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The London School of Economics and Political Science 1
French regional variations in the spending progress rate of the European Social
Fund during the programming period 2007-2013: a regional difference of
absorption capacities?
Or how to make the concept of absorption capacity operational in the French context
of ESF system management?
Dissertation submitted for MSc Local Economic Development
Candidate number 52452
Word count: 9934
August, 2012
LSE |Abstract 2
Abstract
This paper aims to identify the drivers explaining the regional variations in
European Social Funds spending in France for the programming period
2007-2013. The hypothesis underlined in the research states that the
administrative, institutional and financial absorption capacities of
Metropolitan French regions are explanatory variables. The analysis of the
empirical evidence shows that regional absorption capacities can, in part,
explain these regional variations in ESF spending. Furthermore, the
absorption capacities seem to be a requirement for regions to adapt
themselves to European and national constraints and to subdue the lack of
absorption capacities of the Central government. This paper also argues that
the regional structures can even be weakened, introducing a potential “point
of saturation” (Cace et al., 2009) of ESF absorption for the regions lacking in
absorption capacities. Therefore, the evidences, presented here,
demonstrates that the conditions aiming to promote regional
competitiveness and employment is not, in the case of France, successfully
tackled, reconsidering, in conclusion, the priorities defined for the next
programming period 2014-2020.
LSE |Glossary 3
Glossary
CQG: Contrôle Qualité Gestion
DGEFP: Délégation générale à l’emploi et à la formation professionnelle
ESF: European Social Fund
DIRECCTE: Direction Régionale des Entreprises, de la Concurrence, de la
Consommation, du Travail et de l’Emploi
ERDF: European Regional Development Fund
IB: Intermediate Bodies
OP: Operational Programme
CICC: Commission interministérielle de coordination des contrôles
SFs: Structural Funds
NMS: New Member States
DSGC: Descriptif de Système de Gestion et de contrôle
RCE: Regional Competitiveness and Employment
DMA: Delegated Managing Authority
MA: Managing Authority
LSE |Table of figures 4
Table of figures
Figure 1: The regional variations in the ESF spending in July 2012 –
Figure 2: The four types of regions, in terms of ESF scheduled rate -
Figure 3: Chosen sample of regions interviewed according to the methodology -
Figure 4: The NEI’s framework, type of absorption capacities and definitions -
Figure 5: Conceptual framework and explanatory variables – Support for interviews
sequences and analysis -
LSE |Table of contents 5
Table of contents
Abstract ________________________________________________________________________________________________________2
Glossary ________________________________________________________________________________________________________3
Table of figures _______________________________________________________________________________________________4
Table of contents _____________________________________________________________________________________________5
SECTION 1: INTRODUCTION ________________________________________________________________________________6
1.1. The ESF system of implementation in France______________________________________________________6
1.2. Regional variations in the ESF progress rate in the programming period: a difference of
regional absorption capacities?___________________________________________________________________________8
1.3. The research question and its double interest ____________________________________________________9
1.4. Outline of the research_______________________________________________________________________________ 10
SECTION 2: THE FOUR STEPS OF THE METHODOLOGICAL FRAMEWORK________________________ 11
2.1. The methodological framework____________________________________________________________________ 11
2.2. Overview of the regional spending progress rate ______________________________________________ 12
2.3. The method employed: qualitative semi-structured interviews and sample _____________ 13
SECTION 3 – THE CONCEPTUAL FRAMEWORK OR HOW TO MAKE OPERATIONAL THE
CONCEPT OF “ABSORPTION CAPACITY” IN THE FRENCH AND ESF CONTEXT -__________________ 14
3.1. Academic, reports and evaluations literature review -________________________________________ 14
3.2. Absorption capacity and the ESF: definition, theoretical choices and hypothesis - ______ 16
3.3. Explanatory variables________________________________________________________________________________ 18
SECTION 4: EMPIRICAL FINDINGS AND DISCUSSION –_______________________________________________ 20
4.1. Assessing the degree of administrative absorption capacity ________________________________ 20
4.2. Assessing the degree of institutional absorption capacity ___________________________________ 24
4.3. Assessing the degree of financial absorption capacity ________________________________________ 26
4.4. Alternatives hypothesis ______________________________________________________________________________ 28
SECTION 5: CONCLUSION__________________________________________________________________________________ 30
5.1. Summary________________________________________________________________________________________________ 30
5.2. Policy Implications____________________________________________________________________________________ 31
5.3. Limitations _____________________________________________________________________________________________ 31
5.4. Future Research _______________________________________________________________________________________ 32
Bibliography_________________________________________________________________________________________________ 33
Appendix _____________________________________________________________________________________________________ 37
LSE |Table of contents 6
Section 1: Introduction
The European Union cohesion policy aims to reduce reducing differences in living
standards between European Union regions, and also to promote growth and jobs for all
of these regions (Noetzel, 1997). To reach these goals, the EU set up financial
instruments – the Structural Funds - based on an overall grant of €308 billion for the
programming period 2007/2013. The economic and social cohesion European policy
represents one third of the total EU budget and is divided through three main objectives
(Zaman and Georgescu, 2009).
The objective “Convergence” concentrates 82% of the Cohesion policy total amount and
aspires to accelerate the catching-up of the lagging regions, in term of economic
development. Under this objective, the poorest Member States and regions in terms of
GDP per capita (at or below 75% of the Community average) are eligible. Both the
European Regional Development Fund (ERDF) and the European Social Fund (ESF) are
the two financial instruments used to develop this objective. The academic literature on
the Convergence objective is considerable, especially because of the large financial
amount of money dedicated to this objective (Kalman, 2002). The objective “Regional
Competitiveness and Employment” (RCE) is the second objective and uses 16% of the
Cohesion policy total amount of money. Once more, both ESF and ERDF are financing
this objective, the ERDF promoting innovation and territory attractiveness, while the
ESF supports employment, training and professional insertion. In France, the “RCE”
objective beneficiates to the entire French territory, with the exception of the four
French overseas departments, which are eligible to the Convergence objective. The third
objective, the “European Territorial Cooperation” objective, financed only by the ERDF, is
available for cross-border, transnational and interregional cooperation, using only 2.5%
of the total €308 billion.
1.1. The ESF system of implementation in France
The ESF set by the EU Council and Parliament regulation no. 1081/2006 and more
specifically within the Objective “RCE”, aspires to reinforce the competitiveness and
employment in the regions, which are not covered by the objective “Convergence”, in
anticipating economic and social change. It intends to favour a qualitative and
LSE |Table of contents 7
quantitative increase in human capital investments, to foster innovative actions in the
social field and entrepreneurship, to encourage the idea of local and sustainable
development and to enhance the accessibility, the adaptability of workers and
businesses in combating discrimination through the development of inclusive job
markets (European Commission (b), 2006).
The European Commission decided that every Member State has to manage and regulate
its own ESF system of implementation. This system may vary depending on institutional
factors (Cace et al, 2009), such as the degree of centralisation, the organisation of the
political system and the common inter-relationships between different actors. A
Member state (or a Member State in agreement with the managing authority, the MA)
may decide, in agreement with the Commission, to entrust to appropriate intermediaries
a part of the implementation and management processes. These intermediaries are
called intermediate bodies (IB). An IB is an organisation that executes some tasks
delegated by the MA or the Delegated Managing Authority (DMA), such as local
authorities, national organisations and non-profit making organisations and the third-
sector (Lion et al., 2006).
In France, the programme is managed by the Central State – more specifically, the
DGEFP (Délégation générale à l’emploi et à la formation professionnelle), which is the MA
– and implemented under the “RCE” national Operational Programme (OP), describing
the whole implementation system (Appendix 1). It is a strategic document prepared by
the DGEFP to ensure that the priority areas for ESF are in accordance with the European
Community strategy. Almost 85% of the total ESF amount in France is made available to
the regional Prefects in order to support local projects as closely as possible to the local
needs. The regional offices of the Central State in charge of the implementation and the
management of the ESF are called the DIRECCTE (Direction Régionale des Entreprises, de
la Concurrence, de la Consommation, du Travail et de l’Emploi) and represent the DMA.
The DMA select the local beneficiaries (according to the national OP), such as local
businesses, non-profit-making organisations and professional training structures. The
DIRECCTE also picks up IBs in each region. There are between 300 and 350 IBs in
France, which represents more than half of the IBs in Europe (Cour des Comptes, 2012,
p.5). Finally, 15% of the total grant is implemented and managed directly by the DGEFP.
LSE |Table of contents 8
Nearly €5 billion has to be spent during the programming period 2007-2013, through
five main axes that support a wide range of actions (National ESF OP, 2007; Appendix 2).
1.2. Regional variations in the ESF progress rate in the programming period: a
difference of regional absorption capacities?
“Institutional and administrative capacity” concerns the human capital in the public
sector as well as the efficiency and success of matching the goals of a given public policy
with its results (Emerson et al., 2006). Local, national and supra-national authorities
have committed to develop these capacities in order to subdue the common critiques
relating to traditional public services and their “perceived distance from society as a
whole” (European Commission, 2006 (a)). The development of institutional capacity as a
concept is mainly linked to the pre-accession process of the EU New Member States
(NMS). In this context, the strengthening of institutional and administrative capacity
was identified as one of the main requirements needed for reaching a smooth
convergence process. Through, the Treaty of Lisbon (European Commission, 2007), the
role of public services has been identified as one of the key pillars for achieving the
objectives of the Cohesion policy.
However, in European legislation, institutional capacity building seems to be linked to
the “Convergence” objective, as if regions eligible to the “RCE” Objective were endowed
enough with regional institutional and administrative capacities to absorb the fund and
be competitive. Still, many authors (Horvat, 2004, 2005; Brown et al., 1995) have
pointed out that the ESF has, in some cases, weakened the regional and local structures
and didn’t promote the expected regional economic development (Cace et al., 2009). In
this literature, it has been argued that some territories do not have the sufficient
capacities to use the ESF in an efficient way.
This idea is also revealed by the regional differences in ESF spending. While some
regions have been able to be in the leading pack in the ESF progress rate during the
whole programming period, some regions still struggle to consume the fund, making
them barely competitive at the national scale, but too developed to be part of the
“Convergence” objective.
LSE |Table of contents 9
Figure 1: the regional variations in the ESF spending in July
2012
The situation in July 2012 in the
progress rate of each region is
described in figure 1. Within a
discretization framework based on
the mean and the standard
deviation, important variations
between French regions can be
pointed out. However, this current
picture does not tell the reality. It
is also essential to take the
evolution of the progress rate since
2007 into account. This will be
detailed in Section 2 presenting the
methodology used for the
research.
Thus, how can the regional variations in the spending progress rate be explained? Which
factors can throw light on these differences? Can they only be explained by “accidents
and exceptional events1”, without taking into account any regional logic based on the
interplay of actors and of specific economic, social, institutional and political
characteristics? Or can the concept of absorption capacity be part of the answer?
1.3. The research question and its double interest
Implementation processes can be studied in two different ways. The first refers to the
quantitative implementation and the study of the efficient spending of resources
allocated within a period of time. The second way is qualitative and related to the
evaluation of how resources are invested in relevant and eligible projects according to
objectives (Milio, 2007, p.430). This dissertation focuses on the first aspect of
implementation by trying to find answers to the question “why do some French regions
consume less ESF than others”? This question has a double interest. First of all, this study
aims to fill the lack of literature related to the ESF. While most studies and academic
1 Interview realised the 4th of May with the Director of the Department "ESF Evaluation"
LSE |Table of contents 10
articles question the relevant regional allocation of Structural Funds (Rodriguez-Posé
and Fratesi, 2004); Bouvet and Dall’Erba, 2010), few of them examine the regional
spending of ESF during the programming period and the difficulties of the
implementation processes faced by actors. The main hypothesis tested here is that the
allocated amount of money that has to be spent in a time span is determined, among
others factors, on the regional absorption capacity to spend it. The system of
implementation – decentralised, centralised, and disconcerted (Cace et al., 2009) -
chosen by the Central government, can impact the absorption capacity of actors, and
thus the efficiency of ESF spending. While France cumulates an important number of IBs,
the expertise to manage ESF in smaller structures is weak. Moreover, most of the
literature places emphasis on the NMS (Sumpikova et al., 2004; Zaman and Cristea,
2011) and on the objective “Convergence”, as if the “RCE” objective relating to the
capacity of regions and localities to be competitive is taken for granted.
Secondly, this study aims to put the next programming period 2014 – 2020 and the new
EU regional policy framework into perspective, which concentrates even more the ESF
in NMS. The current difficulties of French regions to spend ESF, revealing the complexity
and the constraints of efficiently using the ESF within the European and national
regulations, may give a clearer and more accurate idea of the future challenges related
to the spending of SFs.
1.4. Outline of the research
The remainder of this dissertation is organised as follows: section two provides an
overview on the methodological choices undertaken in this research. The third section
discusses, in the context of the existing academic literature, as well as of the reports and
evaluations of EU SFs, the reasons underlying the importance of the research’s question.
The theoretical framework is detailed and the concept of “absorption capacity”
operationalized, presenting the dataset employed in this paper. Section four analyses
the results of the interviews and synthesises the findings. In section five, the conclusion
sets out the limits and constraints of this research and then explores some policy
implications. It finally suggests further directions for forthcoming research.
LSE |Section 2: The four steps of the methodological framework 11
Section 2: The four steps of the methodological framework
The previous section introduced the importance of questioning the variations in
regional spending progress rate of the ESF in the French context. Regional absorption
capacities were argued to potentially be an explanation of these. This second section
outlines the methodology used to confirm or invalidate the hypothesis and identify
alternative hypotheses that detect other limits or obstacles in the regional ESF spending.
2.1. The methodological framework
The methodology undertaken in this dissertation can be divided into four major steps.
Firstly, after performing a literature review on the EU regional policy and on the concept
of absorption capacity, I executed desktop research on the necessary capacities for
efficiently implementing the ESF according to the French system of implementation. I
essentially used the guides elaborated by the European Commission and by the DGEFP
for the different actors, such as the potential candidate, the beneficiary, the project
managers and the programme manager (L’Europe s’engage en France, 2008 (b)). I also
used copies of Contrôles Qualité Gestion (CQG) that highlight systemic and common
errors. The aim of this second step is to make the concept of absorptive capacity
operational considering the ESF and the French context. The third step undertaken was
mainly based on published statistics from the DATAR (L’Europe s’engage en France,
2008(a)), presenting the French spending progress, from the beginning of the
programming period in 2007 to July 2012.
Two main methodological choices were made in this third step. In the monthly-
published statistics, two types of data could have been considered: the scheduled rate
(“taux de programmation”) and the certified rate (“taux de dépenses certifiés”). The first
rate refers to the scheduled operations in progress while the second can be defined by
the fenced operations, in which the audit trail and the operation spending have been
controlled by every authority – from the IB itself, to the DGEFP, the DIRECCTE, the CICC
(Commission interministérielle de coordination des contrôles), through the European
Commission. The operation becomes certified when it is fenced, controlled and when the
European Commission has given its agreement. This payment process can be very long
and the payment is rarely carried out in the year that the operation closes and
LSE |Section 2: The four steps of the methodological framework 12
sometimes exceeds two years after closure. In this context, the scheduled rate has been
chosen as the best variable to give an insight on the spending that the region may be
able to reach during the programming period.
The second choice made in this dissertation methodology concerns the dynamic
programming. Between 2009 and 2010, funds have been transferred from priority axis
2, 3 and 4 to axis 1, for a greater adaptability. This shift of funds was enabled by the
adoption of a dynamic programming mechanism in 2009 (“le mécanisme de
programmation dynamique des crédits”), defined by the objective of reallocating credits
that were not programmed in the beginning of the period to the most needed
interventions and to the most dynamic regions in terms of spending. So, it was decided
to calculate the scheduled progress rate of each region without the dynamic
programming mechanism, because the latter tends to skew the spending progress rate
of regions that spend the least.
2.2. Overview of the regional spending progress rate
If in July 2012, the data presented a global picture, showing those regions that are
lagging and those more advanced regions in terms of ESF spending, it was also essential
to take into consideration the evolution of the spending progress rate. Indeed, some
regions have exercised an important progress in one or few months, while they were
classified at the end of the ranking, and inversely.
Group 1 Group 2 Group 3 Group 4
Rhône-Alpes Midi-Pyrénées Poitou-Charentes Picardie
Pays de la Loire Lorraine Alsace Corse
Haute-Normandie Ile-de-France Bretagne Aquitaine
Nord-Pas de Calais Champagne-Ardennes Franche-Comté
Languedoc-Roussillon Basse-Normandie Limousin
Auvergne Bourgogne
Centre
PACA
Figure 2: The four types of regions, in terms of ESF scheduled rate.
LSE |Section 2: The four steps of the methodological framework 13
Figure 3: Chosen sample of regions interviewed according to the methodology
The first group of regions refers to the regions that were either the more advanced
regions for the longest duration during the programming period, or the regions of which
the spending rates increased gradually. The second group encompasses the less
advanced regions or those that have seen their rankings decreased throughout the
programming period. The third group concerns the regions whose rankings stagnate
during the programming period and those which stayed in the middle of the global
ranking. The last group corresponds to the regions in which their rankings and spending
rates have increased quickly in a couple of months.
