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Paper 7 - 25 September 1998 Meeting 

ASSOCIATION OF HAMPSHIRE AND ISLE OF WIGHT LOCAL AUTHORITIES

25 September 1998

EUROPEAN FUNDING FOR THE ISLE OF WIGHT

Report by the Isle of Wight Director of Development and the Policy Officer

RECOMMENDATION

That the Association supports the Isle of Wight's bid for European Structural funding.

SUMMARY

This report sets out the case for support for the Isle of Wight Council in its bid for European funding.

BACKGROUND

1. The Isle of Wight is situated off the central south coast of England, is a county in its own right and is administered by a single unitary authority, the Isle of Wight Council. Although the Isle of Wight appears to have all the trappings of success and is perceived as part of the relatively prosperous South East, it is physically and economically separated from the rest of the region. It has none of the economic benefits and exhibits all the classical problems associated with islands, particularly economic and social exclusion.

RECOGNITION OF THE COSTS OF BEING AN ISLAND

2. Apart from being designated a defence dependent area under the KONVER programme, the Island has no special European status. It does have Intermediate Assisted Area status, which has provided limited financial assistance to business to help with job creation, and part of the Island has been designated a Rural Development Area which is helping with the regeneration of rural areas. Apart from these designations, the Isle of Wight is treated like any other county by the UK Government, who, we believe, does not give adequate recognition through the English Local Government Finance system of the costs of being an island.

COMPARISON WITH OTHER UK ISLANDS

3. There are two English island authorities, the Isle of Wight Council and the Council of the Isles of Scilly, with, we believe the Isle of Wight being treated in an inferior manner to the Isles of Scilly which receive some assistance for being an island. The Isle of Wight receives 4.3m of assistance from the Area Cost Adjustment, equivalent to about 4% of its budget, but this is paid in respect of the higher costs incurred by South East counties in providing services and not because it is an island. The consultants Cooper and Lybrand recently conducted a study and estimated that the cost to the Isle of Wight Council of being an island is 6.3m or around 6% of the Council's budget in 1998/9. These costs relate to both the cost of severance by sea and to the enforced small scale of activities. An example is the Fire Brigade: the brigade must be self-sufficient as there is no neighbouring fire brigade which can lend rapid assistance. No compensation is provided to meet these costs.

4. It is also well known that the Scottish islands receive special treatment from the Scottish Office, but no such recognition is afforded to the Isle of Wight.

EUROPEAN FUNDING AND TERRITORIAL CLASSIFICATION

5. The Isle of Wight is currently joined with Hampshire in an EU territorial classification known as NUTS level II, which considerably distorts the Island's true economic position and effectively precludes the Island from being considered for Objective 1 funding. To be considered for Objective 1 status requires NUTS level II designation and a Gross Domestic Product of less that 75% of the EU average, a criteria that the Island meets at 64% (1995).

6. Recognition of the Island's geographical and economic position has been supported by the Office for National Statistics (ONS). They proposed a new NUTS structure for the UK to Eurostat, the body responsible for European statistics, that took account of the changes in administrative boundaries arising as a result of the formation of the new Government Offices and the Local Government Review. The proposals, which include designating the Isle of Wight as a NUTS II area received support on all sides, including the UK government.

7. In June 1998, following extensive discussions, a new European classification of UK geographical areas was announced. A number of changes were declared at NUTS level II, including the separation of Cornwall and Devon into two separate areas. This "recognised the very different economic conditions of the two counties and Cornwall's sparsity of population, geographical peripherality and cultural and historic factors". The separation of Hampshire and the Isle of Wight was not included although many of the reasons for separation are the same as for Devon and Cornwall. Cornwall now has the opportunity to become an Objective 1 region, but not the Isle of Wight.

CONCLUSION

8. The Isle of Wight believes it was pressure from Directorate-General XVI of the European Commission on Eurostat to reject some of the ONS NUTS II recommendations as this could have opened up more Objective 1 regions in the UK. The Isle of Wight is now asking the European Ombudsman to investigate the Island's failure to be designated a NUTS II area on the grounds of discrimination. If this is not successful the Isle of Wight will be seeking to be included on the list of the UK's Objective 2 regions, ie those regions experiencing structural difficulties whom are not designated Objective 1. Although the Isle of Wight does not completely fit the European Commission's proposed criteria for Objective 2, these are likely to change following extensive lobbying from many quarters for better statistical indicators. Also, Member States will have flexibility to determine some 50% of their eligible Objective 2 areas allowing Governments to address problems of pockets of deprivation in their countries. This not only will require the support of GOSE, but also relevant government departments (DTI, DETR) and government ministers. Extensive lobbying is taking place to ensure this is obtained. Support from the Association will obviously help in this campaign, particularly with GOSE.

DAVID JAGGAR
 Director of Development, Isle of Wight Council

NICK GOULDER
Policy Officer

Last update: 20/09/2000
Author: Nick Goulder, Policy Manager

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