Written Answers. - EU Funding. – Dáil Éireann (28th Dáil) – Wednesday, 19 Nov 1997

This is simply a precaution which will enable the Structural Funds for the projects concerned to be redeployed to other projects or measures within the CSF in sufficient time if any of them should look unlikely to be completed within the time allowed under the current round. If Structural Funds available to Ireland under the CSF are not committed and spent before the expiry of the current round they would be lost to Ireland.

APPENDIX 1

CSF Mid-Term Review Package for the agreement of the CSF Monitoring Committee

Introduction

The Community Support 1994-99 (CSF) for Ireland stipulates that a mid-term assessment be undertaken by the Monitoring Committee after the third year of implementation so that any adjustments required can be made. In carrying out this mid-term review, the CSF and its constituent operational programmes were subject to mid-term evaluations by independent evaluators. The decisions in the mid-term review have been informed by these evaluations and the views emerging from discussions at Monitoring Committee meetings on the evaluations. They have also been informed by the Commission's Priorities for the adjustment of Structural Fund programmes to the end of 1999 and by a report of the European Parliament on Community Structural Funding for Ireland.

Strategic Priorities

The CSF Mid-Term evaluation concluded that to date the CSF "must be accounted a significant success". The Evaluator found, however, that a number of apparent shortcomings emerged. It is acknowledged, therefore, that the broad balance of the CSF is correct and that it represents the most appropriate strategy for the use of Structural Funds to achieve the CSF central objectives of

— ensuring the best long-term return for the economy by increasing output, economic potential and long-term jobs

— reintegrating the long-term unemployed and those at high risk of becoming so into the economic mainstream.

It is recognised that some adjustments are necessary to enhance the effectiveness of the CSF interventions at the mid point of the current round. These include financial adjustments and improvements in monitoring and implementing arrangements. As no additional Structural Funds ar being made available to Ireland in the mid-term review and as the Exchequer, due to the fiscal requirements for membership of EMU including the Stability and Growth Pact and other considerations, is not in a position to provide additional resources any reallocation of funding will have to be financed by way of savings within the operational programmes.

Extensive negotiations have taken place between the Irish Authorities and European Commission on a mid-term review package. The negotiations were informed by:

—the conclusions and recommendations of the OP Evaluators, the Regional Impact Evaluator and the CSF Evaluator,

—the views of the monitoring committees on the evaluation findings as expressed at their special meetings,

—the Commission's guidelines on "Priorities for the Adjustment of Structural Funds Programmes to the end of 1999"

—the anticipated development gap which will face Ireland Post 1999, and

—a report on Community Structural assistance for Ireland adopted by the European Parliament at its Plenary Session in December 1996.

The main priorities for additional resources which have been identified in those negotiations are:

—National Roads

—Industry Research and Development

—Long-term Unemployed, including Early School Leavers

—Information Society

—Farmyard Pollution

—The Environment.

Reprogramming

The following specific reprogramming is proposed in order to address the agreed strategic priorities:

Operational Programme	Reprogramming Proposals-Structural Funds (mecu)
Savings	Reallocation

Industry
Research and Development Marketing	10	37
Food SP	28
Indigenous Management Training	6
Inward Investment Training	5
Traditional Industry Adjustment	7
Software Application Development	6
97 Deflator	4.9
Sub-Total	66.9	37

Agriculture, Rural Development and Forestry
Farmyard Pollution		20
Dairy Hygiene		8.5
Improvement of Animal Welfare	5
Horse Industry	0.5
Horticulture	0.3
Organic Farming	0.2
Agri-Tourism	1
Technical Assistance	0.5
Forest Roads	3
Sub-Total	10.5	28.5

Tourism
SP3 Marketing Adjustment		3
New Environment Measure		3
SP1 Natural Cultural	10
Sub-Total	10	6

Transport
National Roads		26
Luas Ballymun		10
Commercial Seaports	8
State Airports	11
97 Deflator	4.7
Sub-Total	23.7	36

