EU Structural Funds

– in the Northern Ireland Assembly at 12:00 am on 27th March 2001.

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Photo of Lord John Alderdice Lord John Alderdice Speaker 12:00 am, 27th March 2001

I have received notice from the Minister of Finance and Personnel that he wishes to make a statement on current issues relating to EU structural funds.

Photo of Mark Durkan Mark Durkan Social Democratic and Labour Party

I would like to make a statement about some important developments on the European structural funds. In this Building last Thursday, we were able to mark, with the European Commission and the Irish Government, the completion of the negotiations with the Commission on the new round of structural funds. On that occasion, the two member states and Commissioner Barnier formally recorded their agreements to the new Peace II programme and to the Northern Ireland Programme for Building Sustainable Prosperity. This was an important stage in a long and complex process, which began with the Good Friday Agreement. Following that agreement, the First Minister and the Deputy First Minister set out to ensure that the European Union acknowledged and gave practical support to the efforts to build a lasting peace in Ireland. In that endeavour they were given strong support and practical help from the two Governments, MEPs and many others.

The two programmes signed last week are the Programme for Building Sustainable Prosperity and Peace II. They both come under the umbrella of the community support framework, which was agreed by the Commission in December. Now that the programmes have been agreed, the next stage is the production of programme complements which will set out details of the types of projects that will be supported. The programme complements will be approved by the monitoring committees.

The first of the operational programmes, formally known as the transitional Objective 1 programme, will be worth £862 million, including the match funding. It will focus on the key areas of economic growth and renewal, employment and social inclusion, and the environment and rural society.

The Peace II programme, which is worth £366 million — again including the match funding — will have the twin objectives of addressing the legacy of the conflict and taking the opportunities arising from peace.

The possibility of continuing support and assistance from the European Union was signalled through the conclusions of the European Council meetings at Cardiff and Vienna during 1998. At Berlin in March 1999, in the culmination of the spending settlement for the entire European budget for the forthcoming seven years, it was decided that Northern Ireland would receive support as an Objective 1 region in transition. In addition, Northern Ireland was given a unique and distinctive privilege in the form of a further special package of funding to continue and develop the work begun under the first EU Special Support Programme for Peace and Reconciliation in Northern Ireland and the border counties of Ireland. This was secured through the determined efforts of the First Minister and the Deputy First Minister in conjunction with the two Governments and supported by MEPs and many others. Therefore even the process of securing the new round of funding involved working together in Northern Ireland and on a North/South and East/West basis.

In their negotiations with the Commission and the Presidency in Brussels and Bonn, the First Minister and the Deputy First Minister sought assistance with a unique transition. The strong support from the European Union for the process and the Good Friday Agreement has been essential and unique. It allows us to see our place in the future European Union. David Trimble and Séamus Mallon argued that the context called for a new peace programme with some differences from the previous programme. This has been confirmed in the operational programmes that were agreed last week.

The strategic aim of the new Peace II programme is to reinforce progress towards a peaceful and stable society and to promote reconciliation. It will do that by promoting and supporting economic and social development with a special focus on those groups, sectors and areas that have been most affected by the conflict in our society. The aim of the new Programme for Building Sustainable Prosperity is to help to create the conditions for sustainable prosperity in a modern, competitive economy.

Since the Berlin Council we have made a good beginning on the transition. We can already point to the creation and continuation of the institutions and to the difference that the Executive are making through the ambitions in the Programme for Government. The new structural funds operational programmes that were agreed last week should be seen in that context.

Last February, when the Executive addressed the approach to Peace II, we committed ourselves to ensuring that the new programme would deliver progress on social inclusion — and with particular respect to the needs of children, women and young people — on North/South co-operation and, most important of all, on the maintenance and development of the local delivery mechanisms which were a unique and successful innovation under Peace I.

These commitments clearly can, and should, guide the use of this programme, and which is relevant to our wider Programme for Government. The Executive returned to those issues in detail in July and December 2000 when the approach to the Peace II operational programme and the transitional Objective 1 programme was confirmed. The direction of the new programmes is therefore based on careful consideration and discussion by the Executive.

In putting in place arrangements for the management and delivery of the new programmes we have also sought to ensure that we have built on the lessons that we learned from the last round of EU structural funds support. New monitoring committees have been appointed for each operational programme and for the community support framework. The membership of those committees reflects proposals drawn up by the social and economic partners in consultation with my Department and agreed by the Executive. The Executive have also retained and built on the unique combination and diversity of organisations involved in planning and managing the delivery of the new structural funds programmes, particularly Peace II. Thus, the combination of local partnerships operating at district council level, intermediary funding bodies and Government Departments, that have been used for Peace I, has been retained in the new peace programme. Additional roles have been specified for the special EU programmes body, in line with its statutory responsibilities.

In implementing the new programme for building sustainable prosperity we will also seek to work in close partnership with local communities, business, trade unions, the voluntary and community sectors and our universities and colleges to help ensure that the activities funded are used to best effect.

In this context, I want to address directly the concern that, in some sense, the Peace II programme represents a step away from the successful approach to local delivery taken under Peace I. On the contrary, Peace II represents an extension and development of important steps we took as a community with Peace I. Within the context of the new institutions the partnership approach can — and, I believe, will — be extended with new dimensions to gain increasing influence on the way in which we do business. They will have a vision and impact that will last well beyond the horizons of the Peace II programme.

Peace I arrived during direct rule, and the opportunities for influencing the business of Government by local politicians, social partners or district councils were minimal. In the context of the new institutions, I see an opportunity for the partnership process to be widened and deepened at both regional and local level. That is the Executive’s vision for this aspect of the Peace II programme. Throughout this process we have sought to work with the European Commission and many in the community who have displayed an unfailing commitment to the exploration of the opportunities that European funding gives.

We were consistently determined to ensure that the principles of partnership and local delivery were developed. We do not want the partnership approach to be confined to European funding, nor do we want it to wither away when that source of income has ceased.

