Replacement of European Structural Funds in Scotland Post EU Exit

Response to Scottish Government Consultation from Senscot, Social Firms Scotland and Scottish Community Alliance – February 2020

Background Summary and Introduction

The UK Government is committed to introduce a Shared Prosperity Fund, which “respects the Devolution Settlement” to replace funds currently received in the UK and Scotland under the European Regional Development Fund, European Social Fund, European Agricultural Fund for Rural Development and European Maritime and Fisheries Fund. UK and Scotland receipts from these EU funds will cease at the end of December 2020.

We are submitting this paper to amplify the Consultation Response submitted online to Scottish Government from Senscot, Social Firms Scotland and Scottish Community Alliance, on future funding possibilities, especially the Shared Prosperity Fund, after UK exit from the European Union. Based on surveys conducted by our organisations, our Consultation Response recognises continuing difficulties in accessing funds under current EU Programmes and suggests remedies to facilitate easier access to funding from a proposed Shared Prosperity Fund. 

Experience shows that our organisations, our members and the wider third sector generally can add to the implementation capacity and reach of the public sector. As examples, third sector undertakings are well placed to provide tailor made labour market reintegration or rehabilitation services as part of active labour market policies; or early childhood education and care services for children with a minority or migrant background.

Replacement programmes after Brexit require cross departmental discussion and pooling of budgets that best fit the Scottish Government’s programme for government and contribute to the Government’s Economic Strategy, with a particular focus on inclusive growth, and achieve the best possible cumulative impact under the National Performance Framework.

Our Consultation Response includes suggestions for development of funding similar to that which will be available for Community Led Local Development (CLLD) initiatives, to which Articles 24 to 28 of the Common Provision Regulations (CPR) for 2021-2127 Programmes make extended reference (European Commission, 2018c, pp.42–44). These CPR Regulations include more extensive references to CLLD than any previous EU Programme.

We are also mindful of provision for local community involvement stimulated for some Community Planning Partnerships under Priority 1 ESF and Priority 3 ERDF in 2007-2013 Structural Funds Programmes, from which we feel that there are appropriate lessons. 

Responses to Scottish Government Consultation

Objectives

1)   What are the main aims that this funding should seek to achieve?

We recommend the following main aims any replacement for EU funds:  

Complementarity with and additionality to Scotland’s Industrial Strategy (Council of Economic Advisers, 2017)

“Substantial use has also been made, and continues to be made, of European funding, particularly from the European Regional Development Fund. As things stand, this limits the potential for use of self-funding vehicles, and the extent to which receipts from successful investments can be used to support wider economic development activities. Brexit could have significant implications for support for business development funding (and infrastructure investment) in coming years as EU funding has been an importance source of capital for many business development initiatives”.

Complementarity with and additionality to Scotland’s Strategy for Inclusive Growth, including Scotland’s Labour Market Strategy, building on the Fair Work Framework and Scottish Business Pledge Scottish (Scottish Government, 2020).

Complementarity with and additionality to Scotland’s Social Enterprise Strategy 2016-2026 (Scottish Government, 2016)

Complementarity with and additionality to Scotland’s Sustainable Social Enterprise Action Plan 2017-2020, including Stimulating Social Enterprise, Developing Stronger Organisations, Realising Market Opportunity and Implementation (Scottish Government, 2017)

Complementary with and additionality to Scotland’s Community Empowerment Strategy, including Empowering Communities Programme  (Scottish Government, 2019a).

Developing a comprehensive support environment for the creation and growth of social enterprise has been a key plank of the Scottish Government’s Economic Strategy and its Social Enterprise Strategy, the service reform programme and a shift towards prevention. Social enterprise already delivers across various themed areas and we would expect existing Scottish Government support and investment measures for social enterprises to be enhanced by successor programmes to EU funds – for example, opening markets for enterprising third sector organisations, public social partnerships, support infrastructure and investment for growth and sustainability of the sector.

2)   How could funding be used most effectively to address spatial inequalities between areas and communities in Scotland?

For Inclusive Growth, we support Thematic Objectives and Investment Priorities in current Programmes for social inclusion, local development and combating poverty. Especially, we support Investment Priorities which include support for social enterprises in ERDF and promoting the social economy and social enterprises in ESF.  We also support opportunities for third sector organisations to become involved in joint and partnership delivery for these objectives.

