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European Committee

3rd Report, 1999

Report on the Objective 3 Operational Plan


SP Paper 54

Session 1 (1999)

The committee reports to the Parliament as follows–


  1. The Scottish Objective 3 operational programme is one of three operational programmes (the other two are for Wales and England) to implement Objective 3 in the UK.

  2. Objective 3, as defined in the Structural Fund Regulations, is to support "the adaptation and modernisation of policies and systems of education, training and employment" and is financed by assistance from the European Social Fund (ESF). The three operational programmes have to be set in the context of the UK Objective 3 Community Support Framework that provides a basis for co-ordination of the ESF assistance provided by the operational programmes.

  3. In global terms, the value of Objective 3 funding in Scotland over the next programming round (2000-2006) is some €481 million (321 million), based on an exchange rate of €1.5 : 1.

  4. The Scottish Operational Programme extends to all parts of Scotland outwith the Highlands and Islands (where parallel assistance will be available under the Special Programme for the Highlands and Islands).




  6. As required by the Structural Fund Regulations, the plan for the Scottish Operational Programme provides a detailed analysis of the current situation in the Scottish labour market, with particular reference to the way in which four pillars of the European Union (EU) Employment Strategy - employability, entrepreneurship, adaptability and equal opportunities - are embedded in the UK National Action Plan for Employment. The plan also provides a detailed assessment of the equal opportunities position in relation to the Scottish labour market, as well as an assessment of the environmental situation.

  7. The plan also sets out in some detail the policy context within which it has been prepared, with particular reference to the relevant policies and strategies of the Scottish Executive and to those of partner organisations.

  8. In the light of these analyses of the economic situation and of the policy context, the plan conducts a Strengths-Weaknesses-Opportunities-Threat (SWOT) analysis which concludes that the underpinning themes of the programme should include:

  • the need for companies to improve competitiveness;

  • the opportunity to encourage new and growth sectors to create additional employment and income;

  • the need to change the attitude of employers and employees to training and learning;

  • the need to anticipate skills mismatches;

  • the need to reduce barriers to opportunity for those suffering from social and economic exclusion;

  • the need to target resources on areas where the problems are concentrated;

  • the need to change attitudes of employers to particular groups in the labour market; and

  • the need to improve the self-perception and confidence of particular groups in the labour market.


  1. The plan then develops a strategy to deal with these issues. The programme's strategic aim is:

  2. "to support economic growth in Scotland by contributing to the sustainable development of a competitive economy, with an efficient and flexible labour market, where people have equal access to training, employment and income earning opportunities."

  3. This is broken down into 5 strategic objectives, the first three of which pursue the competitiveness agenda while the latter two are more focused on the access agenda:

  • to support a flexible labour market that contributes to a competitive workforce and a competitive economy, and which contributes to the reduction of exclusion through actions which anticipate and prevent groups and individuals moving into long term joblessness;

  • to develop a skilled and enterprising workforce where people at all levels have appropriate, up to date skills, thus enabling individuals to compete within the labour market, and companies and individuals to compete in the global economy;

  • to develop a culture of lifelong learning where people are both aware of the need to take responsibility for their own learning and are provided with information, facilities and support to undertake this responsibility;

  • to reduce the numbers and proportions of people excluded from the labour market through the provision of a range of support which addresses the key constraints facing groups identified as particularly disadvantaged in the labour market; and

  • to remove gender-specific barriers to accessing training, employment and income-earning opportunities, including identifying and addressing gender-reinforcing actions, practices and procedures within vocational training operations.


  1. These strategic objectives are then translated into the five main priorities for the programme which correspond to the policy fields for intervention as set out in the ESF Regulation. The priorities are:

  • to raise the employability of those recently made unemployed and thereby to reduce the risk of exclusion, particularly with regard to young people and to older people;

  • to address the needs of groups experiencing social exclusion from labour markets, particularly those groups which are concentrated in certain urban and rural areas, as well as those groups which are spread throughout the population; in addition to strengthen the capacity of local organisations to benefit from the programme;

  • to promote lifelong learning, by modernising the training industry and by developing new systems and approaches to lifelong learning;

  • to improve the competitiveness of the Scottish economy, by encouraging awareness of the need to raise skills levels and by supporting training measures for the workforce, as well as promoting entrepreneurship and supporting individuals engaged in new business formation; and

  • to address gender barriers by raising awareness of the benefits of equal access and opportunity and by support for training which address imbalances in gender-dominated occupations and sectors.


