At this present time there are quite a lot of academics heavily involved in issues pertaining to the regeneration of Merseyside, Liverpool and many other poor communities throughout the UK. One of the main academics (who is funded by some government body or other, probably Government Office) involved with regeneration and New deal for Communities (NDC) is Professor Paul Lawless. Professor Lawless can be reached at Sheffield Harlem University. His phone number is 0114-225-5555. This man is head of a team of lecturers who span the whole country, for instance he knows lecturers in Liverpool such as Michael Parkinson and his team, who are situated in Urban Affairs at John Moor’s University and Richard Meagan, who has received funding from a government body known as ESRC to partake in a 3 year research programme. This research formed part of the ESRC’s ‘Cities, Competitiveness and Cohesion’ Research Programme. It was a ‘free-standing project’ based around investigation of an actual regeneration initiative being carried out on Merseyside as part of the city-region’s social and economic conversion plan under Objective One of the European Union’s Structural Funds. This initiative - known as ‘Pathways to Integration’ – was one of five priorities in the Objective One single programming document and was explicitly targeted at issues of social and economic (Richard Meegan Summery of full report). Meegan’s final research summery was favorable and very supportive of the way in which Pathway’s has evolved and is operated. Richard Meagan research can be viewed on the ESRC’s web site:  http://www.regard.ac.uk/cgi-bin/regardng/showReports.pl?ref=L130251044 he can also be reached at the Department of Geography, which is situated in Liverpool University.

There are other critical academics, such as Dr Phillip Boland, web site:  http://www.cf.ac.uk/cplan/staff/boland_p.html who are just as capable as the above mentioned elitist postmodernist academics, but I believe these mainly working class academics are being deliberately censored and kept out of the regeneration picture because they promote democratic process and critical dialogue. Dr Boland’s research papers are attached at the end of this document. On careful observation the reader will see how the Dr Boland research papers differ from the research undertaken by Richard Meegan.



In my opinion the above lecturers, other than Dr Bowland are, are at least to some extent, post modernist in the way they think and are supporters of a system that promoted neoliberalism and actually supports the present oppressive community participation and empowerment methodology that is being imposed on most regeneration communities throughout the UK. This participation methodology does not empower poor communities, but rather, suppresses, subjugates and domesticates them, primarily to facilitate the intervention of outside vested interests so that these elitist bodies can by using stealth impose their agenda onto the unsuspecting community. These lecturers seem to be oblivious to the voice of diversity and critical dialogue, although they will claim to the contrary. Most of these academics are careerists who will pander to the expectations of elitist central and local government bodies. New and innovative ways of empowering communities, ways that grasp to their centre democratic practice are a threat and anathema to these elitist elements, locally and nationally. Libertarian academics such as Paulo Freire, Henry A. Giroux, Professor Ira Shor and others who advocate open democratic community participation and empowerment are being blatantly ignored in favour of a post modernist repressive neoliberal approach.

What has been allowed to evolve here, with no critical intervention or accountability, is a very serious set of affairs that has been set into motion by the Liverpool City Council’s Community Participation Unit and Government Office high ranking civil servants.

In conclusion on closer observation it becomes quite obvious that there is a lot more involved in what is going on with the issues pertaining to the regeneration of Merseyside and the supposed empowerment of poor excluded people who live in poor communities that have been earmarked for regeneration using central government Single Regeneration Budget and European Objective One funding sources. It would seem that there was is definite hidden agenda when it comes to the issue of community participation and empowerment.

Mike Lane

Some of Dr Bowland's papers can be viewed below. See how they are different in the way they view and criticise t Pathways and community participation:

URBAN GOVERNANCE AND ECONOMIC DEVELOPMENT:
A CRITIQUE OF MERSEYSIDE AND OBJECTIVE 1 STATUS, 1994-1999

BY

Dr PHILIP BOLAND
DEPARTMENT OF CITY AND REGIONAL PLANNING
CARDIFF UNIVERSITY
GLAMORGAN BUILDING
KING EDWARD VII AVENUE
CARDIFF
CF10 3WA
Tel: +44 (0)29 2087 5275
Fax: +44 (0)29 2087 4845
Email:  Boland@Cardiff.ac.uk
 http://www.cf.ac.uk/cplan/

Paper for the Regional Studies Association International Conference
‘EU Regional Policy: Progress, Problems and Prospects’
Aix-en-Provence
14-15 September 2000

Abstract

In recent years there has been an accelerating academic interest in the coherence of European regional policy, particularly in relation to the local application of Structural Funds. In tandem there has also been an increasing importance attached to the governance of regions and localities. This paper fuses these two sets of debates in critically examining European Objective One support for Merseyside in the UK. Merseyside was an Objective 1 region for the 1994-1999 programming period, and this paper traces some of the fundamental fault lines in the design and delivery of its Single Programming Document – the strategy and resource framework accompanying Structural Funding. It therefore provides some instructive lessons for the 2000-2006 UK-based Objective 1 regions: Merseyside (receiving its second tranche of support) and the new recipients of Cornwall and Scilly, South Yorkshire and West Wales and the Valleys.

