European Structural and Investment Funds Programmes in Scotland: 2020 case studies booklet

5. Smart Growth

Smart Growth means investing European Social Fund (ESF) and European Regional Development Fund (ERDF) support into Scotland’s businesses and workforce.

Working since 2014 with Lead Partners, the Scottish Government has allocated £260m in ESF and ERDF grants towards our Smart Growth areas.

These include:

• Developing Scotland’s Workforce
  Creating new places for skills development at Scotland’s colleges, providing training courses for careers in Scotland’s growth sectors, and expanding Scotland’s Modern, Foundation and Graduate Apprenticeship programmes.
• Youth Employment Initiative
  Helping young people, particularly those not in employment, education or training, into work, and reducing the number of unemployed and socially excluded young people in south west Scotland.
• Business Competitiveness
  Helping SMEs to become more innovative and to grow in regional, national and international markets.
• Business Innovation
  Promoting investment in research, innovation, manufacturing and product development.
• SME Holding Fund
  Providing access to financing for SMEs and start-ups looking to enhance competitiveness and grow in regional, national and international markets.

Lead Partners:

• Local authorities;
• Scottish Enterprise;
• Highlands and Islands Enterprise;
• Scottish Funding Council;
• Skills Development Scotland;
• Scottish Government Directorate for International Trade and Investment; and
• Business Gateway.

 5.1 Supporting a national programme of Foundation, Modern and Graduate Apprenticeships

The expansion and growth of Scottish Apprenticeships has been delivered with support from the European Social Fund (ESF). Foundation, Modern and Graduate Apprenticeships have helped thousands of Scots learn new skills, gain qualifications and work at the same time.

A Foundation Apprenticeship was the ideal first career step for teenager Heather Wilson from Gourock. Heather has experienced all aspects of engineering thanks to the valuable combination of school, college and work-based learning with ferries operator CalMac.

For Jordanne Currie of Kirkcaldy, a Modern Apprenticeship allowed her to instantly begin working on the development of radar systems at leading aerospace engineering organisation Leonardo in Edinburgh. As her learning is work- based, she has been able to try different types of engineering to see where her passion in the industry lay.

Katy Beckett jumped at the chance to work, earn and learn while studying for her Engineering Design and Manufacture degree as part of her Graduate Apprenticeship. Thanks to the adaptable nature of the apprenticeship, the working mum has been able to broaden her technical skills at Bray Controls in Inchinnan and advocate for women in science, technology, engineering and mathematics (STEM) subjects.

Apprenticeships do not just help individuals. They also provide employers with the skills they need to adapt, sustain and strengthen. Scottish businesses have been able to upskill their workforce, meet future skills’ needs and increase productivity by taking part in the ESF-supported scheme.

Thanks to ESF support, these three different types of apprenticeships have enabled people like Heather, Jordanne and Katy to develop their career in a way that suits them.

Apprenticeships across Scotland have been supported with an ESF allocation of £16m

“The Foundation Apprenticeship is a great way to gain experience before I join the Navy. I learn better by doing something practical, so the Foundation Apprenticeship has been ideal.” Heather Wilson, Foundation Apprentice

“It’s important that women see STEM as a potential career path. There is a high number of females in engineering roles at Bray. I never considered STEM when I was at school and thankfully my Graduate Apprenticeship has allowed me to pursue it now.” Katy Beckett, Graduate Apprentice

5.2 Investing in Scotland’s Small and Medium Enterprises (SMEs)

The SME Holding Fund is managed by a team within the Scottish Government’s Directorate for International Trade and Investment. While they are ultimately responsible for the fund, they distribute the European Regional Development Fund (ERDF) support via investment firms like DSL Business Finance, who are well placed to identify firms in need of finance to grow.

DSL has assisted businesses like Kalopsia and The Refillery, both based in Edinburgh, with ERDF- supported finance.

Kalopsia, established as a textiles artists’ collective in 2012, supplies mills, retailers and independent businesses with ethically-, efficiently- and sustainably-made textile products, such as accessory bags and clothing. This forward-thinking approach to textiles’ manufacturing led to Kalopsia being shortlisted for Manufacturer of the year at the Made in Scotland awards 2018. Thanks to ERDF support, DSL has provided two rounds of investment to Kalopsia, totalling £25,000.

