Discussions about the simplification of administrative rules in the implementation of both cohesion and rural development policies of the EU are currently taking place (“shorter, fewer, clearer rules”). Every single step in this direction has a great significance for rural areas because most of them struggle with the complexity of accessing EU resources since they typically lack adequate information, knowledge and administrative capacity. As compared to
the current programming cycle, the emphasis on local development will be increased in the next programming period (Objective No 5), but to reach a significant impact, at least some specific goals need to be promoted in the coming Hungarian Territorial Development OP, in order to secure a more balanced set of measures and tools in favour of improved rural-urban connectivity. Moreover, some of the measures should be “dedicated” to rural applicants, permitting competition exclusively between rural applicants from towns and villages with similar needs and competing capabilities, otherwise cities will quickly and efficiently absorb most resources.
Illustration: The mayor of Székesfehérvár (county seat) said in a discussion of the Monitoring Committee of the Territorial OP recently: “there is a legitimate competition between cities and other settlements, whether we consider the national or the European level. All city leaders and settlement leaders wherever in the world want to give everything possible for their citizens at the given level of development” (Minutes of the Monitoring Committee, 28,11,2019, p4) This was part of his response to the President of the TÖOSZ, the largest municipal alliance, who raised the issue of the gap in level of preparedness for tendering between the largest cities and rural areas, and suggested shifting the focus of territorial development policy from the largest 23 cities to the 173 district centres, and also ensuring investment that integrated the rural hinterland of these small or middle-sized towns. He strongly criticized the huge amount of funding spent on the “Modern City Programme” and blamed big cities for neglecting their rural surroundings, thus inevitably speeding up urbanisation appearing as outmigration in rural areas. “It is time, he said, to change from development based on isolated investments to territorial development based on
“town-regions” (Functional Urban Areas). (Minutes of the Monitoring Committee, 28,11,2019, p4)
Building the delivery of territorial development policy on functional urban areas (FUAS) is of course an old corner-stone of European cohesion policy since the European Spatial Development Perspective (1999), but it has not been systematically applied in Hungary, despite the concept being ready to put in practice. Right before the outbreak of the Global Financial Crisis in 2008, a concept of spatial development based on FUAS was in fact developed. 110 FUAS were delineated and clustered into four main groups according to the size of town centres and their hinterlands. (Faragó, 2008) Sadly, the concept was swept by the crisis and then by the fundamental reorganisation of spatial structures in Hungary that tore existing linkages apart (See Chapter 1.5.2), atomised the settlement system and weakened municipalities by reducing their mandates/competencies over local issues through the re-nationalisation of basic public services (education, health care, social care, refuse disposal, energy-supply).
There is some hope, however, since, according to the 25th article of the EC Regulation of the European Parliament and of the Council on the ERDF and on Cohesion Funds, a minimum
target of 6% of ERDF resources should be spent under the “Investment for jobs and growth”
goal for integrated territorial development „in order to more effectively tackle the economic, environmental, climate, demographic and social challenges affecting urban areas, including functional urban areas while taking into account the need to promote rural-urban linkages”.
(Article 25, p15, COM (2018) 372 final; 2018/0197 Cod) On the other hand, the emphasis here is obviously on urban development (no article is dedicated to rural development; rural areas are mentioned only four times in the document, etc.) Objective number 5 – Europe closer to citizens by fostering the sustainable and integrated development of urban, rural and coastal areas – is, however, worth highlighting, especially its Section II which mentions not only rural areas as target areas of integrated territorial development (beyond urban and costal areas) but CLLD is also named as an approach through which integrated development can be achieved.
As far as CLLD as a delivery mechanism is concerned, it is still in a pilot phase in Hungary under the co-financing of ESF and ERDF. Of the 106 towns and cities with more than 10,000 inhabitants, 97 towns run 99 CLLD Programmes (Szeged and Miskolc run two programmes).
Funding for the CLLD programmes is modest, only one single theme is addressed in each (local culture), which complies with the strategy of “adaptation” of shrinking rural towns.
