Tuesday 19 October 1999
[THE CONVENER opened the meeting at
(Hugh Henry): Good afternoon, ladies and gentlemen. Welcome to the
sixth meeting of the European Committee. I apologise for the cramped surroundings
in which we find ourselves. It is somewhat ludicrous, given that this is
the only committee that is meeting this afternoon, that we have been pushed
into this small room. I believe, however, that precedence has been given
to the Enterprise and Lifelong Learning Committee that is on its way to
Inverness. The microphones have been purloined from the committee meeting
rooms upstairs to allow it to have its meeting covered. It is absurd that
we are meeting in such cramped surroundings on a very important issue that
is of significant interest throughout Scotland. A number of people have
had to be refused entry.
We have with us this afternoon Jack McConnell, the Minister for Finance,
to discuss European structural funds. Jack has to be away just after 3.20,
so we will aim to finish about then. I also propose to take the special
programme for the Highlands and Islands first, and to try to keep the discussion
of each part of the agenda discrete.
Minister, before I invite you to make your
preliminary presentation, I would like to say, on the committee's behalf,
that we are extremely concerned by the documentation that we have received
and by the time scale in which we received it. I know that you also suffered
delays in getting the document, but we feel strongly that we cannot do
our job properlywe cannot give adequate scrutinyin the very short space
of time in which the document has been before us. Worse than that, the
document is full of gaps. There are certain pieces of information that
we still do not have, and others that we received only belatedly. The feelingrightlyis
that if the committee is to do due justice to the process, then in future
there must be some improvement in any similar documentation that comes
before the committee.
for Finance (Mr Jack McConnell): Thank you for a warm welcome to a
welcoming room. I agree that this is an important meeting of the committee.
not match that importance, I hope that our discussion will.
There are three issues before the committee
this afternoon, but before I address them, the committee should be aware
that Donald Dewar and I had a very productive introductory meeting during
Scotland week in Brussels last week with the new commissioner, Michel Barnier.
He is a French regional politician, and he has an affinity for Scotland
that we welcome, given his responsibilities for the next few years. We
have invited him to Scotland and we hope that he will take up that invitation
in the months ahead. It is early in his days as the new commissioner with
responsibility for structural funds, but we were struck by his commitment
to the funds as a strategic economic tool, and by his commitment to regional
and national identities within the context of the European Union. He recognises
that as part of his work. He will be a tough commissioner to deal with,
but I think that he will be a friend for Scotland. In the context of our
success in Scotland over the last 50 years in dealing with the European
Commission that is good news.
As an introductory comment to our discussions,
I would like to say that Commissioner Barnier is as committed as we are
to a strategic approach to the use of the structural funds. He does not
see them as a stopgap funding measure for local public bodies or others
to use to fill gaps in provision or to deal with temporary local difficulties.
He sees them as a strategic economic tool. Our job over the next few months,
as we agree these plans and have them approved by the Commission, is to
ensure that in six or seven years' time the plans have put us in strong
economic circumstances so that, as enlargement occurs and our eligibility
for structural funds inevitably decreases, we are not left with wasted
opportunities. That is my approach and, I think, that of the new commissioner,
which is good news for us.
We had hoped to have a draft plan for the
new objective 3 today, but it has proved difficult to agree speedily a
percentage allocation for Scotland in the new objective 3. There is going
to be a Scottish-wide programme for the European social fund and for the
new structural funds and we want to ensure that we get the clearest agreement
possible on the percentage of UK resources that will come to Scotland as
part of that. It would not make sense to produce a draft plan until we
know what that figure will be. As soon as we have that figure, we will
start to work with the plan team and with department bodies to produce
a draft plan that will be with this committee before any final decisions
are made. You have my guarantee of that.
I welcome the opportunity that this meeting
will give me to comment on the programme
and the monitoring committees. Those reviews are important and I hope that
we will have some time to touch on that at the end.
This committee has probably met about a
week earlier than we would have likedand I suspect that that is true for
everyone involved in the Highlands and Islands plan. An extra week would
have given those preparing the plan more time to give you full notice of
the documentation, which in turn would have given you more time to consider
it in detail. We must, however, agree a plan to go to the Commission by
31 October and we intend to do so.
The plan is based on a partnership approach
and on consultation at a local level, and I am very keen to listen to the
committee's views and take them on board before any decisions are made.
That is what the relationship between ministers and committees in the Parliament
should be. I am not here today to tell you that I have already seen these
documents and made decisions about them. I am here to listen and I hope
that we will have a chance to take your views on board. With me are Doreen
Mellon, Colin Imrie and Jim Stephen, officials who have been working on
this document and on other objective 2 matters. They will help me out with
some of the substantial technical details that are in the plan and about
which some committee members might want answers. I might need some assistance
with those details.
I recognise that, in particular, the agriculture
and fisheries sections of the plan were circulated very late. Some members
may not have seen those sections prior to their arrival here. Given the
circumstances, I would be perfectly happy to accept comments from committee
members on those sections, preferably in writing, by this weekend. That
would give us time to look at them in advance of decisions next week. If
members want to take time to consider things and to consult locally, I
would be happy to accept comments later rather than to force a discussion
Today is a very important occasion for
the committee and for the Highlands and Islands. The success of the UK
delegation in Berlin, led by the Prime Minister, in achieving these resources
for the Highlands and Islands cannot be underestimated, but our success
in implementing the resources and plans over the next seven years will
be much more important. The purpose of the plan is to set out, in early
terms, how we intend to spend the €300 million that were allocated,
under the various structural funds, to the Highlands and Islands composite
The spending of that money should be put
in some perspective. It is substantially less than the Scottish Executive
currently provides to public bodies in the Highlands and Islands through
||aid to local authorities,
to the enterprise companies and to the Crofters Commission, and through
the common agricultural policy. It is not the most dominant piece of public
expenditure for the Highlands and Islands over the next seven years. Therefore
it should, to some extent, follow local priorities rather than set them.
None the less, the money is substantial and is an important part of our
ability to ensure that the Highlands and Islands are prosperous.
I am also conscious that, because the plan
must meet European regulations and work within the framework of European
guidelines, it is not exactlyas David Chalmers might have said at a previous
committee meetinga reader-friendly document. That is to some extent inevitable,
and I hope that, in discussions like this one, we can tease out some of
the details. At the end of the process, either when we finally submit documents
to the Commission or, more realistically, when the Commission has approved
the plan, I hope to produce a reader-friendly version. People who live
across the Highlands and Islands should know what the strategic plan is
and have an opportunity to engage with it.
It is important to stress that the document
is enabling rather than prescriptive. It must stand the test of seven years,
and it must be able to see the various structural fund spending through
over that seven-year period. Given the pace of change in this region, as
everywhere else in the world, it would be wrong to be too prescriptive
at this stage about exactly where the money will be targeted and spent.
