PREPARATION AND

IMPLEMENTATION OF THE

RECOVERY PLAN

Communication to the Senate Finance Committee

March 2022

2

Executive summary

The Covid-19 pandemic and the business and travel restrictions have caused an

unprecedented contraction of GDP in 2020, of 8.0% in France. In response to this economic

shock, after implementing emergency measures to limit the contraction of activity during the

crisis, the Government has put in place a recovery plan to allow a rapid return of economic

activity to its pre-crisis level. Announced on 3 September 2020, the France Relance recovery

plan dedicates €100bn to the recovery of the economy.

A recovery plan with several objectives and a wide range of

measures

The recovery plan is structured around two objectives and three components. It aims not

only to ensure the recovery of economic activity, but also to transform the economy, with three

priorities: the “ecology” section brings together, for a budgetary volume of €30.4bn, measures

aimed at supporting the ecological transition; the “competitiveness” section has €34.4bn to

transform the productive fabric and strengthen the sovereignty of national production in certain

strategic areas; the “cohesion” section, for €35.7bn, aims to strengthen social and territorial

cohesion.

Designed with a very tight deadline in the summer of 2020, the recovery plan in many

cases extends existing schemes, allocating funds to existing measures (e.g. MaPrimeRénov’

support for energy renovation in private homes) or to schemes awaiting funding (e.g.

investments in the rail network). Regarding the investment component of the Ségur health

plan, the €6bn budget decided in the summer of 2020 has been attached to France Relanc

e.

But the recovery plan also supports new measures, such as aid for the development of the

hydrogen industry, funds for the transformation of urban and industrial wastelands or aid for

the hiring of young people, apprenticeship contracts and professionalization contracts.

The total funds of the plan are divided almost equally between the two objectives of

recovery and transformation of the economy. However, the balance differs between the

different sections, with measures in favour of ecology being more transformational in nature,

while those in favour of cohesion are more likely to have an immediate stimulus objective.

The porosity of the recovery plan with other plans or programmes underway leads to a

weakening of the legibility of France Relance and its measures. Some of them are not part of

the recovery (exceptional subsidy allocated to France Compétences, creation of places for the

studies of new students). Others are similar to emergency measures since their main objective

is to offset the effects of the health crisis (compensation for loss of revenue of local authorities).

Lastly, the integration within the recovery plan of measures included in the new programme

for future investments (PIA 4) creates confusion between the two initiatives.

The recovery plan ultimately consists of a very large number of measures, benefiting

many economic sectors. A major difficulty for its analysis is the lack of an exhaustive, up-to-

date and shared list of measures. It is therefore difficult today to assess the plan as a whole,

as no complete, detailed and up-to-date information is available.

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The financing of the recovery plan is mainly the State’s responsibility, which is

responsible for €86bn of the total budget of €100bn. France benefits from partial coverage by

the

European Union, for €39.4bn. EU funding for some measures, grouped under the National

Recovery and Resilience Plan (NRRP), is however conditional on the achievement of structural

reforms, usually referred to as “milestones”, and on the attainment of quanti

tative targets for

some measures. These requirements are a source of risk for European funding, in case of

non-compliance with milestones or non-attainment of targets. Furthermore, the audit and

control system for the implementation of measures set by the European Union imposes

management costs on the State and can be difficult to apply to decentralised measures, due

to the large number of intermediaries who are not always familiar with the enhanced control

and audit requirements that apply to European funds.

Rapid but complex implementation due to the large number of

measures and stakeholders involved

The implementation of the recovery plan involves a large number of stakeholders, mainly

central administrations, decentralised services, operators, prefectures and local authorities. Its

governance is based on several steering committees, at national and regional levels. The

national committee ensures the proper deployment of the plan, adjusts the measures if

necessary and organises any redeployment. The local committees have the task of circulating

information on the measures and reporting on implementation difficulties. Their functioning

seems to vary from one region to another, with unequal involvement of their members.

The measures of the recovery plan follow different allocation methods: simple public

ordering (several changes have been made since 1 January 2020 simplifying the formalities

of public contracts and facilitating access to them for SMEs); one-stop-shop mechanisms,

which allow aid to be distributed rapidly; and calls for projects, possibly preceded by calls for

expressions of interest, which are used to select beneficiary projects, but which require

deadlines. In all cases, the measures were subject to rapid decision-making processes, with

the risk that the quality of the projects selected would be lower and that priority would be given

to projects that were already ready at the expense of those that needed time to be designed.

The need for specific engineering to develop certain projects may have disadvantaged those

stakeholders who did not have it (e.g. VSEs or rural municipalities).

As regards the budgetary management of the recovery plan, a specific budgetary

mission was created in 2021, comprising three programmes, one for each of the priorities

(ecology, competitiveness, cohesion). This choice is not strictly in line with the principles of the

Constitutional bylaw on budget acts (the programmes include expenditure from various public

policies, the objectives and performance indicators are limited and not very informative).

Nevertheless, it makes it possible to identify and isolate the recovery plan appropriations in the

State budget, and not to create confusion with ordinary appropriations. However, the scheme

suffers from the fact that some of the funds for this plan have been allocated to other budgetary

missions.