Economic Infrastructure
Information Society		10
Telecoms	12
Sub-Total	12	10

Environmental Services
Hazardous Waste	3
Municipal Waste	5
Sub-Total	8

Human Resources
Early School Leavers		20
Bridging/ progression for early school leavers		2
Counselling/ guidance for early school leavers		1
Preventative actions (8-15 year olds)		3
Ex-Offenders		0.6
FÁS Capital		4
Childcare Infrastructure		1
Traineeship		3
TSS/ Network-Industry		6
National Employment Sevice		3.5
Language Training		1.5
Advanced Technical Skills	4
Special Skills Training	7
VPT	2.5
Vocational Training Infrastructure	2
Technical Assistance	1.5
96/ 97 ESF Deflator	14
Sub-Total	31	45.6

Local Urban and Rural Development
ESF Training	1
CSF Total	163.1	163.1

Reserve list of projects/measures in respect of which consideration will be given to decommitting funds in the spring of 1998 if sufficient progress is not achieved¹

ERDF
National Conference Centre	33
Peat Power Station¹	26
Biomass Blanchardstown	9
National Gallery	10
Luas	123
Total	201
ESF
Training LURD OP	10

¹ In the case of the peat power station a full review will be carried out at the end of 1998 as agreed in a letter dated 11 July, 1997 from Commissioner Wulf-Mathies to Mrs. Mary O'Rourke, TD, Minister for Public Enterprise.

All OPs

Any additional reprogramming within the OPs indicated or within the remaining OPs will, subject to the terms of this package, be a matter for the monitoring committees for the OPs to decide.

It has been agreed in principle that the progress on the projects and measures in the reserve list above will be considered in the spring of 1998 by the CSF Monitoring Committee and that if it cannot be proven that sufficient progress has been achieved to secure their likely completion within the existing agreed time scale for them all or part of the funds will be decommitted. National Roads will be one of the main priorities in the consideration of the usage of any European Regional Development Fund funds which might become available.

Human Resources

While the existing balance between "equity" and "competitiveness" measures is deemed largely appropriate, sustained investment in human resources will continue as a high priority over the remainder of the programme.

Particular areas of concern continue to be the incidence of early school leavers as well as the stock of long-term unemployed. While the "flow" of early school leavers is beginning to decline in response to measures taken in this area, it is clear that action on this front must be accompanied by a concerted effort to address the "stock" problem. In this regard a package of measures (26 million ecu) is proposed incorporating a minimum of an additional 1,000 places under Youthreach (20 million ecu), as well as a strengthening of accompanying measures such as bridging/progression (2 million ecu), counselling/ guidance (1 million ecu) and preventive actions (3 million ecu).

As well as this increased emphasis on progression for early school leavers the Tourism and LURD OPs will also examine the scope for providing more progression places for this target group.

The achievement of a reduction in the numbers of long-term unemployed continues to be a priority in the CSF. This target group must be the focus of a more effective and targeted approach over the remainder of the programme. In this context the ESF co-funded training component of the Community Employment Scheme will be refocused to provide pathways towards open employment. 3.5 million ecu will be provided for the National Employment Service.

In the context of the White Paper on Human Resources Development, an industry-related package of 9 million ecu is proposed in response to a number of policy goals which it identified, namely Traineeship (3 million ecu) and TSS/Network-Industry (6 million ecu). Increases on the infrastructural side include provision for additional capital equipment for FÁS (4 million ecu) as well as child care infrastructure (1 million ecu). In addition, there will be a new education initiative involving the provision of 1.5 million ecu for language training.

Industry

The development of a critical mass in research and development is seen as essential to improving the long-term competitiveness of Irish Industry. It is proposed, therefore, that some of the savings within the industry OP will be used to fund additional expenditure of 37 million ecu on Industry Research and Development to further stimulate movement in this direction. The Industry Monitoring Committee will revamp measure 1 of the R&D Sub-Programme to include innovation. Furthermore, elements of competitive bidding and reduced aid rates shall be introduced having due regard to the special circumstances of smaller companies.

