Open - Scottish Government

• Healthier. to help people to sustain and improve their health, especially in
disadvantaged communities, ensuring better, local and faster access to health care
• Safer and stronger. to help local communities to flourish, becoming stronger, safer
places to live, offering improved opportunities and a better quality of life
• Greener. to improve Scotland's natural and built environment and the sustainable
use and enjoyment of it
These are accompanied by five Strategic Priorities that are most critical to economic growth:
Learning, Skills and Well-being
Supportive
Business Environment
Infrastructure Development and Place
Effective Government
Equity
While Structural Funds will make direct and indirect contributions to all of these priorities,
'Equity' is of particular interest. The Strategy recognises the importance of ensuring
sustainable growth and prosperity being fairly shared across Scotland as a whole, in terms
of communities and areas as well as individuals. Actions will include ensuring the most
remote areas of Scotland can contribute to, and benefit from economic growth and
developing a more strategic approach to the growth of Scotland's cities, towns and rural
areas. Both the 2000-06 and 2007-13 Structural Funds programmes are wholly in line with
the Purpose, objectives and priorities of the Government Economic Strategy.
The Strategy contains a series of targets for measuring progress. The headline targets are to
raise Scotland's GDP growth rates to the UK average by 2011 and match the GDP growth
rate of comparable small independent EU countries by 2017. Within the priority for equity, by
2017, the Scottish Government has committed itself to narrowing the gap in labour market
participation between Scotland's best- and worst-performing regions. In addition, it also aims
to increase overall income and proportion of income earned by the three lowest income
deciles by 2017 and reduce greenhouse emissions by 80 percent by 2050.
A related development was the establishment in June of the Council of Economic Advisers
(CEA), set up to advise the First Minister on the best way to improve Scotland's sustainable
economic growth rate. The CEA will be chaired by Sir George Mathewson, former Chief
Executive and then Chairmen of the Royal Bank of Scotland, and includes ten other
members who come from the highest levels of business and economics. The CEA will:
advise the First Minister directly about the best way to improve Scotland's
sustainable economic growth;
• have quarterly meetings following the publication of the quarterly growth figures; and
publish an annual report providing expert commentary on the Scottish economy.
The CEA met for the first time in September.
27

Scottish Budget and Spending Review
Also in November, the Scottish Government set out its proposed spending plans for 2008-
11. Against a background of a relatively tight budget settlement from the UK Government,
the proposed budget - to be debated and decided by the Scottish Parliament early in 2008 -
committed itself to:
reducing - and in many cases, removing - business rates affecting 150,000 small
business premises;
reducing rail journey times between Scotland's
major cities;
undertaking an ambitious programme to tackle climate change; and
freezing Council Tax rates across the country.
Re-organisation of the Enterprise Networks
The new government set out proposals for overhauling Scotland's enterprise networks -
Scottish Enterprise and Highlands & Islands Enterprise - in September. The re-organisation
- to take place during 2008 - aims to de-clutter the organisational landscape for economic
development and create more effective agency responsibilities. The key changes include:
• a clearer focus by the enterprise networks on the goal of delivering sustainable
economic growth;
• greater responsiveness to the needs of businesses and the Scottish economy as a
whole;
• creation of a strategic forum involving Ministers, officials, Scottish Enterprise,
Highlands & Islands Enterprise, and VisitScotland to provide clear ministerial
leadership and promote greater integration and collaboration;
the replacement of Local Enterprise Companies by five regional operations, each
with their own business-led regional advisory board;
the transfer of responsibility for the provision of local business support through
Business Gateway operations and local regeneration functions to local authorities;
• an agenda of co-location of local enterprise staff alongside relevant local authority
colleagues to create a single point of access for advice on planning, licensing,
business development and other services;
• the creation of a single skills body resulting from the merger of Careers Scotland and
learndirect Scotland as well as the training sections of the enterprise networks
(scheduled to be up and running during 2008);
• the transfer into Scottish Enterprise - initially on a joint venture basis - of the
business and innovation grant functions, such as Regional Selective Assistance,
currently delivered by the Scottish Government; and
a requirement for the enterprise networks, VisitScotland
share services where possible.
and the skills body to look to
While it is not clear what the longer-term implications of these changes will be for Structural
Funds, in the short term, there will be minimal impact on existing funding commitments by
the enterprise networks to current projects and on the interest, will and capacity to take
forward new projects under the 2007-13 programmes. Key national business development
and researchlinnovation functions will remain centred on the enterprise networks, so the
changes are unlikely to impact the new Strategic Delivery Body arrangements for the 2007-
13 programmes.
28

Local Authority
Concordat
The Scottish Government reached agreement in November on a Concordat with the
Convention of Scottish Local Authorities (COSLA), setting out a new relationship between
central and local government in Scotland. The agreement involved COSLA recommending
that its local authority members agree to a freeze on council tax resources during the 2008-
11 Spending Review period. In exchange, the Scottish Government committed itself to:
not introduce any structural
reform of local government;
remove the ring-fencing of funding provided by the Scottish Government to local
authorities; and
• establish Single Outcome Agreements with individual local authorities from 2008.
The Single Outcome Agreements will enable local authorities to achieve a range of
outcomes, previously linked to particular packages of funding provided by the Scottish
Government, in the context of the whole Scottish Government funding block to local
authorities. A performance framework system is to be established to monitor progress on
these outcomes.
The reduction in ring-fenced funding applies to Scottish Government funding, not Structural
Funds. Structural Funds awards will continue to have a separate financial control system
and work towards the targets established in the Operational Programmes. It will not be
subsumed within these new arrangements.
Skills Strategy
A new skills strategy, Skills for Scotland - A Lifelong Skills Strategy, was launched by the
Scottish Government in September. One of the key announcement in the strategy was the
creation of a new skills body involving the merger of functions previously held by Career
Scotland, learndirect Scotland and the enterprise networks (as described above). Its vision is
"a smarter Scotland with a globally competitive economy based on high value jobs, with
progressive and innovative business leadership".
Action has been identified as required under the following
headings in the strategy:
Individual development: including developing a distinctively Scottish approach to
skills acquisition, creating a coherent funding support system, and ensuring that the
strategy promotes equal access to and participation in, skills and learning for
everyone
• Economic pull: including stimulating increased demand for skills from employers,
improving the utilisation of skills in the workplace, understanding current and
projected demands for skills to help prepare for future skills needs, and challenging
employers, learning providers, awarding bodies and others to use the Scottish Credit
and Qualifications Framework as a tool to support learning.
• Cohesive structures: simplifying structures to make it easier for people to access the
learning, training and development they need, ensuring that Curriculum for
Excellence provides vocational learning and the employability skills needed,
achieving parity of esteem between academic and vocational learning, challenging
funding bodies to use their budgets to help achieve a step-change in skills
development and use, and encouraging providers to see themselves as part of a
continuum of provision.
Again, the 2000-06 and 2007-13 Structural Funds programmes are wholly in line with the
new skills strategy.
29

Other Key Developments
While the developments noted above are the most important relating to Structural Funds,
there were a number of other initiatives that are worth noting in the following areas:
• business development
• skills
• regeneration
• social enterprise/voluntary sector
climate change and energy
Business Development
Small businesses in the Hiahlands and Islands were supported by a new £7.5 million funding
investment package announced in January, through which ten business parks are to be
expanded and their facilities upgraded.
Across Scotland, additional funding of £40 million was made available in February to
Scottish Enterprise to support a range of capital proiects. Two of the projects earmarked for
additional funding are:
early-stage plans to create an Advanced Forming Research Centre, which will develop
new technologies to improve and speed-up high-precision manufacturing processes,
particularly for engineering companies making high quality metal components; and
a new energy development centre in Aberdeen providing high-quality business units in
response to demand within the energy sector.
The Hiahlands and Islands music industry received assistance from extra and better coordinated
support from the country's enterprise networks, including a new £500,000 fund
(the Scottish Music Futures Fund) to support musicians and musical entrepreneurs.
The main grant schemes to support business innovation were further simplified in April with
the launch of the SMART: SCOTLAND scheme. SMART: SCOTLAND brings together three
existing schemes to support innovative research.
Lastly, the Scottish Government created the Saltire Prize for innovation in industry. This is to
be an annual award that provides funding to projects that demonstrate the best of innovation
in different areas of industry and business. The first award will be made in 2008 and will
focus solely on renewable energy.
Skills
An extra £1 million of funding for enterprise education was announced in March as part of
Determined to Succeed programme. Determined to Succeed is based on the fundamental
principle that a strong Scottish economy requires enterprising and entrepreneurial young
people. The new funding will go towards a range of activities to be agreed with employer
organisations, including the Confederation of British Industry, Scottish Chambers of
Commerce, and the Federation of Small Businesses.
A strategy to provide English language training opportunities to migrant workers and others
was also announced in March. The Enalish for Speakers of Other Lanauaaes strategy for
30

Scotland, supported by funding of £5 million over 2008, will create around an additional
4,000 classroom places, mainly at colleges, to remove pressures which have built up in
recent years, particularly since the enlargement of the EU.
Lastly, in October, universities and colleaes across Scotland have been given an additional
£100 million capital funding package, enabling progress to be made on projects such as
those at Dundee, Inverness, Forth Valley and Kilmarnock.
Social Enterprises
and the Voluntary Sector
In March, a new strateav and action plan intended to grow and develop social enterprise was
launched. The strategy,. Better business - a strategy and action plan for social enterprise in
Scotland, was drawn up by Communities Scotland. It highlights the contribution a social
enterprise business model can contribute to economic growth and business development
while at the same time meeting social objectives. Social enterprises aim to deliver services
focused on the needs of people, on the regeneration and empowerment of people in
deprived communities. It has several strategic objectives:
raising the profile and demonstrating
opening up markets to social enterprise
the value of social enterprise
• increasing the range of finance available to social enterprises
developing the trading capacity of social enterprises through better business support
In August, the Scottish Government made available additional economic development
support to social enterprises to help increase skills in order to maximise income generation,
secure investment in the business and provide more services for those who need them.
Support is to cover:
• Business, financial and investment readiness planning
• Staff development
• Board development/governance
• Market research and marketing
Legal support
Lastly, care workers across Scotland's voluntary sector are benefiting from more training and
development with funding going to 64 groups through the Scottish Government's Voluntarv
Sector Development Fund to improve staff training and support. The fund targets support at
small and medium-sized voluntary organisations which will help their staff meet standards for
registration with the Scottish Social Services Council.
Climate Change and Energy
A new Climate Chanae Bill to cut greenhouse emissions by 80 percent by 2050 is In
development.
In September, authorisation was given to the biggest wave-energy project in the world,
capable of generating electricity for around 2,000 homes. The project, owned by Scottish
Power and operated from the European Marine Enerav Centre in Orkney, would consist of
four 750 Kilowatt Pelamis wave-energy converters.
31

,
3. IMPLEMENTATION: PROGRAMME AND PRIORITIES
3.1 Operational Programme
The socio-economic analysis contained in the Operational Programme and updated in Section
2.1 of this Report describes the strengths and opportunities upon which the region can build, and
the weaknesses and challenges deriving from low productivity and sparsity of population which
require to be addressed.
In recognising the limited resources available the Programme acknowledges that maximum
impact can be best derived from supporting actions as set out in Article 3 of the ESF
Regulation:
• enhancing access to employment and the sustainable inclusion in the labour market of
job seekers and inactive people, preventing employment, in particular long term and
youth unemployment, encouraging active ageing and working lives and increasing
participation in the labour market;
• reinforcing the social inclusion of disadvantaged people with a view to their sustainable
integration in employment and combating forms of discrimination in the labour market;
• increasing adaptability of workers, enterprise and entrepreneurs with a view to
improving the anticipation and positive management of economic change;
• enhancing human capital.
As a result, €52.150 million has been allocated for 2007-2013 across four Priorities:
1. Increasing the Workforce (€15.124 million);
2. Investing in the Workforce (€20.339 million);
3. Improving Access to Lifelong Learning {€15.124 );and
4. Technical Assistance (€1.564 million)
The Financial Tables as approved and set out in the Operational Programme are attached at
Annex 1.
Horizontal Themes
Inherent in this approach is a commitment to the horizontal themes of equal opportunities,
environmental sustainability and social inclusion. Built in to the process of appraisal, these
terms recognise the need to maximise benefit from the Fund during the programming period.
Subsequent Reports will detail what specific benefits have been derived.
StrateQic Delivery Bodies (SDB)
In a major departure from previous arrangements, the Managing Authority has commissioned a
single Strategic Delivery Body - UHI Millennium Institute - to deliver a basket of key strategic
projects within Priority 3 that will be consistent with and contribute directly to the objectives of the
Programme.
The SDB will receive funding from only part of the Priority - the balance being available for
competitive bidding - and support will only be given to activity that is additional and for which
the SDB is the only delivery agent.
The following allocations
apply:
32

