European and External Relations Committee

Meeting date: Tuesday, May 1, 2012

Official Report 462KB pdf

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European Union Structural Funds

Item 2 is an evidence session for the committee’s inquiry on European Union structural funds. There will be two panels of witnesses, and I welcome the first panel to the committee: Alison Cairns, head of development at the Scottish Council for Voluntary Organisations; Alan Boyle, chief executive of West Fife Enterprise; and Laurie Russell, chief executive of the Wise Group. I invite members to ask questions.

Good afternoon, everyone, and welcome. Perhaps I should declare an interest, in that I know Alan Boyle very well and have done for all the time that he has worked with West Fife Enterprise. It is nice to see him here today.

I will focus on the current European programmes from 2007 to 2013. It would be helpful to know how you think Scotland’s current structural funds programmes have performed in your area of expertise.

The current structural funds programmes have still provided significant opportunities, especially for small third sector organisations, to continue to deliver some of the excellent results that I hope are reflected in the papers that have been distributed to committee members. As the programmes have progressed and the level of resources has started to reduce, it has become tougher and tougher to sustain such activities and especially to sustain the match funding through the new model of community planning partnerships as strategic delivery bodies.

When challenge funding was closed to third sector organisations, our unique selling points and excellent performances were lost. We always used to come out very high up in the selection processes for that. Now we face the conundrum of our local authority partners having to decide whether to support their own services or the third sector. I know that everyone expects the best services to be supported, but that is not always the case.

The SCVO has a multifaceted relationship with the structural funds programme in Scotland, in that we have accessed funding from the Highlands and Islands programme and the lowland and upland Scotland programme. We are also involved in advisory groups and programme monitoring committees, and we have been involved in the administering programme management executives as directors of the previous companies.

Regarding the current programme’s performance, the programme’s principles are sound, and lots of things in it are to be welcomed and continued, not least for the voluntary sector. Not many funding streams that are still around allow grass-roots development. Small organisations that know what works in their communities for their members and constituents and would like to design services around that can apply for structural funding to enhance what they do. That has evolved over time, particularly with the introduction of community planning partnerships in the south of Scotland. I will not repeat what Alan Boyle said, but he alluded to some of the challenges in that for small organisations.

Barriers to the sector’s participation in structural funds have been issues of scale—for example, setting high thresholds for projects, particularly in lowland and upland Scotland, marginalises smaller organisations and prevents them from accessing funds. Process issues make it challenging for organisations to consider a fund as something that they can be part of. The social policy objectives do not quite fit with the fund administration process, which makes things difficult. The loss of the 30 per cent advance payment has created a lot of cash-flow problems, particularly for small organisations, so funds have become viable only for large organisations that have a good cash flow.

There have been issues about what is and is not eligible, and there are inconsistencies across the funds. We have experience across the funds and of LEADER and rural priorities, and there are inconsistencies in the interpretation of fund arrangements—something that is eligible for one is not eligible for another. That is being pushed down to voluntary organisations to manage and work out. Unnecessary burdens are placed on those organisations.

In the main, the funds have transformed a lot of voluntary organisations. Alan Boyle’s work is a good example from lowland and upland Scotland. That work would not happen without the funding. There are other examples across the Highlands and Islands and the rest of Scotland that would not happen without the funding.

I have been chief executive of the Wise Group for almost six years. For the 17 years before that, from 1989 to 2006, I was chief executive of Strathclyde European Partnership, which managed the structural fund programmes in western Scotland. The first large-scale programme that was approved in Scotland was the Strathclyde integrated development operation—not a very snappy title, but that is what Brussels called it.

Since the late 1980s, European structural funds have been one of the most important instruments in Scotland, focusing on economic and social policy together. That has been the main benefit, which has allowed organisations—whether third sector, small-scale or national organisations—to not just look at creating jobs and promoting business but tackle social issues at the same time. That is the most important aspect of structural funds, at a big-picture level.

Over the years since the late 1980s we have moved away from a bottom-up approach. As Alison Cairns described, local organisations, which know best what happens in their communities, were able to bid for structural funds, find a co-financer—or they might have already had co-finance—and develop new projects or enhance existing projects. We could clearly see the added value to those projects.