I shall now outline how we envisage the development of this programme at local and regional level. The new round of funding provides an opportunity to radically extend the role and influence of the partnership approach. At local level, the Executive have agreed that the new local strategy partnerships, which will take forward priority 3 of the Peace II programme, will be given the opportunity to develop a strategic approach at local level. Those local strategy partnerships will be encouraged to develop a wider perspective, including increased interaction with the regional Administration and between district council areas.

They will work with the Special EU Programmes Body on North/South co-operation. As set out in the operational programme, their remit includes new dimensions of work on the social economy and human resource development which represent a marked advance and a new opportunity for development of social cohesion at local level.

The new local partnerships being created for the new Peace II programme both acknowledge what has been achieved in the past and reflect what the Executive want to see achieved for the future. I am on record on several occasions as making it clear that I do not see the principles of local partnerships and partnership working as something that we can apply only to European funding and then throw away once that funding ends. Instead, I want to see partnership work becoming an integral part of how we, as a devolved Administration, ensure that local community voices are heard and influence priorities for spending at local level — not just from European funds but from other sources of public, and indeed private, finance.

The whole purpose of our approach is to increase the scope and significance of decision-making at local level. The principles underlying this new approach to partnership work have also been strongly endorsed by the European Commission during our negotiations on the new Peace programme. Both we and the Commission want to see a strong "bottom-up" approach to partnership work under Peace II, which will ensure that the final decisions on local priorities are taken by local communities operating at local level. However, to achieve that we must make some key changes to how the partnership model developed under Peace I operates under the new Peace II programme and beyond.

First, we must ensure that district councils become involved in the operation of the local partnership model, not just through the participation of individual district councillors, but through the engagement of the district councils at a corporate level in the processes of partnership work, and particularly in supporting the preparation and agreement of the locally based strategies that will underpin the work of the new partnerships. The input of district councils will be particularly important, especially given their wider responsibilities — for example, for local economic development under the transitional Objective I programme.

Secondly, we must ensure that statutory agencies operating at local level become actively involved in partnership work — not in a controlling way, but in a way that will ensure that the broader strategic direction of the Department and its agencies take full account of the view and priorities of local communities operating at local level.

Neither of those changes involves a diminution of the influence of the community at local level. On the contrary, they will provide for that influence to be made more effective through a stronger partnership model. Some are concerned that by having a different structure from those which have gone before, the new partnerships will lose some of their strength. I do not believe this to be the case. The approach that we are taking includes an emphasis on reaching agreement on the details of arrangements for local partnerships at local level. We have agreed in the Peace II operational programme that there should be an equal partnership on a fifty-fifty basis between two strands — on one hand, government in the wider sense, and on the other, the social partners, the business sector, the trade unions, the voluntary and community sector and representatives of agriculture and rural society.

Photo of Ian Paisley Ian Paisley Leader of the Democratic Unionist Party 10:45 am, 27th March 2001

If you have that balance, is it not the case that the statutory bodies and those associated with them on the voluntary side will put the elected members of the councils into a minority position for all time?

Photo of Mark Durkan Mark Durkan Social Democratic and Labour Party

I will cover that and explain it fully during the rest of my remarks. When I spoke of a fifty-fifty balance, I referred clearly to government in the wider sense. That will be local government and central Government, or the agencies of central Government as they operate at local level.

The balance between them will be determined locally. Under the existing partnership model it is not the case that local councils form a majority of membership. Those proposals have been developed through working group arrangements.

The proposals for the various stages of developing the new local partnership model have been developed in consultation with representatives from local councils, existing district partnerships, intermediary funding bodies et cetera. Therefore, council numbers for the Government side are to be agreed locally between local government and the statutory agencies. That is welcomed by many in local government, because they believe it puts them in a stronger position to co-ordinate and liaise with the statutory agencies.

I want to emphasise that I fully understand the concerns expressed by many in the voluntary sector about aspects of that approach. Under the Executive’s proposed approach, the scope for the voluntary and community sector, and for the other social partners, to influence what is evolving is strengthened, because the terms of reference for local strategy partnerships are wider. Therefore, through those partnerships, those participating from the social partner side will have important influence not only on the work on priority 3 by each local strategy partnership but also on the wider policy environment.

I am aware that the fifty-fifty arrangement has been taken to imply that each pillar of the social partners will have 12.5% of the membership. [Interruption]

Photo of Lord John Alderdice Lord John Alderdice Speaker

Order. It is not appropriate to get into the habit of intervening when Ministers are making statements. There will be an opportunity for questions afterwards. If Members wish to ask questions on the ministerial statement, they should advise me and I will try to accommodate them. I will note the Member’s name.

Photo of Mark Durkan Mark Durkan Social Democratic and Labour Party

I want to make it clear that we have been at pains to note that membership should be decided at local level rather than be imposed. One size does not fit all. Just as local agreement will be needed on the composition of the Government strand of the partnership, I am confident that local agreement can be reached by the social partners on the composition of their strand. If, working on further guidelines, the social partners can agree on a particular formula to be applied at local level, we shall be happy to accommodate such agreement. That could then be reflected in the final guidelines for the local strategy partnerships and incorporated in the programme complement.

Turning to the relationship between the local and regional dimensions of partnership, again I emphasise that the context is different. At the beginning of Peace I, regional partnership was non-existent. I pay tribute to the Northern Ireland Partnership Board, which came together at that time and played a crucial role in establishing and developing the district partnerships and in overseeing the unique process that that made possible.

We still need the commitment, expertise and enthusiasm of people from many sectors to move forward. However, many things are different now. The Assembly and the Executive are in place together with the North/South institutions and the Special EU Programmes Body. By placing co-operation on European matters right at the heart of the agreement’s institutions, we are emphasising how significant those issues are for us.

Consistent with the new structural funds regulations, the Executive have decided that the new regional partnership board should have a major role in encouraging the ongoing development of effective partnership working at local level. At regional level, its key contribution will be to support the development of strategies and action plans that work effectively with other sectors. Those include the Departments, other statutory agencies and the private, voluntary and community sectors.

