European Structural Funds 2014-2020 programmes consultation

Part 2 - Introduction

1. The Scottish Government has a clear purpose to create a more successful country, with opportunities for all of Scotland to flourish, through increasing sustainable economic growth. As part of our vision for strengthening Scotland's economy, the Scottish Government are launching a consultation on the implementation arrangements for the 2014 - 2020 European Structural Fund Programmes.

The Legislative Framework and Alignment between European Funds

2. In October 2011, the European Commission announced their proposals for the 2014 - 2020 European Structural and Investment ( ESI) funds. The proposals contain a number of new concepts; for example 11 thematic objectives which all ESI funds must focus on, and a Partnership Agreement which will set out the key activities for Structural, Cohesion, Rural Development and Fisheries Funds and how that activity will deliver Europe 2020 aims of smart, sustainable and inclusive growth.

3. Furthermore, the Commission have published a Simplification Agenda to underpin the ESI fund regulations. This agenda should ensure the smooth delivery of policies and a better, less administratively burdensome, experience for fund beneficiaries. The full impact of simplification will only be realised if all authorities involved in the implementation of the future programmes play a key role in ensuring that good practices are adopted and the administrative set up at national and regional level are not unnecessarily over complicated. These principles are reflected in our proposals for how to deliver the ESI Funds in Scotland.

The Policy Framework and Impact of 2007 - 2013 EU Funds Programmes

4. European Funds have played a pivotal role in supporting the Scottish economy and they have underpinned many of the actions the Scottish Government have taken forward in the Economic Recovery Plan. However, when considering the impact the current programmes have had it is important to remember that they were developed before the economic downturn.

5. There have been a number of audit and compliance issues in the current programmes, often the result of over complicated programmes and policies. Funds have been dispersed to a number of small organisations who, as a result of the economic downturn, have been unable to allocate the resources required to manage the funds accordingly. Furthermore, there has been mixed performance of projects with some reporting significant underspends. Not all projects have found it easy to deliver the outcomes they initially projected, and taken together, the projects have perhaps not achieved as big an impact on the economic situation in Scotland as we might have hoped.

6. In addition, the economic and operational issues surrounding the current programmes cannot simply be rolled forward as lessons learned for the next Structural Fund programmes. Each funding period has different underlying objectives which result in significant evolutions of the programmes and their processes changing considerably.

7. With the focus on EU 2020, it is clear that there will need to be a tighter focus on the investment areas which will drive sustainable economic growth, such as low carbon, higher skills levels and R&D&I to address the challenges presented by the economic downturn and for simplification of regulations, processes and procedures. But there will equally be a demand for employability, environmental protection and rural development interventions, and using the ESI Funds together will ensure that between the Funds, we can cover and support all of these critical areas.

Integration of the ESI Funds

8. In order to ensure that all Member States contribute to the Europe 2020 targets of smart, sustainable and inclusive growth each EU Fund programme must have a significant impact on jobs and growth during a period of prolonged economic difficulty. The activities of the all the Funds must complement each other and work in conjunction with other EU funding streams, including Horizon 2020, ERASMUS and COSME.

9. Through integration of the ESI Funds in Scotland, we will not only address regulatory requirements but also address issues which have emerged during the current (2007 - 2013) Programmes. Integration between the ESI funds will also allow for closer alignment with domestic policies and therefore create opportunities for more central match funding by the Scottish Government and major public bodies.

10. Furthermore, integration will simplify audit and compliance arrangements. Experience from the current programmes has shown that working with large organisations - that have the experience and resources to manage complex funding systems - to channel Structural Funds could result in easier access to a range of funding opportunities and allow smaller organisations to focus on delivering outcomes as part of a bigger project. Integration of the ESI Funds will ensure that this logic can apply across all of the Funds, and that the Funds can learn from each other's current experience.

Purpose of the Consultation

11. Work to date on developing the future programmes has shown our commitment to working with our stakeholders to ensure that their needs are identified and address accordingly. Stakeholders have provided input into the development of the new policy thinking for the future programmes for all ESI Funds through various forums and we continue to encourage your engagement through the launch of this consultation, which asks you to consider key points in the development of the delivery and operational arrangements for the new programmes.

12. Your responses will feed directly into the development of the Operational Programmes ( OPs) for Structural Funds and the Partnership Agreement ( PA) which are due to be sent to the Commission for approval in the autumn. We welcome your views on all aspects of these proposals.

13. This consultation reflects the key areas raised during the development process which include:

• Strategy - the aim of the Partnership Agreement and the thematic objectives; the structure of the Structural Funds Operational Programmes; and proposals for integrating the EU funds;
• Governance - the proposals for managing Structural Funds; and
• Delivery - the proposals for how the funds will be allocated and projects will be delivered.

14. During this consultation we are also keen to explore the finer details of the governance and delivery arrangements which will apply to all the ESI Funds; and the choices of thematic objectives and policy priorities for Structural Funds.

15. A parallel consultation is underway on the more detailed policy choices required for the rural development Fund and the Scottish Rural Development Programme - this can be found http://www.scotland.gov.uk/Publications/2013/05/9633. Both this and the rural development consultation will inform the final design of operational programmes and governance and delivery arrangements in Scotland.