Scottish Government Blogs

Post by Kat Feldinger

What a week we’re having for Ministerial activity – a parliamentary statement on Europe day (no less!), a blog, a Committee appearance to discuss using lessons learned in developing our new programmes, and a headline appearance from Fiona Hyslop at the Committee of the Region’s forum on the Common Strategic Framework on last Thursday.

 Ms Hyslop, as some of you might remember, was instrumental in establishing Skills Development Scotland and in promoting the Strategic Skills Pipeline approach when she was Education Secretary and she’s lost none of her focus on ensuring that structural funds achieves big outcomes for individuals, reminding her audience that ‘it’s about the people these funds affect’. And so it is.

 The speech was a great follow-up to Brenda’s blog on community led development, highlighting the work already done by CPPs on skills and employability, and the links between the CPP approach, LEADER, and strategic delivery by for example SDS. Across our current programmes (structural, rural and fisheries), we actually spend almost £150 million locally!

 That says a lot about how mature our local delivery arrangements are inScotland, and poses questions around what we might achieve by linking employability spending with actual employment; and by developing a model that allows local partnership responsibility for economic development.

 With that in mind, it was also a good chance for us to stress to the listening Commissioners that we don’t want those high-quality projects which will transform local areas to be constrained by conflicting funding rules – that it matters less where the money comes from and who is counting it than what it can achieve.

 We think it is only through allowing multi-fund local co-operation that those transformative projects are going to be identified and delivered. The question is how we balance being strategic – big projects with big impacts, requiring bigger organisations to manage them – and being community led, ensuring that not just the ‘usual suspects’ have a say in how funding is spent.  Do you agree?

 In the evening, I think it might actually have been cheaper to charter a plane home from Brussels – with two Ministers, two private offices and half the flight full of Scottish public sector colleagues, it was like coming home before we’d even departed! Now if only our chocolate was as good…

 

So it came to pass. Two weeks ago, on the subject of CAP greening, I wrote “I wonder whether the Commissioner will … stick to his guns, or be willing to go back the drawing board?” And lo, at the Council of Ministers yesterday the Commissioner showed his first signs of movement.

He did so by circulating a “non-paper” about “concepts”. In other words, he wasn’t officially changing his position so much as signalling that if he were to decide to change, then here’s some ideas on what that could look like (that’s the beauty of a “non-paper” in Europe: you can float ideas whilst at the same time asserting that, as this wasn’t an official paper, strictly speaking you’re still sticking 100% to your official position). And he stressed that he wasn’t tearing up his proposals and starting again. Rather, in his eyes he was sticking firmly to his principles but acknowledging that there might be better ways to implement them.

However you package them up, there were some important points in the Commission paper (sorry, non-paper). The threshold for exemption from the 3-crop rule might go up to 10 ha instead of 3, and some mostly-grass farms might also be exempt. The 5-year rotation definition for permanent grass might go up to 8. A longer list of environmentally beneficial actions by farmers might be deemed as automatically “green”.

And importantly for Scotland, there was for the first time recognition from the Commission that they need to amend the proposed definition of grassland so that heather – provided of course it’s managed and grazed – is eligible for Direct Payments. We’ve been pressing on this for months, and I know Scottish farming organisations have been pressing the Commission too, so it’s good to finally see some reaction.

The Member States mostly gave a two-handed response to the Commissioner: on one hand these are welcome steps in the right direction, on the other hand they don’t yet go far enough. But the key point is that there was an impasse, the Commissioner needed to unblock it, and he has. So it’s game on for the next stage of the negotiations.

After previously attending the Global Marine Renewable Energy Conference (GMREC) in Washington DC in 2010, I was asked this year to deliver a keynote speech.

Scotland’s global lead in marine renewable energy attracted international interest and this time around, there was a heightened awareness of Scotland’s global lead with most of the speakers referring to Scotland in their presentations. Woven through the entire conference was Scotland’s pre-eminence in the wave and tidal energy sectors.

There is definitely an even stronger recognition of Scotland’s place in this global market than there was two years ago when I last addressed the conference.

After my speech I spoke to many US companies wanting to know more about working in Scotland. And my colleague in Scottish Development International met with a range of US companies who are actively looking towards Scotland to take forward their developments.