During the previous programme, we tried to have a more strategic approach in Scotland, but we got halfway there—I think that we ended up with the worst of both worlds. When I joined the Wise Group in 2006, it had been benefiting from the structural funds for about 15 years. Out of a £20 million turnover, it had £3.5 million of structural funds. Our turnover in 2011 was £27 million, and we have about £400,000 of structural funds. The funds have become less important to us.

Part of that was deliberate, but part of it was because we have moved to a process that does not really work with a bottom-up approach. The strategic approach has meant putting the funds through Government agencies such as Skills Development Scotland and Scottish Enterprise. However, I do not think that we can demonstrate added value or see the outcomes. None of us knows where that money has ended up and whether it has led to jobs, training or particular issues being tackled. Under the current system, we have been unable to set out what we want to achieve with the structural funds and drive that through. There are lessons for the future in the current programme.

Is it fair to say that that has meant that the same kinds of community initiatives as before are no longer coming through because they are being prevented by community planning partnerships? Is that a fair summary of what each of you said?

The experience of the community planning process in the Highlands and Islands is different from that in the LUPS area. In the Highlands and Islands, not so much has gone through a community planning process and there is still direct access to funding for voluntary organisations. However, there is experience of organisations being marginalised from the community planning process—organisations that, before that model was put in place, would have been able to access structural funds directly.

The playing field has been changed and third sector organisations have been marginalised from it. As a result, they have less and less of a share of European structural funds. The policy context is that civil society is seen as the driver for change and social innovation so, at the end of the day, the rhetoric from Brussels does not quite sit correctly with the share of funding that comes to the sector.

I do not think that community planning is the only reason why fewer funds are being accessed by third sector or community-based organisations. The community planning partnerships that we work with are broadly inconsistent in how they apply structural funds. Each community planning partnership makes its own decisions and no strategic view is taken. For example, a partnership will decide whether to run a structural funds project itself, whether to put that out to tender or whether to approach an organisation about running that in partnership. We see all three approaches. Some would work in favour of an organisation if it had a good relationship with a community planning partnership or if it won a tender but, in some areas, community planning partnerships really just allow local authorities to deliver programmes.

I agree with Laurie Russell. The way in which we use structural funds has changed significantly. In response to Helen Eadie’s question, the best way of articulating that change is that, if somebody tried to start West Fife Enterprise in this structural funds programme, it would never get off the ground. That is how far we have moved away from encouraging bottom-up, community-bedded projects that have the capacity to grow and expand.

We have been fortunate that our long-term engagement in structural funds has built us a reputation as an organisation. I am told that we punch above our weight on performances, targeting people, working with employers and getting people into jobs. That is what has kept us credible when working with community planning partnerships. However, if we were to try to be creative and start a new initiative, that would be extremely difficult, given the way in which structural funds are being applied in the current programme.

14:30

I have a quick question for Alison Cairns. One of the themes coming through the evidence that we have taken is about the level of expertise and knowledge that is required to apply for funds. If a small organisation applies to the Big Lottery Fund, the Big Lottery Fund will send someone out to help it to fill in the forms. Is there a point of contact? Does the SCVO, for example, have expertise that small organisations can go to for help?

Until this programme and halfway through the previous programme, the SCVO had technical assistance contracts. We were able to directly support organisations that were applying for structural funding. When applicants for funding have interventions and support from us, the rate at which applications become live-funded projects is quite high.

At the moment, we provide a technical assistance service on the rural priorities through the Scotland rural development programme and we have a relationship with LEADER. The transfer rate from applicant to live project is extremely high because of the interventions that we provide.

We have not had money for technical assistance since halfway through the previous programme. The SCVO works with its sister councils across the United Kingdom—the National Council for Voluntary Organisations in England and the councils in Wales and Northern Ireland. Scotland is the only country in which the third sector does not have technical assistance. The third sector has technical assistance through the NCVO and its regional third sector partners in England and through the bodies in Wales and Northern Ireland.

As you know, technical assistance sat with ESEP and the Highlands and Islands partnership programme. We have had a good relationship with those organisations. In particular, the Highlands and Islands partnership programme provided an extremely good customer service, going beyond what is required under its current contract. However, there is a deficit in that service compared with ours, because we are aware of all the other funds that are out there, of all the governance issues and of all the legislation such as that on VAT and the charity law burdens that apply to organisations.