The Executive have decided that a new regional partnership board should be established not only to build on the good work of the Northern Ireland partnership board but also to take it wider and deeper. Just as the local strategy partnerships can work on a wider canvas and influence the planning of other activities in their areas, so the regional partnership board will have a wide remit to promote partnership working. It will work with local strategy partnerships to ensure that this development happens as effectively and as clearly as possible and to ensure that that way of working can be sustained beyond the period of Peace II and become a permanent strength of our Administration.

As the scope of partnership working at regional and local level is now intended to be wider, it was clearly less appropriate for the interface between the partnerships and the regional administration to be located in any one Department. Since the chairperson for this new partnership board is from the Office of the First Minister and the Deputy First Minister, the board is at the heart of the new institutions. It is also intended that membership of the new regional partnership board will strongly reflect the perspective, experience and insight of the social partners engaged in the local strategy partnerships.

The Special EU Programmes Body, which is the managing authority for Peace II, will be the secretariat to the new Northern Ireland regional partnership board. It will benefit from close working relationships with the local strategy partnerships in its wider responsibilities for other aspects of EU programmes.

The preparation for the new round of funding has been a long process for all concerned. After the package of support was agreed at the Berlin Council in March 1999, the first main stage was the preparation of the structural funds plan, which was first submitted in November 1999 just before devolution took effect. Following consideration of the key issues by the Executive in February 2000, negotiations on the community support framework (CSF) began last March, and the CSF was approved by the European Commission in December. Those were all necessary stages in the process, and similar steps have been required in respect of structural funds assistance in all member states.

Now that agreement has been reached on the operational programmes, we can look forward to completing the process and ensuring that the new programmes take effect as soon as possible. I have provided a timetable, along with Members’ copies of this statement, to show what will happen next. Under the EU Regulations, the programme complements must be approved by the monitoring committees within three months of the approval of the operational programmes, and we will seek to complete that stage by the end of May. Those will include more detail on the measures making up the programmes and set out more fully the criteria for applications. When the programme complements have been approved, the way will be clear for applications to be invited, so that the first calls for projects can go out in June. The first payments from the new programmes will be available from September.

That timetable for the process sets the context within which the issue of gap funding has arisen. It should be clear to all by now from what I have been saying that the Executive are determined that there should be continuity and development between the Peace I programme and the Peace II programme. These are important changes, designed to ensure that the resources secure sustainable development and important emphases on aspects of economic development, which will make use of the opportunities provided by the new context of peace. However, the fundamental purposes of promoting peace and reconciliation and the inclusive and bottom-up nature of the programme remain very important. Sustaining the work that has gone before under Peace I is important. It is not the case that the peace programmes are about keeping organisations in business or simply maintaining employment. The touchstone has always been the contribution that the organisations and the projects could make to the objectives of the programme.

During the 2000-01 financial year the Executive provided £9 million of gap funding — half for the peace programmes, and half for the mainstream programmes. In my statement to the Assembly on the follow-up to the December monitoring round, I announced a new approach to gap funding to apply for 2001-02. I want to update the Assembly on developments on that front.

Since 12 February the Department of Finance and Personnel has discussed the issue fully with other Departments to ensure that the approach is known and understood. I have also written to the monitoring committees and others concerned to emphasise the Executive’s commitment to making this situation work.

Advertisements have been placed in the press seeking applications from eligible projects. Bids have been sought, and, consistent with the timetable that I have just explained, this scheme can cover the period up to October 2001, by which time the new programme will be fully on stream.

The approach to gap funding is about making sure that those who have been fulfilling the criteria of the Peace I programme — and who are likely to fulfil the criteria of the Peace II programme — will remain in place, fulfilling their objectives and the objectives of the programme without a loss of continuity.

The unique contribution of the European Union to supporting the agreement is something we should celebrate and acknowledge fully at every stage. We thanked Commissioner Barnier last week for that unique and ongoing commitment, which is helping to ensure the continuity of peace and reconciliation funding. It is also helping us to adopt new approaches in our region and lift our eyes beyond our narrow horizons. It is true to say that the assistance of the European Union with the process of peace and reconciliation has been vital and effective. Much credit is due to all who sought and obtained the new round of funding, including the MEPs, the two Governments and especially the First Minister and the Deputy First Minister.

We now have a clearer basis on which to move these new programmes forward. With the negotiations with the Commission complete, the responsibility now lies entirely with the region to get on and complete the programme complements and to ensure that the call for applications goes out as soon as possible so that the benefits can begin to flow without delay.

I ask all concerned to push these objectives and to unite in working with the Executive, the local councils and social partners in order to achieve important collective objectives. This is a tremendous opportunity for us all. It also poses significant but welcome challenges.

Photo of Francie Molloy Francie Molloy Sinn Féin 11:00 am, 27th March 2001

Go raibh maith agat, a Cheann Comhairle. I want to speak as Chairperson of the Committee for Finance and Personnel and to thank the Minister for his statement, which is most welcome. A large gap is appearing between Peace I and Peace II, which has been discussed many times here, and that gap is increasing, because the new moneys will not be in place until September of this year at the earliest. The Committee will be meeting with departmental officials today to get further briefing on this matter. Our role will be to monitor what is happening in the structural funds.

The Minister spoke of the Northern Ireland Regional Partnership Board and district partnerships. I want an assurance, as a member of a district partnership and of a district council, that that is not just an extension of the partnership board. I know that in a number of councils there have been difficulties identifying the roles of the partnership board and the district council. In my area that was not a problem, and we were able to put together all the political parties and the district sectors of the partnership board, but I want the Minister to ensure that statutory agencies coming to the partnership board will be actively involved in promotion. The Minister should ensure that the two sectors operate on a fifty-fifty basis. The statutory agencies should come to the partnership board with money — not just to block and control and not simply knocking back and ensuring mainstreaming.

Photo of Mark Durkan Mark Durkan Social Democratic and Labour Party

I thank the Member for his points and, in particular, for the long-standing and helpful interest that the Committee for Finance and Personnel has had in the structural funds and in the peace programme. Over the present financial year we have addressed the concerns about gap funding. We have introduced new arrangements for interim funding for the next financial year so that we can actually make progress towards Peace II. Obviously, last week’s announcements make that all the more significant and provide an even more encouraging backdrop for all concerned.