Our overall objective must be absolutely clear, and we must see it in the
context of a long-term plan. The criteria for objective 1 status enjoyed
by other parts of the European Union were not met by the Highlands and
Islands, but they are part of the reason for this grant aid to the region.
The criteria are about low GDP, sparsity of population and disparity of
social and economic success across the region. We must tackle those underlying
problems if this set of structural funds is to be put to the best possible
Our objective is to raise incomes and prosperity
across the Highlands and Islands region. That means that over the next
seven years we must ensure that the sort of growth and success that is
currently being enjoyed by Inverness, for example, is shared by other communities
in the region. That is the kind of strategic approach with which we are
working, always taking into account the two important priorities set by
the European Union for structural funds and for other Commission activities:
sustainable economic development and equal opportunities.
As the committee will have seen, the draft
plan contains a vision for the Highlands and Islands with a local and national
policy context. There is a section on the alignment of the plan with European
Commission guidelines, which contain a long and detailed assessment of
the area and its economic sectors. The plan also has a section on strategy
and priorities. Although, as ever in such matters, financial allocation
to priorities will cause most concern when we begin to agree the detail
of the plan, I believe that strategy is just as important an issue as it
sets the tone of our work. Priorities such as increasing business competitiveness,
creating conditions for regional competitiveness, human resource development
and support for the primary sector meet with the guidance that we have
received for various structural funds. Those have been discussed in detail
locally and are reflected in the financial allocations.
Over the next week, Executive officials,
my colleagues and I, as Minister for Finance, will want to study some of
the financial allocations before we agree the final plan, which is why
I welcome today's discussion. It has already been suggested that allocations
for water sewage provision, for the environment, forestry and rural heritage
line and for fishing and agricultural support could all be increased. However,
we cannot increase all those allocations without decreasing allocations
to other areas. I will certainly welcome the committee's comments about
the overall strategy, the priorities that have been set out, the financial
allocations and the presentation of the plan itself and I hope that, on
that basis, we can have a fruitful discussion.
The Convener: Before I throw the
meeting open to questions, I want to raise a few points. Early in your
introduction, Mr McConnell, you mentioned that you would have preferred
to have this discussion a week later. I think that we all would have preferred
that. Among other things, it would have avoided the problem of having to
convene a meeting this week. However, we were advised that, because of
the time scale, next week would have been too late. It is unfortunate that
we are discussing a document that is, to say the least, incomplete.
One of my general concerns is that, although
the document is a weighty tome and is full of facts and figures, it lacks
some of the strategic vision that you mentioned and is weak in many essential
details. I hope that we can tease out some of those details in the course
of our discussion. I am aware that this is the plan team's document, Mr
McConnell, not yours and I am glad that you are prepared to listen to our
comments before making a final decision. However, the committee had a fairly
useful discussion when the document was at
||an early draft
stage and, from my reading of the document, it looks as though our comments
have simply been ignored by the plan team in the final document. That is
unfortunate. Maureen Macmillan and other committee members made very specific
comments that seem to have been overlooked. Although I have a number of
questions and comments that I want to make, I will bring in other members
of the committee before I do so.
Mr McConnell: On the point about
the committee's previous discussion, I welcome today's opportunity to find
out the areas of the document where committee members feel that their comments
have not been reflected. I am aware of the plan team's response to the
committee's points and I get the impression that most of those points have
been taken on board.
Dr Winnie Ewing (Highlands and Islands)
(SNP): I will be sad if Mr McConnell will not take questions on the
fishing section of the document, because I have come prepared to ask a
lot of questions about that issue.
However, let me start with another topic
that might be a little off the subject. Does the document spell the end
of the Highlands and Islands Convention? Many convention members thought
that that was a useful arena in which to air problems in the Highlands,
but we still do not know whether the convention will reconvene. Although
that seems to be a separate issue, it is very relevant to the discussion
as it fundamentally affects the Highlands and Islands.
The document contains a description of
the very firm auditing procedure that will obviously have to be in place.
Furthermore, we have been informed about the powers of both the monitoring
committee and the permanent programme executive. However, I have studied
the document and have not been able to find out the composition of those
two bodies. For example, although we have been told that there will be
regional representatives on the monitoring committeeas one would expectwe
have not been told about which regions they will they come from. Will they
come from every region? The issue could become quite a hot potato.
The Convener: Perhaps we could save
that point for the third element of our discussion on the review of administrative
Dr Ewing: Where should I start?
I am sorry that I was unable to come at half-past 1 for the informal meeting.
Should I start at the beginning of the document?
The Convener: There is a separate
item on the agenda on the review of administrative arrangements for the
new programmes. Some of your concerns apply equally to other programmes.
||Dr Ewing: Which
bit of the document are we discussing now?
The Convener: We are discussing
the draft plan for the Highlands and Islands special programme.
Dr Ewing: That is what I am reading
It might be helpful if I said that the document has no details about
the monitoring committee because the review of administrative arrangements
that is taking place also includes the monitoring committee and the programme
Dr Ewing: So we do not know yet.
Although I spoke to Commissioner Barnier last week about our intentions
on this issue, we will not include the final details until the review has
been completed. We intend to have that review to ensure that the best possible
arrangements are in place.
The kind of question that local people ask me as an MSP is whether
they will be on those bodies.
My second question is not really a question.
The monitoring committee decides on the criteria and then the permanent
programme executive decides on what projects to fund. Are there already
many projects in the pipeline or are we now waiting for projects to be
thought up? It is difficult to cost such projects because of all the complicated
rules. What is the state of play? Are we really ready to go or will we
have to pause as the various organisations prepare their projects?
Mr McConnell: I would be very surprised
if organisations in the Highlands and Islands did not have projects in
the pipeline, to use your phrase. However, we are not yet ready to accept
funding applications as we have to agree the strategic plan to give some
context to the applications. Applications have to meet the strategic objectives
and the allocations that are in the document. Although I suspect that active
organisations in the Highlands and Islands have projects ready for the
pipeline, they will have to tailor their applications to the plan that
the Commission finally agrees. Otherwise, resources will not be freed up
The plan will not affect the Highlands
and Islands Convention in any way. Decisions about the convention
are an entirely separate matter.
Macmillan (Highlands and Islands) (Lab): I am still concerned about
the lack of detail in the document. I know that everything seems to have
been done in a terrible rush. However, the document does not tell us what
projects with objective 1 funding have worked or not worked, nor does it
give us details about proposals for the present set of funding. For example,
the Kintyre-Ballycastle ferry crossing is mentioned as having
||been funded, but
I know from experience that the service has problems. Other areas that
are mentioned in the document might also have problems.
