The urban and environmental dimensions within the Structural Funds of the European UnionCorinne HermantDirectorate-General for Regional PolicyUnit C.2 Urban development, territorial cohesion

Brussels, 28 May 2009

ContentUrban and environmental actions in the Regional Policy

Regional/cohesion policy 2007-2013Activities so far - The URBAN methodology: Key principles for integrated urban development Instruments and tools for supporting urban development 2007-2013 Environmental actions in the cohesion policy

EU Financial Perspectives 2007-2013European Council - 19 December 2005

COMMITMENT APPROPRIATIONS BY HEADINGIn billion of EUR, at 2004 pricesIn %1a. Competitiveness for growth and employment (research, innovation, competitiveness)74.18,6%1b. Cohesion for growth and employment (regional policy)308.035,6%2. Preservation and management of natural resources (Common Agricultural Policy, rural development, environment)371.342,9%of which market-related expenditure (CAP)293.133,9%3. Citizenship, freedom, security and justice (internal policies; public health, asylum, immigration)10.81,2%4. The EU as a global partner (humanitarian and development aid)49.55,7%5. Total administrative expenditure49.85,8%6. Compensations Bulgaria and Romania (after accession expected in 2007)0.80,1%Total commitments864.3100,0%In % of EU-27 GNI1.048%

Principles of the reform of regional/cohesion policy, 2007-2013Challenge 1 - Closing the gaps on a global scale

Challenge 2 - Closing the gaps on a European Scale

Challenge 1 - Closing the gaps on a global scale: EU and US compared

Popmill.Surfacearea kmGDP billion GDP/ capUnempl.%EU274924.3 mill.10 95022 3009.0Germany82.50.36 mill.2 24127 17511.2USA2979.6 mill.10 01233 7005.1

Challenge 2 - Closing the gaps on a European Scale: the 27 Member States

HiLoRatioGDP per cap(% EU27 average)Luxembourg251% Bulgaria33%7.6

PopulationGermany82.5 millionMalta404 000204

INNOVATION PERFORMANCE

Responding to the challenges A reform based on:1. A concentration of resources on the least prosperous regions 2. A concentration of the effort on the Lisbon agenda

Over of population lives in regions below 75% of EU average GDP

13 Member States have GDP below 90% of average (25% of population)Concentration on the regions: policy targets

Regional approach 268 (NUTS 2) regions>average: ca. 16 000 km sq. 1.8 million population

Not income transfers support for programmes

Concentration on the regions: basic principles of EU Regional Policy (1)

Concentration of EU budgetary resources

>81.5% Convergence regions (35% of population); up from 72% >16.0% Competitiveness regions >2.5% Territorial co-operation

Concentration on the regions: basic principles of EU Regional Policy (2)

Index EU 25 = 100Source: EurostatGeographical Eligibility for Structural Funds Support 2007-2013 Objective 'RegionalCompetitiveness and Employment'Phasing-in regions, "naturally" above 75% Convergence objectivestatistically affected regions

Content

Regional/cohesion policy 2007-2013Activities so far - The URBAN methodology: Key principles for integrated urban development Instruments and tools for supporting urban development 2007-2013 Environmental actions in the cohesion policy

Urban actions in EU Regional PolicyNo Commission mandate for urban development in the TreatyUrban development is important task within regional development and within Article 1581980ies: Need for coordination of European policies in certain territorial fields AND need for new (innovative) solutions to problems1989-1999 Urban Pilot-Projects (UPPs)

Urban actions in EU Regional Policy1994-2006: The URBAN Community Initiative EC's instrument to support cities at the regeneration of deprived neighbourhoods Integrated approach Coordinated multiple solutions to tackle multiple problems Scope in time/ scope in space 20 Million investments on areas / 20.000 inhabitants

One important target:The deprived neighbourhoods

Programme (Management) Integrated urban development planIntegrated urban development

ContentRegional/cohesion policy 2007-2013Activities so far - The URBAN methodology: Key principles for integrated urban development Instruments and tools for supporting urban development 2007-2013 Environmental actions in the cohesion policy

Mainstreaming of the urban dimension 2007-20132007-2013: Urban actions become a part of Regional and National Operational Programmes and are no longer expressed through a single Community Initiative

Mainstreaming of the urban dimension 2007-2013Structural Funds 2007-2013: Takes up the approach developed under the URBAN Community Initiative and suggests spreading this methodological concept to cities and regions across Europe..The Commission has carried out an analysis of all 316 ERDF Operational Programmes of all three EU Cohesion Policy Objectives.