I recognise Mr Molloy’s point that there has been an uneven relationship between councils and their local district partnerships. That was partly because membership of the partnership boards was based on individual councillors, and boards depended on the quality of an individual’s performance more than that of councils at corporate level. We want to improve that.

It must be remembered that it is not just that new partnerships will have a say in managing Priority 3 and the funding for that. The strategic thinking of the Departments will inform and influence the work of local councils, in their wider areas of responsibilities, and that of other statutory agencies and Departments.

Representatives of statutory agencies participated in partnerships in the last programme and feedback from various sources indicates that there were uneven levels of involvement and interest. One of the things that we have been concerned about in going for the fifty-fifty option is that we did not want to allocate a fixed proportion to the statutory agencies. We felt that that would just invite the danger that they would simply attend in the numbers allocated to them. We believe that they need, through negotiations with local government, to earn their places in the partnerships. We felt that they would, by participating on an agreed basis, show much greater commitment, and that local government would be put in a much stronger position by virtue of liaising at that level.

We want to make everyone’s involvement in the partnership boards more meaningful; not to give local government or the statutory agencies of regional government more control. We want to make them more amenable to the whole partnership ethos. It will mean that they can reflect the important and positive influences that the perspectives of the other social partners on the partnership boards can bring.

Photo of Esmond Birnie Esmond Birnie UUP

I think that it was an American politician some decades ago who said that the best form of social welfare programme is a well paid job. Can the Minister inform us whether a similar philosophy underpins the general approach to the use of these European moneys?

Will he also confirm that since the transition moneys are, by definition, something of a final bite of the cherry that they will be soundly invested to promote the economic competitiveness and growth that will, in future, generate sustainable funding?

I ask that question because there is a perception that at least some of the previous structural funds in the 1980s and 1990s were, in effect, deadweight spending — that is, money that was given to already profitable private companies for investments that they would have found profitable to pursue anyway.

Photo of Mark Durkan Mark Durkan Social Democratic and Labour Party

We are dealing with two programmes. The programme formerly known as the Transitional Objective I Programme is now called the Northern Ireland Programme for Building Sustainable Prosperity. That programme is what we are getting in order to compensate for the fact that we no longer qualify for Objective I status. It is a special transitional measure. We must use the money well, and we are trying to use it for sustainable economic development. The money for the programme is not additional money, unlike that for the Peace Programme. Nevertheless, it does not relieve us of any of our obligations to make sure that we spend the money judiciously and not on investments that would have been taking place in any event.

We want to spend the money in a way that makes the biggest and most positive difference possible, particularly given the number of serious structural issues that we face as a region. We face many challenges in improving our competitiveness. That is the focus of that particular programme. There will be an improved economic focus on the peace programme and no compromise on the important emphasis that the programme must have on social inclusion. Nor will the integrity of the programme as one that is geared towards peace and reconciliation be undermined.

Photo of Joe Byrne Joe Byrne Social Democratic and Labour Party

I welcome the Minister’s statement and congratulate him and those involved on bringing forward the two programmes, transitional Objective 1 and Peace II. The EU resources that come in the form of those two programmes are very welcome and will help underpin peace, prosperity and the concept of joined-up Government — the connection between local government and central Government.

The new arrangements are an opportunity for local voices to be heard and local issues to be reflected in the policies that are formulated and actions that are taken. The House knows that I am a member of the Northern Ireland Partnership Board (NIPB) — [Interruption]

Photo of Lord John Alderdice Lord John Alderdice Speaker

Order. This is an opportunity for Members to ask questions, and not for them to make prepared statements. The Member must ask a question.

Photo of Joe Byrne Joe Byrne Social Democratic and Labour Party

How thorough has the process of consultation been between the officials of the NIPB, the Special EU Programmes Body and the Department of Finance and Personnel? Does the Minister agree that there has been rumour and counter-rumour that is not in the spirit of peace and reconciliation?

Photo of Mark Durkan Mark Durkan Social Democratic and Labour Party

I am concerned that there has been rumour and counter-rumour, but it is not my place to address that here. I have been perturbed by some of the feedback, but throughout the process I have been determined to ensure that the social partners and the Northern Ireland Partnership Board were fully involved in the transition from Peace I to Peace II.

I acted to ensure that the new monitoring committees were representative of the social partnerships in a new way. The Northern Ireland Partnership Board, the district partnerships and the district councils were fully involved, in the autumn, in the working groups that decided on the agreed way ahead on local strategy partnerships. The group’s proposals were adopted by the interim community support framework (CSF) monitoring committee and then approved by the Executive in December.

I met the Northern Ireland Partnership Board in mid January, and that was followed by the colloquy that I convened at Ballymena on 31 January. A full explanation of the proposed way ahead was given at that meeting, which was attended by representatives from all of the district councils, district partnerships, intermediary funding bodies and Departments.

The secretariat of the NIPB has been represented at the meetings of two groups. One is the department that is concerned with the transition at regional level and the other is the group that is concerned with the preparation of draft guidelines for local strategy partnerships led by the Special EU Programmes Body. The secretariat of the NIPB is responsible for keeping that board informed.

There has been some discussion with the Department for Social Development, and I met the Minister for that Department to hear his views and concerns about some of the issues. It has been, and it remains, my intention to ensure a smooth transition from Peace I to Peace II at local and regional level. I shall be doing that in all good faith and in terms that are consistent with the proper and right decisions that have been taken by the Executive Committee.

Photo of Ian Paisley Ian Paisley Leader of the Democratic Unionist Party

I want to ask some very pointed questions, and I am not dealing with rumour. The Minister is well aware that I have been keeping a close eye on the process. At every partnership meeting that I have attended I have pointed out the unfair allocation of money that has been given to one side of the community. The Unionist community has been held to ransom. For example, at Castlereagh, there was no money for the victims of the La Mon bombing, but there was money for Irish dancing. I have been involved in this since the beginning, and Jacques Delors made me a promise that the money would be for victims. Unionist victims have not had that money.

