The 2014-2020 programming is drawing to a close, and the debate over the use of 2021-2027 funds is particularly heated. We often hear, in this regard, about the “absorption capacity” of European funds. What does it mean?
A summary indicator on the good use of funds
Fund-absorbing capacity indicates the ability to “make good use of funds” in a very specific sense: measuring how much of the funds initially planned is 1) programmed for specific use, 2) allocated to beneficiaries for the implementation of projects and finally 3) actually spent on activities carried out.
Thus, it is a summary indicator of capacity to manage funds: assuming that there is always something useful on which to deploy funds, an authority or territory that does not use them fully is foreclosing important opportunities.
It is not an indicator of effectiveness or impact: that is, it does not measure how much the funds really help achieve the set goals and contribute to the development of an area, but it is certainly a good indicator of efficiency in the use of funds.
(You have already heard somewhere about effectiveness, impact and efficiency, haven’t you? What does it mean? Rediscover it here !)
A key-concept for Structural Funds.
The concept of absorptive capacity is mainly associated with Structural Funds.
Of course, it makes sense to apply it to any type of fund and any managing authority, but the issue is more relevant to Structural Funds, which, as we know, are managed by national or regional authorities and have a well-defined spatial focus (Country, Region or other territorial area): through the concept of absorptive capacity, it is possible to compare the effectiveness in the use of funds: 1) by the various authorities to which this mandate is defined on a given territory; 2) on different territories, in a more or less disaggregated way (country, regions, groups of regions, etc.).
End of programming, time to take stock
Therefore, we have defined what it is. But how did it go with absorptive capacity in Italy in the recently concluded programming period, 2014-2020?
We have already provided some clues as to where to find this information. There are two primary sources: the European Commission’s CohesionData portal, which provides very effective summary data to clarify the concept of absorptive capacity; and the OpenCoesione portal, which allows access to detailed data (by territory, authority, beneficiary) on what has been achieved in Italy.
The data we report are current as of January 15, 2021; the graphs are updated in real time.
- Italy has allocated about 80 percent of the available Structural Funds and spent about 40 percent; these percentages indicate respectively the share of funds that can potentially translate into projects and the share that has already definitely translated into interventions;
- Allocations vary from less than 60 percent (EMFF) to more than 90 percent (ERDF); spending varies between about 30 percent of some funds (ERDF, ESF, EMFF) and 50-60 percent of others (EAFRD, Youth Initiative);
- Italy ranks last in Europe in both funds allocated and funds spent.
To help read the graphs (translation of acronyms into Italian):EAFRD = EAFRD = European Agricultural Fund for Rural DevelopmentEMFF = EMFF = European Maritime and Fisheries FundERDF = ERDF = European Regional Development FundESF = European Social FundYEI = Youth Employment Initiative
For those who would like further details, told in a concise manner, Sole24Ore recently published data and charts on each individual ROP (utilization by fund and region) and each individual NOP (utilization of nationally managed funds). We also recommend the Cohesion Policy Monitoring Bulletin published regularly by the State General Accounting Office (latest availableedition here).
Absorption of Funds in Italy : a commentary
The data are not yet final: as we will elaborate in a future post, the story of the “old” programming period has not yet ended and there is still some time to spend the Structural Funds. However, as we come to the end of programming, the spending figure starts to be very significant: the percentage spent (the “safe” one) is close to 40 percent, while the committed one (around 80 percent) will not necessarily result in interventions.
In quantitative terms alone, our territories could benefit twice as much as they do now through the use of Structural Funds-a figure we can estimate at around 30 billion euros in “lost opportunities.” Added to this, of course, are;
- The possibility of further improving the quality of projects and their qualitative impact on the development of territories;
- The possible “lost opportunities” resulting from participation in directly managed community programs.
Among the main factors behind this situation we can certainly mention:
- the regulatory, organizational and management difficulties of the Italian public administration, the subject of the Council’s recommendations in recent years(2019 | 2020). But not typical of Italy alone, if there was a need to organize the relevant practices into a proper Guide;
- the complexity of the architecture of European funds, the procedures for their management by administrations, and the path to their use by organizations proposing projects. This aspect is the subject of intense simplification and accompanying efforts by EU institutions.
Conclusions: for those involved in europlanning.
This brief analysis presents two important aspects for those involved in europlanning. On the one hand, poor absorption capacity implies a loss of opportunities, even and especially for those working on the front lines of European funds.
On the other, it clearly indicates how much greater awareness, knowledge and capacity in the use of European funds can be important for our country and Europe. We all play an important role in this, and we hope our Guide can contribute!
