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Structurally Unsound:
the Northern Ireland bids
for further EU monies

A briefing paper from Democratic DialogueMarch 2000


This is a briefing paper from the think tank Democratic Dialogue. DD is indebted to the support of its funders, which include the Joseph Rowntree Charitable Trust and the Esmée Fairbairn Charitable Trust. Further copies of the paper are available, as hard copy or e-mail attachment, from DD. Details are on the back cover, as is our web site address.
I am indebted in preparing this paper to three people who advised on it: James Magowan, Myles McSwiney and Geoff Nuttall. Responsibility for the final contents is, of course, entirely my own.

Robin Wilson


The next round of support from European Union structural funds to Northern Ireland offers a critical opportunity to consolidate and underpin political stability in the region. Indeed it is highly unlikely that after the 2000-2006 round, any significant further support will be forthcoming. There is a risk that this opportunity, to build on ‘peace 1’ and to achieve greater social and economic cohesion, will not be fully utilised if government does not present more coherent proposals to the European Commission for the expenditure of this money, amounting to 1.266 billion euros (approximately £1 billion) over the period. In particular we are concerned about the lack of distinctiveness of the proposed ‘peace 2’ programme, which fails to address the causes and consequences of the conflict.


1. At an EU summit in Berlin in March last year, European leaders made significant decisions on the future of structural fund support for Northern Ireland from 2000 to 2006. They agreed to allocate 400 million euros to a second round of the Special Support Programme for Peace and Reconciliation, with a further 100 million going to the southern border counties. They also agreed to continue to allocate substantial ‘normal’ structural funds to Northern Ireland, despite the region once again exceeding the threshold of 75 per cent of average gross domestic product per head applied to other EU regions seeking most-favoured ‘objective 1’ status. By redefining Northern Ireland as ‘transitional objective 1’, however, EU leaders made clear this support would no longer be indefinite. That view is also likely to apply to the ‘peace 2’ programme (which ends in 2004). The prospect of enlargement to the east means many claimant regions are likely to enter the union from around the middle of this decade.

2. The Northern Ireland first and deputy first ministers, David Trimble and Seamus Mallon, had lobbied the European Commission and the German presidency at the highest level, their strategic target having been to secure the same volume of EU structural-fund support as had obtained in the previous round (around £1 billion). Indeed, the informal slogan of ‘levels, not labels’ adopted by the ministers indicated that the overriding priority was to secure the Euro-money, whatever form it might take.

3. It was a strategy with which the direct-rule administration of the day colluded. Addressing a European Liaison event in April, the ‘delighted’ junior NIO minister Paul Murphy stressed this was ‘a unique deal, which no other region has received’. It would mean, he said, Northern Ireland would receive ‘levels of funding broadly equivalent to objective one until well into the next century’.

4. The Department of Finance and Personnel organised two conferences later in the year to consult on the structural-funds programmes, preparing a plan called Northern Ireland: A Region Achieving Transition. In November the draft plan was forwarded to Brussels, followed just before devolution by two draft operational programmes. The European Commission accepted the plan as technically admissible just before Christmas but noted that the draft operational programmes were not compliant with their requirements. In February 2000 the department produced a further consultation paper, with a view to submitting further developed programmes to Brussels this month (March), which could form the starting point for negotiations.

5. The fundamental difficulty is that the opportunistic, funding-driven approach adopted by Northern Ireland ministers has not dovetailed well with the essentially ethical purpose of the commission and the Council of Ministers in showing continued goodwill to the region. In particular, the lack of distinctiveness of ‘peace 2’ from the ‘transitional objective 1’ programme has rendered it difficult to justify Northern Ireland’s continued special treatment, as compared with other less-developed EU regions.

Missing the R-word: ‘peace 2’

1. The overall aim of the DFP plan is described as ‘to contribute to the creation of a more peaceful, prosperous and stable society in Northern Ireland, through processes of economic renewal and social, economic and political transition’. It is noticeable that the word ‘reconciliation’ is missing from this mission, though it manages to mention ‘economic’ twice. It is as if Northern Ireland can make a ‘transition’ beyond sectarianism without having to confront it along the way.

2. The conflict in Northern Ireland did not arise, nor was it perpetuated, by lack of economic growth, though relative deprivation was clearly a factor. Therefore the solution is not likely to be found through economic means. Rather, if the causes and effects of division can be addressed and political stability established then the conditions can be created in which the region can prosper.

