Structural Funds Management Capacity John Bachtler & Irene McMaster European Policies Research Centre Workshop 11E20 European Week of Cities and Regions

Structural Funds Management Capacity

John Bachtler & Irene McMasterEuropean Policies Research Centre

Workshop 11E20 European Week of Cities and Regions

Open Days 2006

11 October 2006

European Policies Research Centre, University of Strathclyde2

European Policies Research Centre (EPRC)

• specialises in comparative research on public policy throughout Europe

• focus on monitoring and analysis of regional development policies at European and national levels

• policy advice and exchange of experience through networks, e.g. (Improving the Quality of Programme

Management) – regional and national Structural Fund programme management authorities from 12 Member States

www.eprc.strath.ac.uk/iqnet/


Structural FundsManagement Capacity

• Policy/institutional context

• Management capacity: key factors

• Management capacity: requirements & challenges

• Building management capacity

• Conclusions


Policy/institutionalcontext

• Macro-economic policy, including public investment – stability, availability of co-finance

• Regulatory issues - labour markets, capital markets etc conducive to employment creation, entrepreneurship, private sector financing etc

• Policy context: – existence of national policy strategies in key sectors– existing re-distributional policies – tax-benefit system,

equalisation mechanisms, regional policies

• Efficiency of public administration - bureaucracy, human resources, competence, credibility etc


Management capacity: key factors

Management capacity requirements depend on:

• programme architecture – regional eligibility, resources, number of OPs, strategic objectives and thematic priorities

• institutional arrangements for managing and implementing the Funds

• resource allocation mechanisms – systems for selecting projects


Management Capacity Challenges

Spatial eligibility, 2007-2013

0%

20%

40%

60%

80%

100%

Convergence Phasing-out Phasing-in Reg. Comp. & Employment



Indicative financial allocations, 2007-2013

0

10000

20000

30000

40000

50000

60000

70000

Polan

d

Spain

Italy

Czech

Rep

Ger

man

y

Hunga

ry

Portu

gal

Gre

ece

Roman

ia

Franc

e

Slova

k Rep UK

Lith

uani

a

Bulga

ria

Latv

ia

Slove

nia

Eston

ia

Belgiu

m

Nethe

rland

s

Sweden

Finlan

d

Austri

a

Irelan

dM

alta

Cypru

s

Denm

ark

Luxe

mbo

urg

€ m

illio

n

Convergence regions Cohesion Fund Phasing-out regions Phasing-in regions RCE regions Terr. Coop



Proposed Operational Programmes, 2007-2013

0

5

10

15

20

25

Num

ber

National/sectoral OPs Regional OPs


Strategic objectives2007-2013

Common commitment to Lisbon (growth and jobs) in the NSRFs, but varied objectives:

• competitive economy (R&D, innovation, knowledge economy, entrepreneurship)

• employment• quality of life / territorial attractiveness• development of human capital• social cohesion• balanced territorial development• European or national convergence


Implementing arrangements:management structures

Managing & Paying Authorities

• Managing Authorities – single ministry MA (e.g.

Estonia, Latvia, Lithuania)

– multiple MAs (e.g. Hungary, Poland)

• Paying Authorities– mainly in finance

ministries– paying units at OP level

in other ministries in some countries

Intermediate & Implementing Bodies

• Delegation of management to intermediate bodies:– central government

ministries (smaller countries)– state agencies (e.g.

CzechInvest, Hungarian National Employment Office, Slovak Energy Agency)

– regional offices of the state (Voivod Offices, Poland)

• Delegation of delivery to implementing bodies

• Use of specialist management bodies (Greece, Netherlands, UK)


Implementing arrangements:management structures

• Delegation to ‘intermediate’ and ‘implementing’ bodies has implications for management capacity: – intermediate and implementing bodies are often

closer to beneficiaries– they may have specialist expertise and knowledge to

generate, appraise and select projects– they can help ensure effective financial management

and control of expenditure (BUT)

– implementation structures can easily become overly complex - effective coordination is critical

– implementing agencies may uphold ‘traditional’ or ‘compartmentalised’ approaches


Implementing arrangements:regionalisation

• Centralised administrative systems – management and implementation by central government and national bodies (Estonia, Latvia, Lithuania, Slovenia)

