 
Structurally Unsound:
the Northern Ireland bids
for further EU monies
A briefing paper from Democratic DialogueMarch 2000
Preface
This is a briefing paper from the think tank Democratic Dialogue. DD is indebted
to the support of its funders, which include the Joseph Rowntree Charitable
Trust and the Esmée Fairbairn Charitable Trust. Further copies of the
paper are available, as hard copy or e-mail attachment, from DD. Details are
on the back cover, as is our web site address.
I am indebted in preparing this paper to three people who advised on it: James
Magowan, Myles McSwiney and Geoff Nuttall. Responsibility for the final contents
is, of course, entirely my own.
Robin Wilson
director
Summary
The next round of support from European Union structural funds to Northern
Ireland offers a critical opportunity to consolidate and underpin political
stability in the region. Indeed it is highly unlikely that after the 2000-2006
round, any significant further support will be forthcoming. There is a risk
that this opportunity, to build on ‘peace 1’ and to achieve greater
social and economic cohesion, will not be fully utilised if government does
not present more coherent proposals to the European Commission for the expenditure
of this money, amounting to 1.266 billion euros (approximately £1 billion)
over the period. In particular we are concerned about the lack of distinctiveness
of the proposed ‘peace 2’ programme, which fails to address the causes
and consequences of the conflict.
Background
1. At an EU summit in Berlin in March last year, European leaders made significant
decisions on the future of structural fund support for Northern Ireland from
2000 to 2006. They agreed to allocate 400 million euros to a second round of
the Special Support Programme for Peace and Reconciliation, with a further 100
million going to the southern border counties. They also agreed to continue
to allocate substantial ‘normal’ structural funds to Northern Ireland,
despite the region once again exceeding the threshold of 75 per cent of average
gross domestic product per head applied to other EU regions seeking most-favoured
‘objective 1’ status. By redefining Northern Ireland as ‘transitional
objective 1’, however, EU leaders made clear this support would no longer
be indefinite. That view is also likely to apply to the ‘peace 2’
programme (which ends in 2004). The prospect of enlargement to the east means
many claimant regions are likely to enter the union from around the middle of
this decade.
2. The Northern Ireland first and deputy first ministers, David Trimble and
Seamus Mallon, had lobbied the European Commission and the German presidency
at the highest level, their strategic target having been to secure the same
volume of EU structural-fund support as had obtained in the previous round (around
£1 billion). Indeed, the informal slogan of ‘levels, not labels’
adopted by the ministers indicated that the overriding priority was to secure
the Euro-money, whatever form it might take.
3. It was a strategy with which the direct-rule administration of the day colluded.
Addressing a European Liaison event in April, the ‘delighted’ junior
NIO minister Paul Murphy stressed this was ‘a unique deal, which no other
region has received’. It would mean, he said, Northern Ireland would receive
‘levels of funding broadly equivalent to objective one until well into
the next century’.
4. The Department of Finance and Personnel organised two conferences later in
the year to consult on the structural-funds programmes, preparing a plan called
Northern Ireland: A Region Achieving Transition. In November the draft plan
was forwarded to Brussels, followed just before devolution by two draft operational
programmes. The European Commission accepted the plan as technically admissible
just before Christmas but noted that the draft operational programmes were not
compliant with their requirements. In February 2000 the department produced
a further consultation paper, with a view to submitting further developed programmes
to Brussels this month (March), which could form the starting point for negotiations.
5. The fundamental difficulty is that the opportunistic, funding-driven approach
adopted by Northern Ireland ministers has not dovetailed well with the essentially
ethical purpose of the commission and the Council of Ministers in showing continued
goodwill to the region. In particular, the lack of distinctiveness of ‘peace
2’ from the ‘transitional objective 1’ programme has rendered
it difficult to justify Northern Ireland’s continued special treatment,
as compared with other less-developed EU regions.
Missing the R-word: ‘peace 2’
1. The overall aim of the DFP plan is described as ‘to contribute to the
creation of a more peaceful, prosperous and stable society in Northern Ireland,
through processes of economic renewal and social, economic and political transition’.
It is noticeable that the word ‘reconciliation’ is missing from this
mission, though it manages to mention ‘economic’ twice. It is as if
Northern Ireland can make a ‘transition’ beyond sectarianism without
having to confront it along the way.
2. The conflict in Northern Ireland did not arise, nor was it perpetuated, by
lack of economic growth, though relative deprivation was clearly a factor. Therefore
the solution is not likely to be found through economic means. Rather, if the
causes and effects of division can be addressed and political stability established
then the conditions can be created in which the region can prosper.
