SCOTTISH PARLIAMENT EUROPEAN AND EXTERNAL RELATIONS COMMITTEE The UK Government’s Draft National Strategic Reference Framework Provisional Response by East Ayrshire Council to Part 1 of the Inquiry 1 1.1 Introduction East Ayrshire Council is pleased to submit evidence to the Scottish Parliament European and External Relations Committee regarding the UK Government’s Draft National Strategic Reference Framework. Over the years the availability of structural funds has been critical in realising a very significant number of key regeneration projects within the East Ayrshire area through the Objective 2 and 3 Programmes and also through the RECHAR Community Initiatives. East Ayrshire has achieved much in relation to regeneration and in the strengthening of its economic position but the demise of the deep coal mining industry and of traditional manufacturing industries such as in textiles and heavy engineering resulted in a spiral of decline that will take a significant period of time to address. It is therefore important that East Ayrshire continues to have access to structural funds in future programmes and that the funds can support the types of activities that are relevant to progressing the local regeneration agenda. Of particular concern is the need to ensure geographic targeting of resources in the future. 1.3 East Ayrshire Council has responded to the earlier consultations on the future of structural funds and in March 2006 sent informal and initial comments to the Scottish Executive on the priorities proposed for the 2007-2013 Scottish Structural Fund Programmes that had been outlined at the stakeholders events. This response builds on those earlier comments. East Ayrshire Council is a member the Alliance for Regional Aid, of the Coalfields Communities Campaign and of the West of Scotland European Consortium and this response also reflects the general views of those organisations. Responses to related NSRF Questions Question 1 Do respondents agree with the assessment in the draft National Strategic Reference Framework of the economic strengths and weaknesses of the UK’s nations and regions?
2.1.1 Strategy for Regional Economic Growth in Scotland The Scottish Executive has recently published its Regeneration Policy Statement. This provides the Scottish Executives domestic policy priorities for regeneration and the document should now Council Headquarters London Road Kilmarnock KA3 7BU
inform the development of the strategic priorities for the Competitiveness and Employment objectives in Scotland. 2.1.2 The Regeneration Policy Statement identifies Ayrshire as a geographic priority. It also acknowledges particular issues regarding the regeneration of former traditional industrial areas in general and gives specific reference to the need to give a focus of attention to the regeneration of Coalfield areas 2.1.3 Development Disparities, Weaknesses and Potential The analysis for the UK provides a very general overview of the economic circumstances but fails to highlight the variations in economic performance between the UK regions and within the regions. There is also no analysis as to whether the gaps between regions have changed over time. This information would provide important initial guidance as to where structural funds might be focused. 2.1.4 The statement in the Scottish chapter that the overall picture for Scotland is that it has displayed strong economic growth in recent years with a low rate of unemployment requires to be qualified. There is evidence to suggest that Scotland in general has not performed as well as the UK s a whole and it is certainly the case that there are considerable local variations in economic performance within Scotland. 2.1.5 The analyses for both England and Wales recognise that there are significant local variations in economic performance within their respective regions. The English Chapter recognises “lagging” rural areas that are typically remote, with poor accessibility and productivity and have commonly seen a decline in traditional rural industries such as agriculture, fishing and mining. It is indicated that the Government believes that the best way to overcome these disparities is to allow each region and locality the freedom, flexibility and funding to exploit indigenous sources of growth. It is indicated that the programmes for England and Wales will reflect, or will be capable of responding to, locally identified priorities. 2.1.6 The Scottish analysis should also recognise the variations in economic performance within the region between and within cities and between and within rural areas. It is important however that city and rural areas are not typecast. This is of particular concern to East Ayrshire as it experiences many “urban” regeneration issues in a “rural” environment. This is particularly evident in the Coalfield area and other rural areas such as the Irvine Valley that were previously so dependent on employment in textiles. 2.1.7 It is noted that the Chapters for the individual regions use the same template of indicators as for the UK analysis and whilst this allows some consistency in description it might have been expected that additional indicators might have been selected in order to describe the circumstances of individual regions or highlight the variations within those regions. 2.2 Question 2 Do respondents agree with the proposed priorities for future Convergence and Competitiveness Programmes in England, Scotland, Wales, Northern Ireland and Gibraltar?
