Which Way Forward for Cohesion Policy Programmes in 2014–2020?

By John Bachtler

Despite the failure of Member States to agree the financial framework for 2014-20, and the associated delay in finalising the regulations for Cohesion policy, Member States are hard at work on their Partnership Agreements and Operational Programmes (OP). During November and December 2012, the Commission has been presenting its 'Position Papers' on the programming of resources, especially its assessment of development challenges and the priorities for each Member State. This article considers how some of the key elements of the proposed regulatory framework (relating to strategic coherence and programming, thematic concentration, performance, and the integrated approach to territorial development) are being translated into practice.

Strategic coherence

The strategic planning framework will be upgraded for 2014-20 involving a more co-ordinated approach across EU Funds and policies and a strong focus on the Europe 2020 objectives for smart, sustainable and inclusive growth. The Common Strategic Framework (CSF) has been drawn up with the aim of increasing coherence between policy commitments made in the context of Europe 2020 and investment on the ground. The intention is to encourage integration by setting out how the Funds can work together and provide a source of strategic direction to be translated by Member States and regions into the programming of the CSF Funds in the context of their specific needs.

To a certain extent, the CSF is fulfilling its intended goal. There is evidence that the CSF is influencing the choice of strategic and specific objectives and encouraging a more integrated approach through better national-level co-ordination of the Funds and their application to territorial challenges. This includes the possible use of co-ordinating committees for all Funds, joint managing authorities for different Operational Programmes (OPs) and - in some Member States - a greater use of national programmes. Although most Member States apparently intend to continue implementing the Funds through a mix of national and regional OPs, with many continuing the current system of one OP per Fund, several Member States are planning to use a single OP for all Cohesion Policy funds (ERDF, ESF, Cohesion Fund) to achieve a more integrated approach to strategic planning and implementation.

One concern is that co-ordination arrangements may become more formalised, bureaucratic and complex than in the 2007-13 period. Other challenges noted by Member States include finding an appropriate balance between high-level strategic direction and scope for fine-tuning at OP level and creating effective co-ordination arrangements between national and sub-national levels, especially where integrated local development initiatives are likely to be used.

Thematic concentration

The regulatory framework foresees thematic concentration of expenditure on a limited number of objectives and investment priorities in order to maximise the contribution of Cohesion policy to Europe 2020 priorities and achieve a critical mass of support. The rationale for thematic concentration is widely acknowledged by Member States, although there are concerns about the prescriptive requirements to focus minimum amounts of expenditure on specified themes.

For the most part, national and regional investment priorities for 2014-20 have yet to be decided. Insofar as Member States are able to identify likely trends, they anticipate a greater proportion of spending on energy-related themes (energy efficiency, renewables and low-carbon economy), RTDI (research, technological development and innovation), ICT (Information and Communication Technology), education/human capital, social inclusion and health. In line with shifts in the current period, there is also likely to be less support for 'hard' infrastructure, such as transport. In some Member States, there will be no significant shifts, mainly because current priorities are already broadly in line with the proposed requirements for 2014-20.

Changes to resource allocation are being driven not just by the proposed regulations on thematic concentration, but also by the strategic objectives of national development plans, regional development policies and sectoral strategies. Decisions on future priorities will also be shaped by the results achieved during the current period and the challenging financial and economic context. Thus, many Member States advocate greater flexibility in the thematic concentration requirements to reflect national and regional development challenges and needs. There are also some concerns about smaller programmes being able to provide the critical mass under each selected thematic objective.

Performance

The new regulatory framework envisages a stronger focus on performance. An important element is the use of ex-ante conditionalities to ensure that the conditions for effective Cohesion Policy investments are in place prior to the launch of programmes. For example, if a Member State is proposing to allocate EU funds to innovation, it must ensure that there is a national or regional research and innovation strategy in place. Many Member States recognise that conditionalities have the potential to enhance the quality of spending by encouraging more rigorous, timely and co-ordinated programming and by supporting a more result-oriented approach. Several stress the importance of implementing conditionalities in line with the spirit of the partial general agreement achieved in the Council, implying that the selected conditionalities are directly linked to programme objectives, negotiated consensually and that the principles of subsidiarity and proportionality are respected (i.e. that conditionalities are negotiated and take account of the scale of funding). Also, there is a concern in some Member States about the additional administrative and co-ordination effort needed to agree and oversee the implementation of conditionalities.