• up to 55% of the total allocation of ESF Priority 3 - Improving Access to Lifelong
Learning, will be allocated to UHI Millennium Institute, a total of€8.318 million.
Community Planninq Partnerships (CPPs)
The development of Community Planning Partnerships is a clear priority of the Scottish
Government. Structural Funds will be made available to support CPPs in the Highlands and
Islands by contributing to integrated social inclusion Iregeneration action plans across the
Programme area, coordinated by Local Authorities.
ESF support for CPPs will come largely from Priority 1 - Increasing the Workforce. Funds
will support projects set out in Plans and will complement the key role of CPPs in delivering
projects supported by a range of other funding bodies.
Local Authorities will be responsible for the submission of Plans, which will then be assessed
by Advisory Groups for eligibility, affordability and impact. Thereafter individual organisations
will be responsible for bringing forward components of the Plan as and when ready.
Between €12 million - €14 million from both funds will be available to support the
development of CPP activity. It is anticipated that complementarity will be achieved through
integration of funding from LEADER and elements of SRDP and the Fisheries fund.
Taroetinq
Targeting and the focussing of investment is fundamental to the successful implementation
of the Programme and to achieving the Lisbon targets. The focus for investment in Priority 1
include the following groups:
• long term unemployedlinactive people, particularly those with no or low
qualifications and multiple barriers to entering employment or self-employment,
and remaining in a job;
• 16-19 year olds not in employment, education or training;
• unemployed/inactive lone parents and other carers;
• older people seeking to re-enter the labour force or requiring re-skilling to allow them
to remain in the workforce; and
• unemployed/inactive people from ethnic minority groups.
In addition, whilst geographical targeting, successfully implemented in previous
programmes, will be applied horizontally across all Priorities, it will be applied particularly in
relation to Priority 1. Whilst the Scottish Index of Multiple Deprivation remains insufficiently
sensitive to adequately identifying rural disadvantage, a more meaningful measure within
the region is the "fragile area" classification applied by Highlands and Islands Enterprise.
This measure recognises structural problems resulting from a self-reinforcing combination of
remoteness, poor infrastructure and low or low earning levels of economic activity.
Targeting will focus on applicants resident in areas which satisfy at least one of the three
sets of criteria which determine fragility - geographic, demographic and economic. A list of
"areas of need" will be produced in due course and future reports will detail how resources
have been allocated in support of these.
Under Priority 2 targeting will focus on particular groups including:
• Employees who lack basic core skills, including those with low levels of literacy
or numeracy and for whom English is not their first language;
33

• Employees without qualifications;
• SME managers with skills needs; and
• Key staff in social enterprises.
Under Priority 3, the aim is to assist the design and introduction of innovative products to
reform education which attract into learning people disillusioned by their previous
experience. Implementation requires to be horizontal, across the region however activity
requires to support the following:
Proqress
• Personnel in public and private training/education providing access to lifelong
learning and support services to key client groups;
• Voluntary sector/social economy organisations;
• Agencies working with employers;
• Employers, their representative bodies, the Scottish Trades Union Congress,
trade unions and workers organisations.
The Scottish Government held a "Shadow Round" for ESF Priority 1 (Increasing the
Workforce) commencing in January 2007. The purpose of the round was to allow project
activity to take place during the year in the absence of approved Structural Fund
Programmes and to ensure vulnerable target groups and projects were not disadvantaged. A
total of up to £2 million was made available.
A total of sixteen applications were received with a total grant request of £1.238 million.
Following assessments by the Scottish Government supported by the Intermediate
Administrative Body, six projects were recommended for approval with a total grant
commitment of £383,233.
The limited number of applications received during the round is largely down to the relatively
recent round under the previous Programme (Autumn 2006), which provided support for
many organisations into 2007. These will be covered in the Transitional Programme Annual
Implementation Report for 2007. In addition, the low number of recommendations is possibly
due to the relatively short window for preparation and submission. There were also a number
of very small applications brought forward without sufficient preparation or understanding of
ESF.
The first formal round opened in October. Under Stage 1, a total of 84 projects were
received with a total grant request of £14.394 million. This included the application from the
SOB.
Following assessment, sixty-eight projects were invited to proceed to Stage 2. Due to lack of
match funding confirmation, five projects chose not to submit, leaving sixty-three projects
seeking grant assistance totalling £12.582 million, again including the SOB.
Following appraisal by the Advisory Group in December a total of forty-two projects were
recommended for approval with an approximate grant request of £2.584 million.
Amendments to the grant figure require to be made as not all ineligible costs had been
removed. It is also anticipated that a number of projects may subsequently withdraw. No
recommendation was made in respect of the SOB application. This was considered
separately at the Programme Monitoring Committee in January 2008.
34

Issues
During discussions
the following issues were highlighted:
• the low number of applications under Priority 2 and 3 and in particular the
disappointing performance of the Further Education sector;
• the quality of applications was relatively poor and indicated that bodies had not
yet taken on board the opportunities offered by the New Programme; and
• the eligibility of training related to forestry and foodstuffs under ESF. This issue
may well result in an amendment of the Operational Programme to ensure the
ESF can support and that EAFRD is not the most appropriate route.
35

Priorities
Priority 1: Increasing The Workforce
Description:
Proqress
• to provide support to strengthen the "bottom-up" approach to training and
development within local communities. Financial assistance will be given to
locally-based organisations delivering support to the target groups and trainers.
During 2007, there were six projects approved under this Priority with an ESF grant request
totalling £0.383 million. The types of project approved include craft employability, rural
opportunities for disadvantaged groups on Western Isles and a Transport to Work Scheme.
In addition a further twenty projects were recommended
request of £1.48 million. The key projects recommended
for approval with a total grant
include:
Indicators
• Scottish Childminding Association - Childminding Recruitment and Training.
Providing training opportunities for 152 young people;
• Cothram - Combating Social Exclusion. Community Based Learning in South
Uist; and
• Barnardo's Scotland - Youthbuild. Assisting disaffected young people with
skills, experience and opportunities to access independent, sustainable
employment.
Actual
Actual
Indicator Type Target Baseline Achievement in Achievement
Year
Cumulative
Number of participants receiving Output 3,000 98.500 economically
support inactive of working age nfa nfa
CONS. 2005)
Number of participants with multiple Output 1,400 Not available
deprivations (i.e. those who qualify in 2 nfa nfa
or more of the tarQet Qroups)
Number of participants entering Result 1,000
emplovment. nfa nfa
Number of participants entering Result 1,000
education or training. nfa nfa
Number of participants gaining a partial Result 1,400
(i.e. a completed unit towards a full nfa nfa
Qualification) or full qualification.
Number of participants in employment Result 500
six months after leavinQ
Number of participants who progress
towards employment. nfa nfa
Net number of participants entering Impact
emplovment. nfa nfa
36

Priority 2: Investing In The Workforce
Description:
Proaress
• to increase skills and earnings levels within the Highlands and Islands
workforce in all sectors of the regional economy, with particular reference to
priorities identified in the ERDF programme, fostering the growth of
enterprises and entrepreneurship.
During 2007, there were no projects approved under this Priority. Twenty projects were
recommended for approval, with a total grant request of £1.008 million.
The types of projects recommended
include:
Indicators
• Construction skills;
• Developing Leaders for Sustainable Communities;
• Training for Land Based Businesses for Growth; and
• Re-skilling for Oil, Gas and Renewables.
Indicator Type Target Baseline Actual Actual
Achievement Achievement
in Year
Cumulative
Number of participants Output 7,930 275,000
receiving support
economically
active of
working age
(ONS, 2005)
Number of participants Result 2,960
gaining partial (i.e. a unit
within a full qualification)
or full qualification
Addressina low Daid//low skilled and vulnerable arouos
Number of male Output 1,130 7,500
participants without basic economically
skills active with no
qualifications
(ONS,2005)
Number of female Output 1,130 9,500
participants without basic economically
skills active with no
qualifications
(ONS, 2005)
Number of male Output 1,130 330,000 (ONS,
participants without level 2005)
2 skills
Number of female Output 1,130 301,000 (ONS,
participants without level 2005)
2 skills
Number of male Output 430 495,000 (ONS,
participants without level 2005)
37

Indicator Type Target Baseline Actual Actual
Achievement Achievement
in Year
Cumulative
3 skills
Number of female Output 430 452,000 (ONS,
participants without level 2005)
3 skills
Number of male Result 440
participants gaining basic
skills
Number of female Result 440
participants gaining basic
skills
Number of male Result 350
participants gaining level
2 skills
Number of female Result 350
participants gaining level
2 skills
Number of male Result 90
participants gaining level
3-5 skills
Number of male Result 90
participants gaining level
3-5 skills
Number of participants Impact
who progress into more
secure or better skilled
emplovment
Addressina under-reoresentation in the workforce
Number of projects Output 850 Not available
addressing better gender
balance.
Number of women going Result 510
into gender-imbalanced
sectors after 6 months
Imorovina manaaerial skills and continuina orofessional develooment
Number of participants in Output 370 Not available
projects addressing
managerial skills
Number of participants in Output 480 Not available
projects addressing
continuing professional
development
Number of participants Result 600
gaining a partial or full
qualification
Number of participants Result 340
QaininQ levels 6-10 skills
Number of companies Impact
benefiting from improved
skills traininQ
Increasina social enterorise skills
Number of participants Output 850 Not available
from social enterprises
38

Indicator Type Target Baseline Actual Actual
Achievement Achievement
in Year Cumulative
Number of participants Result 600
from social enterprises
gaining a partial or full
Qualification
Number of social Impact
enterprises benefiting
from improved skills
traininQ
Priority 3:
Improving Access to Lifelong Learning
Description:
• to widen access to lifelong learning, increasing the range of quality education
and training provision available and participation rates, particularly through UHI
Millennium Institute and its network.
Proqress:
During 2007 there were no projects approved under this Priority. Two projects were
recommended for approval, with a total grant request of £0.96 million.
The types of projects recommended include:
• Community Empowerment in Tourism, Heritage and Leisure based activities.
Indicators:
Indicator Type Target Actual Actual
Achievement Achievement
in year Cumulative
Number of participants who are Output 850 n/a n/a
trainers
Number of projects supporting the Output 30 n/a n/a
development of new courses/materials
or innovative approaches to learning
Number of local learning Output 120 n/a n/a
centres/access pointsl workplace
initiatives supported
Number of trainers gaining a partial Result 600 n/a n/a
(i.e. completed unit towards a full
Qualification) or a full Qualification
Number of new courses/materials Result 300 n/a n/a
developed
Number of participants benefiting from Result 2,800 n/a n/a
support
Number of participants gaining a partial Impact
or full qualification as a result of
supported proiects
39

Additional
ReportinQ
In accordance with Commission Regulation 1828/2006 Annex XXIII, additional reporting is
required in relation to indicators that do not have targets set for them. When data is available
(in 2008) breakdowns will be provided by both unemployment and inactivity status, gender,
vulnerable groups status (migrants, ethnic minorities and disabled individuals and age of the
following:
• number of participants receiving support
• number of participants gaining a partial qualification
• number of participants gaining a full qualification
• number of participants without basic skills
• number of participants without level 2 skills
• number of participants without level 3 skills
• number of participants gaining level 1 skills
• number of participants gaining level 2 skills
• number of participants gaining level 3-5 skills
• number of participants in projects addressing better gender balance
• number of participants going into gender imbalanced sectors
• number of participants in projects addressing managerial skills
• number of participants in projects addressing continuing professional development
• number of participants gaining a partial qualification (in projects supporting managerial
skills)
• number of participants gaining a full qualification (in projects supporting managerial
skills)
• number of participants gaining specialist training in equal opportunities and
environmental sustainability issues
• number of participants from social enterprises
• number of participants from social enterprises gaining a partial qualification
• number of participants from social enterprises gaining a full qualification.
There is no information yet available for projects approved in 2007 (Shadow Round) as final
claims are not due until April 2008. Based on the information provided in application forms
designed to capture the required data to support Annex XX111, in respect of six projects
approved the following is anticipated:
Gender MainstreaminQ
No activity to report. Final claims due April 2008.
243
123
46
73
33
Miqrant Participation
in Emplovment
No activity to report. Final claims due April 2008.
Activities to Improve Social Inclusion of Minorities
No activity to report. Final claims due April 2008.
40

Activities to Improve Social Inclusion of Disadvantaqed
Includinq Those With Disabilities
All six project approvals tackle disadvantage. No output activity to report during 2007.
Innovative Activities
No output activity to report during 2007.
Trans-national and/or Inter-Reqional Actions
No output activity to report during 2007.
Policy Actions
The Operational Programme establishes the policy context for its implementation.
Specifically, it highlights the need for alignment with:
• The EU's Community Strategic Guidelines (CSG);
• The UK's National Strategic Reference Framework (NSRF);
• The Integrated Guidelines on Growth and Jobs;
• The European Employment Strategy recommendation; and
• The UK's National Reform Programme (NRP), successor to the National Action Plans.
The following nine "Key Programme Challenges", the basis for the three ESF Priorities map
to both the Community Strategic Guidelines and the National Strategic Reference
Framework Priority Actions:
Fiqure 5: Proqramme challenqes and the Community Strateqic Issues
KEY PROGRAMME
CHALLENGES
1: Targeting particular client groups
I 2: Encouraging women returners
Attract
and retain more
• people in employment.
I 3: Addressing
under-employment
4: Targeting low-waged/low-skilled
5:Addressing gender pay gap/representation
6:lncreasing business/entrepreneur/CPO skills
Improve adaptability of
workers
and
enterprises and the
flexibility of the labour
market.
8: Improving access for most vulnerable
9: Improving UHllearning capacity
Increase investment in
human capital through
better education and
skills.
41

Future reports will seek to demonstrate how ESF actions supported relate to the key
challenges and aggregate to the Community Strategic Guidelines and the National Strategic
Reference Framework.
In addition, the aggregation of activity in relation to Programme Challenges 1 to 3 will add
value to the employment strategy set out in the National Reform Programme. This analysis
will provide details of ESF activity in support of:
• New Deal (focussing on long term unemployment);
• Pathways to Work; and
• Closing the Opportunity Gap.
42

