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6. IMPLEMENTING PROVISIONS

6.1 Roles and responsibilities

The following section sets out the roles and responsibilities for the management of the Programme. It covers the identity and duties of the following:

• Managing Authority
• Certifying Authority
• Audit Authority
• Compliance body
• Intermediary bodies

Managing Authority

The Managing Authority of the Programme will be the Scottish Executive through the Enterprise & Lifelong Learning Department:

In accordance with Article 60 of Regulation 1083/2006, the tasks of the Managing Authority will consist of the following:

• ensuring that operations are selected for funding in accordance with the criteria set out in the Operational Programme and with relevant Community and national rules;
• verifying that co-financed activities have been delivered and permissible expenditure defrayed in accordance with Community and national rules;
• establishing and maintaining an effective monitoring system and that beneficiaries can fulfil their monitoring obligations as well;
• ensuring the evaluations set out in Chapter 7 are made;
• ensuring an adequate audit trail for expenditure;
• overseeing the annual and final reports on implementation;
• ensuring compliance with the required publicity actions; and
• providing the Commission with information to allow it to appraise major projects.

The Managing Authority will pay the beneficiaries on receipt of valid claims.

In accordance with Article 59, the Scottish Executive has decided to delegate selected Managing Authority tasks to Intermediate Administration Bodies ( IABs). A single body will be responsible for managing and administering selected Managing Authority tasks in the ESF Programme on behalf of the Scottish Executive for the whole of the region. The principal tasks will be:

• publicity: to implement the relevant publicity requirements of the EU regulations;
• project applications: to facilitate the process of publicising, overseeing the application process, registering new organisations and provide advice and support to prospective applicants and communicating decisions, key guidance and programme/policy changes to partners;
• project selection: to undertake technical checks on applications and facilitate the assessment of challenge-fund applications and recommendations of awards to the Programme Monitoring Committee;
• project monitoring: to carry out monitoring visits on all projects in fulfilment of programme obligations;
• reporting: to monitor progress towards programme financial targets and contribute to programme requirements; and
• secretariat to the Programme Monitoring Committee.

The Intermediate Administration Body will be accountable to the Executive and the Programme Monitoring Committee and act in accordance with the formal contractual agreement. The Agreement and the contract to the body selected to carry out IAB functions will be reviewed by 31 December 2010.

Certifying Authority

The Certifying Authority of the Programme will be the Scottish Executive through the Enterprise & Lifelong Learning Department. Certification will be undertaken by a unit within the Department that is functionally independent from the Managing Authority. Its tasks, as set out in Article 61, will be to:

• draw up and submit certified statements of expenditure and payment applications to the Commission;
• certify that the statements of expenditure are accurate and verifiable, comply with relevant Community and national rules and have been incurred in accordance with the relevant Operational Programme criteria;
• ensure for the purposes of certification that the Managing Authority has provided adequate information on procedures and verifications carried out in relation to the expenditure detailed in the statements of expenditure;
• take account of all relevant audits for the purposes of certification; and
• maintain adequate records of expenditure declared to the Commission and of amounts recoverable or withdrawn following cancellation of a contribution for an operation.

The Scottish Executive will receive all payments made by the Commission through the Enterprise & Lifelong Learning Department.

The Executive will also make payments to individual projects and Intermediate Delivery Bodies and ensure all monies incorrectly paid are recovered.

Audit Authority

The Programme Audit Authority will be the Scottish Executive through the Finance & Central Services Department. As described in Article 62, the tasks of the Audit Authority will be to:

• ensure that audits are carried out to verify the effective functioning of the management and control system of the Programme, including audits on a sample of operations to verify expenditure declared;
• submit to the Commission an audit strategy for the Programme within nine months of the Programme's approval as well as an annual control report detailing the audits carried out during the previous year, their result and any shortcomings consequently found in the management and control of the Programme;
• submit to the Commission an annual control report setting out audit findings in the previous year (to the period ending 30 June of the year concerned);
• issue an annual opinion on the basis of the controls and audits that have been carried out under the Audit Authority's responsibility as to whether the management and financial control systems function effectively and provide assurances to the Commission with respect to the statements of expenditure;
• where appropriate, produce for the Commission a declaration for partial closure assessing the legality and regularity of the expenditure concerned (where appropriate) and, at the latest by 31 March 2017, a closure declaration covered by the final statement of expenditure, which will be supported by a final control report; and
• ensure that audit work takes account of internationally accepted standards.