The Industry Monitoring Committee shall initiate a process of identifying areas, where in the interest of industry, the quasi-monopoly position of Government agencies could be opened up to competition.

Where presently deficit financing mechanisms exist, the Industry Monitoring Committee shall consider the introduction of programmatic financing mechanisms. This will apply in particular, but not exclusively, to Industry/Third Level Co-operation services.

Agriculture, Forestry and Rural Development

The prevention of farmyard pollution can make a significant contribution to the quality of the environment as well as increasing the efficiency of production methods. It is therefore proposed that 18 million ecu of the savings from the Food SP in Industry together with 10.5 million ecu of savings in the Agriculture, Forestry and Rural Development OP will be used to fund additional expenditure of 28.5 million ecu on Farmyard Pollution and Dairy Hygiene.

In relation to Sub-Programme 5(B), the research stimulus fund, it is agreed that of the remaining uncommitted amounts under this measure one third will be reserved for projects where TEAGASC is not involved. If all funds have been committed, the amounts falling free because projects are abandoned should be used for projects where TEAGASC is not involved.

Tourism

In recognition of the importance of the environment a new sustainable tourism measure is being proposed. This will tackle on a pilot basis congestion problems in areas of high demand and it is proposed to provide 3 million ecu for this purpose. In order to increase the value added to the economy of the investment being made in cultural tourism and to promote off-season events an additional 3 million ecu is being provided for marketing this aspect of the tourism programme. This additional expenditure will be funded from some of the savings within the Natural/Cultural Sub-Programme. The Tourism Monitoring Committee will give consideration to the aid rates, geographic spread and qualifying types of investment (other than hotels) in relation to the use of the remaining allocation for the Product Development Sub-Programme.

The training measures in Tourism OP should be better focused on small tourism operators and large firms should pay a larger part of the training provided. Progress on the National Conference Centre will be monitored closely and if there is a risk that the project will not be completed on time to draw down the funds committed to it, all or part of these funds will be decommitted next year.

Economic Infrastructure

The development of the information society is seen as a key to improving competitiveness and overcoming peripherality. In recognition of this, it is proposed to reallocate 10 million ecu within the Economic Infrastructure OP to fund a new measure for broad band telecommunications. It is a condition, however, that all the players, including the private sector, are allowed to participate in tendering for the grant on the basis of criteria set down in advance. An Information Age Town pilot project by Telecom Éireann will go ahead without grant aid except for the possibility of some technical assistance.

Transport

The completion of the country's road network to reasonable standards remains a priority in overcoming peripherality and increasing competitiveness. There is evidence of increased congestion on Ireland's road network and in order to partially address this the agreed savings identified in Transport OP together with some savings within the Tourism, Environmental Services and Economic Infrastructure OPs will be used to finance additional activity on National Primary Roads. At this time an additional 26 million ecu is proposed for National Roads and these will also be a priority in any consideration which might be given to the reallocation of funds as a result of reviewing progress on the large projects to be revisited in the spring of 1998. These additions are conditional on improvements in cost control and in economies in road design. Furthermore, the Transport Monitoring Committee should ensure that a study on road pricing and related issues is undertaken. The study should have regard to practice on road pricing across the EU.

On the assumption that the first stage of Luas will be completed under the current programme it is proposed to allocate an additional 10 million ecu to finance preparatory work on the third line to Ballymun. A study on the selling of the operational concession for the light rail will be carried out including aspects of Park and Ride facilities.

Local Urban and Rural Development

There has been slow progress to date in expenditure in this OP and it will be monitored carefully to ensure that it is capable of spending the resources allocated to it within the programme period. One million ecu will be reallocated from ESF funded activity within the OP for child care infrastructure.