URBAN GOVERNANCE AND ECONOMIC DEVELOPMENT:
A CRITIQUE OF MERSEYSIDE AND OBJECTIVE 1 STATUS, 1994-1999

INTRODUCTION

31st December 1999 marked the official conclusion of Merseyside’s first round of Structural Funding support as an Objective 1, economically lagging, region within the European Union (EU). The availability of some £1.6 billion in ‘matched’ aid between 1994-1999 provided policymakers with a significant opportunity to tackle economic and social decline, and thence lay the basis for regional development and employment creation. This paper provides a critical appraisal of Objective 1 on Merseyside, particularly in relation to the design and delivery of its Single Programming Document (SPD), the economic strategy and policy and resource framework accompanying European monies. It also provides some instructive lessons for Merseyside, and the new United Kingdom (UK) Objective 1 regions of Cornwall and Scilly, South Yorkshire and West Wales and the Valleys, as they enter the next tranche of Objective 1 funding for the 2000-2006 programming period.

CONTEXTUALISING THE EMPIRICAL ANALYSIS

The interface between urban governance and economic development

This paper draws upon the governance literature (see, for example, Boland, 1998, 1999a, 2000; Harvey, 1989; Jeffery, 1997a; Jessop, 1995, 1997; Lloyd and Meegan, 1996; Mayer, 1994; Painter and Goodwin, 1995; Peck and Tickell, 1994; Pierre, 1998; Rhodes, 1995). Quite whether these, admittedly eclectic, writings comprise a consistent and watertight theory is open to debate (see Keating, 1998). However, the common theme running through this scholarly material, and thereby the theoretical binding agent for this paper, concerns an analysis of the interrelationships between the plethora of actors - public, quasi-public, private, voluntary and community - participating in the design and delivery of economic policy. Or alternatively, the interface between urban governance and economic development. Another important conceptual mapping component is the contention that the process of governance is played out at many spatial resolutions, from the heights of the macro international stage down to the micro community level: so-called ‘multi-level’ governance (see Bullman, 1997; Jeffery, 1997b; Marks, 1997; see also Jessop, 1995). In recent years the notion of governance has become an almost ubiquitous term in academic discourse, sometimes used quite loosely and lacking theoretical rigour (for some valuable explications see Harvey, 1989, p. 6; Mayer, 1994, p. 322; Rhodes, 1995, pp. 1-2; Stoker, 1998, pp. 34-35). Interestingly, it has also become a staple ingredient in the verbal diet, along with globalisation, competitiveness, networking, innovation etc., that too often spews from the rhetoric of government-, media- and institution-speak.

European Structural Funds and contested multi-level governance

The Maastricht Treaty on European Union (1993) upgraded the importance of EU regional policy, and placed economic and social cohesion as one of its primary objectives (CEC, 1994a, 1994b, 1997). European regional policy is driven by the belief that social and economic disparities between regions of the Union are excessively divergent which necessities corrective remedial action by the European Commission (EC), primarily through the disbursement of its Structural Funds (Michie and Fitzgerald, 1997, p. 14; Turok and Bachtler, 1997, p. 5). An indication of their importance is that the Structural Fund budget has increased substantially in recent years, from 43.8 billion ECU over 1988-1993 to some 141 billion ECU for the 1994-1999 programming period. Some 70% of which were allocated to Objective 1 regions, those peripheral or lagging regions - examples in the UK were Merseyside (England), the Highland and Islands (Scotland) and Northern Ireland. Receipt of financial assistance from the EC is not unproblematic, however, for it has been demonstrated that there exist fundamental “institutional tensions between European, national and local bodies, and the impact of new partnerships on local development”, which has led many to question the ‘coherence’ of EU regional policy (Bachtler and Turok, 1997a, p. 1). This has directed academic attention to focus on the local impact of the Structural Funds, in particular on how policies supported by the EC are developed and implemented within a regional and local context.

In the UK the relationships between the plethora of actors engaged in implementing Structural Funding are often conflictual. There is strong evidence that during 1994-1999 this had important impacts on the design and delivery of many, if not all, recipient regions’ SPDs (see Lloyd and Meegan, 1996; Roberts and Hart, 1997). One major problem stems from the fact that both the EC and UK Government have strong regional footholds, the former as the provider of the resources, the latter as the main regional animateur (Carvel, 1994, p. 6; Michie and Fitzgerald, 1997, p. 19). This meant that spatial scale of contestedness shifted downwards to those regions receiving support, whom were faced with the difficulty of preparing the strategy and delivery mechanisms for their SPDs while having to reconcile “the conflicting ideas and instructions emanating from Brussels and Whitehall” (Lloyd and Meegan, 1996, p. 58). This is an example of what has been referred to as the problematic ‘local reach’ of the Structural Funds. It is important to note that this tension occurred in many Member States of the Union, often lapsing into “suspicion, friction and even conflict between governments and the Commission” (Turok and Bachtler, 1997, p. 7).