2.3. The method employed: qualitative semi-structured interviews and sample
This third step of processing published data gave an insight into how the regions to
interview could be chosen. According to the research question and the main hypothesis,
a greater focus has been undertaken on the group 1 and group 4. Indeed, trying to
identify the obstacles that regions face in order to spend the ESF efficiently is an easier
task with lagging regions or/and with regions that were behind for the majority of the
period but ameliorated their scheduled rate throughout the programming period.
Figure 3 sums up the regions interviewed and studied.
For most of the regions2, two persons have been interviewed: one from the DIRECCTE in
each region – most of the time the head of the ESF department – and one person from an
IB – often a person from the Regional Council, because the latter implements and
manages a large part of the delegated amount of ESF. A representative of the DGEFP, the
Director of the Department "ESF Evaluation", has also been interviewed. Finally, the
Director of the evaluation and audit department of a European Funds Management
2 Except for Auvergne and Champagne-Ardennes, in which no interviews in IBs could have been scheduled.
Types of
regions
Regions interviewed and studied
Group 1 Pays de la Loire
Group 2 Auvergne – Centre – Champagne-Ardennes – Lorraine – Midi-Pyrenees
Group 3 None
Group 4 Aquitaine – Corse - Picardie
LSE |Section 3 – The conceptual framework or how to make operational the concept
of “absorption capacity” in the French and ESF context -
14
Consultancy, who is used to audit and evaluate beneficiaries, intermediate bodies and
program managers, answered my questions. In total, 18 qualitative semi-structured
interviews were undertaken, between April and July 2012 (Appendix 4). The interview
guideline (Appendix 5) used is based on the theoretical framework elaborated in Section
3. The fourth step of the methodology is the processing of the interview data and the
analysis of discourses according to my hypothesis and to the theoretical framework.
Section 3 – The conceptual framework or how to make operational the concept of
“absorption capacity” in the French and ESF context -
This section analyses the existing academic literature, as well as the EU literature, in
order to establish the theoretical framework used throughout the dissertation.
3.1. Academic, reports and evaluations literature review -
Two main orientations have been given to the SF’s literature (Milio, 2007). The first one
emphasises the processes of decision-making, mainly led by the intergovernamentalist
theory. The latter seeks to analyse the existence of the European Union “as the result of
strategies pursued by rational governments acting on the basis of their preferences and
power” (Moravcsik, 1993, p.496). It also discusses the priorities and objectives
determined at the supra-national scale and their political and institutional factors. A
second theme of study explores the regional and local economic impact of SFs and either
argues that SFs fail to address its initial objectives (Martin, 99; Lopez Bazo et al, 99;
Rodriguez-Pose and Fratesi, 04) or it permits the regional convergence at the heart of
the EU regional policy (Leonardi, 1995). However, a lack of literature can be pointed out
concerning the difficulties following from the implementation processes and the factors
that could explain regional implementation differences (NEI, 2002; Noetzel, 1997).
In the academic literature, the term “absorption capacity” first emerged under the pen of
Cohen and Levinthal (1989). This seminal work defined this term as the firm’s ability to
identify, assimilate and exploit external knowledge, in tune with the main role of its own
investment in R&D (Cohen and Levinthal, 1989, p.570). The two authors perceived this
LSE |Section 3 – The conceptual framework or how to make operational the concept
of “absorption capacity” in the French and ESF context -
15
concept as a cumulative “virtuous cycle” (Clemente et al, 2008), in which more
knowledge engenders more absorption capacities, that would develop the potential
identification and assimilation of new types of knowledge. However, despite the fact that
this “construct is perceived as very important to a field because of high citation frequency”
(Clemente et al, 2008, p.6), its highly abstract characteristic weaknesses is its theoretical
foundations. Not tested enough and used in a ritual way too many times, this concept is
seen as overstated (Lane et al, 2006; Zahra and George, 2002).
The first authors (Herve and Holzmann, 1997), investigating the role of absorption
capacities related to SFs, have empirically made an attempt to link, in a macroeconomic
analysis, their theoretical review to existing literature in academic areas such as public
choice or development economics (Horvat and Maier, 2004). Nevertheless, this study
dealt principally with the economic dimension of the absorption capacity issues, leaving
behind the administrative and institutional dimension. Others researches, on the
contrary, coped only with the administrative absorption capacities and their role in the
SFs absorption processes of NMS (Dimitrova, 2011; Milio, 2007).
The overuse of the absorption capacity concept is also visible in EU policy guidelines and
in the EU and national legislation. Since the SFs reforms in 1988, a raise in the amount of
money and public resources dedicated to regional development has accompanied every
enlargement3. These financial transfers aim to help the less developed EU countries to
catch up economically (Kalman, 2002). However, an increasing literature has emerged
from EU experts, stating that these important amounts of money transfers cannot be
effectively absorbed by the NMS because of institutional, administrative and financial
limits (ECORYS, 2011). Then, the multiplication of evaluation and reports mainly
focused on the ERDF pointed out a lack of absorption capacities for NMS or the risks of
insufficient absorption capacities for Candidate countries (Regular reports, since 1998;
(Papadopoulos, 2003). However, very few dealt with in-depth qualitative analyses. In
2002, the European Commission has commissioned experts to define the necessary
absorption capacities, through a wide range of indicators, for effectively managing the
3 Many authors have argued that the increase in SFs amount of money can be more explained by political bargaining
games or redistributional purposes, rather than fostering regional economic development (Rodriguez-Pose and
Fratesi, 2004; Boldrin-Canova, 2000; Bouvet and Dall’Erba, 2010).
LSE |Section 3 – The conceptual framework or how to make operational the concept
of “absorption capacity” in the French and ESF context -
16
SFs (NEI, 2002). The obstacles that most European countries face in the early years after
their accession concern mainly a lack of long-term vision of the authorities, the difficulty
to overcome the national insufficient financial resources to co-finance projects and
respect the principle of additionality of the SFs4, the limited ability of human resources
in central and local administration and its lack of cooperation and partnership at
different level (Cace et al., 2009; Zaman and Georgescu, 2009). Therefore, in this context,
the term of absorption capacity can be defined as the “capacity of the countries on low
incomes to absorb productively a large volume of foreign aid” (Bourguignon and
Sundberg, 2006, p.1). This wide definition rests upon the functioning of a central
government in line with the EU administrative and institutional pre-conditions for using
effectively the SFs, its ability to adjust dysfunctions and to adopt minimum
administrative, institutional and financial requirements.
3.2. Absorption capacity and the ESF: definition, theoretical choices and
hypothesis -
According to the literature, the relevant definition for this dissertation framework can
be written as follows: the absorption capacity is the level of a country’s appropriateness
of the financial, administrative and institutional prerequisites for being capable of
spending efficiently the allocated resources of SFs during the programming period.
Generally, the absorption capacity is divided in two different ways. The first refers to the
capacity of absorption of the implementation system defined by any given state to
administer the SFs, considered as the “absorption capacity on the side of the offer”, while
the second dimension focuses on the side of the beneficiaries of the SFSs, which can be
called the “capacity of absorption on the side of the demand” (Cace et al., 2009, p.15). In
this dissertation, the words constraint restricts the discussion of both the side of the
demand and the side of the offer. Nevertheless, only the side of the offer would be
considered.
4 Article 15 of Regulation (EC) No 1083/2006: “the principle of additionality means that EU Structural Funds may not
replace the national or equivalent expenditure by a Member State. The principle of additionality is verified at national
level by the Commission, in cooperation with Member States, for the regions covered by the Convergence objective.”
LSE |Section 3 – The conceptual framework or how to make operational the concept
of “absorption capacity” in the French and ESF context -
17
Despite the importance of this term in official EU publications, as well as in academic
literature, the absence of a conceptual and operational framework to comprehensively
assess the absorption problems of the SFs make the concept itself “vague and ill defined”
(Emerson et al., 2006; Milio, 2007). So, it becomes essential to elaborate a clear and
operational framework to throw light on the potential absorption issues in the specific
context of the ESF in Metropolitan France. This analytical framework is based on the
assumption that the effectiveness, the efficiency and the performance of the EU
Cohesion Policy are at best contingent to the country’s institutional, economic, social,
administrative and political context (Ederveen et al., 2006; Ivanovna, 2012).
The NEI framework (2002), on which the European Commission based its
understanding of absorption capacities, is determined by three factors.
The theoretical framework used to provide answers to the research question will not be
exactly the same analytical framework followed by NEI. First, the macroeconomic factor
will not be discussed in this dissertation in details because at the national and at the
regional scales, the annual amount received from the ESF since 2007 does not exceed
4% of the GDP5. A second theoretical choice is made dividing the institutional capacity
and the administrative capacity into two different type of absorption capacity. This
5 Council Regulation (EC) No. 1260/1999, Article 7.8
TYPE OF
ABSORPTION
CAPACITY
DEFINITION
THENEIFRAMEWORK(2002)
The macro-
economic
absorption
capacity
Defined and calculated in terms of GDP levels to SFs allocated and in which, the
upper limit should not exceed 4% of the GDP of the interested Member State
The financial
absorption
capacity
The “ability to co-finance EU supported programmes and projects, to plan and
guarantee these national contributions in multi-annual budgets, and to collect
these contributions from several partners interested in a programme or project”
(NEI, 2002, p.4)
The
administrative
absorption
capacity
“The ability and skill of central and local authorities to prepare suitable plans,
programmes and projects in due time, to decide on programmes and projects, to
arrange the co-ordination among principal partners, to cope with the
administrative and reporting requirements, and to finance and supervise
implementation properly, avoiding irregularities as far as possible” (NEI, 2002,
p.4)
Figure 4: The NEI’s framework, type of absorption capacities
and definitions
LSE |Section 3 – The conceptual framework or how to make operational the concept
of “absorption capacity” in the French and ESF context -
18
choice is based on the belief that the ability and skills of a public structure does not
necessarily represent a causal link with the good local functioning governance between
a wide variety of actors, in the ESF context.
3.3. Explanatory variables
Figure 4 divided each type of absorption capacity highlighted in Section 3.2. For the
administrative absorption capacity, the necessary requirements are split up according to
each step of the policy life cycle (NEI, 2002): management, programming,
implementation and financial management and control (Bachtler and Wren, 2006). The
evaluation and monitoring step is purposefully separated from the other steps, because
French regions are not in charge of this step. If they have to integrate regional data
through different indicators software, they do not have to evaluate the ESF regional
management. The European Commission and the DGEFP - through various external
service providers - are the actors responsible for this policy step.
The institutional absorption capacity is divided into two themes that permit a global
picture of the institutional relationships and context in which the ESF has to be managed
and implemented: the first concerns the regional context and the regular and common
partnerships that are already present in the existing economic development policy. The
second corresponds to the specific context of the ESF management and implementation
and the inter- or intra - relationships within structures and between them. Concerning
the financial absorption capacities, the indispensable requisites and factors for
efficiently using the ESF in French regions and that can explain the difficulties that
regions face in managing the ESF efficiently, have been categorized with the help of
national guidelines for the programmes managers and legislation.
LSE |Section 3 – The conceptual framework or how to make operational the concept
of “absorption capacity” in the French and ESF context -
19
Figure 5: Conceptual framework and explanatory variables – Support for interviews sequences and
analysis -
TYPES OF
ABSORPTION
CAPACITIES
STEPS IN THE
ESF POLICY
CYCLE
INDICATORS
ADMINISTRATIVEABSORPTION
CAPACITIES
Management Staff number
Seniority of the
staff and
turnover
Clarity in the
responsibility, tasks
and roles
Training and
matching
between initial
competences
and
recruitment
needs
Programming Analytical skills Process skills
Delays in operations
and IB’s delegations
tasks approval
(DSGC)
Guidelines and
methodological
support
Implementation
Experience of the
main IB staff
Clarity in the
responsibility,
tasks and roles
Impact of the main IB (Regional
Council) in the spending progress rate
Financial
management
and control
Adequate
staffing for all
financial
management and
control functions
Auditing
training
available for
civil servants
Established practice in dealing with
financial irregularities
INSTITUTIONALABSORPTION
CAPACITIES
Regional context
Regional
partners that are
already present
in existing
economic
development
policy, especially
in the social
development
policy
Regional
partners
interested in
being either a
ESF financial
partnership or
either a ESF
beneficiaries.
Regional
partners that are
already present
in existing
economic
development
policy, especially
in the social
development
policy
Regional partners
interested in being
either a ESF
financial
partnership or
either a ESF
beneficiaries.
Management
and
implementation
Cooperation and
coordination
among the
different
departments
within the DMA
Cooperation
and
coordination
among the
different
departments
within the
main IB
Cooperation and
coordination of
the DMA with the
MA
Cooperation and
coordination of
the main IB with
the DMA
FINANCIALABSORPTION
CAPACITIES
Actors and
evolution
Evolution of the
regular financing
partnerships
throughout the
programming
period
Withdrawal of
financing
actors and
commitment to
the initial
projects or
operations
approval
The potential Impact of the financial
crisis in the ESF co-financing principle
The regional
impact of the
financial EU and
national
regulations
The role of the
automatic
decommitment
rule in the ESF
financial context
of the region
The role of the
dynamic
programming
in the financial
context of a
region
Dividend payments delays and impacts
on the total scheduled rate in the
region
LSE |Section 4: Empirical findings and discussion – 20
This chosen theoretical framework, widely based on the NEI framework allows the
concept of absorption capacity to be made operational in the French and ESF context. It
also helped to direct the interviews and to analyse the results, via the creation of an
answers grid for each region, giving a global picture of the regional absorption capacities
From the Appendix 6 to 14, this table is completed for each region, with different
potential answers, according to the type of absorption capacities.
Section 4: Empirical findings and discussion –
For each region studied, the above table has been completed, presenting a global picture
of the regional absorption capacity of the nine regions tested. The regional absorption
capacities are, in part, an explanatory factor of the variation of the ESF scheduled rate
during the programming period 2007-2013. However, other factors have been revealed.
4.1. Assessing the degree of administrative absorption capacity
A positive evolution related to the regional administrative absorption capacity
throughout the 2007-2013 programming period can be noted. Nevertheless, the lack of
administrative absorption capacity from the previous programming period 2000-2006
has been an important factor in explaining the regional variations in the ESF scheduled
rate.
4.1.1. The administrative absorption capacity in the management step in the ESF policy
- the impact of the turnover in the regional absorption administrative capacity
The results of the analysis show that the regions suffering of a lagging ESF scheduled
rate are the regions that face a high turnover within the DIRECCTE staff. All the lagging
regions have pointed out this factor as a “disastrous obstacle6”. The reasons behind this
high turnover are multiple: the complexity and technicality of the profession, the
isolation within the working structure or between the others structures concerned by
the ESF and the pressure for reaching the objectives in a restricted time span (Lequiller,
2010). Another factor of explanation is linked to the management of the French
6 Interview realised with the Director of the ESF department of the DIRECCTE Centre and Lorraine.
LSE |Section 4: Empirical findings and discussion – 21
territorial Civil service. The actors interviewed have argued is that “the recruitment in
this organisation is mainly based on geographical mobility, more than on competences and
specific profile for a particular job”7. In the ESF service in each DIREECTE, employees
rarely choose the ESF profession, but instead they accept this specific function in order
to work in the same region in which they wanted to live. But the difficulty of such a job
causes them to ask for a transfer position within the same regional DIRECCTE after a
year. Therefore, every DIRECCTE seems to underestimate the number of employees
needed to efficiently spend the ESF. In the NEI framework, more than 10 persons is the
pre-condition for an effective service, managing or implementing the ESF. Only Pays-de-
la-Loire (ranked number one in the regional ESF scheduled rate in July 2012) has more
than 10 persons in the ESF service and does not suffer from a high turnover of staff
(Appendix 13).
- Clarity in the responsibilities and the roles of the DIRECCTE staff
In November 2009, a decree initiated the fusion of a wide number of disconcerted
services within the same organisation, called DIRECCTE. Before that decree, the ESF
management system was distributed between different services. Then, after the decree,
each DIRECCTE established a new way of managing the ESF that could have still evolved
many times throughout the programing period. This decree aimed to avoid overlapping
and administrative inertia in order to develop coordination between services. However,
this organisation reform has impacted the ESF scheduled rate, because some regions
have met more obstacles and have difficulties in finding “the well-functioning
organisation8”. It seems, according to the interviews, that the centralization of the ESF
management within the same service in the DIRECCTE had helped to boost the
scheduled rate. The lagging regions interviewed had – except Midi-Pyrenees –
experienced and are still experiencing difficulties to find the right organisation within
the DIRECCTE to efficiently manage the ESF (Appendix 7 and 9). The clarity of the staff
responsibilities and roles were defined late and are hardly implemented because of the
turnover. This is a factor of explanation related to the regional administrative
absorption capacity that highlights the regional variations in the ESF scheduled rate.
