European Structural Funds 2014-2020 programmes consultation

Part 4 - Governance And Delivery

Governance

1. All European Structural and Investment Funds will be held to account through the Scottish chapter of the Partnership Agreement. This will also contain the objectives for the funds and how much resource from each ESI Fund has been allocated to the Scottish Themed Funds and what outcomes are expected. In addition, the individual Operational Programmes will set out the reporting, evaluation, compliance, verification, audit and payment requirements.

2. Projects or schemes of projects (referred to as operations) which are eligible for ESI Funds will be owned by Lead Partners who will provide the initial match funding , but may deliver operations directly, contract delivery or enter into partnerships. Monitoring of these operations will be done by Strategic Delivery Partnerships ( SDPs) which will ensure that they are complementary and that various interventions are performing and making a measurable contribution to the Europe 2020 targets.

3. For coherence across the Scottish Themed Funds there will be a single Partnership Agreement Monitoring Committee ( PAMC), replacing past separate programme monitoring committees. The PAMC will oversee:

• Performance - monitoring progress towards outcomes, targets and milestones, and continually assessing the contribution to EU 2020;
• Complementarity - of the programmes and schemes in operation, with the ability to recommend changes to the SDPs, and to the Operational Programmes if required; and
• Implementation and mainstreaming of horizontal themes, ensuring that European Funded activity contributes to equality and sustainability.

Delivery

4. Delivering operations through SDPs will ensure that most current beneficiaries of ESI Funds will continue to have opportunities to access funding. Strategic decisions on where and how the funds will be concentrated will be decided by the SDP early in the programming period.

5. The SDPs will shape the operations that will be supported and will comprise of the main national and local agencies and lead policy directorates from the Scottish Government. The SDPs will have three key responsibilities:

• help shape the Operational Programmes by deciding what operations to fund;
• ensure funding stability through the lifetime of the funding period by providing the initial match funding for the agreed operations; and
• be accountable for the impact of the Structural Funded operations.

6. During 2013, Lead Partners will work with industry and stakeholder representatives and smaller organisations, particularly Structural Fund partners, to identify 6 - 10 operations which are most likely to collectively have a maximum impact on Europe 2020. This might, for example, be an SME growth initiative, or it could be an agri-environment scheme under the Rural Development Fund. These operations must:

• match with the thematic objectives set out in the Partnership Agreement;
• be operations which Lead Partners can dedicate match funding/co-financing, and which they can operate and be accountable for;
• viable to run for at least 3 - 4 years of the programming period; and
• set ambitious targets and outcomes to be achieved with EU funding.

7. The members of each SDP must work together and challenge each other to ensure that the programmes provide real and significant contributions to Europe 2020 targets. The SDPs should also ensure that operations do not simply seek to continue existing programmes and that they will deliver the long-term structural changes the Structural Funds are expected to support.

8. The SDPs will influence the development of the Partnership Agreement and the Operational Programmes which are due to be submitted in autumn 2013 and timescales therefore need to be aligned. This process will run alongside this consultation and will result in decisions on key interventions for each fund being finalised by autumn this year.

9. The diagram below sets out the governance and delivery arrangements for the future programmes:

Governance & Delivery

Governance and Delivery Objectives

10. The outcome of planning and delivering this way should result in programmes with greater impact and clearer lines of sight between funding levels and achievements, and should ensure a smaller audit and compliance burden on all parties. It will also address the match funding difficulties experienced in the 2007 - 2013 Programmes which are expected to continue. Furthermore, it will give long-term funding stability to the Lead Partners and their programmes.

11. To ensure that these benefits are achieved, a review of the Structural Fund programmes will be carried out in 2017 and will check that they are delivering the desired outcomes, represent value for money, and remain the most appropriate way for deploying EU funds.

Question 5 - How do you think the governance and delivery arrangements will impact on your sector?

Question 6 - How do you think the governance and delivery arrangements will impact on your organisation?

Question 7 - Are there any unidentified governance or delivery arrangements that could aid simplification of the future programmes and ensure that the Structural Funds complement each other?

Youth Employment and Structural Funds

12. The Youth Employment Initiative announced as part of the recent European Council agreement on the European budget will complement the European Commission's 'Youth Guarantee', whereby any young person in the EU who has been unemployed for more than four months is to be offered a job, training or apprenticeship. The initiative would be allocated a €6 billion budget from the 2014 - 2020, €3 billion of which would come from the European Social Fund and the other half from cohesion policy. However, these figures are subject to an agreement being reached on the EU's financial budget for 2014 - 2020 and an amendment to the proposed ESF Regulations.

13. The initiative would mean that all regions in the ' NUTS 2' category that had youth employment rates above 20% in 2012 would be eligible for Youth Employment Initiative help. This may mean that the South West of Scotland could be eligible to benefit from this funding.

14. While we await the outcome of the negotiations on the regulations, financial budget and for the 2012 youth employment figures to be published it is important for us to start thinking through how this funding stream could be delivered in line with the proposed governance and delivery arrangements. Some suggestions have been for the youth employment operations to be delivered under the Scottish Themed Fund for competitiveness, innovation and jobs by the Third Sector who would report to Lead Partner for this funds SDP.

Question 8 - What other delivery options do you think would be feasible for delivering youth employment initiatives?

Audit, Control and Simplification

15. Despite of the Commissions ambitions for simplification each ESI fund will have its own implementing regulations. As a result mixing ESI funds in a single strategic operation may be difficult to manage from an audit or reporting perspective.

16. In order to retain clear reporting and audit lines each operation will need to either:

• Draw from one ESI fund; or
• Be designed to have clear distinct elements which only draw from one ESI fund.

17. The Lead Partners will be responsible for maintaining and recording separation of funding streams across a range of funders and will result in beneficiaries only having to engage with one public body.

18. For interventions funding with multiple beneficiaries such as training or business support programmes there will be a significant move away from repayment of actual costs incurred, to unit costs, procurement and contracting wherever possible. This will link payment clearly to the delivery of an outcome rather than to financial profiling, as well as reducing the detailed record keeping by delivery agents and end beneficiaries across the ESI funds.

Question 9 - What other measures could be taken to reduce the audit and control pressures?