Agreeing an SPD into place involves detailed negotiations between the EC, relevant Government departments and regional actors that can become protracted, tense and even acrimonious. A significant product of this process was that in the lead up to the 1994-1999 programming period many UK SPDs became subjected to “a substantial degree of policy iteration and that a number changes were made to the content of the policy agendas” (Roberts and Hart, 1997, p. 205). This arose from the fact that the (then) UK Government advocated a more flexible approach to economic development with administrative mechanisms aimed at delivering policy and spending resources efficiently, thus indicating its ambivalence, if not antipathy, towards regional plans and regional governance structures which were key objectives of the EC. This is the first tier of what has been referred to as contested multi-level governance: “a multi-layered battle for control over policy direction and resource distribution” (Boland, 1999b, p. 788).

These are important contextual issues surrounding the impact of European Structural Funds in the UK. This paper now moves on to examine Merseyside’s recent experience of Structural Funding, in the form of Objective 1 status, with particular reference to the design and the delivery of the region’s SPD.

THE EVOLUTION OF MERSEYSIDE'S SPD

The designation of Objective 1 status

In recent decades Merseyside has frequently been used as a laboratory where various treatments for the ailments of economic, social and urban decline have been tested. By the late 1980s it was evident that the neo-Liberal supply-side panacea had failed to cure the cancer of unemployment, poverty and exclusion (see Boland, 1998, pp. 70-105, Meegan, 1989). In 1989 the region, stung by reductions in domestic regeneration resources and encouraged by the Thatcher Government, began exploring the possibility of accessing European Structural Funds and was duly granted Objective 2 status as a declining industrial region. Three years later Merseyside ‘progressed’ to an Objective 1 region and gained access to the highest priority under Structural Fund support for depressed regions. Interestingly, the transition to Objective 1 status caused some anxiety both locally and nationally. Despite a large hike in access to funding the granting of Objective 1 status was viewed by certain local figures as presenting a distinctly negative image of Merseyside; the perception was that this could discourage firms from investing and so threaten the prospects for economic development (Boland, Mannin and Wallace, 1995). A similar note of caution was voiced by the (then) Regional Policy Commissioner, Bruce Millan, who pointed out that: “Getting Objective One status is in a sense a double-edged sword. It acknowledges that things have gone badly wrong in the past - and that can be accounted a negative signal to the rest of the world” (cited in Carvel, 1994, p. 4).

The UK Government has also been accused of adopting an ambivalent attitude. For some it was ‘politically sensitive’ for a Conservative Government to actively promote a privileged position for Merseyside in the EU, particularly in light of the raft of (failed) policies it had promoted during the 1980s and early 1990s (Boland, Mannin and Wallace, 1995). Others went further and charged the Government with being somewhat ‘embarrassed’ by the extent of the economic and social decline of Merseyside (Carvel, 1993). In time, however, the UK Government came to support Merseyside’s case and mobilised its officials within the Commission to have Objective 1 awarded. Some may (rightly) cynically argue that this was merely part of a wider ploy to snatch some money back from our European partners to offset the UK’s net contributions to the Commission, a constant bone of contention during the Thatcher years.

Preparing and negotiating the SPD

The Commission encourages local authorities to cooperate with their partners to prepare regional development strategies (i.e. SPDs) to provide a backcloth for European funding (Martin and Pearce, 1993). It was during the preparation and negotiation phases for Merseyside’s SPD that the ideological debates between the UK Government and the EC took root, and so began to affect its future shape and content. This problem was further compromised by the fact that many local stakeholders were in tune with the EC, while the UK Government was heard to be singing from a rather different song sheet (Lloyd and Meegan, 1996, p. 74). This was a very difficult situation from which to formulate an appropriate economic strategy.

In support of Merseyside’s case for Objective 1 status the regional partnership, consisting of the Merseyside Task Force (representing the Government), the five local authorities and other (carefully selected) regional partners, produced a regional conversion plan (the first stage in progression to an SPD) for the Commission prior to the release of the funds. The thrust of this document, referred to as Merseyside 2000, was to reduce the economic and social disparities between Merseyside and the rest of the EU by reducing unemployment and increasing GDP towards the EU averages (MTF, 1993). However, it was commonly accepted that it had set itself some dubious, over-ambitious and unattainable economic targets. Commissioner Bruce Millan reflected the sense of unease when he went on record as saying: “I think, if anything, the Merseyside 2000 plan was over enthusiastic about what might be achievable” (cited in Carvel, 1994, p. 4).

