Islands Strategic Group minutes: December 2020

Attendees and apologies

Attendees:

• Paul Wheelhouse, Minister for Energy, Connectivity and the Islands
• Michael Russell, Cabinet Secretary for the Constitution, Europe and External Affairs
• Cllr Robin Curriet, Argyll and Bute Council - Leader
• Pippa Milne, Argyll and Bute Council - Chief Executive
• Malcolm Burr, Comhairle nan Eilean Siar – Chief Executive
• Cllr Roddie Mackay, Comhairle nan Eilean Siar - Leader
• Cllr Allan Henderson, Highland Council – Vice-Convenor
• Kate Lackie, Highland Council – Executive Chief Officer, Performance and Governance
• Alex Gallagher, North Ayrshire Council - Cabinet Member for Economy
• Julie McLachlan, North Ayrshire Council - Senior Manager, Economic Policy
• Maggie Sandison, Shetland Islands Council – Chief Executive
• Cllr Steven Coutts, Shetland Islands Council – Leader
• Peter Peterson, Shetland Islands Council
• John Mundell, Orkney Islands Council – Acting Chief Executive
• Cllr James Stockan, Orkney Islands Council – Leader
• Anna Whelan, Orkney Islands Council – Strategy Manager
• Gavin Mitchell, Orkney Islands Council 
• Gavin Barr, Orkney Islands Council
• Georgette Herd, Orkney Islands Council    

Scottish Government:

• Erica Clarkson
• Des Tinney
• Nicola Crook
• Paul Maxton
• Cameron Anson
• Lorraine Lowrie
• Kate Higgins
• Fiona Loynd

Apologies:        

• Donna Manson, Highland Council – Chief Executive  
• Coinneach Morrison, Scottish Government

Items and actions

Welcome and introductions

Mr Wheelhouse welcomed everyone to the tenth meeting of the Islands Strategic Group (ISG), noted the welcome change of platform to MS Teams and outlined the agenda items.   

EU Exit Update – Michael Russell  - Cabinet Secretary for the Constitution, Europe and External Affairs

Mr Russell gave an update on EU Exit. He noted that the SGORR (Scottish Government Resilience Room – the SG equivalent of the UK Government COBRA group) is now operational on a seven day a week basis to prepare for the coming months and that the Multi Agency Co-ordinating Centre (MACC) and Local Resilience Partnerships are also being stood up. 

Mr Russell spoke about the concurrent risks of the continuing pandemic, adverse winter weather and the increased pressure that puts on the health service and other public services, and the pressures of Brexit. He noted that whilst it is not known exactly what will happen on January 1st, we do know that there will be some dislocation of things as they are currently known, e.g. supply chains albeit the detail of this is not clear. Mr Russell gave an overview of what it might mean for things like tariffs, etc. if there is ‘No Deal’ in place and explained that arrangements are already in place and being worked on in collaboration with the UK Government (UKG) to ensure the continued supply of ‘Category 1’ products like medical goods, etc. in the event of this happening.  

Mr Russell recognised that a lot of the front line workers and services who are going to be involved in this delivery have been the same ones who have been under a lot of pressure working through the Covid-19 pandemic

Mr Russell noted an additional £100 million has been made available to help communities most at risk this winter. 

Malcolm Burr asked if the government was thinking about any sort of transitional relief for particularly vulnerable economic sectors like shellfish/aquaculture whose products are time critical and Mr Russell noted there have been discussions with UKG around potential ‘light touch’ arrangements however there can be no full transitional extension but there could be a series of ‘mini’ transitional agreements. 

Cllr James Stockan noted Mr Russell’s comments about geographically vulnerable communities having access to Cabinet Ministers and the importance of keeping those lines of communication open. 

Cllr Robin Currie raised the issue about fishermen potentially taking their catches to Northern Ireland and exporting directly to the EU from there and Mr Russell noted he was aware of this issue. 

Alex Gallagher raised concern about challenges for tourism and hospitality businesses in the Clyde Islands due to Covid-19 and the worry about a ‘bad’ Brexit running in tandem with this. He asked could consideration be given to a direct conduit from the Islands into ministerial action.  Mr Russell noted his comments and recognised that hospitality businesses in rural and island areas may well need more support and that the Cabinet Secretary for Finance and the First Minister are aware of this.  He also noted that every penny that comes in to SG for business support is going out the door. 