We can provide a more comprehensive and holistic service to organisations that are applying for structural funds because we know about all the other bits of the jigsaw. We still get people coming to us for advice and we provide it when we can, but we are not paid or funded for that and we no longer have the resources to provide that service.

Are there any other questions?

Laurie Russell talked about the discrepancies in how the community planning partnerships are working in this area. Last week, we heard about the two specific examples of the partnership model in Dundee and the contract model in Glasgow. Do you have any comments on those models and how well they are working?

We should stick with one approach. During the previous programme, we moved halfway from the bottom-up approach towards a strategic approach. Clare Adamson highlighted how complex it is to apply for structural funds and that is absolutely true. As Alison Cairns said, a number of organisations can provide support, but why spend the money on a complex and inefficient system to get relatively small sums of money to small organisations? We should move to a more strategic approach, be clear about the objectives that we want to achieve with structural funds and then manage that through a national contracting system. I do not see any real benefits coming from either the partnership or the contract approach at the community planning level.

We should not be looking at the structural funds on their own as a sum of money that we treat differently; we should see them as being part of how the country funds the strategic objectives of economic and social cohesion that we want to achieve. We need to agree what those objectives are and manage them through a contracting system that allows the contractor or commissioner to be clear about and measure the outcomes that they want.

At the moment, we have no idea what the structural funds buy us in Scotland. Although we produce lots of reports, they tend to examine the money that we spend; indeed, we spend a lot more time and effort on auditing the money going in than we do on the results coming out. As Alan Boyle and Alison Cairns will know, what people measure in employability programmes are the jobs you get people into and the length of time you sustain a person in work, and we have to shift the structural funds towards outcomes. The best way of doing that would be to have a commissioning and tendering process that ensures that the best organisations in Scotland can achieve the structural fund objectives that the Scottish Government wants to achieve.

I sound a note of caution about seeking to make everything strategic. One of the key values of structural funds is their ability to add value and allow something to happen that otherwise would not have happened. If we streamline these funds with all the other domestic funds, they will end up being no different from them and we will lose entirely our ability to be creative.

In response to your question, there is clearly inconsistency among community planning partnerships in a number of respects. We need to consider seriously having within the framework of structural funds a common code of practice that community planning partnerships must work to. As a tangible example, some CPPs will meet the costs of third sector organisations up front and claim the European funds later, while others simply act as the medium to allow the bid to be made, leaving the third sector organisations vulnerable to cash-flow demands. Not only has that brought a number of organisations close to crashing, but it has disillusioned some and led to their drawing out of structural funds altogether. I agree with Laurie Russell that there needs to be a more strategic approach to many of our main funds, but the fact is that many of the big organisations that can take such an approach grew from little acorn starter organisations many years ago. If we do not retain that, we will lose something really important to the structure of the third sector in Scotland. Certainly, however, CPPs need to be far more consistent in how they deal with such matters.

My comments might bridge the views expressed by Laurie Russell and Alan Boyle. Structural funds need to be flexible—there is no one-size-fits-all mechanism. Of course, there will always be a temptation to create that kind of co-financed, commissioned, national and strategic mechanism, whereas the Commission itself wants more community-led local development. Both approaches have their strengths and weaknesses. Although the community planning or LEADER model is a challenge for national organisations such as Laurie Russell’s because it takes them too much time to work across 32 local authorities or CPPs, the fact is that many of those organisations deliver vital services for children and young people, employability and so on.

On the other hand, if you do not take the LEADER-type approach, you marginalise regionally based organisations such as Alan Boyle’s or initiatives such as the Kirkmichael village shop and petrol station, which, as members will know, were bought by the village because their closure would have left the community bereft of key services. Such grass-roots economic community developments are happening up and down the country. In that respect, any instrument must blend both approaches if it is to work and achieve the social policy objectives that we want. We need a model that allows both local community development to flourish and national organisations such as Laurie Russell’s and others to do what they do best.