  1. The plan also explains how the horizontal themes of:

  • sustainable economic development;

  • equality of opportunity;

  • lifelong learning;

  • support for local initiatives; and

  • the social and labour market dimensions of the information society


will be integrated within each of the 5 vertical priorities.


  1. The plan analyses each of these priorities and discusses the appropriate measures by which the programme will intervene. It attaches indicators and targets to each of the measures.

  2. In addition, the plan briefly discusses a number of associated issues, including:

  • details of the extent of consultation on the plan;

  • the consistency of the programme with the National Action Plan for Employment, with the Commission guidance on the plans and with other Community policies;

  • the management and control arrangements, as well as the monitoring and evaluations arrangements; and

  • the publicity strategy associated with the programme.


  1. The plan discusses the rationale for the allocation of the available financial resources to the individual priorities and measures. These allocations are summarised in the table below. The rationale for the concentration of the programme's resources in the new Objective 2 areas and, to a lesser extent, in those transition areas that will lose Objective 2 or 5b status is also explained.


    Priority and











    Raising employability of short-term unemployed and young unemployed




    Raising employability older unemployed











    Addressing exclusion of thematic groups




    Addressing urban exclusion




    Addressing rural exclusion




    Capacity building for organisations











    Capacity building for lifelong learning




    New systems and approaches to lifelong learning











    Positive actions for workforce training and learning




    Raising workforce skills




    Raising higher level skills




    Promoting enterprise culture




    New firm formation











    Promoting positive actions




    Positive actions for individuals and companies







      Global Grants (Local Social Capital)



      Technical assistance







  3. Finally, the plan includes the independently undertaken ex ante evaluation of the programme. This section of the plan discusses the ongoing critique of the plan undertaken during its development and the responses made to that critique.


  5. The following sections set out the issues identified by, and recommendations of, the European Committee in relation to the Objective 3 Operational Plan. These were discussed in detail with the Minister for Finance during the 10th meeting of the committee on the 14 December 1999.

Generic across all priorities

  1. The committee noted the importance of training as an issue across all priorities. The committee recommends that due attention is paid during project selection to initiatives that focus on training as a means of supporting economic growth in Scotland by contributing to the sustainable development of a competitive economy, with an efficient and flexible labour market, where people have equal access to training, employment and income earning opportunities.

  2. Training is particularly important in Small to Medium–sized Enterprises (SMEs) which also have a number of unique difficulties, particularly at the small or micro-sized organisation. These include provision of sufficient personnel capacity to allow employees to take part in training, whilst providing sufficient cover to minimise disruption. The committee recommends that the Scottish Executive pay particular attention to innovative projects that enable and facilitate training in SMEs and ensure that all possible measures are put in place to allow this to take place, such as pump-prime funds.

  3. A concern has been raised in the committee that, given the demographic trends in terms of ageing population, there is a need to ensure that the focus for projects and expenditure does not overly favour the younger age-group at the expense of the increasing proportion of older workers or older unemployed. The committee recommends that the Scottish Executive pay particular attention to this issue over the course of the programming round and alters the proportion of expenditure accordingly.

  4. The committee has a number of concerns over the focus in the plan of an emphasis on support for capacity building. The broadening of the range of potential actors, against the background of less potential resources is of concern but benefits could be seen through the introduction of innovative approaches to training. The committee is of the view that support for community capacity building should include an emphasis on acquiring accreditation for the groups involved. The committee also recommends that partnerships in capacity building actions should be emphasised and that this could be introduced as a priority within the scoring process.

  5. The committee believes that the programme makes a bold move to ensure that Equal Opportunities are mainstreamed, but recommends that detailed consideration of how the process is tracked will need to be addressed in the design of the application forms and guidance notes for applicants.


Sector-specific balance

  1. The committee welcomes the innovative use of a global grant facility for a social capital project to assist with capacity building in voluntary organisations. The committee would welcome feedback from the Scottish Executive in due course on how this facility is to be operated and in time, how it is progressing.

  2. The committee considered the issue of balance between the need to focus on increasing the competitiveness of the current workforce and the need to tackle social exclusion and assist the unemployed enter the market place. The committee considers the relative balance of expenditure to be reasonable. The committee recommends that the Scottish Executive monitor the situation in light of labour market trends over the course of the programming round, and consult the committee accordingly on any remedial actions proposed.

