1 Introduction |
1. Reducing regional economic disparities within
Europe has become an increasingly important policy objective for
the European Union (EU), particularly since the accession of ten
new Member States in 2004. Article 174 of the Treaty on the Functioning
of the European Union states:
In order to promote its overall harmonious development,
the Union shall develop and pursue its actions leading to the
strengthening of its economic, social and territorial cohesion.
In particular, the Union shall aim at reducing disparities
between the levels of development of the various regions and the
backwardness of the least favoured regions.
2. The European Regional Development Fund (ERDF)
is the largest of the three main funds used by the EU to achieve
greater economic cohesion, reduce regional disparities and promote
economic growth across the EU. The fund was set up in 1975, and
now operates on a seven year cycle. The total budget for the current
ERDF round of 2007-13 was set at 201 billion and negotiations
are underway to set the objectives, regulations and size of the
ERDF for the next programming period covering 2014-20. This process
forms an integral part of negotiations over the EU's whole budget
for that period, of which regional funding forms an increasingly
large proportion. It
is in this context that we decided to hold an inquiry into ERDF,
with the intention of informing the UK's negotiating position
over the coming months, and examining whether England's regional
policy and funding should be a matter exclusively for Ministers
3. We issued the following call for evidence
on 28 February 2012 asking for submissions that addressed the
- how, and on what, is ERDF spent?
- is the taxpayer in England
obtaining value for money from the ERDF?
- could the funds contributed
to, and paid out on, regeneration through ERDF be spent more effectively
by repatriating ERDF to the Government in London?
- with the abolition of the Regional
Development Agencies responsibility for ERDF in England passes
to DCLG. What effects are these changes having on the administration,
assessment and payment of ERDF?
4. We received over 40 written submissions from
local authorities, think tanks, academics, the European Commission,
the Government and other interested parties. We held two oral
evidence sessions in April and May 2012 at which we examined the
themes and issues that emerged from the written evidence. We are
grateful to all those who gave evidence and contributed to the
5. In this Report we consider in chapter 2 what
the ERDF has delivered in England, and whether it is possible
to assess its value for money. In chapter 3 we look at the role
of the Department for Communities and Local Government (DCLG)
and, specifically, at the impact of the transfer from Regional
Development Agencies (RDAs) to DCLG, and how the abolition of
the RDAs has affected the operation of the fund on the ground.
We consider, in particular, the problem of match funding, and
whether this has stopped some worthwhile projects going ahead.
We then look forward in chapter 4 to the next ERDF round, covering
2014-20, and what improvements could be made to make the fund
more effective. We conclude in chapter 5 by considering the issue
of repatriation, and whether, in the longer term, the direction,
management and funding of English regional policy should be a
matter exclusively for England, without the involvement of the
1 Treaty on the Functioning of the European Union,
Article 174 Back
The terms regional policy and cohesion policy are often used
interchangeably; for consistency we refer to regional policy in
this report. Back