Although, as I have said, it is nice and easy and is tempting to try to formulate a one-size-fits-all approach, I suggest that we do not do that and that we have more conversations on the matter. We have been having conversations with our UK partners and the Department for Business, Innovation and Skills in England, which is going to lead the negotiations on the partnership contract. It has recently taken an NCVO employee on secondment for a year to help to facilitate some of those things.

The voluntary sector in England has had a terrible time with the co-financing model. It has been extremely difficult and grass-roots community development has been marginalised. Although some people were happy about the removal of the regional development agencies, that has caused a problem for regionally based organisations. The sector has been taken out of designing and implementing the priorities in the operational programme, and because it is co-financed, there is co-financing of anti-poverty work. That work cannot be decided at a national Government level. It has to be done by a combination of grass-roots organisations and national strategic bodies. I make a plea for that blend.

Thank you for that detailed response.

I have a question for Alison Cairns. We will hear from the University of the Highlands and Islands later but, in the summary at the end of its written submission, it mentions what it considers would be the benefit of

“A Single Scottish Plan, identifying shared aims and objectives”.

I do not want to put words in your mouth, but I think that you said that you do not want a one-size-fits-all approach. Do you disagree with the UHI or is there common ground somewhere?

I have not read the UHI’s written submission, so I cannot agree or disagree with it. I will have a look at it later and provide a comment on that point, if you like.

There is no harm in having a single plan for Scotland. I would just challenge the process by which we go about creating that. I am talking about getting the right instruments for distributing and managing the funds so that we do not have large Government bodies such as the Department for Work and Pensions domesticating the funding, matching it at source and then contracting everything out. There might be a role for that approach in some instances—it would probably benefit organisations such as Laurie Russell’s, which operates on a larger scale and across different areas—but it marginalises the best of what we get from community development. Community bodies cannot participate in large-scale contracting arrangements because they do not have the cash flow or the resources to apply for contracts and they do not want to operate throughout Scotland. The blend that I am talking about is about the instruments and programmes that are developed.

We do not disagree with the UHI. What I am saying might reflect what it is saying. We need a strategic plan and the strategic objectives to be set out from the centre. One of those objectives—I would agree with this—could be to set up a small-scale programme for locally based organisations to achieve something that the Scottish Government believes we should achieve across all communities in Scotland.

For example, under the Scottish Government’s enterprise growth fund, third sector organisations can bid for up to £200,000 to grow community-based activity. The structural funds could add to that fund so that there was more money available for projects, if the Scottish Government sees that as a strategic objective. There would then be a tender for an organisation to manage that, which could be the SCVO, the Wise Group or another body, and it would work as a bottom-up fund for that kind of activity.

My model for the use of structural funds is not to exclude small-scale, bottom-up projects that will achieve the overall objective that the Scottish Government sets out, but we should not work in a random way such that there is a different approach in every part of the country and smaller organisations have to take on the administration of running the structural funds aspect. I would want that to be taken out and dealt with at the centre, which is what people call the co-financing model.

There are pros and cons to any model that we set up. The Wise Group also works in the north-east of England, where we run a contract that has European social fund money in it across 12 local authorities. To us, that model is much easier to manage than the Scottish European funds at the moment because it is genuinely strategic and regional—we can take a regional approach or a local approach, but we use a strategic model. We are clear about the small number of strategic objectives that we want to support with the structural funds, and we bring in national money at the same time and at the centre.

14:45  

I think that we have covered that ground considerably. Do members have any new questions?

The witnesses have mentioned both the contract approach and the partnership approach. Would they come out in favour of one or the other for managing the funds across Scotland? In our previous evidence session, we heard from Glasgow City Council that it works on a contract basis, although we heard that Dundee City Council works on a partnership basis. Do the witnesses have any observations to share with the committee on that?

The partnership approach is by far the preferable, especially in supporting small to medium-sized third sector organisations. However, given the comments that have been made about the inconsistencies in community planning partners, we want to achieve a flatter, more transparent methodology of working in community planning partnerships. They have the scope to work extremely well, but they have not got there yet. I would prefer the partnership model. However, I believe that, as with a number of things that we have touched on this afternoon, we should be able to work on a small scale—locally—as well as strategically through community planning partnerships if we have a more even-handed method of framing what community planning partnerships should be doing.