When Member States submit regional conversion plans to the Commission they are then “subjected to independent scrutiny and then negotiated line-by-line with the Commission prior to revision” (Turok and Bachtler, 1997, p. 6). When Merseyside 2000 was submitted to the EC in November 1993 it met with what has been (rather euphemistically) described as a ‘guarded cynicism’ (Boland, Mannin and Wallace, 1995). Peter Lloyd and Richard Meegan at the Department of Geography, University of Liverpool, undertook the subsequent independent scrutiny of Merseyside 2000. The general critique was as follows (see Lloyd and Meegan, 1994; see also Fazey, 1994). Firstly, it was heavily influenced by the UK view of regional development policy. Secondly, it would have involved the funding of projects that were not dissimilar to those that had previously proved fruitless in delivering economic growth. And thirdly, it did not contain a coherent analysis of the regional economy and was not a genuine strategic regional plan. The fundamental criticism was therefore that it lacked originality and innovative policies.

Timescales are revealing in relation to European issues. Merseyside was designated Objective 1 in July 1993 and Merseyside 2000 was submitted to the EC in November of the same year, but it was not until July of the following year that the SPD was finally agreed and ratified. The reason for this delay was the often heated discussions conducted between EC officers, the Government Office for Merseyside (GOM) and Department of Trade and Industry officials, which were set against the backdrop of the differing perspectives of regional development policy referred to earlier. A source from Merseyside’s Objective 1 Secretariat offered the following insightful reflection into these deliberations. It was acknowledged that the UK Government and the EC had contrasting views on both social and economic policy, and the important, if not difficult, role for the GOM involved weaving itself between these competing ideologies in order to negotiate the SPD into place. It was accepted that the GOM acts along national policy priorities and so it was important to ensure that what was agreed in the final SPD did not clash with or contradict national policy.

The GOM therefore became a strategic governance structure through which the UK Government could dictate the nature of the SPD so that it conformed to national policy priorities. Interestingly, such practices also occurred in other regions of the UK, such as Scotland, Yorkshire and Humberside, West Midlands and the South West (see Roberts and Hart, 1997, pp. 204-207). Returning to Merseyside, the contested debates at a national-European level about the nature of regional development policy were shifted down the spatial scale to the region. The effect was that the design of the region’s SPD was subjected to some major revisions and a protracted delay – the first publicly available copy of the SPD did not emerge until early 1995. An important postscript here is that during this lag time the GOM had been inundated with a substantial number of project bids as the mechanics of resource allocation rapidly took priority.

The compromise SPD: all sides can declare themselves as winners

The finally agreed SPD represented a ‘compromise’ between the EC and UK Government views on regional development policy (Boland, 1998, p. 129, 1999a, pp. 649-650, 1999b, p. 789, 2000, p. 220; Carvel, 1994, p. 6; Lloyd and Meegan, 1996, p. 65-70). It maintained the supply-side measures and the strategic objectives of the original document (allied to the UK view), but it also incorporated a series of ‘drivers for change’ providing the ‘dynamic forces’ from which local economic development would emerge. It emphasised social as well as economic development, reflecting the EC policy on social exclusion, not something the UK Government would have normally attached special attention. The EC also claimed credit for refining the ERDF measures to deal with business support rather than road building or water authority investment as initially intended, for modifying the original training measures and reducing the amount of monies allocated to the ESF by 10% to 37%. This clearly shows that Merseyside, like other UK regions, did not escape the policy changes that are indicative of negotiating an SPD.

The SPD satisfied the principal protagonists with both sides managing to secure concessions from the other, which led one observer to rather wryly opine: “a compromise in which all sides can declare themselves to be winners” (Carvel, 1994, p. 6). It is quite plausible that a compromise was the only realistic outcome given the degree of policy divergence surrounding the negotiation process; for according to one informed respondent it is inevitable you get a ‘balance’ between the Member State and the EC. A senior source from the Objective 1 Secretariat offered a different interpretation of the SPD. Rather than being a compromise, it was perceived to be both ‘focused and flexible’ in the sense that it had a set of focused economic drivers, but within them there was a certain degree of flexibility in terms of project applications. Government officers in the region regarded this as being a very positive feature in the SPD, which worked efficiently in allocating resources.

Underpinning Merseyside’s SPD were five economic ‘drivers of change’: inward investment and large companies, local small companies, knowledge-based industries, culture, media and leisure industries and human resources. These were intended to provide the stimulus to economic development and “break the cycle of slow growth and even stagnation that has affected the region” (CEC, 1994c, p. 22). To completely close the economic gap between Merseyside and the EU would require two remarkable economic activity rates to be set in motion. Firstly, an increase in GDP of approximately 5% above the EU average. Secondly, an increase of employment growth of 8,400 jobs for the five year timescale of the strategy. Many respondents acknowledged that these objectives were wildly optimistic and it was extremely unlikely that the end of 1999, particularly given the severity of the region’s socio-economic malaise would meet them. Cambridge Econometrics, however, did forecast that with the introduction of Objective 1 Merseyside would benefit from a 3% (real terms) increase in regional GDP, and a net increase of 25,000 jobs by 1999 (CEC, 1994c, p. 23). The fact that Merseyside is to receive a second helping of Objective 1 support raises serious doubts on these targets (see Conclusions).

