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BACKGROUND
Future Structural Funds in Scotland
9. The development of these programmes is set against a backdrop of considerable change. In particular, with EU enlargement and the shifting of EU funds towards the new Member States, the UK, like many other Member States, will experience a significant reduction in the level of its Structural Funds receipts. Although figures have still to be finalised we expect Scotland to receive around 40-45% of what it currently receives in the 2000-2006 period.
10. The Highlands & Islands will receive â'¬158 million (approximately £105 million) as a 'statistical-effect' transitional region under the Convergence Objective, which replaces the current Objective 1 and which will support the economic convergence of the poorest regions. This figure, which will cover both the ESF and ERDF programmes, represents a cut of almost 50% on what the region currently receives.
11. The rest of Scotland ( Lowlands & Uplands Scotland) will receive funding through the Regional Competitiveness and Employment Objective. Allocations on the UK pot of Competitiveness funding are decided by the UK Government in consultation with the Devolved Administrations. Although figures have still to be confirmed there will be sharp cuts on the equivalent 2000-06 funding levels for Objectives 2 and 3.
Reduction in Scope of Future Structural Funds
12. Another major change in the next programming period comes with the new constraints on how Structural Funds can be spent. The Structural Funds regulations will be more restrictive in scope. In particular, there is a strong emphasis on activities which support the EU's renewed Lisbon Strategy for Growth and Jobs. Under a commitment made by Member States at European Council in December 2005 we are required to direct the vast majority of funding towards activities supporting the Lisbon Strategy and the Structural Funds regulations contain a list of 'earmarked' activities which are regarded as contributing directly to the Lisbon goals. This list of Lisbon eligible activities is attached in the Annex C. Under the regulations, 60% of activities in Convergence Objective regions (ie. the Highlands & Islands) and 75% of activities in Competitiveness Objective regions (ie. Lowlands & Uplands Scotland) must come from this list. This means that there will be less support for many activities traditionally funded by Structural Funds - such as large-scale infrastructure projects in transport, tourism or economic development more generally - and more focus on activities such as workforce development, encouraging enterprise, business growth and support for innovation, commercialisation of research and development. Allied with the decline in levels of funding, this reduction in the scope of eligible activities places intense pressure on programmes to be more focused in their spending.
Programme Structure
13. The new Structural Funds regulations have adopted a mono-fund approach to programming with specific programmes required for each of the Funds, meaning that there will now be separate ERDF and ESF programmes, one for each programme area. The ERDF supports the structural change of regions whose development has slowed or lagging and the socio-economic change of urban, industrial and rural areas. The ESF supports training and skills development and equal opportunities schemes to promote the employability of people.
14. There will also be new arrangements for agriculture and fisheries support with separate, independent programmes under the new European Agricultural Fund for Rural Development through the Scottish Rural Development Programme and the European Fisheries Fund. This replaces the current arrangements where the European Agriculture Guidance and Guarantee Fund and the Financial Instrument for Fisheries Guidance have been incorporated into the mainstream Structural Funds programmes.
15. With these changes comes a challenge to adapt the way that Structural Funds programmes are designed and delivered. It is also important to remember, however, that, as the 2007-2013 programming period is the first under a devolved Scotland, we have an excellent opportunity to make Structural Funds add real strategic value and contribute to our domestic policies in making a significant impact on the Scottish economy.
Territorial Co-operation Objective
16. As part of preparations for the 2007-2013 the Scottish Executive is also involved in the development of a number of programmes under the Territorial Co-operation Objective which will replace the current Interreg programmes. Three strands are proposed: Cross-border Co-operation; Transnational Co-operation; and Interregional Co-operation. Scotland will have continued involvement in a number of transnational programmes: the North West Europe Programme; the North Sea Programme; the Atlantic Area Programme; and the Northern Periphery Programme. For the first time there will also be Scottish involvement in a Cross-border programme due to more flexible criteria around 'maritime' borders. Parts of the West of Scotland would be covered by an extended Republic of Ireland-Northern Ireland programme. Consultation on these programmes will be undertaken separately. Further details on the consultation process for these programmes can be found at www.scotland.gov.uk/structuralfunds.
17. Under the ESF Programmes, interregional co-operation actions will also be supported within all priorities. Interregional arrangements will provide the opportunity to recognise activities being addressed by programmes elsewhere in the EU which can positively influence the delivery of the Programme in Scotland.
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