Can the UK still take part in European Territorial Cooperation (Interreg) Programmes after Brexit?
Last week the UK Government wrote out to Interreg UK project partners with an “Important update on ETC no-deal Brexit preparations for UK project partners” (10 September 2019). Later in the week they also updated their guidance online for ETC in event of a No Deal Brexit (13 September 2019).
The main purpose of the communications was to highlight to project partners involved in Interreg projects, that should a No Deal Brexit happen, there are certain risks project partners should be aware of. The letter has caused concern amongst project partners and the UK Government’s ETC Team have endeavoured to speak to all UK project partners before the end of October. These will be introductory conversations, to ensure UK project partners have seen and understood the recent communications and help them start thinking about their options, enabling them to ask questions they might have.
The UK Government has also stated that they are continuing to talk to and work with Managing Authorities / Joint Technical Secretariats to try to find a solution, and will be attending upcoming Committee meetings as usual (the UK Government had issued a statement indicating that “UK officials will stop attending most EU meetings to focus on our future relationship with the EU and countries around the world” effective from 1 September but this will not affect Programme Monitoring Committees and Programme Steering Committees for Interreg).
The UK Government are encouraging those with questions to get in touch via email: ETCTeam@communities.gov.uk.
The Scottish Government has subsequently written to Northern Periphery and Artic project partners following on from the UK Government letter, in their role to manage no deal preparations for that programme. The Scottish Government letter is a helpful read for project managers involved in the other Interreg programmes too. It presents 4 options being considered in a No Deal scenario, the content of which presents the information from the UK Government letter in a different way, whilst highlighting the differences in positions between the two Governments.
- Option 1: UK Government accepts the European Commission’s offer of the EU Contingency Framework Regulation till December 2020 – whereby the UK in exchange for paying its share of the EU budget during 2019 and 2020 continues to participate in EU programmes as now with no change to contracts.
- Option 2: Should the UK not agree to paying its share of the EU 2019 and 2020 budget a side agreement could be agreed whereby the UK’s financial contribution for projects would be sent to the programme Managing Authorities directly, allowing UK partners to participate and drawn down money through existing JTS mechanisms.
- Option 3: Should the above options not be agreed; UK contributions could be vired straight to projects with a Parallel Contract. The existing project Partnership Agreement for EU partners and third countries written into the programmes would either continue as normal (or potentially it may need updating to remove UK partners) with a contract issued by UK Government for UK partners. This is broadly the approach currently being planned for most other EU programmes delivered on an international basis.
- Option 4: If all of the above options are not possible, the UK Government guarantee could cover those aspects which could be delivered on a standalone basis by UK partners. The Scottish Government letter, recognises that this option may be difficult to achieve, given that international collaboration is at the core of most ETC projects.
Further Background Information on ETC and Brexit
2014-2020 Withdrawal Agreement
If the Withdrawal Agreement is approved by the UK Parliament and EU 27 Member States, no changes will be made to the management of current programmes and the UK will continue to be eligible for all Interreg and other European programmes until 2020.
2014-2020 No Deal
From the EU’s perspective, the United Kingdom or entities established in the United Kingdom will cease to be eligible to receive funding under European Union programmes, unless relevant provisions for participation of third countries are included in the legal acts of EU spending programmes.
Technically, the Interreg programmes do allow third countries in their Regulations and these third countries are listed in the regulations with their eligible regions specified in each Cooperation Programme. UK NUTS 2 regions are listed in the geographically focussed Interreg Cooperation Programmes whereas Interreg Europe and Urbact programmes have EU wide eligibility with third countries listed (rather than regions). Upon a No Deal scenario, any decision on UK continued participation would require involvement of the other participating Member States in the geographically focussed programmes.
A no-deal scenario will leave the budgetary relations between the Union and the UK without agreed legal arrangements, until an agreement is eventually reached. To counter this ‘legal vacuum’ the European Council proposed a Regulation at the end of January which would act as contingency framework in the event of ‘No Deal’. This proposes that UK partners could continue to take part in EU programmes till the end of December 2019, on the condition that the UK makes a written commitment to the proposal; accepts the EU control and audit rules; and commits to the financing of the budget for 2019 (the Commission recently proposed this be extended till 2020). The UK Government has not responded to this proposal but is analysing the proposal’s implications.
The only exception to this is the PEACE IV (Ireland-United Kingdom) programme and the United Kingdom-Ireland (Ireland-Northern Ireland-Scotland) programme; where the UK and Irish governments and the EU have noted their commitment to the funding of both current programmes regardless of the outcome of negotiations on the UK’s withdrawal from the EU up and till 2023. This commitment is backed by an EU contingency regulation.
The UK Government has however provided a Guarantee to underwrite all awarded EU projects by December 2020 with UK partners involved. For Interreg this would mean a stage 2 application would need to be approved by the Programme Steering Committee by the end of December 2020 for the UK Treasury Guarantee to take effect. The UK Government has issued a technical note on the Guarantee in relation to the Interreg programmes in April this year which helps would be applicants make informed plans and preparations.
Interreg programmes are subjected to a slightly higher level of risk than some other EU programmes, in that the Treasury Guarantee to underwrite EU projects is more straightforward where bi-lateral agreement is required between the European Commission and the UK Government which can be pre-negotiated or planned. In contrast Interreg programmes will require multi-lateral agreements with Member States involved in the Interreg Programmes. The UK Government are however working jointly with all the Interreg programme Managing Authorities and the EU Member States in each Interreg programme to deliver the Treasury Funding Guarantee using existing programme management arrangements, where possible. UK Government is yet to formally provide details of how this might work in practice (other than the letter to partners on the 10 September 2019) and formal arrangements cannot be started until the UK is no longer a Member State.
Non-EU countries like Greenland, Norway and Switzerland currently take part in European Territorial Cooperation Programmes. Therefore, provided there is an agreement in place between the UK Government and the EU, the UK could continue to be part of these programmes post 2020.
The Scottish Government has stated that it values the opportunities that European Territorial Cooperation Programmes gives organisations in Scotland and are committed to continuing to take part. Scottish Government has delivered several workshops during August and September looking at the future of Scottish interests in the Interreg programmes. Scotland Europa commissioned the European Policies Research Centre to produce a report on the outcomes of the workshops. Scottish Government will use information from the report as a basis for wider public consultation, as well as to inform the development of the Scottish Government’s position on future programmes. At this point, neither the UK Government or Scottish Government have made a formal commitment to taking part in the broad spectrum of European Territorial Cooperation Programmes post 2020.
The Commission have proposed the continuation of the Peace and Cross-border programme, based on their existing management structures. A new post 2020 “PEACE+” programme would be new strand distinct from the 2021-2027 Interreg EU regulations integrating the Interreg programme covering Northern Ireland and the border regions of Ireland. It is intended contribute to social and economic stability in these regions and has commitment from EU/Irish/UK Governments. A public consultation of its future is anticipated in January 2020.