Government proposes to reform regional development laws to correspond with national and EU objectives

The Government has proposed to enact a law on regional development and implementation of the European Union’s regional and structural policy (the implementation act) and a law on the funding of regional development and the European Union’s regional and structural policy projects (the funding act). The proposed laws help preparations for the new programming period of the EU’s regional and structural policy in 2021–2027.

The new laws aim to update the objectives, planning and practices of regional development so that they better correspond to changes in the operating environment as well as to national and EU objectives. The laws also aim to support and promote effective interaction and agreement in regional development, to clarify regulation and to reduce the administrative burden of public authorities and recipients of funding.

“Above all, the aim of the legislative reform is to ensure that the EU’s regional and structural policies are simple, flexible and dynamic. The national regional development policies and the EU’s regional and structural policy funds should have a similar impact. That regional and structural policies are implemented in partnership with the regions will be taken into consideration at all stages of implementation,” says Minister of Economic Affairs Mika Lintilä.

Regional development to remain a remit of State and municipalities – Role of regional councils to be clarified

Under the proposal, the regional planning system would be streamlined, while its operators as well as the duties and powers of the authorities would remain largely unchanged.  

As per the current regulations, the State and municipalities would be responsible for regional development. Regional councils would continue to act as regional development authorities on behalf of municipalities. The Government’s priorities for regional development (regional development decisions) would continue as a key document for guiding the regional development by different administrative branches and regions. 

Regional strategic programmes would remain key planning documents, but the drafting of implementation plans would be discontinued in order to make the procedure easier. Regular regional development discussions between the State and the regions would be introduced as a new form of cooperation in order to promote their mutual interaction and to support regional councils in their development work.

The proposed acts would include national provisions on Interreg programmes and the implementation of Interreg external border cooperation programmes, which would be new. In future, regional councils would carry out administrative checks on the beneficiaries of the Interreg programmes and Interreg external border cooperation programmes. In the Interreg programmes, the regulation of national counterpart funding would be harmonised between the different programmes so that regional councils alone would be responsible for managing counterpart funding, instead of the Ministry of Economic Affairs and Employment. 

No changes are proposed to the management of the EU’s regional and structural policy funds, the European Social Fund Plus (ESF+), the European Regional Development Fund (ERDF) and the new Just Transition Fund (JTF) by the regional councils and ELY Centres. The Finnish Food Authority would be a new intermediate body for EU regional and structural policy funds. The Finnish Food Authority could grant support from the European Social Fund for projects related to distribution of food aid.

No significant changes to aid procedures

The act on funding would specify and supplement the national application of the regulations on the funds for the upcoming programming period in 2021–2027. The act would also apply to the granting and payment of national funds for regional development and the national counterpart funding for the Interreg programmes and Interreg external border cooperation programmes. 

There would not be any significant changes to aid procedures. The proposed amendments aim to clarify the rules, reduce the administrative burden and ensure the equal treatment of aid applicants. The act on funding will be specified by government decrees on aid procedures and eligibility of project costs.

The amended laws are scheduled to enter into force on 1 September 2021.

Consultation round on decrees started

Three government decrees will be issued based on the legislative proposals. A Finnish-language consultation round on the draft decrees started on 1 April 2021 at Lausuntopalvelu.fi. A Swedish-language consultation round will be launched later in April at Utlåtande.fi.

Inquiries:
Jenny Hasu, Special Adviser to the Minister of Economic Affairs, tel. +358 40 658 3510
Minna Laherto, Senior Specialist, Ministry of Economic Affairs and Employment, tel. +358 29 504 7029