The following delivery outline from the current 2014-2020 ESF Social Inclusion Strategic Intervention Package are relevant for consideration within the Shared Prosperity Fund or any successor funding programme:

  • 08 – Promoting sustainable and quality employment and supporting labour mobility
  • 8i – Access to employment for job seekers and inactive people, including the long term unemployed and people far from the labour market, also through local employment initiatives and support for labour mobility
  • 08a – Promoting sustainable and quality employment and supporting labour mobility (YEI).
  • 8ii – Sustainable integration into the labour market of young people (YEI), in particular those not in employment, education or training, including young people at risk of social exclusion and young people from marginalised communities, including through the implementation of the Youth Guarantee
  • 09 – Promoting social inclusion, combating poverty and any discrimination.
  • 9i – Active inclusion, including with a view to promoting equal opportunities and active participation, and improving employability
  • 9v – Promoting social entrepreneurship and vocational integration in social enterprises and the social and solidarity economy in order to facilitate access to employment

The following Strategic Objectives in the current ESF Operational Programme are also relevant:

  • Active inclusion – through promoting equal opportunities, active participation, and improving employability (Strategic Objective 21) (Scottish Government, 2014, p.45)
  • Increase the number of disadvantaged participants from workless, lone parent and low income households with positive employment or training outcomes (Strategic Objective 22) (Scottish Government, 2014, p.46)
  • Enable disadvantaged communities to develop long-term solutions to increase active inclusion and reduce poverty (Strategic Objective 23) (Scottish Government, 2014, p.46)
  • Increase the sustainability and capacity of the social economy to deliver support to the most disadvantaged areas and groups (Strategic Objective 24) (Scottish Government, 2014, p.23)
  • Support and encourage social innovation ideas and solutions (Strategic Objective 25)  (Scottish Government, 2014, p.53)

As an example of current difficulties faced by social enterprise and third sector organisations in accessing EU Funds, Skills Development Scotland currently has an ESF Programme of £19.8mn from 2016 to 2022, which is described as:

“A fund to support national third sector organisations to deliver support to unemployed and inactive participants mainly in stages 1 and 2 of the employability pipeline. It will target those with the multiple barriers in accessing employment including young people with disability and those isolated from the labour market through poor educational attainment; ex-offenders; substance abuse; and geography”.

Senscot supports a number of Thematic Social Enterprise Networks in the fields of health, community food, sport, culture and tourism – all of which could offer important contributions to Scotland’s National Performance Framework. Social Firms Scotland facilitates a national Employability Network with over 200 social enterprise members. All have been consulted.

EU funding for employability services at local level has been bureaucratic and onerous in terms of match funding requirements, with some areas receiving no bidders at all for certain lots or poor quality bids. This is a lost opportunity for some of the most vulnerable clients who want to work. There has also been confusion over some Strategic Objectives, with some local authorities taking some programmes, including employability, in house and then offering them for tender. This could lead to poorly designed commissioning and short lead in times resulting in shortage of quality consortia bids

In addition to the above, though there is adequate provision in the present 2014 to 2020 ESI programmes for Community Led Local Development (CLLD), this has not been followed in Scotland (European Commission, 2016; Regional Studies Association, 2016). We recommend that CLLD is integral to any successor programmes.  CLLD is a tool for involving citizens at local level in developing responses to the social, environmental and economic challenges of their respective areas and the Commission’s Guidance Document (European Commission, 2018b) makes detailed proposals for local delivery.

3)   Geographically, at what level would the priorities for funding be best set?

Though as organisations in this submission we all have extensive experience in working with communities at local level, we believe that at the beginning of current Structural Fund Programmes discussions with some Strategic Leads on involvement in their delivery was not an easy task. We believe that an emphasis on local delivery at community level is in line with current developments in Scotland around a co production/co planning approach to the design and delivery of public services.

We therefore favour NUTS3 since NUTS2 areas are too large and include significant variations. We recommend that funding should be allocated to those local authorities with more than 10% of data zones in the bottom SIMD decile (Bell, 2019, p.12).