Mr McConnell: Doreen Mellon is the
official who has been responsible for the plan team and has been involved
in discussions about learning lessons. It might be more appropriate for
her to answer that question.
Doreen Mellon (Scottish Executive):
The ex post assessment of the current programme does not formally take
place until the programme has ended. That means that there is a hiatus
in timing, which makes it difficult to take on board the lessons that have
been learned in the full objective 1 programme. We have incorporated lessons
that have been learned from the mid-term evaluation exercise. However,
the majority of those are not terribly exciting, as they are administrative
exercises about how we can make the programme work more smoothly, rather
than dealing with the most successful projects that have been implemented.
Although the document mentions some projects from which lessons have been
learned, it does not present an overall picture because of that technical
The Convener: Although I accept
that the evaluation cannot take place until the programme has ended, has
not there been an interim evaluation that has raised criticisms?
Doreen Mellon: That is the assessment
to which I was referring. Most of the lessons that emerged from that assessment
concerned the administration of the programme and the prevention of hiatus.
Those lessons have been incorporated into the current programme.
Macmillan: We have to get this in the proper sequence. We cannot start
giving money to other enterprises if we do not know whether that kind of
funding has worked properly before. We need to know about such things before
we start dispersing funds again. How long will that hiatus be?
Doreen Mellon: As the ex post evaluation
does not take place until the programme has formally ended, it will be
2001 before we can undertake the next evaluation. We can compare the programme's
achievements with the targets that were set for it and whether it has produced
a certain number of outcomes with the funds involved. The results of the
previous programme are recorded in the document. That indicates which projects
have hit their targets most easily and suggests how we can go about quantifying
targets for the next programme, at least in the initial period.
Mr McConnell: Returning
to Mrs Ewing's point, I want to add that one of the reasons that we want
||to review administrative
arrangements is to ensure that committees and executive teams learn lessons
from the past and can deal with new circumstances such as the reduction
in resources and the strategic approach to the end of the programmes in
six or seven years' time. We are keen for the review to take place to ensure
that we have a responsive team and a decision-making structure that will
be able to take on board both positive and negative lessons from the past.
Mundell (South of Scotland) (Con): I welcome that review, Jack, as
I have raised the issue in the committee before.
I was pleased to hear that you will be
flexible about spending, because the amount of money that will go to agriculture€21
million out of a potential €300 millionseems inexplicably low when
compared with the importance of agriculture to the entire area. Furthermore,
the project selection criteria in the document seem unduly restrictive.
Will you take those comments on board?
Mr McConnell: I do not want to be
prescriptive about decisions that will be made on different financial allocations
and I am aware of similar comments by others about the resources that have
been planned for agriculture. However, it is important to understand that
the amount that you mentioned is the allocation for agricultural business
development rather than specific support for agriculture. At the moment,
£95 million a year is spent on agriculture in the Highlands and Islands
through the common agricultural policy. This £21.4 million must be
seen in that context. It is in addition to that and it is about agricultural
business development rather than support for existing farm schemes.
David Mundell: The project selection
criteria are quite restrictive. If people are to diversify successfully,
they must take a few risks, rather than do bed and breakfast or the other
standard businesses that people may be asked to diversify into.
Jim Stephen (Scottish Executive):
Are you reading from the measures for agriculture that have been prepared?
David Mundell: I am reading from
Jim Stephen: The diversification
element has been drawn deliberately wide, so that it covers almost every
diversification possibility from converting buildings for residential letting
through to diversifying into some new agricultural crops. We drew this
up with the members of the plan team and the industry representatives from
Union, the Scottish Landowners Federation and the Scottish Crofters Union.
We cast the net as wide as possible so that projects would not be ruled
out because of over-prescriptive criteria.
David Mundell: I accept that that
is the intention, but think you should have another look at it.
Jim Stephen: We will examine it.
Ben Wallace (North-East Scotland) (Con):
I thank the minister for attending and thank him for twice replying
to the letters that I wrote in the interim between the last reviews. Those
replies were informative.
I have two questions. First, a number of
proposals in the plan mention money being used for the upgrading of the
transportation system to improve competitiveness, the upgrading of sewage
outlets and the like. Do you think that it is appropriate that European
funds be used for upgrading sewage outlets, which is already a duty of
the water authorities, and to improve the roads, which is probably in the
Executive's transport budget. Is that an appropriate use of the funds?
The funds are not as great an amount as people like to suggest in comparison
to what the Executive already spends in the Highlands and Islands.
Mr McConnell: That is an important
question. It is the sort of question that I ask regularly. The uses to
which those funds can be put do not include projects that would be a statutory
requirement of an existing Government or local government programme in
Scotland. Those funds are in addition to those projects. In the Highlands
and Islands, we must recognise that transport or water and sewerage provisions
and improvements may be required that are clearly statutory requirements.
However, there are projects that could also be pursued relating to both
those headings that are not statutory requirements, but would help to achieve
the outcomes desired in this plan: to reduce disparity between different
communities across the Highlands and Islands and to improve its economic
infrastructure. It would be against the objectives and criteria set by
this plan that any projects under those headings would take the place of
proper funding for statutory requirements that should be met by us or by
local government in Scotland.
Ben Wallace: My second question
is about a matter that was raised in the committee last timeventure capitalists.
We were concerned, because it is the last funding of sustainability, that
we introduce venture capital.
It is in your wider priorities that we
stimulate the private sector and new business. On page 96, it states that
private or one-off applicants will
applications and that:
"Such individual applications will require
a public-sector sponsor."
What public sector sponsors are envisaged?
Is it the enterprise companies alone, do you have any other agencies in
mind, or do you intend to create other agencies?
Doreen Mellon: This is part of the
accountability exercise in relation to the funds, so that we can ensure
auditing and control of the money as it is spent. On that particular scheme,
it is more than likely that the sponsor would be Highlands and Islands
Enterprise or the local enterprise companies, but others, such as local
authorities, would not be banned from being public sector sponsors for
that area, as that has been the case in other areas.
Tavish Scott (Shetland) (LD): Ben
Wallace asked an important question about waste water, because any small
town in the Highlands and Islands with under 10,000 inhabitants, of which
there are many, will be non-statutory by definition. Some of us may question
what the North of Scotland Water Authority's capital programme is about.
I will focus on the support for the primary
sector, particularly the fisheries measure and the amount of money that
is to be allocated, under this draft plan, on page 136. My concern is that
we are going backwards in terms of funding the fisheries sector.
You rightly made a point about a strategic
economic tool. I would argue that, in the context of this plan, fisheries
delivers more strategic economic outputs than many other areas. If you
take the five years of funding under the first objective 1 programme, when
you added financial instrument for fisheries guidance and Pesca funding
together, less money is now spent in a seven-year period. You encouraged
people to make representations to you about increasing funding in certain
areas, I think that you can justify an increase in FIFG funding to achieve
the objectives that we all want to achieve, and do that by reallocating
within the overall allocations. Fisheries, whether the catching, aquaculture
or processing sector, have many strategic objectives, such as adding value
and ensuring that the product is processed in the Highlands and Islands
and not outside it, that meet many of the economic output requirements.
