Allister disappointed Task Force didn't address 'Additionality'
14 April 2008
In noting the publication of the EU Task Force Report, it is important to stress that no additional funds will, as a result, become available to Northern Ireland, other than what was already possible. The Report merely assists in better identifying existing funding opportunities. Though this, in itself, is a worthwhile exercise, an opportunity to press President Barrosso last May into a commitment to a new Infrastructure Fund for Northern Ireland, was missed by OFMDFM.
The Peace Package – whatever its defects – was the product of an “on the hoof” commitment by the Commission President in 1994. Technically it was not possible within EU policies and programmes as they then existed, but it was achieved virtually by presidential decree and the policy and budget framework was then put in place to accommodate it. Similar pressure on Barrosso, at a high point of EU goodwill, could have produced a special programme to meet our infrastructural deficit, particularly on roads and water & sewerage - which continue to be our greatest need. The justification was obvious: such necessary expenditure over the years had got squeezed out by the prioritising of security spend and the fact that we missed out in qualifying for such aid under Cohesion Policy when it was available. Sadly, however, OFMDFM failed to secure such a meaningful package and instead we got a Task Force, which sounded good, but amounted mostly to a triumph of form over substance.
The Report is certainly strong on historical recital, but, frankly, it amounts to little in terms of future benefit.
One of my biggest criticisms and regrets is that the report failed, at all, to address the vexed issue of "additionality", which has long blighted regional aid from the EU.
EU funding is supposed to be additional to national spending in Northern Ireland. Article 11 of Council Regulation (EC) 1260/1999 stipulates such when it says, "In order to achieve a genuine economic impact, the appropriations of the Funds may not replace public or other equivalent structural expenditure by the Member State." This is the essence of additionality.
That is the theory but the practice in regard to Northern Ireland is shamefully different. Upon challenging the Direct Rule Finance Minister, Lord Rooker, on this issue, back in 2006, he replied as follows:-
"Your fourth point asks whether the EU funding to Northern Ireland represents additional funding to Northern Ireland or if it goes to reduce the burden on the UK Exchequer. The level of public expenditure that takes place in Northern Ireland is determined by the bi-annual spending review process for the UK as a whole and changes to Northern Ireland total spending are determined by the Barnett formula. The total amount of public expenditure available in the UK is determined by the revenue available. One of the factors determining this total revenue is the level of EU income. Other factors include tax revenues and borrowing. Northern Ireland benefits from the fact that higher levels of EU income to the UK enable higher total levels of expenditure throughout the UK including Northern Ireland."
Thus it is very clear that Northern Ireland and its needs are used as the means of attracting EU funding, but when it is received it goes directly to the UK Exchequer to the benefit of the UK as a whole, rather than for the singular benefit of Northern Ireland. EU funding, when received in the UK Exchequer, is then used to reduce the balance of UK-wide tax revenue and borrowing which is necessary to meet the UK’s public expenditure demands.
I contend that this use of EU funding does not deliver true additionality and is not how it should be deployed. I had hoped that under devolution the DFP Minister would have ensured that the Task Force focussed on this issue, with a view to bringing real benefit to Northern Ireland. To find the Task Force silent on the issue is a major disappointment.
In considering Northern Ireland in the context of EU funding, it is also relevant to recall that the UK as a whole is a net contributor to Europe. Even with the UK rebate our net annual contribution is habitually of the order of £4billion, and rising. Northern Ireland's taxpayers play their part in funding this subsidy to Brussels and therefore it is wrong to suggest that our region is solely a net beneficiary of funding from Europe. Two things are clear: we do, through our membership of the UK as taxpayers, contribute substantially to the funding of Europe and that which we get back is not transparently additional to other public expenditure within the Province, as it ought to be.
While the Report rehearses many of the infrastructural weaknesses regarding our water, transport and waste management systems, no extra assistance is offered specifically to help target regional deficiencies. While the Report centres on the six EU funding Programmes for 2007-2013, these were earmarked for Northern Ireland regardless of Commissioner Hubner’s Task Force Report.
One of the more useful outcomes of the Task Force is to reveal the extent to which Northern Ireland authorities are not fully up to speed with various EU funding streams available. The Report politely states that relations between the Commission and the Northern Ireland Executive office at Brussels involves ‘regular’, but not ‘systematic’, contact. In relation to agricultural policy, the Task Force Report stresses the importance of Northern Ireland authorities being as proactive as possible in discussions on the future shape of the Common Agricultural Policy, both at UK and EU levels. I echo calls for increased efforts by Northern Ireland civil servants in Brussels, to represent Northern Ireland’s interests in Europe on an ongoing basis with their counterparts in the Commission. This preventative approach would be effective in safeguarding against legislation which is unsuited to the individual circumstances of Northern Ireland, and would replace the need for much ‘firefighting’ at a later stage.
I welcome the Report’s recommendation that Northern Ireland needs to secure its fair share of funds under the Competitiveness and Innovation Programme, which will provide high risk capital for innovative SMEs in their expansion stage. Such funding is essential to enabling small and medium businesses to develop at the growth stage.
I take issue with a prevalent theme of this Report, which is a lack of respect and acknowledgement of Northern Ireland as an autonomous region, separate from the Republic of Ireland. Indeed, when referring to Regional Development, the Report specifically speaks of cross-border remedies being necessary to address the economic and social disadvantage arising, ‘as a result of the existence of the border’. There must be due respect for the existence of national borders between Member States.
Lessons that should be taken from this Report, include more effort being needed on the part of Northern Ireland officials to be aware of, and bid in for our fair share of European funding on funds other than the ‘big 6’ which are Northern Ireland specific. Our economy could benefit from R&D funds available under the Framework Seven Programme, but yet little is known about the existence of these funds, even within DETI.
Closer scrutiny of European matters could also go some way in excluding Northern Ireland from much of the irrelevant EU bureaucracy which does not take into account the unique circumstances of Northern Ireland, such as the recent steps to impose a ban on mince derived from animals slaughtered more than 6 days.
