Wales: the impact of EU funding and regional assistance

Wales: the impact of EU funding and regional assistance:
The European Union and UK government has recognised the on-going socioeconomic problems that face Wales by providing valuable financial support. Approximately 90% of Wales has been designated as being eligible for Objective 2 or 5b funding from the current round of the EU's Structural Funds. In addition, Wales is also covered by all Community Initiatives which are not restricted in coverage - eleven in all - and by the UK Objective 3 programme.

European funding helps support initiatives in such areas as:

- Infrastructure

- Support for tourism

- Diversification of agriculture

- Promotion of research and development

- Support for business expansion

- Enhancement and protection of the environment

- Development of disadvantaged groups and communities

- Training and skills development.

The assistance provided by the European Union and UK government is a vital element in the on-going process of restructuring and rejuvenating the Welsh economy and in tackling the considerable problems that it still faces.

European funded/part funded programmes in Wales include:

Land Reclamation Projects:
Much new manufacturing inward investment in Wales has located on sites 'reclaimed' using European Union funds. Since the WDA inherited responsibility for land reclamation in 1976 the Agency has reclaimed 1,200 sites covering 10,000 hectares. This represents 80% of the historic dereliction left by the decline of traditional industries in Wales which left parts of the Welsh landscape blighted.

Examples of the Agency's work in the area of land reclamation include its assistance at the British Coal Workshops at Tredegar, Gwent and the former Oakdale Colliery and Tip complex.

The first site was taken into the WDA Land Reclamation Programme in 1988 and was subsequently acquired by the Agency in 1992 following its complete vacation by British Coal. The site was then transferred to Blaenau Gwent County Borough Council for reclamation and subsequent development. The acquisition and reclamation of the site was funded by the WDA Land Reclamation Grant at a total cost of £2.7 million.

The reclamation work covered the demolition of the buildings on the site, removal of contamination and underground obstructions and the recompaction of the site to improve foundation conditions.

The site has been recognised as being central to the comprehensive regeneration of Tredegar town centre. The land reclamation work has been supported by an ERDF grant of £450,000.

The reclaimed site will provide a 6- hectare development platform with Development Area Status. This platform could support up to 350 jobs in 9,000 square metres of floorspace and attract up to £8 million of private sector investment. Welsh Office Capital Challenge funding is also providing £1.26 million towards infrastructure and building costs. This job-creating investment will take place in an area with Wales' highest level of unemployment at 12%.

The Oakdale site, an area totalling 140 hectares, was also bought by the Agency from British Coal in 1990 using a Land Reclamation Grant which also funded subsequent reclamation at a total cost of £10 million.

The reclamation project includes the demolition of colliery structures and major earthmoving on the adjacent tips which will be completed later this year. The earthmoving work is supported by a £1.8 million ERDF grant under the Objective 2 Industrial South Wales Programme.

The site will provide two main development platforms of 40 hectares (100 acres) and 20 hectares (50 acres) along with some other small development areas. The main platform will provide the largest area available for development in the Central South Wales Valleys area and with Development Area Status providing further financial assistance, the project has regional significance.

The reclaimed site will support up to 5,000 jobs in 167,000 square metres of floorspace and could attract up to £180 million of private sector development. Such development would provide high quality sustainable employment in a location near to some of the areas of highest unemployment in Wales. Welsh Office Capital Challenge funding is also providing £5.6 million towards building and infrastructure costs. Local supplier links are to be established under the Source Wales Programme.

Wales Information Society (WIS):
The Wales Information Society was launched with the support of the European Commission to ensure that Wales takes advantage of the opportunities presented by the information society culture. It is one of twenty three similar regional projects being undertaken across Europe, including two elsewhere in the UK.

The WIS projecth as involvement from both the private and public sectors and is run by a project team which is based at the WDA.

Jacques Santer, President of the European Commission, has described the WIS as:

especially challenging in the way it uses the tools of the information society to combine parts of the regional cultural heritage with the interregional and global aspects of information retrieval, electronic communication and advanced network services ... an example of best practice in regional initiatives to introduce the information society to a wider public.

SAGE (Strategic Approach to a Global Economy):
SAGE is a WDA management development initiative which aims to stimulate and support businesses in Wales, particularly SMEs, to overcome the challenges resulting from the globalisation of trade and competition. Its objectives are to raise awareness, to initiate management development programmes and supporting materials to ensure Welsh enterprises adopt appropriate strategies for the international market.