In principle, the partnership model is a good model although, as you know, there are inconsistencies in quality and in how dynamic different partnerships are, so there is patchy economic development across the country depending on who is involved in what partnership. There is no reason why the LEADER approach cannot work for all the structural funds as long as it takes into account the strategic piece and allows for national programme delivery. The challenge is in working out a way for that to happen.

The other challenge is that, although LEADER has worked well in lots of ways and people work really hard to make it good, it has evolved to be controlled predominantly by local authorities. They underwrite it, so they should expect a little bit of the control but it is meant to be an enabling partnership for community development. Getting the balance of power correct in these partnerships as well as the innovation is a challenge.

Our colleagues across the border have had the co-financing model for some time, and we have had prime contracting arrangements for employability activity through the DWP in Scotland, but that does marginalise the sector, because it is difficult for it to engage in such large-scale contracting. The audit burden is high. This is sort of putting the cart before the horse, but we could look at how necessary some of the audit processes that are in place are and ask whether we could free some of that up to make it easier for organisations to use and manage structural funding.

It is not as simple as an either/or choice. One can contract and insist in the contract on a certain level of partnership. The reason why the third sector is marginalised in DWP programmes is that the DWP said from the beginning, in its guidance, that 30 per cent of the activity would be delivered by the third sector and then did not stick to that. I am sure that if the Scottish Government had such a guideline, it would stick to it. That is important. One can insist on the kind of partnership approach that one wants through a contract method.

We all want to be involved at the strategic level and in helping to shape the objectives. The delivery should then be about the most efficient way of doing it. Often, that is through a partnership; at other times, there is a contract with one organisation that is left to get on with it.

I thank the witnesses for their contributions and their attendance today.

I suspend the meeting for a short period to allow the other witnesses to join us.

14:50 Meeting suspended.

14:53 On resuming—

I welcome our second panel of witnesses. We have Dr Jeff Howarth, vice-principal for research and commercialisation with the University of the Highlands and Islands; Graeme Hyslop, chair of the West of Scotland Colleges Partnership and principal of Langside College; and Derek Banks, director of finance and estates at Coatbridge College. Good afternoon to you all. We will go straight to questions from members.

The European Commission, in its staff working document for a common strategic framework and its horizon 2020 proposals, states that it wants greater synergies between the research and innovation activities that are funded under the European Union regional policy and the research and development framework programme. It is clear that structural funds have an important role in supporting regions to build up their research and innovation capacity. Indeed, the Commission has already said that it sees that as being taken forward through the development of smart specialisation strategies by the national and/or regional managing authorities, which would involve key stakeholders such as higher and further education bodies, local industry and social partners. On the back of that, what do you perceive to be the main opportunities for greater interaction between the EU’s research and regional policies?

Nobody is keen to answer that, so I will start. Over and above the points in our written evidence about transition and strategic delivery body status, alignment between programmes is pretty important. In fact, there are a whole bunch of nested alignments that we think can add value. We are trying to make the link between structural funds and years of capacity building to be ready for the new framework programme, horizon 2020. That is a great challenge and there are several issues within it.

For instance, one round of structural funds and a piece of research capacity building does not necessarily prepare an institution to compete at the highest level in the framework programmes. That can be a challenge, so we need to consider modifying the mechanisms so that they facilitate that transition. I am not entirely sure that the linking of innovation and research is necessarily the way to make that happen. Some of the current budgets in the seventh framework programme, such as the regions of potential budget, are disappearing, with the responsibility moving to the structural funds. I am worried that the purpose of those budgets will not be addressed properly.

There are ways in which alignment could be improved. That goes back to the idea of partnership. Institutions that are capacity building using structural funds are often not too far away geographically—sometimes they are, right enough—from excellent institutions that have been performing at the highest level in the framework programmes, although they are apart socially. Rather than a kind of nominal parenthood relationship in which someone writes a nice letter saying, “We support that first-pass framework programme from an institution,” why not fund much more creative and real collaborations between capacity-building institutions and ready-made experts? There are no existing mechanisms that are designed to do that. Regions of potential promotes the idea of partnership, but it funds only one institution for a set of activities, and what we might call the uncles get almost nothing out of it. There could be another level that involves promoting not just thematic alignment, but actual alignment and real collaborations.

