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The UK's dismal result in May's Eurovision song contest, scoring nil points for the first time in the event's 47-year history, is not the only consequence of a changing Europe. Professionals in the UK's regeneration initiatives are looking to 1 May 2004 when 10 more countries join the European Union. These new members will be able to apply to the same EU funding programme - objective 1 funding - that is financing much of the regeneration work in the UK's most deprived communities.

The intention behind objective 1 funding is to increase economic growth, raise employment and provide more opportunities for people. To be eligible for this funding an area's gross domestic product per head must be less than 75 per cent of the EU average. The four areas in the UK that receive this funding are Cornwall and the Isles of Scilly, Merseyside, South Yorkshire and west Wales and the valleys.


There is a concern that the UK's eligibility to access this revenue will be removed by the entry of 10 new states, eight of which are from the former communist bloc, because they are poorer than the UK's most deprived areas.

EU aid is channelled through structural funds. These include the European regional development fund (ERDF), of which objective 1 is a part. Between 2000-6 the three objective 1 areas in England will receive more than £1.2bn. The largest portion, £565m, is going to projects in the Merseyside area, followed by £497m to South Yorkshire and £190m to Cornwall and the Isles of Scilly. Regeneration schemes in west Wales and the valleys are to receive £1.2bn.

Andy Churchill, chief executive of regeneration agency Merseyside Network for Europe, says European structural funds (ESF) are continuing to change and there may be less available to the UK in the future. "ESF could be used more efficiently," he says. "It could be targeted primarily on social inclusion rather than split into a variety of activities, many of which are now mainstreamed."

Sandra Hayes, Communities First programme co-ordinator at Swansea community regeneration unit, says the changing face of Europe can only be a positive thing for regeneration and communities in Wales. "It means we have to ensure that our projects and programmes are self-sustaining and not reliant on external changes, which is the whole essence of regeneration," she says.

Even if objective 1 funding does go to the new EU members Cornwall may still be eligible at the end of the current funding programme, says Rob Pickering, project manager at Cornwall Voluntary Sector Forum, because wages are 30 per cent less than the UK national average.

Many Cornish community groups feel objective 1 funding has by-passed them because of its narrow economic definition for regeneration. "Improving quality of life is more important than just increasing gross domestic product," he says.

Local Government Association economic and environmental policy officer Tony Rich says regeneration will not grind to a halt come 2006 as many areas are already not eligible for objective 1 funding and use other sources of revenue to run their schemes. He advises projects that receive existing objective 1 funding to "look to become self-sustaining" if possible.

Yorkshire and Humberside Assembly director for Europe Paul Wardle says regeneration initiatives will not necessarily have a "landing with a bump" in 2006. "These projects will have a lengthy lead-in time to adjust and draw up exit strategies from EU funding."

Regeneration and its relationship with EU grants is high on the government's agenda. It is contributing to the EU's debate on the future of European structural funding and a four-month cross-government consultation into reforming regional policy, including reviewing ESF, ended earlier this month. Chancellor Gordon Brown proposed the EU should no longer operate the regional policies that support regeneration in the UK. Instead, he suggested the Treasury provide more funding for regional policy in the next comprehensive spending review for the UK areas no longer in receipt of EU money.


At the launch of the cross-government consultation in March, Brown argued against extending the ESF budget to help poorer members. He said: "The better way forward is agreeing both a sensible ceiling on European funding focused on the poorest member states and, at the same time, offering far more freedom and flexibility for other member nations to tackle market failures in their own localities and regions."

A spokesperson for the Office of the Deputy Prime Minister says an enlarged EU will affect the four regions in the UK receiving ERDF, such as objective 1 funding. This is why the government is calling for richer countries to fund their own regeneration initiatives while a central fund supports poorer members.

"By taking full control of funding we will allow decision-makers in the regions, and local partners, to have a bigger stake in the regeneration of their own communities," she says.

Professionals involved with regeneration initiatives should take into account the possibility of not having EU funding streams in the future and conduct the necessary risk assessments, argues Wardle. "Is it not our aim to become non-eligible for objective 1 to reduce dependency on public aid in the economy?" he asks.

Pickering adds that objective 1 funding was always understood to be a one-off programme and projects should have considered this when planning their work.

There is likely to be structural funding available in objective 1 areas until several years after 2006, although this has yet to be finalised. And regeneration schemes may also continue to receive the matching funding they had to attract to qualify for objective 1.

Hayes says some communities could benefit from a longer exit period from the programme to adjust as they may struggle initially to overcome the loss of objective 1 funding. She says this will be less of a problem for areas in Swansea. "Communities here have planned to be self-sufficient while EU funding remains in place."

Rich agrees that communities dealing with social deprivation will be hit by a change in objective 1 funding. He urges relevant authorities in those areas to seek other sources of public and private financing. "They should also seek greater private investment and generate a greater self-sustaining community enterprise."

But Churchill says deprived communities are unlikely to experience any drastic change. "Structural funds are in any case not meant to exist for ever," he says. "They are there to solve structural problems and, once solved, they can be used elsewhere."

Although Pickering says there will be little immediate impact on communities, he warns: "In the longer term these communities will need these initiatives to be funded from somewhere if regeneration is to continue."

The 10 states that will join the European Union in 2004 are:

Cyprus

Czech Republic

Estonia

Hungary

Latvia

Lithuania

Malta

Poland

Slovakia

Slovenia