3. The plan itself concedes that the region’s progress is severely retarded by the ‘serious barriers to reconciliation between the two communities’:
polarisation and mutual mistrust leads [sic] to residential and workplace segregation and creates rigidities within local labour markets, loss of productive output due to sectarianism related incidents in the workplace, an undermining of business confidence, a negative external image, a ‘brain drain’ of bright young students and the physical scarring of cities, towns and villages throughout Northern Ireland, particularly in interface areas.

4. Indeed, it recognises that the damage sectarianism inflicts on the society has been paradoxically exacerbated by the ‘peace process’:
There is evidence that the violence which in Northern Ireland was previously expressed through the conflict has been displaced and finds a number of other expressions such as sectarianism in the workplace, increasing numbers of disputes about parades, increasing intimidation, increasing residential segregation, increasing attacks on members of ethnic minorities and increasing domestic violence.

5. The current, ‘imperfect’ peace, even if it endures, will not in itself change this debilitating communal apartheid and social fracturing. And it would represent the most heroic belief in economic determinism to imagine that enhanced prosperity would reduce sectarian tensions—the last decade, after all, also saw economic growth ahead of the UK average. But this is precisely the implicit assumption underlying ‘peace 2’, which the operational programme describes as the prior peace programme ‘with a new economic focus’.

6. The consultation paper was issued by DFP after the peace programme had been discussed in the Executive Committee during the period of devolution. It notes that there was ‘strong support for a greater emphasis on reconciliation’ and that a ‘less marked’ emphasis on economic projects was now being suggested—though still moreso than under ‘peace 1’. Indeed, whereas 17 per cent of the latter programme was committed to ‘productive investment and industrial development’, ‘economic renewal’ accounts for 31 per cent of the proposed ‘peace 2’. In addition there appear to be measures contained in ‘peace 2’ which clearly should be funded under the ‘transitional objective 1’ programme. The shift of local economic development from the objective 1 programme to its peace counterpart serves only to reiterate the lack of distinction between them.

7. It is recognised that there must be integration between social and economic means and ends. But the paper bases on the assertion that many activities ‘have both economic and social benefits’ the more tendentious claim that ‘there should not be a false dichotomy between types of action’. This is presumably to justify the decline in support in ‘peace 2’ for social-inclusion projects, which comprised 31 per cent of ‘peace 1’ expenditure but are projected to account for only 19 per cent of the new programme. It remains unclear—mainly because the plan and rationale for the proposed actions have not been adequately developed—how the economic actions are to achieve social outcomes and social actions contribute to economic outcomes.

8. A better starting point for the DFP proposals would have been the approach adopted by the Northern Ireland Council for Voluntary Action. In its proposals on ‘peace 2’ two key objectives were identified, and given equal weight. These were ‘promoting reconciliation’ and ‘social inclusion’. Moreover, we have been down this road before. An independent mid-term evaluation of ‘peace 1’ flagged up in 1997 the failure of the programme to contribute to reconciliation and criticised its economistic character, which the DFP remains determined to enhance. That review complained:

The ill-defined nature of ‘peace and reconciliation’ can be traced to ambiguities in the design of the original programme. In effect, a significant part of the programme was a plan for reinvestment in Northern Ireland and the border counties of the Republic—but without a vision as to how this might contribute to peace and reconciliation. Some parts of the programme were barely disguised extensions of existing structural fund programmes. The lack of an agreed understanding of how to achieve peace and reconciliation and the relative weakness of this [reconciliation] constituency also played their part.

9. These mistakes look set to be made once more—if the European Commission allows them to be. The DFP paper, under the heading ‘Distinctiveness of the new peace programme’, sets out four alternative criteria by which projects will be considered for inclusion. Number one is the catch-all ‘showing a strong economic renewal effect linked to the opportunities arising from peace or to the transition to a more peaceful and stable society’. Number two itself contains four alternative parts: advancing reconciliation is only one of them. Not only is a commitment to furthering reconciliation not presented as essential for any project to enjoy support under ‘peace 2’. It is not even presented as a desirable attribute.

