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8 FINDINGS: TARGETING
Questions 14 and 15 raise the issue of spatial targeting within the Programmes for the Lowlands and Uplands Scotland region. In addition, respondents were invited to make any additional comments to the consultation under Question 16.
Q14. What are your views on spatial targeting for community regeneration under ERDF Priority 2 and ESF Priority 1?
The consultation document proposed the use of targeting ERDF Priority 2 and ESF Priority 1, which were set out in the priority descriptions as targeting the problems of the most deprived urban areas. Question 14 asked whether - and how - eligible areas for these priorities could (or should) be determined.
Of those who responded to the question none disagreed with the need for some form of spatial targeting. Five respondents agreed with the proposed approach outlined in the consultation document while approximately 80% of those who responded (65 respondents) supported spatial targeting in principle but had slight concerns, reservations or suggested improvements to the proposed approach. Four agreed with the need for spatial targeting but had significant concerns over the proposed approach. However, there was little consensus on how targeting could be applied.
A number of respondents (7) supported the SIMD as a good and appropriate basis for spatial targeting and thought that it demonstrated the geographic disparities across the country. However, a substantial number of respondents (36) thought that there could be a greater degree of flexibility or had concerns over the possibility of 'micro-zoning' or limiting of support to the 15% most deprived data-zones under SIMD. A number of respondents (8) thought that experience of the existing programme showed that using this system could lead to delivery difficulties due to its inflexibility and that a less mechanistic approach was required. These units were too small and widely dispersed to be economically meaningful and led to restrictive 'micro-zoning'. It was thought essential that funding support was beneficiary focussed. Significant numbers of vulnerable individuals will not be supported because they are out of 15% most deprived SIMD areas. One respondent thought that any flexibility would be acceptable only if those at the bottom 5% were not adversely affected by a wider disbursement of funds.
Seven respondents would like a degree of flexibility in targeting ESF Priority 1 to ensure that not all participants in supported activities need to be residents of the designated areas. The focus should be on the needs of individuals irrespective of where they stay. Others agreed that Priority 1 target groups will not necessarily be resident in Community Regeneration areas. By creating artificial geographical barriers, many individuals and communities will be disadvantaged. It was suggested by one respondent that a certain percentage of activity be eligible outside of the spatially-targeted areas to encompass these groups. A client-based approach similar to the current approach was also supported by another respondent.
A significant number of respondents (17) requested that a rural indicator be used to supplement the SIMD and that the needs of small towns be included. Two other respondents suggested that the COSLA/South of Scotland Alliance study on small towns be taken account. Other alternative approaches were put forward. Four respondents thought that SIMD analysis could be used to arrive at an overall level of population coverage at Local Authority level. This would be equivalent to a Local Authority's proportion of population resident within the 15% most deprived data-zones. CPPs could then be used to define their own coherent spatial priorities within these local authority areas. Fourteen respondents agreed that CPPs would be well placed to identify areas of particular need in each local area.
Six respondents thought that some form of thematic targeting could be more useful, especially with reference to ESF Priority 1. Three of these suggested a mixed approach of geographic and thematic targeting with two respondents suggesting 80% for geographical and 20% for thematic targeting. Specifically, two respondents thought that spatial targeting failed to identify patterns of disadvantage relating to other features such as disability. They suggested that a 'disability targeting' should be introduced to protect the interest of those most marginalised.
A number of respondents thought that spatial targeting should be extended to other priorities. In particular a notable number of largely West of Scotland respondents felt that spatial targeting should be extended to cover ERDF Priority 1 (12) and ESF Priority 2 (4). They felt 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. Four respondents felt that there should be targeting under all priorities.
Seven expressed concern that a number of 'grey zone' areas which do not qualify as urban or rural may not qualify under the spatial targeting proposals even though they had significant regeneration and social inclusion issues to address. A number of respondents (4) mentioned ex-coal-mining areas specifically.
Executive response
The Executive welcomes the recognition among partners of the value that geographical targeting can bring to the new Programmes as well as difficult decisions that its application will entail. In deciding of whether to make use of targeting, we have been determined to maximise flexibility in any targeting methodology. The aim has been to capture as many good, strategic projects across the region as possible while still concentrating funding on areas where the Structural Funds can have the maximum impact. It is also important to manage partners expectations about future bids against a background of sharp funding reductions.
Reflecting on the consultation responses, geographical targeting will be introduced into the Programmes. This should be limited to ESF Priority 1 and ERDF Priorities 3 and 4 (as newly-numbered), for reasons set out in the responses to Questions 2 and 15.