2.2.1 In relation to the Scottish Chapter the principal concerns are to ensure the introduction of geographical targeting and the introduction of a wider range of eligible criteria including activities to support physical regeneration projects. The comments below refer also to the draft ERDF and ESF Priorities that were discussed at the stakeholders events.
2.2.2 ERDF ERDF Priority 1”Supporting innovation and entrepreneurship” The range of eligible activities could be widened. In many areas of need, for instance, there is still a requirement to provide basic infrastructure to support economic development. ERDF Priority 2 “Promoting Community Regeneration” Clarification is required both as to the identification of areas that may be eligible and the activities that may be supported. It may also be desirable to extend the range of eligibility criteria for instance to include support for the development of Social Enterprises. ERDF Priority 3 “Environmental sustainability and rural development” Specific reference should be made to coalmining areas in this section. General The text suggests that Priorities 1 and 2 might focus on urban areas and that Priority 3 might focus on rural areas. It is unclear as to why this should necessarily be the case given, for instance, that urban areas can contribute very significantly to supporting environmental sustainability objectives. 2.2.3 ESF ESF Priority 1 “Progressing into sustainable employment” The Aim should more closely reflect the NEET Strategy by strengthening the reference to school leavers. The substitution of “especially” for “as well as” may be appropriate. The Aim should also reflect the requirement for early intervention. In relation to the target groups a degree of prioritisation might be introduced to ensure that the intervention focuses on those groups that are most disadvantaged and that it also reflects other Agency’s priorities. In relation to Jobcentre Plus these would be Lone Parents, IB Recipients, Young People and Older People. ESF Priority 2”Progressing through sustainable employment” It may be appropriate to identify Young People as a specific target group to help reflect a developing priority ESF Priority 3 “Investing in the lifelong learning support environment” No comments 2.3 Question 3 Do respondents agree that the proposed priorities include a sufficient focus on the Lisbon Agenda?
2.3.1 It is unclear as to what degree the structural funds should be a slave to meeting the objectives of the Lisbon Agenda. The purpose of Cohesion Policy is to help overcome structural deficiencies in order to reduce economic, social and territorial disparities and to enable them to strengthen their competitiveness and increase employment. 2.3.2 The suggestion that 75% of expenditure should be on activities that refer to the Lisbon Agenda appears overly restrictive. In areas of need it is often the case that the activities that will make the most difference, and that are most appropriate to address the economic issues of a particular area, are not necessarily those that are linked to the Lisbon Agenda as interpreted by the proposed list of “Lisbon compatible” activities. In order to meet the overall requirements of the Lisbon Agenda it may therefore be appropriate for there to be regional or sub regional variations such as by allowing areas of need to spend a greater proportion of funds on “non earmarked” activities. 2.4 Question 5 Do respondents agree with the proposed architecture for future Programmes?
2.4.1 For Scotland the Scottish Executive proposes an ERDF Competitiveness Programme for the Lowlands and Uplands of Scotland and an ESF Competitiveness Programme for the Lowlands and Uplands of Scotland. 2.4.2 It is proposed that all parts of the area will be eligible for Competitiveness funding and this will mean that not only will there be less funding overall but that less prosperous areas will have greater competition to secure a share of the funds. 2.4.3 Unless geographic targeting is introduced in some form there is a danger that this will result in structural funds supporting already successful areas and urban centres rather than other areas of need. For instance the activities currently identified for the Priority 1 ERDF focus heavily on RTD activities that currently cluster around city areas. Whilst this is understandable in terms of research there may be an opportunity to use geographic targeting to encourage the commercial opportunities resulting from research to be directed to areas of need. Such an approach would accord with the need for structural funds to address market failure. 2.4.4 The UK Government believes that the best way to overcome economic disparities is to allow each region and locality the freedom, flexibility and funding to exploit indigenous sources of growth. Given the economic variations within Scotland it is unlikely that a single programme could introduce that flexibility and, importantly, local accountability. 2.4.5 East Ayrshire Council in its response to the Consultation entitled “A Modern Regional Policy for the United Kingdom” in July 2003 suggested that Regional Economic Policy should continue to support positively the restructuring of less prosperous areas and be sufficiently flexible to allow local partners develop and realise regeneration strategies targeting areas of particular need. 2.4.6 Given the degree of economic inter linkages in the West of Scotland, and the past experience in delivery, there may be an argument to introduce a new West of Scotland Programme. 