Newsystem Ofcategorisation

New system of categorisationof areas of interventionfor 2007-13 (August 2004)

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Newsystem ofcategorisation

ofareas of intervention

for 2007-13

August 2004

TABLE OF CONTENTS

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New system of categorisationof areas of interventionfor 2007-13 (August 2004)

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1.Background

2.The system of categorisation 2000-06

2.1.Breakdown of data

2.2.Reliability of data

2.3.Allocation of the codes

3.The new categorisation 2007-13

3.1.Aim

3.2.Nomenclature

3.3.Collection of data

4.Annex

1.Background

Since the beginning of the2000-06 period,there has been asystem for the breakdown of investments into areas of intervention under the Structural Funds.The purpose of thesystem is:

firstly,decentralisationofimplementation requires the upwards collection of information. The Commission, like each of the Member States, must account to itsbudgetaryauthoritiesand to taxpayersfor how it has used public money. Goodgovernancerequires this;

furthermore, such asystem identifiesmore clearly the real value added by theFunds tocohesion policyand to the other policiesof the Union. Theguidelines set out in the“Third report oneconomic and socialcohesion”include astrategyfor acohesionpolicymore oriented to the Union’s priorityobjectivesand a simplification of the systemofimplementation based on greater subsidiarity;

finally, asystem of breaking down investments assists the day-to-daymanagement of the Funds at all levels.

Thismeans that thesystem of monitoring, inspection and evaluationshould increasingly:

make use of statisticswhich are horizontal and sectoral, rather than merely nationalorregional,

be in a position to reply to requests for specific information from theCommunityinstitutions, theMemberStates and the public,

be based on the immediateavailability of the information.

The newsystem of categorisationof the areas of intervention for the period 2007-13 is planned to be anintegral part of the rules on implementation governing the newcohesion policy.

2.The system of categorisation 2000-06

2.1.Breakdown of data

An analysis based on theclassificationof the areas of intervention (Annex IV toRegulation (EC) No 438/2001) allocated to themeasuresin the programmecomplements (taking all Objectivesand Funds together) shows that:

• 61.60% of assistance wasencoded at the basic level ofdetailof the codification of all the fields (3 to 4 figures),
• 31.25% of assistance wasencoded at the basic level ofdetailofthe fields“Humanresources” and “Social and health infrastructure”(2 figures),
• 6.90% of assistance wasencodedat a non-broken down level ofdetail (1 to 2 figures),
• 0.25 % of Communityassistance wasencodedas miscellaneous (unknown code).

This means that information wasentered at a sufficientlevel ofdetailto provide an overall view of the use ofthe funds but thatinformation was lacking forsome parts of the analysis.

2.2.Reliability of data

Although the reliability of this information islessened by the fact that it is based on percentage estimates by the Member States in theprogramme complements, it gives us an overview of the use of the Structural Funds in the various areas of intervention.

2.3.Allocation of the codes

The problem with the currentsystem ofcategorisationis the multiple functionof some areas of intervention. The same investment may be coded as belonging to twodifferentareas of intervention, giving sectoralinformation which may have an impact on severaleconomiccategories.

A check on the applications for information receivedallowed the areas of interventionin the currentsystemto be classified bycategories. Table1 shows the overlapping which existsbetween theareas of interventionand the variouscategories.

Table 1:Breakdown of theareas of interventionbycategories.

Category / Codes of theareas of intervention
Economy and finance / 1314 / 155 / 165
Agriculture & forestry / 11 / 12 / 13
Education and culture / 113 / 128 / 166 / 167 / 174 / 184 / 354 / 415
Employment and social affaires / 2 / 113 / 128 / 166 / 167 / 174 / 184 / 323 / 415
Energy and transport / 31 / 33
Business / 15 / 16 / 17 / 35
Environment / 34 / 152 / 162 / 353
Fisheries / 14
R.D.T.I. / 18
Health andconsumer protection / 36 / 166
Information society / 32 / 24 / 414
Tourism / 17

3.The newcategorisation 2007-13

3.1.Aim

The aim isto implement a newcategorisationfor 2007-13 offering a direct link between the strategic and the operational levels.

The newcategorisationwill form part of the management andinformationactivitiesat the level of the operationalprogrammes and in the annual implementationreports.

3.2.Nomenclature

The central element of theprojectis the production of aharmonised nomenclature which ispreciseand meets the information needs of users. This is an essentialpre-condition for the production of information offering sectoralaggregationwith anacceptable degree ofprecision.

This nomenclatureshould:

(1)concentrate on the dimensions which can be assessedobjectively;

(2)be basedon the keyprioritiesof the Lisbon/Göteborgstrategy and on the priorities in the“Third report oneconomic and socialcohesion”;

(3)be consistent with the priorities in theoperationalprogrammes without replacing the typologies defined by thosepriorities.