With respect to ESF Priority 1 and the new ERDF Priority 3, the limited funding should be targeted on those areas where urban deprivation is most acute. This does not deny the occurrence of the same problems across the region, in rural areas as well as areas that are neither wholly 'urban' or 'rural', but it is argued that funding should be concentrated where it can have a maximum impact, reducing the immiserating cycle of deprivation in the worst urban areas. The challenges facing rural areas are captured in the new ERDF Priority 4 (as set out in Question 15). Other parts of the region will be eligible for funding under the newly designated ERDF Priorities 1 and 2 and ESF Priorities 2 and 3. The allocations to these priorities have been increased to reflect this, as described in Questions 6 and 7.
The same principle of targeting underlies key defining Scottish strategies for these two priorities - especially Workforce Plus, the Regeneration Policy Statement and the NEET Strategy. Reduced Structural Funds will have a maximum impact if it complements domestic policy priorities. Consequently, the following methodology will be used for selecting targeted areas.
- Selection will be conducted on the existing designation in key Scottish strategies (as described below) and on the basis of the SIMD, examining the 15% most-deprived data-zones. As argued above, the SIMD is felt to be the most robust, widely-used measure of urban deprivation.
- It is crucial that flexibility is used in targeting. Targeting will be applied at Local Authority level. While projects should address the most deprived data-zone areas, it will not be required that project activity takes place in those areas. As many stakeholders have noted, it is important to avoid micro-zoning. Nevertheless, wherever activity is located within the Local Authority area, it should be clearly demonstrated that the target beneficiaries would be within the most deprived data-zones.
- Eligible areas which have been designated in other strategies will be included, specifically, Workforce Plus Priority Areas, NEET priority areas or the geographical priorities identified in the Regeneration Policy Statement. In addition, to reflect changes in the SIMD ranking outside of these strategies, the ten Local Authority areas with the most substantial share of their populations in the SIMD would be designated.
- Where projects cover beneficiary groups that overlap with deprived data-zones in bordering Local Authority areas, up to 10% of the project award could be spent outside of the list of designated Local Authorities. This would not apply to the funding set aside for the pilot phase of the CPPs.
- The list of eligible areas would be reviewed on an annual basis to take account of changes in the priority areas set by the parent strategies and updated SIMD figures.
Q15. What are your views on spatial targeting for rural development under ERDF Priority 3?
Overall, most respondents accepted the need for spatial targeting in all programmes, but views different widely on how to achieve this. Fourteen agreed with the need to target Priority 3 geographically and supported the propose approach of ERDF Priority 3. A further eighteen supported spatial targeting in principle but had slight concerns, reservations about the intended approach under Priority 3.
Another fourteen did not support a rural priority or the use of rural targeting. They suggested that areas should not be eligible for funding merely because of their rural nature but rather on the basis of proven economic circumstances and that the priorities of sparsely populated areas could be accommodated within ERDF Priorities 1 and 2. Some of these (3) did support the concept of delivering integrated packages of small-scale actions to be supported by the Structural Funds through an action plan approach but suggested that this should be done on a pilot basis and, if successful, replicated in others parts of rural Scotland.
Twenty-eight had concerns over the definition of 'rural' which it was felt needed to be clear, either to be very robust and tightly defined or flexible to include wider areas. Many respondents recognised the difficulty ( EU-wide) in defining rurality. However, there were some suggestions. Ten suggested that the definition of rurality be limited to these rural Local Authorities with a population density of less than 50 people per square kilometre. Another suggested limiting the geography to accessible small town and remote small towns (using the Scottish Executive definition) as these have the potential to deliver on some of the objectives in Priority 3. The SRDP could then cover the remaining rural areas.
One respondent felt that if the ERAD six-fold classification of rurality is to be used as the basis for designating eligible 'rural areas', it is essential that this is not confined to the ERAD definitions of remote rural and accessible rural areas. Recognition was needed of the important role that larger towns have to play in the social and economic fabric of rural areas. Rural designation should include all small rural towns and strategic market towns such as Dumfries, Perth and Stirling which have a significant impact on the rural economy.
Eleven were concerned at the lack of detail in the targeting for ERDF Priorities 2 and 3, fearing that semi-urban/rural areas would 'fall between the cracks' of the two priorities. They expressed concern that a number of smaller rural areas or towns (or 'grey zone' areas) which may not qualify as urban or rural and would not qualify under the spatial targeting proposals even thought they had significant issues to address. In particular, many semi-rural and ex-coalfield areas would require a flexible approach.
