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5 FINDINGS: PRIORITY CONTENT
The questions in this section (Questions 2-8 and 11 in the consultation document) concentrate on the priorities within the two Programmes, particularly their focus, relevance, consistency, prioritisation, the funding allocated and their complementarity with other key domestic and EU policies.
Q2. Do the proposed priorities for the 2007-2013 ERDF programme in Lowlands and Uplands Scotland address the strengths, weaknesses and opportunities of the region?
Question 2 asked whether the three priorities set out in the draft ERDF Programme reflected the key challenges identified in the socio-economic analysis. More respondents agreed that the priorities reflected the region's challenges than disagreed. Thirteen agreed that the proposed ERDF priorities addressed the strengths, weaknesses and opportunities of the region while another 23 thought they addressed them in part or mostly but had some reservations, concerns or suggestions for improvement. Thirteen respondents thought that the priorities did not address the strengths, weaknesses and opportunities of the region.
A range of comments were made on the priorities. These are discussed in terms of more general remarks and issues relating to particular priorities.
General comments
A number of respondents (8) were concerned that the Lisbon focus of the programme would exclude investment in infrastructure and activities such as reclaiming derelict and contaminated land. Infrastructure continued to be an important issue for many parts of Lowlands and Uplands Scotland, although it was recognised by most that this was due to reduced funding and Lisbon earmarking requirements.
A number of respondents felt that the importance of key sectors was not addressed in the programme. In particular, it was felt that the importance of fishing (3), agriculture (3) and forestry (1) to rural Scotland and the LUPS region as a whole were not properly addressed. Significant numbers called for more focus on tourism (14), food and drink (9), textiles (9), and renewable industries (9). In general, many respondents who commented on the list of priority industries felt that there should be more flexibility in what sectors receive funding.
Priority 1
There was a strong feeling from many respondees (23), particularly from the West of Scotland, that spatial targeting of Priority 1 was necessary to guard against the danger of funds all going towards a few high profile activities all concentrated in existing areas of economic growth and opportunity as opposed to areas of need (7). It was felt that this was shown through experience with many existing domestic funding streams such as SPUR.
In addition, care needed to be taken to ensure that Structural Funds were targeted effectively and funding did not simply duplicate existing domestic and EU programmes for research and commercialisation activities and the high-growth end of business support programmes, including the 7 th Framework Directive (four respondents) There was some concern that Priority 1 did not provide enough support for indigenous SMEs which continue to need support for growth and development (2).
Four felt that the definition of 'innovation' was too narrow and excluded the majority of SMEs. There should be a greater range of sectoral strengths and opportunities identified with regard to RTD/innovation. This needed to reflect the needs of smaller companies not just in promoting spin-offs but in how RTD/innovation outcomes can be usefully adapted and applied to SMEs in all strategic sectors.
Five respondents felt that there was an over-emphasis on RTD which did not reflect the reality of the local business base and does not address the start-up growth needs of a wider range of businesses. There was a mis-match between the amount of eligible activity provided under entrepreneurship and business development and that associated with RTD given the low propensity for new firm formation identified in the analysis. Priority 1 funding should be used to address a broader range of business and sectoral development activities and should be sufficiently flexible to support enterprise development in a wide range of activities and sectors including more traditional industries. Indeed, two respondents suggested that Priority 1 should be broken down into two separate priorities supporting RTD-type activity and business development respectively.
A number of respondents (3) highlighted the fact that ICT skills and technologies, e-business and their links to competitiveness, employability and productivity were not adequately addressed in Priority 1.
Priority 2
Under Priority 2, the key issues related to spatial targeting. Respondents queried the use of the Scottish Index of Multiple Deprivation as a measure. It was felt by one respondent that small towns in the South of Scotland should have access to Priority regeneration funds. There was also concern that spatial targeting would exclude former coalfield areas (3).
A number other comments were made on the content of the priority. Four respondents referred to the need for increased links between community regeneration and areas of economic opportunity. Four mentioned that vacant, contaminated and derelict land was a significant issue which should be recognised in the priority. Three respondents felt that there was a need for special inclusion of social enterprises within the definitions of SMEs, entrepreneurship and 'social firms' within this priority.
Priority 3
There was a strong division in the responses on the priority. Some respondents disagreed with a separate priority for rural development (11) and felt that there was an undue focus on 'rurality' which would marginalise more deserving urban and semi-urban areas, while others (13) explicitly welcomed the priority.
