Regional Economic Policy Advisory Group minutes: February 2022

Attendees and apologies

Members

• Professor David Bell (Chair), University of Stirling
• Professor John Bachtler (Co-Chair), European Policies Research Centre, University of Strathclyde
• Robin Clarke, Highlands and Islands Enterprise (HIE)
• David Coyle, Skills Development Scotland (SDS)
• Jennifer Craw, Opportunity North East
• Douglas Colquhoun, Scottish Enterprise (SE)
• Rob Dickson, VisitScotland
• David Ford, South of Scotland Enterprise (SOSE)
• Anna Fowlie, Scottish Council for Voluntary Organisations (SCVO)
• Councillor Dr. Steven Heddle, Convention of Scottish Local Authorities (COSLA) 
• Robbie Kernahan, NatureScot
• Malcolm Leitch, Scottish Local Authorities Economic Development (SLEAD)
• Claire McPherson, Scottish Funding Council (SFC)
• David Reid, Forth Valley Regional Economic (on behalf of Jennifer Tempany), Partnership                
• Kevin Rush, Glasgow Regional Economic Partnership

Observers

• Christine Mulligan, Skills Development Scotland (SDS)
• Aoife Keenan, Scottish Funding Council

Scottish Government

• Cornilius Chikwama, OCEA, Scottish Government
• Karen McAvenue, Regional, Scottish Government
• Phil Raines, Rural, Scottish Government
• Julie Ann Bilotti, Fair Work, Scottish Government               

Regional Policy Secretariat

• Dr. Rachel Phillips, Scottish Government
• Fiona Loynd, Scottish Government
• Sean Jamieson, Scottish Government
• Hannah Reid, Scottish Government

Apologies

• Jennifer Tempany, Forth Valley Regional Economic          

Items and actions

Welcomes and introductions

David Bell welcomed members to the fifteenth meeting of the group and first under the new scope and title, the Regional Economic Policy Advisory Group (REPAG). In light of the increased membership following this, Professor Bell asked all members to introduce themselves before moving onto the first substantive agenda item regarding the UK Government’s (UKG) recent White Paper Publication on Levelling Up.

The Levelling Up Agenda White Paper – overview and initial reactions

Members welcomed the recognition given to a regional focus noted in the UKG’s Levelling Up White Paper however questions were raised regarding how the UKG aimed to achieve its goals for ‘Levelling Up’ with little clear consideration on how it intends to create private sector growth or tackle inequalities.

Additionally, the group highlighted the lack of future planning in way of skills or the just-transition as a method of achieving the general aims of the Levelling Up Agenda.

Members did however note that the creation of a Islands Forum may offer a platform to ensure that island and rural communities are properly considered in the development of the Levelling Up policy Agenda going forward.

The group highlighted the lack of clear consideration of the proposed governance of the Levelling Up Agenda with the creation of annual reporting and Ministerial Council not offering a clear system of accountability.

Members raised concern regarding the lack of substantive policy development within the white paper with no clear strategic objectives being provided and little additional funding being offered at this stage.

Whilst the additional Research and Development funding announced for the Glasgow Region was welcomed by members with the group noting the need for growth in this sector in the south-east, members noted that much of the document lacked substantive detail on how the UKG plans to achieve its aims.

Members noted that whilst some of the aims of the White Paper’s ‘12 missions’ were positive with proposed improvements to transport and digital connectivity there are concerns on how the UKG planned to achieve these.

Members raised concern that the UK Shared Prosperity Fund (UKSPF) was to be used as the main funding stream to achieve the UKG’s Levelling Up Agenda and this turn would be detrimental to the initial purpose of the Fund as a set replacement to the achievements of the EU Structural Funds.

UK Shared Prosperity Fund (UKPSF) Pre-launch guidance - overview and initial reactions

Professor Bell thanked members for their comments before requesting that the discussion focus on the UKSPF pre-launch guidance which was launched alongside publication of the UKG’s Levelling Up White Paper.

Focus of the fund

Members noted that there was a lack of information regarding the key priorities of the Fund noted within the pre-launch guidance.

Similarly, the group raised concerns that the general focus of the Fund (with mention of tackling graffiti and improving bus shelters) was unclear in how it would succeed in making substantive change or tackle regional inequalities. 

Allocation of funding

Members welcomed the change in dir.ection of allocating funding from a challenge fund model which had been seen in the pilot Community Renewal Fund toward one based more on allocation of need. However, it was noted that due to a lack of information on the methodology proposed in UKSPF’s allocation more questions are still to be answered.