There are mixed views among Member States on the proposed performance reserve. Some are sceptical due to previous experiences in 2000-06 when the obligatory reserve proved difficult to implement in a manner that was practical, objective and results-oriented. It is also recognised that performance management is a complex, time-consuming and long-term exercise, which requires changes in systems and behaviour. Nevertheless, the Member States that used a performance reserve voluntarily in the current period argue that the experience was beneficial overall. There are also positive experiences reported with outcome-based payments in the current period under the ESF, EARDF and at the level of specific interventions in other countries.

A further central element of the performance framework is the emphasis on setting the right targets and identifying appropriate indicators to ensure effective monitoring, evaluation and reporting on the performance of the policy. This will require the development of guidance, expert support, evaluations of current arrangements and consultations. Member States recognise that indicators will need to be relevant, coherent and streamlined, and there is considerable work underway on the use of indicators in the next period, as well as the necessary adaptations to monitoring and evaluation systems to report on progress against the milestones and targets. Some Member States emphasise that assessing causal impact requires a broad range of tools - such as impact evaluation, case studies, benchmarking, surveys and robust statistical techniques - and note the difficulty of demonstrating results where small sums of funding are involved.

Integrated approach to territorial development

Taking account of the territorial cohesion objective, the new regulatory framework highlights the importance of an integrated approach to territorial development, including through Community-led Local Development, Integrated Territorial Investments (ITIs) and sustainable urban development. Partnership Agreements will be required to describe how different types of territories and the integrated approach will be supported.

The territorial dimension is widely supported by Member States as an asset of Cohesion Policy compared to a sectoral approach, ensuring sensitivity to territorial specificities and a bottom-up approach to development. It is recognised that the new regulatory framework provides Member States with opportunities to promote a more integrated approach to territorial development in line with domestic needs. Some consider that the potential of the territorial dimension is not yet being fully exploited, for example via the negotiation of the CSF and the application of tools like territorial impact assessment.

In taking forward the territorial development instruments foreseen in the draft Regulations, Member States have identified a range of issues that will need to be resolved during the programming of Partnership Agreements and OPs. These include the level of demand for ITIs, the relationship with thematic concentration, the role of different Funds, strategic coherence in the treatment of territory at different scales and the level of administrative capacity at sub-regional level. While the Community-led Local Development instruments are based on the existing LEADER approach, ITIs are new and there is a lack of detail on how they can be used most effectively in practice. Finally, notwithstanding the efforts of the Commission to harmonise rules, there are concerns about the different administrative requirements for each of the Funds which could undermine an integrated approach to territorial development.

Conclusions

Much about the programming for 2014-20 is still uncertain. Although there has been considerable investment in analysis, consultation and the preparation of Partnership Agreements, key decisions still have to be made in many Member States on the future programme architecture and the allocation of resources, some of which depend on the overall budget that will be available. As this article has shown, there are several important aspects of the regulatory framework that need further interpretation or clarification.

A critical element of the new framework is the goal of raising the performance of the Funds with more visible results. This requires Member States to put the new 'intervention logic' into practice, but it is unclear whether managing authorities fully understand or support the expectations of the Commission. There appears to be a gap between the commitment of European and national politicians for better quality spending and, at least in some Member States, a perception that existing programming, monitoring and evaluation practices can be largely rolled over into 2014-20.[1] In this area, as with the implementation of strategic coherence, thematic concentration and integrated territorial development, the coming year will reveal whether the ambitions of the Commission for the new period can be realised.


This article draws on a paper produced for the Cyprus EU Presidency prepared by John Bachtler, Carlos Mendez and Stefan Kah, European Policies Research Centre, University of Strathclyde, Glasgow. The permission of the Cyprus Presidency to use the material is gratefully acknowledged. Further detail on the debates underlying each of the regulatory changes being negotiated is available in: Mendez C, Bachtler J and Wishlade (2012) Cohesion policy after 2013: A critical assessment of the legislative proposals, Study for the European Parliament, Brussels.

[1] Mendez C, Kah S and Bachtler J (2012) The promise and perils of the performance turn in Cohesion policy, IQ-Net Thematic Paper 31(2), European Policies Research Centre, University of Strathclyde, Glasgow.

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