I told the conference that according to recent research undertaken by Scottish Renewables, with 11,000 people directly employed in renewable energy in Scotland, the sector is employing more people than the Scottish whisky industry. The 550 people employed directly in the wave and tidal sectors, of which half are based within the Highlands and Islands, is equivalent in scale to over 30,000 jobs in the US.

Scotland is clearly leading the world in the development of this new global industry. We are the world centre for marine testing, with more devices deployed in Scottish waters than the rest of the world combined, and a growing cluster of Highlands and Islands companies supporting the marine renewables supply chain.

The European Marine Energy Centre (EMEC) in Orkney is the world’s first and only grid connected wave and tidal test centre, and I informed delegates that its success was all about taking the long view.

The planning for EMEC started over 10 years ago, with the first Pelamis device deployed in 2004. Then it was three years before the next, Open Hydro’s tidal device, came on site. That’s a long time to run what is a quasi commercial business without real revenue. That’s why we in the public sector in Scotland needed to take the long view when making hard financial decisions, and of course keep a strong focus on the ultimate prize – that of Scotland being a global centre for the marine renewables industry.

All of EMEC’s 14 test berths are currently fully contracted and the number of wave and tidal devices deployed in Scotland, as evidence of the success of Scotland’s long-term view. These projects include the world’s first shoreline wave device, Wavegen’s Limpet on Islay; the world’s first offshore wave device, Pelamis; and the world’s first floating tidal device to generate electricity to the grid, Scotrenewables’ SR250 – all of which have been developed by Scottish marine developers.

In addition to the fantastic natural resources Scotland has, it is thanks to the fact that industry, academia and Government had worked so closely over the last decade that Scotland has the global lead in this sector.

The press reported last week that a number of MEPs are calling for the planned new EU rules on defining LFA land – to be re-titled Areas of Natural Constraint or ANC – to be postponed until after the rest of the new CAP is in place. But why does Europe need new rules anyway, and why is this controversial?

The current, fairly longstanding, rules give Member States quite a lot of discretion in deciding which land should be classified as LFA – and therefore qualify for LFA payments. Several years ago the European Court of Auditors said that some Member States – not the UK or Scotland I hasten to add – had exploited this flexibility and designated land as LFA which they really shouldn’t have. The ECA therefore called on the EU institutions to introduce a tighter, more scientific, and therefore fairer method of deciding which land is LFA.

Since then the European Commission has made repeated attempts to introduce tighter rules, including in 2005 when the current rural development regulation, which is the legal base for today’s LFASS, was being negotiated. But some Member States have resisted the change. The politics of the situation are understandable – in any Member State which has been wrongly designating land as LFA, tightening the rules will mean some people losing their LFA payments, and they are bound to lobby their governments against this.

The Commission’s current proposal is that for the 2014-2020 CAP, the Area of Natural Constraint designation will be based on a set of biophysical criteria set in the EU regulation (soil quality, slope, temperature etc). They propose that if two-thirds of the land in an area – say, a parish – meet these criteria, then the whole area would be designated ANC.

In Scotland’s case, we consider that we’ve already been doing the job properly. Our existing LFA designation is scientific and based on factors very close to the Commission’s proposed criteria. So our negotiating aim is that under the new system, all land which deserves to be in must be in. Ideally we’d also like to ensure that all land which doesn’t deserve ANC status stays out. But the Commission’s proposal makes it quite possible that some of this “wrong” land might come into the future ANC.

So we might have to deal with this within the design of the future ANC support scheme, maybe by saying that obviously non-disadvantaged land which has come into the ANC on a technicality doesn’t get ANC payments. But that’s jumping a long way ahead. We won’t know whether it’s necessary until the EU rules themselves are firmed up.

At the Council of Ministers in Brussels on Monday, the Dutch have organised an event to celebrate a new book about Sicco Mansholt. Mansholt was a President of the European Commission in the 1970s, and before that was Agriculture Commissioner during the formative years of the CAP in the 60s. When he died in 1995, one newspaper described him as the “sire” of the CAP.