3.2 National Reform Programme
The National Reform Programme sets out the UK Government Strategy to:
• raise the skills levels in the workforce by increasing participation in education at
age 17 from 75% to 90% over the next ten years;
• ensure 2.25 million adults improve their basic skills over the period 2001 to 2010;
and
• reduce the number of adults in the workforce without a Level 2 qualification by at
least 40%.
Structural Fund activity addressing Key Challenges 1-3 will add value to the strategy, whilst
Key Challenges 4-9 will add value to the Skills Strategy in Scotland.
Future reports will detail:
• how ESF actions contribute to the foregoing:
• assess how actions may be refined to support the policy framework; and
• provide examples of good practice.
This may be done at a Priority level and in accordance
Annex XXIII (as set out in page 40 of this report).
with the analysis required for
43

3.3 Financial Engineering Instruments
No activity to report.
3.4 Coordination
Liaison and joint working agreements between the Highlands and Islands and Lowland and
Upland Scotland Programme has been undertaken within the following fields:
• applicant registration; and
• application processing/appraisal.
Reqistration
The Scottish Government requires all organisations to register for the 2007 -2013
Programmes in order to:
(i) allow an assessment of their eligibility to apply for Structural Funds; and
thereafter
(ii) to provide access to the new online application system (EUROSYS).
Registration is required only once during the lifetime of the Programme (albeit a reregistration
is required following the launch of the new database).
Organisations are required to register with one Intermediate Administrative Body (lAB), and
this covers them for all four Scottish Programmes. Once the recipient body is satisfied
regarding the status of the applicants, the remaining lAB is informed accordingly.
Application
ProcessinQ/ Appraisal
Where applications are received in respect of pan-Scottish projects or where applicants
pursue support for projects in both Programme areas, the assessment and appraisal
information is shared between the respective lABs.
This approach seeks to ensure consistency in decision making, in respect of outputs and in
terms of any conditions that may be applied.
Two applications - Princes' Trust and Venture Trust - in the Shadow Round demanded
liaison between the lABs. This joint working was extended to a combined Article 60b Visit in
respect of the Venture Trust.
The benefits of enhanced coordination is recognised and various issues around the
interpretation of the National Rules suggests that the current informal arrangements may
need to be formalised following Stage 2 submissions.
44

3.5 Horizontal Themes
The essential interplay of economic development and social inclusion, equal opportunities
and environmental sustainability continue to be at the centre of European Union, United
Kingdom and Scottish Government policy priorities.
In the 2007-13 programmes all applications will be expected to demonstrate that they have
taken these issues fully into account in designing and delivering their projects.
Projects will be scored on each of the horizontal themes in terms of how far these issues
have been considered and acted upon. A zero score for any two of the horizontal themes will
result in the project not receiving an award.
Social Inclusion
In the relevant section of the Application form Horizontal Themes, applicants are expected to
demonstrate that they have taken Social Inclusion issues fully into account in designing and
delivering the programme. Projects are scored on how far those issues have been
considered.
A new combined initiative is being considered by the Scottish Government to replace the old
anti-poverty strategy. The new strategy could be linked to the Single Outcome Agreements -
A variety of initiatives such as: Working for Families Fund, Workforce Plus, More Choices
More Chances and others may be involved.
The three ESF priorities focus on exclusion in the following ways:
• Priority 1: Increasing the workforce - supporting the training of groups which face
barriers to entering the workforce and ensuring that they have the skills to gain
sustainable employment.
• Priority 2: Investing in the workforce - ensuring low skilled, low paid, under-employed
and migrant workers have the necessary skills to take advantage of opportunities for
higher-quality, better-paid and more sustainable employment.
• Priority 3: Improving access to lifelong learning - recognising that support for
individuals must be made in parallel with improvements to the systems that will
enable them to access the training and support needed to enter, stay and progress in
the labour market.
The 2007 - 2013 Programme will link into enhanced Government Strategy relating to Social
Inclusion. The Managing Authority will monitor and evaluate social inclusion indicators
throughout the lifetime of projects and will look for new ways of integrating social inclusion
factors into the Programme with a view to enhancing Scotland's social inclusion agenda.
An inclusive labour market supports social inclusion and a well-functioning economy. This is
a long-term approach, which requires a balance between the objectives of social inclusion
and economic objectives. The reality that poverty and exclusion is not decreasing among all
groups or communities, despite the efforts so far, points clearly to the fact that actions to
close the opportunity gap need to be mainstreamed across all the new Structural Funds
programmes and priorities.
The promotion of Social Inclusion will be carried forward by staff in the new Intermediate
Administration Bodies and the European Structural Funds Division in the Scottish
Government. A Social Inclusion Champion was appointed within the Division.
45

Equal Opportunities
Equal opportunities have been a consistently key element of Scottish Structural Funds
programming. For over a decade, Scottish Programmes have actively pursued the
integration, or mainstreaming, of the horizontal themes, particularly Equal Opportunities and
Sustainable Development, into the design and delivery of programmes
The following sections provide summary detail of the activities in 2007 underpinning the
embedding of good practice in the new programmes with respect to Equal Opportunities.
Equal Opportunities
- National Overview
Equal Opportunities activity in 2007 had two key strands: looking forward to the new
programmes and ensuring that partners understood the implications of recent legislation.
With respect to the latter, a range of new public duties for equal opportunities arose from
2006 legislation. The Equality Act 2006 introduced a move towards more pro-active equality
legislation, in line with the amended Race Relations Act. It introduced legislation through
public sector duties on disability and gender equality as well as the creation of the
Commission for Equality and Human Rights (subsequently renamed the Equality and Human
Rights Commission) which merged the existing Equality Commissions (the Commission for
Racial Equality, the Disability Rights Commission and the Equal Opportunities Commission).
The public sector duty on disabilitv equality came into force on 4 December 2006 and
ensured that when public authorities carried out their functions they gave due regard to:
promoting equality of opportunity
between disabled people and other people;
• eliminating discrimination that is unlawful under the Disability Discrimination Act;
eliminating harassment of disabled people that is related to their disability;
• promoting positive attitudes towards disabled people; encouraging participation by
disabled people in public life; and
taking steps to meet disabled people's needs, even if this requires more favourable
treatment.
The public sector duty on aender equality came into effect in April 2007 and meant that
service providers and public sector employers would have to design employment and
services with the different needs of women and men in mind. The duty requires public bodies
to set their own gender equality goals in consultation with service users and employees and
to take action to achieve them.
New ESF Programmes in Scotland - New Horizontal Themes - Social Inclusion, Equal
Opportunities and Sustainable Development. In the 2007-2013 Programme application
forms for applicants - Compliance with Equal Opportunities stated the following:
• Your organisation must have an active Equal Opportunities policy and a form complaints
procedure in place.
• If the project's target group is restricted to single sex of particular racial groups you must
comply with all relevant Equal Opportunities Legislation.
• If your organisation has had any unlawful discrimination findings in the last 3 years you
must disclose the outcome.
• Also applicants and their sub-contractors must promote equality of opportunity with no
discrimination on the grounds of Gender, Ethnic Origin, Religion or belief, Disability, Age
and Sexual Orientation in accordance with the Commission for Equality and Human
Rights guidelines.
46

In this context, it is worth noting a September 2007 conference held in Inverness to reflect on
the role and activities of the Equalities Commission and look forward to the new Equality &
Human Rights Commission. The conference - Doing the Gender Equality Duty Better in the
Highlands and Islands - consisted of several workshops and discussions led by the Royal
National Institute for the Blind, Glasgow University and Edinburgh Council with widespread
representation from Structural Funds partners, including SCVO, Aberdeenshire Council and
the Scottish Government.
Recognising the need to help partners understand the implications of these new duties, the
Scottish Government's Equality Unit developed an Equality Impact Assessment Tool. The
Equality Impact Assessment Tool is available to all staff via the Government's internal
intranet and a read-only version of the Equality Impact Assessment Tool is available online
at: http://vq 73eda/systmes/EqualityU nit!Assessment.
At the same time - at a Structural Funds level, and reflecting the shift in activity to
developing the new 2007-13 Programmes(speak to Muriel where this is available) - the
Equal Opportunities Adviser to the Scottish Structural Funds Programmes worked on
distilling Scottish good practice over the last few years into advice and support for the new
programmes. The final key activity of the Adviser in 2007 was preparing a summary report
on the good practice in the Scottish programmes. The promotion of Equal Opportunities will
be carried forward by staff in the new Intermediate Administration Bodies and the European
Structural Funds Division in the Scottish Government. An Equalities Champion was
appointed within the Division.
For the new programmes, an Equal Opportunities Assessment was carried out as part of
programme development. The Scottish Government requires an Equality Impact
Assessment to be undertaken when introducing new policies or changing existing policy in a
significant way. This entails:
assessing and consulting on the likely impact of the policies they are proposing to
adopt;
monitoring
any adverse impact of their policies;
publishing the results of their assessment, consultations and monitoring; and
ensuring public access to the information
and to services arising from the Policy.
In recognising this duty, the European Structural Funds Division within the Scottish
Government ensured that the implications of the changes proposed in the new round of
Structural Fund Programmes were thoroughly assessed from all aspects of equality through
an Equal Opportunities Assessment of the new programmes. A joint meeting of the Equal
Opportunities Forum and the Impact Assessment Working Group was held on 22 November
2006 in Glasgow. This was timed to coincide with the formal consultation period on the new
programmes which ran from October 2006 to January 2007. This meeting mainly focused on
the consultation from an Equal Opportunities view point with regard to the new programmes.
A series of questions, based on those in the formal consultation were asked, which again
informed the final draft programmes and the delivery process. Representatives were invited
from a wide range of equality groups in addition to the usual Equal Opportunity Forum
members, however attendance was low. The reason for this may have been that there had
been extremely good input from a wide range of bodies in the initial stages, and their views
had been taken into account in the development of the draft which had been published and
was then at the formal consultation stage. Some bodies may have preferred at that stage to
enter a view as part of the formal process registering their input in that way.
47

Further contact was made with those absent from the Forum and the workshop in order to
obtain their views and feedback from the questions relating to the consultation. This was
tried in various forms, e-mailing, suggesting meetings at Scottish Government offices or for
officials to go to their offices, asking for feedback either by telephone or bye-mail. Further
responses from the Disability Rights Commission and the Empower Theme B EQUAL
Initiative Development Partnership were received, and these also informed the assessment.
Environmental
Sustainability
As with Equal Opportunities, the focus of activity in mainstreaming Sustainable Development
has been with applying the lessons of the old, to the development of the new programmes.
Sustainable Development has been divided into two themes in the new programmes; Social
Inclusion and Environmental Sustainability. The Managing Authorities recommend that
Environmental Sustainability should be pursued at programme level as part of the overall
aims of the European funding programmes.
In giving visibility to both Social Inclusion and Environmental Sustainability as separate
entities under the umbrella of Sustainable Development, both these elements are given the
opportunity to have a clear priority for the future. The measures put in place to assess these
themes contribute to a key Scottish Government target of sustainable economic growth.
The Managing Authority and Programme Management Executives previously had at their
disposal a Sustainable Development National Advisor, who had been funded by Scottish
Natural Heritage and the Scottish Environment Protection Agency to guide the information
and evaluation of Sustainable development within the programmes. This role was further
developed through participation in workshops on the role of Sustainable Development in the
new programmes. Two workshops were held with key partners on sustainable development
and the new programmes during 2006. Follow-up actions were taken in 2007 with
workshops involving the Scottish Government and SNH on setting a scoring system for
assessing applications and appropriate environmental indicators for measuring project
activity. The results of these workshops informed the procedures for implementing the new
programmes.
In terms of delivery, the instruments for mainstreaming will continue to build on the good
practice tested and assessed under earlier programmes. For example, champions will
continue to be designated at different levels, such as managing authorities and the
intermediate administrative bodies for the new programmes. Where required, short term
expertise will be used for training different parts of the delivery system to mainstream the
Horizontal Themes on a continuing basis through the lifetime of the programmes, reflecting
the smaller scale of the programmes, the experience developed to date across programme
management and the reduced need for full time national advisors.
48

4. IMPLEMENTATION- FINANCIAL
4.1 Payments Made
As at 31 May 2008 no payments have been made to applicants under the 2007-13
operational programmes.
4.2 Payments Received
As at 31 May 2008 the only payments received from the Commission are in respect of the
programme advances.
4.3 Payment Targets
The N+2 Rule is a requirement of the Financial Regulations which require Programmes to
meet established financial targets on an annual basis from the end of Year 1 (plus 2) i.e. in
the case of 2007-2013 Programmes, the first annual target is the end of 2009.
N+2 relates to expenditure defrayed, and meeting targets can be hampered by a slow rate of
commitment and by implication expenditure and delays in the implementation of projects.
Compliance rules have applied in previous programmes, however the Scottish Government
is planning a more rigorous approach in the years ahead.
Article 93 of Regulation 1083/2006 details the principle of automatic decommitment.
Effectively the Year 1 (2007) budget allocation as defined in the Financial Tables requires to
be paid out and declared to the Commission by 31 December of Year 3 (2009).
The Regulation allows for an advance of funds in 2007 and 2008, which reduces the target
for 2009 and 2010. The targets for the programme are:
ESF N+2 Tarqets
Year € Tarqet Annual TarQet Increase
2009 12,794,189 -
2010 23,929,810 +11,135,621
2011 33,335,402 +9,405,592
2012 40,937,309 +7,601,907
2013 46,659,623 +5,722,314
2014 50,424,119 +3,764,496
2015 52,150,195 +1,726,076
Failure to meet the targets will result in a loss of grant so implementation arrangements
developed by the Managing Authority aim to avoid any such difficulties.
49