Some (9) had concerns over what they perceived as bias towards or over-emphasis on the South of Scotland area in the priority and questioned the ring-fencing of funding for the South of Scotland. However, a number of respondents (13) welcomed the focus on the South of Scotland and emphasised the need for the priority to be aligned with the South of Scotland Competitiveness strategy.
Many individual suggestions were made about improving the priority, particularly the inclusion of particular industries (eg. forestry, tourism) and greater emphasis on community regeneration in rural areas.
Executive response
The Executives welcomes the largely positive response to its proposed priority structure and the suggestions for improving the priorities.
With respect to Priority 1, the Executive acknowledges that there is scope for clarifying the focus of the supported activities while introducing more flexibility in how the priority will deliver on achieving the Lisbon Agenda. In addressing many of the points raised by partners, we have concluded that Priority 1 should now be split into two separate priorities.
- The new Priority 1 will have a clear focus on supporting research and innovation, which has been set out as priority area for EU intervention in the Community Strategic Guidelines. The priority will take a more flexible approach to RTD and innovation, recognising that it should apply to the needs of enterprise across the region and cover not just products, but services and business processes. A clearer distinction with the types of activities to be supported under the 7 th Framework Programme will also be made.
- The new Priority 2 will address other enterprise development needs, but concentrate on access to finance, support for entrepreneurs and start-ups and encouraging resource and energy efficiency in enterprises. More general business development will not be possible given the limited funding and the difficulties in establishing clear added value to existing business support provision.
In reviewing partner views, the Executive does not think that there is a compelling case to introduce geographical targeting or weighting for these two new priorities. The challenges set out are faced by enterprises across the region. Ensuring support to different parts of the region will bring benefits to all of Lowlands and Uplands Scotland. There is little evidence to suggest that good projects would not be forthcoming from all parts of the region, ensuring an equitable distribution of funding (though this would be monitored by the Programme Monitoring Committee in any case).
Moreover, there will be no inflexible targeting of particular industries, though funding will be prioritised for sectors and industries that can demonstrate national, regional or local importance, particularly under the new Priority 1.
Priorities 2 and 3 (now renumbered 3 and 4 as a result of splitting Priority 1) will address the distinctive needs of different parts of the region. The socio-economic analysis and priority descriptions will set out more clearly the special challenges of the most deprived urban areas and the most rural and remote parts of the region. However, while the priorities will be retained, their allocations should be adjusted, particularly in light of the use of targeting, as described in the responses to Questions 6 and 7 below.
For the new Priority 3 on urban regeneration, the focus of the priority on urban deprivation justifies the use of SIMD as the most accepted, robust measure, not least as it underpins Executive strategies on urban regeneration. In terms of the proposals for more infrastructure spending, the restrictions of the EU regulations limit the scope for development. With respect to social enterprises, the Executive acknowledges their importance, particularly in these regeneration areas, and will ensure that this remains prominent in the Operational Programme.
For the new Priority 4 on rural development, the priority will apply to the most rural areas in the region as a whole. To ensure greater demarcation with Priorities 1 and 2, the priority description will be revisited with a view to supporting the underlying conditions for competitiveness in these areas rather than duplicating enterprise support available elsewhere in the Programme. On how rural areas should be defined and the issue of ring-fencing funding for the South of Scotland, we will respond in Question 15.
Q3. Do the proposed priorities for the 2007-2013 ERDF programme in Lowlands and Uplands Scotland show appropriate coherence and concentration?
The question asked stakeholders to comment on whether the priorities showed sufficient coherence and concentration, reflecting the importance of the ERDF Programme to target limited funding on key priorities for the region while ensuring that activities complement each other and the overall strategic goals of the Programme. Overall, respondents felt that the priorities had achieved this - 29 thought the priorities showed coherence and concentration to a degree while 13 respondents disagreed.
Similar issues to Question 2 were raised for each of the different priorities.
Priority 1
Respondents questioned the breadth of the priority. Some (3) thought that Priority 1 had too narrow a focus. Others (3) commented that ambitions to achieve the Lisbon goals should not be pursued to the detriment of other sectors. Two felt that traditional sectors could suffer from their exclusion and a large number of respondents (10) felt that Priority 1 should include regional industry sectors such as textiles and a focus on industrial innovation in rural areas with particular reference to micro and small businesses.
