A Community framework for R & D : with evidence / Select Committee on the European Communities.

Great Britain. Parliament. House of Lords. Select Committee on the European Communities

Date:: 1990

Catalogue details

Licence: Open Government Licence

Credit: A Community framework for R & D : with evidence / Select Committee on the European Communities. Source: Wellcome Collection.

146/156 (page 112)

followed. As well as general lack of adherence to this principle, a further problem in the UK is the problem of non-additionality which, in some ways, is the converse to additionality. Experts working in the field of EC funding tend to note only exceptions to the rule of non-additionality such as elements of the Belfast Integrated Development Operation Programme (IDOP), of a few years ago, and more recently the funding for Kilroot Power Station in Northern Ireland. [Dr Quigley of the Department of Economic Development, Northern Ireland would be able to give a view on this specific example]. The way we understand non-additionality works is that the EuroPESC system controls the total level of public expenditure in the UK as part of a Keynsian macroeconomic policy. Money received from Brussels is set against Departmental spending levels in a way which roughly correlates the funding they receive from Brussels with the reduction in their permitted expenditure. It is understood that the main rationale for this system is to maximise the benefits of public sector EC receipts in reducing UK public expenditure, as the UK is a net contributor to the EC budget. Operation of this non-additionality principle leads on to the separate question of attribution. This refers to where reductions will be made in the expenditure patterns of departments to satisfy the Treasury claw back. This is a particular concern of SERC. As more of the Framework Programmes move from technology to science there is concern that money coming in from Brussels may be attributed to the science vote rather than to DTI. It is extremely difficult to ascertain whether there is any increase in UK Departmental expenditure as a result of funding allocations from Brussels. An analysis of replies to parliamentary questions over the years indicates a consistent ministerial line that the level of expenditure on a given activity, such as Regional Selective Assistance is at a level higher than it would otherwise have been if Brussels funding had not existed. However, if one looks at expenditure on regional policy over the years it is difficult to demonstrate this statistically. As EC regional expenditure has risen, UK regional expenditure in real terms has declined. However, it is impossible to prove that it would not have declined further if funding from Brussels had not existed. Examples of the way in which Brussels and UK Departmental expenditure intertwine are best obtained from an examination of those Civil Servants in the Treasury, DTI, DES and Cabinet Office who are concerned with the operation of the policy. At an informal and anecdotal level, however, it has been understood from Civil Servants over the years, that their lack of enthusiasm for EC programmes has been directly related to recognition of the financial penalties that would fall on their Departments if EC programmes are started or expanded. Specific examples in which the non-additionality problem has occurred are often difficult to demonstrate because evidence lies in things not happening for which other justifications can often be cited. The following examples, however, illustrate the problem. In the field of Structural Funds, we can give two clear examples which possibly serve as a warning to the HE sector: (i) Paisley Central Institution. An award of £200,000 from the European Regional Development Fund (ERDF) was made to Paisley for the development of a small business centre. It is understood that the Scottish Education Department was surprised to be subsequently told by the Treasury that it had to reduce its expenditure (ie find savings) by a similar amount. In the event, we understand that the Scottish Office assisted SED by finding savings of £50,000, leaving SED to reduce its expenditure by £150,000. (ii) Warwick University. The University put forward proposals to build an applied R&D centre at the University with the aid of ERDF funding. The possibility of making a submission to the Regional Fund was a matter of some discussion in the DES, the Cabinet Office and the Treasury. It is understood that Warwick was seeking £1 million and had intended to use the additional money from the EC to construct a larger building for the centre. After much discussion it is understood that the Treasury ruled that the University could receive the money, but the DES would have to make a saving on its expenditure equivalent to the grant received from the ERDF. DES then declined to support the application to the EC and, as a result, the DoE would not put it forward to Brussels. Warwick constructed a smaller building than they would have done with ERDF support. It is understood that one factor the DES considered was the knowledge that consultants working in this field had eight or nine similar projects waiting on the result of the Warwick test case. (iii) A third example is drawn from a Structural Fund support service. This relates to an example under the ERDF Article 15 procedure (Old Regulation). The Article 15 powers provided for the possibility of funds being made available to support the establishment of an applied regional policy Research Centre, technology transfer, and business services. It is understood that a programme, involving the Economics Fite tage of Dundee University, Stirling Business School and the Research Unit at Strathclyde University was being prepared for a possible ERDF Article 15 submission, but not proceeded with on the advice of the Scottish Office. No funds could be made available because of the need of the Scottish Office to find matching savings. In the event, it was decided two years later to make limited funds available nationally for Article 15 proposals, but by then the educational institutions concerned had given up and pursued other activities.