Margaret Hodge announces the national strategy for future
EU structural funds spending in the UK
The Government today announced how €9.6 billion of European
Structural Funds will be distributed across the United Kingdom
over the next seven years.
Every region of the UK will be given a share of European money,
according to how much they need it, on a formula worked out
after a detailed consultation earlier this year.
When the allocations were announced by Brussels at the end
of last year, the UK received a total of €9.6 billion
for 2007 to 2013. In the current seven year period the UK
was given €15.85 billion.
The poorest regions of the UK (Cornwall, West Wales and the
Valleys and the Highlands and Islands) get €2.6 billion.
The allocations for these regions (Convergence funding) were
agreed at the EU level in December 2005. The UK's remaining
regions will share €6.2 billion of Competitiveness funding.
The Government has developed a methodology for distributing
these funds. There is also €0.6 billion for cross-border
and trans-national projects.
Two regions – Merseyside and South Yorkshire - lose
their special status, but have been allowed extra transitional
Margaret Hodge, Minister of State for Industry and the Regions,
said: "All the richer countries in Western Europe
have been allocated a reduced slice of the cake this time
round. That is partly because the British economy has been
such a success in the last seven years and partly to allow
money to be given to the new states joining in Eastern Europe.
"Our job has been to make sure this European funding
is distributed around the United Kingdom in the best way to
ensure that all parts of the country benefit from our increased
economic prosperity and employment.
"We are confident the rules we have drawn up will
mean the money is used in the fairest way for every region.
No one is excluded.
"Whilst we are proud of our economic record, we
know we have more to do to tackle regional disparities in
economic performance. These funds will help us to bring the
performance of our poorest regions up to the performance of
the best. It is only by doing this that we can increase the
UK's long-term growth rate and ensure jobs and prosperity
in every region. That is why it was vital to establish the
Today's announcement follows a nationwide consultation
on future Structural Funds spending in the UK, which closed
on 22 May 2006. The Government has also published today a
response to the consultation including a summary of stakeholders'
The Structural Funds play a major role in supporting regional
development and employment across the EU. They only account
for a minority of total spending on regional development in
The new National Strategy establishes three broad priorities
for future Structural Funds spending: Enterprise and Innovation,
Skills and Employment, and Environmental and Community Sustainability.
The response to consultation sets out the Government's
approach to allocating funding between the UK's nations
and regions and the principles adopted for delivering the
funds from 2007-2013. The allocation methodology will ensure
that Competitiveness funding is divided fairly between the
UK's Competitiveness regions on the basis of objective
evidence of economic need. It will also ensure that funding
supports the Government's domestic priorities for regional
development and employment.
ALLOCATIONS TO UK STRUCTURAL FUNDS
|Convergence Funding (€m)
||Total Funding (€m)
||Per capita allocation (€)
|Yorkshire and Humber
|East of England
(South Yorks & Merseyside)
(West Wales & Valleys)
(Highlands & Islands)
All allocations for 2007-2013 are in millions of
Euros at 2004 prices. These allocations will be up-rated in
due course to current prices for each year of the 2007-2013
On 28 February, the Government launched a nationwide consultation
on future Structural Funds spending from 2007 to 2013. The
consultation invited comments on three issues: a draft National
Strategic Reference Framework for future Structural Funds
spending; the Government's approach to distributing
the UK's Structural Funds allocations under the new
Competitiveness Objective; and administrative arrangements
for delivering the funds from 2007 to 2013.
The consultation attracted 320 responses. The Government's
response to the consultation and the UK's National Strategic
Reference Framework are available on the DTI website at:
The allocations for the UK's Competitiveness Programmes
are set out in an Annex to the National Framework.
Under the new EU Structural Funds Regulations for 2007-2013,
the Government must draw up a National Strategic Reference
Framework establishing the broad priorities for future Structural
Funds spending in the UK. Under the Regulations, the Government
must also decide how to allocate its Competitiveness funding
across the UK. The allocations are subject to agreement by
the European Commission.
Government spending on regional development has increased
significantly in the last six years. For example, Government
expenditure on the Regional Development Agencies has increased
more than threefold from £0.6 billion in 1999 to £2.15
billion in 2005.
Government expenditure on the Neighbourhood Renewal Fund
has more than doubled from £0.2 billion in 2001 to £0.5
billion in 2005
The DTI has developed the UK's National Framework in
close collaboration with other Government Departments responsible
for the Structural Funds, the Scottish Executive, the Welsh
Assembly Government, the Northern Ireland Administration and
the Government of Gibraltar.
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