The government today sets out how the UK’s allocation of European Union (EU) Structural Funds will be divided across England, Northern Ireland, Scotland and Wales for the period 2014 to 2020.
Last month, the Prime Minister negotiated a real terms cut in the EU budget for the first time in history. As the independent Office for Budget Responsibility has said, the effect of this deal was to reduce its forecast for what taxpayers across all parts of the UK will pay by £3.5 billion over the next five years.
As a result of the new EU formula for allocating Structural Funds, agreed by the European Council in February, there would not have been a fair distribution across the UK, with each of the Devolved Administrations set to lose significant funding vital for economic growth.
In view of this, the UK government has decided to re-allocate EU Structural Funds to minimise the impact of sudden and significant cutbacks in Northern Ireland, Scotland and Wales.
Business Minister Michael Fallon said:
EU Structural Funds are important for supporting economic activity. The EU formula would have seen several areas in most need of funds lose out, so we have taken the decision to correct that.
It is important that these areas use this funding to help deliver strong, sustainable growth and assist in rebalancing the economy.
The government is providing:
- Northern Ireland with a total allocation of around €457 million, an uplift of €181 million compared to the amount that Northern Ireland would receive under the EU formula for allocation of the Funds to the UK.
- Scotland with total funding of around €795 million. This represents an uplift of €228 million compared to the amount that Scotland would receive under the EU formula for allocation of the Funds to the UK.
- Wales with total allocation of around €2.145bn. This represents an uplift of €375million compared to the amount that Wales would receive under the EU formula for allocation of the Funds to the UK.
- England with a total allocation of €6.174 billion.
This decision means that each Administration is only subject to an equal percentage cut of around 5 per cent in funding compared to 2007-13 levels. The government believes that this delivers the fairest deal for England, Northern Ireland, Scotland and Wales.
The 2007-13, EU Structural Funds are estimated to so far have helped create more than 50,000 jobs in the UK, assisted the start up of more than 20,000 businesses and supported more than 1,300 research and technical development projects. Funds are used to support a wide variety of projects such as building skills for the unemployed, increasing the participation of women in science and engineering careers, and developing new healthcare technologies.
The EU funds covered include the European Regional Development Fund (ERDF) and the European Social Fund (ESF). These funds are the main European instruments for supporting local projects to increase jobs and growth. Funding for the European Territorial Cooperation objective and the Youth Employment Initiative will be subject to a separate process.
ERDF focuses on regional development, economic change and enhanced competitiveness. The ESF focuses on training, access to employment and social inclusion.
Notes to Editors
1.Final allocations will be subject to the agreement on the EU regulations and the ongoing negotiation of the 2014-20 EU Budget with the European Parliament. The European Commission will also need to agree the government’s proposals.
2.The total allocation for England is €6.174 billion, and a breakdown of allocations across Local Enterprise Partnership (LEP) areas will be announced shortly.
3.All figures are in 2011 prices.
4.For media enquiries relating to Northern Ireland, please call the Northern Ireland Office press office on 020 7210 6446.
5.For media enquiries relating to Scotland, please call the Scotland Office press office on 0131 244 9028.
6.For media enquiries relating to Wales, please call the Wales Office press office on 020 7270 0565.
7.The government’s economic policy objective is to achieve ‘strong, sustainable and balanced growth that is more evenly shared across the country and between industries’. It set four ambitions in the ‘Plan for Growth’ (PDF 1.7MB), published at Budget 2011:
- to create the most competitive tax system in the G20
- to make the UK the best place in Europe to start, finance and grow a business
- to encourage investment and exports as a route to a more balanced economy
- to create a more educated workforce that is the most flexible in Europe.
Work is underway across government to achieve these ambitions, including progress on more than 250 measures as part of the Growth Review. Developing an Industrial Strategy gives new impetus to this work by providing businesses, investors and the public with more clarity about the long-term direction in which the government wants the economy to travel.