SAGE is co-funded by ERDF under the Industrial South Wales and Rural Wales programmes for actions in Wales.

Regional Technology Plan (RTP):
With the support of the European Commission and the WDA, Wales is developing a Regional Technology Plan, designed to improve the innovations and technology performance of Welsh companies. The Welsh RTP is one of eight similar pilot schemes supported by the European Commission.

Since its launch in June 1996 the Welsh RTP has made significant progress and is now regarded as a flagship for the whole of Europe. It has created a framework of six priorities which are underpinned by over sixty tangible projects targeted to increase the capacity of the Welsh economy to profit from innovation and technology.

Gateway Europe:
Gateway Europe is a WDA initiative which promotes relevant European Commission business development programmes in support of small and medium-sized enterprises in Wales.

The initiative is co-funded by ERDF under the Industrial South Wales and Rural Wales programmes.

Wales Innovation Relay Centre:
The Wales Relay Centre is one of a network of 53 centres around the European Union. Relay Centres disseminate information on EC funded R&D programmes and promote technology transfer opportunities throughout the Community.

The WDA is the host organisation for an all-Wales Relay Centre providing expert support to Welsh organisations. The Centre has 650 clients who have benefited from a wide range of services and events.

Wales Commercial Centre (WCC):
Since October 1995, the Wales Commercial Centre (WCC) has provided a base in Brussels for Welsh-based companies who wish to develop new European business in the Benelux markets and via the EU's aid programmes. The WCC also targets companies in the Benelux markets to develop new inward investment prospects for Wales.

Wales European Centre (WEC):
The Wales European Centre (WEC) provides a presence in Europe through its office in Brussels and a comprehensive service of information to its public sector sponsors for the wider benefit of Wales. WEC advises on European Commission policies affecting sponsor interests and works with its backers to promote and strengthen these interests. It also aims to raise the profile and networking capabilities of its Welsh institutions.

Wales European Information Centre (WEIC):
The WEIC provides information on EC public procurement and legislation to Welsh SMEs and other organisations in the private and public sectors. It is one of a network of EICs - twenty three in the UK and 250 altogether across Europe.

The Intelligent Region project:
The Intelligent Region project was developed in 1994 when the WDA's traditional role as a reclaimer of land and builder of industrial property was being challenged by the convergence of economic, social, planning, regional and industrial policies.

The WDA looked to university departments with experience across Europe for assistance in developing more intelligent policies and programmes. This grew into a working partnership between the Agency and the Department of City and Regional Planning at the University of Wales in Cardiff.

The Intelligent Region project's main objective is to develop the capacity of key regional development players to stimulate and nurture economic growth. The project was accepted for funding in 1995 under the European Commission's Leonardo da Vinci programme.

European Structural Funds:
The WDA continues to be very active in applying for mainstream Structural Funds.

In relation to funding for Objective 2 and 5b programmes, to date twenty four projects have been approved for Industrial South Wales and eighteen for Rural Wales.

The RECHAR II initiative is aimed at the economic regeneration of former European coal mining areas and to date three WDA projects have received funding.

The LEADER II initiative helps address the issues and problems of rural communities. The WDA provides matching funds for measures designed to encourage new product development, telematics, marketing and tourism.

Regional Selective Assistance (RSA):
The main form of direct assistance to encourage industrial development is Regional Selective Assistance. Levels of RSA given to companies locating or expanding in designated Assisted Areas in intermediate and development areas are fixed by the EU and cannot be exceeded.

RSA amounting to £22.561 million was given to 274 projects to encourage indigenous industrial development and create or safeguard 12,674 jobs. A further £43.431 million was allocated to support 88 inward investment projects to create or safeguard 23,301 jobs.

The above is extracted from the 'European Council Summit Information Pack' supplied to media representatives by the Welsh Development Agency in June 1998. There are further sections in the pack giving details of the Welsh economy, inward investment from other European countries and brief political and historical information about Wales. The full information pack can be accessed on the Internet at http://www.wda.co.uk/-wda/news/eurosummit/ (still available at time of compilation of this feature).

See also the 'Bibliographic snapshot' on p33 of this issue of European Access for further information sources on Wales and the European Union, including contact details for many of the organisations, activities and initiatives mentioned above.