7 Interview realised with the Director of the ESF department of the DIRECCTE Midi-Pyrenees.
8 Interview realised with the Director of the ESF department of the DIRECCTE Picardie
LSE |Section 4: Empirical findings and discussion – 22
- The impact of training provision and methodological support development
To overcome the impact of the turnover in the regional scheduled rate, some regions
have been able to either develop an internal consolidated system of training or to hire
an external service provider – consultancy firms -, financed on the Axis 5 “Technical
assistance” of the ESF OP. However, the 5 lagging regions interviewed have faced
difficulties to develop knowledge on Public Procurement, needed for hiring an external
service provider. So, they all started to be supported by a service provider since 2010 or
2011, which was already late in the programing period. Therefore, internal training has
been developed in regions that have a high scheduled rate, or that have made up for lost
time really quickly. It is the case of Pays de la Loire and Picardie (Appendix 14) that
elaborated methodological guides for overcoming the turnover and for transmitting the
knowledge. Yet, the DGEFP has diffused methodological documents for each type of
actor, but late in the programming period, in 2009.
If the methodological framework allows us to highlight key factors linked to the regional
administrative absorption capacity that explain the variations of scheduled rate, it
remains true that further factors need to be taken into account, such as the lack of
administrative capacities of the organisation of the central government.
4.1.2. The administrative absorption capacity in the programming step in the ESF policy
- Analytical and process skills
Generally, the analytical and process skills of the staff are highly developed in each
region interviewed. The research does not show any impact from these skills on the
regional variations of the ESF scheduled rate for two main reasons. First, the OP is
divided into so many different types of actions that each region and each structure is
able to find a type of action corresponding to the regional context. Secondly, if the initial
territorial diagnosis and the negotiation of the ESF regional design has not been
properly made, different instruments permit the correction of the regional ESF design in
order to adjust it to the evolving regional context, such as ESF transfer amount between
axes or between actions. Moreover, in opposition to the NMS, when a candidate submits
a proposal for receiving the ESF grant, it is rarely refused. One of the reasons is that,
LSE |Section 4: Empirical findings and discussion – 23
before the selection of beneficiaries, a tailored work to beneficiaries’ needs has been
completed by the DIRECCTE service and the IB.
- Delays impacting the regional scheduled rate of ESF
The programming period 2007-2013 has witnessed an important lateness in the
programming step. This has been justified by two main factors during the interviews, as
well as the reports and evaluations. First, not every region programed operations in
2007, and few in 2008. This has been explained by the fact that they were all spending
the rest of ESF from the previous programming period. If regions were still
programming until 2009, sometimes 2010, the lack of regional absorption capacities
from the previous programming period was pointed out, by the interviewees, as the
main cause of this lateness (for 8 out of 9 DIRECCTE interviewed – except Midi-
Pyrenees). Secondly, the Central government did not produce and publish the document
support, the methodological guides, nor the legislative instructions, presenting the
requirement from the audit trail, in 2007. The national training plan for every DIRECCTE
and hold by the DGEFP started to be effective in 2010. Presage, the monitoring software,
made its appearance at the end of 2008. Therefore, every DIRECCTE and every IB had to
develop documents, without any legislative support. The regions with the more
developed administrative capacities had been able to create these documents that were
eventually really similar to those published by the Central government. The others had
to prepare and implement recovery action plans for each operation throughout the
programming period. Some interviewees talked about an “irrelevant or delirious public
action9”, in which they had to spend weeks changing documents or sentences in
documents for 2008 operations, while these documents did not even exist (Appendix 8).
So, the lagging regions lost time in retroactive adjustments processes for each official
documents and requirements of the audit trail.
4.1.3. The administrative absorption capacity in the implementation step in the ESF policy
Every DIRECCTE delegated tasks and responsibilities to a certain number of IB. This
number had an important impact on the regional capacity to effectively spend the ESF.
9 Interview realised with the Assistant Manager of the ESF department of the DIRECCTE Centre.
LSE |Section 4: Empirical findings and discussion – 24
Indeed the IB, such as regional councils or councils of French department, was able to
develop the necessary administrative capacities for managing the ESF throughout the
programming period. Moreover, it seems that the degree of involvement of these two
types of structures is an explanation variable for a high ESF scheduled rate, because of
the large amount of ESF allocated. However, the number of IB, such as the PLIE, largely
based on the “entreprise d'insertion”, which are small structures that aim at helping a
specific kind of unemployed people, were multiplied at the beginning of the
programming period. The DIRECCTE delegated a small amount of ESF to a large number
of PLIE that became IB. In this type of structure, a small number of staff was concerned
by the ESF management and could not effectively manage to attain the ESF audit trail
requirements (Lion et al., 2006). The Central government, in June 2009, legislated on the
matter regarding a potential PLIE mutualisation, eventually decreasing the regional
number of PLIE, and thus of IB. Therefore, it appears that there are a critical number of
small regional structures for a more advanced scheduled rate.
4.1.4. The administrative absorption capacity in the financial management and control step
in the ESF policy
In this step, the administrative absorption capacity does not appear to play an important
role for explaining the scheduled rate. However, it becomes a solid variable, concerning
the regional variations in the ESF certified rate (the rate of ESF paid to operation
initiators).
4.2. Assessing the degree of institutional absorption capacity
Three main explanatory variables have been identified for the lagging regions and are
related to the lack of regional institutional absorption capacity. The interviewees from
the lagging regions pointed out the lack of transversality and coordination between the
services of the DIRECCTE and of the IB, the lack of individual connections with the ESF
service of the DGEFP and finally the sensitive balance between a developed regional
network invested in the ESF and enough administrative and financial capacities in each
of the network’s structure.
LSE |Section 4: Empirical findings and discussion – 25
4.2.1 A lack of coordination within the services of the IB and DIRECCTE
Both the IB and the DIRECCTE suffer from a lack of with the others services coordination
within their own structure. The technicality and the procedural aspect of the ESF are
two reasons why the ESF services in the IB and in the DIRECCTE are feeling really
isolated. Nevertheless, it seems that these relationships start to evolve positively
because with the decrease of the central government’s funds, the different services need
to find new ways of financing and start to come and knock on the ESF door. A second
reason explaining this lack of coordination concerns the way the different services
approach the public policies. In these administrations, “instead of thinking the public
policies in terms of project, they keep thinking in terms of financing method10” (Appendix
11). This lack of transversality and coordination between the services of either the IB or
the DIRECCTE is a factor of explanation the regional variations in the ESF scheduled
rate. The regions able to enhance the relationships within services are able to use more
efficiently the ESF. It’s the case of Picardie and Pays de Loire regions. They spent time to
make their work known within the services, the importance of the ESF, its rationale and
the way it has to be used.
4.2.2. The density of regional structures involved in the ESF implementation and
management phases.
As already explained in 4.1.3, the institutional density of the regional actors involved in
the ESF policy has an impact in the ESF regional scheduled rate. If important actors
become IB, they will be the main catalysts of the ESF spending. On the other hand, if the
smallest structures are without the expertise necessary for dealing with the entire ESF
process, then it can have a negative impact on the ESF spending. Once more, the
importance of the regional network interested in the ESF will be positively correlated to
a good advancement in the ESF spending if the main regional actors are the leaders of
the network and if every structure has the minimum financial and administrative
capacities to use the ESF. In the lagging regions, either the main actors were not
involved in the ESF process, or there were too many little structures that became IB and
10 Interview realised with the Assistant Manager of the ESF department of the DIRECCTE Lorraine.
LSE |Section 4: Empirical findings and discussion – 26
that they could not deal properly with the ESF audit trail. The three types of regions –
Aquitaine (Appendix 6), Corse (Appendix 10), Picardie - that ameliorated their ESF
scheduled rate throughout the programming period have one common point: the
number of IB decreased during the programming period, especially the smallest
structures with the lowest level of absorption capacities. It appeared that it boosted the
ESF scheduled rate in these three regions.
4.2.3. The impact of the type of relationship between the DIRECCTE and the DGEFP
The types of relationships developed by the DIRECCTE with the DGEFP are considered –
in 15 out of 18 interviews – as an explanatory variable for the regional variations in the
ESF scheduled rate. The practical translation of the various and numerous legislative
instructions (L’Europe s’engage en France, 2012), which is supposed to throw a light on
the audit trail requirements, is not given to all the regions in the same way. Each actor
seeks help on its own side, through its own connections. It seems that knowing someone
in the DGEFP permits the region to be able to anticipate many legislative evolutions and
change before the others. This argument has been validated by a large number of
interviews, justifying their ranking and their ability to translate all the legislative
production by themselves, or to highlight the fact that they have difficulties to create,
develop and maintain a contact within the DGEFP. This variable was not expected to be
found at the beginning of the research and clarifies the necessary regional institutional
absorption capacities for using the ESF efficiently.
4.3. Assessing the degree of financial absorption capacity
According to the interviews, few regions had to deal with the financial withdrawal of
actors in operations during the programming period. However, it appears that the future
for the next programming period seems to gather round all the doubts and fears, created
because of the economic and financial crisis. The ESF makes it necessary for every
structure to advance the ESF amount of money until - for most of the regions
interviewed - two years after the closing of the operation. For the important regional
structures, such as the local authorities, Pôle Emploi or the OPCA, this is not risky and
this does not impact the structure’s activity, because they have the financial critical
LSE |Section 4: Empirical findings and discussion – 27
mass. However, for the smallest structures, such as the “entreprises d’insertion”, it
weakens their functioning and on some occasions they close for cash flows problems,
because of the delay of being reimbursed by the ESF. This impact is at the basis of the
notion of “point of saturation” (Cace et al., 2009), introducing the idea that the ESF, at a
certain threshold and in a specific context, can harm the territory and corresponds to a
“toxic fund” (Champagne-Ardennes).
Secondly, the economic and financial crisis had an impact on the decrease in public
assistance in France. From 2009, Regional Councils, councils of French department and
the Central Government started to diminish the usual public grants they used to provide
in respect of the additionality principle. Thus, many regions had to anticipate the
withdrawal or the decrease in the initial amount of co-financing of different actors. To
do so, the DIRECCTE and the IB tend to over-program during the programming period in
order to overcome this difficulty.
Thirdly, the laws that the Central government or the European Commission legislated
relating to the advance of the scheduled rate and the certified rate create some financial
impacts in the regions. The decommitment rule or N+2 rule, established by the Article
31.2 of Regulation 1260/1999, is a financial control set by the European Commission for
avoiding an important activity at the end of the programming period. It establishes the
decommitment of ESF not spent by the end of the second year following the year to
which they were allocated. The majority of regions were decommited by the European
Commission in 2010 but this process didn’t seem to have an important impact for the
regions.
The dynamic programming, instituted by the Central government, rests upon the
objective of reallocating credits that were not programmed at the beginning of the
period to the most needed interventions and to the most dynamic regions in terms of
spending (Section 2.2). Once more, the majority of regions interviewed were subjected
to this rule, even if they were not in the last rankings of the scheduled rate. The
calculation of the amount that has been taken and the amount that has been returned
indicates that a very small amount of ESF has been returned to the most dynamic
regions. However, the 15% of the total grant implemented and managed directly by the
LSE |Section 4: Empirical findings and discussion – 28
DGEFP has received an important amount of ESF from the dynamic programming and
the regions with the least capacities to use the ESF effectively.
A striking result was the fact that this withdrawal of ESF during the programming
period did not have a major impact in the regions because they were finally relieved to
have a small amount of ESF to manage, and the withdrawal made their scheduled rate
more important because the total amount had decreased. This questions once again the
role of the ESF in the lagging regions and introduces the potential “point of saturation”
(Cace et al, 2009) of the ESF in certain regions.
However, the regional financial absorption capacities have been put into perspective by
each interviewee for the next programming period 2014-2020, raising doubts and
questions about the public finances and their capacities of co-financing the ESF in the
poorest regions.
4.4. Alternatives hypothesis
The qualitative methodology used permits the identification of others factors, explaining
the situation of the lagging regions. This last sub-section aims to present them. First, the
factors related to the absorption capacities are two-fold. All of the lagging regions and
the regions that evolved quickly in the national ranking had suffered from the lack of
regional absorption capacities – especially administrative – from the previous
programming period. While some regions (Pays de la Loire, Aquitaine and Midi-
Pyrenees) have finished the previous programming period 2000-2006 in 2007 or at the
beginning of 2008, some regions – such as Corse, Picardie, Auvergne, Centre,
Champagnes-Ardennes, Lorraine – have continued to program until 2010. This has a real
impact on the progress rate of some regions for the programming period 2007-2013
(Barbier, 2002).
Secondly, the lack of administrative absorption capacities of the Central government has
been enumerated as another explanatory variable for explaining the difficulties of
regions in consuming the ESF. So, it seemed that the development of regional capacities
helped to overcome the delays created by the central level and the legislative vagueness
LSE |Section 4: Empirical findings and discussion – 29
coming from published instructions, aimed at helping the regions, but which in fact,
made the audit trail even more complicated to follow. The interpersonal relationships
needed for the DIRECCTE to obtain information quickly have an impact on the ability of
regions to better and faster understand the national requirements and to use the ESF
efficiently. The preparation of the launch of project applications in the regions has been
hindered by the fact that the DGEFP have prepared the guides for candidates with delay.
Once again, the legislative modifications from the Central government were not always
quickly updated in the documents or in the guides, creating a posteriori difficulties for
the regions that were not able to correctly translate the legislation. Thus, the lack of
absorption capacities at the Central level revealed the lack of regional absorption
capacities.
Others factor, untied from this paper’s main hypothesis in terms of regional absorption
capacities, such as the financial and economic crisis has been discussed in the sections
above. However, two factors explaining the lateness of the regional spending rate have
not yet been explored. The first that can explain the situation of Midi-Pyrenees is the fact
that the DIRECCTE and the IBs did not set the operations’ data in the monitoring
software, Presage (Appendix 12). So, in reality, this region spent a lot more ESF, but it
did not update their rate through the software. Apparently, the fact that they would be
subjected to the dynamic programming was not an issue (Section 4.3), because it
decreased the allocated amount of ESF for the region. Secondly, this dissertation made
the choice not to study the capacity of absorption on the side of the demand, the
beneficiaries and their ability to follow the European and national requirements to use
the ESF. In the interviews, this factor was pointed out but not studied, but represents an
interesting area for further research.
LSE |Section 5: Conclusion 30
Section 5: Conclusion
5.1. Summary
This paper aimed to analyse the reasons explaining the regional variations of ESF
scheduled rate in the programming period 2007-2013, in France. This research was
made analysing interviews from the programmes managers of the ESF, disconcerted in
regions or decentralized in regional local authorities. The initial hypothesis is that the
regional variations in absorption capacities are explanatory variables to understand the
differences in the regional scheduled rate of ESF. Widely used but rarely conceptualized
in practice, the regional absorption capacity was made operational through the ESF
system of implementation in France. Three types of absorption capacity were identified:
the administrative, institutional and financial absorption capacities.
The analysis concludes that, indeed, the differences in regional absorption capacities
are, in part, explaining the regional variation of the ESF scheduled rate. In the regional
administrative absorption capacity, the impact of a high turnover, the lack of visibility in
the responsibility and tasks, the lack of capacity of providing training to the staff and the
low number of staff appear to be important factors for explaining the situation of the
lagging regions in ESF spending. The delays in the management and implementation
processes, a high turnover and the lack of training are attributed to the lack of
administrative and institutional capacities of the Central Government. Therefore, the
number of IBs in charge of delegated tasks and responsibilities is an important factor
that can either enhance or curb the ESF scheduled rate in a region. Concerning the
regional institutional absorption capacity, the lack of co-ordination between the
departments of the DIRECCTE or the IB is an important weakness that impact the ESF
scheduled rate. Even more, the presence of interpersonal relationships between the
DIRECCTE and the DGEFP reveals to be an important explicative variable for the more
advanced regions in terms of ESF spending. Therefore, the financial absorption capacity
appears to be a not convincing variable for this programming period, in the French case.
However, every actor raised doubts about the next programming period 2014-2020.
LSE |Section 5: Conclusion 31
5.2. Policy Implications
The policy implications are two-fold. First, this analysis questions the next Territorial
Reform that the French Central Government should launched in 2013. The regional and
local authorities would become the new Delegated Managing Authorities in 2014, with a
potential decentralisation of money and staff. However, interviewees asked about the
training, experiences and knowledge that the DIRECCTE have been able to accumulate
during the two previous programming periods. How does this change will be managed?
How could be used the notion of “knowledge-based society” (Cace et al., 2009) in this
context? The transfer of staff should be ensured from the DIRECCTE to the future DMA,
the current IBs. Methodological guidelines should be diffused and transferred through
structures to permit the enhancement of knowledge about the ESF requirements.
Secondly, the orientation that the European Commission took concerning the coming
programming period, that is a bigger emphasis on the NMS for the ESF, can be
questioned. Indeed, the knowledge transfer on the obstacles that both Central
government and local authorities face, should be developed by the Old Member States to
the NMS. Simplifying the financial control process is a requirement, its cost judged
unproductive. In France, the administrative cost for building an operation is around
€2000, which is a strong dissuasion for an important number of actors. The ESF led to a
significant cost, which is in part absorbed by the Axis 5 of the ESF. This fact echoes the
actual economic situation of the NMS.
5.3. Limitations
This study was based on qualitative interviews and remains dependant on the actors
interviewed. The relationships between the Central Government and the DIRECCTE
appear to be complicated and the answers during the interviews sometimes moderated.
Questioning more than two people in each regions would have been difficult in due time.