Cllr James Stockan asked about the Erasmus/Horizon 2020 Programmes and what it means for continuity of them if there is a No Deal Brexit. Mr Russell noted that he understands there is a commitment to continue with Horizon2020 but that the UK could not be a net beneficiary so that limits what can take place. Less clear what is happening with Erasmus at that time. The issue is wider than just those two programmes, it is about all EU funding streams. Mr Russell expressed that he continues to press the UKG for answers. 

Mr Russell left the meeting for another engagement at this point.

Minutes of the previous meeting and matters arising 

Mr Wheelhouse asked members of the ISG to indicate whether or not to approve the minutes of the previous meeting. Members confirmed nothing to note on the minutes and they were therefore proposed by Cllr Allan Henderson and seconded by Cllr James Stockan.  

Islands Team update 

Members were issued with an update on work being carried out by the islands team (attached with minutes) and agreed in the interests of time that this would be reported on by exception at this meeting. 

Malcolm Burr asked for an update on the National Islands Plan Route Map (NIP IRM). Erica Clarkson noted that the Islands Team are thinking carefully about a report for Parliament on the National Islands Plan progress (which is a legislative requirement under the Islands Act by Spring 2021). Nicola Crook advised that the Islands Team are currently fine-tuning the final draft of the NIP IRM and confirmed that once it is finalised, it will be sent to the members of the ISG. It is still on track for a winter publication however noted that this will be a living document and will be an ongoing process. 

Nicola Crook gave an update on the proposed National Islands Plan Governance Group and advised that it is hoped it will be in place by the end of January 2021, but will discuss this with the Partnership Working Group whilst it is being set up to make sure the Terms of Reference meet expectations. 

Nicola Crook also noted that the Islands Survey work has now concluded and the analysis is being collated which will be published early 2021. Nicola also confirmed that results would be available by Local Authority area.  

Pippa Milne advised that she is still working on costing estimates for Island Communities Impact Assessments and will get this to the team as soon as possible. Pippa also noted concern about the timing of the launch of ICIAs coming just before the budget announcements which may cause further pressures. Paul Maxton advised that this will be on the agenda at the next Partnership Working Group and noted that it would be very helpful if other local authorities could provide costing estimates as well. 

Alex Gallagher enquired about financing any activities that may come out of the NIP and Mr Wheelhouse noted his comments and advised about the £30 million coming from the Draft Infrastructure Investment Plan to support implementation of the National Islands Plan over it’s duration. Mr Wheelhouse noted that the intention of the funding is to address issues that require capital funding and are relevant to delivery of the NIP but that it does not represent the totality of the funding. Mr Wheelhouse also confirmed that this £30 million funding is in addition to the Islands Growth Deal. Erica Clarkson noted that the Islands Team will be in touch with the Partnership Working Group and the Islands Strategic Group in the new year to discuss the IIP funding further. 

Malcolm Burr enquired about the applicability of ICIAs to existing policies, strategies and services and how Scottish Government is approaching this. Mr Wheelhouse noted that these reviews would need to be done over a period of time and that there is scope for sharing experience with this. Paul Maxton noted that tentative discussions have been held around reviewing all SG policies for ICIA purposes and agreed that this will be a significant piece of work. 

Cllr Robin Currie asked about Rural Repopulation, noted that there is an urgency around this and enquired as to whether the ISG should set up a taskforce around this. Julie McLachlan noted that at the last CoHI meeting, a sub-group was established who will be discussing the depopulation paper that was presented at CoHI, and reporting back at the next meeting. Comhairle nan Eiean Siar, Argyll and Bute Council, Highland, North Ayrshire and Highlands and Islands Enterprise are all on this sub-group. Julie also noted that COSLA are feeding into the Population Action Plan currently being developed by Scottish Government. Mr Wheelhouse noted that it would be good to get input from Orkney and Shetland on this and identify similarities. 

Pippa Milne noted that there is a danger that some of the wider population work becomes so broad looking that the urgency gets lost. The need to rebalance is important however it is important that focus around west coast depopulation is not lost. Mr Wheelhouse noted this concern and indicated that any effort to look at issues affecting other islands communities need not detract from or delay work already underway on depopulation in those areas subject to our current focus, but would potentially add value in augmenting our understanding of issues, by learning from similar issues arising in some islands within the Northern Isles.   