I am not alone in that; I have raised the matter at one meeting after another. The Minister had much to say about the uneven allocation of places. What will he do about the uneven allocation of money? Why did he not move on the ring-fencing of grants so that each community would get a fair allocation? Will he do that? What will he do about the two members who were appointed by each of the MEPs to the regional board? So far, I have had no communication from him about that matter. There is an imbalance that must be faced and remedied. I find it amazing that the two Ministers who are responsible for that, Minister Haughey and Minister Nesbitt, are not even in their places today, and they are the people who are looking after the appointments to those boards.

Photo of Mark Durkan Mark Durkan Social Democratic and Labour Party 11:15 am, 27th March 2001

Dr Paisley has asked several questions, and I think that that was as close to being a speech as any other question asked here this morning.

I will mainly address the Peace II issues. There is a specific indicative Peace II allocation, at this stage, of £6.7 million for victims. The Executive agreed that in February 2000. That money will be distributed using objective criteria, and the details of the criteria and precise measures will be developed at the programme complement stage that we are now entering.

In our work with the interim community support framework monitoring committee on our proposals for the CSF and the other programmes, we developed and agreed several horizontal principles. Those proposals addressed equality and balance considerations. I made it clear in our work with the committee that those principles partly reflected the need that was identified following Peace I to overcome the obstacles that existed, for whatever reason, and ensure that there was a better balance in the applications for the funds and their distribution. We agreed to take that forward.

I acknowledge the role of the MEPs, not just in making helpful interventions and showing interest in the current round of funding that we are talking about, but also in the Peace I programme. We are beginning a new programme. We are in a new context with new arrangements. Therefore not all of the arrangements for Peace I will be the same for Peace II. The role of the regional partnership board will be different, and the two junior Ministers at the Office of the First Minister and the Deputy First Minister will be chairing it.

I am addressing the issues in these programmes that are part of my responsibility as Minister of Finance and Personnel. I would again point out that we are going to finalise the programme complements. There will be a period of consultation, and the monitoring committees must agree the complements. Dr Paisley says that he has not heard from me on this; I have written to the MEPs seeking a meeting with them at this significant stage in the process.

Photo of Ian Paisley Ian Paisley Leader of the Democratic Unionist Party

On a point of order, Mr Speaker. The Minister should know that my office has been in touch with his office and has arranged a time for that meeting. I was not dilly-dallying.

Photo of Lord John Alderdice Lord John Alderdice Speaker

It sounds as though the Minister is looking forward to the meeting.

Photo of Seamus Close Seamus Close Alliance

I think it might be useful, Mr Speaker, if Peace II were to break out here, with all the funds that are going around.

Photo of Lord John Alderdice Lord John Alderdice Speaker

I am encouraged that the Member thinks it is Peace II. Some people are still waiting for "peace I".

Photo of Seamus Close Seamus Close Alliance

Hope springs eternal, does it not? I welcome the Minister’s statement. It is fair to say that this is a good news day. A package of £1·23 billion cannot be sneezed at, nor should it be sneezed at by anyone.

How can the Minister assure the House that sustainability will be seen to be the key? The reference to gap funding in the previous round is a clear demonstration that sustainability was not really taken seriously. In the immortal words of the Rolling Stones, "This will be the last time". Therefore it is essential that sustainability be the key and that that message be really drummed home.

Finally, can the Minister further assure the House that proper and verifiable appraisals will be carried out on all the projects, thus ensuring that there will be a clear demonstration that the bad habits that crept in under previous rounds have been eradicated?

Photo of Mark Durkan Mark Durkan Social Democratic and Labour Party

I welcome the change of Rolling Stones tune from Mr Close. Normally I hear "I can’t get no satisfaction" in the Chamber. I am glad that he welcomes the stage we are at with these programmes, but we have still more work to do. He rightly identifies the important principle of sustainability. It is important not just for us but also for the European Commission. Essentially, part of the contract in Peace I was meant to be sustainability, and people receiving funding under Peace I were meant to make arrangements to ensure the sustainability of their projects and to provide exit strategies.

However, the difficulties that we are witnessing show that that has not happened. In fairness, all the blame cannot be laid at the doors of the individual projects. One of the things that we must do in the next round is to not just address the issue of sustainability as a hard economic test, the burden of which falls solely on each individual project, but also develop a wider framework for sustainability. We must see how we can ensure the sustainability of the sort of programmes, models, measures and mechanisms that have been developed under Peace I and that we want to see developed under Peace II. It is in the wider context of ensuring the sustainability of that sort of approach that organisations will find themselves even better equipped and even better motivated to concentrate on maximising their own specific grounds for sustainability.

Photo of Mr Billy Hutchinson Mr Billy Hutchinson PUP

I welcome the statement. Can the Minister elaborate on the role of the intermediary funding bodies? What percentage of the peace funds will be channelled through them, and how will they be chosen?

Photo of Mark Durkan Mark Durkan Social Democratic and Labour Party

The intermediate funding bodies are being chosen on the basis of competitive tender in this round. That was agreed by the Executive. I know that some of the existing bodies were disappointed by that decision, but we believed that it was important, given that this is a new programme. We also believe that it is important given the European Commission’s requirements and our own public procurement requirements, because in a sense the work of these bodies really is an important contract.

We are looking at an indicative distribution of 34% of the programme being managed by intermediary funding bodies.

Photo of Ms Jane Morrice Ms Jane Morrice NIWC

I too rise to welcome the securing of the European funding and to congratulate the team for the work they have done to get it. I also thank Europe and the European Union for this commitment to Northern Ireland.

The Minister has concentrated most of his efforts on changing the partnership approach. My argument is this: if it is not broken, why fix it? What is the Minister doing to keep his own house in order? He will be aware of the findings of the Public Accounts Committees on European funding. I refer to what Seamus Close called "bad habits" in Government funding.