In Mansholt’s day, the CAP challenge was all about harmonising the national rules in the six original Member States, to create a common market for each of the main agricultural commodities. The market was to be not only common, but also organised or managed (CAP jargon today still uses the term organisation commune du marché or common market organisation). Europe aimed to manage price levels actively and permanently, and through them the balance of supply and demand. The CAP budget was spent on measures to manipulate the market price – such as subsidies to traders for exporting surplus produce – and farmers benefited indirectly from that spending, via the market price, rather than receiving public money directly.

Of course much has changed since then. Successive reforms since the MacSharry reform in the early 90s have reduced the role of market management, and shifted the balance of the CAP towards supporting farmers through direct payments. Prices should now react to the normal market forces of supply and demand. The role of the market organisation measures has changed from permanently managing markets, to providing a safety net in the event of an absolute price collapse.

So in the current negotiations, one of the things Member States are looking closely at is how those safety net measures will work in future. We all hope there isn’t another beansprouts-style food scare, or a Europe-wide animal disease outbreak. But we need to make sure Europe has the right tools in its toolbox, just in case.

 

Today, on Europe Day, I was pleased to stand up in the Scottish Parliament and announce a cash boost of around £25 million from the European Structural Funds, to get young people into real jobs.

European Structural Funds have, for many years, played a significant role in facilitating structural economic reform in Scotland, supporting restructuring and development in key sectors and supporting opportunities and individuals in disadvantaged and vulnerable communities. As the Minister responsible for Structural Funds, I am delighted at the positive impact these Funds have made and continue to make.

Already, we have allocated over £650 million since 2007, supporting over 14,000 businesses, creating nearly 20,000 jobs and providing advice and support to over 240,000 individuals to enter employment or to progress in the workplace. These figures show that we are delivering projects that provide real added value.

I have made it clear that we will take an all-Government, all-Scotland approach to youth employment. We will work together with the public, private and third sectors. We want to break the cycle that too many of our young people find themselves unable to escape from. Of course the global financial downturn means these are tough times, but by incentivising recruitment and getting young people into jobs we can start to break that cycle.

This is why I will be asking the Structural Funds Programme Monitoring Committee to prioritise youth employment with the Structural Funds remaining unallocated in the period up to 2014. I want the focus of these funds to be incentivising the recruitment of young people into jobs, building on the £30 million already committed by the Scottish Government to youth employment.

I encourage everyone to contribute and tell us how you think this money should be spent.

Alex Neil, Cabinet Secretary for Infrastructure and Capital Investment.

 

Thank you all again for your comments and e-mails on our continuing negotiations with Brussels.  Your input into the new programme is vital if this is to be a truly collaborative process.

 Talking of which, the Commission has proposed some new approaches to support local and regional development including Community led local development (CLLD) an option which will be available across all 4 funds and will contunue to be mandatory for rural development and is similar to the LEADER programme .

 CLLDs allow funds from various programmes to be combined to support local development strategies which in turn, can be delivered by local action groups consisting of partners from public, private or the third sectors.

 What do you think, could this approach work for you?

 At what level would a CLLD work, would a local authority be too large or not large enough?

 Alternatively there is the provision for a Joint Action Plan (ERDF & ESF only) which offers the opportunity to deliver large scale regional projects and can apply to any area.

Finally there  is an Integrated Territorial Investment (ITI) offering the opportunity for the delivery of ERDF & ESF from different thematic objectives – the delivery of which could be delegated to cities.

 Do you think the new proposals would be more bureaucratic? (structural funds – bureaucratic – surely not)

 As you all know we have used CPPs in this current programme particularly to fund employability projects. In addition, remaining funds have been allocated to the strategic skills pipeline where money is used to match existing local initiatives to further support employment and training opportunities.

 Do you see a role for the CPP model in the new programme and if so is this a model which we could widen?

It was a great pleasure to see the first turf being cut at the new life science centre in Elgin on Friday.

The creation of the £6.5m Alexander Graham Bell Centre is an exciting step forward in providing the facilities Moray needs to be at the forefront of delivering innovative healthcare systems for the future.