3. The plan itself concedes that the region’s progress is severely retarded
by the ‘serious barriers to reconciliation between the two communities’:
polarisation and mutual mistrust leads [sic] to residential and workplace segregation
and creates rigidities within local labour markets, loss of productive output
due to sectarianism related incidents in the workplace, an undermining of business
confidence, a negative external image, a ‘brain drain’ of bright young
students and the physical scarring of cities, towns and villages throughout
Northern Ireland, particularly in interface areas.
4. Indeed, it recognises that the damage sectarianism inflicts on the society
has been paradoxically exacerbated by the ‘peace process’:
There is evidence that the violence which in Northern Ireland was previously
expressed through the conflict has been displaced and finds a number of other
expressions such as sectarianism in the workplace, increasing numbers of disputes
about parades, increasing intimidation, increasing residential segregation,
increasing attacks on members of ethnic minorities and increasing domestic violence.
5. The current, ‘imperfect’ peace, even if it endures, will not in
itself change this debilitating communal apartheid and social fracturing. And
it would represent the most heroic belief in economic determinism to imagine
that enhanced prosperity would reduce sectarian tensions—the last decade,
after all, also saw economic growth ahead of the UK average. But this is precisely
the implicit assumption underlying ‘peace 2’, which the operational
programme describes as the prior peace programme ‘with a new economic focus’.
6. The consultation paper was issued by DFP after the peace programme had been
discussed in the Executive Committee during the period of devolution. It notes
that there was ‘strong support for a greater emphasis on reconciliation’
and that a ‘less marked’ emphasis on economic projects was now being
suggested—though still moreso than under ‘peace 1’. Indeed, whereas
17 per cent of the latter programme was committed to ‘productive investment
and industrial development’, ‘economic renewal’ accounts for
31 per cent of the proposed ‘peace 2’. In addition there appear to
be measures contained in ‘peace 2’ which clearly should be funded
under the ‘transitional objective 1’ programme. The shift of local
economic development from the objective 1 programme to its peace counterpart
serves only to reiterate the lack of distinction between them.
7. It is recognised that there must be integration between social and economic
means and ends. But the paper bases on the assertion that many activities ‘have
both economic and social benefits’ the more tendentious claim that ‘there
should not be a false dichotomy between types of action’. This is presumably
to justify the decline in support in ‘peace 2’ for social-inclusion
projects, which comprised 31 per cent of ‘peace 1’ expenditure but
are projected to account for only 19 per cent of the new programme. It remains
unclear—mainly because the plan and rationale for the proposed actions
have not been adequately developed—how the economic actions are to achieve
social outcomes and social actions contribute to economic outcomes.
8. A better starting point for the DFP proposals would have been the approach
adopted by the Northern Ireland Council for Voluntary Action. In its proposals
on ‘peace 2’ two key objectives were identified, and given equal weight.
These were ‘promoting reconciliation’ and ‘social inclusion’.
Moreover, we have been down this road before. An independent mid-term evaluation
of ‘peace 1’ flagged up in 1997 the failure of the programme to contribute
to reconciliation and criticised its economistic character, which the DFP remains
determined to enhance. That review complained:
The ill-defined nature of ‘peace and reconciliation’ can be traced
to ambiguities in the design of the original programme. In effect, a significant
part of the programme was a plan for reinvestment in Northern Ireland and
the border counties of the Republic—but without a vision as to how this
might contribute to peace and reconciliation. Some parts of the programme
were barely disguised extensions of existing structural fund programmes. The
lack of an agreed understanding of how to achieve peace and reconciliation
and the relative weakness of this [reconciliation] constituency also played
their part.
9. These mistakes look set to be made once more—if the European Commission
allows them to be. The DFP paper, under the heading ‘Distinctiveness of
the new peace programme’, sets out four alternative criteria by which projects
will be considered for inclusion. Number one is the catch-all ‘showing
a strong economic renewal effect linked to the opportunities arising from peace
or to the transition to a more peaceful and stable society’. Number two
itself contains four alternative parts: advancing reconciliation is only one
of them. Not only is a commitment to furthering reconciliation not presented
as essential for any project to enjoy support under ‘peace 2’. It
is not even presented as a desirable attribute.