The operation of this programme will be reviewed by the programme monitoring committee to see what scope there is to make use of existing funds to further develop and promote the effectiveness of the four designated Territorial Employment Pacts selected in Ireland and to introduce a Pilot Scheme for Rural Resettlement. To the extent that requirements are identified and that future resources become available within the programme these will be regarded as a priority for the use of such resources.

Exchange Rate

In view of emerging concerns among some of the implementing agencies in relation to movement of the IR£ against the ecu the Department of Finance issued an instruction on 6 March, 1997 reminding Departments and agencies that grant commitments should be made in ecus or, alternatively where they are expressed in IR£, they should contain a condition to the effect that the exchange rate is subject to fluctuation. It pointed out that any losses which might occur as a result of movements in the IR£ against the ecu would be borne by the beneficiaries of the EU aid. Activities and targets within programmes will, where necessary, be scaled back to reflect the level of funds which will be available as a consequence of exchange rate movements.

Use of the Deflator

With the exception of Human Resources, the 1996 deflator will be applied on apro-rata basis within OPs. While the 1996 European Regional Development Fund element of the Human Resources deflator will be applied pro rata, the ESF element will be applied to the priorities identified above. Three million ecu of this deflator will also be allocated to FÁS. It is proposed that a more flexible use of the 1997 and subsequent years' deflators will be employed. Subject to satisfactory progress being achieved, the 1997 and subsequent years' deflators will be applied on a pro-rata basis to all OPs but the monitoring committees for the OPs will decide which measures should benefit. Exceptions to this arrangement for 1997 are the Industry, Human Resources and Transport OPs where the deflator will be applied as indicated in the above reprogramming proposals.

Progress and Reallocations

In preparing progress reports between now and the end of the current round for the monitoring committees of OPs the lead Departments will include a specific heading on substantial underspends. A report will be given to the monitoring committee under this heading in relation to measures in respect of which expenditure is expected to be more than 20 per cent below the year's provision in the latest approved financial plan. The report will give details of the underspend, the reasons for it together with the corrective action proposed. Apart from the major projects/measures included in the above reserve list, the monitoring committee may, if it is not satisfied with the explanation given, propose the reallocation of the funding to another measure within the OP (provided it is under the permitted limits for reallocations by OP monitoring committees as set out in the CSF). If there is insufficient scope within the OP or if the monitoring committee cannot reach agreement on a reallocation of the funding the matter will be brought to the attention of the CSF Monitoring Committee for decision. The OP secretariats will report regularly to the CSF Monitoring Committee on the operation of this arrangement.

Cost Recovery and Deliver Mechanisms

The CSF Evaluator's recommendations in regard to greater recourse to cost recovery and the need for more competition in the delivery of services are noted. It is recognised that there are inherent risks as well as practical difficulties in attempting to introduce fundamental changes over a relatively short period of time. This is especially so in programmes which are proving significantly successful in providing training for employment and enhancing the competitiveness of industry. Implementing departments will, nonetheless, examine the scope for implementing changes in pursuit of these goals. An effort will be made at OP level to increase private sector participation and/or to reduce aid rates and to initiate a process where the position of Government agencies as deliverers of services could be opened up to competition. A new impetus will also be given to a policy direction which initiates a more "market driven" approach to education and training provision whether at company or individual level.

The Department of Enterprise, Trade and Employment and the Department of Tourism, Sport and Recreation will require the industrial agencies to review their range of activities and to indicate the steps which they have taken to date towards reducing aid rates and greater cost recovery from industry.

The purpose of existing training measures for industry such as Training Support Scheme (TSS) is to encourage industry to provide their own training. It is focused on SMEs with the aid rates being tailored to their needs. FÁS training for industry is put to tender in many cases under existing arrangements. There will be an increased emphasis on tendering for training delivery under the auspices of the proposed National Employment Service.

The proposed savings in the Advanced Technical Skills measure under the Human Resources OP will mean that the aid rates under the scheme will have to be reviewed to see if it is possible to avoid the measure being closed down for the academic year 1999.