Roberts and Hart (1997, pp. 199-204) contend that once UK SPDs emerged from the ‘Whitehall washing machine’ their policy content shared a common degree of standardisation and uniformity, lacking genuine local input and innovative policies. Moreover, Lloyd and Meegan (1996, p. 78) argue that they were not regional plans, rather they were “carefully redefined to meet the UK Government’s own national agenda for a flexible market driven response to regional need”. This is particularly true of Merseyside’s SPD. Firstly, its five economic drivers are almost identical to those of other UK SPDs. Secondly, there is no rigorous analysis of the regional economy or regional dynamics; in fact, it allocates only one page to economic and social indicators, but fails to account for how these problems arose or specific solutions to them. This adds weight to claims that it was not a coherent regional plan. However, the shining beacon in terms of innovative policy is Pathways to Integration, Merseyside’s Community Economic Development (CED) priority that is based on cultivating a bottom-up – people-led – approach to local economic development (see Boland, 1998, pp. 156-179, pp. 180-227, 1999c; CEC, 1994c, pp. 125-129, 1996).

This section has demonstrated how the conflictual debates between the UK Government and the EC over economic policy adversely affected the design of Merseyside’s SPD. Moreover, the process of contested governance has also impacted upon the delivery of the SPD, particularly in terms of the power relations within the regional partnership and the mechanics of resource allocation.

THE IMPLEMENTATION OF MERSEYSIDE’S SPD

The regional partnership: asymmetric power relations

Regional partnerships form the focal point for the delivery of European Structural Funds. They are intended to involve all actors engaged in economic development and urban regeneration, and ought not to be dominated by one or more participants. It is argued, however, that during the 1994-1999 programming period the structure of economic governance in the UK was characterised by the centralisation of power and control in Whitehall and Westminster, and a lack of effective regional governance structures (Lloyd and Meegan, 1996, pp. 78-82; Martin, 1997, p. 52; Roberts and Hart, 1997, p. 200, p. 212). The creation of ten integrated Government Offices (GOs) in the English regions in April 1994 played a critical role in this process. In combining the previously separate regional offices of Environment, Employment, Transport and Trade and Industry their (official) remit was to provide a more coherent co-ordination in policy implementation (Hogwood, 1995; Mawson et al., 1995). In effect they became key regional governance structures through which Central Government could effect leverage over the application of European and domestic regeneration funding. This lent life to “a growing concern that the introduction of integrated regional offices in England represents an attempt by Whitehall to seize the vacant regional ground” (Martin, 1997, p. 65). A related debate subsequently erupted over the power and privilege conferred on the un-elected Senior Regional Directors who head the GOs. These Government appointed officials were compared to district commissioners of the British Empire, Roman pro-consuls, French prefects and viceroys, while their control over spending led many to question their accountability and discretionary powers (Foster, 1995). Indeed, one Merseyside MP, Peter Kilfoyle, criticised the secrecy and lack of accountability of the GOM in distributing funds: “The system seems to be running secretively, with grants of up to £3.8m awarded without any elected representative considering the application” (cited in Foster 1995, p. 9).

The regional partnership on Merseyside, as in other regions, has been characterised by ‘asymmetries of power’ (Boland, 1998, pp. 133-135, 1999a, p. 651, 1999b, p. 790; Lloyd and Meegan, 1996, p. 73). It has been dominated by the big players, with the GOM at the helm, ably supported by the five local authorities, the three Training and Enterprise Councils (TECs), the privatised utilities and local quasi-public agencies. While there has been a limited, if not minimal, role for the marginal players, such as the private, voluntary and community sectors, trades unions and other social partners. Local MPs voiced their misgivings at the lack of effective social partner involvement on the floor of the House of Commons (Hansard, 1995, p. 884). In the UK the problem of unequal power relations arises from differential access to knowledge, expertise and resources – ‘knowledge is power’. The big players have the necessary expertise and resources at their disposal which, combined with a familiarity with EC funding under previous programmes, represented a significant advantage over the marginal players, who concomitantly lacked the ‘capacity to act’ (Lloyd and Meegan, 1996, pp. 73-75; Roberts and Hart, 1997, p. 203). This quickly translated into a powerful role for the big players in the EC policy and resource machinery. On Merseyside these asymmetric power relations created an unhealthy environment for the effective delivery of the SPD, for it has been handicapped by the dominance of a small clique of actors who have effectively monopolised the process. This breeds conflict and suspicion, which has been particularly evident in the Knowsley Borough of Merseyside (see Boland, 1999c). Moreover, the lack of any substantive input from the marginal players denies the delivery of the SPD a valuable source of information and energy.

