Glossary of Terms used in European Structural Funds
The world of European Funds is full of jargon and obscure technical terms. To make things a little easier, here are some words and expressions you will hear regularly from the outset: 'Eurospeak' put into plain English!
A, B, C, D, E, F, G, H, I, J, K, L, M, N, O, P, Q, R, S, T, U, V, W, X, Y, Z
A
Actions
These are the kinds of activities Structural Funds can support. Assistance for capital investment, business start-ups and the search for new markets are all "eligible actions".
Additionality/Added Value
Funds from the European Union should be additional to what national governments would normally have spent in an area: they should not displace such resources. Similarly, individual projects must be able to demonstrate that without European Structural Funds their project would not be able to go ahead (or only in a reduced form). This is the principle of additionality at the level of the Member State and added value at the level of the individual project.
Advance Payment
(30%) on submission of a completed Annex A to the Scottish Executive, the project applicant receives an Advance Payment. Single Year projects receive 30% of the total ESF award Multiannual Projects receive 30% of the first calendar year's ESF award.
Advisory Group
The first stage of project appraisal in Scotland where projects are scored by the Programme Management Executive and a local peer group of project applicants.
Annual Implementation Report (AIR)
Each year, a report needs to be prepared for each Programme detailing progress towards meeting programme targets. The Programme Monitoring Committee will need to understand, own and agree this report which is sent to the European Commission. For the 2000-2006 period, these Annual Implementation Reports have an enormous significance on the ongoing review process of the five Programmes and their subsequent development on the ground.
Annual Review Meeting (ARM)
A new and very important part of the increased emphasis the Commission places on effectiveness will be delivered through an annual meeting between the Member State, partners and the Commission. This is the annual review meeting which takes place within two months of submission of the AIRs to the Commission in June.
Anorak
Someone who knows more about Structural Funds than is good for them - will be able to quote Regulations, and their subsets called Articles, freely.
Appraisal
The process whereby project applications are assessed for eligibility, fit, value for money and quality.
Approval
The process through which a project is recommended for support.
Approval letter
Formal letter issued by the PME on behalf of the Scottish Executive to successful projects. Attachments to the letter detail the offer and conditions of grant.
Articles
Structural Funds are governed by legally binding agreements signed up to by all EU Member States (also see Regulations). Regulations are written agreements and each section tends to be called an Article and has a number.
Audit
Approved projects may be subject to an audit visit by the European Court of Auditors. In addition the Project Management Executive conduct monitoring visits and the Executive monitors the PMEs - these are not audits. See Monitoring.
Auto decommitment
Not a scene from "Terminator 2", but the process whereby money can be taken back by the European Commission from programmes that are not spending or delivering to a particular profile (see "Berlin Profile" and "Performance Reserve").
Award
The total amount of money awarded to a project.
B
Berlin Profile
The Commission, as part of ensuring Programmes are managed in a more disciplined way, now insists that they spend to a particular annual profile (also known as "N+2" see below). The shape of the annual spend was agreed under the German Presidency and is known as the Berlin Profile.
Beneficiary
An individual who receives support through a project.
C
Capacity Building
A commonly used term for projects which improve the ability of communities or businesses/organisations to take the lead in their own development through improving their expertise and awareness about relevant issues.
Cohesion Fund
This is not available in Scotland as it is provided only to the poorest Member States (currently it is available in Greece, Spain, Portugal and Ireland). The Cohesion Fund supports large environmental and transport infrastructure projects.
Commitment
When a project is approved for funding, it receives an offer letter (called an Annex A) setting out how much funding it will get. The sum of all these offer letters is called the commitment. It has a specific definition in terms of the Berlin Profile in that what has been committed in a particular year has to be spent two years later.
Community Initiatives
Community Initiatives comprise around 5% of the 2000-2006 Structural Fund budget and are pilot projects/test beds for activity which, if effective, are then mainstreamed into the larger Funds. There are four Community Initiatives which currently benefit Scotland. These are INTERREG III, URBAN II, LEADER+ and EQUAL.
Community Support Framework
The Scottish Objective 3 programme is set in the context of the UK Objective 3 Community Support Framework (CSF) that provides a basis for the co-ordination of European Social Fund assistance. There are similar programmes for England and Wales. The CSF is the basic programming document, agreed between the Commission and Member States, which sets out plans for Structural Fund support in the regions concerned. It identifies particular problems facing the labour market, the strategy and priorities for action and where money should best be channelled. Within each CSF, Operational Programmes set out in more detail the way the funding will be used.