Methodological choices were made, but the side of the demand would be an important
explicative factor, for highlighting news factors of the regional variations in ESF
spending. Having the analysis of beneficiaries and candidates in each region would have
been interesting as well. Therefore, this dissertation strictly focuses on the French
LSE |Section 5: Conclusion 32
context, which may not always represent the current situation in others Old Member
States.
5.4. Future Research
This dissertation raised a lack in the academic literature concerning both the Old
Member States and their absorption capacities in the implementation process of a SFs
policy cycle. It questions the will of the European Union to decentralize policies and
their implementations. In the case of the ESF, the decentralisation system brings some
issues, especially concerning the capacity of structures and territories to respond to the
technicality and the requirements coming from the European Commission and the
National governments. This fact needs to be discussed in further details, in the context of
Old Member States. Therefore, if it appears that implementing and managing the ESF
regionally is a difficult task, but it also seem that in some contexts, the ESF is perceived
as a toxic fund, weakening the regional structure, economically and socially. This
phenomenon should also be analysed in greater depth.
LSE |Bibliography 33
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LSE |Appendix 37
Regional
managing
authorities
(Préfectures de
région)
Intermediate
bodies
Managing authority
(DGEFP: national
government)
ESF actors’ overview
Beneficiaries
DIRECCTE
Intermediate
bodies
Appendix
Appendix 1: the French ESF system of implementation
LSE |Appendix 38
Appendix 2: The allocation of ESF amounts between axes
20%
28%39%
9%
4%
ESF funding per axis for the regional "competitiveness and
employment" French Operational Programme (2007-2013)
Axis 1: Adaptation of workers and enterprises to economic change
Axis 2: Improving access to employment for job seekers
Axis 3: Social inclusion and combating discrimination
Axis 4: Development of human resources, innovation and transnational co-operation
Axis 5: Technical assistance
LSE |Appendix 39
Appendix 3: Evolution of the ESF regional spending (from 01/12/2009 to 01/07/2012)
01/12/2009 01/06/2010 01/12/2010 01/06/2011 01/12/2011 01/03/2012 01/06/2012 01/07/2012
Alsace 4 10 5 3 5 6 10 10
Aquitaine 3 13 19 17 18 18 19 9
Auvergne 17 4 18 19 21 16 18 12
Basse Normandie 8 16 9 20 15 17 16 13
Bourgogne 18 8 7 12 9 12 11 15
Bretagne 5 9 4 5 4 8 12 14
Centre 14 18 10 15 17 19 14 17
Champagne-Ardenne 11 20 20 21 19 20 22 22
Corse 21 15 21 22 14 22 4 7
Franche-Compté 13 14 14 18 22 11 9 11
Haute-Normandie 7 1 1 2 1 2 1 4
Ile-de-France 15 17 3 9 10 15 20 20
Languedoc-Roussillon 6 11 15 8 6 5 5 6
Limousin 2 3 11 7 7 7 7 8
Lorraine 20 22 22 14 20 21 21 21
Midi-Pyrénées 12 12 13 13 12 14 17 19
Nord-Pas de Calais 10 5 16 6 11 3 6 3
PACA 19 21 17 11 8 13 15 18
Pays-de-la Loire 22 19 6 4 3 1 3 1
Picardie 16 6 8 10 16 9 8 2
Poitou-Charentes 9 7 12 16 13 10 13 16
Rhône-Alpes 1 2 2 1 2 4 2 5
LSE |Appendix 40
Appendix 4: List of interviewees
Most of the interviews have been recorded. They are available upon request. Examples
of interviews transcripts are, as well, available upon request. The anonymity of each
interviewee has been ensured.
Claude RACK, Director of the Department “ESF Evaluation” – DGEFP or the Directorate
for Employment and Vocational Training –
Interviewed the 03/05/2012
Cléo MUZARD, Director of the Audit and Evaluation Pole of ARAMIS - European Funds
Management Consultancy firm -
Interviewed the 12/05/2012
Jean-Fabrice ALFANDARI, Director of the ESF Department in DIRECCTE Pays de la Loire-
Interviewed the 12/06/2012
Christophe BROUSSE, Responsible of the Europe Department in Conseil Général 53
(Mayenne) –
Interviewed the 05/07/2012
Jean-Louis ANTOMORI, Director of the ESF Department in DIRECCTE Midi-Pyrénées –
Interviewed the 18/06/2012
Marine LAHITTE-LOUSTEAU, Director of the ESF Department in DIRECCTE Corse –
Interviewed the 16/07/2012
Nicole CASTENINI, Project Manager in the European Policies Department in Collectivité
Territoriale de Corse –
Interviewed the 19/07/2012
François MERLE, Director of the ESF Department in DIRECCTE Lorraine –
Interviewed the 02/07/2012
LSE |Appendix 41
Laurent MONCELLE, Project Manager of the European Policies Department in Conseil
Régional de Lorraine –
Interviewed the 25/07/2012
Christelle FAVERGEON, Director of the ESF Department in DIRECCTE Champagne-
Ardennes –
Interviewed the 16/07/2012
Sylvie DUBO, Director of the ESF Department in DIRECCTE Aquitaine –
Interviewed the 03/07/2012
François PINEL, Director of the ESF Department in DIRECCTE Auvergne –
Interviewed the 04/07/2012
Delphine LEMAIRE, Director of the ESF Department in DIRECCTE Picardie –
Interviewed the 06/07/2012
Pascal Lebeau, Project Manager of the European Department in Conseil Régional de
Picardie –
Interviewed the 27/06/2012
Pascal VANHAELEN, Director of the ESF Department in DIRECCTE Centre –
Interviewed the 12/07/2012
Jean-Luc MARTY, Project Manager of the European Department in Conseil Régional du
Centre –
Interviewed the 22/06/2012
Jean-Marie BLANC, Project Manager of the European Department in Conseil Régional
d’Aquitaine –
Interviewed the 13/07/2012
LSE |Appendix 42
Philippe PERIES, Project Manager of the European Department in Conseil Régional de
Midi-Pyrénées –
Interviewed the 14/07/2012
LSE |Appendix 43
Appendix 5: Interview Guideline
 Could you briefly describe the team working in the ESF department/service of
your structure (DIRECCTE or IB)?
 Number of staff,
 Competences,
 Turnover,
 Responsibilities and tasks,
 Training provided to face the turnover.
 What are the major skills and competencies that your team needed to developed
and maintained for managing the ESF properly?
 Do you think that the number of staff in your service is sufficient for managing
properly the ESF?
 How would you explain the turnover? Which kind of strategies did or do you
develop for facing the turnover?
 Could you tell me how you manage to obtain an expertise on European and
national legislation concerning the ESF?
 Could you describe me the relationships your service maintain with the others
services within your structure?
 Frequency of contacts?
 Which purposes?
 Co-ordination with the others services?
 Isolation?
 Evolution?
 Could you describe me the relationships maintained with the DGEFP (in the case
of a DIRECCTE interviewed) or with the DIRECCTE (in the case of an IB
interviewed)?
 Frequency and purposes.
 Would you say that the ESF OP is in coherence with your region’s needs? Do you
think that the delay in your ESF scheduled rate can be explained by a lack of
coherence, and thus a lack of demand?
 Would you say that the allocation between axes negotiated in 2007 was relevant
with the territorial needs?
LSE |Appendix 44
 How often does it happen to reject projects of ESF candidates?
 How often does it happen that you have to de-program operations because of
incoherence in funding, in objectives or in the structure’s capacity to manage the
project or operation?
 Could you tell me the general delay in approving operations in your structure?
Could you tell me the factors of such a delay?
 (In the case of an IB) How long did it take to get your DSGC approved? (DSGC is
the document that describes all the management system defined in the IB and has
to be approved by the DIRECCTE, and then by the CICC)?
 Did you develop your own methodological guidelines, presenting all the steps of
the audit trail?
 In your opinion, what are the factors of delay in the ESF scheduled rate in your
region?
OR
 In your opinion, what are the factors that permit you to have an advanced ESF
scheduled rate in your region?
 Have you been subjected to CQG (financial and procedural audit control)?
 If yes, what were the conclusions?
 Following this CQG, did you develop corrective financial actions plans during the
programming period to adjust to CQG conclusions and recommendations and
others financial controls? Did further controls or external service provider have
validated these plans?
 Does your service know about the CQG’s requirements? Does someone in the
structure manage to do CQG training on your own operations? Is it a common
practice in your structure?
 Have you been subjected to the decommitment rule?
 If yes, when? What was its impact?
 Have you been subjected to the dynamic programming rule?
 If yes, when? What was its impact?
 Could you describe briefly the functioning regional governance in the social
development policy? Who are the main actors? Who are the main backers?
LSE |Appendix 45
 Are they part of the ESF implementation process? Have they been sensitized to
the ESF, its goals and principles?
 Could you tell me the importance of the financing actors withdrawal and their
commitment to the initial projects approval?
 Did and do you manage to find new backers to co-finance the ESF during the
current programming period?
 What is the impact of the financial crisis, in your region on the ESF scheduled
rate? Does it limit the number of backers? The number of potential
beneficiaries? The regional mobilisation for the social development policy?
 Could you tell me the general delay in paying back your beneficiaries in your
region? Could you tell me the factors of such a delay? Do you think that this delay
has an impact on the potential beneficiaries?
 Would you say that in your region, the ESF is a toxic fund? Why?
 Could you choose the more relevant option concerning the role played by the ESF
in your region?
 « Robin Hood » (help the poorest persons)
“"The icing on the cake" (finance the structures with the best Financial
health)
 “Private club” (restrictive interpretation of the OP)
« Open window » programme (large interpretation of the OP)
 « Laboratory » (to finance just innovative actions)
« Production line » (to finance common-law actions)
 “One shot treatment” (punctual intervention)
« Chronic » (recurring aid)
LSE |Appendix 46
Appendix 6: Aquitaine
TYPES OF
ABSORPTION
CAPACITIES
STEPS IN
THE ESF
POLICY
CYCLE
INDICATORS
ADMINISTRATIVEABSORPTIONCAPACITIES
Management Staff number
Seniority of the staff and
turnover
Clarity in the responsibility, tasks and roles
Training and matching between initial competences
and recruitment needs
Less than 5
most of the
programming
period
Important turnover: Staff
turnovers most of the time every
year
Absent or starting: Staff roles and responsibilities unclear,
changeable or vaguely defined since the beginning of the
programming period.
Absence: On-the-job training and no or few matching
between the initial competences and the job’s
requirements
Between 5
and 10 most
of the
programming
period
Medium turnover: every 2-3 years
Developing: Staff roles and tasks have been defined
throughout the programming period and are still being
clarified.
Starting or developing: punctual training support by the
DMA itself or by the MA / Medium correspondence
between the needs and the initial competences
More than 10
most of the
programming
period
Absence or very few of turnover:
nearly the same staff since the
beginning of the programming
period
Strengthened: staff responsibilities well defined since the
beginning of the programming period.
Consolidated: professional training supported internally
or by the MA. Or initial competences matching the job’s
needs.
Programming
Analytical skills Process skills
Delays in operations and IB’s delegations
tasks approval (DSGC)
Guidelines and methodological support
Absence of coherence
between the programmed
operations, the national ESF
OP and the territorial needs
Important number of projects and operations
that had to be de-programmed because of
incoherence in funding, in objectives or in the
structure’s capacity to manage the project or
operation.
Approval of operations strongly delayed
(more than 6 months)
Absence of methodological documents for the
programming process in the DMA or in the IB,
presenting all the steps of the audit trail and
that have been controlled and validated.
Approval of IB’s delegation tasks approval
strongly delayed (more than 2 years)
Developing coherence
between the programmed
operations, the national ESF
OP and the territorial needs
Few projects and operations that had to be de-
programmed because of incoherence in
funding, in objectives or in the structure’s
capacity to manage the project or operation.
Approval of operations delayed between the
submission of the application and below 6
months
Late developments of methodological
documents for the programming process in the
DMA or in the IB, presenting all the steps of the
audit trail and that have been controlled and
validated.
Approval of IB’s delegation tasks approval
delayed (between 1 and 2 years)
Coherence between the
programmed operations,
the national ESF OP and the
territorial needs
Absence of projects and operations that had to
be de-programmed because of incoherence in
funding, in objectives or in the structure’s
capacity to manage the project or operation.
Approval of operations weakly delayed
Use of methodological documents for the
programming process in the DMA or in the IB,
presenting all the steps of the audit trail and
that have been controlled and validated.DSGC approved one year after its submission
LSE |Appendix 47
ADMINISTRATIVEABSORPTIONCAPACITIES
Implementation
Experience of the main IB staff Clarity in the responsibility, tasks and roles
Impact of the main IB (Regional Council) in
the spending progress rate
No or few matching between the initial competences and the
job’s requirements – No initial experience in the management
of SFs
Absent or starting: IB Staff roles and responsibilities unclear,
changeable or vaguely defined since the beginning of the
programming period.
Negative impact: the spending impact of the main
IB does decrease the regional spending
Medium correspondence between the needs and the initial
competences – Medium experience of the IB staff in the
management of the SFs.
Developing: IB Staff roles and tasks have been defined
throughout the programming period and are still being
clarified.
Null impact: the spending impact of the main IB
does not increase or decrease the regional
spending
Important experience of the main IB staff in the management
of the SFs.
Strengthened: staff responsibilities well defined since the
beginning of the programming period.
Positive impact: the spending of the main IB
increases the regional spending
Financialmanagementandcontrol
Adequate staffing for all financial management and
control functions
Auditing training available for civil servants
Established practice in dealing with financial
irregularities
Important weaknesses in the financial management and
control functions staff: lack of experience, turnover, roles and
responsibilities unclear
No experience in CQG: staff does not apprehend
correctly the audit requirements and does not
have access to training
Has not developed corrective financial actions plans during
the programming period to adjust to CQG conclusion, even if
these latter recommended doing so.
Few weaknesses in the financial management and control
functions staff: lack of experience, medium turnover, roles
and responsibilities still being clarified
A little experience in CQG: staff does not
apprehend totally the audit requirements and
has or had the opportunity to experiment CQG
Has developed corrective financial actions plans during the
programming period to adjust to CQG conclusions and
recommendations and others financial controls, which have
not been validated by further controls.
Lack of weaknesses in the financial management and control
functions staff
A strong experience in CQG: staff doing CQG
internally in order to be prepared for external
CQG and knows the audit trail requirements.
Has developed corrective financial actions plans during the
programming period to adjust to CQG conclusions and
recommendations and others financial controls, which have
been validated by further controls.
INSTITUTIONAL
ABSORPTION
CAPACITIES
Regionalcontext
Regional partners that are already present in existing economic development
policy, especially in the social development policy
Regional partners interested in being either a ESF financial partnership or either
a ESF beneficiaries.
Lack or absence of inter-mobilisation at the regional scale between the regional and
locals actors, in the social development policy
Lack or absence of interest at the regional scale of regional partners to be part of the
ESF policy.