There should be a strong pitch for more funding in this area.
Mr McConnell: To link those two
questions, it is important to note that one of the areas in which money
allocated for water and sewage projects could be of direct benefit to business
development is fish processing. While there is a figure for fisheries regulation,
it is subject to some
many of the other allocations will include elements that will benefit not
just fishing but farming, to come back to Mr Mundell's question.
We must be creative in our interpretation
of the description of business in the Highlands. Partly because of the
European priority given to them over the past decades there is a tendency
to treat fishing and farming as separate from the rest of business and
economic development in Scotland, when they are integral and central to
business and economic development in much of rural Scotland. It is important
to bear that in mind. Projects will come up under other allocations in
those headings that will be of direct or pump-priming benefit to fishing
and to agricultural economies.
If any member would like to make more detailed
comments on those sections that were circulated late, I would be happy
to receive them.
Tavish Scott: I do not disagree
with that at all. I possibly agree with it, as my point is that they are
businesses and they need that kind of support, because it will make a difference
in a fragile part of the world. The FIFG measures were oversubscribed last
time round. Doreen Mellon will know this from the facts and figures. I
have some of those in front of me and I will not bore you by going into
them. However, because those are oversubscribed and as they are business
investments, I would argue that this is a crucial sector, which should
receive a higher allocation. You know that by making this kind of investment
you will, to some extent, achieve your economic objectives.
Allan Wilson (Cunninghame North) (Lab):
My comments are on much the same lines as the previous two speakers.
I am surprised at Ben coming back to infrastructure, given the committee's
previous discussions on the strategic importance of infrastructure projects
to developing the economy of the Highlands and Islands. Are you happy that
the strategic objective of reducing disparity across the region, so-called
internal cohesion, has been properly met in the draft financial allocation?
Infrastructure projects require greater emphasis than has, arguably, been
given. At the previous committee meeting, I talked about the weaknesses
in the sectoral overview; for example, the exclusion of the transport and
construction sectors. Are you satisfied that those weaknesses have been
addressed and that improvements in transport and infrastructure will be
possible to stimulate growth in related economic activity? I agree that
improving water quality is of benefit, not just to agriculture but to fishing
and tourism as well. External cohesion is addressed by targeting the funds
in the Highlands and Islands to bring them up to the European average.
If we are to reduce the social and
within the Highlands and Islands and address internal cohesion, infrastructure
projects are vital. The emphasis should be more on infrastructure projects
and creating the conditions for regional competitiveness than it currently
Mr McConnell: In my introductory
remarks, I was careful to say that one of the main objectives in preparing
those plans must be to ensure that we operate within the overall European
Commission guidelines. Therefore, although sometimes what we would like
to do with 300 million euros does not necessarily fit with those guidelines,
the plan must be put together according to those.
I understand that the plan team has taken
on board, at least partially, the comments made by the committee on this
the last time round. I would be interested to hear if members think that
it should go further. We must also bear in mind that as well as investment
in infrastructure, it is important that the other elements that make up
the overall Highlands and Islands structural funds programme are accounted
for. As the plan currently stands, by far the biggest investment is in
the communications infrastructure.
We must be aware of the need for not just
transport infrastructure but telecommunications infrastructure, if we are
serious about creating jobs for the future rather than preserving jobs
from the past in the Highlands and Islands. Some of the more exciting developments
in the Highlands in recent months have involved new technology being used
on a small scale in rural communities, to link public and private in a
way that creates jobs locally and helps save or develop local public services.
Where that is possible, and structural funds can be used to pump-prime
those developments, that would be good news in the long term. That is the
direction in which we must go to spread economic growth across a wider
area than the immediate environment of Inverness.
We must be aware that changes will take
place over the next decade across the Highlands and Islands, at Dounreay
and elsewhere. There will also be changes in the economies of the islands.
Those factors must be taken into account. That is why the plan must have
flexibility in it at this stage. We will be responding to events as well
as working within an overall framework.
Allan Wilson: I was pleased that
emphasis was placed on creating conditions for regional competitiveness.
I am concerned that the mechanism must be there to ensure that it is targeted
within the region to ensure that disparities are addressed. The mechanism
must address the obvious disparities within the region.
Mr McConnell: One of the ways to
influence that will be the criteria for project choice, against
for projects will be judged. That will arise out of this plan once it has
been agreed. It will be used by the programme executive, to which Mrs Ewing
referred earlier. The programme executive will not select projects as the
monitoring committee does that, but it will analyse projects in comparison
to the criteria and objectives set in the plan.
Bruce Crawford (Mid Scotland and Fife)
(SNP): I thank the minister for some useful answers. I would like to
know what strategic approach is being taken to the end of the transition
period. At the moment we have, effectively, a blank space. I want to tease
out how we might deal with that by seeking flexibility in Government expenditure.
On 8 October, Donald Dewar was quoted in The Herald newspaper as
"If money from Europe goes up then the
money we get from the Treasury would go down because we can't go above
what we are entitled to under the Barnett Formula."
I presume that the converse is true: if
the Highlands and Islands no longer receive money from European structural
funds, the money that they receive via the Barnett formula will increase.
I am sure that the minister will confirm that. In other words, structural
funds are non-additional to Scotland's overall bottom-line position. If
that is the case, at the end of the transition period will the Executive
give consideration to maintaining the level of spending in the Highlands,
because the money will still form part of the Scottish block?
Mr McConnell: Much as I would like
to be able to see seven years into the future of the Executive and the
The Convener: I think that Bruce
Crawford is suggesting that in seven years you and your colleagues will
still be in a position to influence expenditure.
Mr McConnell: I welcome and share
Bruce Crawford: I am grateful to
the convener for his partisanship.
Mr McConnell: It is important that
we plan for the longer term, but it would be inappropriate for me to tie
the hands of future Administrations, even implicitly. However, over the
next six or seven years we have an opportunity to use the European funds
that are availablealong with other substantial public funds that have
been allocated to the Highlands and Islandsin a co-ordinated fashion.
That will ensure that the relative economic prosperity of the Highlands
and Islands does not suffer as a result of enlargement of the European
Union and changes in the global economy, and that that corner of north-western
Europe is in a
position in seven years' time.
I would be very surprised if, six or seven
years from now, a Scottish Parliament and a Scottish Executive that were
serious about their businesswhatever their political colourdid not take
into account the position of the Highlands and Islands when deciding what
to do with those resources, once they have been freed up. However, at this
stage, when we are setting out to be successful in the Highlands and Islands,
it would be wrong to assume failure. Nearer the time, I hope that we will
be able to examine the situation objectively and to make the best judgments
not only for the Highlands and Islands, but for the whole of Scotland.
