SCOTTISH EXECUTIVE

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Concordat on European Structural Funds

Introduction

1. This document and attached annexes are to be read in conjunction with the Memorandum of Understanding (MOU) and the overarching Concordat on co-ordination of EU policy issues between the UK Government, Scottish Ministers, the National Assembly of Wales and the Northern Ireland Executive and the enabling legislation establishing these administrations. Reference to devolved or non-devolved matters will be construed in accordance with the MOU.
2. This concordat is an agreement between the UK Government and Scottish Ministers. This concordat is not intended to constitute a legally enforceable contract or to create any rights or obligations which are legally enforceable. It is intended to be binding in honour only.
3. This Concordat sets out the agreed mechanisms between HM Government Departments, DTI, DfEE, MAFF, DETR, DCMS and the Scottish Executive for the development of policy and implementation of European Structural Funds. The Scottish Executive and Whitehall Departments affirm their commitment to work together on the development of policy and implementation of Structural Funds across the UK. This concordat is intended to give both parties the assurance that working relationships will be conducted in an agreed and helpful manner. There is no intention to change fundamentally the existing balance of the relationship and responsibilities between the different Departments; in relation to Structural Funds, the Scottish Executive has, as a general principle, acquired and undertakes all the responsibilities and roles previously held by The Scottish Office and Whitehall Departments will continue to retain the responsibilities currently held.

General Principles

4. The reduction in the economic disparities between regions in Europe is one of the principal aims of the European Union. Greater economic and social cohesion and reducing the disparities between the level of development of the various regions are encouraged by channelling financial assistance and resources to the less well-off regions through a series of inter-related funds known as the Structural Funds. The Funds consist of the European Regional Development Fund (ERDF), the European Social Fund (ESF), the Guidance section of the European Agricultural Guidance and Guarantee Fund (EAGGF) and the Financial Instrument for Fisheries Guidance (FIFG).
5. The overarching concordat on co-ordination of European Union Policy issues sets out the mechanisms between Whitehall Departments and the Scottish Executive for the handling of EU business including the arrangements for the resolution of matters which cannot be resolved bilaterally. It lays out in general terms how EU business should be handled. This Concordat adheres to the principles set out in the EU Concordat and adds more specific details about the handling of European Structural Funds matters. These arrangements will rely for their effectiveness on mutual respect for the confidentiality of information (including statistics) exchanged. Complete confidentiality is often essential in formulating a UK negotiating position in the EU and in developing tactical responses.

Developing UK Structural Funds Policy

6. DTI retains overall responsibility for developing the single UK line on all Structural Funds policy but will continue to involve Scottish Executive officials as directly and fully as possible in all discussions. DTI will give the Scottish Executive access in good time to all necessary information relating to policy formulation with a view to reaching agreement between the administrations. Where DTI is not persuaded by any substantive view expressed by the Scottish Executive, it will give the Scottish Executive a full explanation as soon as possible and, where possible, before the UK line is expressed to Community institutions, other Member States or publicly in the UK.
7. The Scottish Executive would not normally expect to receive direct approaches from the Commission relating to new policy initiatives. Should it do so, it will inform DTI as soon as possible of such approaches and pass on to DTI its views in good time for them to be taken into account.
8. As overall responsibility for European Social Fund policy lies with DfEE, the arrangements discussed in paragraph 6 above will apply between the Scottish Executive and DfEE. As overall responsibility for the European Agricultural Guidance and Guarantee and the Financial Instrument for Fisheries Guidance policy lies with MAFF, the arrangements discussed in paragraph 6 above will apply between the Scottish Executive and MAFF.
9. The Scottish Executive have a responsibility to provide information to Scottish Ministers, and to the Scottish Parliament when requested while the relevant Whitehall Department have a similar responsibility to provide information to UK Ministers, and to the UK Parliament. Exchange of full and comprehensive information between the Scottish Executive and Whitehall Departments is important to allow these responsibilities to Ministers to be fulfilled.

Distribution of Funding under Future Programmes

10. The current programming period ends on 31 December 1999 and the Scottish Executive will have the responsibility which The Scottish Office would otherwise have had for the management and closure of these. Following publication of draft regulations by the European Commission in March 1998, negotiations between existing Member States and the Commission on future Structural Funds started shortly thereafter. The Scottish Executive will participate in the negotiations (as set out in paragraphs B3.12, 13 and 15 of the EU Concordat) and the inter-departmental Structural Funds Reform Working Group. Whitehall Departments will consult where appropriate the Scottish Executive on matters arising from the proposed introduction and implementation of the new Structural Funds Programmes, including the designation of eligible areas in Scotland and their submission to the Commission, the preparation of the Community Support Framework for Objective 3 and the introduction of Community Initiatives. DTI will consult the Scottish Executive about the designation of eligible areas in Scotland and DTI Ministers will consult with a view to seeking agreement with the Scottish Ministers which Scottish areas should be put forward to the European Commission by the UK.
11. Once decisions have been reached on the designation of eligible areas, the Scottish Executive, as the designated authority for the European Structural Funds in Scotland, will be responsible for the planning and preparation of draft Programmes. DTI will have input into this process to ensure consistent and co-ordinated plans across the UK.