Once again these trends are not unique to Merseyside, but were a common feature in many UK regions (Lloyd and Meegan, 1996; Martin, 1997; Roberts and Hart, 1997). This, along with concerns over the size and elected (political) membership of Monitoring Committees and Technical Panels (which oversee the bidding process for funding), indicates the “restricted scope and narrow membership of regional partnerships” (Roberts and Hart, 1997, p. 200). There are therefore concerns that in many areas of the UK “the commitment of agencies to genuine local partnerships is either absent or fragile” and that “local agencies still have relatively little influence over decisions which determine the overall distribution of funding” (Martin, 1997, p. 52). However, a senior source from Merseyside’s Objective 1 Secretariat confirmed that local trades unions are now involved in the Objective 1 process and are represented on the both Technical Panels and the Monitoring Committee. In addition, they have also been involved in the Steering Groups working on the design of the new SPD. This is evidence that some progress is being made toward inclusivity on Merseyside.

Resource allocation: a row of pigs with their snouts in the trough

The determining factor for local agencies seeking involvement in European initiatives is to establish a seat at the funding table (Martin, 1997, p. 53; Roberts and Hart, 1997, p. 199, p. 211). As with other European related issues, Merseyside provides a revealing case study of these processes in action. There is powerful evidence to show that the Objective 1 resource allocation process has been dominated by ‘professional money chasing’ and the ‘principle of take’ (Boland, 1998, p. 233, 1999a, p. 651, pp. 656-657, 1999b, p. 790; Lloyd and Meegan, 1996, p. 74). One respondent vividly encapsulated the mentality of the bidders: “Take what we can get this year and hope that we can get the same or more next year” (Interview, 1996). Brauner (1996, p. 12) alludes to a more crude, if not accurate, animalistic analogy to describe the funding arrangements: “A row of pigs with their snouts in the trough”. The pot of £1.6 billion sent local partners into a feeding frenzy as they scrabbled among themselves for a share of the spoils. This was particularly true in terms of the Pathways to Integration initiative in the Knowsley Borough of Merseyside, which had the negative effect of shrouding the CED initiative in deep controversy (see Boland, 1998, pp. 180-227, 1999c). Acknowledgement of the existence of this debilitating practice was not limited to the academic and media fraternity; for it was recognised by the Objective 1 Secretariat itself. One senior figure accepted that the problems centred on “who is going to control the grant, not how it is going to be delivered. It was mayhem in the first two years, and an awful lot of opportunities have been wasted” (cited in Barnett, 1996, p. 9, original emphasis).

What is clear from the Merseyside case is that resource allocation is driven less by need and competency and more by positions of power and the ability to generate matched funding. The desire to draw down and spend the money became the modus operandi for local stakeholders, while adherence to an agreed local economic development strategy and/or a regional partnership came a poor second. The commitment to partnership was conveniently cast aside; maybe it was illusory to begin with, as the mechanics of accessing funding took priority. One senior local respondent conceded that whilst the official feedback on the partnership principle during the 1994-1999 programming period was favourable, the reality was that as soon as competition for funding kicked in individual priorities took precedence. There are grave concerns that this has had wider implications for the effective delivery of Objective 1 on Merseyside:
“In the face of fiscal stringency and the micro-motives of each individual partner the imperative of take has rendered the programme anti-innovative and exclusionary. While higher order debates continue around issues of regional planning versus market forces or a Europe of the regions versus national sovereignty, on Merseyside these now take second place to more pragmatic concerns in attempting to solicit bids, process them and organise spend against a tight timetable” (Lloyd and Meegan, 1996, pp. 74-75, original emphasis).

As a means to caricature the situation on Merseyside the analogy of the law of the jungle is appropriate. Use of the following metaphor is an attempt to crystallise the process that has been taking place. The dominant predatory felines (public and quasi-public sector agencies) rule as they carefully prowl and meticulously observe their prey (EC resources). When the opportune time arrives they attack and firmly fix their sharpened teeth and razor-like claws into the helpless beast. They then gorge themselves on a prolonged feast, while their ravenous rival competitors (private, community and trades unions sectors and civil society) wait impatiently to feed on the carcass that remains. While not arguing that such a natural law exists on Merseyside, the comparison is useful in depicting how the dominant actors are able to use their strength and power to obtain the lion’s share of EC funding, while others are left to pick upon the scraps left behind.

The debate over additionality

There is another contentious caveat to European funding – additionality, which has historically complicated the delivery of EC Structural Funds in UK regions. It can usefully be defined as “genuine additional economic impact and an equivalent increase in the total value of official aid” (Welfare and Beaumont, 1993, p. 183). Following the 1988 reform of the Structural Funds a series of principles were introduced to enhance the effective implementation of European regional policy. One of the most important has been the additionality principle which sought to ensure that Members States’ spending matched European spending and “that EU funds should not be used as a substitute for funds from national sources”, i.e. net additionality (Michie and Fitzgerald, 1997, p. 19). The problem lies in different concepts of additionality. The EC adheres to the ‘net additionality’ concept per region. In contrast, the (then) UK Government plunged into the murky waters of ‘global’ public expenditure accounts to reveal that recipient regions were ‘better off’ with EC funding compared to previous funding regimes (Boland, Mannin and Wallace, 1995, pp. 698-699; Lloyd and Meegan, 1996, p. 77; Martin, 1997, p. 53).