Mainstreaming of the urban dimension 2007-2013New period, new opportunities for cities:More than half of the ERDF programmes have an identifiable urban dimension, and address challenges in urban areas Wide scope of actions in cities All cities are potential beneficiaries of ERDF funding More money in Convergence regions, but higher allocation in relative terms to urban development in RCE regions

Mainstreaming of the urban dimension 2007-2013A dual picture, strong sectoral focus:Less emphasis on integrated urban development in new Member States than in the other Member StatesUrban development operations in new Member States show strong tendency towards sectoral investment The necessary capacity building and guidance, necessary for sufficient know-how and skills in integrated urban development, is foreseen in only a few cases, mainly in old Member States

Mainstreaming of the urban dimension 2007-2013Local involvement a major challenge:Limited role for cities in the design and implementation of programmes, in programme-related decision making processes and in governing budgets for investment on their territoryThe possibility to delegate responsibilities to local authorities used in very few cases. Limited information on concentration of funding to reach critical mass (i.e. minimum threshold of 5-10 million per operation in French and Czech OPs). Cities should be involved more strongly and more effectively in cooperation activities

Instruments and Tools: URBACT Exchange of Experience and NetworkingURBACT (2003-2006): Programme for the exchange of experience on urban developmentPart of the URBAN II Community Initiative (only URBAN and UPP cities were eligible)has developed 20 networks and 6 thematic working groups. in 2005 alone, more then 100 working seminars were organised in the framework of URBACT. approach was highly successful, but not directly linked to operations in Structural Funds programmes

URBACT II (2007-13)The Urban Development Network ProgrammeProgramme within the new objective Territorial CooperationEnlarged eligibility for citiesStronger links to mainstream OPs assistance for the implementation of urban actions within SF programmesOne of the implementation instruments for Regions for Economic Change Started in October 2007Current state of play

Instruments and Tools: Urban Audit Analysing European CitiesIts almost 300 indicators cover the key aspects of demography, society, the economy, the environment, transport, the information society and leisure. A total of 258 cities are already covered and this years exercise will extend this to over 300 cities. Urban audit may help to design an intelligent urban policy in Europe today. The results have been published on the Commissions Urban Audit website www.urbanaudit.org

ContentRegional/cohesion policy 2007-2013Activities so far - The URBAN methodology: Key principles for integrated urban development Instruments and tools for supporting urban development 2007-2013 Environmental actions in the regional/cohesion policy

ObjectivesExploit the potential for a win-win" synergy between environmental protection and business growth:

Mainstreaming environmental considerations

Assist regions in tackling climate change and engage in the low carbon economy

Eco-innovation & SMEs

Cohesion Policy & environment- 30% of total Cohesion Policy funds 2007-2013- 3 times more than in 2000-2006 ( 37 billion)

Investment examples:Water management: 22 billionWaste management: 6 billion Biodiversity & nature protect.: 3.9 b.

Environment integrated in programme objectives & horizontal approach to implementation

Project compliance with EU environmental legislation:Strategic environmental assessment (SEA) of plans and programmesEnvironmental Impact Assessment (EIA) of specific projects

Mainstreaming environment

Investment examples: Railways: 23 billion Clean urban transport: 6 billion Renewable energies: 4.8 billion Energy efficiency: 4.2 billion Principles:- Cross cutting integration of low carbon practices and indicators- Regions are crucial to achieve EUs climate goals: climate change as an opportunity

Principles: Foster competitiveness Leadership in environmental technologiesInvestments: - Support to environmentally friendly products and processes (SMEs): 3 billion

Leader in green developmentWin-win policy:Positions EU as lead market in green technologiesCreates new and sustainable jobs in local economies (growth)Improves and protects the environment

Sources of informationRegulations 2007-13 (C.R. 1080/2006 and 1083/2006)Community Strategic Guidelines 2007-13, especially chapter 2.1Communication C(2006) 385 Cohesion Policy and cities. The urban contribution to growth and jobs in the regions (13.7.2006) http://ec.europa.eu/regional_policy/consultation/urban/index_de.htm (in all languages) with annexed working paper

For further information: corinne.hermant@ec.europa.eu

Sources of informationUrban actions websitesUrban Audit: www.urbanaudit.org URBACT: www.urbact.eu DG REGIO/URBAN II: http://ec.europa.eu/regional_policy/urban2/index_de.htm ESPON: www.espon.eu

***I am going to structure my intervention into three parts:

1. Why cities matter is the subject of the first part

2. In part 2 I will provide an account of activities so far what has the Commission done within the field of integrated urban development until now?This includes the experience from the URBAN Community Initiative including the methodology which was developed as a part of it which have become the key principles for integrated urban development

3. The third and last part of my intervention is dedicated to the instruments and tools for supporting urban development during the 2007-2013 period. Here I will take a closer look at the operational programmes for the current programming period as well as at some additional initiatives from the Commission.

