Inquiry into the Scottish Executive’s plans for the future structural funds programmes 2007-13: Future structural fund delivery in Scotland

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The South of Scotland Alliance submitted the following written evidence to the Scottish Parliament European and External Relations Committee inquiry on future structural fund delivery in Scotland:

Question 1 – Has the current structure of Structural Fund programme delivery in Scotland been successful?

The Alliance believes that in most parts the current structure of Structural Fund programme delivery in the Scotland has been successful in providing regional solutions to regional problems.

The Alliance notes that a particular strength of the current delivery mechanisms in Scotland had been the creation of strong regional partnerships which included representatives from a range of local agencies and other organisations.

Indeed the Scottish model of delivery of Structural Funds has been recognised as a model for the rest of Europe and the South of Scotland Objective 2 European Partnership is a unique example of a long term cross boundary partnership between public agencies for the delivery of European funded programmes.

There is a need for local programmes to deliver local priorities within a national and European policy context. This provides for local accountability and local ownership.

Question 2 – What are the advantages and disadvantages of changing this structure?

The Alliance does not see any significant advantage in changing the structure of Structural Fund programme delivery in Scotland.

Recent research carried out for the carried out for the Scottish Executive by the consultants Hall Aitken concluded that on moving to a single stream funding model overall financial savings were unlikely and that the implementation of single stream funding in other countries, including England had led to considerable upheaval and discontinuity and a long lead in time. No examples were found on a successful system of single stream funding.

Question 3 – To what extent should the delivery of Structural Funds in Scotland link with Scottish Executive priorities?

The Alliance believes that Structural Funds in Scotland should link with the priorities of the Scottish Executive but should have important links with local and regional strategies. The Alliance has prepared for the period 2007-2013 a South of Scotland Competitiveness Strategy, which is attached for information.

Question 4 – How can Scotland maximise the reduced amount of Structural Funds available?

The Alliance believes that through effective linkage of Structural Funds and other European funding with national domestic programme funding is the way for Scotland to maximise the reduced amount of Structural Funds available. The Alliance’s Competitiveness Strategy describes how this could be achieved in the South of Scotland.

Question 5 – What do you think the main priority areas should be for the new Structural Fund programmes from 2007-2013?

The Alliance welcomes the recognition of the distinct rural and urban dimensions outlined in two of the three proposed ERDF priorities in Scotland, namely “promoting community regeneration” and “environmental sustainability and rural development”. However, they also expressed some concern at the proposals.

The Alliance considers that the “supporting innovation and entrepreneurship” priority places undue emphasis on the commercial spinout opportunities from higher educational institutions. Innovation is broader than just the spin off from academic establishments and occurs in further education and businesses themselves. Also rural areas such as the South of Scotland where the academic base has not yet developed significant research capacity will need major investment prior to being able to make a significant contribution to such a priority. This would include investment in hard infrastructure including roads, rail, and air communications, information technologies, water and sewerage together with suitable commercial and industrial properties as these provide the context for support for innovation and entrepreneurship.

The Alliance is concerned about “environmental sustainability and rural development” priority. This is because of its twin focus on environmental issues and rural development did not appear to create a coherent priority.

The Alliance is strongly of the view that this priority should be replaced by two priorities with the creation of a separate rural priority which encompasses rural economic development in its widest sense. This would help to support traditional industries and develop the economic potential of the regions’ cultural and natural heritage as outlined in the proposals, but would also support the development of new industries in rural areas.

There is a real danger that the proposed “environmental sustainability and rural development” priority for Lowland and Upland Scotland’s competitiveness programme will focus on waste reduction or energy savings with resources going to urban rather than rural development.

Question 6 – What are your views on the Scottish Executive establishing one European Regional Development Fund programme for Lowland and Upland Scotland? If there is one Lowland and Upland Scotland programme, how would you ensure a balance between urban and rural areas?

The Alliance is disappointed at the proposal for a single ERDF programme for Lowland and Upland of Scotland and is concerned at the difficulty in achieving the commitment of locally based partners to input to such a programme’s decision taking. The regional aspect of decision taking is considered to have been a fundamental component in the success of the current Scottish regional programmes.

Question 7 – What are the advantages and disadvantages of introducing a system of co-financing for the distribution of Structural Funds?

The Alliance considers that there may be some potential to streamline some of the bureaucratic systems through single stream funding, but noted that research recently carried out for the Scottish Executive by the consultants Hall Aitken concluded that overall financial savings were unlikely and that the implementation of single stream funding in other countries, including England had led to considerable upheaval and discontinuity and a long lead in time. No examples were found on a successful system of single stream funding.

Indeed the Scottish model of delivery of EU Structural Funds has been recognised as a model for the rest of Europe and the South of Scotland Objective 2 European Partnership is a unique example of a long term cross boundary partnership between public agencies for the delivery of European funded programmes.

The Alliance notes that the success or otherwise of single stream funding was highly dependent on the choice of organisation used to channel this funding and queried whether such organisations would have the administrative capacity and skills in place in time for the start of the new programming period on 1 January 2007.

The Alliance questions how regional priorities could be reflected within any single stream funded programmes and is concerned about the practicability of implementing a new system in the short timescale available.

The Alliance is concerned that the needs of urban areas would dominate nationally delivered single stream funded programmes and questioned the additionality of structural fund investment in single steam funds which were very closely aligned to national domestic programmes.

The Alliance also queries how regional priorities would be addressed and also how reactive programmes could be to changing regional circumstances.

The Alliance notes that a particular strength of the current delivery mechanisms in Scotland had been the creation of strong regional partnerships which included representatives from a range of local agencies and other organisations and felt that single stream funding risked undermining their further development.

Also the experience of the Lowland Scotland Objective 3 programme shows that there is a need to devolve the delivery of ESF to local delivery systems. This is because rural areas tend to be peripheral to the main thrust of such national programmes and this can be shown by the relative share of resources that they have received from the Objective 3 programme.

There is a need for local programmes to deliver local priorities within a national and European policy context. This provides for local accountability and local ownership. There is a need for local programmes to deliver local priorities within a national and European policy context. This provides for local accountability and local ownership.

The Alliance has prepared a South of Scotland Competitiveness Strategy 2007-2013 which presents the way forward for the use and delivery of EU Structural Funds in the South of Scotland (copy attached).

Question 8 – Do you think that the introduction of co-financing will give current stakeholders access to Structural Funds?

The Alliance believes that the introduction of co-financing could reduce stakeholder access to Structural Funds, reduce the level of local/peer assessment of project applications and the co-operation and commitment of local partners.

15 May 2006

Contacts for South of Scotland Alliance

Douglas Scott c/o Scottish Borders Council Council Headquarters Newtown St Boswells Melrose TD6 0SA Tel: 01835 825155 Email: dscott@scotborders.gov.uk

Tony Fitzpatrick c/o Dumfries and Galloway Council Council Headquarters English Street Dumfries DG1 2DD Tel: 01387 260101 Email: tony.fitzpatrick@dumgal.gov.uk