5. IMPLEMENTATION - QUALITY AND EFFECTIVENESS
5.1 Programme Monitoring Committee
The management arrangements for the Programme are based on a two tier structure
comprising:
(i)
(ii)
Programme Monitoring Committee, responsible for Monitoring and Reviewing progress of
the ERDF and ESF Operational Programmes, for consideration of operational issues and
approval of project recommendations;
Advisory Groups, responsible for detailed project appraisal, development of guidance and
advice on selection criteria.
The Committee and the Advisory Groups are chaired by an official of the Scottish
Government and serviced, under contract, by the Intermediate Administrative Body.
In accordance with Article 63 of Council Regulation (EC) No 1083/2006 of 11 July 2006 a
single Monitoring Committee was established with responsibility for the ERDF and ESF
Operational Programmes.
In order to ensure quality and effectiveness of the Programme, the Committee has drawn up
its own:
(i) Terms of Reference (Annex 2); and
(ii) Rules of Procedure (Annex 3),
within the institutional, legal and financial framework of the Member State.
Membership of the Committee combines representatives of the key public, educational and
voluntary bodies operating within the Programme area together with "social" partners.
MeetinQs held
The Monitoring Committee met once during 2007, as an Interim Committee, prior to the
approval of the respective Programmes. All decisions made at the meeting on 25 September
were "in principle". All were homologated at the first full meeting on the Committee following
approval of the Programmes, held in January 2008.
The Committee
approved "in principle":
• Terms of Reference and Rules/Procedure;
• Structure, Terms of Reference and Rules/Procedure of Advisory Groups; and
• Implementation Arrangements in respect of:
Registration Procedures;
National Rules on Eligibility;
Strategic Delivery Bodies;
Community Planning Partnerships;
Annual Expenditure Targets;
Audit and Marketing;
Selection Criteria;
Application Timetable and Process; and
Retrospection.
In addition the Committee also approved "in principle"
• Communication Plan;
50

• Evaluation Strategy;
• Technical Assistance; and
• "Shadow" Round Awards.
During the year there were no significant problems encountered and no modifications were
made to either of the Operational Programmes, albeit amendments to the Selection Criteria
were made.
Advisory Groups
Three Advisory Groups support the Programme Monitoring Committee. They undertake the
technical appraisal of projects in accordance with the approved selection criteria and
thereafter make recommendations in respect of projects to the Committee. The Groups are
chaired by an official of the Scottish Government and comprise "technical experts" and not
organisational or sector representatives. Membership of Advisory Groups was established
following an open tendering procedure. Following press and website advertisements, the
Scottish Government appraised candidates and made the appointments. Details of
Structure, Terms of Reference (Annex 4) and Rules of Procedure are attached (Annex 5).
Groups are required to meet in order to deal with the normal flow of applications. During
2007:
• Advisory Group 1 met on 20 March to assess projects submitted in the "Shadow"
Round; and
• Advisory Groups 1, 2 and 3 met in early December to consider the applications
submitted in the first formal round.
In response to issues raised by the Advisory Group members at the December round of
meetings a report "Strategic Issues" was prepared for Monitoring Committee consideration
(HI/PMC/07-13/020). The points raised included eligibility issues around:
• marina developments;
• sports facilities;
• community halls; and
• roads projects.
5.2 Intermediate Administration Body (lAB)
The following steps have been taken by the lAB to ensure quality and effectiveness of the
Programme:
• a training session for Advisory Group 1 members prior to the Shadow round in
January;
• a training day for all Advisory Group members on 8 November; and
• a series of workshops across the Programme area at the end of June/early July, in
Inverness, Kirkwa II, Lerwick, Oban and Stornoway, to promote the new Programmes.
Throughout 2007, the lAB was involved in a series of meetings to establish detailed
operational arrangements with respect to the Community Planning Partnerships and the
Strategic Development Bodies. Both Highlands and Islands Enterprise and UHI Millennium
Institute made presentations to Advisory Groups during the December series of meetings.
51

5.3 ManagingAuthority Action
Work at the level of the Managing Authority concentrated on the essential elements for
effective implementation of the new programmes. A Steering Group, comprising members of
the Managing Authority and Certifying Authority convened to consider strategic aspects to
programme drafting, negotiation and implementation. Business processes, guidance and
other 'operational' issues were considered and developed by the Business Continuity Group,
comprising members of the Managing Authority, Certifying Authority and the Intermediate
Administration Bodies. a Project Board oversaw the development and roll-out of the new IT
system. (This work continues into 2008.)
In addition, groups were established to lead the development of both the Evaluation and
Communication Plans.
The value of the respective groups is already evident in the contribution each has made to
the successful introduction of the programme. the scope and membership will be reviewed
regularly to ensure that both remain relevant and appropriate.
5.4 Ongoing Evaluation
Following recommendations 4 contained in the European Commission's working documents 5 ,
and in part from the increased emphasis placed on evaluation by the European Regulations
(Article 41 [1] and Article 13 of Council Regulation 1083/2006) we have produced a Scottish
Structural Funds Evaluation Plan. The plan is focused on both the European Regional
Development Fund (ERDF) and the European Social Fund (ESF), but it also has read across
to the Scottish cross-border and trans-national programmes under the Territorial Cooperation
Objective, although evaluation activities on these programmes will be covered
under a separate plan.
In 2007 we also established the Scottish Monitoring and Evaluation Group (MEG). This
group has been set up in order to promote sharing of experiences and dissemination of good
practice. The group includes officials from European Structural Funds Division, our two
Intermediate Administration Bodies, Highlands & Islands Enterprise, Scottish Enterprise (the
latter two are key partners with significant evaluation experience as the regional
development bodies for Scotland) and the Scottish Government's analytical services unit.
Part of the role is to identify and provide intelligence on what evaluations have been or are
being carried out from other sources. Members will be encouraged to network together to
share that information. The group convened in person in August and November this year.
In addition to this activity we were present at the UK Evaluation Standing Group in July, the
DG Emploi ESF Partnership Meetings in May and September, and the DG Regio ERDF
network meeting in September. We also attended an evaluation and monitoring seminar
that was run by the European Institute of Public Administration in Maastricht on 22-23 March
2007.
We are currently running two separate evaluations. We are setting up a new approach to
how we manage external consultants to evaluate our Programme, moving from individual
tendering to a 'pool' of key evaluators. We are also in the early stages of tendering for an
evaluation of the shadow round funding.
4 This is not a compulsory requirement of the European Commission.
5 Working Paper 2: Indicative Guidelines on Evaluation Methods: Monitoring and Evaluation
Indicators and Working Paper 5: Indicative Guidelines on Evaluation Methods: Evaluation during the
Programme Period.
52

5.5 Ongoing Monitoring
The following Article 60b check activity was planned and carried out during this year:
Project:
Reference:
Date:
The Venture Trust: A Chance for Change
HI/ESF/SI/2007/0005
24/10/07
The visit was undertaken jointly with LUPS. Numerous concerns were raised and highlighted
to the applicant and Scottish Government. A follow up meeting with the applicant took place
on 30 November (and a subsequent meeting held on 7 February).
53

6. PUBLICITY
6.1 Scottish Communication Plan
Draft in progress
54

7. FINANCIAL CONTROL
7.1 Management and Control Report
The Management and Control Report is currently being drafted for the 2007-13 operational
programmes.
7.2 Problems and Corrective Measures
No activity to report during 2007.
7.3 Technical Assistance
The interim Programme Monitoring Committee agreed in principle at its meeting of 25
September 2007 to the use of Technical Assistance from the programme to support a range
of implementation and evaluation initiatives. While many of these will emerge as the
programme matures, two principle actions have already attracted Technical Assistance -
The Scottish Government contract with Highlands & Islands Partnership Programme as the
Intermediate Administration Body; and, the Scottish Government initiative to introduce a new
web-based application and claim process and database.
7.4 Verification and Compliance
No projects were approved under the programme in 2007. As a result no on-the-spot visits
were carried out.
55

8. COMPLEMENTARITY, CONSISTENCY, COORDINATION
COMPLIANCE WITH EUROPEAN COMMUNITY POLICIES
AND
8.1 Competition Policy & State Aids
Guiding principles for a comprehensive reform of State aid rules and procedures were set out in
the State Aid Action Plan, published by the Commission in 2005. This was published in
response to a series of challenges: the re-Iaunch of the Lisbon Strategy for growth and jobs, the
enlargement of the EU and the increasing complexity of State Aid rules.
The reform, set out in the action plan, progresses as the Commission continues to review and
update existing regulations and procedures. New Guidelines on State aid for Environmental
Protection were introduced in January 2008. These are an important part of the Commission's
Energy and Climate Change Package to provide the right incentives for Member States and for
industry to increase their efforts for the environment. During 2008, the Commission is expected
to adopt a general block exemption regulation which will simplify, consolidate and expand the
existing regulations. Member States are also being consulted on Rescue and Restructuring Aid
and the State aid rules for Public Service Broadcasting.
The Scottish Government State Aid Unit continues to ensure that stakeholders across Scotland
are updated on developments and consulted on relevant proposals for review and change. The
Unit also promotes awareness of State aid and provides an advisory service to public sector
stakeholders in Scotland. All approved projects assisting undertakings with public funds are
required to ensure compliance with EU competition policy and associated relevant legislation
prior to receiving an offer of grant. Guidance on Structural funds and State aid is available on the
State aid website at www.stateaidscotland.gov.uk
8.2 Public Contracts
Project sponsors are required to advertise necessary contracts in the Official Journal, providing
details of these adverts prior to the issue of the award. This is also followed up by provision of a
public procurement questionnaire if the project is around or over the threshold for Official Journal
advertisement. This is submitted to the Managing Authority. No public contracts were advertised
during 2007.
8.3 European Investment Bank
The EIB, although providing Scotland with assistance in the form of support to transport,
infrastructure and environmental projects does not duplicate the work of Structural Funds in
Scotland. The organisations to which these loans have been granted are not in receipt of
other EU funding. Overall, the Scottish Government remains committed to maintaining a
continuing dialogue with the EIB and to exploring the possibility of EIB supported projects. At
present there is particular interest in and discussion of the JEREMIE and JESSICA
initiatives, which could bring about useful collaboration between the EIB, ERDF, and
domestic funding in the fields of business investment and urban regeneration.
The Scottish Government's European Structural Funds Division will continue to give careful
consideration to all proposed investment in Scotland by the EIB and ensure co-ordination
between funds where appropriate.
8.4 European Agricultural Fund for Rural Development
The Scottish Rural Development Programme implements relevant measures in Regulation
1698/2005. These comprise those related to Axis 1, improving the competitiveness of the
56

agricultural and forestry sectors, Axis 2 improving the environment and the countryside, Axis
3 the quality if life in rural areas and diversification of the rural economy and axis 4 Leader. It
takes full account of other Community support instruments, setting out the demarcation
criteria for the operations supported by the EAFRD and those supported by other
Community support instruments. The new Scotland Rural development Programme runs
from 2007 to 2013. A draft operational programme was submitted to the European
Commission during 2007. (This was subsequently approved in early 2008.)
8.5 Common Fisheries Policy
The European Commission published the regulation for the European Fisheries Fund (EFF)
in July 2006. The EFF succeeds FIFG in all Member States and operate over the 2007 -
2013 programming period (2007-2013). In consultation with stakeholders and other UK
Administrations the Scottish Government is developing an Operational Programme for the
EFF which should allow the European Commission to approve the new schemes
establishment in the UK in late 2008.
8.6 Other
There were no major projects approved in 2007. Global Grants do not apply under this
programme.
57

9. ANNEXES
Annex 1:
Annex 2:
Annex 3:
Annex 4:
Annex 5:
Financial Allocations
Programme Monitoring Committee: Terms of Reference
Programme Monitoring Committee: Rules of Procedure
Advisory Groups: Terms of Reference
Advisory Groups: Rules of Procedure
58

Annex 1
FINANCIAL ALLOCATIONS
The financial allocations for each year of the programme are shown in the table below. €52.15
million of Community funding will contribute to a Programme of €104.3 million in total, resulting in
a target Programme intervention rate of 50% (as calculated on the basis of public expenditure).
Table 12: Year bv source offundina for the Proaramme (in €)
Community
National Public
Year Funding Funding Total Fundina Co-financina Rate
{a} {b} {c} = {a} + {b} {e} = {a}!{c}
2007 12,794,189 12,794,189 25,588,378 50%
2008 11,135,621 11,135,621 22,271,242 50%
2009 9,405,592 9,405,592 18,811,184 50%
2010 7,601,907 7,601,907 15,203,814 50%
2011 5,722,314 5,722,314 11,444,628 50%
2012 3,764,496 3,764,496 7,528,992 50%
2013 1,726,076 1,726,076 3,452,152 50%
2007 - 2013
Total 52,150,195 52,150,195 104,300,390 50%
For the three key priorities of the Programme, resources have distributed with
the following rationale .
• Priority 1 has received a significant share of funding, reflecting the priority placed on the
challenge of worklessness in domestic policy, particularly for an economy where
employment rates are already relatively high.
• Priority 2 has the highest share of funding because it covers a range of important, interrelated
factors influencing skills development in the region. Improving the skills of the
workforce has been identified in domestic policy and by partners as the key strategic
area for EU intervention.
• Priority 3 has a similarly large share of funding in recognition of the importance of access
to lifelong learning in a rural, peripheral region and the scope for the UHI and its college
network to address these issues.
Table 13: Priorities b source of fundin in €
Priorit
Priorit
Priorit
Priori
Total
Year
Axis 1
Axis 2
Axis 3
Axis 4
a
15,123,557
20,338,576
15,123,557
1,564,505
52,150,195
National
Public
Fundin
b
15,123,557
20,338,576
15,123,557
1,564,505
52,150,195
EIB
Contributions
oo
o
o
o
o
Other
Fundin
o
o
o
o
o
o
The intervention rates have been set to reflect previous ESF experience and to ensure that
the minimum required EU funding will be provided to match fund projects.
59

