Europe 2020: Scottish national reform programme 2017

Introduction

Europe 2020 is the European Union's strategy for delivering, smart, sustainable and inclusive growth over the period to 2020. It aligns closely with the Scottish Government's core Purpose of focusing government and public services on creating a more successful country, with opportunities for all of Scotland to flourish, through increasing sustainable economic growth.

This is important because growing Scotland's economy is the cornerstone of improving the prosperity and living standards of all Scots, now and in the future.

This report is the seventh 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 the Europe 2020 Strategy.

The strategy sets out five key targets for the EU to achieve by the end of the decade. These 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 the delivery of these ambitions. The Scottish Government's view remains that Scotland is in a stronger position to deliver the ambition of achieving smart, sustainable and inclusive growth as part of the EU family, rather than being outside of it. Following the UK vote to leave the EU, the Scottish Government published Scotland's Place in Europe ^[1] , a set of proposals which sought to maintain Scotland's place in the European Single Market.

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 2017.

However, in order to highlight the unique characteristics of Scotland, and the distinct approach to the Europe 2020 ambitions that we are taking forward, the Scottish Government has once again produced a Scotland-specific NRP. This approach underlines Scotland's desire to continue positive engagement with its European Union neighbours (in the June 2016 EU referendum, 62% of those in Scotland who took part voted to remain in the EU). The report 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 its partners in 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 2017 Annual Growth Survey ^[2] , the European Commission proposes that efforts focus on the three following priorities for 2017:

• Boosting investment;
• Pursuing structural reforms; and
• Ensuring Responsible Fiscal Policies.

Country Specific Recommendations for the UK

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

1. Endeavour to correct the excessive deficit in a durable manner by 2016-17. Following the correction of the excessive deficit, achieve a fiscal adjustment of 0.6% of GDP in 2017-18 towards the minimum medium-term budgetary objective.

2. Address shortfalls in network infrastructure investment, including by delivering the priorities of the National Infrastructure Plan. Take further steps to boost housing supply, including by implementing the reforms of the national planning policy framework.

3. Address skills mismatches and provide for skills progression, including by strengthening the quality of apprenticeships. 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 at Chapter 2, and information relating to CSR 3 can be found at Chapters 3 and 7.

Delivering the Ambitions

Chapters are presented for the areas covered by each of the five headline targets set out in the strategy - 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. In addition, the next chapter provides a brief overview of why EU funding matters to Scotland.