When we talk about the use of European structural and investment funds (ESIF), we are always struck by “too much bureaucracy,” administrative burden and costs too high, which are generally the consequence of too many laws, rules, norms or instructions. This abundance of rules is known as “gold plating”. Gold-plating can be active (when additional administrative procedures are adopted, that go beyond what is required at European level) or passive (when national authorities do not apply the simplification measures proposed by the European Funds regulations).
At the level of the Commission for Regional Development within the European Parliament, in which I am a substitute member, the causes and effects of this gold-plating have been analysed. I will present below the results of this analysis along with a series of recommendations for the next period.
Thus, the main causes of gold-plating at national level are the following:
- Inconsistencies in the various existing regulatory frameworks (legislation, rules, instructions, etc.) that may result from other EU rules, from deadlines or from additional rules in the Member States.
- Various uncertainties of the authorities managing the ESIF, such as late adoptions, changes in legal requirements, various interpretations of ESIF regulations and different political agendas.
- Audit fears either due to the administrative culture and traditions of different Member States, or as a result of a previous negative audit experience. The fear of noncompliance often leads the actors involved in managing the funds to narrower interpretations of the rules.
- The complexity of the ESIF’s shared management system, with many structures, interests and perceptions involved and the lack of communication between them, creates a rather complex management system.
As a result of gold-plating, we have the following consequences in managing ESIF:
- Increasing the administrative burden and costs, including the beneficiaries at different stages of project implementation.
- Excessive administrative burdens make ESIF no longer very attractive. In some Member States, ESIF are perceived as a burden and over-regulation increases this burden further, as additional requirements discourage potential beneficiaries with good-quality projects to request funds. Consequently, projects that could have made a valuable contribution to the objectives of the program are not selected in the end.
- The programs are experiencing increasing risk of error as a result of gold-plating. Excessive rules and requirements to be complied with also require careful monitoring and control. Limited resources to evaluate the fulfilment of all requirements or the fear of making mistakes tend to cause mistakes.
- Conformity takes precedence over performance. Due to the application of rigid rules, the quality of projects is often secondary, while compliance with these formal rules is becoming more and more important, adversely affecting potential outcomes.
It can be debated whether gold-plating is always a negative practice, because in some cases it may be inevitable and in others it can reduce costs or administrative burden. In most cases, its negative effects have to be reduced, and this can also be done during the current 2014-2020 programming period. Possible actions include strengthening administrative capacity, open dialogue, better focus on balance between compliance and performance, encouraging the use of simplification measures, and limiting different interpretations of regulations by auditors.
At European level, transparency should be increased and the clarity, simplicity and continuity of the rules should be promoted. At national level, co-ordination can be increased and programs need to focus on providing the beneficiaries with as much clarity as possible.