ADDITIONALITY AND MATCHING-FUNDING

  53.    The Government and the Commission were both apparently satisfied that the principle of additionality is now observed in the United Kingdom. Other witnesses were not so convinced. The TUC thought that additionality was "often a chimera . . . used to mask expenditure cuts to the regions" (p 230) An academic witness commented that in some Member States where a small amount of money is spread thinly over numerous aid schemes it was the visibility of additionality that was a problem (p 186).

  54.    Matching-funding is required by the promoters of local projects because EC funding is less than 100 per cent: up to 75 per cent in Objective 1 areas and up to 50 per cent for Objective 2 and 5b. The English local authority associations complained that the system of Supplementary Credit Approvals as operated by the Department of the Environment did not cover matching funding which could often only be provided at the expense of other spending allocations. This, it was claimed, severely restricted local authorities' ability to undertake projects. The associations also complained of difficulties in the operation of public expenditure controls by Government departments: there was a lack of coordination between the Departments with consequential delays (Q 287, p 63).

Opinion: additionality and matching-funding

  55.    In our deliberation some doubts were expressed about the usefulness of the requirement for additionality mainly because it was recognised that it was temptingly easy for governments to claim that they had not reduced their funds for purposes to be supported by Structural Funds and that any appearance to the contrary was explained by the general stringency of public funds. Where, as is often the case, a project can go ahead only if it obtains non-EU funding from a public source to match available EU funds, the stringency argument may well be genuine but only so because of restrictions imposed by the national government on spending by lower tier bodies. To abandon the additionality requirement would almost certainly produce a reduction in the total funds devoted to structural purposes whereas we think that EU funds should add to the work done to reduce disparities. Accordingly, we recommend that the requirement for additionality should be maintained and that national governments should make every effort to demonstrate, not only to the Commission but also to the local citizens, that it has been met.

  56.    We are sure that it is right for there to be no requirement for additionality in relation to the Cohesion Fund: the purpose of the Fund is to make good to some extent the inability of the national government to undertake, within the limits of prudent national deficit management, major projects which will strengthen cohesion. We considered whether it was anomalous for the Cohesion Four to be required to meet additionality for their Structural Fund projects. Our opinion is that additionality is the desirable norm: it reduces dependency and promotes responsible financial management. The Cohesion Fund should be seen for what it is-a temporary and exceptional measure. We do not think that value for money would be enhanced or policy goals advanced if the requirement for additionality for Structural Fund programmes were abolished for countries receiving support from the Cohesion Fund.