management methods and structures in support of the Funds. Members States can be innovative in their own right in this regard.
Thanks for your attention
12 October 2005
ADDRESSING THE ABSORPTION CAPACITY IN THE NEW MEMBER STATES
Mr Stephen O’Sullivan
Assistant Secretary
Banking Finance and International Division
Department of Finance, Ireland
______________________
Introduction
The enlargement of the Union to 25 members and the prospective further enlargements present unprecedented challenges for the Union as a whole and for its constituent Member States. One of these concerns the successful and productive absorption of the very considerable volume of resources to be transferred from the Member States with above average levels of development to those which are catching up.
There are many aspects to the challenge of absorption. I will say a few words about the overall level of financial commitment involved and talk about the challenges that we in Ireland had to overcome in utilising the funding placed at our disposal from the Union Budget over the years. I am fully aware of course that what may have worked reasonably well in one particular setting does not necessarily constitute a model which all will find appropriate for their particular circumstances. Nonetheless, I do hope that some of the lessons that we ourselves have drawn from our experience of planning, drawing down and implementing the Funds will resonate with you.
My main messages to you today will be
The absorption challenges facing the new Member States are greater that those which we in Ireland had to address;
We overcame our challenges by concentrating on partnerships and planning. The main focus of this paper is around these points; and
Our efforts paid off. Thanks to the structural funding transferred to us by our fellow EU Member States, Ireland’s level of GNP on a sustained basis will be 2.5% above what it would otherwise have been.
The scale of the challenge
The scale of the absorption challenge facing the newer Member States is undoubtedly greater than that which we in Ireland had to overcome. Ireland joined the Union in 1973 at a time when our per capita income was around 60% of the EU average. Between 1973 and 1986, Structural Fund receipts averaged 0.9% of GDP per year. From 1987 to 1992 and again from 1993 to 1999, the annual average level of transfers doubled to 1.9%. Since then, these receipts have fallen sharply and now run at under ½% of GDP annually. Obviously, this will decline further in the next financing round.
A few simple points emerge from these data. First, the scale of the financial challenge facing the new Member States is double that which it was for Ireland, at its peak. Second, we in Ireland moved gradually up to that peak over a number of years. The step change in the level of funding inflows for the new Member States is much steeper than that which we had to surmount. Third, the inflows to Ireland were sustained for a very long period indeed. Between 1973 and 2003, Structural and Cohesion Funds receipts averaged 1.3% of GDP. This is a considerable period of time over which to learn from mistakes and to embed the funding flows into the mainstream of annual and medium-term budgetary planning.
Ireland was fortunate in other respects also. While some of those advantages are shared by a number of the newer Member States, others are not.
First, we are small. When it comes to planning and coordination, that helps a lot. Second, ours is a relatively centralised system and that helps too. In saying that, I am fully aware that the broad trend is towards decentralisation and devolution but there is no doubt in my mind that purely in terms of the effectiveness with which plans can be drawn up and integrated with mainstream macroeconomic management, a relatively centralised system has its advantages. And when you are dealing with flows of the order of 4% of GDP annually, their integration with national economic and budgetary planning is vital. Third, in planning to absorb and apply the Structural Funds, we were from the very outset building on a system and structure which was already there and which had to be developed rather than invented. Finally, the scale of the economic development gap which we were attempting to bridge was less than that currently facing some of the new partners.
These are just some of the factors which suggest to me that the challenges facing the new Member States are greater than those which we had to surmount. They are also some of the reasons why the Irish experience is not necessarily a model which will work for all. But for what it may be worth, I will describe what I think were the main elements in our relatively successful absorption record in the hope that some of the points will be of value to you. And it has been, I would argue, a good track record. During the 1989-93 programming period, Ireland was able to absorb something of the order of 95%+ of its Structural Funds allocation. For the 1993-99 Cohesion Fund round, we claimed in excess of 99% of our allocation. Under the current round, we had claimed in excess of 93% of our allocation by the end of 2003.
The keys to success – partnerships and planning
Successful absorption is not just about pulling in the money, it is also about using it well. If I had to sum up in just two words the key to Ireland’s story, those words would be partnerships and planning.
I said just a moment ago that a relatively centralised system has been one of the factors explaining our good record. Let me now explain and qualify that. The key decisions on the application in Ireland of available Structural Funding are made by central Government on the basis of recommendations made to Government by the Department of Finance. As this Department is also responsible for economic and budgetary planning, including taxation policy, this would appear to be a very highly centralised system of decision-making. However, it is necessary to qualify that view by looking at the process by which the decisions are reached and this is where partnership comes in.