The debate over additionality led many UK regions to voice concern that EC resources would in reality not constitute net additional funds. In their research on English Objective 1 and 2 regions, Lloyd and Meegan (1996, p. 77, original emphasis) reported that “many regional bodies believe that a substantial proportion of the regional funds have been captured by the GOs to support national spend”. This is further evidence of the pivotal role played by the GOs in relation to the funding and management of the Structural Funds in UK regions. The source of the problem rests on the fact that effective control over the allocation of the Structural Funds lies with the GOs, who also disburse national regeneration funding. This made it difficult to decipher where the resources for one strategy ended and another began, and so the distinction between UK and EC programmes became unnecessarily and confusingly obfuscated. It is argued that this generated serious ex-post evaluation difficulties for the Commission, particularly in terms of ascertaining the real economic impact of Structural Fund intervention. According to Martin (1997, p. 53) this “made it almost impossible for the Commission to determine baseline expenditure levels against which the increases resulting from its assistance can be judged”. In short, European money is supposed to represent a net gain; but sceptics have shown that this has been paralleled by cuts in capital allocations in national policies and programmes, thus negating the overall benefit (Welfare and Beaumont, 1993). The GOs have therefore been a key conduit for Central Government in terms of resource distribution; they allow the allocation of Structural Funds to be abused.

Returning to Merseyside, concern was raised that the UK Government was effectively ‘clawing back’ Objective 1 funds, and in Objective 2 regions, to compensate for its net contributions to the EC (Boland, Mannin and Wallace, 1995, pp. 698-699; Lloyd and Meegan, 1996, p. 74). Interestingly, this was not a new practice because under previous EC funding regimes for Merseyside projects were supported that would have proceeded without European money. Furthermore, during the negotiation for the SPD there was some suspicion within the Commission that the UK Government was intending to use Objective 1 funds to pay for training schemes that were already underway (Carvel, 1994, p. 5). Again the problem rests on two different interpretations of additionality which, according to one informed respondent, are equally valid. The local community group perception was that the ESF would be used to provide new courses for local people. In contrast, the training provider view was that additionality did not mean a completely new course, rather it was the same course with an extra number of students or an extended timescale. This has created some very serious problems in Knowsley where there is a deep sense of suspicion, cynicism and conflict over the use of the ESF by local training providers, and more importantly the entire CED project (see Boland, 1998, pp. 212-217; 1999c, pp. 224-225). Indeed, the additionality debate raised so much local controversy that Knowsley Council sought advice from the EC Regional Policy Commissioner, Mrs Monica Wulf-Mathies. On a regional level there were rumours that the Commission had threatened to withhold Objective 1 monies from Merseyside, which took nearly a year for a settlement to be reached. There still remains a significant degree of local controversy raging over additionality.

This section has commented upon how the problem of contested governance had a negative impact on the delivery of Merseyside’s SPD. It now moves on to offer more general critical conclusions on the Merseyside experience of Objective 1 status, particularly on the economic impact of the policies and the lessons for the next programming period.

CONCLUSIONS

This paper has shown that Merseyside in particular, and other UK recipient regions, are instructive examples where the “regionalised approach to economic development has been a source of particular difficulty” (Turok and Bachtler, 1997, p. 7). It has revealed that there are important lessons to be learned from the Merseyside experience of Objective 1 status. More generally, it provides a valuable input into wider debates concerning the ‘coherence’ of European regional policy (see Bachtler and Turok, 1997b). In demonstrating the problems that can occur during the design and delivery of an SPD, Merseyside is a highly relevant case study for other regions currently embarking on their Objective1 journeys, such as Cornwall and Scilly, South Yorkshire and West Wales and the Valleys (see Boland, 1999d). Quite whether the new Regional Development Agencies (RDAs) in the English regions, the Scottish Parliament and the Welsh Assembly will transform the nature of economic governance, decision making and inclusivity is an important future research agenda (see Bentley and Gibney, 2000).

Assessing the economic impact of Objective 1

Objective 1, 1994-1999, was an attempt to improve Merseyside’s performance on key economic indices, e.g. unemployment, economic activity and inactivity and GDP. At the time of writing, however, latest Government statistics raise some serious questions marks over the economic success of Objective 1; moreover, it is argued that “they paint a familiarly disturbing picture” (Boland, 1999b, p. 791). Firstly, the latest (seasonally adjusted) unemployment figures reveal that Merseyside still has the highest unemployment rate of any county in the UK, a figure of 8.5% that remains double the UK average of 4.2% (ONS, 1999a). An unemployment rate of 11.9% for the Borough of Knowsley represents the fourth highest unemployment rate for any local authority area in the UK. Secondly, Merseyside has the highest economic inactivity rate in the UK, with 31.2% of the working population not participating in the labour market compared to 21.4% for the UK. The corollary is that Merseyside has the lowest economic activity rate in the UK with only 68.8% of the working population active in the labour market, set against 78.6% for the UK (ONS, 1999b). More alarming is the fact that the between 1996 and 1999 the economic activity rate for the UK remained constant around 79%; however, the corresponding figures for Merseyside show that during the same period economic activity fell from 71% to 68.8%. Conversely, the economic inactivity rate for Merseyside increased from 29% to 31.2%, a rise of 2.2%, while the figure for the UK hovered around 21% (MLM, 1997; ONS, 1999b). In other parts of the UK this has been referred to as ‘hidden unemployment’, where in areas with poor employment prospects people purposefully disengage themselves from the formal labour market (Beatty and Fothergill, 1998, pp. 128-130; MacKay, 1997, p. 7). Thirdly, the fact that Merseyside is to benefit from a second round of Objective 1 support indicates that regional GDP has not progressed beyond 75% of the EU average, the eligibility criteria for Objective 1. In fact, the latest Eurostat figures reveal that Merseyside’s GDP per capita is currently 72% of the EU average. At the time of designation in 1993 it was 73%, so in effect regional GDP performance is moving away and not towards the EU average as Cambridge Econometrics forecast in the SPD.