***GDP and population: 2005 data (Eurostat)USA surface and unemployment rate: CIA world factbook******UK allocation: total Structural Funds allocation 2007-2013 at current prices (data Spring 2007)**Let us now however move on to the first point: Why cities matter?

*There is no mandate for the Commission in the field of urban development in the TreatyHowever, urban development is important task within regional development and within Article 158The 1980ies saw the need for coordination of European policies in certain territorial fields and the need for new (innovative) solutions to problemsThat is why the Commission launched the Urban Pilot-Projects Phase I in 1989.

*This was followed up in 1994 with the URBAN Community Initiative a specific Commission instrument aimed at supporting cities in the regeneration of deprived neighbourhoods:Two programming periods: 1994-1999 and 2000-2006.188 programmes in two rounds (1994-1999: 118 plus 2000-2006: 70)The URBAN method: Targeting relatively small areas with an integrated and holistic approach Strong local partnerships A systematic learning cycleCommon Objectives of the Community Initiative programmes: Reinforcing the competitiveness of the area. Projects seek to promote small businesses, entrepreneurship, new technology, training and employment. Tackling social exclusion, improving access to jobs and training for all, including immigrants and those from ethnic minorities. In addition, building the capacity of local communities to help themselves. Physical and environmental regeneration, ensuring sustainability and improving the attractiveness of towns and cities. This includes building on the cultural and architectural heritage as well as promotion of activities such as recycling.URBAN I (1994-1999)URBAN II (2000-2006)Number of eligible areas/ cities118 programmes70 programmesParticipating MSEU-15 (until 1995: EU-12)EU-15Eligible population3.2 million inhabitants2.2 million inhabitantsTotal budget 1,800 million (current prices) 1,580 million ERDF contribution 953 million (1999 prices) 739 million Average ERDF per programme 8.1 million 10 million

*Lets now move one step closer to reality and take a look at city level. And lets take the example of Warsaw. The map on the slide highlights the housing conditions in different parts of the city: There are 4 distinct clusters of neighbourhoods where housing quality is clearly poorer than in the rest of the city - between 7 and 34% of the dwellings lack basic amenities. These areas are likely to have suffered from a lack of investment in housing maintenance and repairs over many years. The effects of non-decent housing on the health and well being of residents can be severe.

*The integrated approach developed under the URBAN Community Initiative and which we normally refer to as the URBAN Acquis is illustrated in this slide. As you can see it includes a number of aspects such as economic development, social inclusion, environmental issues, mobility, education and physical regeneration. To this we add methodological aspects such as exchange of experience, networking, governance and participation. This means that in order to successfully tackle urban problems it is necessary to take a holistic approach and develop mechanisms that look at all relevant aspects of the problem. To illustrate the argument, in order to effectively tackle problems with social exclusion in a deprived area more than just upgrading of the immediate environment is necessary. In order to be effective a whole range of problems need to be addressed. First and foremost there must be jobs for the inhabitants, which means that there must be businesses and facilities for businesses to start up. The jobs created may not always match the qualifications of the inhabitants and training and/or re-training may be necessary. In addition, service in the form of schools, crches and local shops must be provided, adequate public transport available and the area must be reasonably safe to live in. All in all, this requires an integrated approach to be applied.

*Let us now move on the Instruments and tools for supporting urban development 2007-2013. We will look at how the urban dimension is covered in the 2007-2013 period of cohesion policy. In addition, I will briefly introduce three additional elements relevant in the urban context, the URBACT programme of exchange of experience, the Urban Audit and the Jessica instrument for financial engineering in urban areas.

*The 2007-2013 period: No programmes targeted exclusively on urban development like under URBAN II. But urban dimension included within regional (and sectoral) programmes = mainstreaming of the urban dimension. Widening of the scope of interventions: URBAN II was about deprived neighbourhoods. Now we add Lisbon and Gteborg = growth and jobs, innovation and entrepreneurship. But also sustainable development.