Compliance Body

Article 71 requires that an independent body is designated to give an opinion whether the management and control systems are in compliance with the Articles 58-62, based on a description of the systems to be provided to the Commission within twelve months of the Programme's approval. The 'Article 71' body for the Programme will be the same as the Audit Authority: the Scottish Executive through the Finance & Central Services Department.

Intermediate Delivery Bodies

Certain delivery bodies will be designated as Intermediate Delivery Bodies to deliver parts of the Programme. In all cases, Structural Funds will be supporting activity that is clearly additional to the bodies' existing activities and fully eligible with the scope of the Programme. This would be demonstrated through annual plans reviews setting out planned expenditure, activity to be supported and performance targets.

A selection of local partnerships will be designated with responsibility for delivering funding under Priority 1 of the Programme (in conjunction with funding through the ESF Programme for the Highlands & Islands region). Funding would be delivered through specified accountable bodies to be used in activities set out in line with key local strategies, such as the Regeneration Outcome Agreements of the CPPs.

The roles and responsibilities of the IDBs would broadly be the same as those as for individual project beneficiaries. For each IDB, there would be a body designated to receive awards and to be responsible for the financial management, reporting and accounting of expenditure (such as the submission of quarterly claims). Financial spend and project performance would be reviewed on a quarterly basis by the Managing Authority and the Intermediate Administration Body. This review would form the basis for a formal annual review of the IDB annual plans by the Managing Authority and the Programme Monitoring Committee.

The mechanism takes advantage of several of the recommendations made by the Hall Aitken report on options for delivering Structural Funds programmes, including the use of local area agreements and thematic partnerships, the specification of major projects and the limited use of single-stream funding.

6.2 Partnership and Committee Structure

The Operational Programme will be implemented in partnership with the European Commission and with appropriate authorities and bodies in accordance with national rules and practice. At the consultation stage, the Programme was developed in partnership with key stakeholders such as relevant Government departments, social partners, equality commissions, the voluntary and community sector and others who will have a positive contributory role to play. Partnership arrangements will continue as programme activity is prepared, implemented, monitored and evaluated.

The Managing Authority will encourage the participation of social partners in programme activities. It will also encourage participation and access of non-governmental organisations, particularly in projects that will promote social inclusion, gender equality and equal opportunities in the Programme. Where appropriate, Technical Assistance funds will be made available to support partners in the non-governmental sector to participate in and deliver the Programme.

At Programme level, partnership will be embodied in the Programme Monitoring Committee, which will be responsible for monitoring implementation of the Programme. Reflecting the principle of partnership, its membership will be drawn from representatives reflecting the regional and sector interests in the Programme, including the economic and social partners, along with the Scottish Executive. The European Commission will be represented in an advisory capacity. The aim will be to ensure a gender balance in representation.

The Committee will set its rules of procedures with the Managing Authority within the institutional, legal and financial framework of the Member State. It is expected to meet at least twice a year and will be chaired by a senior Scottish Executive representative. The Programme Management Executive will provide the secretariat function for the PMC and its meetings, under the guidance of the Scottish Executive.

The PMC tasks will be to:

• adjust the Operational Programme, when appropriate;
• approve the indicative annual financing plan for each priority;
• set the criteria for selecting operations eligible for financing under each priority within six months of the Operational Programme approval to review the specific objectives of each priority at periodic intervals;
• approve and review the annual plans of the Intermediate Delivery Bodies;
• consider the annual implementation reports to be submitted for the Programme before submission to the Commission and monitor progress towards achieving the targets set for the Programme, particularly at the mid-term point;
• approve adjustments to applicant guidance;
• monitor co-ordination of funding with European Regional Development Fund, European Agricultural Fund for Regional Development and the European Fisheries Fund in line with the arrangements set out in Chapter 5; and
• propose adjustments to assistance to the Managing Authority with respect to the implementation of the Programme.

6.3 Horizontal Themes

In the 2000-06 programming period, horizontal themes were defined to act as underpinning policy priorities and be applied across all programmes. These horizontal themes were embedded at all stages of programming, from project design and application, through project selection to implementation and, finally, to project monitoring and evaluation. As the Adding Value, Keeping Value report discussed in the section above on lessons of earlier programmes made clear, this commitment to a series of overarching policy objectives running through the programmes should be maintained into the 2007-13 period.

