Structural Funds are the European Union's main instruments for supporting social and economic restructuring across the Union. They account for over a third of the European Union budget. The UK's allocation from the Structural Funds for the period 2000 - 2006 is over £10 billion. Over the same period, the UK has also been allocated £ 80 million for the Financial Instrument for Fisheries Guidance and £595 million for the Community Initiatives.
A region may have access to one or more of the four structural funds, depending whether it has Objective 1 or 2 status; all regions have Objective 3 status. There are four structural funds available in the UK:
1. The European Regional Development Fund (ERDF)
Aims to improve economic prosperity and social inclusion by investing in projects to promote development and encourage the diversification of industry into other sectors in areas lagging behind. This fund is available in Objective 1 and 2 areas.
2. The European Social Fund (ESF)
Funds training, human resources and equal opportunities schemes to promote employability of people in both Objective 1 and 3 areas. In Objective 2 areas ESF may be used to complement the ERDF activities.
3. The European Agricultural Guidance and Guarantee Fund (EAGGF)
Is available in rural Objective 1 areas to encourage the restructuring and diversification of rural areas, to promote economic prosperity and social inclusion, whilst protecting and maintaining the environment and our rural heritage. In areas outside Objective 1, the EAGGF (Guarantee section) provides funding within the England Rural Development Plan.
4. The Financial Instrument for Fisheries Guidance (FIFG);
Funds projects to modernise the structure of the fisheries sector and related industries and to encourage diversification of the workforce and fisheries industry into other sectors. It also aims to ensure the future of the industry through achieving a balance between fisheries resources and their exploitation.
Most structural fund spending is targeted on specific regions, known as Objective 1 and 2 regions. There are separate national Objective 3 programmes in England, Wales, Scotland and Northern Ireland. The national and regional bodies responsible prepared programmes for the UK for 2000-2006.
Objective 1:
Eligible areas are those that have less than 75% of EU average GDP. It is the highest level of regional funding available from the EU. It is aimed at promoting the development and structural adjustment of the EU regions most lagging behind in development.
In the UK areas that qualify are Merseyside, South Yorkshire, Cornwall and the Scilly Isles, and West Wales and the Valleys. In addition to these areas, the UK also has two transitional Objective 1 areas, the Highlands and Islands and Northern Ireland which also qualifies for a unique PEACE programme. In total the UK will have received over £3.9 billion of Objective 1 money between 2000 and 2006.
Objective 2:
Aims to support the economic and social conversion of areas facing structural difficulties. It is the second highest level of funding available from the EU. Areas qualify for Objective 2, under four strands - industrial, rural, urban and fisheries. Objective 2 covers well over nineteen million people (including 5 million people in transitional areas) in the UK. In total, the UK will have received over £3.1 billion for UK Objective 2 and transitional Objective 2 areas for the period 2000 - 2006.
Objective 3:
This Objective involves only the European Social Fund and operates outside Objective 1 areas. Its aim is to develop labour markets and human resources and to help firms and workers adapt to new working conditions and so compete more effectively in global labour markets. It is directed at the long-term unemployed and those facing particular barriers to finding fulfilling employment because of their disability, racial origin, or sex. The UK will have benefited from just under £3 billion of Objective 3 money in 2000 - 2006.
In addition to the priority Objective areas around 5% of the Structural Fund budget will fund four Community Initiatives. The UK will have received around £916 million for these in 2000- 2006. The current initiatives are:
The Department of Trade and Industry (DTI) co-ordinates overall UK Government policy on the Funds and takes the lead on many issues affecting more than one fund or more than one part of the UK. The Department for Education and Employment has overall responsibility for the European Social Fund and the Ministry of Agriculture, Food and Fisheries leads on the EAGGF Guidance section and FIFG.
However, implementation of the Structural Funds is devolved to the Scottish Executive, National Assembly for Wales and Department for Finance and Personnel in Northern Ireland while in England the Department of the Environment, Transport and Regions (DETR) takes the lead on the ERDF, operating through the Government Offices in the regions.
Applications for funds should be made direct to the appropriate regional Government Office in England, or devolved administration in Northern Ireland, Scotland and Wales. The Department for Education and Employment has responsibility for European Social Fund, but applications for funds should be made to the relevant Government Office in England, or to the devolved administrations in Northern Ireland, Wales and Scotland.
The regional Government Offices, who are the Programme Secretariat, publicise the programmes, invite applications for projects also issue application forms and guidance. Applications are judged against the criteria that have been previously drawn up by the Programme Monitoring Committee (PMC). The criteria reflect the priorities in the Single Programming Documents. The Regulations require that projects are monitored and returns are made on a regular basis to the Commission.
The maximum contribution of the funds to a project depends on the type of project and where it takes place. In practice, in the UK, Objective 1 projects can receive up to 50% funding from the Structural Funds, but the proportion may be lower, e.g. in a project which is intended to result in commercial activities and profits. It is normally the responsibility of the applicant to find the remaining funding which must usually include public funding to match the Structural Funds contribution. However, Government Offices and Regional Development Agencies (RDAs) can help potential applicants find match funding.