The Convener: That touches on a
matter that this committee has considered before. Jack, you told the committee
that, because of the way in which the Barnett formula works, there will
be no reduction in overall expenditure in Scotland. Donald Dewar made the
same point to the Parliament. Our concern is that any money that remains
in the block should be used flexibly to meet our priorities. Bruce has
made that point on a number of occasions, and we will have to return to
Bruce Crawford: It is interesting
that the minister used the words "freed up". That confirms that, in the
end, structural funds have no impact on the bottom-line position of the
Scottish assigned budget.
Mr McConnell: Perhaps I should make
myself absolutely clear. It is important that we place on record that in
October 1999 we are not in a position to say what the Scottish assigned
budget will be in 2002-03, never mind 2007. The decisions on the budget
for 2002-03 will be made next year. Our current financial statement outlines
provisional plans for next year and the year after that. As I have said
before in this committee, assuming that current levels of resources and
current assigned budget levels are maintainedbecause we cannot predict
the outcome of general electionsthe resources that have been allocated
will remain part of our assigned budget. As less money is spent from European
structural funds, surpluses will be freed up to be used for other purposes.
However, at the moment we cannot say for certain what the level of the
assigned budget will bewhat it is now, what it is now plus inflation,
or what it is now plus anything else that is allocated to Scotland's needs
over the next seven years.
We must not raise expectations that the
funding that is currently available will be guaranteed for all time. We
have a seven-year programme of €300 million, and we must make best
use of that. We must try to create the economic conditions that will make
that money unnecessary in seven years'
a strong Highlands and Islands that can survive economically without it.
Bruce Crawford: I realise that we
do not want to stray too much into general issues, but this is an important
point. The minister is confirming that structural funds do not affect the
overall bottom-line budget. I would like to know how the money is accounted
for in terms of the structural funds that are allocated to other parts
of the UK. We can then begin to understand the implications for budgets
south of the border.
The Convener: A similar question
arises with respect to objective 2 funding. I propose that the minister
take note that this committee would like to discuss that point in more
detail, as it affects both Highlands and Islands objective 1 transitional
funding and objective 2 funding.
Bruce Crawford: I would like to
make one more point.
The Convener: Please do so very
Bruce Crawford: We have heard about
how good the outcomes have been, both for the Highlands and Islands and
for the areas covered by objective 2 funding. We have been offered comparisons
with the situation south of the border, but not qualitative information
on what has happened in other EU countries, such as Denmark, Austria, Greece
and Portugal. We need that information to judge how successful we have
been in obtaining structural funds for Scotland.
Mr McConnell: I have tried hard
in the past to provide that information clearly, and I will do so again
First, no part of the European Union with
a GDP per head comparable to that of the Highlands and Islands of Scotland
has received the same amount of money or a special programme. In that respect,
Scotland has benefited more than any other EU state.
Secondly, if the UK's plans for the objective
2 mapwhich we will come to in a minuteare approved by the European Commission,
Scotland will receive an allocation that covers 40 per cent of its population.
That is more than any member state of the European Union, apart from the
four cohesion countriesIreland, Spain, Greece and Portugalwhich have
benefited consistently from a higher level of structural funding than other
states. Finland, with around 31 per cent, is the nation whose population
coverage comes closest to ours. This is a very good deal for Scotland.
Cathy Jamieson (Carrick, Cumnock and
Doon Valley) (Lab): My question relates to a point that I raised previously
and that has not been picked up in this redrafting; if it has, I have missed
it and am happy to be corrected.
||Priority 1 is to
increase business competitiveness, to create employment and to increase
incomes. On a previous occasion, I mentioned the value of the social economy
and looking to the longer term. This is not about only the public and private
sectors, and it is not enough simply to add not-for-profit organisations
to your list. Co-operatives and similar developments may provide an opportunity
to create sustainable community businesses. That model is understood in
Europe and would be easy to transfer to the Highlands and Islands. However,
the philosophy behind it is not evident anywhere in this document.
Doreen Mellon: Priority 2, measure
5, which relates to the community and social infrastructure, has been adjusted
since we received the committee's previous comments, to deal with the point
that Cathy Jamieson has raised. She also mentioned capacity building, and
it has been made more explicit that increased provision would be made for
that in regard to human resource development.
The Convener: Winnie, you had a
Dr Ewing: I thought that you had
ruled out discussion of fishing. Perhaps I misunderstood you, because immediately
afterwards another member raised a point about fishing.
I have many questions but, rather than
take up too much of the committee's time, I will mention only one of my
concerns. This document refers to modernisation grants and new building
grants, but I was under the impressionperhaps I am out of date, as I have
not been a member of the European Parliament since Julythat, under the
multi-annual guidance programme, we do not have access to those grants.
I do not need an answer now, but I would like a note on where we stand
with regard to the MAGP. We seem to have lost out because we do not meet
the criteria. I often wonder why we allow our part-time vessels to be included
on the register when other EU states do not, and whether that is what places
us above the MAGP threshold.
The Convener: Can you arrange for
Dr Ewing to be sent a note, minister?
Mr McConnell: Certainly. This is
one of several issues that have caused a delay in the drafting of this
section. We hope that the implementing regulation, when it is finally published,
will clarify the matter, but I will ensure that Dr Ewing receives a note
about it. I also take on board Cathy Jamieson's point and will ensure that
the thrust of what she has said is reflected in the plan in its final form.
The Convener: We have run out of
time, but I would like to make a number of points for the record. Perhaps
the minister could consider them after the meeting.
||In future, it would
be helpful if annual reports and the minutes of the programme monitoring
committees were to come before this committee for consideration.
The document has significant weaknesses
as regards consultation. The section on consultation has nothing in it;
given the emphasis that the Commission has placed on consultation, that
is a glaring weakness. I would like to know, too, whether the extensive
external consultation that has taken place in other parts of Scotland,
right down to community group level, has also taken place in the Highlands
There is a reference to social inclusion,
but the document does not flesh out how that is consistent with the Executive's
aspirations in that area. I would like that to be firmed up.
I also want to know whether the plan has
followed the checklist of chapter headings that was issued by the European
Commission. There have been suggestions from a number of quarters that
there are tensions between partners and Highlands and Islands Enterprise.
At some point, I would like to know whether the Scottish Executive has
been aware of those tensions and, if so, what has been done to resolve
There are also some weaknesses in the draft
as regards the national policy context. Might the Commission not be concerned
by the relatively inward-looking nature of the plan, which fails to place
the Highlands and Islands in a Scottish context? A number of members have
spoken about integration and a more strategic view, but the document remains
weak in that area. There is no recognition that this is not simply a continuation
of previous programmes; in other words, that we should not just be pursuing
more of the same. We should be looking at the Highlands and Islands as
a transitional area with an enhanced financial allocation.