Complaints of the locals relate to the small amount of funding (approx. 500 million HUF, = 1,6 Million EUR), and their reasons are the same as in case of the LEADER Programme: it is a fragmentation of an already relatively small amount of allocated funding resource due the lack of project selection. According to the original intentions, only half of the eligible towns and cities would have been selected, but, in the end, each application was supported, thus the budget per project was halved. This explains a suggestion of one of the Commission’s delegates at the Monitoring Committee discussion. „We must return to the original idea behind the CLLD, which formulated the conception that it should not be a programme which had national extent, but a programme referring to 30-40 groups situated in different locations within the country. On the part of the European Commission, he was of the opinion that the CLLD could lose its credibility in Hungary and the actors on the ground would not consider it as a possible measure to be implemented.” (Monitoring Committee, 28,11,2019 p7). Avoiding the selection of applicants was a feature of clientele-building, which was already the case in 2007 when the same decision was made in relation to the LEADER Programme (when a left-wing-liberal coalition was in power).
Since both LEADER and CLLD play key roles in EC regulations for the next programming cycle, it needs to be emphasised that without a critical mass of financial support, potentials and positive impact of these policy tools will not be realised, rather, even the small amount of funding gets wasted.
Delivery of the LEADER Programme should be improved fundamentally in the next programming period; implementation has to be adjusted to the size of funding resources. If 100% of rural territory is covered (this means approximately 100 action groups), additional
financial must be given to LAGs in a similar way as during the 2007-2013 period when LAG agencies could earn their maintenance costs via managing Axis III measures of the Rural development Programme. Similarly, in the current cycle, LAGs could manage at least the measures of basic services and tourism. This would be more than nothing. There are other viable solutions, too, such as merging agencies or diversifying their activities in other ways through moving to the “market” and thus increasing financial autonomy.
So far each political shift and/or each programming period brought with it fundamental reorganisations, a shrinking of institutional and human capacities, and a troublesome as well as long transition from one iteration of the Programme to the other. The current (2014–2020) period was the worst ever, when the Paying Agency lost its institutional autonomy and was subsumed under the Treasury; its regional branches (NUTS 2 tier units) were closed down in 2012, and its IT system was completely renewed causing an intolerably lengthy delay of four years before awarding grants to the selected projects could be started. So far there is no evidence of change in the attitudes of policy makers; LEADER continues to be part of the EAFRD funding in 2021-27, this is acknowledged by authorities but nothing has started yet, and least of all has any intention to change the current practice been revealed.
What has emerged from discussions with local stakeholders and perhaps deserves mentioning here was the gap between rural (CAP Pillar II) policies and territorial development policies. The resulting inadequate synergies are the consequence of EU-level rigidity both concerning co-financing rules between the CAP and the Structural Funds (expected to be even more rigid in the next programming cycle) and the consequent institution system, namely its rather strict separation of managing authorities, paying agencies, etc.
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The Hungarian case study does not provide either positive or innovative responses in respect of collaborative structures and innovative approaches. There is perhaps one exception from the rule the Hungarian Village Programme, a badly needed nationally finances programme, launched in 2018, addressing rural areas and specifically rural shrinkage through the albeit indirect measures of developing road networks, public services, and a direct measure of Family Protection Action Plan, which was made accessible for villages and small towns of less than five thousand inhabitants with a three year gap (See Chapter 3.1.1). Innovation was achieved through the bottom-up design of the Program by the largest municipal alliance, which explains its extremely fast realisation. The same NGO is currently designing the Hungarian Town Program for middle-sized towns as mentioned in the previous chapter.
5 Policy recommendations
Due to sound centralisation and extreme concentration of power at the centre, little reminders have remained from collaboration-based planning and programming at all levels of government. This tradition should be ‘reloaded’ so that policy tools aimed at reducing population decline could be elaborated on a collaborative basis. The output of the action would not be a complete development concept or strategy, rather, a set of crystallized thoughts discussed through at several meetings and drafted in a short document. An equally important outcome would be the group of revitalised and organised local actors ready to participate in programming once it starts related to the territorial OP, LEADER, CLLD.
In other words, policy recommendations should be forged in the frame of a preliminary collaborative planning.