Developing or modest inter-mobilisation at the regional scale between the regional and
locals actors, in the social development policy
Developing or modest interest at the regional scale of regional partners to be part of the
ESF policy
Sophisticated inter-mobilisation at the regional scale between the regional and locals
actors, in the social development policy
Important interest of regional partners to be part of the ESF policy
LSE |Appendix 48
INSTITUTIONALABSORPTION
CAPACITIES
Managementandimplementation
Cooperation and coordination
among the different departments
within the DMA
Cooperation and coordination among the
different departments within the main IB
Cooperation and coordination of the DMA
with the MA
Cooperation and coordination of
the main IB with the DMA
Poor intra-staff and intra-
departments communications
Poor intra-staff and intra-departments
communications
Poor cooperation from the MA to the DMA:
confrontational, difficult or absence of
professional relationships
Poor cooperation from the DMA to
the IB: confrontational, difficult or
absence of professional relationships
Developing intra-staff and intra
communications
Developing intra-staff and intra communications
Modest or developing relationships and support
coming from the MA to the DMA
Modest or developing relationships
and support coming from the DMA to
the IB
Consolidated intra-staff and intra
communications
Consolidated intra-staff and intra
communications
Consolidated relationships and support from
the MA to the DMA
Consolidated relationships and
support from the DMA to the IB
FINANCIALABSORPTIONCAPACITIES
Actorsandevolution
Evolution of the regular financing
partnerships throughout the
programming period
Withdrawal of financing actors and
commitment to the initial projects or
operations approval
The potential Impact of the financial crisis in the ESF co-financing principle
Decrease in the number of financing
actors during the programming
period
High level of withdrawals of financing
partnerships, having a high impact on the ESF
scheduled rate
High impact of the financial crisis, limiting the number of financing actors the number of
potential beneficiaries, the conditions of public management and implementation and
the regional mobilisation for the social development policy
Maintaining in the number of
financing actors during the
programming period
Modest level of withdrawals of financing
partnerships, having a low impact on the ESF
scheduled rate
Low impact of the financial crisis, limiting moderately the number of financing actors,
the number of potential beneficiaries, the conditions of public management and
implementation and the regional mobilisation for the social development policy
Increase in the number of financing
actors during the programming
period
Absence of withdrawals of financing
partnerships, having no impact on the ESF
scheduled rate
Absence of impact of the financial crisis on the number of financing actors, the number
of potential beneficiaries, the conditions of public management and implementation and
the regional mobilisation for the social development policy
TheregionalimpactofthefinancialEU
andnationalregulations
The role of the automatic decommitment rule
in the ESF financial context of the region
The role of the dynamic programming in the financial
context of a region
Dividend payments delays and impacts on the total
scheduled rate in the region
The region has been subjected to the automatic
decomitment rule and this had a strong impact in
the ESF management and implementation
processes
The region has been subjected to the dynamic programming
process and this had a strong impact in the ESF management
and implementation processes
Dividend payments more than 2 years after the closing of the
operation, impacting the total scheduled rate in the region
The region has been subjected to the automatic
decomitment rule and this had a modest impact in
the ESF management and implementation
processes
The region has been subjected to the dynamic programming
process and this had a modest impact in the ESF
management and implementation processes
Dividend payments between 1 to 2 years after the closing of
the operation, impacting the total scheduled rate in the region
The region had or had not been subjected to the
automatic decommitment rule and this had a no
impact in the ESF management and
implementation processes
The region had or had not been subjected to the dynamic
programming process and this had a no impact in the ESF
management and implementation processes
Dividend payments less than 1 year after the closing of the
operation, not impacting the total scheduled rate in the
region
Laure Piquemal - Dissertation - MSc LED
Laure Piquemal - Dissertation - MSc LED
Laure Piquemal - Dissertation - MSc LED
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Laure Piquemal - Dissertation - MSc LED

  • 1. The London School of Economics and Political Science 1 French regional variations in the spending progress rate of the European Social Fund during the programming period 2007-2013: a regional difference of absorption capacities? Or how to make the concept of absorption capacity operational in the French context of ESF system management? Dissertation submitted for MSc Local Economic Development Candidate number 52452 Word count: 9934 August, 2012
  • 2. LSE |Abstract 2 Abstract This paper aims to identify the drivers explaining the regional variations in European Social Funds spending in France for the programming period 2007-2013. The hypothesis underlined in the research states that the administrative, institutional and financial absorption capacities of Metropolitan French regions are explanatory variables. The analysis of the empirical evidence shows that regional absorption capacities can, in part, explain these regional variations in ESF spending. Furthermore, the absorption capacities seem to be a requirement for regions to adapt themselves to European and national constraints and to subdue the lack of absorption capacities of the Central government. This paper also argues that the regional structures can even be weakened, introducing a potential “point of saturation” (Cace et al., 2009) of ESF absorption for the regions lacking in absorption capacities. Therefore, the evidences, presented here, demonstrates that the conditions aiming to promote regional competitiveness and employment is not, in the case of France, successfully tackled, reconsidering, in conclusion, the priorities defined for the next programming period 2014-2020.
  • 3. LSE |Glossary 3 Glossary CQG: Contrôle Qualité Gestion DGEFP: Délégation générale à l’emploi et à la formation professionnelle ESF: European Social Fund DIRECCTE: Direction Régionale des Entreprises, de la Concurrence, de la Consommation, du Travail et de l’Emploi ERDF: European Regional Development Fund IB: Intermediate Bodies OP: Operational Programme CICC: Commission interministérielle de coordination des contrôles SFs: Structural Funds NMS: New Member States DSGC: Descriptif de Système de Gestion et de contrôle RCE: Regional Competitiveness and Employment DMA: Delegated Managing Authority MA: Managing Authority
  • 4. LSE |Table of figures 4 Table of figures Figure 1: The regional variations in the ESF spending in July 2012 – Figure 2: The four types of regions, in terms of ESF scheduled rate - Figure 3: Chosen sample of regions interviewed according to the methodology - Figure 4: The NEI’s framework, type of absorption capacities and definitions - Figure 5: Conceptual framework and explanatory variables – Support for interviews sequences and analysis -
  • 5. LSE |Table of contents 5 Table of contents Abstract ________________________________________________________________________________________________________2 Glossary ________________________________________________________________________________________________________3 Table of figures _______________________________________________________________________________________________4 Table of contents _____________________________________________________________________________________________5 SECTION 1: INTRODUCTION ________________________________________________________________________________6 1.1. The ESF system of implementation in France______________________________________________________6 1.2. Regional variations in the ESF progress rate in the programming period: a difference of regional absorption capacities?___________________________________________________________________________8 1.3. The research question and its double interest ____________________________________________________9 1.4. Outline of the research_______________________________________________________________________________ 10 SECTION 2: THE FOUR STEPS OF THE METHODOLOGICAL FRAMEWORK________________________ 11 2.1. The methodological framework____________________________________________________________________ 11 2.2. Overview of the regional spending progress rate ______________________________________________ 12 2.3. The method employed: qualitative semi-structured interviews and sample _____________ 13 SECTION 3 – THE CONCEPTUAL FRAMEWORK OR HOW TO MAKE OPERATIONAL THE CONCEPT OF “ABSORPTION CAPACITY” IN THE FRENCH AND ESF CONTEXT -__________________ 14 3.1. Academic, reports and evaluations literature review -________________________________________ 14 3.2. Absorption capacity and the ESF: definition, theoretical choices and hypothesis - ______ 16 3.3. Explanatory variables________________________________________________________________________________ 18 SECTION 4: EMPIRICAL FINDINGS AND DISCUSSION –_______________________________________________ 20 4.1. Assessing the degree of administrative absorption capacity ________________________________ 20 4.2. Assessing the degree of institutional absorption capacity ___________________________________ 24 4.3. Assessing the degree of financial absorption capacity ________________________________________ 26 4.4. Alternatives hypothesis ______________________________________________________________________________ 28 SECTION 5: CONCLUSION__________________________________________________________________________________ 30 5.1. Summary________________________________________________________________________________________________ 30 5.2. Policy Implications____________________________________________________________________________________ 31 5.3. Limitations _____________________________________________________________________________________________ 31 5.4. Future Research _______________________________________________________________________________________ 32 Bibliography_________________________________________________________________________________________________ 33 Appendix _____________________________________________________________________________________________________ 37
  • 6. LSE |Table of contents 6 Section 1: Introduction The European Union cohesion policy aims to reduce reducing differences in living standards between European Union regions, and also to promote growth and jobs for all of these regions (Noetzel, 1997). To reach these goals, the EU set up financial instruments – the Structural Funds - based on an overall grant of €308 billion for the programming period 2007/2013. The economic and social cohesion European policy represents one third of the total EU budget and is divided through three main objectives (Zaman and Georgescu, 2009). The objective “Convergence” concentrates 82% of the Cohesion policy total amount and aspires to accelerate the catching-up of the lagging regions, in term of economic development. Under this objective, the poorest Member States and regions in terms of GDP per capita (at or below 75% of the Community average) are eligible. Both the European Regional Development Fund (ERDF) and the European Social Fund (ESF) are the two financial instruments used to develop this objective. The academic literature on the Convergence objective is considerable, especially because of the large financial amount of money dedicated to this objective (Kalman, 2002). The objective “Regional Competitiveness and Employment” (RCE) is the second objective and uses 16% of the Cohesion policy total amount of money. Once more, both ESF and ERDF are financing this objective, the ERDF promoting innovation and territory attractiveness, while the ESF supports employment, training and professional insertion. In France, the “RCE” objective beneficiates to the entire French territory, with the exception of the four French overseas departments, which are eligible to the Convergence objective. The third objective, the “European Territorial Cooperation” objective, financed only by the ERDF, is available for cross-border, transnational and interregional cooperation, using only 2.5% of the total €308 billion. 1.1. The ESF system of implementation in France The ESF set by the EU Council and Parliament regulation no. 1081/2006 and more specifically within the Objective “RCE”, aspires to reinforce the competitiveness and employment in the regions, which are not covered by the objective “Convergence”, in anticipating economic and social change. It intends to favour a qualitative and
  • 7. LSE |Table of contents 7 quantitative increase in human capital investments, to foster innovative actions in the social field and entrepreneurship, to encourage the idea of local and sustainable development and to enhance the accessibility, the adaptability of workers and businesses in combating discrimination through the development of inclusive job markets (European Commission (b), 2006). The European Commission decided that every Member State has to manage and regulate its own ESF system of implementation. This system may vary depending on institutional factors (Cace et al, 2009), such as the degree of centralisation, the organisation of the political system and the common inter-relationships between different actors. A Member state (or a Member State in agreement with the managing authority, the MA) may decide, in agreement with the Commission, to entrust to appropriate intermediaries a part of the implementation and management processes. These intermediaries are called intermediate bodies (IB). An IB is an organisation that executes some tasks delegated by the MA or the Delegated Managing Authority (DMA), such as local authorities, national organisations and non-profit making organisations and the third- sector (Lion et al., 2006). In France, the programme is managed by the Central State – more specifically, the DGEFP (Délégation générale à l’emploi et à la formation professionnelle), which is the MA – and implemented under the “RCE” national Operational Programme (OP), describing the whole implementation system (Appendix 1). It is a strategic document prepared by the DGEFP to ensure that the priority areas for ESF are in accordance with the European Community strategy. Almost 85% of the total ESF amount in France is made available to the regional Prefects in order to support local projects as closely as possible to the local needs. The regional offices of the Central State in charge of the implementation and the management of the ESF are called the DIRECCTE (Direction Régionale des Entreprises, de la Concurrence, de la Consommation, du Travail et de l’Emploi) and represent the DMA. The DMA select the local beneficiaries (according to the national OP), such as local businesses, non-profit-making organisations and professional training structures. The DIRECCTE also picks up IBs in each region. There are between 300 and 350 IBs in France, which represents more than half of the IBs in Europe (Cour des Comptes, 2012, p.5). Finally, 15% of the total grant is implemented and managed directly by the DGEFP.
  • 8. LSE |Table of contents 8 Nearly €5 billion has to be spent during the programming period 2007-2013, through five main axes that support a wide range of actions (National ESF OP, 2007; Appendix 2). 1.2. Regional variations in the ESF progress rate in the programming period: a difference of regional absorption capacities? “Institutional and administrative capacity” concerns the human capital in the public sector as well as the efficiency and success of matching the goals of a given public policy with its results (Emerson et al., 2006). Local, national and supra-national authorities have committed to develop these capacities in order to subdue the common critiques relating to traditional public services and their “perceived distance from society as a whole” (European Commission, 2006 (a)). The development of institutional capacity as a concept is mainly linked to the pre-accession process of the EU New Member States (NMS). In this context, the strengthening of institutional and administrative capacity was identified as one of the main requirements needed for reaching a smooth convergence process. Through, the Treaty of Lisbon (European Commission, 2007), the role of public services has been identified as one of the key pillars for achieving the objectives of the Cohesion policy. However, in European legislation, institutional capacity building seems to be linked to the “Convergence” objective, as if regions eligible to the “RCE” Objective were endowed enough with regional institutional and administrative capacities to absorb the fund and be competitive. Still, many authors (Horvat, 2004, 2005; Brown et al., 1995) have pointed out that the ESF has, in some cases, weakened the regional and local structures and didn’t promote the expected regional economic development (Cace et al., 2009). In this literature, it has been argued that some territories do not have the sufficient capacities to use the ESF in an efficient way. This idea is also revealed by the regional differences in ESF spending. While some regions have been able to be in the leading pack in the ESF progress rate during the whole programming period, some regions still struggle to consume the fund, making them barely competitive at the national scale, but too developed to be part of the “Convergence” objective.
  • 9. LSE |Table of contents 9 Figure 1: the regional variations in the ESF spending in July 2012 The situation in July 2012 in the progress rate of each region is described in figure 1. Within a discretization framework based on the mean and the standard deviation, important variations between French regions can be pointed out. However, this current picture does not tell the reality. It is also essential to take the evolution of the progress rate since 2007 into account. This will be detailed in Section 2 presenting the methodology used for the research. Thus, how can the regional variations in the spending progress rate be explained? Which factors can throw light on these differences? Can they only be explained by “accidents and exceptional events1”, without taking into account any regional logic based on the interplay of actors and of specific economic, social, institutional and political characteristics? Or can the concept of absorption capacity be part of the answer? 1.3. The research question and its double interest Implementation processes can be studied in two different ways. The first refers to the quantitative implementation and the study of the efficient spending of resources allocated within a period of time. The second way is qualitative and related to the evaluation of how resources are invested in relevant and eligible projects according to objectives (Milio, 2007, p.430). This dissertation focuses on the first aspect of implementation by trying to find answers to the question “why do some French regions consume less ESF than others”? This question has a double interest. First of all, this study aims to fill the lack of literature related to the ESF. While most studies and academic 1 Interview realised the 4th of May with the Director of the Department "ESF Evaluation"
  • 10. LSE |Table of contents 10 articles question the relevant regional allocation of Structural Funds (Rodriguez-Posé and Fratesi, 2004); Bouvet and Dall’Erba, 2010), few of them examine the regional spending of ESF during the programming period and the difficulties of the implementation processes faced by actors. The main hypothesis tested here is that the allocated amount of money that has to be spent in a time span is determined, among others factors, on the regional absorption capacity to spend it. The system of implementation – decentralised, centralised, and disconcerted (Cace et al., 2009) - chosen by the Central government, can impact the absorption capacity of actors, and thus the efficiency of ESF spending. While France cumulates an important number of IBs, the expertise to manage ESF in smaller structures is weak. Moreover, most of the literature places emphasis on the NMS (Sumpikova et al., 2004; Zaman and Cristea, 2011) and on the objective “Convergence”, as if the “RCE” objective relating to the capacity of regions and localities to be competitive is taken for granted. Secondly, this study aims to put the next programming period 2014 – 2020 and the new EU regional policy framework into perspective, which concentrates even more the ESF in NMS. The current difficulties of French regions to spend ESF, revealing the complexity and the constraints of efficiently using the ESF within the European and national regulations, may give a clearer and more accurate idea of the future challenges related to the spending of SFs. 1.4. Outline of the research The remainder of this dissertation is organised as follows: section two provides an overview on the methodological choices undertaken in this research. The third section discusses, in the context of the existing academic literature, as well as of the reports and evaluations of EU SFs, the reasons underlying the importance of the research’s question. The theoretical framework is detailed and the concept of “absorption capacity” operationalized, presenting the dataset employed in this paper. Section four analyses the results of the interviews and synthesises the findings. In section five, the conclusion sets out the limits and constraints of this research and then explores some policy implications. It finally suggests further directions for forthcoming research.
  • 11. LSE |Section 2: The four steps of the methodological framework 11 Section 2: The four steps of the methodological framework The previous section introduced the importance of questioning the variations in regional spending progress rate of the ESF in the French context. Regional absorption capacities were argued to potentially be an explanation of these. This second section outlines the methodology used to confirm or invalidate the hypothesis and identify alternative hypotheses that detect other limits or obstacles in the regional ESF spending. 2.1. The methodological framework The methodology undertaken in this dissertation can be divided into four major steps. Firstly, after performing a literature review on the EU regional policy and on the concept of absorption capacity, I executed desktop research on the necessary capacities for efficiently implementing the ESF according to the French system of implementation. I essentially used the guides elaborated by the European Commission and by the DGEFP for the different actors, such as the potential candidate, the beneficiary, the project managers and the programme manager (L’Europe s’engage en France, 2008 (b)). I also used copies of Contrôles Qualité Gestion (CQG) that highlight systemic and common errors. The aim of this second step is to make the concept of absorptive capacity operational considering the ESF and the French context. The third step undertaken was mainly based on published statistics from the DATAR (L’Europe s’engage en France, 2008(a)), presenting the French spending progress, from the beginning of the programming period in 2007 to July 2012. Two main methodological choices were made in this third step. In the monthly- published statistics, two types of data could have been considered: the scheduled rate (“taux de programmation”) and the certified rate (“taux de dépenses certifiés”). The first rate refers to the scheduled operations in progress while the second can be defined by the fenced operations, in which the audit trail and the operation spending have been controlled by every authority – from the IB itself, to the DGEFP, the DIRECCTE, the CICC (Commission interministérielle de coordination des contrôles), through the European Commission. The operation becomes certified when it is fenced, controlled and when the European Commission has given its agreement. This payment process can be very long and the payment is rarely carried out in the year that the operation closes and
  • 12. LSE |Section 2: The four steps of the methodological framework 12 sometimes exceeds two years after closure. In this context, the scheduled rate has been chosen as the best variable to give an insight on the spending that the region may be able to reach during the programming period. The second choice made in this dissertation methodology concerns the dynamic programming. Between 2009 and 2010, funds have been transferred from priority axis 2, 3 and 4 to axis 1, for a greater adaptability. This shift of funds was enabled by the adoption of a dynamic programming mechanism in 2009 (“le mécanisme de programmation dynamique des crédits”), defined by the objective of reallocating credits that were not programmed in the beginning of the period to the most needed interventions and to the most dynamic regions in terms of spending. So, it was decided to calculate the scheduled progress rate of each region without the dynamic programming mechanism, because the latter tends to skew the spending progress rate of regions that spend the least. 2.2. Overview of the regional spending progress rate If in July 2012, the data presented a global picture, showing those regions that are lagging and those more advanced regions in terms of ESF spending, it was also essential to take into consideration the evolution of the spending progress rate. Indeed, some regions have exercised an important progress in one or few months, while they were classified at the end of the ranking, and inversely. Group 1 Group 2 Group 3 Group 4 Rhône-Alpes Midi-Pyrénées Poitou-Charentes Picardie Pays de la Loire Lorraine Alsace Corse Haute-Normandie Ile-de-France Bretagne Aquitaine Nord-Pas de Calais Champagne-Ardennes Franche-Comté Languedoc-Roussillon Basse-Normandie Limousin Auvergne Bourgogne Centre PACA Figure 2: The four types of regions, in terms of ESF scheduled rate.