For the 2007-13 programmes, the intention is to build on the work of the horizontal themes in 2000-06 programming and further mainstream them. The General Regulation of the 2007-13 Structural Funds makes clear the need to address the issue in Article 3.1 (and further set out in Article 17):

The action taken under the Funds shall incorporate, at national and regional level, the Community's priorities in favour of sustainable development by strengthening growth, competitiveness, employment and social inclusion and by protecting and improving the quality of the environment.

As the Highlands & Islands Scotland ESF Programme has been developed with a view to supporting sustainable development in Scotland, the horizontal themes to be supported in the 2007-13 period reflect the commitment to achieving that goal. Sustainable development consists of three key elements: the sustainable growth of the Scottish economy in a way that does not compromise the environmental resources of future generations; the inclusion of as much as Scottish society as possible in the achievement and benefits of that growth; and the conservation of Scotland's environmental assets in pursuing sustainable development.

As the Programme already has as its central aim to contribute towards the sustainable growth of the region's economy by balancing support for underlying sources of national as well as regional competitiveness, the economic growth strand of sustainable development is already recognised. To ensure that the other two elements are mainstreamed effectively in the Programme, two horizontal themes have been identified:

• equal opportunities; and
• environmental sustainability.

While they will be subject to common processes in the Programme, they are discussed in turn below.

Equal opportunities

A Structural Funds commitment to equal opportunities is clearly set out in the General Regulation at Article 16:

The Member States and the Commission shall ensure that equality between men and women and the integration of the gender perspective is promoted during the various stages of implementation of the Funds. The Member States and the Commission shall take appropriate steps to prevent any discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation during the various stages of implementation of the Funds and, in particular, in the access to them. In particular, accessibility for disabled persons shall be one of the criteria to be observed in defining operations co-financed by the Funds and to be taken into account during the various stages of implementation

In Scotland, a wide view of equality has traditionally underpinned the design and operation of Structural Funds programmes, encompassing not just the integration of a gender perspective into all stages of programming, but ethnicity and disability perspectives as well. The 'mainstreaming' approach has been set out in the Scottish Executive's Equality Strategy - Working Together for Equality:

Mainstreaming equality is the systematic integration of an equality perspective into the everyday work of government, involving policy makers across all government departments, as well as equality specialists and external partners.

The Equality Strategy has been fully integrated into the design of the Scottish Structural Funds programmes. This can be seen in the Strategy's Objectives and how they apply to the Programme:

• to make sure that an equality perspective is integrated into the Executive's work and activity in policy and programme development, legislation and spending plans, service design and delivery: in the Structural Funds Programme, this has been apparent in the use of specialist workshops and 'equality' proofing in the development of the Programme;
• to follow policies and programmes that seek to address the inequalities and exclusion which result from discrimination: the programmes have a range of 'vertical' and 'horizontal' measures designed to tackle discrimination, as outlined below;
• to extend the ownership of and commitment to this strategy to all key public, private and voluntary sector bodies, equality specialists, academics and trade unions: the mainstreaming approach described below is intended to ensure that all Structural Funds partners build the equality perspective into their project design and delivery;
• to promote the inclusion of under-represented groups in policymaking, decision-making and public appointments: representation of the target equality groups are included in the key decision-making and advisory bodies of the Programme;
• to foster greater understanding of and respect for Scotland's different communities: the publicity, good practice and training actions envisaged under the Programme's approach to equal opportunities have been developed from this perspective; and
• to educate and raise awareness about discrimination and the need for it to be challenged: the profiling of equal opportunities as a key horizontal theme in the programmes shows this commitment to awareness-raising.

Scotland has a strong tradition in mainstreaming equal opportunities into Structural Funds programming and past experience has formed the basis for the approach set out for 2007-13 programmes. The experience was extensively examined in the mid-term evaluations of the 2000-06 programmes, which gave special attention to the horizontal themes. In the case of equal opportunities, the common theme in the evaluations was the strong embedding of a mainstreaming approach in the management and administration of Structural Funds, but limits to pushing partners to develop their existing approach to equality further in their projects. Responding to these comments, the programmes developed a common Equal Opportunities Good Practice Guide, Equality in Practice - Making It Work, which picked out the principles and practical examples of mainstreaming equal opportunities into project design and delivery. Similarly, the report of the Mainstreaming Equal Opportunities in the EU Structural Funds Conference held in Glasgow in 2003 has also shaped the approach taken for 2007-13.