Annex 2
Programme Monitoring Committee
Terms of Reference
The Monitoring Committee shall satisfy itself as to the effectiveness and quality of the
implementation of the operational programmes in accordance with the following:
it shall consider and approve the criteria for selecting the operations financed within six months
of the approval of the operational programmes and approve any revision of these criteria in
accordance with programming needs;
it shall periodically review progress made towards achieving the specific targets of the
operational programmes on the basis of documents submitted by the managing authority;
it shall examine the results of implementation particularly the achievements of the targets set
for each priority and the evaluations undertaken by the managing authority as referred to
Article 48 (3);
it shall consider the recommendations from Advisory Groups on operations to be financed and
thereafter approve projects, making recommendations to Ministers with regard to the award of
grant assistance;
it shall consider and approve the annual and final reports on implementation pursuant with the
terms of Article 67;
it shall be informed of the annual control report, or of the part of the report referring to the
operational programme concerned, and of any relevant comments the Commission may make
after examining that report or relating to that part of the report;
it may propose to the managing authority any revision or examination of the operational
programmes likely to make possible the attainment of the respective fund's objectives, referred
to in Article 3 or to improve its management, including its financial management;
it shall consider and approve any proposal to amend the content of the Commission decision
on the contribution from the funds;
it shall agree Technical Assistance measures in accordance with Article 46 including
management, monitoring and control together with activities to reinforce the administrative
capacity for implementing the funds.
it shall ensure compliance with all Community policies (where appropriate) and coordination
with assistance granted by the other grant and loan instruments of the Community e.g. the
European Agricultural Fund for Rural Development (EAFRD) and the European Fisheries Fund
(EFF);
it shall also consider any matters relating to the implementation of the programmes e.g.
retrospection, geographical targeting and multi-annual awards; and
it shall establish such supporting Committees or structures as considered appropriate to assist
the Committee in exercising its functions and responsibilities. To this end the Committee is
required to approve:
The establishment of Advisory Groups - membership being determined by the managing
authority; and
The Terms of Reference and Rules of Procedure of Advisory Groups.
60

• In order to promote objectivity and the exchange of frank and impartial views and
comments, it is essential that advisory group members respect the confidential nature of
the proceedings of any meetings that take place.
• Accordingly, members must not report the context of any part of an application or of any
detailed discussion to any third party, and in particular must not attribute any discussion,
score or comment to anyone or more members of the advisory group.
• In the event that a member of an advisory group is unable to appraise applications or
attend any specific meeting no substitution will be allowed, as this appointment is on an
individual basis.
63

Annex 5
Advisory Groups
Rules of Procedure
Membership
1. Advisory Groups will be chaired by a member of a Managing Authority and will comprise up to
ten "technical" experts appointed by the Scottish Government.
2. Members will be appointed for their knowledge, expertise and experience and shall not act as
representatives of any agency or sector.
Place and Frequency
3. Advisory Groups will normally meet on up to two occasions per year, at a particular stage in the
application cycle, at a convenient location, normally in the Programme area.
Agenda
4. The Convenor, with assistance from the lAB, will draw up an agenda for the meeting including
any items which might be requested in writing by a member of the Groups. The agenda shall be
issued to Advisory Groups, along with papers necessary for the meeting, normally ten working
days before the date of the meeting.
Secretariat
5. The Advisory Group secretariat will be provided by the lAB, Highlands and Islands (Scotland)
Structural Funds Partnership Ltd, (HIPP)
Written Procedures
6. Any issued that cannot be dealt with in normal business may be dealt with by written procedure.
Members will be required to give their views within ten working days unless there is justification
for a shorter deadline. The absence of objection from any member of the Committee will
generally indicate approval for the course of action proposed.
Record of the Meeting
7. The lAB shall produce a record of each Advisory Group meeting and this shall be submitted in
draft to the Convenor within ten working days of the meeting. Draft minutes shall be issued to
the Group within twenty working days of each meeting.
Draft minutes will be made available for circulation on the Programme's web-site following
clearance from the Convenor.
Decisions and Conclusions
8. Decisions and conclusions of the Advisory Group shall be reached, wherever possible by
consensus.
64

Annex 3
Programme Monitoring Committee
Rules of Procedure
Membership
1. Membership of the Monitoring Committee will be determined by the Minister on the advice
of the Scottish Government. In addition the Committee will comprise officials of the
Scottish Government and other Government Departments and Agencies as appropriate.
Representatives of the Commission shall participate in the work of the Committee in an
advisory capacity.
2. The Committee will be chaired by a representative of the Member State or the managing
authority and with his/her agreement, the Committee may call upon the advice of nonmembers
depending on the business to be discussed.
Place and Frequency
3. The Monitoring Committee shall meet on at least two occasions per annum at a
convenient location, normally within the Programme area.
Agenda
4. The Convenor will draw up an agenda for the Committee meeting, including any items
which might be requested in writing by a member of the Committee. The agenda shall be
issued to the Committee, along with the papers necessary for the meeting, normally ten
working days before the date of the meeting.
Secretariat
5. The Monitoring Committee secretariat will be provided by the Intermediate Administrative
Body (lAB), Highlands and Islands (Scotland) Structural Funds Partnership Ltd.
Written Procedure
6. At the initiative of the Convenor, or at the request of another member of the Committee,
and with the Convenors agreement, an item of substance which requires an outcome prior
to the next Committee meeting may be submitted to the Committee for adoption by written
procedure. Members of the Committee shall give their opinion within ten working days of
effective delivery. The absence of objection to the written procedure from any member of
the Committee will generally indicate approval for the course of action proposed.
Record of the Meeting
7. The lAB shall produce a record of each Committee meeting and this shall be submitted in
draft to the Convenor within ten working days of the meeting. Draft minutes shall be
issued to the Committee within twenty working days of each meeting.
8. Draft minutes and associated papers will be made available on the website following
clearance by the Convenor.
9. Papers will be available on request following the Committee, in advance of being
incorporated on the web-site.
Conclusion
10. Decisions and conclusions of the Monitoring Committee shall be reached, wherever
possible, by consensus.
61

Annex 4
Advisory Groups
Terms of Reference
1. Groups will apply the thorough appraisal and scoring mechanisms developed by the Scottish
Government for projects submitted under both funds on the basis of the procedures approved by
the Monitoring Committee;
2. Groups will apply agreed selection criteria and therefore rank projects. This will involve taking
into account technical checks undertaken by the lAB and policy issues raised by the Scottish
Government;
3. Groups will submit a list of project applications with recommendations on funding to the
Monitoring Committee, having regard to Priority level financial commitments;
4. Groups will be required to approve the operational details of all schemes including the regular
reporting requirements prior to the approval of that scheme;
5. Groups will ensure that projects are consistent with the objectives of the respective Programmes
and comply with all relevant EC Directives and Regulations including in particular, State Aid and
Procurement; and
6. In terms of the participation of Advisory Group Members, the following will apply:
• Membership will be for up to three years. At the end of 2010, members wishing to continue
on the group will need to re-apply.
• Members will be expected to participate fully in all relevant advisory group activities,
including the training provided before any applications are sent for appraisal. Consistent
inability to do so will result in a re-assessment of membership.
• Members will require to act in an objective and non-partisan way.
• Members must not advocate projects within their constituency or interest.
• In the event that a project application, under consideration by an advisory group, derives
from the employing organisation of a member of the advisory group, that member cannot
speak to the project in question and will be asked to disengage themselves from the
appraisal process - including removing themselves physically from the room during any
discussion.
• No member of the advisory group can advocate or represent a project in any way where
their employing authority has a financial or other formally expressed interest in the project.
The advisory group member can neither advocate for the project nor speak in answer to
points of clarification or matters of technical or factual nature. As with all project applicants
questions of clarification and requests for additional information will be formally raised in
writing with the applicant organisation following the meeting of the advisory group.
• Where appraisal groups meet to discuss specific projects, discussions will be recorded in a
summary, unattributable, minute. This minute will be available to any person requesting it
in order to conform with the Freedom of Information (Scotland) Act 2002, which introduced
important rights for all to access information held by Scottish public authorities.
• The names of advisory group members, and their organisations will also be published proactively
on lAB websites, also in line with the Freedom of Information (Scotland) Act 2002.
62

•.
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.Sandwtck ~act,StOmoWay, i1s1 2BW
Rathad Shanndabhalg, Steornabhagh. HS1 2BW
Mr. Dennis Malone,
Chief Executive,
HIPP,
12a Ness Walk,
INVERNESS.
IV3 5SQ
Telephone:
Facsimile
ALEX A MACDONALD
CONVENER
01851 -709502
01851 -706022
7 May 2008
Dear Dennis,
HIGHLANDS AND ISLANDS SCOTLAND EUROPEAN STRUCTURAL FUND
PROGRAMMES 2007-13
RECOMMENDATIONS ON STRATEGIC ISSUES AND SDB APPLICATIONS
I refer to your recent letter regarding the above and asking for consideration and
agreement on two sets of recommendations. I would comment as follows -
(1) SDB Applications
(2) Strategic issues Paper
• Marina/Pontoon DeveloDment: J agree with the recommendation.
• SDorts Facilities: I agree with the recommendation.
• CommunitvNillage Halls: I agree with the recommendation.
• RoadslTranSDort: As you; will be aware Comhairle nan. Eilean Siar has a
·vested! int~rest" having: anapplicationia the ~yst~m and approval is still
awaited.' .

2
With respect to Jhefirst and third j "bullet pointed" recommendations. I would suggest
that the limit, ofg~a.nt, on i'1fra~t~cture:proje~~ .be: i,e. ~500kwith, a', maximum
intervention rate 01,25%. This 'JitO!Jldtake ~ccount of the need for such.projectsto
be strategic as:,set out in the Operational Programme. I would also' draw your
attention to the Paragraph on ]p~ge 84, of the: Operational,. Programme
1 I
headed
.
...
"Structural
~ . j , ..... '
Funds Value Added:' ~nd especially: the first: and last sentences. 'In
addition a single cap figure. an~ ,maximum intervention rate would assist clarity.
With respect t~ ~hethird ·bull~ ~oipt" I V/9uld suggest t~at H;IT~$. and:ZETRANs
prior:ities be t~,k~nifl1o accouj'lt i~ tpe id~rltificati(m, of.pr:oj~~s.:.>and nottJe the sole
basis as is impliedii1 the teXt.' , .
I am in agreement with the fourth;"Qullet point". All,of these recommendations should
apply to applications submitted of 4 June 2008 .
..-- -- --...
With respect to our own application referred to earlier, you will be aware that this was
submitted in September 2007 under the rules as they then were, i.e. no restriction on
project costs or grant. It doe~ not seem equitable that new rules are applied
retrospectively. ,I would also pqin; ,out that project costs ~ave ~sen steeply as a
result o,fthe d~l~y in decisiqn:.m4kirg reg~~dingo~r aw~r~. i~hil~t I ~ould not wish
to delay matters. further I cannot agree to these recommendatIons until my concerns
have been address.
Finally, as you will be aware I did not receive the original correspondence regarding
these matters by e-mail. Giv~n ~h~ ·silence is a~sent" response. requested I would
suggest that HI,P?: should s~~ tQ establishwh~ther, corr,espondence, has been
received in the first instance. ' "
I look forward to hearing from you.
Yours sincerely,
Convener

Enterprise, Energy and Tourism Directorate
European Structural Funds Division
John Rigg
Deputy General
T:0141-242 5413 0141-2425959
John.rigg@cotland.gsi.gov.uk
RIECfE~\fIE[)
3 0 MAY 2008
---------------
~
The Scottish
Government
Dr John Rigg
Meridian Court
5 Cadogan Street
GLASGOW
G26AT
28 May 2008
Dear Dr Rigg,
DECLARATION OF INTERESTS AND NON-DISCLOSURE UNDERTAKING
- EUROPEAN STRUCTURAL FUNDS 2007-13 PROGRAMMES
At recent Programme Monitoring Committee (PMC) meetings we agreed to provide a
Declaration of Interest and Non-disclosure Form to cover your participation in the 2007-13
programmes.
Members will be aware of recent high profile cases on the handling of data by public
authorities and their agents, from media reporting. In light of this, and in line with general
good practice in this area being adopted by Government, I attach a form which I would like
you to complete. This covers 6 key points to be adopted as a member of either a PMC or
Advisory Group (AG).
Our new IT system, €'UROSYS, will also allow permissions for members to access certain
details on-line for project appraisal and this declaration covers the privileges and benefits
that will bring. I should remind you however, that our data on-line is held to the highest
security standards (including access logs recording the use of all registered users) and there
is very little information within the new system that requires encryption for financial or
personal purposes.
Can I ask if you are intending to use delegates for appraisal purposes that they also sign and
return the form. This will allow us to hold a formal register of delegates and use this list to
set up access and monitoring arrangements, for delegates use of €UROSYS.
I would be grateful if you could read and sign the attached form and return it to Norman Muir,
at the address in the footer below, by 30 June 2008.
Yours sincerely
",.;- .
~Jk - R....,r;
--------
Dr John Rigg
Meridian Court, 5 Cadogan Street, Glasgow G26AT
www.scotland.gov.uk
INVESTOR
IN PEOPLE