How much money is going to be channelled directly through the Government? How will the Minister ensure that that money actually goes to peace and reconciliation and not to pet Government projects? How can he ensure that funding is not blocked? We have some projects still waiting for money to be channelled from certain Departments which was promised months, if not years, ago. How can the Minister guarantee that the process will flow smoothly?

Photo of Mark Durkan Mark Durkan Social Democratic and Labour Party

I thank the Member for the welcome that she gave to the announcement and for her thanks to the officials involved, who have undertaken an enormous amount of work. It is appropriate that thanks are expressed here by Members. The European Union is also due proper recognition.

Following on from the last question about how much the intermediate funding bodies are going to handle, in the next programme, the Department will be handling, on the basis of the indicative allocation that we are working on, some 39% of the funding in the next round.

I also point out, as I indicated in my speech, that the Executive undertook last February to monitor what the Departments would do about their measures on social inclusion, and especially the inclusion of women, children and young people, North/South activity, and using local delivery mechanisms. As I have tried to stress, we do not see the only funding going to and through local delivery mechanisms as being the funding under priority 3. We want to see that used more widely.

We are going to manage this programme in a meaningful way, and we have much more robust and more meaningful monitoring arrangements in place for this programme than was the case for the last one. The monitoring committees in the last round did not have a clear remit. They had very big and unwieldy memberships. We have, with the help of the social partners, designed a much more streamlined and coherent role for the monitoring committees.

There will also be clear reportage. The European Parliament will require annual reportage on how we are managing these issues and spending the moneys. There are problems with completing the spend in Peace I. All the allocations under Peace I have been made, but not all the money has been drawn down. My Department, other Departments and the Special EU Programmes Body are working with the district partnerships and intermediary funding bodies, to try to ensure that that money is drawn down and well spent.

Photo of Dr Dara O'Hagan Dr Dara O'Hagan Sinn Féin

Go raibh maith agat, Cheann Comhairle. I welcome the Minister’s statement. Many groups and organisations will also welcome that we have at least reached this stage in the process.

I have looked at the timetable that the Minister has provided. There are concerns that the bulk of the money will not filter down to the ground until around January 2002. Given those concerns, does the Minister believe that the existing arrangements are adequate for the gap funding, given that he has acknowledged the valuable work of the voluntary and community sector? Can the Minister assure the House that that European Union money will be truly additional and that it will not be used by Departments and statutory agencies to do what they should be doing already?

Finally, in the last line of paragraph 13, the Minister refers to the use of "private finance" in the future. Can he give more details on how he envisages that finance being used?

Photo of Mark Durkan Mark Durkan Social Democratic and Labour Party 11:30 am, 27th March 2001

I will first deal with the issue of additionality. Peace II moneys, as with Peace I funds, are additional, and we respect that fact. We have been at pains to ensure that the peace programmes and the programme for building sustainable prosperity were distinctive in this way. As a result, significant changes had to be made to the draft of each programme, precisely to ensure and underpin the necessary distinctiveness, which is part of the guarantee of additionality.

We have now made arrangements to build on the £9 million of gap funding that we have allocated for the current financial year. That allocation of funding from the Executive’s budget shows that the Executive are sensitive and responsive to those problems. A different approach is to be taken in the next financial year, which will be geared towards facilitating the transition to Peace II, particularly in the context of the operational programmes. The funding to be available under that mechanism can last until October, and we expect that that money will be allocated in September, based on the timetable I have outlined. This progression will, of course, be subject to our getting the necessary agreement on the programme complements on time in May, but with a big effort we can do that. If there are any other difficulties we will simply need to stretch the transition funding arrangement that we are planning. We are, therefore, dealing with the Member’s concerns about gap funding.

We have no plans to use private finance on any particular project or in any particular way. However, the strategic partnerships are meant to be local, which should have an influence and a strategic bearing on a number of issues in their areas — not just priority 3 — and all the social partners, including businesses, should be involved. Several measures being taken at local level already involve some private financial investment or activity. In the light of that, all such positive developments should be within the purview of those local partnerships.

Photo of Mr James Leslie Mr James Leslie UUP

I thank the Minister for his statement, although I regret that he did not see fit to mention in his statement the fact that the structural funds were not additional. Before we throw our hats in the air with joy about that £860 million, we should remind ourselves that the funding is simply a mechanism by which the European Union graciously allows the United Kingdom to spend its own money, albeit that the amount spent in Northern Ireland is higher than it would otherwise have been.

The Minister referred to match funding, although not in quantum. In the context of his comments on sustainability, does he believe that when those programmes end, the part of the spending that was represented by match funding might continue to be applied to the same measures in the future? It could be argued that that would not be a further burden on public expenditure as provision for such spending is already there.

Photo of Mark Durkan Mark Durkan Social Democratic and Labour Party

I regret that I was unable to cover every detail on match funding in the statement. I assumed that most people knew that Peace II money was additional while the transitional Objective I funding was not. There was no attempt to mislead by omitting to mention that fact in my statement.

Secondly, match funding is obviously a requirement that we must meet in respect of these programmes. Europe requires that. If the emphasis on the programme for building sustainable prosperity, which Mr Leslie seems to be most interested in, is to underpin sustainable economic development, when we come to the end of it, all those measures, areas of activity and sectors that have been benefiting under that programme will still have to be taken forward, depending on what stage of development they are at.

We will have to take decisions at that point. How do we sustain that development? I do not think anybody is pretending that all areas of those programmes will involve a finite commitment, within the life of these programmes, to those areas. There will be ongoing commitments with consequences. That is one of the reasons for, when deciding what measures we are going to adopt or support under these programmes, having an eye to longer-term sustainability.

Photo of Mrs Annie Courtney Mrs Annie Courtney Social Democratic and Labour Party

I welcome the Minister’s statement and congratulate him and his team on the management of a complex and lengthy process. Although there are still a couple of months to go on those programmes, today’s announcement will be of immense significance to how we progress. I am also conscious that there is a challenge ahead with sustainable prosperity. Given that a sound energy infrastructure is vital for economic development, equality of opportunity and access to prosperity, can the Minister confirm that those programmes can be used to support gas pipeline development so that people from outside Belfast, and especially those in the greater north-west, can enjoy a level plain field?

