Handbook of territorial and local development strategies

Introduction  

All places are important to the future wellbeing of Europe. The European Union (EU) is committed to ensuring that the development potential of places in Europe is uncovered and valorised. Integrated territorial and local development strategies promoted by EU cohesion policy are relevant tools to sustain this process.

In 2020, the Joint Research Centre of the European Commission (JRC) published the ‘Handbook of Sustainable Urban Development Strategies’[1] to help national, regional and local authorities to deliver integrated urban strategies in the context of EU cohesion policy (Fioretti et al., 2020). Building on that experience and acknowledging the necessity to look at all type of European territories, this ‘Handbook of Territorial and Local Development Strategies’ addresses territorial development beyond cities, functional urban areas and metropolitan areas, i.e. when the main focus of action is in areas other than urban areas[2].

The two Handbooks are complementary and cover the spectrum of development strategies in all types of territories.

Policy context 

The Handbook’s approach to integrated and sustainable territorial development is embedded in the EU-wide objective of territorial cohesion.

The Treaty on the Functioning of the European Union (TFEU)[3] states that the EU shall promote the overall harmonious development of its Member States and regions. Actions must support the less favoured regions harnessing their development potential. Particular attention needs to be paid to rural areas, areas affected by industrial transition, and regions that suffer from severe and permanent natural or demographic handicaps – such as the northernmost regions with a very low population density and island, cross-border and mountain regions.

The Territorial Agenda 2030 (TA2030)[4] provides a political vision and ambition for the territorial cohesion objective. Under the heading ‘a future for all places’ the Territorial Agenda advocates place-based policy responses to territorial challenges, the involvement of subnational authorities and citizens, and a stronger uptake of EU territorial instruments and other territorial tools for integrated territorial development.

Territorial cohesion is at the heart of one of the EU’s longest-standing policies – the EU cohesion policy. Its territorial dimension has been strengthened in the 2021–2027 programming period with the introduction of a dedicated objective: Policy Objective 5 (PO5) ‘Europe closer to citizens’, through the fostering of sustainable and integrated development of all types of territories and local initiatives.[5] PO5 has two specific objectives. The first objective addresses sustainable and integrated development in urban and functional urban areas. The second refers to strategies that focus on sustainable and integrated development of non-urban areas, taking also into account rural-urban linkages.

Within the EU strategic and policy framework, there are other initiatives that call for and support development processes in non-urban areas.

The long-term vision for the EU’s rural areas (LTVRA)[6] published by the European Commission in 2021 provides a framework for rural development. The vision identifies several areas of action towards stronger, connected, resilient and prosperous rural areas by 2040. The accompanying EU Rural Action Plan will pave the way to fostering territorial cohesion and create new opportunities to attract innovative businesses, provide access to quality jobs, promote new and improved skills, ensure better infrastructure and services, and leverage the role of sustainable agriculture as well as diversified economic activities.

The European Green Deal[7], Farm to Fork Strategy[8], EU Biodiversity Strategy for 2030[9] and REPowerEU are all relevant to territorial and local development strategies addressing, for example, sustainable food production, the provision of ecosystem services to mitigate climate change and environmental degradation, the production and use of renewable energy or investments in research and innovation towards more resilient economies.

In parallel, the roll-out of digital infrastructure and services in non-urban areas will be indispensable to make Europe’s Digital Decade[10] a reality, while providing more opportunities for the sustainable development of rural areas beyond agriculture, farming and forestry. These can contribute to the growth of manufacturing and service activities outside urban areas.

Understanding areas other than urban areas 

The category of areas other than urban areas as interpreted by the EU cohesion policy regulations is quite broad.[11] Non-urban areas are highly diverse. They cover rural areas, mountainous areas, islands and coastal areas, remote and sparsely populated areas and many other types of territories where a mix of urban and rural features coexist (e.g. river basins, natural parks, low-density clusters, etc.).

The diversity of these territories is reflected in the differences of their development needs and potential, depending for example on their territorial context, socioeconomic and ecological characteristics and geographical specificities. Areas in close proximity to a city have different development challenges and potentials than areas far away from an urban centre. Likewise, areas along the coastal shores of Europe have different challenges and potentials than areas in the mountain ranges, and so on.