Completer
Refers to a beneficiary who has completed a project and will not return to the project.
Compliance (issues)
the Project Applicant is responsible for ensuring EC regulations and other 'compliance' requirements associated with the project are met.
Concentration
The principle by which resources are focused on a particular area, community or sector so that there is real impact and visibility. The Commission is opposed spreading resources too thinly - also see targeting.
D
De-commitment
The process by which ESF money awarded to a project is reclaimed. The net effect is the reduction of the amount of Grant awarded.
Defrayed expenditure
All costs claimed against a project must have been 'defrayed' i.e. paid by the applicant. Paid is defined by having given money for goods/services e.g. an invoice has been received, a cheque sent and the transaction has been entered in the applicant's accounts.
Desk Officer
The key contacts the Scottish Executive and the PME have in the European Commission Directorates General.
Directives
These are, like Regulations, laws which are binding on Member State Governments. They differ from Regulations in that they allow the Member State more flexibility in the timing and method of their implementation - normally they need to be transposed into Scottish or UK Law before they come into force ( Regulations do not). See Rules
DG
Short hand for "Directorate General". These are Departments of the European Commission (like Scottish Executive departments), which deal with specific issues, such as Structural and Cohesion Funds. Our main dealings are with DG Regional Policy, which deals primarily with the European Regional Development Fund and DG Employment, which deals with the European Social Fund. We also have dealings with DG Agriculture and DG Fisheries.
E
EAGGF
This is the European Agricultural Guidance and Guarantee Fund. It focuses on Rural Development. In Scotland, only those in the Highlands & Islands Special Transitional Programme area can apply for EAGGF funding. It has key links with the Rural Development Plan.
Eligible and Ineligible costs
Approved project costs, as set out in the guidance provided to Applicants.
Eligibility
The Commission specifies in various rules what types of activity and expenditure are eligible for Structural Funds support. If you are checking claims, you will have to be aware of the type of things which are and are not eligible for Structural Fund assistance - this will be in the Guidance which is available to download from the relevant PME page.
EQUAL
Promotes equality in the labour market, focused particularly on disadvantaged groups including women, ethnic minorities, people with disabilities and asylum seekers. The EQUAL programme operates across Scotland through development partnerships working with particular groups or issues.
Equal Opportunities
Enables equal access to opportunities by all members in society including men, women, disabled, ethnic minorities, socially excluded, those of low education and those living in peripheral areas.
ERDF
This is the European Regional Development Fund. It is one of the four Structural Funds and the principal Fund in the Objective 2 and Highlands and Islands Programme areas.
ESF
This is the European Social Fund. It focuses on human resources and skills related issues. It is not to be confused with the term European Structural Funds (also abbreviated to ESF at times) which encompasses the four funds of ESF/EAGGF/FIFG and ERDF.
European Commission
This is one of the EU institutions. The Commission Services is equivalent to an EU civil service. It is responsible for Structural Funds and many other policies over which the EU has competence. It is based in Brussels and Luxembourg.
European Court of Auditors
European Commission's auditing body, responsible for ensuring the Structural Funds are appropriately spent and administered.
Evaluation
There is a legal requirement to evaluate Structural Funds Programmes at three points. These take place before the start of the Programme i.e. ex-ante (and this exercise becomes part of the Programme document); half-way through - known as the interim or mid-term evaluation; and after programmes have closed (known as ex-post). These evaluations will always be undertaken by an independent, external evaluator and assess the performance and delivery of all aspects of the Programme.
F
FIFG
Financial Instrument for Fisheries Guidance finances measures for the adjustment of fisheries and aquaculture structures and processing and marketing of their products.
Final Quarterly Claim
This is the final (last) quarterly claim submitted for the a Project. A Final Claim must be submitted to the Project Management Executive within 3 months of the approved end date of the project.
Financial Tables
The section of the Programme plan which shows how funds will be spent by year, by Fund, by priority and with what match funding contributions. This is a vital part of the Programme and the key to the Berlin Profile.
G
H
Horizontal themes
In the main, this refers to sustainable development and equal opportunities (which, for the Commission, means gender equality). There is a requirement that these themes run through all projects and Programmes. These are sometimes called cross-cutting themes.
I
Impacts
The longer term impact of the project including an assessment of its additionality, e.g. net jobs created. This is now referred to as a result.
Indicators
The targets a Programme elects to use to judge its performance, e.g. the number of jobs created. See outputs and results, which are the two types of indicators.
