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Ensuring EU funding is used effectively

This is an article for the Government Gazette

As well as the benefits to businesses the European Union brings us through trade and investment, our poorest communities in Wales receive significant support through European Structural Funds.  This will be worth around £2 billion to Wales over the next six years, which will be a significant boost for jobs and growth.

Nevertheless, it is disappointing that regions of Wales continue to qualify for European Structural Funding due to the fact that West Wales and the Valleys have a GDP of less than 75% of the European average.  My region has already received two rounds of funding and has now qualified for a third round.  Nobody wants to be in the position of us qualifying for a fourth round.

The Welsh European Funding Office (WEFO), a division of the Welsh Labour Government, manage the EU funding programmes.  Their handling of the first round of EU funding was heavily criticised for lacking focus and trying to set up too many projects and as a result failing to achieve its key aims.    

The Auditor General for Wales, supported by the Wales Audit Office is the independent statutory external auditor of most of the Welsh public sector.  This April they completed an inquiry: European Union Structural Funds 2007-2013.  The report examined whether the programmes have been administered effectively, and is on track to deliver their intended benefits.

It was encouraging to see the Wales Audit Office findings that the 2007-2013 funding was spent more effectively than before, which means that more jobs will be created thanks to this vital EU aid.  However there are still improvements to be made, as the report found that project sponsors view WEFO’s management system as slow and bureaucratic. 

It is disappointing that small businesses are unintentionally excluded from receiving EU Structural Funding.  During the 2007-2013 rounds, only 3 out of 159 projects were awarded to the private sector.  It is my view that it is essential that small businesses are supported to develop, to enable the region to progress economically and sustainably.  A report by the Federation of Small Businesses last year highlights a number of key actions:

    • Projects need to be better marketed and communicated to SMEs.  Too often businesses had only heard about funding opportunities through word of mouth or informal networks.

    • Some programmes were criticised as too rigid in design.  They must be more flexible to take account of the individual needs of businesses.

    • Applications for funding ‘can involve burdensome and time consuming administrative processes’ which discourages SMEs from applying as they lack the time or resource to navigate their way through complicated application and monitoring processes.

One of the clear points emphasised to the National Assembly for Wales during a recent Committee inquiry was that the Welsh Labour Government needs clear strategic goals and a clear strategy on how to deliver these goals, who to target and how to make the most effective use of resources.  The Welsh Labour Government’s strategy is too complicated and ‘merely aspirational’ with no set targets or milestones and no process for evaluation or measurement.

As an Assembly Member for South Wales West, I represent three Local Authority areas (Bridgend, Neath-Port Talbot and Swansea), all within the West Wales and Valleys region eligible for European Structural funds.

The Swansea Bay Innovation Hub is being constructed at the new £400 million Swansea University campus.  It will provide facilities and intends to foster collaboration with local industry, particularly SMEs.  It will inevitable create very welcome  jobs.  But measuring how many of those jobs are directly related to European funding is difficult.

WEFO provides statistics of key achievements by local authority including Gross Jobs Created, but we are unable to assess which project has created those jobs.  One of the Wales Audit Office recommendations states that ‘WEFO should strengthen its focus on monitoring output targets…and monitored…at regular intervals.’

The Neath Port Talbot Regeneration project has re-developed the town’s former docks quarter into ‘Harbourside’.  It will transform the area into a new knowledge focused business hub, hoping to create hundreds of skilled jobs.  This regeneration will undoubtedly attract new businesses to the area, but WEFO fail to monitor, and if necessary provide the required support.  The funding needs to enable the local economy to thrive.

These programmes will ultimately be judged by their impact on the lives of the people of South West Wales.  Lessons must be learnt from previous mistakes.  It is time to focus on delivering tangible outcomes for our most deprived communities.  If we can meet key economic targets then this will have a positive impact on bringing our communities out of poverty, improving health and educational outcomes.

It is disappointing that once again Wales has qualified for European funding.  But now the Welsh Government has another opportunity to make effective use of the support that is available to us.  They need to ensure the funding is utilised, to help boost the economies of communities across Wales.

We hope that the Welsh Government will listen to the voice of businesses, the recommendations of our Assembly committees and the Auditor General for Wales, as it plans for the implementation of the third round of funding.  It is essential that we continue to learn lessons that help make the most effective use of this support to build a stronger economy and a fairer society.

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