SIMD looks at the extent to which an area is deprived across seven domains: income, employment, education, health, access to services, crime and housing and represents the Scottish Government’s approach to identifying areas of multiple deprivation. It can help improve understanding about outcomes and circumstances of people living in the most deprived areas. It can also allow effective targeting of policies and funding where the aim is to wholly or partly tackle or take account of area concentrations of multiple deprivation.

Alignment with Scottish Policy and Other Funding Streams

4)   How could the use of future funding add value to other sources of funding focussed on similar objectives in Scotland?

Where possible, there should be alignment with other relevant programmes and deliverers. Current Programme Strategic Leads might continue to be involved. But some lack expertise in dealing with communities and third sector organisations. This alignment needs cadres of expertise within local authorities and other strategic deliverers. For example, though Zero Waste Scotland is accustomed to dealing with communities, other Strategic Leads do not demonstrate this familiarity.

This picture is now further complicated by City Deals with different objectives and complex governance systems, which often have little real contact with local communities.

Throughout future post Brexit Scottish policy development and implementation, following strategic priorities, thematic objectives and investment priorities in the 2014-2020 Programmes, we would like to see more explicit mention of the importance of social entrepreneurship, social enterprises and the social economy more generally.

Alignment with UK and EU Policy

5)   What practical value would you see in future funding in Scotland being aligned with the UK Industrial Strategy and other spatially differentiated UK economic policies such as the City and Regional Deals or the Industrial Strategy’s sectoral approach?

Involvement in City Deal governance and administration in Scotland has not been easy for third sector organisations, since these are ad hoc structures which merit greater democratic accountability. There is experience in Urban Development Corporations and other previous structures in Scotland which shows that direct input from social enterprises and third sector organisations is difficult. We believe that there are significant lessons from Development Partnerships under the 2000-2006 EU EQUAL ESF Programmes in Scotland which should not be lost, since this model was effective in engaging a range of small, specialist social economy organisations in delivery of programme objectives.

City Deals are dominated by UK policies for England and are like Growth and City Deals in England. English City Regions and Metro Mayors have completely different agendae. Great Manchester Combined Authority has a legislative structure for all Greater Manchester Boroughs so that strategies already generated into which City Deal might fit. There are no similar structures in Scotland.

6)    What practical value would you see in maintaining alignment with EU Cohesion Policy?

The draft 2021-2027 Common Provisions Regulation (CPR) proposes that ERDF, ESF+, the Cohesion Fund and the EMFF will support the following policy objectives, which should be maintained in any successor UK programme (European Commission, 2018c, p.27):

  1.  smarter Europe by promoting innovative and smart economic transformation;
  2. a greener, low-carbon Europe by promoting clean and fair energy transition, green and blue investment, the circular economy, climate adaptation and risk prevention and management
  3.  a more connected Europe by enhancing mobility and regional ICT connectivity
  4. a more social Europe implementing the European Pillar of Social Rights
  5. a Europe closer to citizens by fostering the sustainable and integrated development of urban, rural and coastal areas and local initiatives.

Thematic Objectives in the 2021-2027 Programme are reduced from 11 to 5, with 65% to 85% of Funds allocated from each Member State in TO 1 and TO 2, with at least 25% of these directed to climate action. There is also a strong focus on local projects, through Community Led Local Development (CLLD) (Articles 25-28 of CPR), but with a minimum 6% threshold of investments of the total ERDF contribution to Member States into urban development (Articles 24-27 of CPR).

Article 25 of the CPR states that Member States shall ensure that Community Led Local Development should include the following characteristics which should be continued in successor programmes (European Commission, 2018c, p.42):

  1. focused on sub regional areas
  2. led by local action groups composed of representatives of public and private local socioeconomic interests, in which no single interest group controls the decision-making
  3. carried out through integrated strategies in accordance with Article 26 (Local Action Groups – see below)
  4. supportive of networking, innovative features in the local context and, where appropriate, cooperation with other territorial actors

Article 26 of the draft Common Provisions Regulation is specific on elements to be included in Community Led Strategies (European Commission, 2018c, p.42):

  1. the geographical area and population covered by that strategy
  2. (b) the community involvement process in the development of that strategy
  3. an analysis of the development needs and potential of the area
  4. the objectives of that strategy, including measurable targets for results, and related planned actions
  5.  the management, monitoring and evaluation arrangements, demonstrating the capacity of the local action group to implement that strategy
  6. a financial plan, including the planned allocation from each Fund and programme concerned.

