N+2 Rule
At the beginning of each programming period annual financial allocations are made to each Programme. Programmes are then required to spend funds by the end of the second year following the year in which they are allocated. These targets are called the N+2 rule.
Failure to meet the annual spending targets means that money will be returned to the Commission budget and therefore lost to the Programmes in Scotland.
The de-commitment rule (N+2) is set out in Article 31 of Council Regulation 1260/1999 and is a financial control designed to encourage sound management of the programmes and avoid end-loading of activity. It requires de-commitment of any funds not spent by the end of the second year following the year to which they were allocated.
The annual targets relate to payment of Structural Funds by the Commission to Member States as reimbursement of expenditure. In order to meet the targets therefore, project development, delivery, spend and claims are all essential throughout the programming period.
The Programmes are administered by 5 external bodies, the Programme Management Executives. To ensure the N+2 targets are achieved European Structural Funds Division closely monitors the progress of each individual Programme, taking action were necessary to ensure that the targets are met.
Specific in year targets have been given to the Programme Management Executives and progress of the respective programmes towards these targets will form the basis of the current years monitoring process.