What kind of partnerships need to be developed to maximise the benefit?

If the objective is to equip capacity-building institutions in the regions to perform at competitive levels in the framework and horizon 2020 programmes, we need to build research collaborations. That is fine and there are easy ways to do it.

You mentioned innovation. That is another set of nested alignments that are not well addressed. The issues of aligning structural funds to framework funds or business connections are not particularly well addressed in the European regional development fund or Interreg budgets. The issues are nominally there, but real eligible funded activities that can be done with structural funds do not seem to be fully formed.

The college sector has not been particularly actively involved in the research aspect of structural funds since the funds were set up, although we have had materials development and knowledge-transfer initiatives that have received structural funds support. For the college sector, we are probably talking about trying to be engaged where the research has an impact at the level of the local or regional economy. We can perhaps tie in research activities with some of the work-related training that is going on. There is a role for colleges. The issue perhaps takes us back to the discussion with the previous panel about funding what is required, rather than trying to squeeze something into the funding that is available. We need to think more closely about what Scotland and its regions need, and I am sure that colleges can play a part in that.

15:00

Does Derek Banks want to say anything about that?

Unfortunately, I am afraid that I do not have the experience or knowledge to be able to comment on that question.

I return to Graeme Hyslop. Is the college sector starting to make any preparations for looking at the synergies between the use of the structural funds and horizon 2020? I am conscious that the colleges have not been too involved in research funding, but we are trying to look at how we can use those funds to have a greater impact with small and medium-sized enterprises and the creation of employment opportunities.

That is the key. We have the connectivity with the SMEs and big ideas about some of the emerging challenges for Scotland—about the application of renewables, for example. We have professionals and the wherewithal in the sector to contribute. Whether we can lead or whether we should be lead bidders in a strategic or local model remains to be seen, but there is quite a lot of energy in the sector to contribute to an on-going debate.

The biggest challenges in the current structural funds programme relate to how we can use the experience of that programme to deliver what Europe expects and Scotland needs in the next programme. From that point of view, I am a kind of hybrid guy in relation to the local partnerships and the strategic plan. To put it another way, I am a bit of a Stalinist and a bit of a Maoist. Let a thousand flowers bloom, but do that within a plan. That is the Laurie Russell line. We can do both. In fact, my experience as a member of the programme monitoring committee is that, right in the middle of the programme, in partnership with the European Commission, we turned from a community-based model to a strategic model. We did that through dialogue in the mid-term evaluation review process, and both models work for the college sector. My sector punches well above its weight—even better than Alan Boyle’s sector—in either model.

What is coming through is that people in the public sector in Scotland are flexible enough to make any model work. The contribution that my sector can make to research is still untapped—that question is unanswered—but there is willingness to contribute.

I would like to pick up on that theme. Obviously, UHI is an unusual university in that it is also part of the college sector, and we are keen on a full tertiary continuum that links research to further education. In some senses, there could be further alignment. Structural funds—the European social fund and ERDF Interreg-type things—tend to be too discrete. The ESF tends to focus on training and educational outputs—and that is what thou shalt do—whereas, in our programme, the ERDF provision is very much focused on research and pure research posts with funding from the regional development agency. It is all to do with the alignment to the research excellence framework and framework programmes. However, the truth is that we are a holistic academic business and that teaching and research are inseparable. That is doubly so when we think of the continuum from the further education and higher national qualifications, which often form the first part of our degrees.

There are pure, discrete research investments that are made with no reference to us as a holistic academic business, and there is a risk of getting stranded research investments that do not make the connection. In UHI, that is doubly unfortunate for us, as we really are trying to promote the full tertiary connection. Many of our courses in years 1 and 2 are embedded with further education and college staff and culture, but we are promoted as, and we very much want to take part in, aligning to the excellence framework. If alignment changes can be made, there can be alignments with the programmes by all means, but we should try to ensure that there is flexibility so that the academic business of teaching, research-informed teaching and research-teaching linkages are not inadvertently excluded.

Even if we then say, “Well, that’s fine. It can be done,” there should be a specific objective to achieve it rather than an approach of sneaking it through within the rules. There is a key issue in that regard, which relates to the link between research and education.