Implementation of Structural Fund Programmes in Scotland

12. The Scottish Executive will take the responsibility which was previously for The Scottish Office of implementing all Programmes operating in Scotland – currently 7 geographical Programmes, 3 horizontal Programmes and 11 Community Initiatives as well as Objective 5a Measures to improve structures in the agricultural and food processing sectors supported by the EAGGF Guidance section. This role will continue into future Programming periods. The Regulations recently adopted by the European Council of Ministers refer to the Managing Authority; this role will be fulfilled by the Scottish Executive.
13. The current Programmes can be divided into 2 administrative types; those which apply to geographically defined parts of Scotland and those which apply to GB but where project approvals and payments are made in Scotland. The Scottish geographical Programmes will be run through Scottish Monitoring Committees chaired by officials from the Scottish Executive. As the lead UK Department, DTI has observer status on Scottish Monitoring Committees and can make points under technical or policy competence. Management Committees will also be chaired by Scottish Executive officials. A list of the specific responsibilities of the Scottish Executive and Whitehall Departments in relation to Scottish geographical programmes is attached at Annex B. Future Programmes may also fall into 2 administrative categories; the responsibilities of the Scottish Executive will remain the same for Scottish geographical programmes. Scottish Executive officials may be members of a GB or UK horizontal Programme Monitoring Committee. The horizontal GB programme may be replaced by separate operational programmes for Scotland, Wales and England within an overall GB Community Support Framework. In some cases, an overall UK Programme may include separate programmes for Scotland, England, Wales and Northern Ireland but co-ordinated at a UK level. The operational responsibilities of the programme for Scotland will be exercised by the Scottish Executive; as would the responsibility of operating GB or UK programmes in Scotland. Details are set out in Annex A.

ANNEX A

PROGRAMMES 2000 ONWARDS

In line with the sections of the EU Concordat covering the Implementation and Enforcement of EU obligations and Infraction Proceedings under future Programmes the Scottish Executive will be responsible for the following in relation to geographically defined programmes [non-horizontal]:

• Nominating designated Scottish areas for eligibility for Objective 2 to DTI.
• Contributing to the single UK negotiating line (see paras 6 and 10 above) about UK areas to be proposed to the Commission for Objective 2 designation.
• Drafting Scottish Programme Documentation for eligible Scottish areas.
• The submission of Programmes to the Commission through UKRep, involving DTI as necessary and copying to them in any event.
• Negotiating and agreeing Scottish Programme Documentation with the Commission in accordance with UK policy.
• Ensuring that Structural Fund Programmes are implemented in accordance with UK policy.
• Establishing Scottish Committee structures and membership for Scottish Programmes.
• Accepting designated Member State responsibilities for administering Scottish Programmes and ensuring compliance with appropriate policy and legislation of appropriate bodies (the Scottish Parliament, HMG and European institutions).
• Acting as Implementing or Managing Authority for Structural Funds in Scotland.
• All operational responsibilities referred to at paragraph 13 above for Scottish Programmes.
• Reporting to the Scottish Parliament on Scottish Programmes.
• Where necessary direct liaison with the European Commission about all devolved aspects of the operation of Scottish Programmes, keeping the DTI and UKRep informed of such contacts.

In relation to horizontal programmes, the Scottish Executive will have responsibility for operating the operational programme within the appropriate Community Support Framework and for operating GB or UK Programmes in Scotland.

ANNEX B

RESPONSIBILITIES FOR PROGRAMME IMPLEMENTATION

Programmes: 1994-1999

For those Programmes in Column A, the following will be the responsibility of the Scottish Executive:

• Accounting officer
• Project approval and monitoring
• Payments
• Verification and financial control
• Committee structure and secretariat
• Programme commitments
• Declaration of expenditure to EC
• Programme adjustment
• Programme closure
• Large projects
• Evaluation

The LEADER II Programme is an exception as Highlands & Islands Enterprise and Scottish Enterprise have been contracted directly by the Commission to operate the LEADER Programmes through a global grant. The above responsibilities with the exception of accounting officer, verification and financial control, therefore, lie with HIE for the LEADER Objective 1 Programme and with SE for the Objective 5b Programme. The Scottish Executive remains, however, Implementing Authority and hence has overall financial responsibility for LEADER II Programmes.

For those Programmes in Column B, the Scottish Executive still holds responsibility for the management of the Programmes within Scotland but the relevant Whitehall Department has overall responsibility to the European Commission for the Programme. The following are responsibilities of the Scottish Executive which acts as Implementing Authority:

• Accounting Officer
• Project approval and working groups
• Payments
• Verification and financial control of ERDF, EAGGF and FIFG
• Scottish advisory or working group structure and secretariat.

The responsibility for the following belongs to the relevant lead Whitehall Department:

• UK/GB monitoring committee structure and secretariat
• Programme commitments
• Verification and financial control of ESF
• Declaration of expenditure to EC
• Programme adjustment
• Programme closure
• Large projects
• Evaluation

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