North Yorkshire has a fight on its hands if it is not to lose out on millions of pounds worth of funding from an enlarged European Union. SIR GRAHAM HALL, chairman of Yorkshire Forward, describes from the inside, how battle has commenced...

IMPENDING enlargement of the European Union could have serious implications for North Yorkshire when existing EU funding programmes finish in 2006.

On May 12 all nine chairmen of the English Regional Development Agencies (RDAs) travelled to Brussels to meet Michel Barnier, EU Commissioner for the Regions.

We were there to comment on the allocation and administration of the current Structural Fund Programmes, and also to raise the vital issue of what will happen to them after 2006.

With the English regions set to lose as much as £4.46 billion in Objective One and Two funding, the future of some of our poorer areas is a major concern.

Many of the new countries, which include the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, Slovenia, Cyprus and Malta, are perceived as much poorer than the existing member states. So, undoubtedly those funds and other training money available to regions like Yorkshire and the Humber will be severely affected.

In any case, lower unemployment rates in the UK, coupled with the rise in living standards, mean that with or without enlargement, some UK regions may not qualify for European funds after 2006.

Objective 2 is aimed at regenerating areas suffering from the decline of particular industries and services, with those benefiting from projects supported through this programme based on strict geographical areas.

A significant part of North Yorkshire's upland and coastal areas have been awarded Objective 2 status, which means they are eligible for assistance through both the European Regional Development Fund (ERDF) and the European Social Fund (ESF).

Over the life period of Objective 2, namely between 2000 and 2006, grant allocation for North Yorkshire stands at about £43 million. This represents 14 per cent of the £310 million allotted to the Humber, North Yorkshire and West Yorkshire combined - funding which has helped provide vital support for a huge range of businesses and organisations and projects, particularly during the recent foot and mouth crisis.

One example is a project at Scarborough business park for new and expanding small and medium-sized enterprises, which will provide 45 new jobs and £1.5 million in increased business sales.

At that Brussels meeting, Mr Barnier's prime concern was to project his own vision, which counters the UK Government's recent consultation paper on the subject. He advocates that in future, two-thirds of funding should be awarded to the poorest areas, with one-third reserved for helping other regions - using a much more decentralised approach than at present.

He also wants to abolish zoning (implications here for Objective 2) and wants a menu of priorities from which regions can choose, believing that this would provide more flexibility for the regions.

But how would this work in practice? How will it affect the UK? All the RDA chairmen have called for more information. Having listened to Commissioner Barnier's vision we are generally convinced that for the English regions to see the best deal post-2006, the Government's proposal seems to offer a more workable and effective regional funding policy.

One of the main aspects of the UK's proposals is the separation of policy and funding, and the RDAs could play a major role here, using our direct experience of utilising policy to influence agendas and spending.

We will be submitting a joint response to the Government's proposals by the July 4 deadline.

Next step will be to update our joint RDA position to influence the Third Cohesion Report which will effectively set out the Commission's proposals for future implementation arrangements for Structural Fund Programmes after 2006. One thing is clear - there is still opportunity to shape the future of EU regional policy and we mean to ensure that areas like North Yorkshire do not miss out.

Updated: 10:03 Tuesday, May 27, 2003