EUROPE & SCOI1AND
European Regional DewIopment Fund
Investing inyourFtrtur~
IUIDPE & SCOI'lAND
£uropeanSocial Fund
Investing in your Future
Programme Monitoring Committee members
Advisory Group members
Named delegates
DECLARATION OF INTERESTS AND NON-DISCLOSURE UNDERTAKING
- EUROPEAN STRUCTURAL FUNDS 2007-13 PROGRAMMES
Under the terms of your appointment to a Programme Monitoring Committee
(PMC) or Advisory Group (AG) in the 2007-13 Lowlands and Uplands or
Highlands (LUPS) & Islands (H&I) Scotland Programmes you accept the
following conditions:
1. You will be expected to attend all PMC or AG meetings (or participate fully in
marking as 'virtual' AG in the LUPS area). The PMC meets at least twice a
year and you may be required to attend additional meetings from time to time.
AGs meet in accordance with the number of application rounds, notified in
advance by the Scottish Government and its Intermediate Administration
Bodies (approximately twice a year from Autumn 2008).
2. You will be expected to bring an independent judgement to bear at meetings
(or appraisal as a 'virtual' AG member) on issues of strategy, performance,
compliance and the disbursement of Structural Funds.
3. You must not put yourself in a position where your own interests or those of
your constituency are in direct conflict with the proper conduct of the
PMC/AG. In such an event you must immediately disclose to the PMC/AG
any material interest you have in any aspect of the deliberations of the
PMC/AG or any project requiring particular consideration by the PMC/AG.
4. As a member you will have access to confidential and sensitive information,
including recommendations made by others on PMC/AG on the award of
funding. Prior to meetings you must not divulge or communicate this
information to any person or cause any unauthorised disclosure.
5. The proceedings of the PMC/AG are recorded in a non-attributable format.
PMC/AG members are required to respect the confidential nature of the
deliberations and not to disclose these outwith the formal meetings, other
than through the agreed and published minute, published on lAB websites, in
line with the freedom of information requirements.
~~~
The Scottish nt

EUROPE. SCOI\AND
European Regional Development
Investing in your Future
Fund
EUROPE.
SCOI\AND
EuropeanSodalFund
tnvesting In your Future
6. In using the €UORSYS system to access information, you confirm that any
access privileges provided will be undertaken in conformity with the rules set
out above.
I have read above and agree to the terms of my appointment.
Name (BLOCK CAPS): .
Role: .
Signed: . Date: .
~~~
The SCOttish
CioVernment

EUROPE & SCOTlAND
European Regional Development
Investing in your Future
EUROPE & SCOTlAND
European Social Fund
Investing in you~future
Fund
THE HIGHLANDS & ISLANDS
ERDF & ESF PROGRAMMES 2007-2013
PROGRAMME MONITORING COMMITTEE
WEDNESDAY, 4 JUNE 2008
09:30 HOURS -12:30 HOURS
TOWN HALL, LERWICK
HIP~
AGENDA
1. CONVENOR'S INTRODUCTION
2. APOLOGIES
3. MINUTE OF PREVIOUS MEETING: 22 JANUARY 2008
4. MATTERS ARISING
5. STRATEGIC OVERVIEW
• Past and present
• Forward look
• N+2
6. WRITTEN PROCEDURE UPDATE
• SDBs
• Strategic Issues
7. COMPLEMENTARITY & COORDINATION
• SRDP
• LEADER
• EFF
Report from the Scottish
For Information
HI/PMC/07-13/023
Report from the Scottish
For Information/Decision
HI/PMC/07-13/024
Report from the Scottish
For Information/Decision
HI/PMC/07-13/025
Government:
Government
Government:
8. ANNUAL REPORTING Report from the Scottish Government:
HI/PMC/07-13/026
(i)
(ii)
ERDF Annual Implementation Report
ESF Annual Implementation Report
For Decision:
H I/PMC/07 -13/026(i)
For Decision:
HI/PMC/07-13/026(ii)
9. ANY OTHER COMPETENT BUSINESS
10. DATE OF NEXT MEETING
f'\ VI- - ~ ~~L
A BUFFET LUNCH WILL BE PROVIDED BY SHETLAND ISLANDS COUNCIL
•
AT CLOSE OF COMMITTEE BUSINESS
U f'.J..vl:- A-k.... •.
INVESTOR IN PEOPLE
~ Lor-- ~ ("--
O.nA.- 2../1 I.~
.

EUROPE & SCOTLAND
European Regional Development Fund
Investing in your Future
HIP~
EUROPE & SCOTLAND
European Social Fund
Investing in your Future
Jubilee Lodge
12c Ness Walk
Inverness
IV3 5SQ
Tel: +44 (0) 1463279500
Fax: +44 (0) 1463279501
21 May 2008
Dear Colleague
HIGHLANDS & ISLANDS STRUCTURAL FUNDS PROGRAMMES 2007-2013
PROGRAMME MONITORING COMMITTEE
The next meeting of the Programme Monitoring Committee in respect of the above is scheduled to take
place on 4 June 2008 in the Town Hall, Lerwick commencing at 09:30 a.m. The meeting will be hosted by
Shetland Islands Council.
Unfortunately due to delays, the Annual Reports (ERDF and ESF) are not included in the papers. These
will follow under separate cover. Please accept my apologies for the delay.
I trust the above is satisfactory and if you require any assistance prior to the meeting please get in touch
with either myself of my colleague Rosemary Currie on +44(0)1463 279500 or email
rosemary. currie@hipp.orq.uk
I look forward to seeing you at the meeting.
Yours sincerely
Dennis Malone
Chief Executive
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•Europe & Scotfand
Investing in your Future
Highlands and Islands Convergence
Programmes 2007-2013
PROGRAMME MONITORING COMMITTEE
HIP~
Present
Dr John Rigg
Cllr Sandy Park
Cllr Alex MacDonald
Cllr Dick Walsh
Mr Stuart Black
Mr John Ferguson
Mr Stephen Boyd
Mrs Linda Stewart
Ms Lynn Hamilton
Mr lain Duff
Ms Morag Redwood
Tuesday 22"d January 2008
Royal Marine Hotel, Dunoon
Scottish Government
The Highland Council
Comhairle nan Eilean Siar
Argyll & Bute Council
Highlands and Islands Enterprise
Scottish Council for Voluntary Organisations
Scottish Trade Union Congress
UHI Millennium Institute
VisitScotiand
Scottish Council for Development & Industry
H&I Equality Forum
European Commission
Ms Annick Villarosa
Mr Marc Vermyle
DG Regional Policy
DG Employment
In Attendance
Mr Jim Millard
Mr Dennis Malone
Ms Lorna Gregson-Macleod
Mr Donald Mackenzie
Ms Melissa Mackin
Ms Billie McLean
Scottish Government
HIPP - Intermediate Administration Body
HIPP - Intermediate Administration Body
HIPP - Intermediate Administration Body
Scottish Government
Scottish Government
CONVENORS WELCOME AND INTRODUCTION
1. The Convenor welcomed members to the second meeting of the Monitoring
Committee, with particular reference to Stephen Boyd (STUC) attending his first
meeting. He also thanked Councillor Walsh, Argyll & Bute Council, for hosting the
meeting and for dinner the previous evening.
2. The Convenor thanked members for their patience in establishing a revised date for
the meeting and explained that the financial front loading of the Programme
demanded early decisions that secured early commitment and spend on projects.
lNVESTOR IN PEOPLE