• Deconcentrated administrative systems – central management, implementation by regional offices of the state (Czech Republic, France, Poland)

• Decentralised administrative systems – national coordination, (part-)management and implementation by regional self-governments (Austria, Italy, UK)

• Regionalised administrative systems – management and implementation by regional self-governments (Belgium, Germany)


Implementing arrangements:regionalisation

• Progressive regionalisation of Structural Fund management in many EU countries– increased ‘ownership’ of the programmes– increased regional responsiveness– builds regional institutional capacity

• Barriers to effective & efficient regional participation: – lack of regional institutional infrastructure– concerns over capacity to co-finance programmes– lack of human & administrative resources and experience – poor coordination with central government


Implementing arrangements:resource allocation

Allocation systems:• Subsumed (use of existing domestic decision-making

systems)• Differentiated (separate, Structural Fund-specific systems)• Composite (combination of subsumed & differentiated)

Allocation mechanisms:• Direct single project application systems - national or regional

implementing body• Special funds – ring-fenced, competitive support for special

purposes (e.g. community projects)• Intermediate delivery mechanisms – global grants, local

strategies, thematic partnerships, framework projects• Major projects – pre-selected strategic or ‘flagship’ projects


Implementing arrangements:resource allocation

Choice of resource allocation system has implications for:

• administrative complexity (demands on applicants, selection procedures, decision times)

• strategic coherence of the funding• added value, scope for innovation• accessibility to beneficiaries• flexibility to adapt to changing circumstances• visibility /transparency


Management capacity: requirements & challenges

Marketing & project generation

Project selection & implementation

Programme development

& management

Monitoring & evaluation


Programme development & management

• Requirements: - regional analysis - evaluation of lessons

learned - strategy development

financial planning - indicator

development - consultation &

negotiation

• Difficulties: - incomplete information - lack of time - adjustment to new

regulatory requirements - reconciling partner

aspirations with regional needs

- allocating finance between competing priorities

- inadequacy of indicators


Programme marketing & project generation

• Requirements:- identifying the

information needs- choosing the right

tools and messages- appropriate

communication management system

- provision of support to project applicants

• Difficulties: - lack of information for

applicants - uneven application rates

(and quality) from different sectors & regions

- good-quality ideas into good project submissions

- lack of support & feedback for applicants


Project selection& implementation

• Requirements: - efficiency and

transparency- quality projects in

line with objectives- meeting N+2 / N+3

commitments- flexibility to deal

with innovative applications

- after-care arrangements

• Difficulties:- compatibility of national

and EU appraisal systems- time and expertise for

systematic assessment - rigorous selection, but open

to innovative submissions- lower quality projects now

or higher quality projects later?

- involvement of elected vs expert officials in the decision-making


Monitoring & evaluation

• Requirements:

- rigorous financial and physical monitoring systems

- accurate data- effective IT- monitoring/evaluation

expertise- robust indicator system- ‘useful and useable’

information

• Difficulties:

- delays in establishing monitoring systems

- problems with IT - indicators with

insufficiently clear definition and focus

- poor coordination and data-gathering systems

- limited experience and lack of qualified staff/evaluators


Building managementcapacity

Key factors for effective management are:

• Investment in human resources – adequate personnel, requisite mix of skills (management, analytical, process etc), clear assignment of responsibilities, motivation and retention of key staff, utilisation of previous experience

• Access to reliable information – for regulatory compliance but also for effective programme management across the whole cycle

• Effective communication mechanisms – for coordination of management and implementation bodies, dialogue with programme partners, informing and engaging applicants, publicity

• Learning and support systems – institutional resources, access to external experts, participation in networks and national/international exchange of experience – and also flexibility to change


Conclusions

• Importance of supportive policy and institutional context - co-financing, regulation, compatibility and coherence with domestic policies

• Management requirements vary according to programme architecture, institutional arrangements and resource allocation systems/mechanisms

• Programme management requirements need to recognise challenges and constraints of the different parts of the programme cycle

• Key factors for effective management are: investment in human resources; access to reliable information; effective communication mechanisms; and learning and support systems

Documents

Structural Funds Management Capacity John Bachtler & Irene McMaster European Policies Research Centre Workshop 11E20 European Week of Cities and Regions