The dimensions included will normally be:

1) Lisbon/Göteborgstrategy,

2) priority theme,

3) economicactivity (basedon the NACE[1]),

4) form of finance,

5) territory,

6) location (NUTS[2]).

Tables 2 to 6 show the agreed coding of the first five dimensions.

Table 2:Codifying theLisbon/Göteborgstrategy.

Code / Lisbon / Göteborgstrategy
1 / Small firms and business competitiveness
2 / Innovation andresearch
3 / Socialcohesion
4 / Employment and life-long training
5 / Network of key infrastructure
6 / Climate change, use of clean energy, energyefficiency
7 / Protection and management ofnaturalresources
0 / Not applicable

Table 3:Codifying thepriority theme dimension.

Priority / Code / Priority theme
Innovation, economicreform and knowledgeeconomy / 01 / Productive investment*
02 / Business services
03 / Promoting the business spirit*
04 / Direct aid toinvestment*
05 / Promotion of innovation and R&D*
06 / Information society*
07 / Localinfrastructure
08 / Investments in tourism and culture
09 / Otherinvestments and expenditure required for economicreform and the developmentof potentialfor growth
Access and services ofgeneraleconomicinterest / 10 / Transport, telecommunicationsandenergy networks
11 / Trans-European networks*
12 / Secondary networks
13 / Socialinfrastructure
Conservation and improvement of the environment. Preventionand management of risk / 14 / Measuresfor the application ofCommunitylegislationon the environment
15 / Investments in infrastructure related to biodiversityand the Natura 2000 networkcontributing to sustainableeconomicdevelopment
16 / Promotion and use of environmental technology and promoting the developmentof industries usingecologicalproduction techniques*
17 / Promoting the integrationof clean technologies and measures toprevent pollution in small firms*
18 / Restoration of contaminated land and disusedindustrial areas*
19 / Encouragement ofmeasuresto prevent and managenatural and technological risks
20 / Measuresto manage and use cleaner meansof transport
21 / Measuresfor clean and sustainable public transport in urban areas
22 / Energy efficiency*
23 / Developmentand use of renewablesources ofenergy*
Education, employment,social support and assistance with adaptabilityforworkers / 24 / Improving labour-market institutions
25 / Expanding educationand trainingsystems*
26 / Improving social services and assistance
27 / Developing the life-long trainingstrategy, mainly bypublicauthoritiesand thesocialpartners*
28 / In-house training to increase workers’adaptability*
Humancapital, labour market and disadvantaged persons / 29 / Initial and ongoing trainingmeasures*
30 / Active labour policyto ensure accessto the labour market for all*
31 / Support of socialinclusion*
32 / Improvingstrategiesfor active aging andpreventing earlydeparture from the labour market*
33 / Measuresto increase women’s participation in the labour market*
34 / Measuresto increase employmentpotential,equalaccessand inclusion forthe disabled, migrants andethnicminorities*
Institutional andadministrativecapacity / 35 / Improving the institutional capacity of national andregional administrations to manage the Structural Funds and the Cohesion Fund
36 / Improving thequality and ability to adapt of theauthoritiesresponsible forthe labour market, educationand trainingsystems, social services and health care
37 / Adapting the public administration to change by providing administrative capacity
00 / Not applicable

* Link with theLisbon and Göteborgstrategy

Table 4:Codifying theeconomicactivity dimension.

Code / NACE / Economicactivity
01 / A / Agriculture, hunting andforestry*
02 / B / Fishing, aquaculture*
03 / CA / Extraction ofenergyproducing materials
04 / CB / Extraction of other than energy producing materials
05 / DA / Manufacture of foodproducts and beverages*
06 / DB / Manufacture of textiles and textile products
07 / DC / Manufacture of leather and leather products
08 / DD / Manufacture of wood and wood products
09 / DE / Manufacture of pulp, paper and paper products;publishing and printing
10 / DF / Manufacture of coke, refined petroleum products and nuclear fuel
11 / DG / Manufacture of chemicals, chemical products and man-made fibres
12 / DH / Manufacture of rubber and plastic products
13 / DI / Manufacture of other non-metallic mineral products
14 / DJ / Manufacture ofbasic metals and fabricated metal products
15 / DK / Manufacture of machinery and equipment n.e.c.
16 / DL / Manufacture of electrical andopticalequipment
17 / DM / Manufacture of transport equipment
18 / DN / Other manufacturing
19 / 40 / Electricity, gas, steamand hot water supply
20 / 41 / Collection,purification and distribution of water
21 / F / Construction
22 / G / Wholesale and retail trade; repair of motor vehicles, motorcycles and personal and household goods
23 / H / Tourism: Hotels and restaurants
24 / 60.1 / Transport via railways
25 / 60.2 / Other landtransport
26 / 60.3 / Transportvia pipelines
27 / 61.1 / Sea and coastal water transport
28 / 61.2 / Inland water transport
29 / 62 / Air transport
30 / 63 / Supporting and auxiliary transport activities of travel agencies
31 / 64 / Postand telecommunications
32 / J / Financial intermediation
33 / K / Real estate, renting and business activities
34 / L / Public administration and defence; compulsory social security
35 / M / Education
36 / 85.1 / Human health activities
37 / 85.3 / Social work activities
38 / O / Other community, social and personal service activities
00 / - / Not applicable
* Itshould be noted thatsectorsofeconomicactivityunder codes 01 and 02 will normally be servedby the EuropeanAgricultural Fundfor Rural Development (EAFRD) and/orthe EuropeanFisheries Fund(EFF), not the Structural Funds.That is also true of code 05, provided it concerns theprimarytreatmentof certain products. Thesesectorsare nevertheless retained in the codification ofthis dimension to cover allsectorsand certain themes related to these economic activities.