2.4.7 Another option may be to support the implementation of Economic Forum Strategies. These strategies fit with National Strategies, are locally led, are prepared on a partnership basis and reflect local economic circumstances. This would be relevant to the Ayrshire circumstance given that Ayrshire is a priority in the Regeneration Policy Statement. 2.4.8 A third option may be to support Community Planning Partnerships perhaps on a pilot basis given that the Partnerships are at various stages of development. In the case of East Ayrshire the Community Plan is the sovereign document. It represents a very strong Partnership and has an excellent track record of joint funding of projects. A local structural funds programme document to respond to the opportunities provided by the structural funds could be readily prepared and the existing Partnership could form a local management committee to consider applications and monitor performance. This mirrors the Leader process which has been recognised as successful by the Commission. 2.4.9 The RECHAR Community Initiatives also allowed the development of such local responses and proved highly effective. For RECHAR the Strathclyde European Partnership administered the PMC meetings and provided the Technical Assistance and this expertise might be used to administer and provide technical support for local programmes.
2.4.10 Considerable expertise and experience has been developed in Scotland in delivering the EU Structural Funds and these strengths should be used to best effect in establishing any future delivery mechanisms. 2.5 Question 9 Do respondents have views on how to improve coordination between Structural funds and domestic spending within England, Scotland, Wales and Northern Ireland?
2.5.1 East Ayrshire Council in general agrees that it is a sensible objective to have appropriate alignment between EU and domestic spending. However it is important that there remains a degree of flexibility to ensure that local solutions to local circumstances can be identified and realised. 2.5.2 East Ayrshire Council supports the Government’s proposal to retain the current decentralised approach of devolving responsibility for delivery of Structural Funds to the Scottish Executive and other UK devolved administrations. 2.5.3 The Council also supports the need to continue to build on the strengths of existing Structural Funds programmes and in particular the local delivery and partnership working aspects of previous programmes. Suggestions as to how this may be achieved are include in the response to Question 5 above 2.5.4 It is important that those organisations involved in the delivery of Structural Fund projects and who have built up significant levels of expertise, are able to provide input into the overall development and monitoring of programmes. This is particularly relevant now that limited funds need to be concentrated even more effectively on those priorities which will provide the greatest impact and emphasises the need for a geographical focus/context. 2.6 Question 12 Do respondents agree that greater use of single-stream funding mechanisms would be beneficial in Scotland?
2.6.1 Further information regarding this suggestion is required. It is unclear whether the proposal is that funds would be given to Agencies to merely increase their national programmes of activities or whether it would be used to support additional projects. There is also an issue as to whether National Agencies would be flexible enough to support local projects or target funds to specific areas. 2.6.2 There is a therefore a concern that single stream funding could result in the loss of additionality and might also reduce the role of local government in the regeneration process In relation to ERDF for instance there would be concern if Scottish Enterprise National held the funds for the delivery of Priority 1 and delivered them solely in line with the objectives of Smart Successful Scotland. It is difficult to see how many areas of need would benefit unless there was a specific requirement for a significant proportion of the funds to be targeted to such areas. 2.6.3 East Ayrshire Council is of the view that the responsibility for funding decisions should be with independent programme committees supported by independent programme secretariats through local partnerships that have democratic accountability. 2.6.5 In the event of some delivery being through the Community Planning process one option may be to allocate ERDF and ESF to appropriate National Agencies with the proviso that a set proportion of the funds be used to support local projects identified through the Community Planning process. In East Ayrshire, for instance, the Local
Enterprise Company, Communities Scotland and Jobcentre Plus are key players in the Community Planning Partnership. 2.6.6 The establishment of special Key funds co-funded by structural funds and those of a public Agency may also be attractive if they were relevant to local circumstances as they would not require applicants to identify match funding. Inability to secure match funds often makes it very difficult to realise what may be appropriate projects.