Lead Partner event 20/2/19 Minister TII speech

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OFFICIAL – European Structural Funds Lead Partner Event, 20 February,
Minister for Trade, Investment and Innovation
SPEAKING NOTES FOR EUROPEAN STRUCTURAL FUNDS
LEAD PARTNER EVENT, GLASGOW, 20 FEBRUARY 2019
[Thank you David for the introduction]
INTRODUCTION AND SCENE SETTING
1. Welcome to the first lead partner event of 2019.
2. It’s great to be here this morning. It seems like no time at
all since I welcomed some of you to the Annual Event in
Inverness in November, where we celebrated the
contribution of 30 years of Cohesion Policy across
Scotland.
3. As we are at the half way point of this programme, it’s a
good time to take stock and recognise where we are. We
have all gone through a steep learning curve with the
European Commission’s Regulations, and the changes
compared to the previous programmes. The stance taken
by the Commission on fraud, procurement and audit trail is
far more exacting than in the past. Systems have

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evolved, and the harsh impacts of decommitments and
audits have been tangible. Together we have faced the
difficulties of securing match funding.
4. The focus of today is to jointly explore ways to maximise
our delivery of the ESF and ERDF programmes, to ensure
that we are more efficient while adhering fully with the
regulations.
PERSONAL REFLECTION
5. In June of last year, I was appointed Minister for Trade,
Investment and Innovation. With that came responsibility
for European Structural Funds, European Territorial
Cooperation Funds and State aid. My very first
appearance as Minister at the Economy committee in
parliament was about these programmes.
6. To prepare, I had to very quickly understand how these
programmes worked, and how they supported activity
across Scotland. From this experience two key things

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struck me about how these funds function: firstly, the
crucial part that you as organisations play in delivery of
these programmes – and secondly, the complexity of the
rules and governance.
VALUE OF THE PROGRAMMES
7. Since then, I have had a chance to visit some projects
supported by the programmes, meet some of you who
have been delivering them and speak with the people who
benefit. Without travelling far from my constituency of
Provan here in Glasgow, I met the team from Scottish
Natural Heritage, Scottish Canals and Glasgow City
Council to visit the Canal and North Gateway Project. That
project is transforming green space around the Forth &
Clyde Canal so that the local community can enjoy the
benefits of an improved and protected natural
environment.

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8. I also paid a visit to somewhere close to my heart, Firhill
Stadium, to meet with Partick Thistle Charitable Trust. I
never thought this job would lead me to talking about
Partick Thistle and Europe in the same sentence! This
Charitable Trust has been supported by the Social
Economy Growth Fund to increase its outreach
programme. They provide social activities including
football, for people living in poverty, for those who are
homeless and for those suffering from mental health
issues.
9. Visiting these projects, seeing the improvements they
make to our environment and the difference they make to
people’s lives provided me with a real insight to the
essential part they play in supporting our economy and
society in different ways. These achievements would not
happen without strong collaboration between you the lead
partners, delivery groups, and the Scottish Government as
the Managing Authority. Based on the number of projects I

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have recently approved, I appreciate that you are still
working hard to identify opportunities to utilise these
funds.
10. To date, we have awarded in total £490m to
approved operations. This includes the new Natural and
Cultural Heritage programme that aims to improve visitor
facilities in our beautiful Highlands and Islands.
11. In addition to this, £100m more has been approved at
Strategic Intervention level, extending the programmes
managed by Scottish Funding Council and Skills
Development Scotland. There is also a new Innovation
Challenge Fund, to be managed by Scottish Enterprise,
supporting our aim to become a future proofed, high-tech,
low carbon economy
12. In these times of uncertainty caused by exiting the
EU, it is essential that we all continue to work together.
Your role as lead partners is crucial, identifying need,
producing innovative proposals and delivering on them.

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The Managing Authority’s role is to support you and
ensure funds are managed appropriately. This
collaboration needs to continue to enable us all to tackle
and overcome the challenges facing Scotland.
CHALLENGES AND COMPLEXITY
13. However, we all know that this hasn’t been easy. I
am very aware of the real concerns that lead partners
have about the complexity of the programmes. I am also
very aware of the Managing Authority’s concerns about
the levels of activity being reported. Most importantly, we
all should be very aware of the effects of not achieving the
N+3 targets which could result in further loss of funding
opportunities. Honestly, it frustrates me that we will not
receive the full value of these funds in what may be our
last year of participation. Therefore we all need to do
whatever we can to maximise the spend and impact of
these funds.

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14. But how do we do that? The Managing Authority
have already carried out an Early Programme Review in
2017. Having listened, we took action that has resulted in
new activities, such as those I mentioned earlier, the
Natural and Cultural Heritage fund and the upcoming
Innovation Challenge Funds. We increased intervention
rates, and we made amendments to the rules where
possible.
15. In addition we have recruited more staff, including a
dedicated EUMIS contact; we have increased the
frequency of progress meetings with lead partners; we
have expanded our engagement at events like this and
introduced an e-bulletin to keep you up to date. And I
know David and the team are committed to continuing to
review and improve how the Managing Authority works to
give you as much support as possible.
16. But we still need more from you, the lead partners.
The structure of these programmes is meant to give you

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the freedom to identify the needs in your area and deliver
the programme over a number of years. It also requires
that these projects are achieving the targets set out and
are spending the allocated budget. Frankly, it is
disappointing that in too many cases this is not happening.
17. We know that the regulations and governance of the
programmes can act as a constraint. But we all have to
recognise that this is public money and must be managed
with a transparency and accountability that can withstand
robust scrutiny. We have learnt lessons from previous
programmes, and we cannot afford the types of errors
made in the past that resulted in the loss of significant
sums of money. That said, it is crucial that improvements
are made in the rate of progress and expenditure being
reported to the Managing Authority.
18. As part of the agenda for today, David will spell out
the risks and requirements that we face. A key part of the
day is to discuss together how we all can do more to

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deliver these programmes. By meeting these challenges
together and working towards solutions, I am confident we
can achieve these improvements to maximise these
funds.
19. The investment in the economy through these funds
is worth nearly two billion pounds, and it is targeted at
critical sectors of the economy: employment, skills, SMEs,
innovation, transport, low carbon. Supporting these
sectors is vital to our economy’s success now and in the
coming years. We are mid-way through the current
funding period - a lot of good work has been achieved. We
need these programmes to be successful. We need now
to address issues and risks that could prohibit us from
meeting our funding ambitions and delivering on their
promise.

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FUTURE FUNDING
20. Finally, if you think that I might have come here today
to update you on the status of the Shared Prosperity Fund
then I’m afraid you may be disappointed – as, frankly, are
we. David and his team are continuing to press UK
Government officials for answers on replacement funding,
but despite this we are still none the wiser on how much it
would be worth, what activities it might support, and how
much freedom we would have to deliver it in Scotland.
21. We await the delayed UK government consultation,
as I’m sure you all do too. We have repeatedly made the
point to our UK counterparts that any replacement funding
proposals must provide us with at least the same amount
of money and flexibility as we currently receive. And
what’s crucial is that the devolution settlement is
respected. The Scottish Government needs to be involved
in the development, design and management of these

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funds, so that we can make sure that they deliver the best
outcomes for Scotland.
22. Thank you for your time. I ask that you to work
together to ensure this is a productive day, and that you
participate in the discussions to address the issues and
risks I have highlighted.
[Invite Questions]

Lead Partner event 20/2/19 Minister TII speech

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Lead Partner event 20/2/19 Minister TII speech