10. In this form the programme would be wide open to the danger that the mid-term
review of ‘peace 1’ identified as ‘colonisation … by local
interests’. Indeed any groups wanting to take the reconciliation dimension
seriously would find themselves competing, under the DFP proposals, for a drop
in the funding bucket: just 3.4 per cent of ‘peace 2’, it is suggested—12.7
million euros—should be allocated to what it describes as ‘community
relations’.
11. The work is crying out to be done. There are excellent projects in being.
The proposed Museum of Citizenship would challenge sectarian stereotypes in
an interactive and internationalist manner. ‘Counteract’ does much
quiet but important work to combat harassment and intimidation at work. Moreover,
projects such as these are of great potential benefit to the EU as a whole,
given the ethnic tensions characteristic of many of the accessor states, not
to mention the particular problems of Cyprus.
12. Reconciliation in Ireland, on a wider view, is not only a matter of changing
intercommunal relationships in Northern Ireland but also of changing relationships
across the island as a whole. Indeed, one is obviously related to the other.
Yet the DFP plan and even the ‘peace 2’ operational programme were
drafted without prior agreement with the authorities in the republic on what
would comprise the cross-border dimension, though consultation was ongoing.
There is a strong disposition in the European Commission to support closer north-south
integration in Ireland, and the go-it-alone approach of the Northern Ireland
civil servants went down badly when the operational programme was submitted
to Brussels.
13. This is partly because the commission has for many years grappled with the
difficulties of securing co-ordinated development across member-state frontiers.
Cross-border co-operation schemes are vulnerable to a ‘back-to-back’
mindset which hinders effective co-operation. This danger can only be avoided
if co-operation is built in from the outset. Again successful initiatives would
be of great assistance to the EU institutions in thinking about cross-border,
inter-regional and transnational initiatives elsewhere.
14. Those involved in north-south reconciliation activities, whether through
non-governmental institutions, the universities or whatever, found themselves
hamstrung by the first peace programme, with its geographical confinement to
the six southern border counties. The flexibility to extend the geographical
scope introduced towards the end of the last programme was thus welcomed. While
not wishing to detract from the important claim of disadvantaged groups on either
side of the border for specifically cross-border monies for social-inclusion
activities, more widely extended north-south (and ‘east-west’) co-operation
projects should be considered admissible in this programme.
15. A further difficulty arises with the suggested delivery mechanisms for the
peace programme. One of the innovations of ‘peace 1’ was the establishment
of district partnerships to disburse funds at the level of the 26 council areas.
But the DFP paper implies a subtle and perhaps worrying change. The district
partnerships were genuine, one-third/one-third/one-third partnerships between:
locally-elected representatives; the voluntary sector; and business, trade unions
and others. Each sector appointed its own representatives, and the voluntary
sector and the trade unions made genuine efforts to secure, for example, gender
balance in their representation.
16. Now the department is suggesting ‘an evolutionary development’
in which the district council would ‘take the lead’ in its area in
establishing the partnership. This appears to suggest some rolling back of the
participatory dimension, which would only be to the detriment of the overall
performance of the partnerships and would in fact be in nobody’s interest.
17. Implementation should be undertaken by the organisation best fitted to deliver
the required outcome. The first programme showed that intermediary funding bodies
were highly effective in getting to the target group and they have developed
their expertise as delivery agents. The opportunity arises to consolidate the
best of what has been achieved in a manner that simplifies procedures, avoiding
overlap, while ensuring that the benefits of such approaches—in particular
local sensitivity, diversity and independence—are retained, thus creating
a more efficient and effective model. Where possible, functional expertise and
local knowledge should be used to enhance effectiveness and add value to the
programmes.
An economic step-change?: ‘transitional objective 1’
1. Where the economic focus rightly falls is of course in the ‘transitional
objective 1’ programme. The crucial goal of objective-one funding is to
elevate the per capita GDP of lagging regions towards the EU average—as
has so dramatically succeeded, alongside numerous other influences, in the Republic
of Ireland. But this requires (as has indeed also been the case in the republic)
a policy focus on the strategic priorities to be pursued if the key bottlenecks
to radically improved performance (in the republic’s case, these were inter
alia volatile industrial relations and educational under-achievement) are to
be removed.