Ineligible costs
See Eligible and Ineligible costs
Innovative Actions
This Programme aims to stimulate innovation among SMEs. The Scottish-wide Programme links with a network of 156 other Programmes across the EU. Operates for the 2-year period of 1 Jan 2004-31 Dec 2005.
INTEREG
Promotes co-operation and exchange of experience between regions, based around particular geographies (eg countries who share land borders) or issues. Operates through a system of development partnerships with a number of transnational partners
Intermediate Administration Body (IAB)
The 2 organisations appointed to assist with administrating the European Structural Funds for the 2007-13 Programmes. ESEP Ltd operate in the Lowlands & Uplands Scotland (LUPS) area and the Highlands and Islands (Scotland) Structural Funds Partnership Ltd do likewise for the Highlands and Islands (H&I) area.
Intervention rate
A project will not normally receive more than 50% of its eligible costs from Structural Funds. The remainder has to be covered by match funding (this can be private as well as public). The percentage which Structural Funds represent within the total eligible costs is called the Grant rate or intervention rate.
IQ-Net
Is a network of regions whose aim is to improve the quality of Structural Fund programming through exchange of experience. The network exchanges experience on aspects of programme development, management and evaluation, bringing together ideas from across the EU and sharing information on good practice.
J
K
L
LEADER +
Programme that aims to promote innovative strategies for integrated sustainable development for rural areas.
LEC
Is the term often used to describe a Local Enterprise Company. These are the local agencies set up across Scotland as part of Scottish Enterprise - sometimes also known as the Enterprise Network.
Legacy
Working in partnership to ensure European Structural Funds have a lasting impact.
M
Mainstream Funding
Refers to Priorities for which applications are submitted on an annual bidding process (see also Rounds/Rolling Programmes).
Managing Authority
The organisation deputed by the Member State to have overall responsibility for the proper running of Structural Funds. In Scotland this is the Scottish Executive. In England this is the Office of the Deputy Prime Minister (ODPM), which discharges the function through Government Offices (GOs).
Match funding
Structural Funds make up a maximum of 50% (although it is possible to exceed this in the Highlands and Islands) of any project costs. All Structural Fund resources have to be matched by other funding. This can come from public sector sources (e.g. Local Authorities, Colleges, Local Enterprise Companies and the Lottery), private sector contributions, in-kind and volunteer time.
Measures
Structural Funds plans have two levels of detail. They are first broken down into Priorities and then into Measures. Measures describe how the Priority will actually work. For example, the Priority might say it will address the problems of new businesses, while individual Measures might look at start-ups, support for new firms, and tackle issues of long-term survival. Both Priorities and Measures have a sum of money attached to them in the Financial Table, although the Commission only agrees the Financial Table at Priority level. Programme Monitoring Committees can decide to move money between measures in a Priority.
Monitoring
Three strands to this!
• The first is that individual projects may receive a monitoring visit to check on progress from the Programme Management Executive staff.
• The second is that the Programme Management Committee will receive regular reports on the progress of the programme as a whole and notably on the extent to which it is meeting targets.
• Final strand - European Structural Funds Division also has to perform some monitoring visits of PMEs themselves, over the length of the Programme, to check they are carrying out their tasks in compliance with EC regulations.
Multi-annual
This relates to the duration of a project. A multi-annual project will be delivered over a period no longer than 36 months. Projects delivered in a maximum of 12 months are known as 'Single Year'.
N
N+2
Not a new boy-band like "Take That". This is the principle whereby the spend required of a programme under the Berlin Profile is calculated. N is the commitment year. +2 is the year by the end of which funds committed in N have to be spent (or returned - see "auto de-commitment").
National Action Plan (NAP)
ESF under Objective 3 supports the national employability agenda in all parts of the UK, in particular the National Action Plan (NAP) for Employment. All ESF plans are linked to the targets set out in the Employment Guidelines and in the NAPs. This is also linked to the European Employment Strategy (EES).
NUTS
The Nomenclature of Territorial Units for Statistics (NUTS) was established by Eurostat more than 25 years ago in order to provide a single uniform breakdown of territorial units for the production of regional statistics for the European Union.
There is an ever-increasing demand for statistical information at a regional level amongst EU Member States. In order to achieve common definitions, Eurostat have agreed that the regional levels agreed are to be used by the European Commission for statistical purposes whenever possible.
O
Objective
The bulk of Structural Funds are dedicated to delivering three Commission Objectives. Objective 1 programmes help regions lagging behind the EU average to restructure. Objective 2 programmes help regions with specific incidences of industrial decline or rural deprivation. Objective 3 programmes operate outside Objective 1 areas and deliver training to achieve the aims of Lisbon Agenda/the European Employment Strategy.