I am not convinced that the plan complies
with the sustainability criteria that have been set down, and I do not
think that there is a proper relationship between economic analysis and
the strategy for use of the funds. The document fails to justify in detail
its proposed use of the funds. I have already mentioned the lack of policy
coherence with the Scottish Executive's priorities.
Some of what I am saying poses questions
about the role of Highlands and Islands Enterprise as the key organisation
in the area. I do not think that either the Scottish Executive or the programme
management executive should take the main responsibility for any weaknesses
in the draft plan. We slipped upbut it is part of our learning experiencebecause
||should have got
the plan team and Highlands and Islands Enterprise here, and we should
have subjected them to a more rigorous analysis before we invited the minister.
There are some problems with the suggestion
of area targeting. I do not think that the document justifies area targeting
enough, and there is little or no integration of rural development regulations
or fishery development regulations. It has been a whirlwind, and I have
not had time to flesh out some of that, although there are pointers that
I did not want to be missedthat I wanted this committee to have the opportunity
to considerand I apologise for that.
Mr McConnell: There are a number
of statements there that demand a response at the very least. Having heard
a list of them, we should produce a written response for you, as convener
of the committee, that would go on the record and could be circulated to
committee members at the next meeting. There are one or two helpful comments
that I could make. A draft of the consultation section of the paper was
circulated on Friday, with the other papers that the clerk received. That
draft is not complete, as the document is still in the consultative process.
A factual statement about consultation will be completed at the end of
the full consultation period, and will include consultation with this committee.
While the Scottish Executive is not directly
responsible for writing and producing this document for the committee,
ultimately we are responsible for ensuring that this document is a success.
I take that responsibility fully, which is why I am here today to listen
to the committee. We must ensure that the document complies with the Commission's
guidelines as well as our own local desires. That is why it is importanthowever
difficult it might be, from time to timefor us to work in partnership
locally. That can be difficult; it is not always a smooth path, but it
is the best way. It is a model that is used throughout Europe, and which
is based on the Scottish experience.
Rather than take up more time this afternoon,
convener, I would welcome the chance to respond in writing to the points
that you made at the end of the discussion. I would appreciate it if that
response were distributed among committee members with the next agenda.
The Convener: That would be helpful.
Thanks very much, minister.
I am aware of the time and of the committee's
interest in the next itemobjective 2 funding. I invite the minister to
make a brief introduction.
Mr McConnell: There are several
points to be made about the detail of the announcement of the UK's submission
to the Commission, and on the
First, I would like to make it absolutely
clear that, despite the disappointment for some areas, and a trend that
will continue in future years, of Scotland's relative economic prosperity
resulting in a decrease in the overall population coverage and the allocation
of objective 2 funding, we welcome the UK Government's proposals to the
Commission. We were fully involved in their preparation. That was a good
example of the Scottish Executive and the Scotland Office working together
with the Department of Trade and Industry, and we hope that we have achieved
a package that meets the twin objectives of working within guidelines that
will be acceptable to the Commission and targeting as many needful communities
as possible throughout Scotland.
I recognise that there will be organisations
working in communities throughout Scotland that will be disappointed by
some of the exclusions from the map. However, this map is a significant
improvement on the situation four months ago. The breakdown of areas to
groups of council wards is of direct benefit for communities throughout
Scotland. It has been achieved after much discussion and through a welcome
persistence on which I congratulate Scottish politicians and officials.
It was vital that we focused as much as possible of the declining resources
on areas of need. Having said that, we have still managed to achievein
spite of the fact that most of the recognised regions of England have a
significantly lower gross domestic product than Scotlandmore than 40 per
cent population coverage on the map. That is good news for us. If the Highlands
and Islands coverage is included, it is well beyond the EU-wide average
and the average of the other member states, apart from the four cohesion
European structural fundseven objective
2must be seen in context; they are only a small part of Government and
local government public expenditure in Scotland. However, they are an important
part; they are well used and much needed by the communities that are affected.
Although the total for the main fund will be just under €600 million
over the next seven years, and the transition fund will be just more than
€150 million, that is still a substantial amount of money that must
be spent to the greatest effect. I am keen for us not only to target the
main fund as effectively as possible within the guidelines, but to target
the transition money to help particularly those individual communities
that, because of isolation, statistics, or their location in relation to
other areas, have been missed out on this map. I will take a personal interest
in ensuring that that happens. We must be flexible in our approach to the
allocation of resources. We must consider how the use of objective 2 money
can be linked to the
||new objective 3
fundingwhich will cover the whole of Scotland, although the objective
2 areas will have priorityand we must continue to meet criteria as we
This was not an easy map to put together.
It has not been an easy set of proposals to put together. It has not yet
been agreed by the Commission, and may yet be rejectedwhich would leave
more communities in Scotland disappointed. However, we have done our best
to meet the industrial, urban, fisheries, and rural criteria, and we have
done so in substantial enough groups of wards to make the case for a substantial
community of interest, to meet relative needs. We hope, therefore, that
we can proceed to implement both the main fund and the transition fund
in a way that will see us through the next seven years. After that, I think
that we will find ourselves in a new, enlarged European Union, in which
there are communities, particularly far to the east, that will need this
money more than we do in Scotland.
The Convener: Those who are involved
are to be congratulated on some of the things that have been achievednot
least of which are the ward-based allocations, which have been important
in Scotland. Overall, there is a positive story to be told. There will
undoubtedly be some questions about the areas that have been identified.
Andrew Wilson (Central Scotland) (SNP):
I am grateful to you, convener, for allowing me to speak, as I am not
a formal member of this committee. In the context of objective 2 funding,
I would like to clarify some of the points that Bruce mentioned a moment
Minister, you said that we have benefited
more than any other European Union states, with one or two exceptions.
You also mentioned the achievement of 40 per cent population coverage.
The question, however, is this: how does that coverage compare with the
UK average? Given that, in any structural fund allocation, we cannot get
more than a Barnett formula share, that does not do Scotland any good whatsoever.
The statement that we have done better
than any other European Union state is not accurate. If we are getting
only the average of what the UK is allocated in terms of the bottom-line
budget, all these debates, negotiations and discussions have not come to
much. They affect the Highlands and Islands, and the other regions that
are concerned, but only in the context of the Scottish budget, which itself
has not gained. Is that the case?
Mr McConnell: I shall try again
to explain this. Every time I try to explain it, I think that I am getting
somewhere, but at other times I have my doubts.
We now have devolution and an assigned
budget. That assigned budget includes the
||provision for European
Union structural funds that existed in the former Scottish Office budget.