Article 27 is specific on Local Action Groups, which, exclusively, shall carry out the following tasks (European Commission, 2018c, p.43):

  1. building the capacity of local actors to develop and implement operations
  2. drawing up a non-discriminatory and transparent selection procedure and criteria, which avoids conflicts of interest and ensures that no single interest group controls selection decisions
  3. preparing and publishing calls for proposals
  4. selecting operations and fixing the amount of support and presenting the proposals to the body responsible for final verification of eligibility before approval
  5. monitoring progress towards the achievement of objectives of the strategy
  6. evaluating the implementation of the strategy

Article 28 seeks to ensure that Member States will ensure support from the Funds for CLLD projects (European Commission, 2018c, p.44):

  1. capacity building and preparatory actions supporting the design and future implementation of the strategies
  2. the implementation of operations, including cooperation activities and their preparation, selected under the local development strategy
  3. the management, monitoring and evaluation of the strategy and its animation

We believe that all these above Articles describe critical features in CLLD projects and as much as possible these should be retained in the Shared Prosperity Fund and any successor programmes.

Innovation

For many third sector organisations, the innovation in successor programmes to ESI funds needs clarification. In the Europe 2020 Innovation Union initiative, the EU has supported “the creation of an innovation-friendly environment that makes it easier for great ideas to be turned into products and services that will bring our economy growth and jobs”. 

Scottish third sector organisations during 2000-2006 made significant progress in innovation under the ESF EQUAL programme with €3.2bn in innovative projects across the European Union.  Successful EQUAL Development Partnerships operated to design, test and validate innovative solutions to integrating people with disadvantages into the labour market and developing the social economy.  EQUAL succeeded in demonstrating added value that innovation brings to design and delivery of inclusive labour markets, and improved conditions for generating a significant number of innovations. As a result, a consensus emerged that promoting innovation should be an integral part of all future funding programmes. However, without explicit measures to encourage innovation within successor funds, we would expect less impact on Europe 2020 goals as well as Scottish priorities.

Evaluation and Monitoring Progress

7)      How could we best evaluate the success of this new fund?

As suggested and recommended throughout our response, there should be more involvement and participation by social enterprise and third sector organisations in both proposals for and agreement of Ex Ante Conditions (EACs) and any Ex Post considerations. The European Court of Auditors Report on EACs and Performance Reserves shows that those Thematic Objectives most relevant to third sector organisations are those which are most easily agreed and completed, compared to others. This suggests that measurement, monitoring and evaluation are too narrowly restricted to authorities which propose, implement and deliver funded projects and should be extended.

Other sections of our response underline the need for evaluation to be completely functionally independent of authorities which propose and implement projects.  

8)        What relevant parts of the National Performance Framework should this funding be targeted towards?

Following references to CLLD throughout our Consultation Response, the next National Performance Framework steps proposed by the Carnegie Trust are particularly relevant (Carnegie Trust, 2019):

“The name, the National Performance Framework, is a relic of the origins of the framework as an internal document. It is not the best way to describe a framework that is owned by the people of Scotland, nor is it a title that engages people. A simple fix would be to rename it the National Progress Framework”.

“Away from the centre of government, it isn’t clear how a service provider or a community group is meant to contribute to the NPF outcomes or indicators. Many are confused about how Local Outcome Improvement Plans fit in the new framework. The Scottish Government should explain our wellbeing approach as the golden thread between programme and population outcomes: laying out a theory of change with specified indicators”.

Indicators still being developed for the National Performance Framework include Community Ownership, Places to Interact, Social Capital, Growth in the Cultural Economy, Educational Attainment, Engagement in Extra Curricular Activities, Skills Underutilisation, Economic Participation, Healthy Life Expectancy Mental Wellbeing, Influence over Local Decisions and a Positive Experience for People Coming to Scotland (Scottish Government, 2019b). All these are relevant to proposals made in our response for replacing EU funding, especially for CLLD.

9)        Which specific aspects of the monitoring and evaluation framework from European Cohesion Policy do you consider would be beneficial to retain for any new fund?

