Management of latest EU Structural Fund Programmes in Wales ‘Improved’

23 Apr 2014 - 12:19pm

'But too early to assess overall impact’, says Auditor General

The 2007-2013 EU structural funding programmes in Wales – which help deliver jobs, growth and sustainable development - has progressed well compared with previous programmes. But, it is too early to assess the overall impact. A report by the Auditor General for Wales has found that, despite certain difficulties in the early stages, the 2007-2013 programmes have benefited from better management arrangements. And, while the overall impact of the programmes may not be fully evident for some time after they have closed, there are positive signs from ongoing evaluations.

Wales is eligible to receive around £1.87 billion of European funding for the 2007-2013 period and the total value of the structural funding programmes is around £3.2 billion when match funding is included. Spending under these programmes, which is managed by the Welsh European Funding Office (WEFO), will continue until the end of 2015.

Auditor General for Wales, Huw Vaughan Thomas said today:

This latest EU Structural Funding round has clearly benefited from the lessons from past programmes and is much improved as a result. However, it is still too early to assess the full impact and there are still areas where improvements can and should be made. My report makes a number of recommendations which are designed to make the next funding round even better.

Learning lessons from the 2000-2006 programmes, the Welsh Government started the 2007-2013 funding round wanting to streamline programme structures, focus more closely on strategic priorities and manage performance more effectively -  through fewer but larger projects. The Welsh Government also placed a stronger emphasis on collaboration between stakeholders and greater use of competitive procurement.

Today’s report found that WEFO has made good progress in committing available funds to projects. The programmes have met EU spending targets, but the rate of expenditure has been slower than forecast by project sponsors. The programmes are on track to meet, and in some cases far exceed, most of their key performance targets. However, progress with environmental sustainability and equal opportunities has been mixed with the programmes forecast to fall short of most of the related targets.

Stakeholders generally support the action that WEFO has taken to simplify programme structures and reduce the number of projects. But there have been mixed views about the overall administration of the programmes, with some project sponsor organisations expressing concerns about the speed of decision making and the administrative burden involved in participating in the programmes.

The report concludes that the programmes have been flexible enough to respond effectively to the economic downturn and to some significant changes in policy. And, while the greater use of competitive procurement as a delivery model proved to be difficult to implement, if it is well managed it should have positive effects in the longer term.

Today’s report also found that WEFO has established a robust system to support project development and selection but sponsors can find the process challenging and time-consuming. Financial management is sound and performance is better managed than under the previous programmes, although it could be tighter in some respects.

WEFO has also strengthened monitoring and evaluation arrangements and developed more robust approaches to measuring impact but data quality remains a concern.

In all, the report makes 12 recommendations for improvement, including:

  • WEFO should publish guidance explaining the content, purpose and likely duration of each step of the process leading up to project approval, indicating the most common causes of uncertainty and delay and how such problems may be averted or mitigated. The guidance should set out the responsibilities of both the sponsor and of WEFO for ensuring that the process runs smoothly and with minimal delay.
  • Targets for the new EU Structural Funds programming round should be set at a challenging but realistic level based on current economic conditions and experience to date in the current programming round.
  • WEFO should monitor the value of contracts awarded through the programmes to Welsh-based companies and SMEs.
  • WEFO should more rigorously enforce data quality standards so that sponsors provide timely, accurate and complete information on participants and businesses.