Objective 1
Promotes the development and structural adjustment of regions whose economic development is lagging behind - usually those regions whose per capita GDP is less than or close to 75% of the Community average. In Scotland, the Highlands and Islands area is in transition from Objective 1 status.
Objective 2
Promotes economic development and change in four kinds of regions: those hit by particular urban problems; areas which have been hardest hit by industrial decline, where traditional industries such as coal and steel, textiles and shipbuilding can no longer compete successfully; areas which have particular problems in their rural economy; and areas which are dependent on fisheries. There are three Objective 2 Programmes in Scotland: the East, South and West, some areas of which are in transition from Objective 2.
Objective 3
Combats long term unemployment; assists young people and those at risk from exclusion from the workforce; promotes equal opportunities and improves women's position in the workforce; promotes adaptability and entreprenuership in the workforce; and improves training, education and counselling for lifelong learning. There is one Objective 3 Programme in Scotland, operating in the area outside the Highlands and Islands.
OJ
The Official Journal of the European Union. Large contracts must be advertised in the OJ to ensure that organisations across the European Union have an equal chance of bidding.
OLAF
Office Européen de Lutte Anti-Fraude. The anti-fraud wing of the Commission it's aim is to fight fraud, corruption and any other irregular activity, including misconduct within the European Institutions.
Operational Programme
Like an SPD, only for Objective 3 they call it an Operational Programme.
Outputs
The actual activities which the project finance will pay for - hand in hand with results as outputs should lead to results.
P
Partnerships
Local, sub-regional, regional and sector groupings who work together (in the main, on an informal basis) to ensure projects coming forward in their area meet needs and do not duplicate and conflict with each other.
Paying Authority
The organisation responsible for paying claims. The Scottish Executive is the Paying Authority in Scotland. In England this is the Office of the Deputy Prime Minister (ODPM) for ERDF and the Department for Work and Pensions (DWP) for European Social Fund. Unlike the Managing Authority, the Paying Authority is not involved in project decision making or policy making.
Performance Reserve
The Regulations require Member States to hold back a certain amount of funding. At the end of 2003, all programmes will be assessed to see how effective they have been. Programmes which have been demonstrably effective will receive more money from this performance reserve. The Regulations allow the Commission to renege on the Performance Reserve if targets are not achieved.
Priority
An allocation of funds to support projects which will address a key issue identified in the Programme.
Programme Complement
For the 2000-2006 period, the Commission approves the programme plan only down to the level of Priorities. This leaves a significant amount of detail to be agreed locally - and therefore gives real flexibility and power for local decision making. The document that takes this second level of detail forward is called the Programme Complement. These have all been agreed by the PMCs in Scotland for the current Programmes.
Programme Management Committee
This is the group which meets after the Advisory Groups have agreed a list of project applications for approval. The Management Committee (in SEP Ltd this is called the Implementing Committee) approves the list which then goes to the Programme Monitoring Committee and is finally agreed by Scottish Executive Ministers.
Programme Management Executive (PME)
These are the partnership organisations which help the Scottish Executive to deliver the five Structrual Funds Programmes in Scotland. There are five PMEs: East of Scotland European Partnership (ESEP), Highlands & Islands Partnership Programme (HIPP), Objective 3 Partnership Scotland Ltd, Strathclyde European Partnership Ltd (SEP) and South of Scotland European Partnership (SoSEP).
Programme Manager
A staff member of the Programme Management Executive responsible for managing a particular Priority/Measure. Support staff are often known as Programme Administrators
Programme Monitoring Committee (PMC)
This is the Committee which makes final recommendations on project selection to the Scottish Ministers after they have been appraised by peer advisory groups and the Management Committee. There is one PMC for each of the five Programmes in Scotland. When the PMCs were first set up, a wide consultation process took place and, with the agreement of Ministers, invitations were issued to individuals in a personal capacity, while at the same time, aiming to achieve the best possible sectoral, geographical and gender balance on the Committees. The PMCs also consider strategic implementation of the Programmes.
Programming
Since 1989, the spending of Structural Funds resources in regions have been expressed through one planning document for each objective, rather than through a string of individual projects bidding to the centre. This is called programming.
Project
A discreet capital or revenue operation which contributes to thew fulfilment of the programme aims and objectives.
Q
R
Regional Development Plan (RDP)
This is the regional "chapter" of the national Objective 3 programme.