The codification of theeconomicactivitydimension, based on the NACE (given on an indicative basis in this document),has been drawn upconventionally at a level ofdetail adaptedto the needs for information.

Table 5:Codifying the form of financedimension.

Code / Form of finance
01 / Non-refundable aid (direct aid) - TA: preparation, implementation
02 / Non-refundable aid (direct aid) - TA: evaluation, studies
03 / Non-refundable aid (direct aid) - TA: information, communication
04 / Non-refundable aid (direct aid) (other)
05 / Non-refundable aid via a local developmentfund
06 / Interest subsidies
07 / Refundable aid
08 / Direct public guarantees
09 / Public capital holding
10 / Public holdingin a venture-capitalfund orguarantee fund

Table 6:Codification of theterritorialdimension.

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New system of categorisationof areas of interventionfor 2007-13 (August 2004)

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Code / Territory
1 / Urban
2 / Rural – mountain
3 / Rural – islands
4 / Rural – other areas
5 / Trans-national cooperation
6 / Cross-border cooperation
7 / Inter-regionalcooperation

Codification ofthelocation dimension (NUTS) may be found in the Annex to Regulation (EC) No 1059/2003.

3.3.Collection ofdata

Asystem for breaking down investments with severaldimensions must be easy for operators, i.e. the managingauthorities, to use.

The Regulation requires them first of all to breakdown total fundingfor the programme by allocating appropriatecodes andestimatedpercentages in each of the six dimensions (Annex - diagram 1).

That breakdownimposes noconstraintsas regards the final use of that funding. Inany case it is obvious that only alimitednumber of codes in each dimension will be appropriate for any given programme.

The second task of themanagingauthoritywill be to give eachprojecttheappropriate code for each ofits dimensions (Annex - diagram 2).

Normally aprojectwill have only one exclusive code per fieldof assistance. That is not so in the case of theLisbon/Göteborgstrategydimension which, by its nature, is a horizontal dimension. Aprojectmay therefore come under both theInnovation and researchstrategyand the Climate change, use of clean energy, energyefficiencystrategy. Hence total percentages will exceed 100% ex-anteandex-post.

If that is done, the computer system willpermit extraction from theannual implementation reports of a breakdown of the state of progress of the programme by adding up the amounts of theprojectsapprovedby the MemberState using the combinations of codes used(Annex - diagram 3).

Since the Member States use national and regional accounting based on a nomenclature which is better suited to their situation, itcould be useful to construct an automatic interface to convert between the codes used by the MemberStates and the list of codes defined by the Commission. Thatinterface could be prepared for eachMemberState with help from the Commission.

In addition, the Member States will still have the opportunity to create in their information systems subdivisions within the list of codes defined by the Commission. However, if the Commission is to be able to carry out summary analyses using the variousdimensions, these“sub-codes” must remain within their systemsand be recorded at the level of aggregationof codification laid down for the transmission ofthe information to the Commission.

4.Annex

Diagram 1:Breakdownbythe funding for operationalprogrammesdimension.

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New system of categorisationof areas of interventionfor 2007-13 (August 2004)

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Diagram 2:Codifying of dimensions inprojects.

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New system of categorisationof areas of interventionfor 2007-13 (August 2004)

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Diagram 3:Breakdown of the state of progress of the programme in the annualimplementationreports.

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[1]Statistical classification of economic activities in the European Community (NACE Rev.1.1). Regulation (EC) No 29/2002, 19.12.2001.

[2]Nomenclature of territorial units for statistics (NUTS).

Regulation (EC) No 1059/2003, 26.5.2003.