Future of European Structural Funds 

Fiona Loynd from the Scottish Government European Structural Fund and State Aid Team, gave a presentation on the future of European Structural Funds. Presentation attached for your information. Fiona confirmed following the meeting that these slides can be shared.  

Several questions were posed by members following the presentation which can be viewed in Annex A.  

Fiona extended the offer to return to the ISG in a few months to give a further update. 

Public Petitions Committee – Minister for Energy, Connectivity and the Islands

Erica Clarkson opened a discussion about the Public Petitions Committee, initially around looking into parking charges at island lifeline ferry ports. Erica noted that Mr Wheelhouse attended the Public Petition Committee on 12 November  to answer questions and gave a commitment to revert to the Committee following discussions with ISG members and colleagues in Transport Scotland.

Pippa Milne noted that this stemmed from a proposal in Argyll and Bute some time back which has not gone ahead. Argyll and Bute Council are now working with the Mull community on an alternative approach. Erica advised that the Islands team will come back to Pippa out with the meeting to get an update on this. 

Cllr Steven Coutts noted that this issue is not reserved to ferries and Local Authorities but also lifeline air services and for example HIAL. 

Malcolm Burr raised the HIAL petition which has been launched by the community councils and supported by Comhairle nan Eilean Siar, on the changes proposed to air traffic management. 

Cllr Allan Henderson advised that Highland Council have been trying to generate income through car parking charges, especially through tourism. There are issues in places like Mallaig and Ullapool around free parking with people leaving their cars long term in the villages. 

Mr Wheelhouse advised he would speak to the Cabinet Secretary for Transport, Infrastructure and Connectivity on these issues and encouraged members to share comments on this matter offline.  

AOB 

Cllr Roddie Mackay raised concern about the withdrawal of Permitted Development Rights, specifically around the Shared Rural Network and the move into next phase of the connectivity programme which may affect the rollout of their programme. Mr Wheelhouse noted concerns on this have been raised in a paper to the Minister for Local Government, Housing and Planning and that he would be grateful if direct feedback could be put in to Robbie McGhee/Pippa Gardner in the Scottish Government Digital Team. 

Cllr James Stockan noted that when we leave the EU on 31st Dec, we will no longer be under EU court jurisdiction and asked about the Road Equivalent Tariff that exists in other areas of the country and the impacts on island tourism.  Mr Wheelhouse noted that there is an ongoing evaluation of RET and that this is actively being discussed. 

Erica Clarkson advised that Catriona Maclean, Rural Economy and Communities Deputy Director has now left the division and the new Deputy Director, Phil Raines is now in post. 

Erica also advised that Don Morrison has also left and moved to a new team. Send best regards to all. 

Mr Wheelhouse expressed his thanks to Don and Catriona. 

Date of the next meeting

Mr Wheelhouse thanked everyone for attending and their contributions

The next meeting will take place on 24 March 2021. 

Close

Annex A - Future of EU structural Funds – Q and A

James Stockan (Leader of Orkney Islands Council) 

a. In the current (and all previous) ESIF Programmes the H&I has been given special transitional status (or equivalent) which equated to higher intervention rates and a wider range of activities which could be supported.  What thinking has gone into ensuring the replacement fund has similar considerations and awareness for those areas which are remote/rural?  

When drafting plans, SG worked closely with representatives from rural and remote areas (notably Steven Heddle (Orkney Islands Council) David Rennie (SOSE) and Rob Clarke (HIE) ) to make sure that their specific challenges were given due consideration . That is not say that further work does not need to be done.  It does and SG will be ensuring these issues are a key part of the next steps if the UK government transfers funding and authority to the Scottish Government, enabling plans to be enacted.  SG are also working on a needs based allocation model and again the requirements of rural and remote areas will be taken into account as part of this.  Unfortunately SG cannot say more at this stage due but members should be assured that the partnership approach that has been used to develop policy up until now will continue to be a feature of the Scottish Government’s approach going forward. 

b. How much money has actually been committed to the H and I through this current Programme? (Islands detail also provided below).