*Two generations of URBAN Community Initiative programmes have demonstrated this integrated approach in around 200 cities across Europe. Elements such as cross-sectoral coordination of actions, strong horizontal partnerships, increased local responsibilities and the concentration of funding on selected target areas constitute key success factors of the URBAN Community Initiative, and a common European "Acquis urbain". The current programming period takes up this successful approach, and suggests spreading this methodological concept to cities and regions across Europe. The impact of programmed operations will strongly depend on a sufficient connection between local development policies and European targets. Regional and national urban policies signify important links in this context.Based on the analysis of all 316 ERDF Operational Programmes of all three EU Cohesion Policy Objectives, this Working Document draws the first picture of the urban dimension of the 2007-2013 programming period. Building upon the analysis of the programming documents, the main findings are the following *

Main findings of the Commission analysis:

New period, new opportunities for cities. In the current programming period, questions related to urban development are an important, reoccurring topic in the strategy and implementation of ERDF Operational Programmes. More than half of the ERDF programmes have an identifiable urban dimension, and address challenges in urban areas. This urban dimension is characterised by the wide scope of actions in cities, which clearly corresponds to the needs on the ground. Operations extend from the rehabilitation of disadvantaged areas to actions with a strong focus on innovation and competitiveness in urban growth poles. In doing so, urban actions within Operational Programmes make an essential contribution to the core objectives of EU Cohesion Policy and to the European Growth and Jobs Agenda. This great variety of actions also reflects the diversity of challenges which European cities are currently facing. It also indicates that cities play a vital role in tackling future European challenges, such as the question of urban-rural linkages or energy efficiency and climate change.The availability of funding to cities has been clearly expanded. For the first time in the history of Cohesion Policy all cities are potential beneficiaries of ERDF funding. This is reflected by the fact that around 3% of the ERDF budget (approx. 10 bn.) has been programmed for urban development at Priority Axis level. When adding possible operations at sub-Priority Axis level, the total share of budget allocated to urban development can be expected to be significantly higher. While the number of Priority Axes dedicated to urban development is equally split between Convergence and RCE regions, the latter regions show a comparably high percentage of investment (8.9% of the ERDF budget for the RCE Objective against 3.2% for the Convergence Objective). On the other hand, in absolute terms, almost three times the money will be invested in Convergence regions ( 7.24 bn.) in comparison to Competitiveness regions. With the "mainstreaming" of the URBAN Community Initiative, regions and Member States had the opportunity to apply the successful approach of URBAN in all cities and under possibly varying thematic orientations. URBAN signifies the Commission's ongoing efforts to better integrate different sectoral policies in cities, and to stimulate positive progress in governance-systems. In the case of urban actions this includes elements such as the involvement of cities and citizens in the design and implementation of operations, the sharing of responsibilities and a strong and strategic concentration of funding on the target areas. This could take place within or outside Article 8 of the ERDF Regulation, which also provides an enlarged set of eligible operations. *