Against this background, the aim of the 2007-13 Programmes for equal opportunities is to take forward the work that has been done by 2000-06 programmes. The vision is:

to increase the opportunities within the Programme for all groups and to prioritise and adapt support for groups facing particular disadvantages to participation

The vision will be delivered through two objectives:

• to adjust the scope of the Programme to support the particular needs of disadvantaged groups in achieving sustainable employment and access to lifelong learning; and
• to improve the approach to mainstreaming equal opportunities in Scotland.

These objectives are part of a twofold approach to equal opportunities. The first objective will be addressed through direct support for projects that explicitly aim to achieve equal opportunities goals. The approach is integrated across all three priorities. This can be seen in examples of the types of activities in support of equal opportunities eligible under the different priorities:

• Priority 1
• Explicit targeting of groups that often face discrimination and other equal opportunities challenges in accessing the labour market.
• Customised support that recognises the key developmental needs and most appropriate modes of skills learning for different groups.
• Priority 2
• Explicit support for projects that aim to reduce gender imbalance in the Scottish labour market.
• Recognition that the challenges facing the groups under Priority 1 can persist into employment and consequently, require continuing dedicated support.
• Priority 3
• Support for projects developing new, innovative approaches and instruments to encouraging access to lifelong learning by under-represented groups.

The second objective of the Programme's vision to equal opportunities will be achieved through a wider mainstreaming of the horizontal theme into Programme processes. This would mean that explicit consideration of the issues would be required at every stage of Structural Funds-supported policy and project design: from the initial development of the project/scheme through application for Structural Funds support to actual project activity and finally, monitoring and evaluation. Structural Funds cannot affect a cultural change alone, but through mainstreaming, help to set up procedures that will inform policy-making and project design more generally.

The instruments for mainstreaming build on existing methods which have been tested and assessed under 2000-06 programmes, not just in Scotland but elsewhere in the UK.

• Capacity. The experience of 2000-06 programmes has shown the importance of having equal opportunities champions and expertise in different parts of programme delivery. Champions will be designated for the different committees, particularly the Programme Monitoring Committee and advisory groups in the Programme, in many cases drawn from relevant Scottish organisations. However, the Programme's commitment to equal opportunities will not be concentrated in individuals, but be a dimension to all delivery activities. Consequently, short-term expertise will be used for training different parts of the delivery system to mainstream equal opportunities on a continuing basis through the Programme lifetime. There is also a need for expert advice to be available to projects in terms of meeting their equal opportunities obligations. This will be provided through the 'delivery body' and core guidance and good practice material
• Selection: To encourage projects to take full account of equal opportunities, the principle will be embedded in the application and selection system for projects. All projects will be required to demonstrate a commitment to equal opportunities as a core programme criteria at each part in the application form, showing - where relevant - how the issue has been taken fully into account at all stages of project design, implementation and evaluation. A minimum level of commitment needs to be demonstrated for project selection.
• Management: To assess the equal opportunities impact of the Programme, relevant indicators will be built into the project monitoring system. The issue will be reviewed annually for the Programme Monitoring Committee and independently assessed as part of a mid-term evaluation.

Environmental sustainability

As defined by the World Commission on Environment and Development, sustainable development entails "development that meets the needs of the present without compromising the ability of future generations to meet their own needs" ( WCED, 1987). Environmental sustainability is the component in a sustainable development approach governing how the environmental resources of a region are used. While usually referring to the treatment of the physical environment, environmental sustainability has wider implications beyond natural resource usage, involving cultural attitudes to environmental protection. Consequently, environmental sustainability has several elements that should be addressed in programming:

• ensuring that economic and social development is fully in line with the conservation of the surrounding environment and its biodiversity;
• making full economic and sustainable use of environmental assets so that conservation and economic development goals reinforce each other rather than work in opposition or require compromise; and
• raising awareness of the importance of environmental sustainability as a fundamental consideration in project /policy-making more widely.

There is a strong tradition of environmental sustainability in Scottish domestic policy, both in terms of giving it due policy prominence as an areas in its own right as well as promoting it as a key influence on all policy-making. As the Scottish chapter of the National Strategic Reference Framework detailed, the Structural Funds programmes in Scotland for 2007-13 would reflect both goals by being fully informed by the key environmental sustainability statements of policy, particularly the Green Jobs strategy, the Scottish Sustainable Development strategy and the Scottish Biodiversity strategy. The strategies are discussed below.

