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New decree guarantees continuity of the Canary Islands development fund
The Canary Islands Government Council has approved the new decree regulating the Fondo de Desarrollo de Canarias (FDCAN), a public financing tool designed to drive the economic and social development of the archipelago. The regional government’s spokesperson, Alfonso Cabello, explained after Monday’s Cabinet meeting that the new regulation guarantees the continuity of the fund and improves its operation following the results obtained in its first phase, between 2016 and 2026. According to figures from the regional executive, every euro of public investment has generated an economic impact of €1.72.
Up to €2.6 billion in total investment over the next decade
The new decree establishes maximum funding of €1.626 billion over the ten-year period, with an annual allocation of up to €162.6 million, which will be included in the region’s General Budgets. Contributions from the island councils will be added to this amount, as occurred in the previous phase, with the aim of reaching a total investment of €2.6 billion over the coming decade.
In addition, the text approved by the Government on Monday sets out three strategic investment priorities for the FDCAN, with a financial distribution tailored to the archipelago’s main current challenges: social and healthcare infrastructure, public works with particular emphasis on housing construction, and facilities of strategic interest along with R&D&I.
How the €1.626 billion will be divided
Fifty per cent of the €1.626 billion fund will go towards improving public infrastructure and facilities, including housing under a public protection regime, while 35% will be used to build, expand, adapt and bring into operation social and healthcare places and facilities aimed at dependency care and active ageing. Meanwhile, the remaining 15% of the FDCAN will be allocated to promoting innovation, digitalisation, knowledge transfer and collaboration between universities, research centres and businesses. Employment, training and entrepreneurship will be mainstreamed across the three priorities through measures aimed at improving professional qualifications, employability and job opportunities linked to the investments.
Updated rules based on a decade of experience
The new regulation also updates the FDCAN’s regulatory framework based on the experience accumulated during the implementation of the programmes and projects developed since its creation ten years ago. Among its main objectives are expanding and updating the eligible strategic lines, simplifying administrative management, strengthening the autonomy of the recipient entities and improving planning, evaluation and financial control mechanisms.
The FDCAN seeks to promote the economic, social and territorial cohesion of the Canary Islands, correct the imbalances stemming from insularity and promote strategic investments that contribute to the diversification and modernisation of the economy, job creation and the improvement of public services.
Different funding rates to offset double insularity
In this regard, the asymmetry in the co-financing system is maintained to compensate for double insularity and foster territorial cohesion. Thus, the percentage financed by the FDCAN will be 50% for the island councils of Gran Canaria and Tenerife, 80% for Lanzarote, La Palma and Fuerteventura, and 90% for La Gomera and El Hierro.
Its continuity will be conditional on maintaining the suspension of compensation to the State for the abolition of the General Tax on Business Traffic (IGTE), or its definitive elimination, as well as on the financial sufficiency of the regional government to guarantee the provision of public services.
Three-year plans and greater flexibility
The island councils, town halls and Canary Islands public universities will draw up a Canary Islands Action Plan (PACAN), with three-year programming setting out the strategic, financial and timing plans for the lines of action to be developed during that period. The budgets may specify projects and actions that develop the three-year plan.
The PACAN will be flexible in nature and may be updated annually through the addition, removal, modification or rescheduling of actions, within the maximum annual and total allocation assigned to the recipient entity. In this way, the regulation makes it easier to modify actions and allows certain adjustments to be made without additional authorisation when they do not exceed the established limits and do not alter the essential objectives or increase the allocated funding. Changes of greater scope will have to be authorised by the Update and Monitoring Committee or by the Canary Islands Government, depending on their nature.
UNIFICA platform to cut red tape
To reduce administrative burdens and speed up the execution of public resources while maintaining control guarantees, the use of the UNIFICA corporate platform is being rolled out generally to process plans, manage actions, report modifications and rescheduling, submit justifications and carry out financial monitoring.
New monitoring bodies and reporting duties
Finally, the new model strengthens coordination between the Canary Islands public administrations and establishes three specialised bodies: the Update and Monitoring Committee, the Programme and Project Admission and Selection Committee, and the FDCAN Evaluation Committee. The latter will produce an annual report on the degree of implementation, compliance with objectives and results. In addition, information on programmes and projects will be updated quarterly and communicated to the Canary Islands Federation of Islands (FECAI) and the Canary Islands Federation of Municipalities (FECAM).
Likewise, entities must report on the material and financial implementation of actions at the start of the second half of each year. Recipient entities must justify the use of funds, keep information up to date on UNIFICA and facilitate audit and control activities. The decree also regulates the total or partial repayment of amounts improperly applied or not justified, with proportionality criteria.
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