Additional resources for National Roads is contingent on the issue of road pricing being examined. In this regard the external evaluator for the Transport OP has been requested to carry out a study on future road pricing mechanisms.

Indicators/Monitoring

The recommendations of the CSF Evaluator in regard to a revision of the indicators and the monitoring systems at CSF and OP level are noted. It is proposed that the CSF Evaluation Unit will be asked to review the recommendations of the evaluator and to make specific proposals for a change in a paper to be presented to the Spring 98 Monitoring Committee meeting of the CSF. Similar work will be undertaken at OP level and it will be co-ordinated by the CSF Evaluation Unit.

Evaluation Units

The monitoring committees for the OPs will review the work programmes of the evaluation units to consider the findings of the CSF Evaluator that their work programmes are excessively broad as compared with the resources available and whether their work should be more focused.

It is proposed that to assist the deliberations of the monitoring committees in this regard the CSF Evaluation Unit will carry out a review of the performance of the evaluation units and external evaluators for the OPs. The outcome of that review will be furnished to the CSF Monitoring Committee in the spring of 1998.

In order to address the concerns of the CSF Evaluator in regard to the quality of certain cost benefit analyses the CSF Evaluation Unit will finalise its draft paper on cost benefit analysis. It is proposed that the Unit will produce a follow up paper on cost benefit analysis for the benefit of implementing departments and agencies.

The additional functions and responsibilities envisaged for the CSF Evaluation Unit will mean that the existing staffing complement will need to be increased. It is proposed that an additional evaluator and an additional IT Officer will be recruited as soon as possible. The additional staffing and other costs arising from the new responsibilities will be funded from technical assistance.

Co-ordination

The RTD Co-ordinating Committee will continue its work of rationalising the measures and arrangements for industry research and development.

While chairmanship of the Human Resources Co-ordination Committee will be retained by the Department of Enterprise, Trade and Employment as the lead Department for human resources policy, it is proposed the committee will be put on the same footing as the RTD Co-ordinating Committee. It will become a sub-committee of the CSF Monitoring Committee and it will report twice yearly to the CSF Monitoring Committee. It is also proposed to establish an Environment Co-ordinating Committee to examine and co-ordinate environmental policies in relation to environmental issues across programmes. Chairmanship of this sub-committee will be provided by the Department of the Environment.

Regional Authority Role

A Working Group comprising representatives of the Commission, regional authorities, the CSF Evaluation Unit, the CSF Information Office, the Department of the Environment, the Department of Finance and the lead Departments responsible for the ESF, EAGGF and FIFG will be established to improve the arrangements for the dissemination of information to regional authorities and to help regional authorities to carry out more effectively their review function in regard to the implementation of the CSF in their functional areas. A report will be presented to the Spring 1998 meeting of the CSF Monitoring Committee.

The Evaluation Unit in conjunction with the CSF Information Office will also collect information from lead Departments and the implementing agencies of interest to regional authorities. The lead Departments will disseminate the information to the regional authorities in a manner which is user friendly and capable of supporting the review function of regional authorities. The Departments and agencies will undertake to give their full co-operation to this effort.

Partnership/Publicity

The partnership between the Commission and the Irish Authorities is satisfactory. In order to bring the Partnership at the CSF level into line with the Operational Programmes the CSF Monitoring Committee will examine how the Partnership can be enlarged to involve the Social Partners at this level. Efforts will, however, be intensified with the assistance of the Structural Funds Information Officer to avail more frequently of opportunities to brief the media on CSF developments and on the contribution of structural funds to Ireland's development.

Dáil Éireann debate -
Wednesday, 19 Nov 1997

Written Answers. - EU Funding.

Denis Naughten

Denis Naughten

Minister for Finance (Mr. McCreevy)

Dáil Éireann debate - Wednesday, 19 Nov 1997

Written Answers. - EU Funding.

Denis Naughten

Denis Naughten

Minister for Finance (Mr. McCreevy)

Dáil Éireann debate -
Wednesday, 19 Nov 1997