ERDF – Eligible Costs - £132,577,141 – Approved Grant - £72,956,151
ESF – Eligible Costs - £88,165,582 – Approved Grant - £50,670,236

Below is a table which details each of the awards by Local Authority across the Highlands and Islands; In addition there are pan-Scotland schemes which have a H and I component to them – and also 2 schemes which are exclusively for recipients based in the H and I. A breakdown of these various schemes by area or by recipient type is not yet available.  

Highlands and Islands

Local authority	Grant award
Argyll and Bute Council	£      524,220
Comhairle nan Eilean Siar	£   3,035,493
Highland Council	£ 14,020,388
Moray Council	£   3,197,616
Orkney Islands Council	£      224,934
Shetland Islands Council	£   1,588,400
	£22,591,050

Highlands and Islands exclusive schemes

Scheme	Amount
Digital Connectivity	£10,000,000
NatureScot	£10,285,386
Total	£20,285,386

 

Pan Scotland Schemes 

Scheme	Lead partner	Grant award
Scotland's 8th City - the Smart City	Glasgow City Council/Highland Council	£ 21,327,520
Delivering Financial Inclusion (Dundee, Glasgow, Inverclyde, South Ayrshire)	The National Lottery Community Fund (Scotland)	£   5,445,326
Green Infrastructure	NatureScot	£ 17,709,528
Innovation Challenge Funds	Scottish Enterprise	£ 15,510,674
Improving Business Innovation	Scottish Enterprise/Highlands and Islands Enterprise	£ 15,769,242
Improving Business Competitiveness	Scottish Enterprise/Highlands and Islands Enterprise	£ 18,426,105
Developing Scotland’s Workforce	Scottish Funding Council	£ 45,103,394
Developing Scotland’s Workforce - Youth Employment Initiative	Scottish Funding Council	£ 27,954,757
Growing the Social Economy	Scottish Government	£   4,285,507
Aspiring Communities Fund	Scottish Government	£ 10,865,887
Low Carbon Infrastructure Transition Programme	Scottish Government	£ 36,795,054
SME Holding Fund (BC)	Scottish Government	£ 65,800,001
SME Holding Fund (Innovation)	Scottish Government	£ 12,400,000
Developing Scotland's Workforce	Skills Development Scotland	£ 77,156,692
National Third Sector Employability Fund	Skills Development Scotland	£ 22,711,082
Low Carbon Travel and Transport Programme	Transport Scotland	£ 22,282,794
Resource Efficient Circular Economy Accelerator Programme	Zero Waste Scotland	£ 34,326,532
		£453,870,095

Did the H and I get their full allocation during this Programme or has some of it leaked to the Rest of Scotland area?  

All the funding requested through Lead Partner SI and Operation applications have been approved. Approximately £5m was lost to the region as a result of not achieving agreed targets and outputs within the Priority Axis.

c. Is there any money which has been uncommitted through this current Programme which has either gone to (a) rest of Scotland (b) back to EU as uncommitted? If so, how much? 

Approximately, £100m was decommitted over the course of the 2014-20 programme.  This was due to project targets not being met across Scotland,  including in the Highlands and Islands.  Decommitments were made in line with European Commission rules.

Alex Gallagher (Cabinet Member for Economy - North Ayrshire Council)

Alex noted that North Ayrshire Council’s preference for how funding is distributed is that it would be aligned with the Local Authorities priorities rather than Scottish Government priorities.

Alex also asked about match funding that EU funds previously attracted and was this being looked into?

Confirmed this was being discussed with the Ministry of Housing Communities and Local Government in UK Government

Cllr Robin Currie (Leader, Argyll and Bute Council) 

Cllr Currie asked to clarify that the EU fund equivalent will start in 22/23 but the interim fund from 21-22 would be a total of £220 million for the UK overall with Scotland’s percentage of this being somewhere around £20 million. 

Confirmed this to be correct however there has been no clarification on how the fund might be allocated throughout the UK; ~£20 million for Scotland is based on an indicative consequentials calculation so should not be considered definitive.

Cllr Alan Henderson (Vice-Convener, Highland Council) 

Cllr Henderson asked if the steering group that was formed has concluded their work and is there an opportunity to join? 

The steering group are happy to continue their work in support of shaping Scotland’s share of the UK Shared Prosperity Fund as a sounding board and providing constructive engagement on development of the fund.