10. In this form the programme would be wide open to the danger that the mid-term review of ‘peace 1’ identified as ‘colonisation … by local interests’. Indeed any groups wanting to take the reconciliation dimension seriously would find themselves competing, under the DFP proposals, for a drop in the funding bucket: just 3.4 per cent of ‘peace 2’, it is suggested—12.7 million euros—should be allocated to what it describes as ‘community relations’.

11. The work is crying out to be done. There are excellent projects in being. The proposed Museum of Citizenship would challenge sectarian stereotypes in an interactive and internationalist manner. ‘Counteract’ does much quiet but important work to combat harassment and intimidation at work. Moreover, projects such as these are of great potential benefit to the EU as a whole, given the ethnic tensions characteristic of many of the accessor states, not to mention the particular problems of Cyprus.

12. Reconciliation in Ireland, on a wider view, is not only a matter of changing intercommunal relationships in Northern Ireland but also of changing relationships across the island as a whole. Indeed, one is obviously related to the other. Yet the DFP plan and even the ‘peace 2’ operational programme were drafted without prior agreement with the authorities in the republic on what would comprise the cross-border dimension, though consultation was ongoing. There is a strong disposition in the European Commission to support closer north-south integration in Ireland, and the go-it-alone approach of the Northern Ireland civil servants went down badly when the operational programme was submitted to Brussels.

13. This is partly because the commission has for many years grappled with the difficulties of securing co-ordinated development across member-state frontiers. Cross-border co-operation schemes are vulnerable to a ‘back-to-back’ mindset which hinders effective co-operation. This danger can only be avoided if co-operation is built in from the outset. Again successful initiatives would be of great assistance to the EU institutions in thinking about cross-border, inter-regional and transnational initiatives elsewhere.

14. Those involved in north-south reconciliation activities, whether through non-governmental institutions, the universities or whatever, found themselves hamstrung by the first peace programme, with its geographical confinement to the six southern border counties. The flexibility to extend the geographical scope introduced towards the end of the last programme was thus welcomed. While not wishing to detract from the important claim of disadvantaged groups on either side of the border for specifically cross-border monies for social-inclusion activities, more widely extended north-south (and ‘east-west’) co-operation projects should be considered admissible in this programme.

15. A further difficulty arises with the suggested delivery mechanisms for the peace programme. One of the innovations of ‘peace 1’ was the establishment of district partnerships to disburse funds at the level of the 26 council areas. But the DFP paper implies a subtle and perhaps worrying change. The district partnerships were genuine, one-third/one-third/one-third partnerships between: locally-elected representatives; the voluntary sector; and business, trade unions and others. Each sector appointed its own representatives, and the voluntary sector and the trade unions made genuine efforts to secure, for example, gender balance in their representation.

16. Now the department is suggesting ‘an evolutionary development’ in which the district council would ‘take the lead’ in its area in establishing the partnership. This appears to suggest some rolling back of the participatory dimension, which would only be to the detriment of the overall performance of the partnerships and would in fact be in nobody’s interest.
17. Implementation should be undertaken by the organisation best fitted to deliver the required outcome. The first programme showed that intermediary funding bodies were highly effective in getting to the target group and they have developed their expertise as delivery agents. The opportunity arises to consolidate the best of what has been achieved in a manner that simplifies procedures, avoiding overlap, while ensuring that the benefits of such approaches—in particular local sensitivity, diversity and independence—are retained, thus creating a more efficient and effective model. Where possible, functional expertise and local knowledge should be used to enhance effectiveness and add value to the programmes.

An economic step-change?: ‘transitional objective 1’

1. Where the economic focus rightly falls is of course in the ‘transitional objective 1’ programme. The crucial goal of objective-one funding is to elevate the per capita GDP of lagging regions towards the EU average—as has so dramatically succeeded, alongside numerous other influences, in the Republic of Ireland. But this requires (as has indeed also been the case in the republic) a policy focus on the strategic priorities to be pursued if the key bottlenecks to radically improved performance (in the republic’s case, these were inter alia volatile industrial relations and educational under-achievement) are to be removed.