The definition of RTD and innovation was raised again under this question. Some respondents (5) thought that there should be a broader or more flexible interpretation of what constitutes R&D and innovation to encompass all aspects of innovation including the application of innovative management and operational processes to improve business efficiency.
A number of respondents (23) felt that there should be more spatial targeting in the ERDF programme, particularly under Priority 1, most suggesting that this should be targeted at the West of Scotland. Some commented that resources for this priority should not be spent in areas that are already performing well in terms of the Lisbon agenda and where market failure is not obvious. One specifically stated that funds should not be allocated to successful regional economies in the east of the LUPS region.
Again, some (3) supported the idea of splitting Priority 1 into two separate priorities - RTD and innovation; and more general enterprise support "to help protect the budget available for entrepreneurship, from the potentially resource-hungry RTD element", as one respondent commented. Others (2) suggested that there was an over-emphasis on RTD activities which skewed the programme towards urban areas. However, one respondent suggested that Priority 1 should not be used to support generic enterprise development which is already supported through domestic policy and existing interventions within the enterprise network,
Priority 2
The designation of Priority 2 as an urban priority was challenged in several responses. Fourteen felt that a strong rural indicator was required to supplement the SIMD to identify deprived areas and there needed to be a greater equity between urban and rural areas within the priority. Fourteen also felt that the needs of small towns should be considered for assistance within this priority.
Some respondents (2) welcomed the recognition that community regeneration and enterprise support were closely linked, particularly the detailed activity proposed under Priority 2 to encourage more local entrepreneurship Others commented that Priority 2 should include more support for community-based business start-ups and SME activity to encourage wealth creation in deprived areas (3).
Priority 3
As noted in Question 2, several respondents disagreed with the proposed rural Priority 3 (11) and felt that there was an undue focus on 'rurality' which will marginalise more deserving urban and semi-urban areas while others (13) argued strongly for the retention of the priority. Concerns about a perceived bias towards the South of Scotland area were repeated here (nine respondents). Again, there was a strong response from partners in the South of Scotland welcoming the recognition of the area's needs and pressing for closer alignment with the South of Scotland Competitiveness strategy (13 responses).
Many respondents (17) commented on or had concerns over the definition of rurality which could become too tightly defined. One respondent thought that rurality should be defined as Local Authorities with a population density less than 50 people per sq. km. Another felt that rurality should be defined as settlements of up to 10,000 people. Some respondents feared that the spatial targeting of Priorities 2 and 3 would not include semi-urban areas.
The creation of a distinct Priority 3 dealing with sustainability or environmental activity such as renewables was supported by a number of respondents (4). Others (2) suggested that commercial exploitation of renewables under Priority 3 should be covered under Priority 1 as the technological development of the sector is often located in urban areas.
Executive response
The Executive welcomes the general support for the consistency and coherence of its ERDF priorities, while recognising the divided comments from respondents on some of its proposals. The issues raised here have been or will be addressed in others part of the document:
- The breadth of Priority 1, its sectoral coverage, the definition of RTD and innovation, geographical targeting under Priority 1 and the proposal to split it into two priorities have been discussed under Question 2.
- Spatial targeting under Priority 2 will be discussed under Question 14.
- The rationale and content of Priority 3 has been discussed under Question 2.
- Geographical targeting under Priority 3 and the position of the South of Scotland in delivery of Priority 4 will be discussed under Question 15.
Q4. Do the proposed priorities for the 2007-2013 ESF programme in Lowlands and Uplands Scotland address the strengths, weaknesses and opportunities of the region?
Question 4 asked whether the three priorities set out in the draft ESF Programme reflected the key challenges set out in the socio-economic analysis. A larger share of respondents felt that the priorities were appropriate - 39 respondents agreed that the proposed ESF priorities addresses the strengths, weaknesses and opportunities of the region while another 20 agreed but had some reservations, concerns or suggestions for improvement. Only two respondents thought that the priorities did not address the strengths, weaknesses and opportunities of the region.
Priority 1
Issues were raised about the urban focus of the priority. A number of respondents (13) emphasised the need to recognise that employability is both an urban and a rural issue.