A dual picture, strong sectoral focus. A considerable number of regions and Member States have foreseen urban actions in their Operational Programmes. This positive result is contrasted by a fairly strong focus on sectoral operations and presents an asymmetric picture when it comes to integrated strategies for urban development: The analysis revealed a certain difference between old and new Member States when it comes to the programmed activities in cities and to governance provisions. A generally less strong emphasis on integrated urban development seems to be linked to the fact that many EU-12 Member States have little experience in integrated urban development and/or were unable to benefit from the URBAN Community Initiative in the past. This is particularly visible with "URBAN-type" operations, which follow the principles of the URBAN Community Initiative. While over 50% of all RCE regions foresee URBAN-type operations (all located in EU-15), only around 35% of the Convergence regions make reference to it. When looking at the Convergence regions from EU-12 alone, the percentage shrinks to just over 10%. Urban development operations in EU-12 show a strong tendency towards sectoral investment, both financially and in their general approach. This not only concerns the infrastructural sector (i.e. transport, waste treatment), but also "mono-physical" rehabilitation measures in cities (i.e. town centre renewal, brownfield development), where integrated approaches would be required. The picture is reaffirmed by the fact that this Working Document only concerns ERDF programmes and left out Cohesion Fund projects which are very likely to introduce even stronger sectoral tendencies in this field.The necessary capacity building and guidance, necessary for sufficient know-how and skills in integrated urban development, is foreseen in only a few cases, mostly in EU-15. This also concerns the possible use of Technical Assistance for these purposes. *The programming documents for 2007-2013 generally show few signs of direct local involvement in the design and implementation of ERDF Operational Programmes. It remains to be seen if this can be improved throughout the execution of the programmes. However, crucial aspects in this regard concern several important points:The Regulations for 2007-2013 offer broad options for improved governance of urban development operations. So far, many of them have not been used or taken on-board in the programming documents. This includes aspects such as appropriate local involvement in the design and implementation of programmes or the active participation of citizens in the process. The analysis also revealed that most cities have a limited role to play in programme-related decision making processes and in governing budgets for investment on their territory.The possibility to delegate responsibilities to local authorities has also been used only in very few cases. The sub-delegation of an entire programme took place only in one case. Nevertheless, it remains to be seen whether the possibility of allocating global grants to cities might not be used by some Managing Authorities at a later stage of programme implementation. Indications on the financing of URBAN-type operations are available only in a limited number of cases. These OPs illustrate the clear and necessary need to concentrate funds and to reach a critical mass of investment (i.e. minimum threshold of 5 to 10 million per operation in French and Czech OPs). To effectively manage integrated operations, it appears also to be important to "ring-fence" budgets and/or to have one common funding "pot" for many different (sectoral) activities. This principle was successfully applied with the budgets for the URBAN programmes. In view of the structures for the implementation of the OPs, the application of this (or a similar) model seems unlikely. Another highly relevant aspect concerns the cooperation between cities and local actors. There is great potential in using urban actors and cities as partners in cooperation activities. Cities also clearly show a need and willingness for cooperation. This is the case in all three strands of the European Territorial Cooperation Objective. Especially considering the potential and the challenges of cross-border agglomerations as well as of broader "urban networks", cities should be involved more strongly and more effectively. The URBACT II programme can, seeing its financial limitations, only serve a selected number of European cities. *Let me now briefly present three instruments which have been developed to complement and support the mainstream operational programmes. The first one of them is URBACT. This is a European Programme which aims to foster the exchange of experience among European cities and the capitalisation-dissemination of knowledge on all issues related to sustainable urban development. URBACT was first set up in 2003 as a part of the URBAN II Community Initiative and cities under the URBAN Community Initiative and UPP cities were eligible to take part in the network. The second cycle of the Programme, URBACT II (2007-2013), follows in the footsteps of URBACT I (2002-2006), which successfully rallied 217 cities across Europe to work in 38 different projects. URBACT II challenge is to improve the effectiveness of sustainable integrated urban development policies in Europe with a view to implementingthe European Lisbon-Gothenburg Strategy (Priority toCompetitiveness, Growth and Jobs).

*For the 2007-2013 period, a new URBACT programme, URBACT II has been launched. It forms part of the Territorial Cooperation Objective and is now following the mainstreaming of the urban dimension for the first time open to all European cities. Approximately 500 cities are covered by URBACT II. In addition, URBACT II is one of the implementation instruments for the Regions for Economic Change. This is an initiative which introduces new ways to support regional and urban networks and to help them work closely with the Commission, to have innovative ideas tested and rapidly disseminated into the Convergence, Regional Competitiveness and Employment, and European Territorial cooperation programmes. URBACT II started in October 2007

State of play:First call for proposals (2007): 7 Working Groups and 24 Thematic Networks launched; 6 Working Groups finally approved (Sept 2008), final approval of the Thematic Networks foreseen for Nov 2008) New Working Group on implementation of Leipzig Charter in end November 2008 New call for proposals in 2010

*URBACT has a dedicated website and a secretariat based in Paris.

www.urbact.eu

*In June 1999, the Commission conducted a data collection of comparable indicators in European cities. This Urban Audit Pilot Project was designed to test the feasibility of the approach and to learn for the future from possible errors in the design.After the completion of the Urban Audit Pilot Project in 2001, the Commission decided that there was a clear need to continue and improve the collection of comparable information on urban areas. The first full-scale European Urban Audit took place in 2003 for the EU15 and in 2004 for the ten new Member States plus Bulgaria, Romania and Turkey. The second full-scale Urban Audit took place between 2006 and 2007, and involved 321 European cities in the 27 countries of the European Union, and more cities in Norway, Switzerland and Turkey.There are 330 indicators in nine domains, covering the key aspects of demography, society, the economy, the environment, transport, the information society and leisure. Thanks to the Urban Audit some striking trends in urban areas could be determined: Three out of four cities have a higher share of tertiary educated residents than their country as whole. Among the Urban Audit cities, Paris and Cambridge have the highest share of tertiary educated with 37% and 32% of their population respectively. Despite the high concentrations of jobs in cities, employment rates are lower in three out of four cities. The differences can be striking, for example in 2001, Manchester had an employment rate of 51% while the UK had an rate of 72%. The concentrations of unemployment in particular neighbourhoods can particularly high, almost one out two cities had neighbourhoods with unemployment rates of 20% or more, and reaching to 50% or more in some neighbourhoods. *Urban Audit has a dedicated website

wwww.urbanaudit.org

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