Your first partner – the European Commission
The key partnership is of course that between the Member State and the European Commission. The many legal and political responsibilities of the Commission in this domain embrace regulatory issues, the efficient and proper execution of the EU budget and the consistent pursuit of an economic development agenda in individual Member States which is consistent with the overall goals which the Union sets for itself. This gives the Commission a central role from the highest political level down to desk officer level in influencing programme design, monitoring execution, evaluating the results and achieving financial closure at the end of the funding round. Furthermore, aside entirely from the legal rights and responsibilities of the Commission in this process, individual officers within the Commission are a rich and helpful resource and, in our experience, are of particular value to smaller Member States. So my first recommendation when it comes to successful absorption would be to establish and nurture a genuine working partnership at all levels with the Commission. There will be many occasions when views will diverge and when you may feel, sometimes rightly, that the Commission has got it wrong or is being unnecessarily inflexible but the core point here is that the Commission fundamentally shares your interests in terms of an efficient and effective application of the available funding. It is your first partner in this process. While the final sign off domestically on the National Plan is obviously made by the national Government, the Commission will have been a key partner at all stages in the development of the proposal put to Government.
Domestic partnership – the central Government sector
So also will the domestic actors in the process. The quality of the domestic partnership process is of prime importance in ensuring successful absorption. While the partnership with the Commission is a factor common to all Member States, the nature of the domestic partnership process will differ from country to country.
Domestic partnership starts within the central Government sector. In Ireland, the Department of Finance carries out many of the coordination functions at central level. We do not have a separate Ministry dedicated wholly to regional policy including Structural and Cohesion Fund matters. There may well be disadvantages to this, of course, but one of the advantages of Ireland’s set-up is that centralisation facilitates the integration of the Structural Funds with the domestic budgetary forecasting decision-making process. There is in my view a lot to be said for relatively centralised arrangements for drawdown, accounting, application and monitoring but of course systems of government differ and one size will not always fit all. However, in countries where the functions are dispersed across more than one Government Department, effective coordination along agreed policy lines is clearly vital especially at the planning stage.
Wider Social Partnership
The partnership between central Government and the regional actors can be seen as a special case of the wider process by which decisions are reached on the domestic economic development agenda. In Ireland’s case, that wider process is quite formalised. There has been in Ireland since 1987 a structured partnership encompassing Government and the representatives of the main economic and social interest groups. Originally conceived in the context of arriving at a national consensus on pay developments, the remit of this partnership soon expanded to include discussions across the broad spectrum of economic and social development priorities. Since 1987, six three year agreements have emerged from this process. This social partnership has made a significant contribution to our economic development. It has been used as a forum wherein opinions can be expressed on the development priorities which should be addressed in the National Development Plan and on results obtained. It has contributed to the building of a consensus on the contents of the Plan and has thereby facilitated the absorption of available Union funding.
PLANNING AND Implementation
Developing and perfecting the overall strategy is not sufficient in itself. Delivery structures play a major role in assuring a high level of absorption. I would see the important issues as these:
Early political agreement and broad consultation
I have already mentioned the quality of the partnership at domestic and EU level. In addition, I would emphasise the need for early political agreement for both the content and process of the planning procedure. This is particularly necessary to strengthen the ability of the key officials to deliver on the chosen strategy. Our experience is that political agreement should be concerned with the over arching issues and not with the detail of programme.
Ex-ante evaluation
A good ex-ante evaluation will help ensure that the operational elements of the programmes are consistent with the objectives. It will also improve the reliability cost and demand forecasts. Programme designers, therefore, need to fully consider the ex-ante conclusions. Despite our best attempts, it is not always possible accurately to cost schemes which will be implemented over a seven year timeframe. We have found that conditions will change with implications for the outturn on costs and demand. I am happy to see the initiative being pursued by the Commission and the EIB in this regard with their proposals for the JASPERS and JEREMY support programme for the new member states.
Delivery Structures and Administrative Capacities
Our experience suggests that it is better to build on or adapt existing delivery structures rather than to establish new ones. Inevitably, new structures take longer to develop the relationships and working modalities that are needed for effective implementation, particularly in the early years of a Plan. Existing structures, even if they have to be adapted, have operational resources and experience, and here I am speaking in organisational and human resource terms, which can be of immediate benefit to the roll out of programmes. Success lies in the effectiveness of administrators and managers. They need to have the technical skills needed to supervise programme execution. Officials should have active engagement with Commission officials.
