By Daniel Hunter
The government has set 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.
“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," Business Minister Michael Fallon said.
“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.
Join us on