Photo of Mark Durkan Mark Durkan Social Democratic and Labour Party

A notional sum of five million euros has been included in the new programme for building sustainable prosperity precisely for energy.

Once proposals for pipeline development have been evaluated, funding for economic growth and competitiveness — a priority of the programme — can be redistributed to allow for the implementation of gas pipeline expansions. The key issue is the appraisal of realistic proposals from the private sector.

My Colleague the Minister of Enterprise, Trade and Investment, Sir Reg Empey, will ensure that that receives proper attention, not just from his Department, but also from the Executive, at the proper time. I also remind Members that in the Budget and under the Programme for Government, we established an Executive Programme fund, which includes money for infrastructure and capital renewal.

Photo of Edwin Poots Edwin Poots DUP

Not for the first time is the Office of the First Minister and the Deputy First Minister showing gross discourtesy to the House by not turning up this morning for something in which it plays such a key role. I also have to say to Mr Close that we are not receiving manna from heaven. Perhaps the people of Northern Ireland are just getting back some of the money they have paid in taxes.

Does the Minister accept that while he intends to build on the strength of partnerships, he needs to eradicate the weakness of partnership? I bring to his attention accountability, fairness and equality, which we have not had in the past. Millions of pounds have been squandered, yet the Protestant community was so discriminated against in Lisburn that it ground the whole partnership system to a halt. What steps does the Minister intend to take to ensure that that does not happen with the Peace II money?

Photo of Mark Durkan Mark Durkan Social Democratic and Labour Party

I have already dealt with the point about balance. There are horizontal principles that will apply in the new programmes, not least in the Peace II programme. They aim to respect our equality obligations fully and to ensure that there is an optimum balance in the use and share of those resources.

With regard to some of the criticisms that have been made about some allocations, obviously a number of measures were taken under Peace I. It would be unfortunate if whatever legitimate concerns or criticisms there may be were now laid at the door of local partnerships. The fact is that the district partnerships faced an enormous task during the life of Peace I, not least because of the novelty and the difficult circumstances that there were in the early days of the partnership enterprise.

However, important lessons have been learnt, including some about deficiencies in the partnerships. Those deficiencies were not in the commitment or the qualities of those involved in partnerships but were deficiencies in the structures. We are trying to make that good by establishing a new and more strategic form of partnership at the local level. That will serve local communities in their fullest and broadest sense and not just in relation to European funding and the Peace programme — the partnerships will go far beyond those measures and will outlast them. I hope that people will recognise that, by bringing forward these changes, we are trying to respond to some of the difficulties and frustrations experienced by the partnerships and others in the last round. We are also trying to improve every other measure under this programme.

Photo of Roy Beggs Roy Beggs UUP

I too welcome the Minister’s statement advising that Northern Ireland taxpayers’ money will be returned from Europe through the transitional Objective 1 and Peace II programmes.

Does the Minister accept that the intermediary funding bodies in the Peace I structure were highly bureaucratic and that local groups often had to apply to several bodies to achieve a total funding package, thus wasting time and effort? Will the Minister advise that there will be a reduction in the overall amount of money spent on administration in Peace II so that more money can be directed towards the groups and projects on the ground? Is the Minister aware of the inequalities of the previous systems, particularly the money spent by intermediary funding bodies? For example, the Educational Guidance Service for Adults spent a total of £4·3 million but only £26,000 in my constituency. Will he ensure that there will be equality in future spending by intermediary funding bodies?

Photo of Mark Durkan Mark Durkan Social Democratic and Labour Party

In acknowledging the important questions raised by the Member, I make the point that intermediary funding bodies had a range of responsibilities under Peace I. They managed different types of funding over a range of sectoral areas. It is not the case that all allocations made by intermediary funding bodies — which are made at a regional level — are subject to a detailed breakdown at local level. Some allocations can be represented at constituency or council level, but that is not always the case. It is common for Departments to be in a similar position. Therefore it would be unfair to use that test against intermediary funding bodies. We must remember that we are dealing with different types of programmes and funding.

We are trying to make sure that any deficiencies that existed in Peace I are rectified and improved upon. In response to the early part of the question, we recognise that there were problems of "cocktail" funding for both funders and applicants. We are trying to streamline those matters. Part of what is being attempted with the new local strategy partnerships is to enable them to respond to the interests and ideas of different groups locally — not just in relation to the funding managed locally by the local strategy partnerships but wider EU programmes. That is why they will be in a strong position to work with the Special EU Programmes Body, which is the managing authority for the wider Peace programme.

We want to see a stronger network of information and contact, so that people will not have to make lots of speculative applications all over the place and so that they will receive better advice and direction. The Special EU Programmes Body is an important asset in this round of funding, and it rectifies a clear deficiency in the last round. The programmes body, particularly as the secretariat of the regional partnership board, will be in a strong position to work closely with the local strategy partnerships.

Photo of Carmel Hanna Carmel Hanna Social Democratic and Labour Party 11:45 am, 27th March 2001

I too welcome the Minister’s statement and appreciate his work and that of his team. Can he outline more specifically how the stronger economic focus of Peace II will be given effect?

Photo of Mark Durkan Mark Durkan Social Democratic and Labour Party

The stronger economic focus in Peace II is not there to the exclusion of the emphasis that needs to be there for our own purposes and, indeed, in the European Commission’s interests on social inclusion, nor will it in any way impair the quality of this programme as one that clearly has to be centred on peace and reconciliation. With an emphasis on regeneration as well as reconciliation, this programme can contribute to economic improvement, and those improvements will, in turn, underpin social inclusion.

As other Members have said, sustainability will obviously be a fundamental principle that underlies the programme, and project sponsors will be required to ensure that, where possible, projects and actions can continue beyond the life of the peace programme. That is particularly relevant when we are talking about those measures that are in the more economic area.

