Written - Progress of the European Structural Funds programmes 2007–2013 in Wales and the European Commission’s agreement of programme changes

I am pleased to report on the progress of the Structural Funds programmes 2007–2013 in Wales and on the European Commission’s recent agreement to our proposals for revisions to the programmes.

When I met Commission officials in Brussels earlier this year, I asked them to consider allowing flexibility within the programmes to help Wales respond to the global economic downturn (as well as exchange rate fluctuations) and resulting pressures on match funding sources, particularly from the private sector. During July, we received formal agreement from the European Commission to several changes to both the Convergence (West Wales and the Valleys) and ERDF Regional Competitiveness and Employment (East Wales) programmes 2007–2013. 

I welcome the Commission’s positive and timely response to our proposals, and am grateful for the support of the All-Wales Programme Monitoring Committee and delivery partners, including the WLGA, in helping us to reach this agreement.

The changes which have been agreed focus on three aspects of programme delivery by:

• reducing the proportion of match funding required through increases in EU intervention rates to ease pressures faced by applicants, including those associated with a decrease in the value of Sterling against the Euro
• responding specifically to current economic difficulties, particularly in the labour market
• making best use of new opportunities presented in the EU Economic Recovery Plan by extending the scope of eligible activities in key areas.

Programme level intervention rates have been adjusted so that sponsors applying for funds for new projects will be able to receive a greater proportion of EU funding:

·        ERDF Convergence: from 46.46% to 57.47%

·        ERDF Competitiveness: from 40.16% to 45.30%

·        ESF Convergence: from 55.56% to 64.36%

Importantly, the overall Sterling value of the programmes and the Sterling value of the Assembly Government’s match funding commitments are retained at their value when the programmes were agreed in 2007.

The overall strategy of the programmes in Wales also remains very much intact. It focuses on addressing medium- to long-term structural weaknesses and challenges, the EU’s Lisbon and Gothenburg agendas and our Assembly Government strategies for creating sustainable growth and jobs.

The Structural Funds programmes 2007–2013 are continuing to make significant progress. Indeed, we recently reached a significant milestone by meeting our end-of-year (2009) commitment target of 50% (over £920 million) of EU funds, a target that we increased in response to the downturn. Moreover, this commitment to date represents a total investment of over £1.8 billion, providing vital support to some 120 projects that will help nearly 29,000 Welsh businesses and 280,000 individuals into work and training.

Over the summer period, we confirmed approval of EU funds of £140m to 15 projects, worth over £245 million of investment. We are also making good progress with our expenditure targets (N+2), as set by the European Commission, having already achieved our end-of-year (Dec 2009) targets for 2009 for the ESF Convergence and ERDF Competitiveness programmes. We remain on track to achieve the remaining programmes’ targets.

As the changes I have described illustrate, during the current global economic downturn the European Structural Funds are proving to be more important than ever. I am confident that the progress of the programmes and the changes agreed with the Commission will help businesses, communities and individuals through the recession and will help prepare Wales for economic recovery.