A significant number of respondents (24) had concerns about the allocation or 'ring-fencing' funding for the South of Scotland area with some suggesting that an allocation required more vigorous justification as the socio-economic evidence did not indicate problems which were more acute than elsewhere in Lowlands and Uplands Scotland. Some of these respondents felt that there were other areas of Lowlands and Uplands Scotland with more severe challenges than the South of Scotland. Three thought that there had been too heavy a reliance on the South of Scotland Competitiveness strategy in rural Priority 3. Some respondents (4) would be particularly concerned if the South of Scotland also had access to funding under the challenge funding element of the programme.
On the contrary, a significant number of respondents from the South of Scotland area (15) welcomed the recognition of the South of Scotland as a specific area for support and felt that the South of Scotland Competitiveness strategy could take a key role in its delivery.
Executive response
The Executive has already set out its reasons for believing that an ERDF rural priority is an important element of future Programmes. As noted above, geographical targeting will involve making difficult decisions on which areas should be eligible. This is particularly true for rural areas, where rurality is not easily defined in the region.
In the consultation document, we suggested the use of the six-fold urban-rural classification. Following the consultation, this still remains the most robust and comprehensive data-source for designating rural areas so it will be basis for the methodology for determining eligibility. The methodology is set out below.
- A similar approach will be used to the methodology for urban targeting for ESF Priority 1 and the new ERDF Priority 3. Areas will be defined at Local Authority level to avoid micro-zoning. The location of project activity will be prescribed, but projects will need to demonstrate benefits will accrue to the priority areas within each Local Authority.
- The funding would not be available across all areas that can potentially demonstrate rurality. It is important that the limited funding in this priority is not thinly spread but can make effective contributions to the most peripheral, disadvantaged rural parts of the region. Consequently, eligibility will be determined on the basis of 'remote rural' and 'accessible rural' areas, as defined in the six-fold classification. These areas are defined as those with less than 3,000 people and within 30 minutes driving of settlements of 10,000 or more. As noted, activity does not need to be limited to these areas, allowing small towns that service these areas to be eligible for activity, but it is important that the impact on the target areas is demonstrated.
- A population thresholds will be applied to capture those Local Authorities that have the most significant share of population in remote and accessible rural areas. This will be set at 35%, reflecting the limited funding and ensuring that most clearly rural areas are addressed by funding.
- As with ESF Priority 1 and ERDF Priority 3, where projects cover beneficiary groups that overlap with remote and accessible rural areas in bordering Local Authority areas, up to 10% of the project award could be spent outside of the list of designated Local Authorities.
Several respondents discussed the issue of granting IDB status to partners from the South of Scotland. We remain convinced of the value of ring-fencing a share of the priority's funding to support a limited number of large, strategic projects for the region as a whole. Such a targeted use of funding recognises the sizable development challenges of the area - which might have resulted in the area's designation as a Convergence Objective area had it been a NUTS 2 region - its successful track record in making effective use of Structural Funds through the 2000-2006 Objective 2 Programme and its clearly-articulated regional aspirations in the Competitiveness Strategy, which shows where Structural Funds can have an additional and significant impact. It would not be granted as block funding, but only in support for well-defined projects of strategic significance, building on the current Objective 2 Programme legacy. As with all IDBs, these projects would need the approval of the Programme Monitoring Committee and be subject to close financial and performance monitoring.
Q16. Do you have any additional comments on the draft Structural Funds Programmes for Lowlands and Uplands Scotland?
In making additional comments to the consultation, stakeholders made a wide range of comments. However, most have been already addressed in questions above so only additional points are noted here.
There were some concerns at the transparency of the consultation process and development of programmes with a number of respondents (8) stating that the programmes had been drawn up in a less inclusive, consultative and transparent process than in the previous programme round. A small number of respondents would have liked to have seen planning teams similar to the ones used in the development of the 2000-2006 programmes.
Executive response
The Executive does not agree with the suggestion that the consultation process has not been transparent and that partners have not been fully engaged in the development of Programmes. Initial proposals were presented for full discussion in stakeholder events held throughout the region in December 2005 and January 2006. Further engagement took place through the consultation on the Scottish chapter of the National Strategic Reference Framework, which defined the overall objectives of Structural Funds spending in Scotland. Finally, the proposals have been set out in the current consultation, with views invited from all stakeholders on all areas. As described in the Introduction, this has been supported by a comprehensive series of priority-based workshops held with partners in November and December 2006.
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