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Investing In your Future
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PROGRAMME MONITORING COMMITTEE HIP~
APOLOGIES
3. Apologies were received from:
• Cllr Stephen Hagan
• Mr William Roe
• Cllr Alistair Cooper
• Ms Susan Davies
• Mrs Rosemary Thompson
Orkney Islands Council
Highlands and Islands Enterprise
Shetland Islands Council
Scottish Natural Heritage
The North Highland College
MINUTE OF PREVIOUS MEETING
4. The minute of the previous meeting, 25 th September 2007, was agreed as a correct
record.
MATTERS
ARISING
5. The following matters were raised:
(i)
(ii)
(iii)
(iv)
Para 8.2: Transitional Proaramme Monitorina Committee
Mr Millard confirmed that a date for a meeting of the Transitional Programme
Monitoring Committee is being trawled for, for the first half of 2008. The
agenda will include the AIR and N+2 decommitment for EAGGF.
Para 9.4: Advisory Groups
Mr Malone confirmed that the final composition of Groups had been
circulated to members by written procedure.
Para 9.9: Declaration of Interest
Position clarified by Advisory Group Convenor prior to each meeting.
Para 10.8: Community Plannina Partnerships
Mr Malone confirmed that discussions had taken place in October but that the
alignment between the Scottish Rural Development Programme/LEADER
and CPPs and where this fits with the respective ERDF and ESF
Programmes remained unclear.
In response to a query from John Ferguson, Mr Millard confirmed that the
competitive process would kick-off in parallel with submission of CPP
proposals in late Spring but acknowledged there may be delays due to limited
readiness of all the necessary components for a viable CPP bid.
(v)
(vi)
Para 10.11: Oraaniaram
Completed, to be taken under item 7 on agenda.
Para 11.1/11.2: Scorina Systems
Mr Malone confirmed that the amendment has been made and implemented
in current round.
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(vii)
Para 14: Access to Full Applications
Mr Malone confirmed that access to the new system is built into the design.
He indicated that a full set of ESF applications had been issued on request to
one Committee member last week.
(viii) Para 19: Communications Plan J Millard
Mr Millard confirmed this had been done. Mr Vermyle advised that any such
documentation requires to be submitted to the Commission on the CCI
database. Mr Millard agreed to re-issue.
(ix) Para 24: TA to support CPP's J Millard
Mr Millard stated that he was still reflecting on this matter and whether there
needed to be distinction between "support for the programme" or
"supporting a project". Whatever, the conclusion will have to be consistent
with the National Rules.
(x)
Para 29: Electronic Issue of Papers
Mr Malone confirmed that electronic copies of the papers had been issued as
requested.
Context
6. Dr Rigg updated members on the Shadow Round, adding that an internal audit had
been undertaken on the process. Conclusions were largely positive and some
helpful suggestions had been made to be incorporated into future rounds.
7. In response to a question from Ms Villarosa, Mr Millard explained that in Highlands &
Islands, only one CPP bid per local authority area was anticipated, largely from
ERDF, and comprising details of a range of eligible projects. The "Plan" would be
appraised by the Advisory Group and thereafter individual project sponsors would
bring forward applications when ready.
8. Cllr Walsh reminded members of the need to avoid potential duplication between
CPP bids and the Challenge bids.
(Interim) Monitorina Committee (HI/PMC/07-13/017)
9. Mr Millard confirmed the need to formally approve previous "decisions in principle"
made by the Committee at its meeting in September 2007. Having detailed the
decisions and having acknowledged the written procedure exercise of December
2007, the Committee approved all decisions of the previous meeting.
Proaramme Deliverv Arranaements (HI/PMC/07-13/018)
10. Mr Malone's short presentation demonstrated how the various delivery arrangements
fit together and what allocations were available for each component. He also
highlighted the differing decision making procedures.
11. Members noted the report.
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PROGRAMME MONITORING COMMITTEE HIP~
StrateQic Deliverv Bodies (HI/PMC/07-13/019)
12. Mr Millard explained that given the scale of the proposed allocation in support of the
SOBs - HIE and UHI Millennium Institute - the decision to approve falls to the
Monitoring Committee. In order to facilitate this process each SOB was being asked
to present their proposals. In addition, the applications and technical comments from
the lAB were attached.
12.1 HIE: Presentation bv Stuart Black
Nine areas of activity highlighted which EROF is needed to support. Following
questions Mr Black confirmed:
• That HIE would be the final beneficiary of grant;
• That advice would not be generic but developmental in support of businesses of
scale;
• That generic advice would be provided through Business Gateway; and
• That support for HISEZ would be monitored to avoid duplication.
Dr Rigg also confirmed that HIE would be required to meet its spend profile in order
to assist the N+2 position.
Ms Villarosa stressed the requirement on all applicants to report to the Scottish
Government on any intended sale and use of buildings sold on.
12.2 UHI Millennium Institute: Presentation bv Linda Stewart
Three areas of activity highlighted under EROF and five under ESF.
Mrs Stewart acknowledged the need to discuss further matters of eligibility. Having
heard the report Mr Vermyle expressed concern over the relatively high percentage
of support being allocated for curriculum development. He explained that ESF was
employment driven and that curriculum development was borderline activity.
While the Commission had knowingly approved this provision in the Operational
Programme the current allocation in support of this activity should not increase.
Ms Villarosa also indicated that residential accommodation was not eligible and
should not be supported.
Mrs Stewart also confirmed that UHI Millennium Institute would be the final
beneficiary.
13. Ms Villarosa requested clarification on the use of TA. Mr Millard confirmed that given
the limited availability of TA priority was given to Programme administration and
evaluation. Any work associated with the delivery of projects would be funded out of
the project. He agreed to reflect on any other potential use of TA.
14. Having heard the presentations and discussion the Committee approved the SOB
applications in principle and invited the Advisory Group Convenor/lAB to address
matters of detail and ensure consistency with the Terms of Reference of the Advisory
Groups and report thereafter by written procedure.
J Millard
J Millard
IIAB
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Strateaic Issues (HI/PMC/07 -13/020)
15. Dr Rigg reminded members of the Committee of their role in ensuring a strategic
perspective to the programmes. He requested declarations of interest, where
appropriate, though he was content for members to contribute to the discussion on
any of the projects. When speaking on individual projects with which they were
familiar, members should restrict themselves to points of information and avoid
lobbying or advocacy.
16. Mr Millard explained that in considering projects the Advisory Groups highlighted a
number of issues where the Committee's position needs to be established.
Following discussion the following was agreed:
(i) Marinas continue to be low priority due to lack of direct employment impact.
"Small scale" developments, where these contribute directly to the
regeneration of a local community, could be considered as part of a CPP bid.
(ii) Community Halls: no blanket exclusions but ERDF to be available to
support only those elements that relate to training/learning and flexible space
which is not allocated for specific/routine use.
(iii) Sports Facilities: continue to be low priority. Little direct employment
impact.
(iv) Roads Projects: continue to be eligible but only where there is evidence of:
(a)
(b)
crucial issue of access to remote communities; and
appropriateness of scale - given that the Priority was not designed
for and cannot sustain significant infrastructure projects when a range
of targets require to be met.
Members invited Mr Millard and the Programme Director to work up a paper to reflect
the foregoing, for clearance by the Committee by written procedure, that will provide
definitive guidance to applicants and Advisory Groups.
J Millard/
D Malone
17. The final point in the report related to the quality and volume of ESF applications.
Members recognised some of the difficulties currently being experienced by
applicants and agreed that a series of workshops was required to address issues of
both volume and quality.
18. Ms Redwood raised concerns over the limited response in many applications to
Equal Opportunities - and how this reflected policy and not implementation.
19. Dr Rigg confirmed that where such issues had been highlighted the lAB had already lAB
gone back to project sponsors. Time restrictions had prevented the received
applications from being presented. On this matter the lAB will ensure compliance
prior to the issue of any grant offer.
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Advisorv Group Recommendations (HI/PMC/07-13/0021)
20. Mr Millard introduced the item in his capacity as Convenor of the Advisory Groups.
He confirmed the quality of assessment applied by the Groups. He acknowledged
the challenges given to the lAB in getting back to numerous applicants, given the
necessarily tight timescale of the round.
21. Ms Villarosa expressed surprise over the reference to lack of quality in respect of a
number of applications which were then recommended for approval.
22. In response Ms Gregson-Macleod indicated that due to the shortened time available
in the round, the lAB had gone back to the applicant and requested amendments to
their applications. Since most of these were unable to respond prior to the issue of
papers, the original views of the AG's featured in the project summaries. However,
projects had not been recommended for approval unless concerns raised in the
appraisals had been addressed.
23. Ms Villarosa also pointed to an apparent lack of clarity between what may be funded
under UHI SOB and what might be delivered under the challenge bidding.
24. In respect of the recommendations on projects, the following issues were raised:
(i)
in response to a query from Ms Villarosa, the Convenor confirmed that the
VisitScotland application would not be operated on the basis of a global
grant;
(ii) in response to concerns over the efficacy of the process, John Ferguson J Millard
requested clarification in respect of SCVO's Positive Steps to Employment
Project. Mr Mackenzie confirmed that Jobcentre Plus had confirmed that
most of the activity proposed was covered by the New Deal Contract
potentially limiting additionality and that SG would be exploring this in more
detail with DWP;
(iii)
(iv)
in respect of New Start Highland, following an intervention from Linda
Stewart, it was acknowledged that the project merited one year support - the
recommendation being overturned; and
in respect of the application for the Western Isles Roads project, it was
agreed to support in principle (allowing the project to proceed) with a final
grant figure to be determined following consideration of a report by the
Monitoring Committee from Mr Millard/Mr Malone.
25. Thereafter, the Committee approved the remaining recommendations thereby lAB
committing approximately £5.75m of ERDF and £2.6m of ESF. In addition the
Convenor confirmed that applicants had the right to re-apply and specifically in this
regard requested the lAB liaise with the STUC over a future submission.
26. Mr Millard confirmed that in respect of the eligibility of training under ESF of
food/forestry, discussion had taken place that should allow an amendment to the
Operational Programme. Current applications to proceed on that basis.
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27. Mr Millard referred to representations from Highlands & Islands European
Partnership regarding the development of a role in the assessment process of a
"Programme Review Group". He confirmed that PRG would be the sounding board
for the next (truncated) round and that the Scottish Government would consider the
position thereafter.
28. Members agreed this was a sensible way forward and would help to aid effective
Partnership.
Biddina Rounds (HI/PMC/07-13/0022)
29. Having heard Mr Malone on the proposals for the Bidding Cycle and meeting
schedule for 2008/09, the Committee agreed the arrangements presented.
A.O.C.B.
30. Dr Rigg indicated that the European Commission consultation on the future of
Cohesion Policy post 2013 was due to close at the end of January. The UK
Government's proposed response was not particularly controversial. A separate
Scottish Government submission would be made stressing the importance of
'regional' cohesion.
31. John Ferguson requested the provision of regular information on the profile of spend
on the Programme for N+2 purposes. Dr Rigg agreed.
32. Mr Millard confirmed that the day's proceedings, when minuted, would be subject to
FO!.
33. Dr Rigg confirmed the departure of two colleagues - Donald Mackenzie from the lAB
and Annick Villarosa from the Commission transferring to External Relations with a
posting in Fiji. He expressed his thanks and best wishes to both.
Date of Next Meetina
34. The date of the next meeting of the 07-13 Monitoring Committee is:
Wednesday 4 th June
Location: Lerwick (hosted by Shetland Islands Council)
Time: 09.30 hours
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Strategic Overview
Report from the Scottish Government
HI/PMC/07 -13/023
HIP~
Purpose
1. To allow the Committee to consider progress of the Programmes at a strategic level and also to
consider how it wishes to progress.
Recommendations
2. The Committee is invited to:
(i)
(ii)
consider the details of the Report and form views on how it wishes to proceed; and
thereafter
to note the Report.
BackQround
1. At the time of the last meeting, the operating environment in respect of the new Programmes
was still evolving.
2. The Government Economic Strateav was published in November 2007 and signals a significant
change of focus putting economic growth at the heart of Scotland's development. The purpose
of the Strategy:
To focus the Government and public services on creating a more successful Country,
with opportunities for all of Scotland to flourish, through increasing sustainable
economic growth."
3. The Strategy sets out a framework with five strategic objectives:
• Wealthier and Fairer;
• Smarter;
• Healthier;
• Safer and Stronger; and
• Greener.
It identifies five key challenges facing Scotland:
• Raising the economic growth rate;
• Improving the poor productivity performance;
• Extending the high participation rate;
• Encouraging population growth; and
• Improving social, regional and intergenerational equity.
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Efforts to address these challenges will be delivered by activity within the following strategic
priorities recognised as critical to economic growth:
• Learning, Skills and Well-being;
• Supportive Business Environment;
• Infrastructure Development and Place;
• Effective Government;
• Equity.
4. The implementation of the Strategy requires the alignment of financial and other resources
including the activities of key bodies, to ensure that policy development and spending
programmes are focused in support of the Purpose.
5. The Strategy provides a clear framework for the implementation of the two Structural Funds
Programmes in the Highlands and Islands.
6. The new National Rules on Eliaibilitv prepared in accordance with EC Regulation 1083/2006
(para. 56) are based on key principles of additional costs and apply to all projects approved
under the 2007-2013 Operational Programmes.
7. Whilst every effort had been made to produce clear guidance on eligibility, the bidding Round
did highlight several areas where additional clarity was required, e.g. in respect of additionality
on New Deal contracts. There remains however "differences in interpretation" for example in
terms of staff or other costs being seen as "in-kind" contributions which are now ineligible.
These matters will be resolved as they arise, but applicants are required to acknowledge that
the new rules are, of necessity, more restrictive and will be applied with greater rigour.
8. The final area where a deal of flux was being experienced was in respect of the application
process. The new IT system has recently been launched and this has involved re-registration
and successful applicants from the first Round also require to upload paper based applications
on to the system.
ImDlementation: 2000-2006
9. Drawing on the ERDF analysis presented to the Monitoring Committee at the end of 2006 the
following key information should be noted:
(i)
Allocations
£46.6 million (37%) to the Enterprise Network;
£39.1 million (30%) to the Local Authorities;
£13.4 million (10%) to Higher and Further Education;
£13.2 million (10%) to Voluntary Sector.
(ii)
Sectors
Transport contains the highest level of awards, with over £41 million allocated in
support of road improvements, air services and ferry and harbour facilities.
£21 million supported tourism, £12 million of which went to infrastructure and almost £8
million providing financial assistance and marketing support.
Of the twenty-nine
were island-based.
project approvals made in support of industrial property, sixteen
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(iii)
Tarqetinq
10. In terms of ESF:
Argyll and the Islands and Western Isles were awarded £34 million of grant directly.
These areas also shared in the pan-Highland & Islands total of £32 million,
implemented in the main through HIE "schemes".
Almost £30 million was allocated in support of those areas with the highest needs
assessment classification.
(i)
Human Resource Development
34% of ESF supported the Further Education Sector, and 31% supported the Voluntary
Sector.
The Further and Higher Education Sector and Highlands and Islands Enterprise shared
a marked drop in approvals from 2005.
The Voluntary Sector has been the most active in supporting the Intermediate Labour
Market. £2.5 million was awarded to the Voluntary Sector to address issues of social
inclusion.
11. In looking ahead at the new Operational Programme, members may wish to have regard to
past performance.
Implementation: 2007-2013
12. Following the first Round (and the earlier "Shadow Round"), a total of fifty-four projects (fortyfive
ESF and nine ERDF) have been approved with a commitment of just over £8 million. Of the
projects approved in January 2008 (forty-eight) still five have received Letters of Offer. The
quality of the applications submitted was of such a standard that almost all applications
required amendment or required to make adjustments to the financial commitment.
13. Progress is being made, but slowly. Technical issues are being resolved but in several
instances applicants are not responding. The application of the new compliance rules could
mean that several projects will be decommitted, however given the limited number of approvals
and the need to achieve expenditure and with the onset of the new IT system, a period of grace
may be allowed.
14. Approvals have been issued in respect of the following:
Voluntary Action Lewis (Social Enterprise);
Outdoor Capital (Lochaber - Marketing);
Scottish Intellectual Asset Management (Business Development);
Comhaire nan Eilean Siar - Rural Opportunities (ESF);
Forestry Commission - Apprenticeship Scheme;
Highland Opportunity - Employment Grants Scheme;
Highland Council - Community Based Bilingual Assistants.
15. Following approval in principle the applications from the two Strategic Development Bodies
(SDBs) - Highlands and Islands Enterprise and UHI Millennium Institute - work has been
ongoing to finalise the details. This is now complete and "Offers" are due to be issued
imminently. UHI Millennium Institute launched its SDB programme on 15 May 2008. In order to
~,
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ensure the strengthening of the horizontal themes in the Programme, a specific condition has