The EU cohesion policy pays specific attention to disadvantaged regions and areas – in particular, rural areas and areas that suffer from severe and permanent natural and demographic vulnerabilities.[12] Several development challenges can be more frequently found in non-urban areas than in urban areas. Among these are: population decline and ageing, a weak local economy and fewer job opportunities, lack of access to essential services, environmental degradation and lower connectivity. In many non-urban EU areas these challenges form the basis of a vicious cycle that reinforces environmental, economic and social decline (EC, 2021). This is coupled with a growing discontent among the people living in these areas, who feel that their needs are neglected in political decisions (Rodríguez-Pose, 2018).

Despite these issues, non-urban areas are undoubtedly places of opportunity. Many non-urban areas have considerable potential – and comparative advantages over urban areas – for example in the fields of bioeconomy, ecosystem services, biodiversity and well-being. New societal demands, the opportunities of the green economy and the digital transformation, together with the consequences of the COVID-19 pandemic and the expansion of teleworking have brought renewed attention to non-urban areas as places of well-being, security, eco-living and new possibilities for social and economic renewal.

Place-specific territorial strategies can help to address these areas’ needs and utilise their potential.

Territorial strategies promoted by the EU cohesion policy 

As previously highlighted, the EU cohesion policy plays a key role in promoting integrated territorial development throughout Europe. PO5 is specifically aimed at providing resources from the European Regional Development Fund (ERDF) for integrated territorial and local development strategies targeting any type of territory.

Integrated territorial and local development strategies should be implemented through territorial tools (also known as territorial delivery mechanisms).[13] In the 2021–2027 period, there are three options:

• Integrated Territorial Investment (ITI);
• Community-Led Local Development (CLLD);
• Other territorial tools designed by a Member State.

The EU cohesion policy sets out some minimum requirements for territorial strategies.[14] The first one is that interventions shall be based on a strategy, which targets a specific geographical area, responds to its development needs and potentials in an integrated way and involves relevant stakeholders. The strategy should hence follow a place-based, integrated and multi-stakeholder approach. The second minimum requirement concerns the fact that relevant territorial authorities should be responsible for the strategies, and select the projects, or at least be involved in the selection process. CLLD has more restrictive requirements concerning the components of the strategy and the governance system, in order to ensure a bottom-up approach.

While Sustainable Urban Development (SUD)[15] is compulsory, involving a minimum financial earmarking concerning each Member State, integrated development in non-urban areas through territorial and local development strategies is a voluntary measure.

The aim of the Handbook 

The ‘Handbook of Territorial and Local Development Strategies’ offers methodological support for operational programmes’ managing authorities, local authorities and any other organisation (e.g. CLLD local action groups) involved in the design, implementation and monitoring of development strategies in the context of the EU cohesion policy.

Rather than providing a step-by-step guide to elaborating territorial strategies according to EU regulations and related technical requirements, this Handbook is designed as a policy-learning tool for policy-makers, helping them become aware of the different options they have.

It offers inspiration and food for thought on how to tackle the most relevant or recurring policy challenges that territorial development actors may encounter during the process of strategy making, by providing them with a number of practical tips, concrete examples and recommendations, as well as references to existing literature, guidance and tools.

The structure of the Handbook 

The Handbook is divided into six chapters, each of which addresses one of the building blocks of an EU integrated and sustainable approach to territorial development, as follows:

1. Strategic Dimension. A strategic approach entails a transformative and integrative socio-spatial process supporting the development of a vision of the future of a place, coherent actions and means for implementation. This chapter explores how to enhance strategic capacity; promote stronger strategic orientation by applying innovative policy-making methods; foster coordination between territorial strategies; and link territorial strategies with EU and global policy agendas.
2. Territorial Focus. A key task for policy-makers responsible for territorial and local development strategies is to identify a consistent territory for policy action. This includes defining the spatial scale and the specific area that are suitable to achieve strategy objectives. This chapter focuses on three main topics: the selection of a suitable functional area for a strategy; the strengthening of linkages between rural and urban areas; and the implementation of strategies across national borders.
3. Governance. The effective governance of EU integrated territorial development strategies in non-urban areas requires the capacity to coordinate within and across different levels of government, public administrations and agencies, as well as the capacity to engage with the private sector, other public entities, NGOs and citizen groups in the concerned territory. This chapter focuses on four key components: governance structures and processes; multi-level coordination; administrative capacity; and stakeholder and citizen engagement.
4. Cross-Sectoral Integration. Integration across different policy areas is essential for territorial development strategies implemented within the EU cohesion policy. The diversity of territories calls for locally designed responses and the appropriate policy-mix corresponding to the specific needs and possibilities of each area. This chapter addresses: the opportunities for cross-sectoral integration provided by the EU cohesion policy; key elements for the design and implementation of effective cross-sectoral territorial strategies; and the cross-sectoral integration at project level.
5. Funding and Finance. Supporting a territorial integrated strategy requires knowledge on funding instruments paired with the capacity and skills to set up selection processes and monitor progress in line with funding rules. In case multiple funding sources and programmes are used, the complexity increases. This chapter focuses on how to strike the right balance between the ambition of the strategy and the capacity of the local actors to manage and access EU funds; the combination of different funds, reducing the administrative burden; and the use of additional funding sources other than grants.
6. Monitoring. The effective monitoring of territorial and local development strategies is crucial for their success. Monitoring provides important data and knowledge to track progress and inform necessary revisions. Moreover, a robust monitoring system supports transparency, accountability and the visibility of EU support ‘on the ground’. This chapter explores the design and implementation of an effective monitoring system; data collection and analysis; the use of monitoring findings in the policy cycle; and stakeholder and citizen engagement in monitoring activities.

Each chapter follows the same outline. First, there is an introduction to the theme of the chapter, including (among others) links to the EU cohesion policy framework. Thereafter, the chapter is divided into main policy challenges. The challenges have been identified as the most important and recurrent ones that policy-makers face in the process of designing and implementing strategies. Various responses and approaches to these challenges are given in the chapter, supported by concrete examples. These examples refer both to territorial and local development strategies developed by using territorial tools in the 2014–2020 programming period as well as policy experiences elaborated outside the EU cohesion policy – but following the same approach to integrated territorial development. A number of cases are illustrated in dedicated boxes while shorter descriptions are used as exemplifications in the main text. Moreover, existing guidelines, studies and online toolboxes are presented. Finally, a series of operative recommendations are listed at the end of each chapter.

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The six building blocks can be read autonomously but they also provide cross-references in order to show the links that should be taken into account when addressing integrated territorial development.

These six building blocks mirror the structure of the ‘Handbook of Sustainable Urban Development Strategies’, making it easier for the reader to integrate the different learning resources made available. In fact, considering that the distinction between urban and non-urban is rather blurred and depends on national classifications in the different EU Member States, the two handbooks can also be consulted in a joint manner.

Methodological note

The Handbook is the result of a collaborative process and benefits from the contribution of several experts who together with JRC staff collaborated on the drafting of this manuscript and its review. The publication also includes the insights and experiences of policymakers (regional and national managing authorities, local authorities, local action groups’ managers, development agencies, etc.), which were gathered through interviews and online meetings.

Finally, the Handbook’s structure and content has benefitted from the generous input and suggestions of a board of experts of more than forty contributors, composed of EC staff, practitioners, researchers and independent experts. Besides providing individual feedback on the Handbook’s various drafts, the board of experts participated in two online workshops. The first workshop was organised in its inception phase (October 2021) and the second workshop took place in the final phase, in July 2022. Six focus groups, each of them dedicated to one of the chapters, provided the opportunity to collectively discuss the Handbook and further enrich it.

Quantitative analysis of territorial and local strategies in the 2014–2020 programming period is based on STRAT-Board, the JRC database that collects information on all territorial strategies funded under the EU cohesion policy of 2014–2020. ITI and CLLD strategies outside the SUD measure have been used as a proxy to identify strategies addressing other than urban areas. Furthermore, information on the location of the strategies, deriving from STRAT-Board, has been cross-analysed with the degree of urbanisation (DEGURBA) provided by Eurostat in order to develop more accurate spatial analysis and better understand the type of territories targeted.

Qualitative information on policy experiences has been collected through both first and second-hand sources, including grey literature.