Preparations for the Structural Funds Programming Period 2014–2020 in Mainland Finland

By Riikka-Maria Turkia

The Managing Authority of The European Regional Development Fund (ERDF) and The European Social Fund (ESF) programmes in mainland Finland, i.e., the Ministry of Employment and the Economy, was determined to avoid the delays and problems that characterised the start of the 2007–2013 programming period. Therefore, the preparations for the next period were started soon after the publication of the Fifth Cohesion Report. A working group including all the relevant stakeholders was established to discuss the organisation and priorities for the future period. The initial starting point was similar to the thinking of the European Commission: management of the funds and the organisational structure both need to be simple; and funding has to be focused on fewer priorities to achieve a better impact on the policies involved.

Organisational structure of the future programme

After long and sometimes heated discussions, a compromise was reached in March 2012 on how the Structural Funds' implementation would be organised in 2014–2020. With simplification as an objective, a decision was taken to have a single Operational Programme (OP) including both ERDF and ESF activities in mainland Finland. The intention was also to facilitate a better co-ordination between the funds and to improve complementarity. Instead of four regional ERDF OPs and one ESF OP with four regional sections and a national section, there will be a single programming document. This means that there will be joint reporting and just one monitoring committee. Operations will, in most cases, be selected in the regions based on their own regional plans and decision-making. A certain share of funding will, however, be reserved for the implementation of nationally important themes and development needs.

The objective to have a leaner organisational structure was not, however, reached. Regional Councils and the Centres for Economy, Transport and the Environment (ELY Centres) have both been implementing bodies of the Structural Funds in the current programming period. Regional Councils are responsible for the co-ordination of regional policy and the ELY Centres are state authorities responsible for the implementation of employment, enterprise, transportation and environment policies, as well as development activities. The initial intention was to change their roles so that the ELY Centres would be in charge of management and payment functions while the Regional Councils would have a role in finding good ideas for projects, and promoting the Funds. The Regional Councils did not consider their role strong enough without the possibility of funding projects themselves, which led to the decision to keep the number of implementing bodies roughly the same as in the current period.

Priorities for funding

The next step was to draft the activities that would be included in the future OP. The outline of the chosen priorities was prepared as a joint effort of the different ministries involved in cohesion policy, taking into account the views of regional authorities and other partners. In principle, these priorities correspond to the Thematic Objectives of the general regulation [1]. The fund-specific regulation proposals [2] gave a fairly simple starting point: ERDF funding in a developed country such as Finland should be focused on competitiveness of small and medium-sized enterprises (SMEs), innovations and low-carbon economy; ESF funding was limited to four Thematic Objectives of which the last one (enhancing institutional capacity, etc.) was considered less relevant for Finland. The discussions on the choice of priorities were not easy either. With representatives of so many different bodies, both regional and national, and different policies, the opinions on what should be included were varied. Common language was sometimes missing and there was often disagreement on details. Finally, the ministries involved in regional development had to decide on the priorities for the Structural Funds for 2014–2020. The compromise was to include everyone's wishes into the plan.

The outline looked fine from the outside with only one exception: northern and eastern Finland would have a special priority for accessibility combining two Thematic Objectives: namely, enhancing access to and use and quality of ICT, and promoting sustainable transport. Major investments in transportation and broadband networks would not be eligible according to the Commission's initial proposal, but in the northern and eastern sparsely populated areas connections to both transportation and communication networks were considered too important to be left out.

What about thematic concentration?

Technically, the nationally set priorities would not jeopardise the application of the rules of thematic concentration. ERDF funding could be focused on three Thematic Objectives: enhancing the competitiveness of SMEs; strengthening research, technological development and innovation; and supporting the shift towards a low-carbon economy in all sectors. These were all themes that would contribute to the overall national objective to strengthen and diversify regional (and national) economies, in particular SMEs, which would also improve employment opportunities.

