Objective 1 in Wales: Rechar Redux?

This article is divided as follows. The next section provides a background to how ERDF money is accounted for by the UK government. The third section looks at the RECHAR dispute of 1991-92 and the issue of additionality. The fourth section examines the Barnett formula and its implications for the funding of Objective 1 in Wales. The potential emergence of another RECHAR-type dispute is highlighted in the fifth section followed by the main conclusion. The outcome of the Objective 1 funding debate in Wales will be determined by the relationship between the Assembly as a whole, its Labour Executive, the UK government and the European Commission. The interaction of EU regulations for SFs and the public expenditure rules of the UK government create a natural alliance between the Assembly and the Commission to place pressure on the UK Treasury to demonstrate the additionality of ERDF expenditure on Objective 1 programmes in West Wales and the Valleys. Osmond, 2000, argues that this is happening already: 'The Objective 1 issue was providing a classic case of an upper and lower tier of governance joining together to put pressure on the nation-state level in-between'. In this sense, the Objective 1 issue in Wales is a return to the politics of the RECHAR dispute.