Other comments related to target groups. Eleven suggested that migrant workers should be supported and four wanted clearer support for disabled individuals and those with learning difficulties. Three respondents felt that, while support for long-term inactive is necessary, it may be unwise to target such a high proportion of limited funds on such a resource-intensive group. Also, the hardest-to-reach groups should be more clearly defined. One respondent felt that there should be a more restricted definition of eligible groups given the reduction in finding. Two respondents wanted greater clarity required over the age range of 'older workers'.
Three respondents felt that ESF Priority 1 needed to address sufficiently sectors where there was a shortage of workers. Priority 1 should encourage unemployed/inactive to enter such sector. Also, it was felt by one respondent that there should be more specific reference to career planning support at the pre-employment stage both pre- and post-school.
Priority 2
A number of individual comments were made about Priority 2.
Six respondents felt that some of the activity listed under Priority 2 would be more appropriately covered under Priority 1 - particularly dealing with the NEET group. However, six also noted that there was a continuum of activity between the two priorities and that the division between them at a project level could be artificial.
Three respondents wanted greater emphasis on productivity in the priority and in the ESF programme as a whole.
Some responses discussed the focus on sectoral skills gaps. For example, one argued that there needed to be clearer definition of 'high growth' sectors. Another suggested that ESF should address training and skills needs of the tourism sector as identified within the National Tourism Strategy.
There were differing views on the balance of support within the priority for lower and higher end skills. Priority 2 should focus on low-paid casual employment and those with few/no qualifications/training opportunities. However, it was felt by one respondent that, although the ESF priorities take account of domestic policy and strategies, they should be considered again to take account of the recently published Leitch Review of Skills which noted that, whilst developing lower-level skills is a critical area of work, developing skills at higher levels amongst those already in employment is more likely to enhance the UK's competitive position. In contrast, others (5) supported the call for greater focus on higher level skills, especially leadership and extending the definition and scope of support for 'entrepreneurial skills'.
Priority 3
The main comment for Priority 3 was its rationale. Eight respondents believed that it could or should be subsumed into Priorities 1 and 2. If was not it should be more strongly differentiated from the other two priorities. This contrasts with the 59 supporting the broad priority structure of the Programme as a whole as it stood.
Executive response
The Executive welcomes the broad support for the ESF priority structure. It does not proposing eliminating or extending any of these priorities.
However, there is scope for both greater clarity within priorities and recognising the continuum between them. On the latter, it is recognised that projects can operate across different priorities. Consequently, we will explore options for simplifying applications to funding under multiple priorities, particularly where project activities spread across two priorities. This approach has already been proposed for ESF Priority 1 and the new ERDF Priority 3 through the creation of what is effectively a single pot, but we will investigate similar options for co-ordinating awards under ESF Priorities 1 and 2.
On the geographical focus of Priority 1, the case for maintaining a concentration on urban areas remains strong. Worklessness is a common challenge to all parts of the region, but it is a particularly acute problem in some urban areas, as recognised in strategies such as Workforce Plus. The key development challenges for rural arguably lie more with under-employment and low earnings, which are one of the foci of Priority 2.
The suggestion of extending the target groups to migrant workers, those with disabilities and those with learning difficulties will be taken up.
Priority 2 addresses a number of separate skills issues. The Executive wants to maintain this breadth by keeping support for both low-end and high-end skills and not to limit support to particular sectors. It will revisit the scope for supporting entrepreneurial and other managerial/leadership skills.
Lastly, the importance of improving productivity across the Programme will be strengthened.
Q5. Do the proposed priorities for the 2007-2013 ESF programme in Lowlands and Uplands Scotland show appropriate coherence and concentration?
Question 5 asked stakeholders to comment on whether the priorities showed sufficient coherence and concentration, reflecting the importance of the ESF Programme to target limited funding on key priorities for the region while ensuring that activities complement each other and the overall strategic goals of the Programme. There was a clear measure of support for the proposals - 33 respondents agreed that coherence and concentration was demonstrated, and only four disagreed.
A range of comments were made on the priorities. These are discussed in terms of more general remarks as well as issues relating to particular priorities.
General
There should be clearer distinction between Priorities 1 and 2. Two commented that Priority 1 should focus on anyone not yet in employment (whether at school or a young person or adult not in employment) while Priority 2 should target those in the workforce. This would provide clear differentiation between the two priorities.