Consequently, what has Objective 1 achieved on Merseyside? One informed respondent reported that there would be no underspend from the previous programme; claiming that all the money – some £1.6 billion – has been committed. Yet the economic indices cited above clearly illustrate that unemployment, economic activity and inactivity and GDP remain deeply problematic and entrenched problems on Merseyside, despite five years of Objective 1. Admittedly, it will take time for some projects to come to fruition and thence deliver their economic impact. However, the fact that economic inactivity is rising on Merseyside must rank as an extremely alarming indicator. It shows that local people, particularly the young cohort, are deciding to remove themselves from the formal labour market. Merseyside has some powerful informal labour markets and the danger is that they may be providing the ‘job’ opportunities that the formal labour market has failed to generate (Boland, 1998, pp. 82-84). This is a very worrying trend and something that the next instalment of Objective 1 needs to address as a matter of urgency.

Implications for the 2000-2006 programming period

This paper has argued that contested governance, a process that has negatively affected the design and delivery of the region’s SPD, has undermined Merseyside’s Objective 1 programme. In terms of the design of the SPD the fundamental problem is that it is not a true regional plan, but a compromise that lacks innovative policies; while the delivery of the SPD has been dominated by asymmetries of power, money chasing and a lack of capacity to act among the marginal partners. To address these problems the next Objective 1 programme would need to progress towards designing a strategic regional plan, establishing a stronger commitment to partnership that is underpinned by genuine inclusivity and a more equitable and effective allocation of resources. A more inclusive partnership based approach is required that is driven by proper dialogue and discussion, mutual idea sharing and a wider exchanging of views and experiences from the previous programme. It would also be worthwhile placing less emphasis on the standard neo-liberal-inspired supply-side policies, encapsulated in the trickle-down approach, and instead design more locally-specific measures which are aimed at stimulating aggregate demand and job creation and increasing social inclusion, for instance, Pathways to Integration.

According to a senior local civil servant what needs to be different in the next programme is a more qualitative framework for assessing the impacts of the projects. This could involve a monitoring system that tracked individual beneficiaries and convassed their views on the qualitative, as opposed to purely quantitative, impact of projects. This would be a particularly useful introduction into the evaluation of the Pathways to Integration related initiatives, and ought to focus on the need to improve local capacity building among civil society. This qualitative approach would help engender a more critical and reflective analysis of the achievements, or otherwise, of the previous programme. It would also provide a clear evaluation of how things can be done differently and identify improvements for the next programme. One respondent claimed that what was unique about the Merseyside case, particularly within a European context, was the degree of ‘ownership’ of the programme and knowledge of the strategy. Partners wanted to ‘own’ the programme, that ‘everyone owned it’ rather than a small clique. Quite whether those marginal players in the outer estates of Merseyside would accept this interpretation Merseyside is debatable.

The new SPD was submitted to the Commission in late 1999. The early informal indications are that it is generally satisfactory, but that certain parts of it may need revising. The Secretariat awaits further detailed feedback. What is striking about the 2000-2006 SPD is that it is a mammoth document, amounting to some 350 pages which massively dwarfs it predecessor by nearly 200 pages. It would seem that Merseyside has learned some of the lessons from the previous preparation process and produced a more definitive regional development strategy. An interesting footnote is that the West Wales and the Valleys’ SPD has received a less positive response through the publication of a critical 40 page response from the Commission. It is argued that the Welsh SPD was a poorly prepared document – a ‘hotchpotch’ of unconnected ‘wish-lists’ - that requires fundamental revisions (Lovering, 2000). This would suggest that Wales may not have taken on board, and responded to, some of the important lessons that have been extrapolated from Merseyside (Boland, 1999d). In conclusion, the new century promises some very interesting times not only for Merseyside, but also the new Objective 1 regions of Cornwall, Yorkshire and Humberside and West Wales and the Valleys. The key question is can they deliver real and decent employment opportunities for those most marginalised and disadvantaged in society; i.e. can they succeed in including the excluded?



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