It amounts to something between £160 million and £170 million
for each of the next three years. That money is in the budget. As the population
coverage and the eligibility for funds for Scotland decreaseas Scotland
is relatively more economically prosperous than it was in comparison with
other parts of the European Union and other parts of Britainthose funds
are released for us to choose how we spend them. It is hard to find an
easier way to describe that situation.
If, for example, by year 7 of this programme
we were spending, across the Highlands and Islands objective 2 and objective
3 programmes, say, £130 millionif we had the same level of assigned
budget and if that budget line had not changed, although the Parliament
could vote to change it by vetoing the Executive's budget and the Executive
could propose changes to its own budget over the next seven yearsthat
would mean that £40 million could be spent flexibly, either on economic
development programmes throughout Scotland or on other things. A point
that I have been trying to make for three months is that one of the benefits
of devolution is the way in which the assigned budget has been set, which
enables us to make our own decisions about how we spend it. That is a good
thing, and I hope that all parties will collectively welcome it.
The Convener: We have only 10 or
15 minutes left for this item. Unfortunately, we do not have time to tease
that point out, but I shall do so. The notion of the assigned budget and
its relationship with European funding can be tabled for further discussion
in the committee.
Bruce Crawford: Would that include
inviting the minister back?
The Convener: If necessary, we will
invite the minister back. There is no difficulty at all in doing so.
Dr Sylvia Jackson (Stirling) (Lab):
Jack, you might know what I am going to ask about.
Mr McConnell: It is not an area
that I live about half a mile from, is it?
Dr Jackson: It is not just that
area. The last time you came to this committee, you stressed the importance
of trying to address the areas of greatest need in terms of objective 2
funding, and to do so on a ward basis so that that funding would be focused.
In your statement to the press, the firm impression was given that there
would be a useful complement of objective 2 funding and the assisted areas
It is my assertionbased on the experience
of a number of areas in Stirling, Falkirk, Dundee,
and Butethat that has not happened. Some areas that are severely disadvantaged
have not been covered in this map of objective 2 funding. I shall give
some examples of the type of deprivation that we are discussing. Dudhope,
in Dundee, has an unemployment rate of 17.7 per cent; Craigmillar, in Edinburgh,
has an unemployment rate of 15.8 per cent; Gowanhill, in Stirling, has
an unemployment rate of 14.7 per cent. If one were to take the worst areas
for unemployment, within the 10 per cent range, the result would be a population
coverage of 62,000.
There are 16 wards that have not been covered.
There must be either some sort of tinkering with the objective 2 settlement
that we have or some other mechanismwhether the gap funding that we have
been talking about or targeting of the transitional moneyswhereby those
areas within that 10 per cent range can be dealt with in the same way as
the objective 2 areas. They would then be able to focus in on the work
that is being done and could capitalise on that to achieve sustainability,
which is one of the principles of the objective 2 and European structural
funds. Objective 3 funding will not miss those areas, as they are not covered
by objective 2 funding.
The Convener: We should leave the
answer on objective 3 funding until another time.
Mr McConnell: It will take me only
a few words to answer the question: objective 3 funding covers the whole
Dr Jackson: Yes, but I gather that
resources are targeted.
Mr McConnell: Yes. It is important
that we get the targeting right and have flexibility across Scotland. Funds
are targeted to objective 2 areas and the transition areas. We did everything
we could to consult local authorities. Some provided us with detailed information
about the most appropriate wards, while others were less able to do so.
It was important for us to provide that opportunity. There are wards in
different local authority areas that, if statistics are taken in isolation,
appear to be among the most needy in Scotland. That is why we have to make
the best use possible of the transition funding. If there are any adjustments
to the map, we will continue to bear those areas in mind.
We have managed to negotiate to the point
where we have the maximum targeting that is possible. To focus in further,
with regard to the size of groups of wards, would be difficult and might
jeopardise the whole map, but we will do everything that we can to ensure
that the transition funding is put to the best use. Let us be frank about
this matter: the objective 2 areas that have
||lost their coverage
on the map include some of the most prosperous parts of Scotland. The transition
funding will not be needed in every single one of those wards, but it is
needed, and will be needed, in some parts of Stirling, Dundee, Keith in
Moray district, in some parts of Ayrshire, Falkirk and perhaps in some
parts of Edinburgh. We want to make the best use possible of the transition
funding. It is important that we try to do that without exaggerating the
impact that the funds can have: it is only slightly more than €150
million over the next five or six years, but it is an amount of money that
we can work on.
The Convener: What is driving the
questionas has been commented on by a number of membersis that there
are obvious anomalies, with areas of opportunity being included and areas
of need not being included. We are looking for an assurance that it is
still possible to address any obvious anomalies.
Mr McConnell: It would be wrong
of me to raise expectations that there is some kind of appeals process,
but there is a process of discussion with the Commission about the map
that has been submitted. It does no harm for members of Parliament to make
representations on behalf of particular areas because if, for example,
the Commission said that in general the map was agreeable but certain parts
of it were unacceptable, that might open doors for other areas, but I would
not want to raise expectations. All I can do is encourage members to write
to me on behalf of particular areas and the letters will not only be replied
to, they will be used during discussions if we have the opportunity to
Dr Jackson: May I say one quick
The Convener: We are running out
of time, Sylvia.
Cathy Peattie (Falkirk East) (Lab):
It is important not to underestimate the impact of the funding. It
is a small amount of money, but for Falkirk that means taking a strategic
approach with other agencies to deliver something that is positive. The
funding covers social inclusion partnership areas. We are talking about
unemployment levels of between 12 and 15.5 per cent within communities,
where other moneys have been brought in to try and deal with the issues
of high unemployment and poverty. It is disappointing that whole areas
of Falkirk have not been included.
The Convener: I do not want to cut
off the minister's reply, but I do not want this discussion to start focusing
down on particular areas: it is principles that are important to this discussion.
Mr McConnell: I would be happy to
address Cathy Peattie's points if she writes to me.
||I am conscious
of the fact that because we had to meet the guidelines and the criteria,
and because we had to negotiate down to groups of wards that fitted together
in a way that made a map justifiable, there are parts of Scotland that
appear on the face of it to be among the most needy that are not included
on the map. It is difficult to include them, but it is not impossible for
us to target the transition funding to those areas. I would appreciate
it if members wrote to me about those areas and they can be sure that we
will do whatever we can to try and improve the economic prosperity of those
areas, which is the whole purpose of the funding.
Cathy Jamieson: I will talk about
the same subject, although I will not go into detail about a particular
couple of wards in a certain constituency, because Jack knows them as well
as I do. I am glad that comments that were made at this committee previously
have been taken on board. It is fair to say that there are some areas that
have been included on the map when, in the initial draft, they did not
appear to be anywhere near being considered.