2. One of the deleterious effects of the delayed formation of the Executive
Committee and its early suspension has been the failure to elaborate a Programme
of Government, as required under the Belfast agreement, which would move the
region beyond the collection of programmes accrued under direct rule into a
‘joined-up’ policy portfolio more attuned to its specific needs. Moreover,
the Strategy 2010 economic-development document prepared under the auspices
of the direct-rule administration, as a backdrop to the formation of the executive,
was badly received by expert economists. This has made it difficult to present
a coherent pitch to Brussels as to what, other than a demand for sustained European
largesse, the justification for further substantial support might be. In the
absence of such a framework, the structural-funds plan has too many bullet-point
wish-lists.
3. Much of the detail in the ‘transitional objective 1’ operational
programme is unexceptional. Indeed there are many welcome individual proposals
to foster economic development and social inclusion. The difficulty is that
at the heart of the programme what is missing is a clear account of what needs
to be done to achieve a step-change in economic and social performance in the
region, and where this fits in with EU approaches.
4. Northern Ireland’s critical challenge, an extreme version of wider structural
difficulties in the UK economy as they affect peripheral regions, is to move
from a low-activity, low-skill, low-wage, high-inequality path to one characterised
by high labour-market participation, high qualifications, and high and egalitarian
incomes. This requires a strategic engagement with EU institutional thinking
on issues such as regional development, social inclusion and gender equality,
and a focus on key priorities, such as:
o providing quality childcare to facilitate female workforce participation and
prevent subsequent educational under-achievement;
o addressing the obsolete academic/vocational binary divide with its long tail
of poorly-qualified school leavers;
o developing intermediate labour markets and using other active labour-market
policies to enhance economic activity rates;
o elaborating a regional innovation system, including inter-firm networks and
links to research/technology institutions, to inject dynamism into the Northern
Ireland economy; and
o pursuing strategic external investments, whose impact can be multiplied via
technology transfer and the development of supply chains.
5. Of course, full pursuit of these priorities requires policy decisions outwith
the ambit of the ‘transitional objective 1’ programme—policy
decisions which will once more be indefinitely postponed in the absence of agreed,
devolved institutions. But there remains a lack of ‘big picture’ thinking
in the operational programme, which means the overall outcome can not be any
more than the sum of its individual parts, however worthy many of the latter
may be.
Conclusion
1. Northern Ireland desperately needs to become a normal civic society, enjoying
economic prosperity, social inclusion and—above all—political stability,
including in its relationship with the rest of the island. The always over-committed
nature of public-expenditure planning, not to mention the expectation that Northern
Ireland can expect a colder public-spending climate in the years to come, means
the support from the EU structural funds is of critical value to the necessary
policy innovation and learning.
2. This is especially so as the chance will not come again to dispose intelligently
and creatively of £1 billion. It would be a travesty if such monies were
to be frittered away on projects not dissimilar from mainstream government programmes,
whose overall coherence was not clear and which, in tandem, did not bring about
the necessary transformation in Northern Ireland as a European region.
3. The best guarantee against such an outcome would be for the draft operational
programmes for the ‘peace 2’ and ‘transitional objective 1’
programmes to be rewritten and set in the context of a well-developed plan with
a clear rationale and coherent yet distinct objectives. The opportunity should
be taken to build on the lessons of ‘peace 1’ through the implementation
of a sharply focused programme specifically addressing the causes and consequences
of the prolonged conflict. This must leave a legacy of lasting peace at the
grass roots and create the conditions for sustainable economic development,
in particular in those areas and amongst those people most affected by the ‘troubles’.
4. The underlying concept driving ‘peace 2’ should be that peace in
Northern Ireland must mean more than the absence of violence, crucial though
the latter is. Bearing in mind the outworking of war in the Balkans in the last
decade, the citizens of the region deserve a future in which they live in peace
with their neighbours. That means co-existing in a multi-cultural space of fluid
identities and a milieu of social inclusion, rather than being trapped in a
communal apartheid. Paradoxically, it is such a freed-up future for Northern
Ireland which is the best guarantor of its political stability.
5. To be deemed eligible for support under ‘peace 2’, therefore, all
projects should have to demonstrate that they are helping to sustain peace and/or
promoting reconciliation, which may be on an all-Ireland basis. This should
be the gatekeeper against opportunistic bids.
6. In addition, the reversal of priority between economic development and social
inclusion in the programme should itself be overturned. And the partnership
local delivery mechanism should be sustained on an equal footing.
7. The emphasis of ‘transitional objective one’ should be economic
and social. But the strategic priorities should be much more clearly delineated,
to ensure those projects supported do, in combination, raise Northern Ireland’s
economic game and enhance social equality in the labour market. This should
again deter ‘grantpreneurial’ claims on the programme.
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