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European Structural and Investment Funds Common Provisions and Common Provision Rules etc. (Amendment) (EU Exit) (Revocation) Regulations 2020

My Lords, the EU regulations for structural funds and the cohesion fund are designed to reduce social and economic disparities in the EU and are the main funding tools designed to deliver the EU’s cohesion policy. They come under the wider family of European structural and investment funds. These EU regulations set out the rules governing these funds and give powers to the member state to ensure the operability of eligible projects.

More than half of EU funding is channelled through the European structural and investment funds. They are jointly managed by the European Commission and the EU member states. BEIS sets the policy and co-ordinates the management of four of these funds across the UK: the European Regional Development Fund, ERDF, which includes European Territorial Co-operation funding—ETC; the European Social Fund—ESF; the European Agricultural Fund for Rural Development—EAFRD; and the European Maritime and Fisheries Fund, or EMFF.

The UK has been allocated about £9.5 billion of funding under structural funds for the 2014-20 period. The funds currently support growth, low carbon, transport, research, innovation, small businesses, employment opportunities and social inclusion. Structural fund programmes are managed and delivered by government organisations designated as managing authorities—MAs—which in essence are delivery bodies for the funds in England and the devolved Administrations and are responsible for drawing up operational programmes. These programmes set out the levels of funding available for certain activities and how the programmes will be run within the parameters set by the EU regulations.

The Department for Business, Energy and Industrial Strategy—BEIS—is the co-ordinating body for ESIFs in the UK. In England, the managing authorities for the European Regional Development Fund and the European Social Fund are, respectively, the Ministry of Housing, Communities and Local Government and the Department for Work and Pensions. The devolved Administrations and Her Majesty’s Government of Gibraltar administer ERDF and ESF in their respective areas. The Department for Environment Food and Rural Affairs manages the agricultural funds—EAFRD—in England, and the devolved Administrations in their areas, apart from EMFF which is run across the UK by the Marine Management Organisation, an executive non-departmental public body sponsored by Defra. Gibraltar receives a small allocation of about €10 million —£8.8 million—from the European Regional Development Fund and the European Social Fund for 2014-20 and has agreed operational programmes with the European Commission to implement them. It also takes part in two transnational programmes.

The need for continued regional investment in the event of a no-deal exit and the nature of the projects supported by these funds led to the introduction of legislation so that these funds could operate domestically under a no deal until their planned closure, even though they would cease to be funded by the EU in such circumstances. As the UK subsequently signed the withdrawal agreement, which maintains the EU regulations for European Structural and Investment

Funds until programme closure, which could be until 2026, given that programmes run until 2023 and then generally take two to three years to wind up, SI 625 contradicts the intent and purpose of the withdrawal agreement.

This instrument is being laid in order to revoke the aforementioned SI 625/2019, which was made on 18 March 2019. That SI disapplied retained EU law in relation to the European Regional Development Fund, the European Social Fund and the European Territorial Cooperation Fund to ensure that the programmes could continue in a no-deal scenario. Under the withdrawal agreement, these regulations can still apply in the UK, despite the UK not being a member state. Now that the withdrawal agreement has been signed by the UK and made into law through the European Union (Withdrawal Agreement) Act 2020, the original statutory instrument, 625/2019, is therefore no longer required and should be repealed in order not to confuse the statute book.

The EU withdrawal agreement Act 2020 allows the UK to continue to apply EU Regulation 1303/2013, supplementary funds, specific regulations and associated delegated and implementing legislation for the European structural and investment funds through until the end of the current programme. It is proposed that the UK shared prosperity fund will be set up as the domestic successor to the European structural and investment funds for new programmes.

In conclusion, it is therefore necessary to revoke the original no-deal statutory instrument 625/2019 to remove conflict with the provisions of the EU withdrawal Act. The UK will continue to participate in European structural and investment funds programmes until their closure, and delivery continues through the managing authorities and devolved Administrations. Therefore, in order to remove any confusion from the statute book as the no-deal guarantee for funding is now not required, I commend this regulation to the Committee.

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