From: Heleen Jalvingh
To: Adam Marshall
Subject: European structural funds
Future European structural funds should not just go to a limited number of northern cities. A more balanced allocation of structural funds to cities, smaller towns and rural areas will enable all regions and all area types in the UK to tackle pockets of deprivation.

The European cohesion policy is intended to reduce regional economic and social disparities in the EU. A sole focus on big cities would exclude many regions from access to structural funds. This would further increase the economic disparities in the UK.

Second, the 'city region' concept is only appropriate for regions with an identifiable 'core' city. This would limit the access to structural funds to a small number of cities. Instead, we think that towns without a core city should also have access to structural funds.

Third, both urban and rural areas need to be able to raise their regional competitiveness by targeting their areas of need. However, other sources of cash are not sufficient to tackle the range of challenges faced by rural areas.

Therefore we please strongly for allocating structural funds, from 2007-2013, on the basis of flexibility and equity to ensure that all UK regions get the opportunity to tackle their deprived areas, targeted according to their own regional priorities and needs. This will raise competitiveness in all regions and will diminish disparities between urban and rural areas and between the northern and the sourthern regions.

Heleen Jalvingh
European affairs policy officer
Local Government International Bureau

From: Adam Marshall
To: Heleen Jalvingh
We agree on one important point. There is no question that every region of the UK – big cities, small towns, and rural areas – contains pockets of deprviation that need to be addressed.

But the European structural funds are a small resource. We have just €9.4bn (£6.5bn) coming from Brussels over the next seven years – nearly half of it already committed to our most deprived urban and rural areas. Policymakers need to acknowledge this limited pot of funding can't do everything.

So the UK faces a critical choice: concentrating structural funds on achieving a small number of key priorities, or spreading the cash so thinly that it has little recognisable effect.

What's more, European structural funds come with strings attached. The European Commission's draft regulations state that European funding must be used to support the Lisbon Agenda – which means a focus on economic growth and jobs.

The Centre for Cities believes that the structural funds can promote growth and tackle disparities if they are concentrated on the biggest city regions outside London. Places such as Birmingham, Manchester, Newcastle and Glasgow have the potential to deliver a step-change in economic growth.

The UK has one final chance to access substantial European funding. And €9.4bn isn't enough to turn around the UK's lacking regions or close the north/south divide.

Adam Marshall, Researcher, Centre for Cities
Institute for Public Policy Research

From: Heleen Jalvingh
To: Adam Marshall
We accept that big cities have an important role to play, but we have to wise up to the situation on the ground. Big cities have big priorities, and they don't always take account of the local needs that only indirectly impact upon them. The whole aim of structuring funding is to tackle disparities, ensuring these local areas which are lagging behind can raise their game.

We all know that regional inequalities form a threat for our economic competitivess. But the only way to boost our struggling regions is to ensure structural funds go to smaller cities, towns and rural areas as well. It is not only the big cities that drive job creation and economic growth.

Take the EU's recent report Bridging the broadband gap. It focused on remote and rural areas and their need to develop an information infrastructure.

Rural areas are lacking broadband communication, but if we focus our future funding on the bigger northern English cities, the problem will not be addressed.

Just because there is less cash available overall, it doesn't follow that local areas in need of support should miss out on targeted assistance. It is of the utmost importance that we get a balanced division of funding and to ensure that the areas of biggest need can invest in jobs and growth. 

From: Adam Marshall
To: Heleen Jalvingh
You mention the broadband needs of rural areas. I have no doubt that this is a barrier to economic growth in places like Cumbria and Devon – but is solving this problem the best use of the UK's last big tranche of European structural funding?

The government's recent State of the English Cities report says 65% of recent job creation has occurred in cities (most outside London) – and we must use EU funding to build on this recent success. This, in turn, will help us to tackle regional disparities while simultaneously achieving the challenging growth goals set by the Lisbon Agneda.

You're right – regional inequalities may threaten the UK's economic competitiveness. But the statistics clearly show that deprivation and worklessness are concentrated in big cities, especially in the north and west of the country. If we use structural funds to boost urban economies, and get more people into jobs in our biggest conurbations, we will make a major contribution to reducing disparities and improving the performance of our lagging regions.

Allocating a limited funding pot is always difficult. There's no escaping the perception that there are 'winner and losers' from the process. But if we spread resources very thinly, and give everyone a slice of the pie, we'll all be losers in the long-term – because structural funding won't have a discernable impact on growth and jobs.

Only by concentrating resources on the big cities in the north will we tackle regional disparities and promote growth at the same time.

From: Heleen Jalvingh
To: Adam Marshall
We agree structural funds should further support cities' contributions to jobs and growth. But you would focus structural funds only on the cities which have so far successfully contributed to the Lisbon Agenda. This would mean smaller towns and rural areas missing the opportunity to tackle their needs.

Let's take the example of rural east of England. Here, 400,000 people are in households which have an income below the government's poverty reduction target. Structural funds will be absolutely crucial here to help boost economic growth and create more employment.

Like all regions in the UK, the east of England needs the opportunity to tackle its deprived areas. Yes, there is deprivation in our big cities, but second-tier towns and rural areas can't be ignored.

From: Adam Marshall
To: Heleen Jalvingh
I'm afraid we're going to have to agree to disagree. Spending our last structural funds allocation in rural East Anglia isn't the best way to use a resource that explicity meant to deliver a step-change in growth and jobs.

Why? The east of England is a successful region – with output and employment figures substantially higher than the national average. While the problems of rural poverty are very real, they're best dealt with by refocusing domestic resources and programmes. For example, learning & skills councils need to help rural people get the training they need to access jobs in places like Cambridge, Colchester, Norwich and Ipswich. And county councils, as transport authorities, must help rural inhabitants to access jobs 'hotspots' by subsisiding bus routes and other travel schemes.

The structural funds, by contrast, should be spent on city regions outside the greater south-east, where productivity and employment figures are substantially lower that the national average. We're convinced that investment in northern city regions will show visible returns: thousands of new jobs, greater economic diversity, better connectivity, and more innovation. This is what the EU is looking for – and what the UK should deliver.

Britain is unlikely to get substantial funding after 2013, so we have two choices. The first is to spread structural funds thinly, and effect marginal change in many areas by 2013. The second is to concentrate resources, and enable our city regions to drive substantial improvements in national growth and prosperity.