Structural Funds Management Capacity John Bachtler & Irene McMaster European Policies Research Centre Workshop 11E20 European Week of Cities and Regions Open Days October 2006

European Policies Research Centre, University of Strathclyde 2 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

European Policies Research Centre, University of Strathclyde 3 Structural Funds Management Capacity Policy/institutional context Management capacity: key factors Management capacity: requirements & challenges Building management capacity Conclusions

European Policies Research Centre, University of Strathclyde 4 Policy/institutional context 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

European Policies Research Centre, University of Strathclyde 5 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

European Policies Research Centre, University of Strathclyde 6 Management Capacity Challenges

European Policies Research Centre, University of Strathclyde 7 Management Capacity Challenges

European Policies Research Centre, University of Strathclyde 8 Management Capacity Challenges

European Policies Research Centre, University of Strathclyde 9 Strategic objectives 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

European Policies Research Centre, University of Strathclyde 10 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)

European Policies Research Centre, University of Strathclyde 11 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

European Policies Research Centre, University of Strathclyde 12 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)

European Policies Research Centre, University of Strathclyde 13 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

European Policies Research Centre, University of Strathclyde 14 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

European Policies Research Centre, University of Strathclyde 15 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

European Policies Research Centre, University of Strathclyde 16 Management capacity: requirements & challenges Marketing & project generation Project selection & implementation Programme development & management Monitoring & evaluation

European Policies Research Centre, University of Strathclyde 17 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

European Policies Research Centre, University of Strathclyde 18 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

European Policies Research Centre, University of Strathclyde 19 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

European Policies Research Centre, University of Strathclyde 20 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

European Policies Research Centre, University of Strathclyde 21 Building management capacity 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

European Policies Research Centre, University of Strathclyde 22 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