Focusing ESF funding on four investment priorities is slightly more difficult. However, the outline of national priorities can be linked to the following investment priorities: Access to employment for job-seekers and inactive people, including local employment initiatives and support for labour mobility; Adaptation of workers, enterprises and entrepreneurs to change; Enhancing access to lifelong learning, upgrading the skills and competences of the workforce, and increasing the labour market relevance of education and training systems; Active inclusion; and Equality between men and women and reconciliation between work and private life, which was an obligatory investment priority according to the original regulation proposal.

There was no formal decision taken on the choice of investment priorities. Although the outline is guiding preparation, some flexibility is needed when the regional and central plans are combined into a programme document. The Managing Authority will also need some room to manoeuvre when entering into negotiations with the Commission.

Getting ready for the negotiations with the Commission

The Commission provided some insight into their views in the position paper [3], in which the four DGs involved had reflected on the most important priorities for funding in Finland. The position paper was also presented at the launching event of the negotiations for the Partnership Agreement between Finland and the European Commission. According to the position paper, "Finland's most pressing challenges are related to the weakened competitiveness of businesses and the need to broaden the research and innovation base together with diversifying the economy, youth and long-term unemployment, ageing population, high energy consumption and the need to improve the sustainable management of natural resources and measures related to climate change."

The priorities that the Commission considers relevant to Finland mostly correspond to those selected nationally. Both the Commission and Finnish authorities agree on the importance of an innovative and competitive business and research environment. Enhancing competitiveness of SMEs and supporting their internationalisation, as well as supporting product development and commercialisation, are measures mentioned in the Finnish outline of important actions for which ERDF support is used. Enhancing transfer to a low-carbon economy is also on the national menu of actions to be included in the future Structural Funds Programme. The Commission sees climate change mitigation, protecting the environment and promoting resource efficiency as specific priorities, whereas Finnish authorities would see these rather as part of the low-carbon economy priority and sustainable development as an overarching principle.

Increasing labour market participation is also a common objective and both the Commission and Finnish authorities emphasise employment of young people and improved quality of working life enabling longer careers. However, there are some differences as to how to approach these issues. The Finnish authorities see young people as a special target group in most of the ESF-funded priorities and do not necessarily see the need to concentrate actions under one investment priority for this particular target group. Quality of working life is seen by Finnish authorities as a fundamental part of adaptation to change. It is somewhat surprising that the Commission does not mention adaptation at all in the position paper, although structural change is an ongoing phenomenon in the Finnish economy, which is likely to continue also in the longer perspective. Change has actually become an inseparable part of economic life, and as such, requires new methods and thinking among all the actors involved: enterprises, employees and authorities. Demographic change is considered as one element requiring adaptation.

It is also interesting that the Commission's outline actually includes more Thematic Objectives and investment priorities than the Finnish authorities consider realistic and possible, taking into account the requirements of thematic concentration. It may well be that after the negotiations with the European Parliament, we are in a situation where the regulations allow for less concentrated focus. It does not, however, change the fact that Finland will most likely receive less funding than during the current programming period. Therefore, it is necessary to carefully consider where the money is allocated in the next seven-year period.

Next steps

An important challenge is to find a way to put together all the plans into a coherent, focused, and balanced programme. This means that the hardest work lies ahead. Ex ante evaluation has recently begun and the evaluators should help with the special targets, indicators, milestones, etc. Another difficult national decision should soon be made regarding the allocation of funding to different priorities and to different implementing bodies. However, if the EU-level negotiations are concluded as planned, there is a good chance that a mainland Finland OP will be ready to be submitted to the Commission by next autumn simultaneously with the Partnership Agreement.

[1] Common provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund. 2011/0276 (COD).

[2] European Regional Development Fund, 2011/0275 (COD) & European Social Fund, 2011/0268 (COD).

[3] 'Position of the Commission Services on the development of Partnership Agreement and Programmes in Finland for the period 2014–2020', 22.10.2012.

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