Whilst members noted that the UKSPF would have both a revenue and capital spilt it remained unclear what form this would take.

The group raised major concerns over the lack of acknowledgement of the third-sector in the UKSPF pre-launch guidance. Despite having played a significant role in delivery of the current EU Structural Funds no mention of them is referenced by the UKSPF. The group suggested that further reassurance must be sought to ensure charities were not precluded from the Fund.

Members raised concern that the finance allocated for the UKSPF would not act as a sufficient replacement to EU funding and that Scotland would lose out as a result. Noting that this was even more pertinent following UKG’s decision to dilute the UKSPF by ring fencing some of the Fund to deliver its Multiply programme. 

The group noted that the UKSPF pre-launch guidance made clear that the UKG’s £559m Multiply Programme, to enhance numeracy across the UK, would be split with £430m in funding for local interventions and the remaining £129m being utilised by the Department of Education to deliver a national digital numeracy platform (amongst other intentions). This is concerning as that even less of the UKSPF will make it into the hands of communities ‘on the ground’.

Similarly, members highlighted the continued lack of information by the UK Government regarding the replacement of the LEADER Programme which would no doubt see the UKSPF diluted further in order to cover this loss.

Governance and delivery

The group stated their concern over the UKG’s ability to govern and deliver the funding coherently, notably highlighting the tight timescales set to both Local Authorities in order to develop Investment Plans and the tight timescales for UKG to assess them. This concern was evidenced from the delays UKG experienced assessing similar funding streams, e.g. CRF, LUF.

It was also highlighted that the whilst the specific reference to regional focus was welcomed, similar to what the Scottish Government had proposed in their approach to the UKSPF, there was many questions still to be answered regarding the mechanism for delivering the Fund and how this approach would be implemented successfully.

Timescales of the fund

Concerns regarding capacity was also highlighted due to the timing of the Fund’s release coinciding with the second round of the Levelling Up Fund which members stated will place greater strain on Local Authorities in order to apply for multiple streams of funding.

Members agreed that the time required by Local Authorities to develop robust Investment Plans ahead of summer 2022 without the release of a comprehensive prospectus would properly mean that funds from the UKSPF would not be in hands of local communities until the 23/24 financial year.

Members suggested that the group should be proactive in ensuring that the money is used to best effect where possible. It was suggested that the newly proposed UKG’s Islands Forum be used as a platform for this.

Action 1: group Secretariat to consider how the group can use the newly proposed Islands Forum as a platform to raise their concerns regarding the delivery and development of the UKSPF.

Regional Economic Policy review update (presented by Rachel Phillips)

Professor Bell thanked members of their comments before asking Rachel Phillips to give the group an overview of the Regional Economic Policy Review currently being carried out by Scottish Government.

Rachel Phillips updated the Group on the review and its purpose, noting the commitment to it made in both NSET and PfG.

Rachel noted that this Review will accompany the National Strategy for Economic Transformation offering an insight into the current landscape of regional economic development in Scotland before providing recommendations on the future of regional policy for Scotland. The review will evidence why, and in which policy areas, economic development works well on a regional scale.

Work by Scottish Government officials is currently underway to draft initial versions of Paper 1 and Paper 2 which will discuss the previous and current status of regional economic development carried out in Scotland and offer a comparative analysis of Scotland’s regions.

Rachel noted that a schedule of consultation is being undertaken with internal Scottish Government officials and wider stakeholders however this process was prolonged due to the delay in the publication of the UK Government’s Levelling Up White Paper. It is anticipated that these Papers will be ready to be considered by REPAG members at the next meeting of the group in March.

Any other business

Professor Bell thanked Rachel for her update and noted that the next meeting of the group in March will discuss the initial draft of Paper 1 and Paper 2 of this Review, before inviting members to raise any additional business items.

With no further comments, David Bell thanked for all attending and concluded the meeting by stating that an availability request will be provided to members shortly after this meeting to schedule the next meeting of the group.

Action 2: group secretariat to share initial drafts of paper 1 and paper 2 ahead of the next meeting of REPAG 

Action 3: group Secretariat to check members' availability before scheduling the next meeting of REPAG for late March

Action log

• group Secretariat to consider how the group can use the newly proposed Islands Forum as a platform to raise their concerns regarding the delivery and development of the UKSPF
• group Secretariat to share initial drafts of paper 1 and paper 2 ahead of the next meeting of REPAG
• group Secretariat to check member’s availability before scheduling the next meeting of REPAG for late March