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European Commission - Fact Sheet

Improving how EU Member States and regions invest and manage EU Cohesion Policy funds

Brussels, 09 June 2015

In 2014-2020 over 351 billion euro will be available to EU Member States, regions and cities under the Cohesion Policy (European Regional Development Fund, European Social Fund and the Cohesion Fund). For many of these countries it is the main source of public funding. It is imperative this money is well invested and managed as weaknesses in national, regional and local administrations can put the success of these programmes at risk.

For the 2007-2013 period, there are allocated funds under Cohesion Policy still to be invested. The Commission wants to help Member States avoid losing valuable investments and make sure money is spent properly and in the right kinds of projects that people will benefit from.

This is why strengthening administrative capacity to improve the way the Funds are invested and managed is at the heart of EU Cohesion Policy in 2014-2020. The Commissioner for Regional Policy Corina Creţu has identified this as a priority for action.

This is what is behind a set of new actions organised by Commissioner for Regional Policy Corina Creţu and her services in the Directorate-General for Regional and Urban Policy, with a contribution from the Directorate-General for Employment, Social Affairs and Inclusion.

 

What does the approach actually entail?

The initiative on better implementation of Cohesion Policy consists of a four-pronged approach:

1. The "Task Force on Better Implementation", via tailor-made action teams, supports national and regional administrations to use the remaining investments from the 2007-2013 programming period effectively. The Task Force analysed the key factors responsible for delays in implementation, and began formulating detailed and comprehensive Action Plans for each programme at risk. The Commission works closely with the Member States concerned to find solutions to maximise the use of commitments under the 2007-2013 Multiannual Financial Framework, as requested by the European Council in December 2014.

2. Building administrative capacity in Member States and regions for the 2014-2020 programmes, through the second phase of the Task Force and through a variety of measures such as sharing of skills, exchange of experts, training and technical assistance.

3. Commissioner for Regional Policy Corina Creţu intends to examine why regions with a low level of economic development or regions experiencing several years of negative GDP growth are lagging behind. For Cohesion Policy, which aims at reducing disparities between the levels of development between the regions of Europe, this trend is of particular concern.

4. The Commission is setting up a group of experts to independently assess the uptake of simplification by Member States and identify further possibilities to simplify rules. The group will make recommendations on how to improve the uptake of opportunities for simplification in implementing the funds for beneficiaries in the 2014-2020 programming period. A secondary goal would be to propose how to simplify further in the post-2020 framework. This action is closely linked to Vice-President Kristalina Georgieva's initiative for an "EU budget focused on results".

 

How did the Task Force on Better Implementation come about?

Creating a special Task Force to help Member States and regions spend Cohesion Policy investments was one of the first initiatives of Commissioner for Regional Policy Corina Creţuwhen she came into office. The Task Force aims to help a number of countries who are facing difficulties in carrying out previously planned investments to improve their "absorption" capacity and seize investment opportunities through stronger administrative capacity.

 

Who is the Task Force focused on?

The attention of the Task Force is currently focused on a group of countries whose absorption rates are below the EU average. The situation could lead to the ‘decommitment’ and loss of the funds that have been allocated or are planned.

The eight countries concerned are Bulgaria, Croatia, the Czech Republic, Hungary, Italy, Romania, Slovakia, and Slovenia.

 

What is the Task Force actually doing?

The first action of the Task Force has been to take stock and analyse the situation through a structured and uniform approach across the Member States concerned. This involved identifying bottlenecks and key weaknesses in implementation for each priority axis of the programmes concerned. For some countries there areproblems and delays in implementing major infrastructure projects, especially environmental and transport ones. Others suffer from overall weaknesses in theiradministrative capacity, as well as more structural and governance issues.

The Task Force is responsible for drawing up action plans for each Member State concerned, or reviewing existing plans where already in place. This process will ensure an exchange of experience and a spread of good practice among the participants. Where relevant, the Directorate-General for Employment, Social Affairs and Inclusion joins forces with the Directorate-General for Regional and Urban Policy to ensure appropriate measures are also taken in the area of the European Social Fund.


Is this about naming and shaming?

Not at all – the aim is to promote models of good practice and lend a helping hand. Administrative capacity building can also be stepped up, particularly with a view to improving implementation in the 2014-2020 period and learning from the past. This is the second remit of the Task Force for the medium term. Member States are encouraged to use their technical assistance budget under Cohesion Policy in a more efficient and targeted way to strengthen their administrative capacity to implement the Funds.

 

Why does administrative capacity matter?

Cohesion Policy operates according to the principle of "shared management" – shared between the Commission and the local and national bodies who manage the funds in the Member States.  

 

The new Cohesion Policy for 2014-2020 puts the focus on administrative capacity building for Member States to fully adapt to the new requirements for using the European Structural and Investment Funds, to implement their investment programmes effectively and achieve the best possible results.

Overall, administrative capacity to manage and invest the Funds and EU co-financed programmes and projects is considered as a key factor contributing to the success of EU Cohesion Policy. When public administrations managing the Funds (Managing Authorities, Intermediate Bodies, Certifying Authorities, Audit Authorities) are weaker, they are confronted with bottlenecks and challenges. The end result is that investments cannot deliver the expected benefits to people living in Europe's regions and cities. This is not merely a question of ethics and rules – it is also more costly to run an inefficient administration.

 

How do you support administrative capacity to better implement the Funds?

Supporting administrative capacity is about getting the right structures, human resources, systems and tools in place. In other words, making sure responsibilities and tasks are clearly assigned; staff properly trained; and the right kind of people recruited to manage the funds. They also need to be equipped with the right tools – IT systems, manuals, rules – to manage the European Structural and Investment Funds. If the systems and tools are there, organisations are less vulnerable. Another important element is governance. This means holding managers accountable for performance, safeguarding against corruption and conflict of interest and promoting transparency.