Regulation
The European Council (EC) has the power to make Regulations which are then legally binding on Member State Governments. Structural Fund Regulation No. 1260/1999 lays down the general provisions for the Structural Funds. There are further specific Regulations for each Fund: ERDF - no. 1783/1999, ESF - no. 1784/1999, EAGGF - no. 1257/1999 and FIFG - no. 1263/1999.
Results
The immediate effect of outputs e.g. increase in SME (small to medium sized enterprise - employs less than 50 people) turnover, qualifications gained gross jobs created. 'Outputs' (replaces any reference to activities) and 'results' (replaces any reference to impacts or outcomes).
Rolling Programme
Refers to Priorities for which applications are submitted on a continual - rolling - basis. That means there are no formal submission deadlines for applications. Designed to help more applicants apply in some Priority areas.
Rules
A number of specific aspects of the Regulations are interpreted and explained further in guidance called rules (formerly "datasheets"). Rules are mostly difficult to understand, but the Scottish Executive is working with partners and others to make them more usable.
Rural Development Plan
Under the Structural Funds regulations, Rural Development Plans have been prepared at a UK and a Scottish level to direct the use of EAGGF. These are steered by the Department for Environment, Food and Rural Affairs (DEFRA) and the Scottish Executive Environment and Rural Affairs Department (SEERAD) respectively.
S
Scheme
A revenue project which is usually administered by one party or partnership through which subsequent applications through a 3rd party can be made. he application of selection criteria.
Scoring
The application of selection criteria.
Scotland Europa
Scotland Europa is a partnership of public, private and voluntary bodies who have combined to provide a central point of contact in Europe. Their offices are based in Glasgow and Brussels, providing a central point of information, analysis and contacts for Scottish organisations.
Selection Criteria
Projects seeking funding must be assessed fairly, transparently and speedily. The Programme Monitoring Committee will agree a selection framework and criteria whereby this can happen with the full confidence of all concerned. The selection framework is a written document containing criteria to assess, among other things, Structural Funds eligibility, fit with local, regional and national policies, and quality.
Single Programming Document (SPD)
With the Programme Complement this is the key document of the Programme. This is the investment plan whereby the partnership says how it is going to spend the money it gets from Structural Funds. There are five SPDs in Scotland - one for each Programme Area.
Social Inclusion
Working together to tackle the combination of linked problems affecting excluded communities and groups, including unemployment, poverty, discrimination, poor housing, ill health and crime.
Spend
When a project has an offer letter that is commitment. Spend only takes place when a project begins to make claims. Projects claim quarterly, in arrears, and on expenditure incurred.
Sub Rosa
is a 'Sub Rosa' is a Latin term meaning "Under the Rose" taken from the practice of diplomacy during the Middle Ages when hanging a rose over a meeting was a sign of confidentiality and the freedom to speak openly and candidly. In modern terms however, 'Sub Rosa' is a confidential, high level, European policy discussion forum sponsored by an informal partnership between the Scottish Executive and the two government Development Agencies for Scotland - Scottish Enterprise and Highlands and Islands Enterprise.
Sustainable development
Development that meets the needs of the present generation without compromising the ability of future generations to meet their own needs.
T
Targeting
Back to thin jam (see concentration). The Commission is keen that resources should have maximum impact. In its view this only happens when resources are focused (targeted) on, for example, particular sectors, particular businesses, and particular locations - and, especially, particular communities.
Technical Assistance (TA)
That part of the Programme budget which can be used to improve Programme performance, management, effectiveness and delivery. In Scotland this is largely used to run the Programme Management Executives.
Transitional Areas
Some areas, though eligible for Structural Funds in the 1994-1999 period, have not met 2000-2006 eligibility as they have become relatively more prosperous. These are therefore in transition from Structural Funds and will leave the programme in 2005.
U
Underspend
When a project spends less than originally requested this is referred to as an Underspend. Underpsends are reported through the Quarterly Claims process and are decommitted (see Decommittment above) from the project.
URBAN
Promotes innovative solutions to urban problems of unemployment and population loss. Focused on small areas where the whole community can be involved in bottom-up approaches to regeneration. URBAN II operates in Port Glasgow and South Clydebank.
V
Verification & Compliance Unit (or VAC Unit/Team)
The Scottish Executive Unit, within European Structural Funds Division, which carries out the inspections of European Structural Funds projects. They do on-the-spot verification checks involving examining the background to projects and checking project expenditure to bank accounts.
Virement
The transfer of funds between measures or Priorities.
W
X
Y
Z