  • 13. LSE |Section 2: The four steps of the methodological framework 13 Figure 3: Chosen sample of regions interviewed according to the methodology The first group of regions refers to the regions that were either the more advanced regions for the longest duration during the programming period, or the regions of which the spending rates increased gradually. The second group encompasses the less advanced regions or those that have seen their rankings decreased throughout the programming period. The third group concerns the regions whose rankings stagnate during the programming period and those which stayed in the middle of the global ranking. The last group corresponds to the regions in which their rankings and spending rates have increased quickly in a couple of months. 2.3. The method employed: qualitative semi-structured interviews and sample This third step of processing published data gave an insight into how the regions to interview could be chosen. According to the research question and the main hypothesis, a greater focus has been undertaken on the group 1 and group 4. Indeed, trying to identify the obstacles that regions face in order to spend the ESF efficiently is an easier task with lagging regions or/and with regions that were behind for the majority of the period but ameliorated their scheduled rate throughout the programming period. Figure 3 sums up the regions interviewed and studied. For most of the regions2, two persons have been interviewed: one from the DIRECCTE in each region – most of the time the head of the ESF department – and one person from an IB – often a person from the Regional Council, because the latter implements and manages a large part of the delegated amount of ESF. A representative of the DGEFP, the Director of the Department "ESF Evaluation", has also been interviewed. Finally, the Director of the evaluation and audit department of a European Funds Management 2 Except for Auvergne and Champagne-Ardennes, in which no interviews in IBs could have been scheduled. Types of regions Regions interviewed and studied Group 1 Pays de la Loire Group 2 Auvergne – Centre – Champagne-Ardennes – Lorraine – Midi-Pyrenees Group 3 None Group 4 Aquitaine – Corse - Picardie
  • 14. LSE |Section 3 – The conceptual framework or how to make operational the concept of “absorption capacity” in the French and ESF context - 14 Consultancy, who is used to audit and evaluate beneficiaries, intermediate bodies and program managers, answered my questions. In total, 18 qualitative semi-structured interviews were undertaken, between April and July 2012 (Appendix 4). The interview guideline (Appendix 5) used is based on the theoretical framework elaborated in Section 3. The fourth step of the methodology is the processing of the interview data and the analysis of discourses according to my hypothesis and to the theoretical framework. Section 3 – The conceptual framework or how to make operational the concept of “absorption capacity” in the French and ESF context - This section analyses the existing academic literature, as well as the EU literature, in order to establish the theoretical framework used throughout the dissertation. 3.1. Academic, reports and evaluations literature review - Two main orientations have been given to the SF’s literature (Milio, 2007). The first one emphasises the processes of decision-making, mainly led by the intergovernamentalist theory. The latter seeks to analyse the existence of the European Union “as the result of strategies pursued by rational governments acting on the basis of their preferences and power” (Moravcsik, 1993, p.496). It also discusses the priorities and objectives determined at the supra-national scale and their political and institutional factors. A second theme of study explores the regional and local economic impact of SFs and either argues that SFs fail to address its initial objectives (Martin, 99; Lopez Bazo et al, 99; Rodriguez-Pose and Fratesi, 04) or it permits the regional convergence at the heart of the EU regional policy (Leonardi, 1995). However, a lack of literature can be pointed out concerning the difficulties following from the implementation processes and the factors that could explain regional implementation differences (NEI, 2002; Noetzel, 1997). In the academic literature, the term “absorption capacity” first emerged under the pen of Cohen and Levinthal (1989). This seminal work defined this term as the firm’s ability to identify, assimilate and exploit external knowledge, in tune with the main role of its own investment in R&D (Cohen and Levinthal, 1989, p.570). The two authors perceived this
  • 15. LSE |Section 3 – The conceptual framework or how to make operational the concept of “absorption capacity” in the French and ESF context - 15 concept as a cumulative “virtuous cycle” (Clemente et al, 2008), in which more knowledge engenders more absorption capacities, that would develop the potential identification and assimilation of new types of knowledge. However, despite the fact that this “construct is perceived as very important to a field because of high citation frequency” (Clemente et al, 2008, p.6), its highly abstract characteristic weaknesses is its theoretical foundations. Not tested enough and used in a ritual way too many times, this concept is seen as overstated (Lane et al, 2006; Zahra and George, 2002). The first authors (Herve and Holzmann, 1997), investigating the role of absorption capacities related to SFs, have empirically made an attempt to link, in a macroeconomic analysis, their theoretical review to existing literature in academic areas such as public choice or development economics (Horvat and Maier, 2004). Nevertheless, this study dealt principally with the economic dimension of the absorption capacity issues, leaving behind the administrative and institutional dimension. Others researches, on the contrary, coped only with the administrative absorption capacities and their role in the SFs absorption processes of NMS (Dimitrova, 2011; Milio, 2007). The overuse of the absorption capacity concept is also visible in EU policy guidelines and in the EU and national legislation. Since the SFs reforms in 1988, a raise in the amount of money and public resources dedicated to regional development has accompanied every enlargement3. These financial transfers aim to help the less developed EU countries to catch up economically (Kalman, 2002). However, an increasing literature has emerged from EU experts, stating that these important amounts of money transfers cannot be effectively absorbed by the NMS because of institutional, administrative and financial limits (ECORYS, 2011). Then, the multiplication of evaluation and reports mainly focused on the ERDF pointed out a lack of absorption capacities for NMS or the risks of insufficient absorption capacities for Candidate countries (Regular reports, since 1998; (Papadopoulos, 2003). However, very few dealt with in-depth qualitative analyses. In 2002, the European Commission has commissioned experts to define the necessary absorption capacities, through a wide range of indicators, for effectively managing the 3 Many authors have argued that the increase in SFs amount of money can be more explained by political bargaining games or redistributional purposes, rather than fostering regional economic development (Rodriguez-Pose and Fratesi, 2004; Boldrin-Canova, 2000; Bouvet and Dall’Erba, 2010).
  • 16. LSE |Section 3 – The conceptual framework or how to make operational the concept of “absorption capacity” in the French and ESF context - 16 SFs (NEI, 2002). The obstacles that most European countries face in the early years after their accession concern mainly a lack of long-term vision of the authorities, the difficulty to overcome the national insufficient financial resources to co-finance projects and respect the principle of additionality of the SFs4, the limited ability of human resources in central and local administration and its lack of cooperation and partnership at different level (Cace et al., 2009; Zaman and Georgescu, 2009). Therefore, in this context, the term of absorption capacity can be defined as the “capacity of the countries on low incomes to absorb productively a large volume of foreign aid” (Bourguignon and Sundberg, 2006, p.1). This wide definition rests upon the functioning of a central government in line with the EU administrative and institutional pre-conditions for using effectively the SFs, its ability to adjust dysfunctions and to adopt minimum administrative, institutional and financial requirements. 3.2. Absorption capacity and the ESF: definition, theoretical choices and hypothesis - According to the literature, the relevant definition for this dissertation framework can be written as follows: the absorption capacity is the level of a country’s appropriateness of the financial, administrative and institutional prerequisites for being capable of spending efficiently the allocated resources of SFs during the programming period. Generally, the absorption capacity is divided in two different ways. The first refers to the capacity of absorption of the implementation system defined by any given state to administer the SFs, considered as the “absorption capacity on the side of the offer”, while the second dimension focuses on the side of the beneficiaries of the SFSs, which can be called the “capacity of absorption on the side of the demand” (Cace et al., 2009, p.15). In this dissertation, the words constraint restricts the discussion of both the side of the demand and the side of the offer. Nevertheless, only the side of the offer would be considered. 4 Article 15 of Regulation (EC) No 1083/2006: “the principle of additionality means that EU Structural Funds may not replace the national or equivalent expenditure by a Member State. The principle of additionality is verified at national level by the Commission, in cooperation with Member States, for the regions covered by the Convergence objective.”
  • 17. LSE |Section 3 – The conceptual framework or how to make operational the concept of “absorption capacity” in the French and ESF context - 17 Despite the importance of this term in official EU publications, as well as in academic literature, the absence of a conceptual and operational framework to comprehensively assess the absorption problems of the SFs make the concept itself “vague and ill defined” (Emerson et al., 2006; Milio, 2007). So, it becomes essential to elaborate a clear and operational framework to throw light on the potential absorption issues in the specific context of the ESF in Metropolitan France. This analytical framework is based on the assumption that the effectiveness, the efficiency and the performance of the EU Cohesion Policy are at best contingent to the country’s institutional, economic, social, administrative and political context (Ederveen et al., 2006; Ivanovna, 2012). The NEI framework (2002), on which the European Commission based its understanding of absorption capacities, is determined by three factors. The theoretical framework used to provide answers to the research question will not be exactly the same analytical framework followed by NEI. First, the macroeconomic factor will not be discussed in this dissertation in details because at the national and at the regional scales, the annual amount received from the ESF since 2007 does not exceed 4% of the GDP5. A second theoretical choice is made dividing the institutional capacity and the administrative capacity into two different type of absorption capacity. This 5 Council Regulation (EC) No. 1260/1999, Article 7.8 TYPE OF ABSORPTION CAPACITY DEFINITION THENEIFRAMEWORK(2002) The macro- economic absorption capacity Defined and calculated in terms of GDP levels to SFs allocated and in which, the upper limit should not exceed 4% of the GDP of the interested Member State The financial absorption capacity The “ability to co-finance EU supported programmes and projects, to plan and guarantee these national contributions in multi-annual budgets, and to collect these contributions from several partners interested in a programme or project” (NEI, 2002, p.4) The administrative absorption capacity “The ability and skill of central and local authorities to prepare suitable plans, programmes and projects in due time, to decide on programmes and projects, to arrange the co-ordination among principal partners, to cope with the administrative and reporting requirements, and to finance and supervise implementation properly, avoiding irregularities as far as possible” (NEI, 2002, p.4) Figure 4: The NEI’s framework, type of absorption capacities and definitions
  • 18. LSE |Section 3 – The conceptual framework or how to make operational the concept of “absorption capacity” in the French and ESF context - 18 choice is based on the belief that the ability and skills of a public structure does not necessarily represent a causal link with the good local functioning governance between a wide variety of actors, in the ESF context. 3.3. Explanatory variables Figure 4 divided each type of absorption capacity highlighted in Section 3.2. For the administrative absorption capacity, the necessary requirements are split up according to each step of the policy life cycle (NEI, 2002): management, programming, implementation and financial management and control (Bachtler and Wren, 2006). The evaluation and monitoring step is purposefully separated from the other steps, because French regions are not in charge of this step. If they have to integrate regional data through different indicators software, they do not have to evaluate the ESF regional management. The European Commission and the DGEFP - through various external service providers - are the actors responsible for this policy step. The institutional absorption capacity is divided into two themes that permit a global picture of the institutional relationships and context in which the ESF has to be managed and implemented: the first concerns the regional context and the regular and common partnerships that are already present in the existing economic development policy. The second corresponds to the specific context of the ESF management and implementation and the inter- or intra - relationships within structures and between them. Concerning the financial absorption capacities, the indispensable requisites and factors for efficiently using the ESF in French regions and that can explain the difficulties that regions face in managing the ESF efficiently, have been categorized with the help of national guidelines for the programmes managers and legislation.
  • 19. LSE |Section 3 – The conceptual framework or how to make operational the concept of “absorption capacity” in the French and ESF context - 19 Figure 5: Conceptual framework and explanatory variables – Support for interviews sequences and analysis - TYPES OF ABSORPTION CAPACITIES STEPS IN THE ESF POLICY CYCLE INDICATORS ADMINISTRATIVEABSORPTION CAPACITIES Management Staff number Seniority of the staff and turnover Clarity in the responsibility, tasks and roles Training and matching between initial competences and recruitment needs Programming Analytical skills Process skills Delays in operations and IB’s delegations tasks approval (DSGC) Guidelines and methodological support Implementation Experience of the main IB staff Clarity in the responsibility, tasks and roles Impact of the main IB (Regional Council) in the spending progress rate Financial management and control Adequate staffing for all financial management and control functions Auditing training available for civil servants Established practice in dealing with financial irregularities INSTITUTIONALABSORPTION CAPACITIES Regional context Regional partners that are already present in existing economic development policy, especially in the social development policy Regional partners interested in being either a ESF financial partnership or either a ESF beneficiaries. Regional partners that are already present in existing economic development policy, especially in the social development policy Regional partners interested in being either a ESF financial partnership or either a ESF beneficiaries. Management and implementation Cooperation and coordination among the different departments within the DMA Cooperation and coordination among the different departments within the main IB Cooperation and coordination of the DMA with the MA Cooperation and coordination of the main IB with the DMA FINANCIALABSORPTION CAPACITIES Actors and evolution Evolution of the regular financing partnerships throughout the programming period Withdrawal of financing actors and commitment to the initial projects or operations approval The potential Impact of the financial crisis in the ESF co-financing principle The regional impact of the financial EU and national regulations The role of the automatic decommitment rule in the ESF financial context of the region The role of the dynamic programming in the financial context of a region Dividend payments delays and impacts on the total scheduled rate in the region
  • 20. LSE |Section 4: Empirical findings and discussion – 20 This chosen theoretical framework, widely based on the NEI framework allows the concept of absorption capacity to be made operational in the French and ESF context. It also helped to direct the interviews and to analyse the results, via the creation of an answers grid for each region, giving a global picture of the regional absorption capacities From the Appendix 6 to 14, this table is completed for each region, with different potential answers, according to the type of absorption capacities. Section 4: Empirical findings and discussion – For each region studied, the above table has been completed, presenting a global picture of the regional absorption capacity of the nine regions tested. The regional absorption capacities are, in part, an explanatory factor of the variation of the ESF scheduled rate during the programming period 2007-2013. However, other factors have been revealed. 4.1. Assessing the degree of administrative absorption capacity A positive evolution related to the regional administrative absorption capacity throughout the 2007-2013 programming period can be noted. Nevertheless, the lack of administrative absorption capacity from the previous programming period 2000-2006 has been an important factor in explaining the regional variations in the ESF scheduled rate. 4.1.1. The administrative absorption capacity in the management step in the ESF policy - the impact of the turnover in the regional absorption administrative capacity The results of the analysis show that the regions suffering of a lagging ESF scheduled rate are the regions that face a high turnover within the DIRECCTE staff. All the lagging regions have pointed out this factor as a “disastrous obstacle6”. The reasons behind this high turnover are multiple: the complexity and technicality of the profession, the isolation within the working structure or between the others structures concerned by the ESF and the pressure for reaching the objectives in a restricted time span (Lequiller, 2010). Another factor of explanation is linked to the management of the French 6 Interview realised with the Director of the ESF department of the DIRECCTE Centre and Lorraine.