 

And more concretely?

The European Commission has launched a series of training events to prepare for the new programming period. These events target the national and regional authorities responsible for managing the European Regional Development Fund, the European Social Fund and the Cohesion Fund. They are primarily dedicated to programming and implementation, but also deal with financial management and control issues.

The Directorate-General for Regional and Urban Policy also helps to strengthen the administrative capacity of national and regional administrations using analytical/diagnostic tools, guidance, and tailor-made support mechanisms such as exchange of good practice and experience, or facilitating peer-to-peer networking. The emphasis is mainly on assisting them to better manage EU investment.

The Commission recently launched two new initiatives: the TAIEX-REGIO PEER 2 PEER exchange system (launched on 24 March) and the Integrity Pacts:

PEER 2 PEER is designed for the 24,000 officials who work for bodies managing funding and projects under the European Regional Development Fund and the Cohesion Fund. It responds directly to specific requests by authorities logged on the online database and will deliver assistance in the form of expert missions, study visits and specific workshops. Officials willing to share their expertise should register with the Experts Database.

  • Integrity Pacts were developed by NGO Transparency International to support governments, businesses and civil society to improve trust and transparency in public procurement. The Commission now aims to pilot Integrity Pacts for several EU co-funded projects by the European Regional Development Fund and the Cohesion Fund.

An Integrity Pact for the Cohesion Policy funds will be a legally binding agreement between the Managing Authority and companies bidding for public contracts that they will follow a transparent and efficient procurement process. To ensure greater accountability, the Integrity Pacts will include a monitoring system led by a selected civil society organisation.

The call for interest to participate in piloting this instrument in Cohesion Policy co-financed projects in the Member States will be launched in May 2015. Authorities and beneficiaries are strongly encouraged to make use of this initiative.

 

Are there other ways in which Member States and regions can invest in efficient public administrations?

Beyond technical assistance, eligible Member States should use measures which support broader institutional capacity building. Investment in institutional capacity building and efficient public administration (Thematic Objective 11), supported by the European Social Fund and by the European Regional Development Fund, has a wider and longer term goal. The focus is on genuine reform and systemic change to improve the intrinsic performance of public administrations, independently of their role in managing EU funds.

In 2014-2020, the European Structural and Investment Funds will continue to support institutional capacity building and reforms. The objective of this support is to create institutions which are stable and predictable, flexible enough to react to societal challenges, open for dialogue with the public, able to introduce new policy solutions and delivering better services. It is directed at more efficient organisational processes, modern management, and motivated and skilled civil servants.

Supporting public administration reforms as part of the Institutional Capacity Building Thematic Objective in the 2014-2020 programing period is linked to the relevant Country Specific Recommendations, related Staff Working Documents, Economic Adjustment Programmes where applicable, and the National Reform Programmes.

 

Is there money in the next programming period to help this effort?

Yes. Around 4.8 billion euro has been programmed in the new Cohesion Policy budget for 2014-2020 to support Institutional Capacity Building and reforms. The funds will also be directed to strengthening the capacity of the bodies directly involved in implementation, through technical assistance.

 

How do you help fight fraud and corruption?

0.2% of all errors reported in Cohesion Policy management are caused by fraud. The Commission has a zero tolerance approach to fraud and corruption and expects the same from Member States and regions. Financial assistance should be used to support competiveness, enhance productivity and create new job opportunities. When screening Partnership Agreements and Operational Programmes, the Commission insists on a clear commitment from Member States to take actions to prevent fraud and will closely follow up on that commitment.  

In December 2013, together with Transparency International, the Commission organised an international conference followed by a series of country seminars on fighting fraud in European Structural and Investment Funds. The main focus of these events was to offer officials hands-on tools that can prevent the misuse of funds.

One of the concrete outcomes of these seminars was the idea of applying the "Integrity Pacts" system, developed by Transparency International, to Cohesion Policy-supported projects.

The Commission has also developed—and strongly encourages Member States to use—a new IT tool called ARACHNE. This tool combines European Structural and Investment Funds monitoring data with external databases and helps managing authorities to identify projects with higher risks which require closer scrutiny.

 

What is the purpose of the High Level Group on Simplification? How will it help Member States to take up opportunities to simplify access to European Structural and Investment Funds for beneficiaries?

The new regulations for 2014-2020 offer a range of opportunities to reduce the administrative burden for beneficiaries and simplify their access to EU Funds. These include a set of common rules for all European Structural and Investment Funds, the extended use of simplified costs options and the move towards e-cohesion. The independent High Level Group monitoring simplification for beneficiaries would focus on five main issues: access to funding by SMEs; the adding of extra requirements or administrative hurdles by national or regional authorities (so called "goldplating") including the process of selecting projects; the use of simpler ways to reimburse the costs involved (for example through lump sums or flat rates); the use of online based procedures (such as "e-cohesion" in Cohesion Policy funded projects); and how projects initiated and managed by local communities (community-led local development) are being put into place.  

During the first year, the High Level Group would assess the take up of simplification possibilities by Member States. It would then work on a more detailed analysis of the implementation of simplification opportunities in Member States and regions. This would result in 2016 in a first set of recommendations on how to improve the take up of opportunities of simplification for beneficiaries provided by the regulations. The High Level Group could then make proposals on how to achieve further simplification in the post-2020 framework in early 2018.

 

More information:

IP/15/5130

PEER 2 PEER

European Commission and Transparency International join forces for better spending of EU investments

On the InfoRegio website: Improving how funds are invested and managed

On the ESF website: Better public services

MEMO/15/5128

General public inquiries:


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