“The first round of ERDF-supported investment helped us improve operations and stabilise production, getting us to a consistent turnover. The second round allowed us to invest in our website which has increased sales, improving cashflow and customer experience. We also took on our first two permanent employees, both newly graduated textiles practitioners. Their input has been a massive boost. All of this support has allowed us to take on more and higher quality orders.” Adam Robertson of Kalopsia

The Refillery, established in 2019, is an ethical grocery store offering everyday groceries but without the plastic packaging. They have become a real hub of the local community, stocking locally produced and organic products and providing advice on how to shop more consciously. They also offer an online service for click & collect or local delivery and have recently launched a franchise package.

Thanks to ERDF support, DSL provided loan funding to part finance start-up costs and working capital.

The SME Holding Fund has been allocated £78.2m of ERDF support

“From initial contact right through until now – DSL was just so supportive. My dream became a reality because of the ERDF-supported finance from DSL.” Kelly Wright of The Refillery

5.3 Providing expert advice to local businesses in Fife 

Support for Small and Medium Enterprises (SMEs) in Fife is delivered through Business Gateway Fife, an arm’s length company wholly owned by Fife Council.

Thanks to European Regional Development Fund (ERDF) support, they were able to offer a range of services to businesses in their local areas. This support has included:

• Expert advice to help businesses achieve their growth potential, covering topics like HR, Finance and IT; and
• A non-repayable grant scheme to support SMEs to upskill their workforce and participate in trade shows and visits.

Bikeworks were just one of many businesses that Business Gateway Fife has assisted. The successful social enterprise recycles, repairs and maintains bikes for the local community, but realised that its digital platforms were restricting it from growing.

Thanks to ERDF-supported advice from Business Gateway Fife, Bikeworks were able to redevelop their website and online strategy. This proved invaluable when COVID-19 struck, as the new website has allowed Bikeworks to continue to sell refurbished bikes and bike parts to the public. The assistance that they have received means that Bikeworks is well positioned to maximise the uptake in interest in cycling and expand its customer base in the future.

Business Gateway activity in Fife has been supported with an ERDF allocation of £2m

“Business Gateway Fife has been a great help to us. The web developer worked closely with us to understand and interpret our needs, all of which was accomplished remotely. The timing of this could not have been better for Bikeworks, as our new website was operational just as we opened for business at the end of lockdown. Thanks to ERDF support, we are in a much better position to serve customers and grow our company.” Rory Sillar of Bikeworks

5.4 Driving up youth employment in Dumfries and Galloway 

Youth Employment Initiative (YEI) was launched by the European Commission to specifically support regions across Europe that had experienced a significant increase in youth unemployment and inactivity.

For Scotland, this meant twelve local authorities in the south west were supported with the European Social Fund (ESF) to provide dedicated support to young people aged 16-29 not in employment, education or training (NEET). A key aspect of YEI was providing wage incentives to businesses to take on young workers.

Dumfries and Galloway Council was one of the local authorities tasked with improving youth employment. They helped people like Nick, who did not know what he wanted to do when he left school.

During Nick’s sessions with support worker Marie, he expressed an interest in working with cars and motorbikes, so some work experience was arranged for Nick at Bridge End Garage in Dumfries.

The owners of the garage were impressed with Nick’s enthusiasm and willingness to learn, and agreed to take him on as Trainee Mechanic using the YEI-funded Young Person Wage Incentive. At the same time, Nick started an apprenticeship mechanic course at Dumfries College.

As a result of the actions taken by the Dumfries and Galloway Council employability team, Nick obtained his apprenticeship, improved his communication and confidence skills, and thrived as a mechanic at Bridge End Garage.

Thanks to ESF support in south west Scotland, local businesses were encouraged to take on trainee workers and scores of young people moved into employment, education or training.

£43m of ESF support was allocated to YEI projects across south west Scotland

“ESF support in D&G through the Employability & Skills Service is a tailored, person-centred approach, engaging individuals who have barriers to employment, training and/or further education. Our Key Worker service offers one- to-one support to overcome these barriers and progress people to achieve their goals.” Marie McKeown, Dumfries and Galloway Council