Other respondents (6) felt that there could be more coherence between Priorities 1 and 2 and that they needed to link up more explicitly together (and to a lesser extent with P1 and 2 ERDF). The division between Priorities 1 and 2 was somewhat artificial given the transition from worklessness to sustainable employment can often be seamless.
Two respondents felt that there was further work required to avoid overlap with national funding priorities.
Priority 1
Spatial targeting was raised in the responses. Nine respondents favoured spatial targeting under Priorities 1 and 2 to ensure that funds reach areas of most need, especially in the West of Scotland. Others did not favour spatial targeting of resources through Priority 1 which they thought could lead to a postcode lottery of eligibility and disadvantage some areas (5). Others stressed that spatial targeting should not be so focused or restrictive as to be counter-productive by being so exclusive that it reduces its impact (4). A number of respondents (14) from the South of Scotland emphasised the need to recognise that employability is a rural issue as well.
As in Question 4, several wanted greater clarity in definition of target groups, particularly with the 'hardest to help' (5).
Priority 2
Similar issues were raised in this question as in Question 4. It was argued that the step-up across the economy from low to intermediate skills levels is more important than intermediate to higher level. Others (5) agreed that the focus of training should be on the lower skilled, low paid elements of the workforce. In contrast, two argued that there could be more of an emphasis on higher level skills, such as leadership and management, to complement the focus of the ERDF Programme.
Priority 3
The rationale for the priority was discussed. A separate lifelong learning priority was not thought necessary by a number of respondents (17) as the activity could be subsumed under Priorities 1 and 2. It was noted that there had been particular difficulties spending Lifelong Learning funding under the 2000-2006 Objective 2 programme.
On the contrary, three respondents explicitly favoured the retention of lifelong learning Priority 3. In particular, it was felt that this priority could help delivery bodies respond to demographic changes.
Executive response
The Executive welcomes the strong support for the consistency and coherence of its ESF priorities, while recognising the divided comments from respondents on some of its proposals. The issues raised here have been or will be addressed in others part of the document:
- Geographical targeting under Priority 1, the definition of target groups and recognition of the artificial distinction between Priorities 1 and 2 have all been discussed under Question 4.
- The scope of activity under Priority 2 has been discussed under Question 4.
- The rationale for Priority 3 has been discussed under Question 4.
Q6. What are your views on the proposed balance of funding between priorities for the future ERDF programme for Lowlands and Uplands Scotland?
Question 6 asked respondents to consider the proposed balance of funding between the different priorities of the ERDF Programme. Leaving aside the need for slight adjustment to be made for technical assistance, the proposed allocations were:
- Priority 1: 48%
- Priority 2: 29%
- Priority 3: 23%
Of those who responded approximately 32 agreed with the proposed allocations, finding them appropriate, reasonable, acceptable or non-problematic. However, 42 respondents disagreed with the proposed balance of funding, had concerns, sought clarification or proposed alteration of the proposed balance of funding. Of the respondents a number (10) felt there was an absence of or need for explanation of the detailed rationale behind the proposed allocations or that there was a lack of clarity.
A range of comments were made on allocations. These are discussed in terms of more general remarks and issues relating to particular priorities.
General
Overall there was a mixture of views on how the allocations could be altered. However, it is clear that a clear dividing issue was over the distribution between urban and rural areas. Thirty-two supported an increase in the allocation to Priority 2 while 29 thought that there should be an reduction in that allocated to Priority 3.
A number of other comments were made in relation to the urban/rural issue. The definition of urban and rural areas was not clear (6) which some (6 respondents) felt made it difficult to assess the appropriate balance between Priorities 2 and 3. Concern existed that 23% of ERDF funds had been earmarked for rural development but no definition of eligible areas had been provided. It was felt by some that the definition of rural should be as wide as possible.
There was a need to consider/define semi-rural areas. Many areas of need (particularly in the West of Scotland) would not fit neatly into either category and there was therefore a danger that they would be unable to access support from either Priority 2 or 3. Three respondents felt that a disproportionate part of the funding had been proposed for urban areas.
Specific suggestions on allocations were made. A significant number of those who responded (11) supported a distribution of 40%/40%/20%, reflecting a belief that Priority 1 funding should be reduced and Priority 2 funding should be increased. A number of respondents (7) supported the redefinition of Priority 3 to support sustainability and environmental protection in all parts of the region and proposed a distribution of 35%/35%/30%. If it were not possible to support such a revised priority, the following allocations were suggested: 43%/42%/15% (3 respondents).