  • 21. LSE |Section 4: Empirical findings and discussion – 21 territorial Civil service. The actors interviewed have argued is that “the recruitment in this organisation is mainly based on geographical mobility, more than on competences and specific profile for a particular job”7. In the ESF service in each DIREECTE, employees rarely choose the ESF profession, but instead they accept this specific function in order to work in the same region in which they wanted to live. But the difficulty of such a job causes them to ask for a transfer position within the same regional DIRECCTE after a year. Therefore, every DIRECCTE seems to underestimate the number of employees needed to efficiently spend the ESF. In the NEI framework, more than 10 persons is the pre-condition for an effective service, managing or implementing the ESF. Only Pays-de- la-Loire (ranked number one in the regional ESF scheduled rate in July 2012) has more than 10 persons in the ESF service and does not suffer from a high turnover of staff (Appendix 13). - Clarity in the responsibilities and the roles of the DIRECCTE staff In November 2009, a decree initiated the fusion of a wide number of disconcerted services within the same organisation, called DIRECCTE. Before that decree, the ESF management system was distributed between different services. Then, after the decree, each DIRECCTE established a new way of managing the ESF that could have still evolved many times throughout the programing period. This decree aimed to avoid overlapping and administrative inertia in order to develop coordination between services. However, this organisation reform has impacted the ESF scheduled rate, because some regions have met more obstacles and have difficulties in finding “the well-functioning organisation8”. It seems, according to the interviews, that the centralization of the ESF management within the same service in the DIRECCTE had helped to boost the scheduled rate. The lagging regions interviewed had – except Midi-Pyrenees – experienced and are still experiencing difficulties to find the right organisation within the DIRECCTE to efficiently manage the ESF (Appendix 7 and 9). The clarity of the staff responsibilities and roles were defined late and are hardly implemented because of the turnover. This is a factor of explanation related to the regional administrative absorption capacity that highlights the regional variations in the ESF scheduled rate. 7 Interview realised with the Director of the ESF department of the DIRECCTE Midi-Pyrenees. 8 Interview realised with the Director of the ESF department of the DIRECCTE Picardie
  • 22. LSE |Section 4: Empirical findings and discussion – 22 - The impact of training provision and methodological support development To overcome the impact of the turnover in the regional scheduled rate, some regions have been able to either develop an internal consolidated system of training or to hire an external service provider – consultancy firms -, financed on the Axis 5 “Technical assistance” of the ESF OP. However, the 5 lagging regions interviewed have faced difficulties to develop knowledge on Public Procurement, needed for hiring an external service provider. So, they all started to be supported by a service provider since 2010 or 2011, which was already late in the programing period. Therefore, internal training has been developed in regions that have a high scheduled rate, or that have made up for lost time really quickly. It is the case of Pays de la Loire and Picardie (Appendix 14) that elaborated methodological guides for overcoming the turnover and for transmitting the knowledge. Yet, the DGEFP has diffused methodological documents for each type of actor, but late in the programming period, in 2009. If the methodological framework allows us to highlight key factors linked to the regional administrative absorption capacity that explain the variations of scheduled rate, it remains true that further factors need to be taken into account, such as the lack of administrative capacities of the organisation of the central government. 4.1.2. The administrative absorption capacity in the programming step in the ESF policy - Analytical and process skills Generally, the analytical and process skills of the staff are highly developed in each region interviewed. The research does not show any impact from these skills on the regional variations of the ESF scheduled rate for two main reasons. First, the OP is divided into so many different types of actions that each region and each structure is able to find a type of action corresponding to the regional context. Secondly, if the initial territorial diagnosis and the negotiation of the ESF regional design has not been properly made, different instruments permit the correction of the regional ESF design in order to adjust it to the evolving regional context, such as ESF transfer amount between axes or between actions. Moreover, in opposition to the NMS, when a candidate submits a proposal for receiving the ESF grant, it is rarely refused. One of the reasons is that,
  • 23. LSE |Section 4: Empirical findings and discussion – 23 before the selection of beneficiaries, a tailored work to beneficiaries’ needs has been completed by the DIRECCTE service and the IB. - Delays impacting the regional scheduled rate of ESF The programming period 2007-2013 has witnessed an important lateness in the programming step. This has been justified by two main factors during the interviews, as well as the reports and evaluations. First, not every region programed operations in 2007, and few in 2008. This has been explained by the fact that they were all spending the rest of ESF from the previous programming period. If regions were still programming until 2009, sometimes 2010, the lack of regional absorption capacities from the previous programming period was pointed out, by the interviewees, as the main cause of this lateness (for 8 out of 9 DIRECCTE interviewed – except Midi- Pyrenees). Secondly, the Central government did not produce and publish the document support, the methodological guides, nor the legislative instructions, presenting the requirement from the audit trail, in 2007. The national training plan for every DIRECCTE and hold by the DGEFP started to be effective in 2010. Presage, the monitoring software, made its appearance at the end of 2008. Therefore, every DIRECCTE and every IB had to develop documents, without any legislative support. The regions with the more developed administrative capacities had been able to create these documents that were eventually really similar to those published by the Central government. The others had to prepare and implement recovery action plans for each operation throughout the programming period. Some interviewees talked about an “irrelevant or delirious public action9”, in which they had to spend weeks changing documents or sentences in documents for 2008 operations, while these documents did not even exist (Appendix 8). So, the lagging regions lost time in retroactive adjustments processes for each official documents and requirements of the audit trail. 4.1.3. The administrative absorption capacity in the implementation step in the ESF policy Every DIRECCTE delegated tasks and responsibilities to a certain number of IB. This number had an important impact on the regional capacity to effectively spend the ESF. 9 Interview realised with the Assistant Manager of the ESF department of the DIRECCTE Centre.
  • 24. LSE |Section 4: Empirical findings and discussion – 24 Indeed the IB, such as regional councils or councils of French department, was able to develop the necessary administrative capacities for managing the ESF throughout the programming period. Moreover, it seems that the degree of involvement of these two types of structures is an explanation variable for a high ESF scheduled rate, because of the large amount of ESF allocated. However, the number of IB, such as the PLIE, largely based on the “entreprise d'insertion”, which are small structures that aim at helping a specific kind of unemployed people, were multiplied at the beginning of the programming period. The DIRECCTE delegated a small amount of ESF to a large number of PLIE that became IB. In this type of structure, a small number of staff was concerned by the ESF management and could not effectively manage to attain the ESF audit trail requirements (Lion et al., 2006). The Central government, in June 2009, legislated on the matter regarding a potential PLIE mutualisation, eventually decreasing the regional number of PLIE, and thus of IB. Therefore, it appears that there are a critical number of small regional structures for a more advanced scheduled rate. 4.1.4. The administrative absorption capacity in the financial management and control step in the ESF policy In this step, the administrative absorption capacity does not appear to play an important role for explaining the scheduled rate. However, it becomes a solid variable, concerning the regional variations in the ESF certified rate (the rate of ESF paid to operation initiators). 4.2. Assessing the degree of institutional absorption capacity Three main explanatory variables have been identified for the lagging regions and are related to the lack of regional institutional absorption capacity. The interviewees from the lagging regions pointed out the lack of transversality and coordination between the services of the DIRECCTE and of the IB, the lack of individual connections with the ESF service of the DGEFP and finally the sensitive balance between a developed regional network invested in the ESF and enough administrative and financial capacities in each of the network’s structure.
  • 25. LSE |Section 4: Empirical findings and discussion – 25 4.2.1 A lack of coordination within the services of the IB and DIRECCTE Both the IB and the DIRECCTE suffer from a lack of with the others services coordination within their own structure. The technicality and the procedural aspect of the ESF are two reasons why the ESF services in the IB and in the DIRECCTE are feeling really isolated. Nevertheless, it seems that these relationships start to evolve positively because with the decrease of the central government’s funds, the different services need to find new ways of financing and start to come and knock on the ESF door. A second reason explaining this lack of coordination concerns the way the different services approach the public policies. In these administrations, “instead of thinking the public policies in terms of project, they keep thinking in terms of financing method10” (Appendix 11). This lack of transversality and coordination between the services of either the IB or the DIRECCTE is a factor of explanation the regional variations in the ESF scheduled rate. The regions able to enhance the relationships within services are able to use more efficiently the ESF. It’s the case of Picardie and Pays de Loire regions. They spent time to make their work known within the services, the importance of the ESF, its rationale and the way it has to be used. 4.2.2. The density of regional structures involved in the ESF implementation and management phases. As already explained in 4.1.3, the institutional density of the regional actors involved in the ESF policy has an impact in the ESF regional scheduled rate. If important actors become IB, they will be the main catalysts of the ESF spending. On the other hand, if the smallest structures are without the expertise necessary for dealing with the entire ESF process, then it can have a negative impact on the ESF spending. Once more, the importance of the regional network interested in the ESF will be positively correlated to a good advancement in the ESF spending if the main regional actors are the leaders of the network and if every structure has the minimum financial and administrative capacities to use the ESF. In the lagging regions, either the main actors were not involved in the ESF process, or there were too many little structures that became IB and 10 Interview realised with the Assistant Manager of the ESF department of the DIRECCTE Lorraine.
  • 26. LSE |Section 4: Empirical findings and discussion – 26 that they could not deal properly with the ESF audit trail. The three types of regions – Aquitaine (Appendix 6), Corse (Appendix 10), Picardie - that ameliorated their ESF scheduled rate throughout the programming period have one common point: the number of IB decreased during the programming period, especially the smallest structures with the lowest level of absorption capacities. It appeared that it boosted the ESF scheduled rate in these three regions. 4.2.3. The impact of the type of relationship between the DIRECCTE and the DGEFP The types of relationships developed by the DIRECCTE with the DGEFP are considered – in 15 out of 18 interviews – as an explanatory variable for the regional variations in the ESF scheduled rate. The practical translation of the various and numerous legislative instructions (L’Europe s’engage en France, 2012), which is supposed to throw a light on the audit trail requirements, is not given to all the regions in the same way. Each actor seeks help on its own side, through its own connections. It seems that knowing someone in the DGEFP permits the region to be able to anticipate many legislative evolutions and change before the others. This argument has been validated by a large number of interviews, justifying their ranking and their ability to translate all the legislative production by themselves, or to highlight the fact that they have difficulties to create, develop and maintain a contact within the DGEFP. This variable was not expected to be found at the beginning of the research and clarifies the necessary regional institutional absorption capacities for using the ESF efficiently. 4.3. Assessing the degree of financial absorption capacity According to the interviews, few regions had to deal with the financial withdrawal of actors in operations during the programming period. However, it appears that the future for the next programming period seems to gather round all the doubts and fears, created because of the economic and financial crisis. The ESF makes it necessary for every structure to advance the ESF amount of money until - for most of the regions interviewed - two years after the closing of the operation. For the important regional structures, such as the local authorities, Pôle Emploi or the OPCA, this is not risky and this does not impact the structure’s activity, because they have the financial critical
  • 27. LSE |Section 4: Empirical findings and discussion – 27 mass. However, for the smallest structures, such as the “entreprises d’insertion”, it weakens their functioning and on some occasions they close for cash flows problems, because of the delay of being reimbursed by the ESF. This impact is at the basis of the notion of “point of saturation” (Cace et al., 2009), introducing the idea that the ESF, at a certain threshold and in a specific context, can harm the territory and corresponds to a “toxic fund” (Champagne-Ardennes). Secondly, the economic and financial crisis had an impact on the decrease in public assistance in France. From 2009, Regional Councils, councils of French department and the Central Government started to diminish the usual public grants they used to provide in respect of the additionality principle. Thus, many regions had to anticipate the withdrawal or the decrease in the initial amount of co-financing of different actors. To do so, the DIRECCTE and the IB tend to over-program during the programming period in order to overcome this difficulty. Thirdly, the laws that the Central government or the European Commission legislated relating to the advance of the scheduled rate and the certified rate create some financial impacts in the regions. The decommitment rule or N+2 rule, established by the Article 31.2 of Regulation 1260/1999, is a financial control set by the European Commission for avoiding an important activity at the end of the programming period. It establishes the decommitment of ESF not spent by the end of the second year following the year to which they were allocated. The majority of regions were decommited by the European Commission in 2010 but this process didn’t seem to have an important impact for the regions. The dynamic programming, instituted by the Central government, rests upon the objective of reallocating credits that were not programmed at the beginning of the period to the most needed interventions and to the most dynamic regions in terms of spending (Section 2.2). Once more, the majority of regions interviewed were subjected to this rule, even if they were not in the last rankings of the scheduled rate. The calculation of the amount that has been taken and the amount that has been returned indicates that a very small amount of ESF has been returned to the most dynamic regions. However, the 15% of the total grant implemented and managed directly by the
  • 28. LSE |Section 4: Empirical findings and discussion – 28 DGEFP has received an important amount of ESF from the dynamic programming and the regions with the least capacities to use the ESF effectively. A striking result was the fact that this withdrawal of ESF during the programming period did not have a major impact in the regions because they were finally relieved to have a small amount of ESF to manage, and the withdrawal made their scheduled rate more important because the total amount had decreased. This questions once again the role of the ESF in the lagging regions and introduces the potential “point of saturation” (Cace et al, 2009) of the ESF in certain regions. However, the regional financial absorption capacities have been put into perspective by each interviewee for the next programming period 2014-2020, raising doubts and questions about the public finances and their capacities of co-financing the ESF in the poorest regions. 4.4. Alternatives hypothesis The qualitative methodology used permits the identification of others factors, explaining the situation of the lagging regions. This last sub-section aims to present them. First, the factors related to the absorption capacities are two-fold. All of the lagging regions and the regions that evolved quickly in the national ranking had suffered from the lack of regional absorption capacities – especially administrative – from the previous programming period. While some regions (Pays de la Loire, Aquitaine and Midi- Pyrenees) have finished the previous programming period 2000-2006 in 2007 or at the beginning of 2008, some regions – such as Corse, Picardie, Auvergne, Centre, Champagnes-Ardennes, Lorraine – have continued to program until 2010. This has a real impact on the progress rate of some regions for the programming period 2007-2013 (Barbier, 2002). Secondly, the lack of administrative absorption capacities of the Central government has been enumerated as another explanatory variable for explaining the difficulties of regions in consuming the ESF. So, it seemed that the development of regional capacities helped to overcome the delays created by the central level and the legislative vagueness
  • 29. LSE |Section 4: Empirical findings and discussion – 29 coming from published instructions, aimed at helping the regions, but which in fact, made the audit trail even more complicated to follow. The interpersonal relationships needed for the DIRECCTE to obtain information quickly have an impact on the ability of regions to better and faster understand the national requirements and to use the ESF efficiently. The preparation of the launch of project applications in the regions has been hindered by the fact that the DGEFP have prepared the guides for candidates with delay. Once again, the legislative modifications from the Central government were not always quickly updated in the documents or in the guides, creating a posteriori difficulties for the regions that were not able to correctly translate the legislation. Thus, the lack of absorption capacities at the Central level revealed the lack of regional absorption capacities. Others factor, untied from this paper’s main hypothesis in terms of regional absorption capacities, such as the financial and economic crisis has been discussed in the sections above. However, two factors explaining the lateness of the regional spending rate have not yet been explored. The first that can explain the situation of Midi-Pyrenees is the fact that the DIRECCTE and the IBs did not set the operations’ data in the monitoring software, Presage (Appendix 12). So, in reality, this region spent a lot more ESF, but it did not update their rate through the software. Apparently, the fact that they would be subjected to the dynamic programming was not an issue (Section 4.3), because it decreased the allocated amount of ESF for the region. Secondly, this dissertation made the choice not to study the capacity of absorption on the side of the demand, the beneficiaries and their ability to follow the European and national requirements to use the ESF. In the interviews, this factor was pointed out but not studied, but represents an interesting area for further research.
  • 30. LSE |Section 5: Conclusion 30 Section 5: Conclusion 5.1. Summary This paper aimed to analyse the reasons explaining the regional variations of ESF scheduled rate in the programming period 2007-2013, in France. This research was made analysing interviews from the programmes managers of the ESF, disconcerted in regions or decentralized in regional local authorities. The initial hypothesis is that the regional variations in absorption capacities are explanatory variables to understand the differences in the regional scheduled rate of ESF. Widely used but rarely conceptualized in practice, the regional absorption capacity was made operational through the ESF system of implementation in France. Three types of absorption capacity were identified: the administrative, institutional and financial absorption capacities. The analysis concludes that, indeed, the differences in regional absorption capacities are, in part, explaining the regional variation of the ESF scheduled rate. In the regional administrative absorption capacity, the impact of a high turnover, the lack of visibility in the responsibility and tasks, the lack of capacity of providing training to the staff and the low number of staff appear to be important factors for explaining the situation of the lagging regions in ESF spending. The delays in the management and implementation processes, a high turnover and the lack of training are attributed to the lack of administrative and institutional capacities of the Central Government. Therefore, the number of IBs in charge of delegated tasks and responsibilities is an important factor that can either enhance or curb the ESF scheduled rate in a region. Concerning the regional institutional absorption capacity, the lack of co-ordination between the departments of the DIRECCTE or the IB is an important weakness that impact the ESF scheduled rate. Even more, the presence of interpersonal relationships between the DIRECCTE and the DGEFP reveals to be an important explicative variable for the more advanced regions in terms of ESF spending. Therefore, the financial absorption capacity appears to be a not convincing variable for this programming period, in the French case. However, every actor raised doubts about the next programming period 2014-2020.
  • 31. LSE |Section 5: Conclusion 31 5.2. Policy Implications The policy implications are two-fold. First, this analysis questions the next Territorial Reform that the French Central Government should launched in 2013. The regional and local authorities would become the new Delegated Managing Authorities in 2014, with a potential decentralisation of money and staff. However, interviewees asked about the training, experiences and knowledge that the DIRECCTE have been able to accumulate during the two previous programming periods. How does this change will be managed? How could be used the notion of “knowledge-based society” (Cace et al., 2009) in this context? The transfer of staff should be ensured from the DIRECCTE to the future DMA, the current IBs. Methodological guidelines should be diffused and transferred through structures to permit the enhancement of knowledge about the ESF requirements. Secondly, the orientation that the European Commission took concerning the coming programming period, that is a bigger emphasis on the NMS for the ESF, can be questioned. Indeed, the knowledge transfer on the obstacles that both Central government and local authorities face, should be developed by the Old Member States to the NMS. Simplifying the financial control process is a requirement, its cost judged unproductive. In France, the administrative cost for building an operation is around €2000, which is a strong dissuasion for an important number of actors. The ESF led to a significant cost, which is in part absorbed by the Axis 5 of the ESF. This fact echoes the actual economic situation of the NMS. 5.3. Limitations This study was based on qualitative interviews and remains dependant on the actors interviewed. The relationships between the Central Government and the DIRECCTE appear to be complicated and the answers during the interviews sometimes moderated. Questioning more than two people in each regions would have been difficult in due time. Methodological choices were made, but the side of the demand would be an important explicative factor, for highlighting news factors of the regional variations in ESF spending. Having the analysis of beneficiaries and candidates in each region would have been interesting as well. Therefore, this dissertation strictly focuses on the French
  • 32. LSE |Section 5: Conclusion 32 context, which may not always represent the current situation in others Old Member States. 5.4. Future Research This dissertation raised a lack in the academic literature concerning both the Old Member States and their absorption capacities in the implementation process of a SFs policy cycle. It questions the will of the European Union to decentralize policies and their implementations. In the case of the ESF, the decentralisation system brings some issues, especially concerning the capacity of structures and territories to respond to the technicality and the requirements coming from the European Commission and the National governments. This fact needs to be discussed in further details, in the context of Old Member States. Therefore, if it appears that implementing and managing the ESF regionally is a difficult task, but it also seem that in some contexts, the ESF is perceived as a toxic fund, weakening the regional structure, economically and socially. This phenomenon should also be analysed in greater depth.