The centre will act as Europe’s first specialist digital health centre bringing together industry, academia, and health experts in the pursuit of innovative solutions to our future health needs. It’s a collaborative project between Highlands and Islands Enterprise, NHS Grampian, Moray College and Scottish Government.

The new centre carries the name of the esteemed Scottish inventor Alexander Graham Bell, who taught in Elgin at a young age. As Bell is renowned as the father of modern communication, a great scientist and engineer, it’s fitting that this centre is being established in Elgin to ensure the use of the communication technology is embedded in future health delivery.

The building will be constructed within the Moray College campus and will be made up of the following complimentary areas:

Research and Commercialisation Centre – the heart of this centre will be the Digital Health Research Unit which is particularly useful in bringing clinical expertise to the point of need in remote and rural areas.

Clinical Skills Training Unit – this is a key driver behind the development of the centre. The building will incorporate a resuscitation room, a minor surgery training room, a four-bed training room and a health and safety room. NHS Grampian intends to transfer part of their education function here.

Business Incubators – commercialisation of research is key to job creation in the area. There will be three incubator pods available for businesses undertaking activity relating to the centre.

Health and Social Care Academy – Moray College will form an academy which will offer more courses at further education and higher education levels which will be delivered on campus as well as though e-learning with extensive use of video conferencing across the UHI networks.

Conference and Meetings facilities – the new facilities will be suitable for letting to outside organisations and will include 120 seat lecture theatre, breakout rooms, VC rooms, and other smaller meeting rooms.

Along with the Centre for Health Science in Inverness, this project demonstrates that Moray and the Highlands and Islands are serious players in the global life sciences sector. We will continue to work with other organisation on this ambitious project and look forward to the Centre opening for business in July 2013.

Here’s the story of yesterday’s meeting of our CAP stakeholder group – as it happened.

10.05. We advertised a 10.30 start with coffee available from 10. But already the room’s half full of people keen to get started.

10.30. Minutes of the last meeting, matters arising. Some new data on likely eligibility of deer farmers for the new system as proposed by the European Commission. For those who’d like SRDP support for lime and slag application – sorry we’ve now triple-checked and it’s not legal.

Presentation on the government’s land use strategy and how it interrelates with CAP. Originally planned for the previous meeting but we talked about CAP itself for too long and ran out of time.

Update on the negotiations in Brussels and our own work here. General agreement that the Commission needs to show willingness to move. Pleas for more discussion with stakeholders on direct payment issues (fair comment).

Presentation of consultation results (look out for them on our website very soon). Discussion on both the results themselves and the innovative consultation format. Mixed views on the latter but a lot of positives (“it stopped us from just writing the usual load of waffle”).

12.45. Lunch. Lots of little discussions and meetings over the sandwiches.

1.30. Greening. The easy bit: criticising the Commission’s proposals. The trickier bit: coming up with really good alternatives.

Producer organisations. We will table a paper for discussion next time.

Research and analysis. Quick run-through, for information, of the various bits of work our analysts have done to help inform our negotiating position.

Any other business, including SRDP transition issues.

3.30-ish. Meeting closed, thanks to everyone for their time and input. Usual post-meeting chats.

3.45. Log on to check emails. 137 unread !

I’m writing this on the train back from London having accompanied the Cabinet Secretary to a meeting between the Defra ministerial team and Devolved Administration ministers. CAP wasn’t the only item on the agenda – these meetings are used to take stock of issues across their respective portfolios. But it did take up a substantial chunk of the meeting, probably more than any other policy issue.

Defra Minister of State Jim Paice said the Danish Presidency is making real efforts to achieve some progress in the CAP negotiations. I think all the ministers present shared the view that it would be helpful if the Commission showed a few more signs of movement too.

For us, Cabinet Secretary Lochhead highlighted some of the crucial issues: the budget; having the ability to tailor the policy in Scotland; new entrants; coupled payments, and so on.

On greening, everyone could agree on the need for more flexibility. And so do all the Member States plus the European Parliament’s Agriculture Committee, said Secretary of State Spelman.

Greening is the topic for the next Council of Ministers discussion in a couple of weeks. I wonder whether the Commissioner will (excuse the mixed metaphors) stick to his guns, or be willing to go back the drawing board?