Priority 1
A number of respondents felt that the funding allocated for Priority 1 was excessive and 27 respondents supported a reduction in the proposed allocation. This feeling was in spite of wide recognition of the need to meet Lisbon earmarking requirements and the need to focus a large proportion of the funds on the activity covered by Priority 1.
With a non-spatially targeted Priority 1, nine of those who responded felt that there was a substantial risk that the bulk of supported activity would take place in the more prosperous parts of Scotland rather than going towards addressing regional economic imbalances.
A small number of respondents positively welcomed the Priority 1 allocation thinking it sensible or unavoidable given Lisbon earmarking requirements (2). Two others thought that increased support should be earmarked for capital spend under Priority 1. Some respondents (3) emphasised the need to ensure rural access to enterprise development funding under this priority.
Priority 2
A large number of respondents (32) thought that Priority 2 should receive an increased allocation which some felt was of equal importance to Priority 1. This was necessary to reflect accurately the population concentration in urban areas and to reflect the challenges of relatively poor economic performance and high concentrations of deprivation in these areas (particularly Glasgow and the surrounding areas).
Priority 3
Twenty-nine respondents opposed the creation of ERDF Priority 3 or felt that the proportion of funding proposed for given previous uptake of funding. In particular, many questioned what they found to be the disproportionate amount of funding allocated under this priority to the South of Scotland as an Intermediate Delivery Body. Others (4) felt that the level of funding provided under Priority 3 was to be welcomed as a meaningful level of support with one respondent stating that this should be kept as a minimum.
Executive response
The issue of financial allocations between priorities elicited strong responses in the consultation, not least given the geographical targeting of some priorities. In setting these allocations, it is essential to balance the compelling need to address Lisbon goals - as reflected in the initial allocation to Priority 1 - and to provide a fair and equitable distribution across the geographically-focused priorities. These principles of allocation have not changed, but in light of the changes to the ERDF priority structure (set out in Question 2) and the proposed approach to geographical targeting (set out in Questions 14 and 15), revisions to the allocations are appropriate.
Consequently, leaving aside the small share of funding for technical assistance, the Executive has revised the allocations as follows:
- Priority 1: 25%
- Priority 2: 33%
- Priority 3: 27%
- Priority 4: 14%
This approach ensures that the clear bulk of funding will continue to be accessible to the whole region (through Priorities 1 and 2).
Q7. What are your views on the proposed balance of funding between priorities for the future ESF programme for Lowlands and Uplands Scotland?
Question 7 asked respondents to consider the proposed balance of funding between the different priorities of the ESF Programme. Leaving aside the need for slight adjustment to be made for technical assistance, the proposed allocations were:
- Priority 1: 43%
- Priority 2: 35%
- Priority 3: 22%
Of those who responded approximately 26% (20) agreed with the proposed allocations, finding them appropriate, reasonable, acceptable, adequate or fair overall. Approximately 71% (54) of those who replied disagreed with the proposed balance of funding, had concerns, sought clarification or proposed alterations. Four respondents felt that there was an absence of or need for explanation of the detailed rationale behind the proposed allocations or that there was a lack of clarity.
There was mixed views on the allocation for Priority 1. Fifteen supported an increase while six wanted a reduction in funding Priority 1.
For Priority 2, 34 supported an increase in Priority 2 with some respondents feeling that the focus should be on providing sustainable and long term employment opportunities and a sufficiently skilled workforce to fill these positions. Others (7) felt that this priority should be reduced with one respondent commenting that businesses had not made sufficient use of equivalent funding under 2000-2006 programmes.
Priority 3 generated the most comments. Thirty-six respondents felt that Priority 3 should either be abandoned or its allocation reduced. Of these, 15 felt that Priority 3 could or should be subsumed into Priorities 1 and 2. Two argued that lifelong learning should be a horizontal priority with particular emphasis on cross-sectoral collaboration and partnership.
In contrast, 27 supported an increase for Priority 3. Some thought that the allocation to Priority 3 should be increased given the importance of lifelong learning in trying to achieve outputs under Priorities 1 and 2. It was felt by one respondent that, in line with the Leitch Review of Skills, Priority 3 should be regarded as no less important than Priorities 1 and 2.