been applied to each of the SOB approvals.
16. It is too early yet to get a perspective on targeting, needless to say that past performance in this
area has been successful with the horizontal application of geographical targeting across
Programmes. This approach still applies but with added emphasis under Priority 3 to assist
smaller communities and "islands off islands".
17. In terms of strategic issues, progress has also been made in terms of shaping the Programme
- identifying what can be funded and what ought not to be funded - given the tighter financial
perspective. Decisions have already been made in respect of:
• marina developments;
• sports facilities; and
• non-eligible areas of community halls.
In respect of roads projects under Priority 3, discussion
is continuing.
18. Conscious of a relatively slow start, particularly in relation to expenditure, two further Rounds
are planned for 2008.
An interim Round over the summer, applications having already been submitted, to pick up resubmissions
from the last Round and any applications that are time critical. It is anticipated that
following a Programme Review Group assessment of Advisory Group Recommendations, a
written procedure with the Committee will be undertaken in mid-August:
19. A full Round will take place in the Autumn the Committee being presented with project
recommendations at its next meeting towards the end of January 2009.
Expenditure
(N+2)
20. Article 93 of Regulation 1083/2006 details the principle of automatic decommitment. The first
test of N+2 falls at the end of 2009, i.e. the 2007 budget allocation paid out and declared by 31
December. The Regulation allows for an advance of funds in 2007 and 2008 which would
effectively lower the target figures for 2009 and 2010.
21. The tables below provide an indication of the targets which have to be met by the end of each
calendar year:
ERDF N+2 Taraets
Annual Target
Year € Taraet Increase
2009 29,896,923 -
2010 55,918,173 +26,021,250
2011 77,896,766 +21,978,593
2012 95,660,586 +17,763,820
2013 109,032,250 +13,371,664
2014 117,828,968 +8,796,718
2015 121,862,392 +4,033,424
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ESF N+2 Taraets
Annual Target
Year € Taraet Increase
2009 12,794,189 -
2010 23,929,810 +11,135,621
2011 33,335,402 +9,405,592
2012 40,937,309 +7,601,907
2013 46,659,623 +5,722,314
2014 50,424,119 +3,764,496
2015 52,150,195 + 1,726,076
22. Failure to meet the targets will result in a loss of grant so the implementation arrangements
developed by the Scottish Government for the Programmes aim to resolve previous difficulties
in meeting targets.
23. During previous Programmes, the Monitoring Committee developed and approved an "N+2
Action Plan" which was adapted to meet circumstances during the implementation of the
Programme. An "Action Plan" will be prepared for consideration by the Committee in January
2009.
Lookina Ahead
24. The 2000-2006 Programme demonstrated a degree of similarity to the Objective 1 Programme
of 1994-1999. Continuity was the order of the day and building on early investment was
encouraged. The 2007-2013 Programme is however a significantly different animal, not least
because of the success of the earlier Programmes and the significant change in the socioeconomic
circumstances of the region.
25. The new Programmes reflect:
• the Lisbon agenda, with up to 60% of investment being required to directly support job
creation;
• the increased emphasis on research and development, technological innovation and
training to match;
• a significant reduction in opportunities for "traditional large scale infrastructure" e.g.
transport, tourism facilities;
• an emphasis on learning and knowledge and on business development.
26. As a consequence the new Programmes offer up different opportunities for investment and
have challenged partners to be innovative. The bulk of the applications received to date - albeit
the SDS applications have yet to realise any activity - tend to reflect the more traditional
approach. There are however exceptions. The Government's Economic Strategy does however
provide a framework to allow the approach to evolve.
27. For example key sectors have been identified. How can Structural funds add value to the
development of these? Should we be prioritising these sectors in appraising applications?
European Social Fund can be used to help address labour market shortages and the skills
deficit in these sectors. This is a particular opportunity to utilise ESF in a much more strategic
manner, driving out what is needed on the back of labour market analysis. A proactive
approach rather than one which is responsive. Delivery of training in the Highlands and Islands
in these key sectors should be the responsibility of Skills Development Scotland, and Structural
Funds should be used to prepare a structured programme of training providing the region with a
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significant asset.
28. During the summer months, a series of workshops across the Programme area will be
undertaken with the specific objective of encouraging new thinking and exchanging ideas on
new types of activity.
Conclusion
29. A steady start to the new Programmes. A lot of work has gone into the development of the SOB
applications and on Community Planning Partnership activity which will have longer term
benefit. Not surprisingly there is still a bit of a hangover from the old Programme in terms of
approach, but new opportunities need to be explored quickly in order to generate the major
expenditure needed to meet N+2. The new IT system should help as will the continuing
development of guidance and eligibility.
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WRITTEN PROCEDURE UPDATE
Report from the Scottish Government
PurDose
1. To update members in respect of the recent written procedure.
Recommendation
2. Members are invited to:
(i) note the additional conditions on the SDS arrangements; and
(ii)
note the progress on the strategic issues and discuss as appropriate.
Backaround
3. The recent "written procedure" sought to address two areas outstanding from the
January meeting of the Monitoring Committee:
• agreement on the detail and score in respect of the four SDS applications
from Highlands and Islands Enterprise and UHI Millennium Institute, following
approval in principle; and
• policy in respect of particular types of activity, highlighted by Advisory Groups
during the appraisal process and discussed by members.
4. The former was facilitated through an Extraordinary Advisory Group meeting whilst
the latter involved detailed consideration by the Programme Review Group.
Strateaic
Deliverv Bodies
UHI Millennium Institute
5. The recommendations of the Extraordinary Advisory Group to support were
accepted. Members found the additional detail and the baseline and projections of
student numbers of value and addressed Commission concerns over growth.
6. Two areas however require particular attention in monitoring and reporting:
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• reporting geographical targeting and outcomes; and
• horizontal themes.
7. The expected outcomes from the UHI SOB are as follows:
15 research facilities supported;
30 e-Iearning/training facilities supported;
15 RTO projects supported;
7 renewable energy projects supported;
5 patents filed;
5 vocational training facilities supported;
50 gross jobs created;
200 participants, level 4 and above.
8. Progress against these targets will be reported quarterly in claims and in bi-annual
reports. The Monitoring Committee will receive an annual update on progress in
advance of the re-assessment of the Annual Operating Plan.
Hiahlands and Islands Enterprise
9. The recommendations of the EAG in respect of the HIE applications were also
agreed, albeit with similar concerns over the horizontal themes.
Conditions
of Grant
10. As a consequence of the foregoing, the following conditions, in addition to standard
conditions, will be included in the formal offers of grant:
• Eligible Expenditure - applications include a list of indicative projects. These
appear broadly in line with the scope of Operational Programmes, however
you are required to liaise with the lAB before committing to individual projects
or elements thereof;
• Expenditure Profile - your application sets out expenditure profiles for EROF
and ESF. The Scottish Government as Managing Authority, attaches
considerable importance to the achievement of expenditure levels to ensure
that programmes meet the exacting annual expenditure targets (N+2). Failure
to commit to and/or achieve sufficient levels of expenditure may result in this
award being withdrawn or reduced;
• Horizontal Themes - applicants are required to submit a further appendix
detailing the Programmes three cross cutting themes - social inclusion, equal
opportunities and environmental sustainability - with explanations of how the
various elements of the projects will address each;
• Reporting arrangements - progress will be subject to regular reporting
including:
- quarterly progress reports (and claims for grant) to the IAB/MA;
- six monthly liaison with the lAB;
- annual reporting to the PMC detailing geographical disbursement of funds.
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StrateQic
Issues
11. Members were invited to consider the policy position in respect of four issues.
Responses were content with the PRG recommendations in respect of:
• Marina and Pontoon Developments;
• Sports and Leisure Facilities; and
• Community/Village Halls.
12. The one area where agreement was not unanimous was in respect of the
recommendations for dealing with Roads/Transport.
Rationale
13. The thrust of the (ERDF) Operational Programme sought to distinguish between
strategic communications (which would not be eligible) and "local" projects designed
to sustain communities by improving access both physically and ·virtually'. The
secondary issue being one of scale.
14. Given the commitment to support the CPP package, approximately £9.5 million is
available to support:
Recommendations
• 40 e-Iearning and childcare (and other) community facilities;
• 15 transport projects;
• 2100 (m 2 ) of business space;
• 15 ICT infrastructure projects;
• 10 renewable energy projects; and
• 1200 gross jobs created.
15. The Programme Review Group recommended that:
• infrastructure projects be restricted to a maximum level of intervention of 20%
up to a maximum grant of £350k (Le. outwith CPP bids);
• a limit of £500k proiect costs for CPP transport projects with a maximum
intervention rate of 25% (Le. within CPP bids);
• revenue transport projects able to apply up to a maximum level of
intervention of 40%;
• up to £3 million of the £9.5 million remaining n the Priority (after CPP topslicing)
to be "allocated" allowing Hitrans/Zetrans the opportunity to prioritise
consistent with the objectives of Priority 3.
16. Concerns were raised in respect of bullet points one and four and members are
invited to consider further.
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Conclusion
17. The SOS application will firm up year on year and greater clarity will be achieved in
respect of outputs and targeting. The conditions on the awards will ensure that
detailed reporting arrangements are established.
18. Clarification on the roads/transport issue requires to be achieved by further
discussion.
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ACHIEVING COMPLEMENTARITY OF THE PROGRAMME WITH OTHER EUROPEAN
FUND PROGRAMMES OPERATING IN THE HIGHLANDS AND ISLANDS
Report from the Scottish
Government
Purpose
1. To explore opportunities for improving the efficiency and sharpening the impact of
the programme through coordination with other European programmes operating in
the programme area.
Recommendations
2. Members are invited to:
• note the overlap emerging between certain parts of the Programme and of other
European funded programmes operating in the Highlands and Islands as these
programmes are adopted and the detail of their provisions and coverage becomes
clear; and
• invite the Programme Review Group to assess the incidence and degree of overlap
and to bring forward recommendations to limit any adverse impact and instead
achieve maximum complementarity of the Programme with the other funding
streams.
Backaround
Complementaritv
3. The European Commission's Community Strategic Guidelines on Cohesion note that
synergies and coherence should be promoted between Cohesion policy (Cohesion
Fund, ERDF and ESF) and the European Agricultural Fund for Rural Development
(EAFRD) and the European Fisheries Fund (EFF). EU regulations oblige Member
State authorities to avoid overlaps and to guarantee consistency and
complementarity between the Structural Funds and the EAFRD/EFF. In addition,
each programme should define the fields of support to be financed by each Fund.
4. Effort to achieve this integration can be focused in two directions - procedural
complementarity and strategic complementarity.
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Procedural complementarity involves how the delivery structures interrelate. In a
Scottish context this could include for example arrangements for common
membership of Monitoring Committees or advisory groups or requirements for
reciprocal attendance at such decision making and pOlicy meetings. Arrangements
of this nature are in hand and progressing.
This paper therefore focuses on the opportunities for strategic complementarity -
that is the segregation - whether by reference to project size, geographic location,
time period or other features - of otherwise potentially overlapping or duplicative
provisions in the respective programmes.
European Funds Proarammes in the Hiahlands and Islands
5. There will be four 1 European funded programmes running concurrently in the
Highlands and Islands during the present 2007- 2013 programme period:
FUND Programme Potential Overlapping Provisions
ERDF H&I Programme Priority 1 theme 1
Priority 3 whole priority
ESF H&I Programme Priority 1
EAFRD
Scottish Rural Development
Programme
Rural Development Contracts Rural Priority Provisions (various)
LEADER
• National Multiple measures
• Ring-fenced
EFF UK Operational programme 2 Axis 4 - Fisheries Dependant Areas
6. These programmes are either exclusive to the area or, being Scottish national
(SRDP) or UK national (EFF) in their coverage, have specific ring-fenced funding
1 Four 'mainstream' programmes. Interreg IV programmes will also operate in all or parts of the
Highlands & Islands.
2 Commences Autumn 2008 for 6 years 2008-2013
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allocated to the Highlands and Islands.
7. The availability of funds from sources outwith the mainstream programme offer an
opportunity which with effective planning, could help re-shape the financing
proposals under Priority 3, as they affect CPPs. These arrangements were
determined in advance of knowing what the additional funding streams could bring to
the area. Reviewing how best to utilise the respective resources could have the
effect of re-balancing the "strategic" focus under the Priority.
The ChallenQe
8. In aggregate these funds deliver less than their respective counterpart funds in the
last programme period yet in the Highlands and Islands they are now potentially
more disconnected from each other in their four separate programmes. In the 2000-
2006 programme period assistance to the four fields covered was delivered through
one programme - the Highlands and Islands Special Transitional Programme with
only LEADER delivered separately. Therefore there is now a more complex
complementarity challenge - four separate funds each with its own programme, each
addressing the same territory in whole or in part, sometimes with quite similar
measures especially in the field of community focused support.
Where is the overlap?
9. Although there is also potential at Priority 1 (theme 1 -support for small business) -
and elsewhere in the ERDF programme - for overlap with the relevant funding
provisions of other programmes, the problem is best illustrated by the degree of
alternative funding available for activities covered by Priority 3: 'Enhancing
Peripheral and Fragile Communities':
1. Conversion and ada tation to enter rise/communit centres/facilities ...
2. Refurbishment of existing business development facilities ... including the
develo ment of local incubator and business su ort centres ... ,
3. Develo ment of e-skills/learnin /commerce facilities
4. Develo ment of childcare/de endent care facilities
5. Support for medium-sized energy production and distribution from
renewable energy technologies in response to community energy needs
(small-scale facilities - typically for farms and individual enterprises - will be
funded throu h the Scottish Rural Develo ment Pro ramme
6.
7.
8. Investments in ICT infrastructure to enable fra ile areas to take better
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D advantage of the region's broadband infrastructure ...
10. To the confusion of applicants, everyone of the above elements is also available in
some degree from the SRDP whether it be under the Rural Priorities section of the
Rural Development Contracts (ROC) provision ( measures 1,2,3,4 and 5 above) or
under LEADER ( measures 6,7 and 8 above). Each option carries different grant rate
ceilings:-
ERDF Priority 3: 40%;
R.D.C.s: on average 75%;
LEADER 50%.
11. Similarly each has different parameters regarding project sizes - Priority 3: minimum
£50k, no ceiling - ROC minimums and ceilings depend on measure applied for,
LEADER minimum £2k - maximum notionally £150k.
12. The implications in terms of operational inefficiency and confusion to the client is
clear but the potential for unfocussed deployment of funding and even the creation of
difficulties over the absorption of funds is an equally serious consideration.
13. The whole issue is dealt with extensively under the title 'Coordination with Other
Funds' at Chapter 6 of the ERDF Operational Programme. That chapter and
matching treatments in the texts of each of the other programmes provide a
comprehensive oversight but are necessarily only descriptive in nature. We need
now to consider how to achieve this coordination in practice.
Differentiation
14. The challenge is to identify clear steps that can be implemented to distinguish the
relevant provisions of the Highlands and Islands ERDF Programme more sharply
from the provisions of the other European Programmes with which they are
becoming blurred. As has already been stated this can be achieved by differentiation
on the basis of the geographic territory each programme covers, the size of project
they will assist or the period during which the provisions will operate. The latter
option is clearly not relevant or feasible now but the first two - geographical
designation and stipulation of minimum project size -are possible and have the virtue
of simplicity. Already the text unequivocally focuses the ERDF Programme - but
most particularly Priority 3 - on peripheral or fragile areas and already a minimum
project size is being applied as a criterion. Any exercise to identify appropriate steps
towards securing complementarity might usefully examine how best to reinforce the
geographic focus in the allocation of funding and consider the scale of any
adjustment of minimum project size necessary to be effective.
Conclusion
15. It is important to take all reasonable steps to achieve complementarity between the
European Programmes operating in the Highlands and Islands and in so doing
ensuring absorption and expenditure to meet annual expenditure targets. Experience
from the Special Transitional Programme has demonstrated that "holding on" to
allocations in the hope of achieving spend is not an effective approach and invariably
results in the loss of efficiency. Partners face a cluttered landscape and we need to
bring greater structure and clarity to process. PRG would be the best vehicle to make
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a start to this and address the detail. Meetings are already provisionally scheduled
for 12 June and 13 August. This should allow recommendations to circulate to the
PMC by written procedure alongside project and CPP recommendations in late
August.
5
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