Especially for CLLD and other community and local projects, ESF Evaluations should be functionally independent. The Commission’s Guidance on ESF Evaluations emphasises functional independence from delivers and managers (European Commission, 2018a, p.28):

“Evaluations shall be carried out by experts that are functionally independent of the authorities responsible for programme implementation. This provision does not exclude the possibility that internal experts within the administration undertake evaluations. Verification of functional independence should be carried out on a case by case basis. As a general rule, functional independence within the same institution may be assumed when the entity carrying out evaluations does not have a hierarchical link with the entity responsible for programme implementation”

With specific relevance to ESF evaluations of CLLD, the following evaluations are also especially relevant (European Commission, 2018a, p.29)

  • Theory-based impact evaluation, which follows each step of the intervention logic identifying mechanisms of change, answering the questions why and how an intervention works. This approach mainly produces a qualitative estimate of the impacts.
  • Counterfactual impact evaluation, which uses control or comparison groups. This method is useful in answering how much of the change is due to the intervention and for whom, and in comparing the effects of different instruments (or the same instrument applied to different target groups).

The Court of Auditors’ Report points to new approaches to agreement for EACs (Ex Ante Conditions). “Number of action plans for unfulfilled EACs and their status at the time of the OP adoption and at 31 December 2016 as reported to the Commission as of mid-September 2017” showed that lowest numbers of EACs unfulfilled all occurred under Thematic Objectives 8 and 9 of the current Programmes: Access to Employment, Self Employment, Labour Market Institutions, Adaptation of workers and the Youth Guarantee and Poverty Reduction Strategy (European Court of Auditors, 2017, p.24).

The Auditors’ “Average time taken (in days) by the Member States to fulfil and by the Commission to agree with the fulfilment of the EACs (for the completed action plans)” shows that completion agreements for these Thematic Objectives in some cases took half the time required by other Thematic Objectives (European Court of Auditors, 2017, p.27). Again, this shows that need for wider involvement of third sector organisations in development and agreement of these EACs, especially since the Auditors’ Report shows that some EAC assessment criteria for these Thematic Objectives were actually mutually exclusive (European Court of Auditors, 2017, p.30).

ERDF Evaluations should also be functionally independent. The Commission’s Guidance on ERDF Evaluations also emphasises that these should be functionally independent of their delivers and managers (European Commission & Directorate-General for Regional and Urban Policy, 2015, p.15):

“The evaluators must be functionally independent of authorities responsible for the preparation and the implementation of the future programme (Article 54 CPR). This independence is essential to support a good evaluation where the evaluators will constructively criticise and give expert judgements on the different elements of the programme. The level of independence should be such that there is no doubt that the work is carried out with objectivity, and the evaluation judgements are unbiased and not subordinated to an agreement of the services responsible for design of the programme”.

Accordingly, our response recommends that any evaluation should be independent of programme applicants, deliverers and implementation agencies.

Allocation and Programme Duration

10)    What approach should be used to allocate the funding at programme level – including the most effective duration of the programme that would better support the identified priorities?

Under the 2007-2013 EU Programme, Priority 1 ESF and Priority 3 ERDF made specific allocations to 13 Community Planning Partnerships in local authority areas, which are similar to those areas with most lowest decile SIMD data zones suggested above by Bell  (Inch, 2008, p.4):

“In parallel to the individual project selection process, Community Planning Partnerships (CPPs) in thirteen local authority areas, selected on the basis of Scottish Index of Multiple Deprivation and NEET data, were invited to submit strategic bids for employability/urban regeneration activity for a two year period between 1st April 2008 and 31st March 2010.

“All thirteen areas submitted bids in November 2007 and this was followed up by each CPP making a presentation to the Scottish Government in February 2008”.

This CPP proposal originated from initial proposal for the ten local authority areas, accounting for the highest shares of population in the 15% most deprived data zones and the seven local authority areas showing the highest concentration of NEET Areas.  The outline of the Lowlands and Uplands European Regional Development Fund Programme 2006-2013 summarised the role of CPPs (Scottish Government, 2008a, p.143):

“Respondents felt that CPPs could make a positive contribution to the new Programmes, but there were numerous comments on how this could be achieved given the varying capacity of the bodies across the region. The Executive intends to fund a selection of CPPs for a pilot period of two years, but this will be limited to a pot of funding within ESF Priority 1 and the new ERDF Priority 3”.