  3. The committee welcomes the particular focus on addressing rural exclusion under the second priority, and considers that this is adequately funded. The committee, however, recommends that rural areas and the rural population are included to a reasonable degree across all of the priorities and measures. In addition, the committee believes that close co-ordination will be required between any training supported under the EU’s Rural Development Regulation and the Objective 3 programme for Lowland Scotland to avoid duplication as well as ensuring consistency with the National Employment Action Programme. The committee also recommends that the Executive ensure that small rural projects have as equal access to the programme as any other projects and make sure the administrative arrangements facilitate this.

  4. The committee considered the particular focus of the second priority and the inclusion of various target groups. This would appear, on first analysis, not to focus to a great extent on lone parents. The committee considers lone parents as amongst the most socially excluded groups in terms of poverty, poor housing, educational qualifications etc. The committee recommends that lone parents be specifically targeted and that adequate funding be provided for projects in due course. This should explicitly cover childcare and transport costs, for a period beyond the initial training.

Administrative matters

  1. The committee are concerned that the consultative process has been done on the basis of an attributable survey. This may give rise to bias in the results, in favour of the more positive perspective. The committee recommends that some element of a blind survey be built in to future consultative exercises.

  2. The committee discussed the issue of fluctuations in the euro to sterling exchange rate and whether this might have a detrimental impact on the levels of expenditure. The committee would welcome further information from the Scottish Executive on this matter, and recommends that measures be considered to assist the recipients of funds if the issue is proved to be of great significance.

  3. The committee would like to see a role given to multi-annual projects wherever possible, and invites the Scottish Executive to provide further information on the feasibility of such an approach.

  4. The committee is concerned that there is a lack of longer-term planning in terms of the situation after the end of the new programming round. The committee accepts that this is still a number of years away and that the Objective 3 measure is currently a horizontal initiative covering all member states. The committee, however, notes that enlargement to include new member states will bring pressures to bear on the overall Community budget which might impact on ESF expenditure, especially for the relatively advantaged countries. The committee recommends that the Scottish Executive begin considering this issue and preparing an "exit strategy" should indications give rise to concern. This should be discussed with the UK Government. The committee also recommends that the Scottish Executive give adequate attention to the issue of continuing to build on the successes achieved by the European funds after the initial grants have been used. This will require a long-term strategy to be developed beyond the programming period.

  5. The committee notes the discussions and comments by a range of organisations and observers in relation to the use of ESF funds to combat or alleviate large-scale industrial closure. The committee notes the relative inflexibility of using such funds to this effect. The committee recommends that the Scottish Executive carry out an analysis, made publicly available, which sets out the feasibility of such a use of funds.

  6. The committee also notes the inclusion of performance indicators and targets since it last considered the draft plan during September 1999. The committee welcomes their incorporation and requests that the Scottish Executive pay particular attention to highlighting progress against these targets during the annual reporting process.

  7. The committee welcomes the focus placed throughout the programme on after-care measures. The committee recommends that the Scottish Executive pay particular attention to ensuring that these initiatives are carried out effectively.

  8. The committee discussed the eligibility for Objective 3 funds and notes that the entire country, with the exception of the Highlands and Islands, can qualify. The committee is concerned to ensure that due consideration is given to geographical as well as sectoral targeting. The committee recommends that the Scottish Executive give a higher priority to the new Objective 2 areas and those disadvantaged wards that could not be included in the reorganised map of eligible areas (due to grouping requirements). Correspondingly, the Executive should give a slightly lower priority to the transition areas, while the lowest priority will go to the areas that are not designated. The committee is broadly content with the Executive’s plans in relation to this issue, but reserves the right to monitor the programme and the expenditure against this specific matter during the course of the programme.

  9. The committee recognises that there is a potential for duplication of support between the Objective 3 and the Objective 2 programmes in this critical area. The committee is very concerned to ensure that there is the closest possible co-ordination of programme planning and subsequent administration to ensure that any policy clashes and funding duplication is avoided from the outset. The committee recommends that this issue be fully and substantially addressed by the Scottish Executive during the current review of implementing arrangements. The committee also requested that the Executive ensure co-ordination between the programmes. For example, it would be unacceptable to fund the building a training centre from Objective 2, only to find that Objective 3 funds were not available for the training programme to be run there.

  10. The committee recognised the significant effort by the various organisations that took part in the process of developing the Operational Plan, particularly the Plan Team, and congratulates them for their efforts.


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