I seek assurances in relation to the transitional
areas. To an extent, we have already had some assurance, in that there
will be a recognition that some areas have been excluded for what might
be called technical difficulties with the map drawing, rather than because
of a lack of need. There are some areas which, by any objective criteria
such as unemployment levels, the need for social inclusion partnerships
and so on, fit poverty indicators but are not on the map. Hopefully, they
will be given absolute priority under the transitional arrangements.
Mr McConnell: I think that my position
is very clear on that matter.
Mr Keith Raffan (Mid-Scotland and Fife)
(LD): I wish to address the principle of using wards as building blocks,
which Sylvia and others have referred to. You are right; they are tightly
drawn and focused but they reduce flexibility. Of course, even with groups
of wards there may be strategic sites just outside, in wards that are not
anomalous, which could have a great bearing on employment in the groups
of wards that have objective 2 status. That is the kind of problem that
we are facing and there are many examples in mid-Scotland, Fife and Stirling,
when wards are used as building blocks rather than the travel-to-work areas
that were used before.
Mr McConnell: With regard to decision
making, ultimately it all comes down to trying to make a balanced judgment.
We had to create significant areas: that was in the guidelines. We managed
to get those significant areas down from the level that they were at and
spread the opportunities across more of Scotland. That still leaves some
areas adjacent to significant areas apparently losing out, but that just
showsif I may go back to my first pointthe wisdom of the Government in
the negotiations in Berlin in arguing for the transition funding.
Clearly, there was always going to be this
problem, regardless of what the map looked like. The case for transition
funding is absolutely crystal clear. We are very lucky that the UK Government
managed to negotiate for it and our job is to make the best use of it,
while keeping an open ear and mind to any possible changes that might still
arise. However, as I said, I do not want to raise expectations because
this outcome has been the product of three months of negotiations and it
is already at the margins of what the Commission is prepared to agree to.
Allan Wilson: On the benefits of
devolution, as you know, Jack, I have been sceptical in the past.
Allan Wilson: Yes, with regard to
the alleged benefits of devolution. I accept entirely the point that you
are making that giving the Scottish Executive and the Scottish Parliament
a role in determining how to target funds is a potential benefit, but surely
it is only a benefitirrespective of some of the political posturing that
has gone onif we can target the funds into the areas of greatest need
and social deprivation.
With regard to Keith's point, what is the
correlation between the objective 2 map and the assisted area status map,
which is drawn up at a UK level? There will be some overlap and duplication,
but some areas will find themselves on one map and not on the other. The
Executive must target available surplus resources away from those areas
that do not need assisted areas support and into those areas that do, but
which find themselves outside the objective 2 funding. That would be a
benefit of devolution.
Mr McConnell: No matter how devolved
we are, or how devolved we could be, inside the European Unionon this
day of discussing words in relation to Europeit is important for us always
to recognise that we are not the sole agents in this matter. With regard
to the funding mechanisms, we are negotiating, discussing and agreeing
within criteria. The criteria for the assisted areas map are different
from the criteria for the objective 2 map.
We have done what we can to try to ensure
that the maps link together, but if they had completely mapped across each
other there would have been more squeals across Scotland, because one of
the benefits of the criteria being slightly different is that, as Dr Jackson
said at the beginning, there are some parts of Scotland that have assisted
areas status and do not have objective 2 status, and some are the other
way round. At the very
||least, hope and
opportunity have been given to more areas than otherwise would have been
Our job, as the Executive and the Parliament,
is to ensure that we use both sets of funds to the best possible advantage
of as many communities in Scotland as possible, and that in seven years'
time we find ourselves in an even stronger set of economic circumstances
so that when the funds get stretched to the east of Europe, those of us
on the far west of Europe are able to survive economically in an increasingly
On the matter of the payments and the estimated €600 million,
will it be paid in instalments? I note that we have to take into account
euro currency fluctuations which, for long-term planning, could mean either
more or less money, depending on how the money is paid. Will the money
be paid in instalments, and does the Executive have plans to provide compensation
if there are fluctuations in the value of the euro, which has fluctuated
by 15 per cent this year?
Mr McConnell: I am conscious of
the fact that over the next seven years there could be fluctuations in
the euro and that that would affect the value of what we have been allocated.
It is hard to make predictions. Clearly, on an annual basis we will have
to take fluctuations into account with regard to the number of project
applications that can be put forward.
The money does come in instalments. It
does not come at the beginning of the seven-year period, which we should
be thankful for in some ways, because I suspect that over the coming seven
years the value of the euro will increase rather than decrease, regardless
of activities that might be occurring in another place.
Crawford: It was interesting to hear Ben arguing that early entry into
the euro might be a good idea. [Laughter.]
I want to address objective 2, and particularly
the 5b element and the impact on tourism, but I can see that the minister
is in a hurry.
I am sorry. I indicated to the convener in advance that I have a pressing
appointment at half-past 3.
Bruce Crawford: I will write to
The Convener: There are a number
of things that we have not been able to address and that I want to flag
up, and it would help if we could have a written reply. The first concerns
administration. We have programmes with reduced funding. Can the current
number of executives be supported with the current level of administrative
costs? There is also a need for an exit strategy with regard to objective
2 funding and it would be useful to see where that is going. There is a
||for the plan teams
to be fully representative of the areas covered. In one or two geographic
areasfor example, GlasgowI believe that that is not always the case.
On the issue of urban coverage, was urban coverage based on the use of
a comparable index of indicators, because reference was made to using comparable
indicators between Scotland, England and Wales? What are the indicators?
We can have a written reply to those questions.
Obviously, at all times members have the opportunity to write to me
with further questions and comments. I would be happy to receive both and
I will try to respond to them more promptly than we were able to do at
times during the summer, when we were in the middle of some difficult negotiations
on objective 2.
I thank the committee for the opportunity
to be here. I was going to comment briefly on the programme management
of the executives and the monitoring committees. In Brussels last Tuesday
I launched a review of both. It is my intention to include elected members
of local authorities, trade unionists and business representatives on the
replacements for the old monitoring committees. It is also our intention
to streamline, learn lessons and produce effective programme management
executives to cover the new programmes for the next period. It is also
our intention, as ever, to ensure that this committee has the opportunity
to comment on those plans and reviews as the weeks go by between now and
the end of the year, when we must have everything in place. I give you
that guarantee. We will submit a paper to the committee for its consideration
as soon as possible.
The Convener: It would also be helpful
if we could arrange to have you back to talk about the new programmes.
Mr McConnell: I am sure that we
will find opportunities to do that.
The Convener: Thank you. I know
that you want to go.
We will break for five minutes.
The Convener: The next item is the
scrutiny of European documents. We may take this item relatively slowly,
so that we do not miss anything out.