The summary of the 2007-2013 Operational Programme explained this in more detail: “Priority 3: Urban regeneration (approximately 27.9% of total funding) This geographically targeted Priority will address the needs of the most disadvantaged urban communities. Activities to promote physical regeneration will include improving workspace and training facilities” (European Commission, 2018d)

The outline of the 2007-2013 ESF Programme also outlined these structures (Scottish Government, 2008b, p.50):

“One key instrument to take forward this and other strategies are the Community Planning Partnerships (CPPs). The CPPs, one for each Local Authority area, set out how the relevant partners at local level intend to combine their activities to achieve regeneration outcomes, as set out in Regeneration Outcome Agreements. The CPPs consist of partnership of the key partners involved in local regeneration, including the local Authority, voluntary sector organisations, local Health Boards and other relevant bodies”

These extracts above demonstrate precedents in Priority 1 ESF and Priority 3 ERDF of the previous 2007-2013 Programme for focusing on areas with highest numbers of lowest decile SIMD data zones as suggested by Bell (Bell, 2019, p.12). Key features of these precedents were the involvement of Community Planning Partnerships and Regeneration Outcome Agreements.  For any proposals for similar lowest decile SIMD data zones communities the Shared Prosperity Fund should fund at least the same time period for the Multiannual Framework for 2021-2017 EU Programmes.

11)    What would be the most appropriate partnership and governance structure to achieve the strategic objectives of the future funding?

As organisations we need more adequate and expert representation on Monitoring Committees. We also need participation by representatives of social enterprise and third sector organisations in preparation and planning of SDS, local authority and other applications  

We already have partnerships with local authorities which might form the basis of David Bell’s SIMD proposal for SIMD lowest decile data zones (Bell, 2019, p.12).  However, for adequate participation and involvement in any future structures, there should be recognition and acknowledgement that a significant role in delivery by social economy organisations will require access and opportunities to available Technical Assistance funds. The process of developing CLLD programmes requires “time and effort, but for relatively small financial investments, it can have a marked impact on people’s lives and generate new ideas and the shared commitment for putting them into practice”. The EU Commission’s Guidance on CLLD for current programmes stresses the importance of local communities gaining ownership of objectives (European Commission, 2018b).

12)    What would be the most effective delivery model to ensure maximum leverage of funds from public and private sectors to regional investments?

We note that there is no reference to third sector organisations in this question and believe that approaches and discussions are needed by all parties to enable adequate participation in these programmes. There is considerable evidence that the public sector has difficulties in approaching third sector organisations and vice versa (Garven et al., 2014)

Communications from Scottish Government, Strategic Leads, and Structural Funds Division have been poor in keeping third sector stakeholders regularly up to date, especially on reasons for the significant delays. Scottish Government and Strategic Leads need to engage with key sector intermediaries who can offer advice and guidance to potential bidders as part of their core work with their member organisations, including social firms and our Employability Social Enterprise Network. Experience from our earlier discussions with Strategic Implementation Leads showed that most were not well prepared for community involvement and participation.

13)    What capacity-building or other support is needed to ensure the ability of local partners and communities to participate in the programme?

Our organisations seek an allocation of Technical Assistance or its equivalent to enable access to any successor programmes. During 2015 under the present Programme, our organisations conducted a series of eleven EU Funding Masterclasses across Scotland, to alert third sector organisations to EU funding possibilities. Though representatives from more than 500 local organisations attended, this series terminated through lack of funding since no Technical Assistance was available.  

Apart from Technical Assistance, to which we have referred above, we recommend the development of approaches similar to CLLD, which, as outlined in the Commission’s Guidance on CLLD, includes possible 50% to 85% funding depending on location, with 25% for setup, development and administration  (European Commission, 2018b, pp.51, 56). The potential for these developments has not been explored in Scotland.

We remain open and hopeful that social enterprise and the social economy will be recognised at a strategic and delivery level within any new programme, as a key sector in the delivery of Europe 2020 objectives and in enhancing our sector’s impact on the Scottish economy and communities.