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  • 37. LSE |Appendix 37 Regional managing authorities (Préfectures de région) Intermediate bodies Managing authority (DGEFP: national government) ESF actors’ overview Beneficiaries DIRECCTE Intermediate bodies Appendix Appendix 1: the French ESF system of implementation
  • 38. LSE |Appendix 38 Appendix 2: The allocation of ESF amounts between axes 20% 28%39% 9% 4% ESF funding per axis for the regional "competitiveness and employment" French Operational Programme (2007-2013) Axis 1: Adaptation of workers and enterprises to economic change Axis 2: Improving access to employment for job seekers Axis 3: Social inclusion and combating discrimination Axis 4: Development of human resources, innovation and transnational co-operation Axis 5: Technical assistance
  • 39. LSE |Appendix 39 Appendix 3: Evolution of the ESF regional spending (from 01/12/2009 to 01/07/2012) 01/12/2009 01/06/2010 01/12/2010 01/06/2011 01/12/2011 01/03/2012 01/06/2012 01/07/2012 Alsace 4 10 5 3 5 6 10 10 Aquitaine 3 13 19 17 18 18 19 9 Auvergne 17 4 18 19 21 16 18 12 Basse Normandie 8 16 9 20 15 17 16 13 Bourgogne 18 8 7 12 9 12 11 15 Bretagne 5 9 4 5 4 8 12 14 Centre 14 18 10 15 17 19 14 17 Champagne-Ardenne 11 20 20 21 19 20 22 22 Corse 21 15 21 22 14 22 4 7 Franche-Compté 13 14 14 18 22 11 9 11 Haute-Normandie 7 1 1 2 1 2 1 4 Ile-de-France 15 17 3 9 10 15 20 20 Languedoc-Roussillon 6 11 15 8 6 5 5 6 Limousin 2 3 11 7 7 7 7 8 Lorraine 20 22 22 14 20 21 21 21 Midi-Pyrénées 12 12 13 13 12 14 17 19 Nord-Pas de Calais 10 5 16 6 11 3 6 3 PACA 19 21 17 11 8 13 15 18 Pays-de-la Loire 22 19 6 4 3 1 3 1 Picardie 16 6 8 10 16 9 8 2 Poitou-Charentes 9 7 12 16 13 10 13 16 Rhône-Alpes 1 2 2 1 2 4 2 5
  • 40. LSE |Appendix 40 Appendix 4: List of interviewees Most of the interviews have been recorded. They are available upon request. Examples of interviews transcripts are, as well, available upon request. The anonymity of each interviewee has been ensured. Claude RACK, Director of the Department “ESF Evaluation” – DGEFP or the Directorate for Employment and Vocational Training – Interviewed the 03/05/2012 Cléo MUZARD, Director of the Audit and Evaluation Pole of ARAMIS - European Funds Management Consultancy firm - Interviewed the 12/05/2012 Jean-Fabrice ALFANDARI, Director of the ESF Department in DIRECCTE Pays de la Loire- Interviewed the 12/06/2012 Christophe BROUSSE, Responsible of the Europe Department in Conseil Général 53 (Mayenne) – Interviewed the 05/07/2012 Jean-Louis ANTOMORI, Director of the ESF Department in DIRECCTE Midi-Pyrénées – Interviewed the 18/06/2012 Marine LAHITTE-LOUSTEAU, Director of the ESF Department in DIRECCTE Corse – Interviewed the 16/07/2012 Nicole CASTENINI, Project Manager in the European Policies Department in Collectivité Territoriale de Corse – Interviewed the 19/07/2012 François MERLE, Director of the ESF Department in DIRECCTE Lorraine – Interviewed the 02/07/2012
  • 41. LSE |Appendix 41 Laurent MONCELLE, Project Manager of the European Policies Department in Conseil Régional de Lorraine – Interviewed the 25/07/2012 Christelle FAVERGEON, Director of the ESF Department in DIRECCTE Champagne- Ardennes – Interviewed the 16/07/2012 Sylvie DUBO, Director of the ESF Department in DIRECCTE Aquitaine – Interviewed the 03/07/2012 François PINEL, Director of the ESF Department in DIRECCTE Auvergne – Interviewed the 04/07/2012 Delphine LEMAIRE, Director of the ESF Department in DIRECCTE Picardie – Interviewed the 06/07/2012 Pascal Lebeau, Project Manager of the European Department in Conseil Régional de Picardie – Interviewed the 27/06/2012 Pascal VANHAELEN, Director of the ESF Department in DIRECCTE Centre – Interviewed the 12/07/2012 Jean-Luc MARTY, Project Manager of the European Department in Conseil Régional du Centre – Interviewed the 22/06/2012 Jean-Marie BLANC, Project Manager of the European Department in Conseil Régional d’Aquitaine – Interviewed the 13/07/2012
  • 42. LSE |Appendix 42 Philippe PERIES, Project Manager of the European Department in Conseil Régional de Midi-Pyrénées – Interviewed the 14/07/2012
  • 43. LSE |Appendix 43 Appendix 5: Interview Guideline  Could you briefly describe the team working in the ESF department/service of your structure (DIRECCTE or IB)?  Number of staff,  Competences,  Turnover,  Responsibilities and tasks,  Training provided to face the turnover.  What are the major skills and competencies that your team needed to developed and maintained for managing the ESF properly?  Do you think that the number of staff in your service is sufficient for managing properly the ESF?  How would you explain the turnover? Which kind of strategies did or do you develop for facing the turnover?  Could you tell me how you manage to obtain an expertise on European and national legislation concerning the ESF?  Could you describe me the relationships your service maintain with the others services within your structure?  Frequency of contacts?  Which purposes?  Co-ordination with the others services?  Isolation?  Evolution?  Could you describe me the relationships maintained with the DGEFP (in the case of a DIRECCTE interviewed) or with the DIRECCTE (in the case of an IB interviewed)?  Frequency and purposes.  Would you say that the ESF OP is in coherence with your region’s needs? Do you think that the delay in your ESF scheduled rate can be explained by a lack of coherence, and thus a lack of demand?  Would you say that the allocation between axes negotiated in 2007 was relevant with the territorial needs?
  • 44. LSE |Appendix 44  How often does it happen to reject projects of ESF candidates?  How often does it happen that you have to de-program operations because of incoherence in funding, in objectives or in the structure’s capacity to manage the project or operation?  Could you tell me the general delay in approving operations in your structure? Could you tell me the factors of such a delay?  (In the case of an IB) How long did it take to get your DSGC approved? (DSGC is the document that describes all the management system defined in the IB and has to be approved by the DIRECCTE, and then by the CICC)?  Did you develop your own methodological guidelines, presenting all the steps of the audit trail?  In your opinion, what are the factors of delay in the ESF scheduled rate in your region? OR  In your opinion, what are the factors that permit you to have an advanced ESF scheduled rate in your region?  Have you been subjected to CQG (financial and procedural audit control)?  If yes, what were the conclusions?  Following this CQG, did you develop corrective financial actions plans during the programming period to adjust to CQG conclusions and recommendations and others financial controls? Did further controls or external service provider have validated these plans?  Does your service know about the CQG’s requirements? Does someone in the structure manage to do CQG training on your own operations? Is it a common practice in your structure?  Have you been subjected to the decommitment rule?  If yes, when? What was its impact?  Have you been subjected to the dynamic programming rule?  If yes, when? What was its impact?  Could you describe briefly the functioning regional governance in the social development policy? Who are the main actors? Who are the main backers?
  • 45. LSE |Appendix 45  Are they part of the ESF implementation process? Have they been sensitized to the ESF, its goals and principles?  Could you tell me the importance of the financing actors withdrawal and their commitment to the initial projects approval?  Did and do you manage to find new backers to co-finance the ESF during the current programming period?  What is the impact of the financial crisis, in your region on the ESF scheduled rate? Does it limit the number of backers? The number of potential beneficiaries? The regional mobilisation for the social development policy?  Could you tell me the general delay in paying back your beneficiaries in your region? Could you tell me the factors of such a delay? Do you think that this delay has an impact on the potential beneficiaries?  Would you say that in your region, the ESF is a toxic fund? Why?  Could you choose the more relevant option concerning the role played by the ESF in your region?  « Robin Hood » (help the poorest persons) “"The icing on the cake" (finance the structures with the best Financial health)  “Private club” (restrictive interpretation of the OP) « Open window » programme (large interpretation of the OP)  « Laboratory » (to finance just innovative actions) « Production line » (to finance common-law actions)  “One shot treatment” (punctual intervention) « Chronic » (recurring aid)
  • 46. LSE |Appendix 46 Appendix 6: Aquitaine TYPES OF ABSORPTION CAPACITIES STEPS IN THE ESF POLICY CYCLE INDICATORS ADMINISTRATIVEABSORPTIONCAPACITIES Management Staff number Seniority of the staff and turnover Clarity in the responsibility, tasks and roles Training and matching between initial competences and recruitment needs Less than 5 most of the programming period Important turnover: Staff turnovers most of the time every year Absent or starting: Staff roles and responsibilities unclear, changeable or vaguely defined since the beginning of the programming period. Absence: On-the-job training and no or few matching between the initial competences and the job’s requirements Between 5 and 10 most of the programming period Medium turnover: every 2-3 years Developing: Staff roles and tasks have been defined throughout the programming period and are still being clarified. Starting or developing: punctual training support by the DMA itself or by the MA / Medium correspondence between the needs and the initial competences More than 10 most of the programming period Absence or very few of turnover: nearly the same staff since the beginning of the programming period Strengthened: staff responsibilities well defined since the beginning of the programming period. Consolidated: professional training supported internally or by the MA. Or initial competences matching the job’s needs. Programming Analytical skills Process skills Delays in operations and IB’s delegations tasks approval (DSGC) Guidelines and methodological support Absence of coherence between the programmed operations, the national ESF OP and the territorial needs Important number of projects and operations that had to be de-programmed because of incoherence in funding, in objectives or in the structure’s capacity to manage the project or operation. Approval of operations strongly delayed (more than 6 months) Absence of methodological documents for the programming process in the DMA or in the IB, presenting all the steps of the audit trail and that have been controlled and validated. Approval of IB’s delegation tasks approval strongly delayed (more than 2 years) Developing coherence between the programmed operations, the national ESF OP and the territorial needs Few projects and operations that had to be de- programmed because of incoherence in funding, in objectives or in the structure’s capacity to manage the project or operation. Approval of operations delayed between the submission of the application and below 6 months Late developments of methodological documents for the programming process in the DMA or in the IB, presenting all the steps of the audit trail and that have been controlled and validated. Approval of IB’s delegation tasks approval delayed (between 1 and 2 years) Coherence between the programmed operations, the national ESF OP and the territorial needs Absence of projects and operations that had to be de-programmed because of incoherence in funding, in objectives or in the structure’s capacity to manage the project or operation. Approval of operations weakly delayed Use of methodological documents for the programming process in the DMA or in the IB, presenting all the steps of the audit trail and that have been controlled and validated.DSGC approved one year after its submission
  • 47. LSE |Appendix 47 ADMINISTRATIVEABSORPTIONCAPACITIES Implementation Experience of the main IB staff Clarity in the responsibility, tasks and roles Impact of the main IB (Regional Council) in the spending progress rate No or few matching between the initial competences and the job’s requirements – No initial experience in the management of SFs Absent or starting: IB Staff roles and responsibilities unclear, changeable or vaguely defined since the beginning of the programming period. Negative impact: the spending impact of the main IB does decrease the regional spending Medium correspondence between the needs and the initial competences – Medium experience of the IB staff in the management of the SFs. Developing: IB Staff roles and tasks have been defined throughout the programming period and are still being clarified. Null impact: the spending impact of the main IB does not increase or decrease the regional spending Important experience of the main IB staff in the management of the SFs. Strengthened: staff responsibilities well defined since the beginning of the programming period. Positive impact: the spending of the main IB increases the regional spending Financialmanagementandcontrol Adequate staffing for all financial management and control functions Auditing training available for civil servants Established practice in dealing with financial irregularities Important weaknesses in the financial management and control functions staff: lack of experience, turnover, roles and responsibilities unclear No experience in CQG: staff does not apprehend correctly the audit requirements and does not have access to training Has not developed corrective financial actions plans during the programming period to adjust to CQG conclusion, even if these latter recommended doing so. Few weaknesses in the financial management and control functions staff: lack of experience, medium turnover, roles and responsibilities still being clarified A little experience in CQG: staff does not apprehend totally the audit requirements and has or had the opportunity to experiment CQG Has developed corrective financial actions plans during the programming period to adjust to CQG conclusions and recommendations and others financial controls, which have not been validated by further controls. Lack of weaknesses in the financial management and control functions staff A strong experience in CQG: staff doing CQG internally in order to be prepared for external CQG and knows the audit trail requirements. Has developed corrective financial actions plans during the programming period to adjust to CQG conclusions and recommendations and others financial controls, which have been validated by further controls. INSTITUTIONAL ABSORPTION CAPACITIES Regionalcontext Regional partners that are already present in existing economic development policy, especially in the social development policy Regional partners interested in being either a ESF financial partnership or either a ESF beneficiaries. Lack or absence of inter-mobilisation at the regional scale between the regional and locals actors, in the social development policy Lack or absence of interest at the regional scale of regional partners to be part of the ESF policy. Developing or modest inter-mobilisation at the regional scale between the regional and locals actors, in the social development policy Developing or modest interest at the regional scale of regional partners to be part of the ESF policy Sophisticated inter-mobilisation at the regional scale between the regional and locals actors, in the social development policy Important interest of regional partners to be part of the ESF policy
  • 48. LSE |Appendix 48 INSTITUTIONALABSORPTION CAPACITIES Managementandimplementation Cooperation and coordination among the different departments within the DMA Cooperation and coordination among the different departments within the main IB Cooperation and coordination of the DMA with the MA Cooperation and coordination of the main IB with the DMA Poor intra-staff and intra- departments communications Poor intra-staff and intra-departments communications Poor cooperation from the MA to the DMA: confrontational, difficult or absence of professional relationships Poor cooperation from the DMA to the IB: confrontational, difficult or absence of professional relationships Developing intra-staff and intra communications Developing intra-staff and intra communications Modest or developing relationships and support coming from the MA to the DMA Modest or developing relationships and support coming from the DMA to the IB Consolidated intra-staff and intra communications Consolidated intra-staff and intra communications Consolidated relationships and support from the MA to the DMA Consolidated relationships and support from the DMA to the IB FINANCIALABSORPTIONCAPACITIES Actorsandevolution Evolution of the regular financing partnerships throughout the programming period Withdrawal of financing actors and commitment to the initial projects or operations approval The potential Impact of the financial crisis in the ESF co-financing principle Decrease in the number of financing actors during the programming period High level of withdrawals of financing partnerships, having a high impact on the ESF scheduled rate High impact of the financial crisis, limiting the number of financing actors the number of potential beneficiaries, the conditions of public management and implementation and the regional mobilisation for the social development policy Maintaining in the number of financing actors during the programming period Modest level of withdrawals of financing partnerships, having a low impact on the ESF scheduled rate Low impact of the financial crisis, limiting moderately the number of financing actors, the number of potential beneficiaries, the conditions of public management and implementation and the regional mobilisation for the social development policy Increase in the number of financing actors during the programming period Absence of withdrawals of financing partnerships, having no impact on the ESF scheduled rate Absence of impact of the financial crisis on the number of financing actors, the number of potential beneficiaries, the conditions of public management and implementation and the regional mobilisation for the social development policy TheregionalimpactofthefinancialEU andnationalregulations The role of the automatic decommitment rule in the ESF financial context of the region The role of the dynamic programming in the financial context of a region Dividend payments delays and impacts on the total scheduled rate in the region The region has been subjected to the automatic decomitment rule and this had a strong impact in the ESF management and implementation processes The region has been subjected to the dynamic programming process and this had a strong impact in the ESF management and implementation processes Dividend payments more than 2 years after the closing of the operation, impacting the total scheduled rate in the region The region has been subjected to the automatic decomitment rule and this had a modest impact in the ESF management and implementation processes The region has been subjected to the dynamic programming process and this had a modest impact in the ESF management and implementation processes Dividend payments between 1 to 2 years after the closing of the operation, impacting the total scheduled rate in the region The region had or had not been subjected to the automatic decommitment rule and this had a no impact in the ESF management and implementation processes The region had or had not been subjected to the dynamic programming process and this had a no impact in the ESF management and implementation processes Dividend payments less than 1 year after the closing of the operation, not impacting the total scheduled rate in the region