I must point out that under priority 3 there are local economic initiatives that can be taken that will specifically come in to the social economy area, for we have responded to some of the concerns that were expressed about earlier drafts of Peace II that had local economic development in under that measure. That measure has, in turn, been transferred to the transitional Objective 1. We have, therefore, been able to maintain that economic focus, while at the same time ensuring that it does not skew against the strong social inclusion emphasis that has to be there.

If we are serious about taking advantage of all the opportunities that arise from peace, and if we are serious about building on the successes of Peace I, we should want to build new ways that sustain both economic as well as social growth.

Photo of William Hay William Hay DUP

I would like to bring the Minister back to the issue of ring-fencing. I want to say very seriously to the Minister that in my constituency of Foyle, if it had not been for myself and others in our district partnership fighting to try to ring-fence some money for the Protestant community, that community would have lost out desperately.

There is no doubt that in my constituency, when money was ring-fenced — and not only for the Protestant community, for some Nationalist groups lost out as well — it worked. You were able to go to a community and say "Here is your money; you come up with a project or programme to fit around it" rather than "Come up with a programme or project, and we might get you the money". Under Peace II, that is an important issue to be looked at, especially in a community that is coming from a very low base and one that is, perhaps, not as active as the Nationalist community in filling in application forms and going for funding. We could argue here all day as to why that is happening.

The Minister has to try to build on success. In my community and in the Foyle constituency we all saw money —

Photo of Lord John Alderdice Lord John Alderdice Speaker

I urge the Member to put his question to the Minister.

Photo of William Hay William Hay DUP

I want the Minister to take a serious look at ring-fencing money for communities that are coming from a very low base.

I have another question. There are councils and partnerships who, for whatever reason, will find it difficult to form a partnership to try to draw down this money. If that happens and the partnership is not formed, what does the Minister intend to do?

Photo of Mark Durkan Mark Durkan Social Democratic and Labour Party

The Member raised several points, some of which have been touched on by others. I refer the Member to the horizontal principles that are meant to govern the use of this funding. I also stress that we are talking about having the partnerships, not just as local delivery mechanisms, but as local decision-making mechanisms.

The Executive are trying to ensure wider understanding of that point and issue. Therefore, at this stage, it is not for the Executive, the Department of Finance and Personnel or the Special EU Programmes Body to start ring-fencing money that might be allocated by particular partnerships. As the Member’s last question indicates, the Executive are trying to encourage people to reach the agreement required to create new strategic partnerships locally. Therefore the Executive are trying to take account of people’s needs and concerns and reflect those in a positive and pragmatic way consistent with all of the principles.

Stronger monitoring arrangements are in place for this programme than was the case for the last programme. Notwithstanding the problems that Members have legitimately identified, there has also been significant progress in respect of some of the problems associated with Peace I — not least through some innovative interventions and allocations by local partnership boards. In those cases more was done to make good the deficit in application of funds to particular areas and communities.

The intermediary funding bodies have seen the same improvements in making progress against that problem. It would be wrong for the Executive to suggest that there has not been progress on that issue just as it would be wrong for me to imply that more progress is not needed or would not be welcome.

Photo of Nigel Dodds Nigel Dodds DUP

I welcome the statement’s commitment to new partnership arrangements that will enhance and increase the role of local government and district councils. That is important given the democratic nature of local councils and the important role that elected representatives and councillors have to play. There is concern among others who played a significant role in the previous partnership arrangements at the make-up of the new boards. Will the Minister indicate in more detail his thinking on the role that those other sectors will play in the new partnership arrangements?

Paragraph 24 of the statement states that the secretariat to the new Northern Ireland regional partnership board is to be the Special EU Programmes Body. Will the Minister explain the thinking behind that? Does he accept that that will not be viewed by some people in Northern Ireland as a positive development, but could rather cause some alienation with regard to the inclusiveness of the arrangements?

Will the Minister take on board the comments made by my Colleagues on this side of the House about the need to ensure that the lack of community infrastructure and capacity in the Protestant and Unionist community is recognised and acknowledged in the new arrangements? Will the Minister ensure that positive steps are taken to redress the deficiencies of the previous arrangements?

Photo of Mark Durkan Mark Durkan Social Democratic and Labour Party

The Member raised several points for which I thank him.

The Executive are trying to ensure that local government’s role at a corporate level is bedded more strongly in the partnership model for the future. The Executive do not want local government to dominate the partnerships or displace the influence of any other sector. The Executive want more of the capacity of local and regional government through the statutory agencies to be brought to the table of partnership.

With regard to the fifty-fifty model, it must be remembered that the Executive are saying that it will be for local government and the statutory agencies to determine locally what the balance should be. Some Members have suggested that the Executive should opt for a model that allocates a fixed 25% to local government, a fixed 25% to the statutory agencies, et cetera. That is not the best way to go because there is a danger of revisiting the situation where people from the statutory agencies turn up only to make up the numbers, rather than properly working their passage and engaging in the real spirit of partnership. Also, I am very conscious that we are talking about reviews of public administration and reviews of local government that might well see a change in the balance between the functions and capacities of local government and the statutory agencies. That is why, in setting the partnership on a fifty-fifty basis, we will have a model which can develop not only over Peace II but also beyond Peace II. We need to take account of the wider factors.

With regard to the interests of other sectors, we have been asked to embrace the principle of social partnership throughout all consultations that we have engaged in. I have also been urged by people in working groups, by social partners — and this reflects the district partnership perspective and the local government perspective too — not to impose a one-size-fits-all model. In that respect it is now 50% participation for social partners. Some people have suggested that we should fix the partnership at 25% for the community and voluntary sector, and 25% for business, trade unions and the rural and agriculture sector. I have no problems if people agree that level locally, or if at regional level the social partners, in the negotiations that will take place on the programme complements, can agree that.

It would be wrong if we imposed that model. Many people have told me that they believe that different levels can be arrived at locally. I am happy to look at building in threshold guarantees to particular sectors. It is something that I looked at but was dissuaded from because people told me to allow it to go forward and be negotiated. I hope that reassures people. Like Mr Dodds, many people have been in touch with me, and when I have explained what we are doing and why we are doing it, they are reassured and wonder why others have been telling them yarns.