The Scottish Sustainable Development Strategy, set out in 2005, shares with the UK the common aspiration:

to enable all people throughout the world to satisfy their basic needs and enjoy a better quality of life without compromising the quality of life of future generations

The strategy has four sets of principles:

• sustainable consumption and production: achieving more with less by reducing the inefficient use of resources, considering the impact of products and materials across their whole lifecycle and encouraging people to take into account the social and environmental consequences of their purchasing choices;
• climate change and energy use: securing a profound change in the way in which energy is generated and used and reducing greenhouse gas emissions;
• natural resource protection and environmental enhancement: protecting natural resources by developing a better understanding of environmental limits and actively improving the quality of the environment; and
• sustainable communities: creating communities that embody the principles of sustainable development locally

The Scottish biodiversity strategy - It's in Your Hands - was published in 2004. While Structural Funds are limited in their pro-active contributions to direct conservation work, the principles of the strategy underpin the Programme with respect to proofing all funded project activity so that there is a neutral, if not positive impact of Structural Funds support on biodiversity within the region.

The Scottish Green Jobs Strategy outlines how Scotland should seize the enterprise opportunities and advantages arising from sustainable development with a view to creatinga vibrant, low-carbon economy with Scotland a centre for green enterprise. This would be achieved through a combination of support for the economic opportunities arising from a commitment to environment sustainability - such as renewables technologies and economic efficiencies arising from waste recycling - as well as more general information-raising and skills improvements in mainstreaming environmental issues into economic activity.

There is also a strong tradition of environmental sustainability in Scottish Structural Funds programming. It has been a key horizontal theme in earlier programmes, particularly in the 2000-06 period, where the approach to sustainable development was taken forward substantially. Structural Funds programming has developed a 'missionary' approach to environmental sustainability, viewing its embedding in wider policy-making as one of the legacy aims of the Programmes. To a large extent, this has been achieved through the development of an archive of good practice projects and processes, which have informed the development of the approach taken in the 2007-13 programme. For example:

• The Scottish Natural Heritage good practice guide, Linking Sustainable Development to Regional Development, has been an important source document in programme development.
• The approach was also an important focus in mid-term evaluations in the 2000-06 programming period. The evaluations noted the success in establishing a commitment to environmental sustainability across the different Programmes, while acknowledging that there remained significant challenges to ensuring more than lip service at project level. Addressing these continuing challenges has been a UK-wide goal.
• Lastly, the 2007-13 Programme has made use of UK research to tackle the issue, particularly Leaving a Legacy, a report of the Environmental Sustainability seminar for Structural Funds Programme practitioners in England.

Against this background, the environmental sustainability vision of the 2007-13 Programmes is as follows:

to ensure that Structural Funds programmes contribute to the sustainable use and conservation of Scottish environmental assets by enhancing the role of environmental sustainability in economic and social development policy-making

This translates into two distinct objectives governing Programme activities:

• to strengthen the mutual contributions of environmental sustainability and economic and social development in Structural Funds-supported activities; and
• to raise awareness of the role of environmental sustainability in project planning and policy development.

As with equal opportunities above, the two objectives embody a twofold approach to horizontal themes. The first objective will be addressed through direct support for projects that explicitly aim to achieve environmental sustainability goals. The approach is integrated across all three priorities. This can be seen in the examples of activities in support of environmental sustainability that would be eligible under the different priorities:

• Priority 1
• Requirement that projects meet recycling and environmental sustainability standards as a condition of support.
• Priority 2
• Encouraging skills training projects for enterprises to include environmental and resource sustainability as one of the skills to be included.
• Priority 3
• Development of environmentally-friendly approaches to improving lifelong learning access (eg. distance learning instruments that reduce carbon emissions).

The second objective of the Programme's vision to environmental sustainability will be achieved through a wider mainstreaming of the horizontal theme into Programme processes. Again, paralleling the approach under equal opportunities, this would mean that environmental sustainability issues would be built into policy and project design at each stage. The instruments for mainstreaming are the same as those for equal opportunities. They build on existing methods which have been tested and assessed under 2000-06 programmes, not just in Scotland but elsewhere in the UK.

It should be noted that this Programme did not have a Strategic Environmental Assessment as the direct impacts of the programme on environmental issues were not felt to warrant a formal exercise in the view of the SEA authorities.

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