Europe 2020: Scottish National Reform Programme 2016

Introduction

This report is the sixth Scottish National Reform Programme ( NRP). It builds on the previous Scottish NRPs and outlines the actions being undertaken in Scotland in support of the delivery of the ambitions of Europe 2020.

The Sottish Government plays an important and distinctive role in developments at the European level. Engaging with the European Parliament and European Commission provides an excellent platform to demonstrate
our success in areas where we are leading practice in Europe and to learn from the experiences of our European partners.

Europe 2020

Europe 2020 is the European Union's strategy for delivering smart, sustainable and inclusive growth over the period to 2020. The Scottish Government supports the development of the Europe 2020 Strategy, and took part in the European Commission's mid-term review of Europe 2020 in 2014. ^[1]

This strategy sets out five key targets for the EU to achieve by the end of the decade. These targets relate to employment; research and innovation; climate change and energy sustainability; education; and fighting poverty and improving social inclusion. This report sets out actions being pursued in Scotland to support delivery of these ambitions.

EU Member States produce annual reports on their structural reform programmes and the progress they are making in delivering the Europe 2020 ambitions to the European Commission through their NRPs. These provide context on the macroeconomic environment, outline how Member States intend to meet the targets set out in Europe 2020, and how they will overcome obstacles to economic growth.

As part of this process, the Scottish Government has contributed to the development of the UK Government's NRP for 2016.

However, in order to highlight the unique characteristics of Scotland, and the distinct approach to Europe 2020 ambitions that we are taking forward within the UK, the Scottish Government is continuing to produce a Scotland-specific NRP. This approach, which has been welcomed by both stakeholders and the Commission, helps emphasise Scotland's positive engagement with the European Union. It also provides a valuable opportunity to highlight particular areas where Scottish actions are making an important contribution to delivering the priorities of Europe 2020, and to share good practice with other EU countries.

The European Semester

The European Commission has established an annual cycle of economic policy coordination called the 'European Semester', which aims to focus the efforts of Member States on achieving the Europe 2020 targets. A summary of the European Semester is presented in Table 1.

Table 1: The European Semester

In the 2016 Annual Growth Survey, ^[2] the European Commission proposes that efforts focus on the three following priorities for 2016:

• Re-launching investment;
• Pursuing structural reforms to modernise our economies; and
• Responsible Fiscal Policies.

Country Specific Recommendations for the UK

The Commission provided the UK with a set of CSRs ^[3] in July 2015:

1. Ensure effective action under the excessive deficit procedure and endeavour to correct the excessive deficit in a durable manner by 2016-17, in particular by prioritising capital expenditure.
2. Take further steps to boost supply in the housing sector, including by implementing the reforms of the national planning policy framework.
3. Address skills mismatches by increasing employers' engagement in the delivery of apprenticeships. Take action to further reduce the number of young people with low basic skills. Further improve the availability of affordable, high-quality, full-time childcare.

This report outlines where the Scottish Government is taking action, within the powers available to it, against these identified priorities. Information on the Scottish Government's approach to CSRs 1 and 2 can be found in Chapter 1, and information relating to CSR 3 can be found in Chapters 2 and 6.

Delivering the Ambitions

Stakeholder engagement plays a vital role in policy development in Scotland, and formed a central part of the development of the Scottish NRP 2016. In line with this approach, a successful stakeholder event was held in Glasgow on 29 January 2016 with representatives from the Scottish and UK Governments, the European Commission, and other interested parties. The aim of this event was to consult a wide range of views to capture the activity being pursued across Scotland that supports the objectives of Europe 2020, in order to inform the development of the Scottish NRP 2016 and the Scottish contribution to the UK NRP 2016.

The remainder of this document focuses on:

• The Scottish Government's approach to delivering sustainable and inclusive economic growth; and
• Actions being pursued in Scotland to support the delivery of the Europe 2020 ambitions, and actions that are contributing to addressing the Commission's CSRs to the UK.

Chapters are presented for the areas covered by each of the five headline targets set out in the strategy - covering Employment; Innovation and R&D; Climate Change; Education; and Social Inclusion and Poverty Reduction. Within these chapters, actions are highlighted which are contributing to each of the UK CSRs and the Commission's Flagship Initiatives.