Flexible Programming
The Commission will agree the financial plan at the CSF and operational programme level. There is little freedom on how the EU commitments are allocated across the years, as they must inevitably match with the Financial Perspectives. The programmes will take some time to get to full implementation status due to such reasons as the setting up of control arrangements, promoting schemes, and processing project applications. Therefore, in order to avoid losses under the N+2 Rule it is necessary to ensure that you have a mix of some high spending elements in the operational programmes. We have relied on some of these “winners” in the early years of implementation to ease the pressure on slower spending schemes and those that take more time to roll out.
Accessibility to Project Promotors
Too often good schemes fail because inadequate thought has gone into communication with the potential beneficiaries or the process for accessing funding is made too complex. You need to design schemes to be easily accessed by the target group for which they are intended. We have found it useful to provide resources to support the project promotor in preparing applications. This has the added advantage of ensuring an efficient project selection process by raising the quality of the applications.
Project Pipeline and Project Selection
I think Ireland has a number of useful experiences with respect to organising the project pipeline or stream. I like to describe this as parallel project development in that a number of projects are at different stages of development at the same time. In Ireland, strong central control ensured that only critically important and strategic projects were developed initially. However, given the certainty with respect to funding, we also pursued a policy of developing the next tier of projects in order to ensure no discontinuity in effort.
CONCLUSIONS
I’m aware that I have taken a broad interpretation of my brief here today. I have perhaps strayed outside the question of “Managing Structural Funds and Instruments” to consider some of the issues which arise at the macro level in tackling the question of how best to absorb available EU funding. In conclusion, let me say that
The absorption challenges facing the new Member States are greater that those which we in Ireland had to address;
The key to successful absorption is to focus on partnerships and planning;
The first partner is the European Commission whose desk officers are a rich and helpful resource, especially for smaller countries;
On the domestic scene, early political agreement is vital as are excellent relations across the main central Government agencies involved;
A relatively centralised system facilitates the integration of the Funds with decisions on the domestic public expenditure;
This has to be balanced by very broad genuine consultations with the key domestic actors;
On the planning side, good ex ante evaluation is the key;
Where possible, build on and adapt existing delivery mechanisms;
Focus on high spending elements early in the programming period;
Financial absorption is not an end in itself. What matters is physical investment and projects delivered. Project cost inflation can lead to a situation where the financial absorption record looks good but the actual content is less than planned;
Resource those seeking to access schemes, especially when it comes to smaller community-based and demand led schemes;
Do not wait until your plan is approved before you start thinking about your projects. It is essential to think of how projects will be developed at the earliest possible stage. Despite failure to agree the Financial Perspectives, all member states should be working on how to ensure a ready stream of projects for the new programming period;
Administrative capacity most be reinforced with ability, not numbers of personnel. The aim should be to use modern management methods and structures in support of the Funds. Members States can be innovative in their own right in this regard.
Thanks for your attention
12 October 2005
5.26.2006
All Different All Equal Campaign
In 1996 The Council of Europe ran this campaign against racism and discrimination. In this 10th year anniversary the emphasis is much more on cultural diversity and positive aspects - promoting Human Rights, Diversity and Participation. The partnership bewteen the European Commission and the Council of Europe is launching the campaign in June 2006 and it will run until September 2007. It will have a young people and grass roots approach. There are National Campaign Committees organising activities on a National level, with much campaign material and slogans being translated into many many languages. International educational activities will also be organised around the main themes, including seminars, training for trainings, youth fora etc.
Quality standards are being developed so that activities and education events can have the possibility to be awarded the "All Different All Equal" logo. It will also be possible for places to be awarded this (schools, workplaces, organizations, institutions etc).
Have a look at the preparation website for a calendar of events, discussion platforms, fora etc:
http://alldifferent-allequal.info
Contact your National Campaign Committee - find the details by clicking here.
Quality standards are being developed so that activities and education events can have the possibility to be awarded the "All Different All Equal" logo. It will also be possible for places to be awarded this (schools, workplaces, organizations, institutions etc).
Have a look at the preparation website for a calendar of events, discussion platforms, fora etc:
http://alldifferent-allequal.info
Contact your National Campaign Committee - find the details by clicking here.
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