Moreover, budgetary management appears complex, with numerous delegations of

credit management, as a result of the distribution of the implementation of the plan between

the ministries responsible for the various public policies and, where appropriate, with

operators. An unusual role with respect to the ministries’ business departments was given to

the budget department, which, as programme manager, became the promoter of the

consumption of the recovery

plan’s appropriations, in order to allow its implementation in a

short timeframe. Despite these disadvantages, the chosen budgetary management method

has clear advantages, establishing a clear separation of recovery appropriations within the

State budget. This separation should be maintained in the future, and the abolition of the

Recovery Plan

mission should be considered as soon as possible after the end of 2022.

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Monitoring of the implementation of the plan is carried out at several levels. The general

secretariat of the recovery plan monitors the progress of the measures, based on targets set

in advance by the ministries. However, the monitoring tool “Pilote relance” gives only a very

imperfect view of the plan, as the targets are rather conventional and not all measures are

covered by Pilote relance. Moreover, this tool is not accessible to the public: only thirty or so

measures are monitored and made public, via the France Relance “dashboard”.

The overall budgetary monitoring of the plan is carried out from the

Chorus

budgetary

and accounting IT system. It is relatively simple for the

Recovery Plan

mission, with a detailed

nomenclature of measures. However, it is limited to the consumption of appropriations by the

State, which does not provide information on the amount of funds actually transferred to final

beneficiaries for appropriations whose management is entrusted to operators. Administrations

have generally developed very detailed monitoring of the measures they implement, but there

is no centralisation and concatenation of this detailed information.

The implementation of the recovery plan has been a significant workload for

administrations and operators. While central administrations and decentralised services have

mostly operated with constant staffing levels, additional management funds and recruitment

authorisations have been granted to certain operators and public entities, with a variable extent

depending on the case.

The implementation of the recovery plan was also accompanied by numerous

communication actions aimed at raising awareness and generating demand from potential

beneficiaries. Numerous communication channels were therefore used to disseminate

information on the recovery plan measures, both to the departments responsible for their

implementation and to potential beneficiaries. They have led to the mobilisation of particularly

significant financial resources compared to other communication plans carried out by the

Government. Without ignoring the need to communicate on the France Relance plan, the

justification for such an amount of expenditure appears uncertain.

Within the recovery plan, a little over €10bn is dedicated to actions whose allocation is

decided at the regional level. The regionalisation of the plan was largely based on the prefects,

who had a role in coordinating all the local players (local authorities, decentralised services,

local services of operators, etc.) and, for certain measures, had the power to choose the

beneficiaries. However, the Court notes a lack of coordination of the various contractualisation

instruments between the State and local authorities: recovery agreements with the regions and

departments, recovery and ecological transition contracts, State-region plan contracts.

Moreover, not all local authorities have benefited from the recovery plan under the same

conditions, some remaining outside the contractualisations or not having the engineering

required to present a project. Lastly, the Court notes that the monitoring of the recovery plan

does not currently allow the identification of all beneficiaries of all measures in a region.

Difficulty in assessing the recovery plan at the end of 2021 and

questions about its continued implementation

The Government’s objective of consuming €70bn of commitments by the end of 2021

has been achieved. For 2022, the objective is to use up all commitments by the end of the

year. The consumption of payment appropriations is logically slower, €42.1bn by the end of

2021. Further disbursements are expected to extend well beyond 2022, at least until 2026.

Given the scale of the plan, and the phasing of disbursements for some measures,

detailed information on progress should be published at regular intervals.

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The continued implementation of the plan beyond 2021 raises several questions:

- while the recovery plan aimed to return economic activity to its pre-crisis level by mid-2022,

this target was reached by the end of the third quarter of 2021. This recovery is

accompanied by the emergence of tensions in some sectors. In order not to exacerbate

these difficulties, the implementation of the remaining funds should now be more selective;

-

the evaluation of the effectiveness of the recovery plan’s measures, foreseen from the

outset by the Government, will have to be carried out with regard to the objectives assigned

to it: stimulus of activity, transformation of the economy, development of the regions;

- Lastly, the continuation of certain measures of the recovery plan, if it is deemed desirable,

can only be envisaged in compliance with a public finance trajectory compatible with the

sustainability of the public debt.

Recommendations

1.

In order to guarantee European funding for expenditure under the national recovery and

resilience plan until 2026, put in place the means to ensure compliance with the

requirements for internal control and audit of European funds

(general secretariat for

recovery plan, ministries)

.

2.

For the

Recovery Plan

budget mission, no more commitment authorisations should be

opened beyond the end of 2022; plan to abolish it as soon as possible after that date

(budget department)

.

3.

Rapidly set up a system for monitoring recovery plan appropriations disbursed by operators

for each budget programme of the

Recovery Plan mission (budget department)

.

4.

In order to measure the regionalisation of the recovery plan, publish an overall assessment

of the regional deployment of the measures in the first half of 2022

(general secretariat for

recovery plan)

.

5.

Publish at regular intervals a statement, detailed by major components, of the budgetary

progress (expenditure, revenue shortfalls) of the recovery plan

(budget department,

general secretariat for recovery plan)

.

6.

Review projects and remove measures that do not meet their targets

(general secretariat

for recovery plan)

.

7.

Only consider the sustainability of certain measures of the recovery plan under the public

finance trajectory provided for in the next programming law

(budget department)

.