Alternative splits were suggested by stakeholders. Nine supported a 50%/40%/10% split, although many of those stated that their preference would be to subsume Priority 3 into Priorities 1and 2. Six suggested a 43%/32%/25% split.
Executive response
As with the ERDF allocation, the Executive recognises the difficulty in setting an allocation share that would be acceptable to all stakeholders. However, it has revisited the priority allocations in light of the comments, particularly of Priority 3. Leaving aside technical assistance, the new allocations will be:
- Priority 1: 45%
- Priority 2: 37%
- Priority 3: 16%
Q8. Do the proposed priorities outlined in the draft Operational Programmes focus sufficiently on the right priorities in Scottish domestic policy?
The question asked whether the priorities both Programmes set out the right priorities identified in Scottish domestic policy at different levels, as EU funding should strongly complement (though not duplicate) spending within the Member States.
Overall, respondents agreed. Fifty-one thought that the priorities did address the right priorities or were aligned suitably with domestic policy. Three respondents felt that the priorities did not focus sufficiently on domestic policy.
Approximately 20% of those who responded (16) expressed disappointment that no reference was made to local or regional economic development strategies and that only Scottish Executive strategies were referenced. Some reference should be made to such strategies as it is through these more localised frameworks that much of the activity foreseen in the Scottish level strategies actually takes place.
However, it was felt by three respondents that the text accompanying ERDF Priority 3 was based heavily on one local strategy, namely the South of Scotland Competitiveness strategy, and examples used are not wholly applicable to other areas of Scotland. A number of respondents to the question (15) suggested that there should be more inclusion of rural-based policies and that there was a need to say more about the link to Scottish rural policies.
A small number of respondents (2) thought that there was an overemphasis on the Lisbon Agenda to the detriment of the Gothenburg Agenda. Three respondents wanted more reference to climate change. One respondent suggested that there should be reference to the Climate Change strategy (' Changing our ways'). Another requested that more reference be made to the Scottish Executive's Sustainable Development Strategy which identifies natural resource protection and environmental enhancement as one of its aims. They also wanted more support for Rural Scotland: A New Approach, which has, as a key objective, "to maintain a rural Scotland where the natural and cultural heritage flourishes in all its diversity". These strategies should be a strong influence visible throughout the ERDF programmes.
Two respondents were disappointed that the programmes did not make more reference to the National Tourism Strategy. It must be clear in the programmes that all tourism projects coming forward for funding must be attuned to the aims, objectives and targets set out in this strategy.
It was suggested by two respondents that there be closer alignment with (and avoidance of duplication with) other sources of funding such as the Big Lottery Fund. It was suggested by another that the Programme could include some method of signposting to other major sources of domestic funding which applicants could access for match-funding such as the Big Lottery Fund and the Coalfields Regeneration Fund.
Executive response
The Executive welcomes the recognition by stakeholders that the Operational Programmes largely reflect Scottish domestic policy priorities. It will take account of the suggestions made and will provide more references to local and regional strategies (emphasising the importance of projects fitting with these strategies), the Gothenburg agenda, Scottish environmental strategies listed and the National Tourism strategy. With regards to other funding sources, there should be operational alignment with the Big Lottery and similar funding sources but given the distinction in their aims, there is limited need for further analysis.
Q11. What are your views on how the Operational Programmes will ensure complementarity between Structural Funds and other EU funding streams?
As well as domestic policy, the Programmes need to demonstrate complementarity with other EU funding streams. Question 11 asked whether the Programmes demonstrated sufficient fit between Structural Funds and these other funds.
Views on complementarity were mixed. Twenty-two thought that the Programmes would help ensure complementarity with other EU funding streams or had the potential to do so. However, 17 believed that the Programmes would not ensure complementarity or that greater efforts to strengthen complementarity were necessary. Several ways of improving complementarity were suggested by the respondents.
EU funding streams
With regards to different funds, respondents noted that complementarity could be better demonstrated with a range of funds.
Nine respondents thought that there was good potential complementarity between ERDF Priority 1 and the 7 th Framework Programme for Research and Technological Development. Complementarity could be achieved by focusing on using existing technologies/knowledge in new and innovative ways. It could also be achieved by supporting small businesses and other stakeholders in trans-European research projects. Some respondents (2) suggested that ERDF be used to assist companies to access Framework funding for RTD activity. Framework applications should be encouraged before ERDF applications for similar activity. However, four stressed that it was important that the ERDF programme did not become a 'mini-Framework' with a significant proportion of Structural Funds effectively duplicating the other funding.
