Norut evaluates the "Erna millions"

Norut evaluates the "Erna millions"

November 6, 2008

Norut Alta - Áltá has now evaluated the Norwegian parliament's 2004 crisis package of NOK 75 million for new and lasting employment on the Finnmark coast.

In 2004, the Storting approved a NOK 75 million crisis package to create new and lasting employment in coastal areas of Finnmark.

The funds were dubbed the "Erna millions" after the then Minister of Local Government and Regional Development Erna Solberg. The use of the extraordinary funding has now been evaluated by Norut Alta - Áltá and Norut Tromsø.

Crisis and election campaign

By late 2004, the full extent of the fisheries crisis had hit the Finnmark coast. The Russian landings had come to a halt, the backbone of the fisheries industry had been fractured and the rates of unemployment and moving away were increasing.

The County Governor had advised the Prime Minister of his concerns that many local communities were on the verge of collapse. Fund-raising campaigns were started to support unemployed people in Vardø.

Several political parties talked about a fresh crisis package for the Finnmark coast by rebalancing the State budget, as they saw the importance of showing political energy in the lead up to the national election campaign in autumn 2005.

Regional partnership

Finnmark County Council chairperson Helga Pedersen took on the task on behalf of regional and local actors to detail the situation for the Ministry of Local Government and Regional Development, as well as proposing possible measures. This enabled the Ministry to set the scope for the funding package.

After a while, the Ministry appointed a regional working party, the "Fløtten Committee", chaired by the Regional Director of the Confederation of Norwegian Enterprise (NHO), Erling Fløtten. The committee also comprised representatives from the Finnmark County Council, Innovation Norway (IN) and the Industrial Development Corporation of Norway (SIVA).

The working party had the task of preparing a plan of action featuring prioritised areas of effort and specific measures. The plan was well received, and the municipalities felt they were listened to and their views were taken into consideration. The plan outlined 20 different industrial measures.

Three separate processes

The municipalities expressed a certain degree of disappointment about not getting a direct say about the funds. Companies with ideas needed to send an application to Innovation Norway's Finnmark office. The applications were dealt with in accordance with the ordinary criteria and levels of support.

Several of the measures outlined in the plan were not found worthy of support, and new applications were submitted directly to IN. A total of scarcely NOK 50 million was granted to 47 different business-related initiatives. Much of the prioritising of applications, following up and implementation was assigned to IN. With that, the regional partnership became detached.

The second type of measure was support for employment in three municipalities. This funding was provided as the municipalities' share in joint finance ventures with the labour and welfare administration, Aetat. These measures were primarily aimed at the long-time unemployed who required training programmes and up skilling.

The third type of measure was strengthening the municipal industrial development funds, with 11 municipalities receiving grants. This measure gave the respective municipal councils the responsibility for allocating the funds for various smaller projects in their own municipality following applications from individuals and the business community.

The results

The aim for the funding package was to create lasting employment and new jobs.

The short-term measures directed towards individuals have partially had a positive effect. They provided long-time unemployed people an opportunity to re-enter the work and succeeded in retaining people in the municipalities who had been considering moving away.

There has been an inadequate level of reporting of funds from the municipal industrial development funds and it is, therefore, difficult to say with any certainty what effect these funds have had.

The majority of the funds were allocated to corporate projects, in which it will take three to five years for the results to be gauged. The majority of the projects have not yet concluded, so it is still too early to say if the targets have been met. To date the projects have only achieved 25 percent of the set target for employment.

Nevertheless, the results and effects of such crisis packages are difficult to measure. We can see examples of excellent and innovative measures, but we can also see unsuccessful projects, which were either not implemented or have not achieved any positive development.

Contact person: Vigdis Nygaard, Norut Alta - Áltá