Sunday, 11 October 2009

Objective what?

Posted on This is My Truth on October 11th

The BBC today reports what we already know - the current round of EU Structural funds is likely to be Wales' last.

It was only our lamentable economic performance that saw us narrowly qualify for the current round of Convergence funding. The enlargement of the EU to include even poorer areas than our own is likely to mean that in 2013 we'll have to learn to live without the top level of European structural funding.

What the BBC failed to ask was, is that a bad thing?

Clearly £1.2 Billion over seven years is not to be spurned, £171 Million pounds a year clearly matters. But in the context of the annual WAG budget of over £16 Billion a year, it is relatively small.

More important to my mind is the opportunity cost incurred trying to spend the EU grant available to Wales. Over the last decade Welsh public servants have learned a whole new language - Eurospeak. It is a secret code. They talk of the intervention rates which they can draw down EDRF to match funds - and that's the intelligible bit.

Civil servants, Quango staff, Local Government officers and voluntary sector workers have become very creative in piecing bits of funding together to access European money. But it has a distorting effect on the way public services are designed and delivered in Wales.

The amount of time, effort and imagination that is being absorbed by tapping into a relatively small funding stream must have a considerable opportunity cost. Time spent on finding ways round opaque EU funding rules is time not spent on thinking new thoughts.

Looking back the debates of ten years ago about 'match funding' seem rather quaint. Anyone with a rough working knowledge of way the Structural Funding is working in practice knows that genuine 'match funding' is a myth. But the amount of energy exerted keeping the myth alive is considerable.

In a contracting public spending environment losing access to any top-up cash is regrettable, but it is a far more nuanced picture than the reports suggest.

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