Three respondents felt that the Competitiveness and Innovation Programme ( CIP) was another area with potential for complementarity with ERDF. It was suggested that the CIP's risk capital and exchange of best practice could build upon ERDF interventions which help to encourage an innovative culture in Scotland's key sectors. It was, however, pointed out that that there was a danger of these two programmes duplicating similar activities as the scope of both programmes was similar.
Thirteen respondents suggested that there should be more complementarity between the Structural Funds programmes and the Scottish Rural Development Plan ( SRDP), particularly the Leader+ element. The boundary between SRDP and Structural Funds programmes was felt to be confusing by some respondents and many felt that there was a need for more stringent demarcation and clarity as to what activities would be funded through ERDF Priority 3 and what through the SRDP. One respondent felt that the biodiversity was not sufficiently supported under either Structural Funds Programmes or the SRDP. Two thought that there was an opportunity to build in a regional partnership review mechanism, given the proposed decision-making structure under that programme.
Similarly, four respondents emphasised the importance of complementarity with the European Fisheries Fund with some insisting that only the North East would be included under this, and that the text of the Operational Programme should be revised as appropriate.
Twelve mentioned the need for complementarity with the new programmes under the Territorial Co-operation Objective. Some respondents (5) thought that there could be greater clarity on how there will be complementarity with the Co-operation programmes, especially the opportunity for complementarity with the Cross-Border Programme between Ireland, Northern Ireland and Scotland.
For eight respondents, complementarity with the proposed JEREMIE and JESSICA funds was important. However, most of these respondents requested further information on these programmes.
Some respondents (4) emphasised the need to link with the Globalisation Adjustment Fund with one of these concerned that the threshold levels for eligible applications were too high.
Five respondents thought that there would be opportunities under the European Integrated Lifelong Programme to provide synergy between Leonardo, Erasmus and Grundtvig alongside ESF Priority 3. Further information was requested on this.
Monitoring structures
A number of respondents felt that there was a need for clear eligibility and priority guidance for each of the funds. Eight suggested that the Managing Authority hold a series of information and awareness-raising events around the various European funding steams.
There were several suggestions on how complementarity could be improved, particularly at regional and local level. Four respondents thought that the Community Planning Partnerships would provide a useful way of ensuring complementarity at a local level. Three felt that the development of local underpinning rural strategies (with full community involvement) would help to ensure greater co-ordination of activities funded through the SRDP and the Structural Funds Programmes. Indeed, a significant number of respondents (ten respondents) felt that the proposal to ensure complementarity through annual meetings of the relevant Managing Authorities would not be sufficient. It was felt that the monitoring of complementarity should instead be carried out at partnership level, possibly through advisory groups or a more open and transparent system led by the Programme Monitoring Committee.
Executive response
As more details have emerged on how the new panel of EU funding programmes will operate, there is scope to improve complementarity between the different funding streams. Once the Programmes have been submitted, we will hold a series of workshops in the region to promote the difference and complementarity of the different funding streams. Details will be presented on this in due course.
More references and demonstration of demarcation will be added with respect to the 7 th Framework Programme, CIP, the Globalisation Adjustment Fund and Regions for Economic Change.
With respect to the Scottish Rural Development Programme ( SRDP) and the Scottish strategy for the European Fisheries Fund, more detail will be provided on the mechanisms of co-ordination in the revised Operational Programmes. This will include relevant projects needing to take explicit account of priority-setting in relevant parts of the other programmes - for example, the priorities set under Axis 3 of the SRDP through the local Rural Development Fora. The scope for including representatives for cross membership of different decision-making bodies will be investigated. Moreover, there will be clearer and more explicit demarcation between relevant activities in different Programmes.
With regards to JEREMIE and JESSICA, the Executive remains positive about the proposals. We are evaluating opportunities for using these initiatives in Scotland and the value to achieving our objectives, but it is too early to commit ourselves.
Lastly, to improve co-ordination, we propose a single Programme Monitoring Committee to oversee the region's two Structural Funds Programmes. This would ensure not just greater co-ordination of ERDF and ESF activities but between Structural Funds and other funding streams. More details on a single PMC are presented in Question 12.
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