2. One of the deleterious effects of the delayed formation of the Executive Committee and its early suspension has been the failure to elaborate a Programme of Government, as required under the Belfast agreement, which would move the region beyond the collection of programmes accrued under direct rule into a ‘joined-up’ policy portfolio more attuned to its specific needs. Moreover, the Strategy 2010 economic-development document prepared under the auspices of the direct-rule administration, as a backdrop to the formation of the executive, was badly received by expert economists. This has made it difficult to present a coherent pitch to Brussels as to what, other than a demand for sustained European largesse, the justification for further substantial support might be. In the absence of such a framework, the structural-funds plan has too many bullet-point wish-lists.

3. Much of the detail in the ‘transitional objective 1’ operational programme is unexceptional. Indeed there are many welcome individual proposals to foster economic development and social inclusion. The difficulty is that at the heart of the programme what is missing is a clear account of what needs to be done to achieve a step-change in economic and social performance in the region, and where this fits in with EU approaches.

4. Northern Ireland’s critical challenge, an extreme version of wider structural difficulties in the UK economy as they affect peripheral regions, is to move from a low-activity, low-skill, low-wage, high-inequality path to one characterised by high labour-market participation, high qualifications, and high and egalitarian incomes. This requires a strategic engagement with EU institutional thinking on issues such as regional development, social inclusion and gender equality, and a focus on key priorities, such as:
o providing quality childcare to facilitate female workforce participation and prevent subsequent educational under-achievement;
o addressing the obsolete academic/vocational binary divide with its long tail of poorly-qualified school leavers;
o developing intermediate labour markets and using other active labour-market policies to enhance economic activity rates;
o elaborating a regional innovation system, including inter-firm networks and links to research/technology institutions, to inject dynamism into the Northern Ireland economy; and
o pursuing strategic external investments, whose impact can be multiplied via technology transfer and the development of supply chains.

5. Of course, full pursuit of these priorities requires policy decisions outwith the ambit of the ‘transitional objective 1’ programme—policy decisions which will once more be indefinitely postponed in the absence of agreed, devolved institutions. But there remains a lack of ‘big picture’ thinking in the operational programme, which means the overall outcome can not be any more than the sum of its individual parts, however worthy many of the latter may be.


1. Northern Ireland desperately needs to become a normal civic society, enjoying economic prosperity, social inclusion and—above all—political stability, including in its relationship with the rest of the island. The always over-committed nature of public-expenditure planning, not to mention the expectation that Northern Ireland can expect a colder public-spending climate in the years to come, means the support from the EU structural funds is of critical value to the necessary policy innovation and learning.

2. This is especially so as the chance will not come again to dispose intelligently and creatively of £1 billion. It would be a travesty if such monies were to be frittered away on projects not dissimilar from mainstream government programmes, whose overall coherence was not clear and which, in tandem, did not bring about the necessary transformation in Northern Ireland as a European region.

3. The best guarantee against such an outcome would be for the draft operational programmes for the ‘peace 2’ and ‘transitional objective 1’ programmes to be rewritten and set in the context of a well-developed plan with a clear rationale and coherent yet distinct objectives. The opportunity should be taken to build on the lessons of ‘peace 1’ through the implementation of a sharply focused programme specifically addressing the causes and consequences of the prolonged conflict. This must leave a legacy of lasting peace at the grass roots and create the conditions for sustainable economic development, in particular in those areas and amongst those people most affected by the ‘troubles’.

4. The underlying concept driving ‘peace 2’ should be that peace in Northern Ireland must mean more than the absence of violence, crucial though the latter is. Bearing in mind the outworking of war in the Balkans in the last decade, the citizens of the region deserve a future in which they live in peace with their neighbours. That means co-existing in a multi-cultural space of fluid identities and a milieu of social inclusion, rather than being trapped in a communal apartheid. Paradoxically, it is such a freed-up future for Northern Ireland which is the best guarantor of its political stability.

5. To be deemed eligible for support under ‘peace 2’, therefore, all projects should have to demonstrate that they are helping to sustain peace and/or promoting reconciliation, which may be on an all-Ireland basis. This should be the gatekeeper against opportunistic bids.

6. In addition, the reversal of priority between economic development and social inclusion in the programme should itself be overturned. And the partnership local delivery mechanism should be sustained on an equal footing.

7. The emphasis of ‘transitional objective one’ should be economic and social. But the strategic priorities should be much more clearly delineated, to ensure those projects supported do, in combination, raise Northern Ireland’s economic game and enhance social equality in the labour market. This should again deter ‘grantpreneurial’ claims on the programme.

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