14)    What can be learned from the design and delivery of the current and previous European Structural Fund Programmes in Scotland?

Most EU funding, including current 2014-2020 ESF and ERDF programmes, has been difficult to access for many third sector organisations unfamiliar with their application processes. Additionally, for deliverers and Strategic Implementation Leads unfamiliar with third sector organisations, understanding and accommodating the needs of third sector organisations have been difficult.

We are disappointed about the considerable delays in opening some ESF Investment Priorities (Social Inclusion and Addressing Poverty in particular) and also that some organisations have still not been able to reclaim expenditure from ESF. Many are small and could not sustain the cash flow challenges this presents. Given the long delays referred to above, there will be significant challenges in meeting conditions required for future spend, in addition to an expected lack of lead in time to prepare our sector to recognise eligibility and outcomes sought. We believe this might detract from a pool of high quality projects and collaborative/consortia bids.

Previous discussions with Strategic Implementation Leads showed that many were ill prepared and ill equipped for third sector participation and have not engaged in discussion with representative organisations. However, there are encouraging precedents from the 2007-2013 ESF Programme shown above. The need for more active community and social enterprise has already been described in one Post Brexit scenario (Bell, 2019, p.11):  

“This model would involve greater community involvement in the allocation of funds towards investment in social infrastructure along the lines proposed by the IPPR. Clearly, an infrastructure would have to be built around supporting the types of social entrepreneurship that demonstrably enhance social capital. Local authorities would play a key role in providing this infrastructure and ensuring that its costs are contained”.

Within a UK allocation to Scotland either based on the present ESF allocation or on GVA (both of which produce similar funding) Bell proposes an eligibility approach based on those local authorities having more than 10% of data zones in the bottom SIMD decile. Since these authorities – which are similar to those in the 2007-2013 Programme mentioned above – already have more funding than less prosperous parts of Scotland, Bell proposes an element of “competition between local authorities in order to incentivise measurable outcomes such as numbers of social enterprise setups” (Bell, 2019, p.12). We believe that this approach should be explored further.

IPPR suggests an even more detailed approach with the more direct involvement of communities (Henry & Morris, 2019, p.24):

“a portion of the SPF should be earmarked (at least 20%) to go directly to priority areas at the neighbourhood level

“for this neighbourhood-level funding, local areas should ensure that communities have direct control over where the funds are distributed. As part of this, local areas should actively involve communities in deciding the strategy for the funds through different mechanisms for community involvement, whether this be though residents’ panels, user groups, community organisers or Poverty Truth Commissions”

However, experience under the Merseyside 1994 to 1999 Objective One Programme’s “Pathways” approach, with 50% of project scoring done by local communities, following the IPPR approach, is that it may be difficult at NUTS3 Levels, within those areas with most lower decile SIMD data zones in relevant areas to secure adequate representative community organisations. Experience at community level shows that the involvement of ‘community anchors’ is needed (Henderson & McWilliams, 2017).

Arising from the above, our response therefore recommends a focus on local areas with more than 10% of data zones within the bottom SIMD decile along similar lines to precedents in the 2007-2013 Programme and others with which we are familiar and look forward to discussion.

References

Bell, D. (2019) Funding of EU Structural Fund Priorities in Scotland, Post-Brexit. 19.

Carnegie Trust (2019) What are the Next Steps for the National Performance Framework. [Online] [online]. Available from: https://d1ssu070pg2v9i.cloudfront.net/pex/carnegie_uk_trust/2019/09/29093559/v5-4216-Carnegie-NPF-Info-Sheet.pdf (Accessed 9 February 2020).

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European Commission (2018b) Guidance for Member States and Programme Authorities on Community Led Local Development in European Structural and Investment Funds: Version Four EGESIF_18-033-00 17/09/2018. p.62.

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European Court of Auditors (2017) Special Report: Ex Ante Conditionalities and Performance Reserve in Cohesion: Innovative but not yet Effective Instruments. p.70.

Garven, F., Grimes, A., Mitchell, J. & Whittam, G. (2014) Community Engagement and CoProduction: Report (draft) to the National Community Planning Group. p.1–153.

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Henry, K. & Morris, M. (2019) Regional Funding After Brexit. p.32.

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(Accessed 8 February 2020).

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