Colleges have traditionally been regarded as centres of excellence for vocational training and as a step in the right direction towards university. I am interested in the new concept of research starting at college level and, we hope, continuing in the universities. What mechanisms do you need to help you to achieve that?

It is an area in which we need to be in partnership, which takes me back to what Laurie Russell said. Jeff Howarth is right about the research continuum—there is a danger of full agreement bursting out here. His university—which is mostly made up of colleges—makes research work for the local economy; I cannot say the same for any other university in Scotland. If the sector is to contribute to the research continuum, we need to be in partnership with the universities, to get the local bit and the connectivity with small businesses.

My college, which Hanzala Malik knows well, has an excellent working relationship with East Kilbride and District Engineering Group Training Association. All my engineering trainees are learning in a real-life situation, off campus. They are gaining practical experience at the very beginning of their learning. Research is the bedrock that is needed to change things. The bedrock is there; we need to foster specific partnerships to make the research realer and stronger—I do not think that “realer” is a word, but you know what I mean.

May I jump in again?

Let me first check whether Aileen McLeod wants to come back in.

I am happy to hear from Jeff Howarth.

I have been invited here to represent Universities Scotland, so in fairness I should say that a concept that is around, which is not restricted to UHI, is the apprenticeship-to-PhD approach, which is meant to span workforce development and skills in a logical, planned way, to address workforce development for key sectors. Jim McDonald, at the University of Strathclyde, is keen on that approach, and we are discussing how Strathclyde’s experiences can be translated to our area, to ensure that we address workforce development in the north on a similar basis, for example in relation to the growing energy sector. The concept has come from the college sector, tertiary institutions and some of the technology-based universities, of which Strathclyde is a perfect example.

The use of structural funds in a way that not only does not hinder but promotes the apprenticeship-to-PhD idea, to address key economic development opportunities in Scotland’s sectors, would be a great result.

I agree whole-heartedly with what Graeme Hyslop said about off-campus training, which is important, particularly in ensuregineering.

I must declare an interest to Dr Howarth: I have been a strong supporter of UHI since the initial concept, and I have been a member of the Scottish Association for Marine Science, at Dunstaffnage for about 20 years—I think that I am allowed to use a Bunsen burner there for an hour a year, or something like that.

UHI is one of Scotland’s three strategic delivery bodies for the funds. Can Dr Howarth provide examples of the impact of the 2007 to 2013 structural funds programme, particularly in the area of renewables, which we hope will be an important industry in Scotland?

I can talk about discrete projects that were invested in, and I can talk about how projects are coming together to equip us to support marine renewables, for example, in the north.

In the most recent programme, we invested—partly using structural funds—in a new facility in Thurso, right on the Pentland Firth, that is focusing on environmental impact and resource assessment and risk issues around marine renewables. We also supported a similar activity—

Sorry—is that to do with wave, tidal or offshore wind, or all three?

It is specifically to do with wave and tidal, but it is not too difficult to translate some of the competencies in the environmental impact assessments to offshore wind farms. The building was created; £4 million was spent on a research team to use that building; and there is a £1 million PhD programme linked with the SuperGen renewables scheme, which is run across the UK by the Engineering and Physical Sciences Research Council.

In addition, I am sure that you are familiar with the marine biomass activities that are going on in SAMS. Those are funded by Interreg, which is another source of structural funding. Those major investments have gone ahead: there are buildings, two research teams and another specialism—in biomass, rather than in wind-related and tidal activities.

All that has been supported—rather artificially, if you like—by a little business development group. It would have been much better if the rules had allowed it to be embedded by aligning it with the universities business and knowledge exchange. That has created an opportunity for UHI to sensibly speak to utilities and engineering companies about the PhD programme and apprenticeships, particularly in the renewables sector. We have built capacity, and by hook or by crook we have reached the point at which we are ready—we hope—to make a sensible contribution to the development of that sector in the north.

I have one more question. Your submission states:

“A Single Scottish Plan, identifying shared aims and objectives, with provision for regional input within this, will lead to greater impact from EU funding and contribution towards Government Economic Strategy.”

I acknowledge that this is a very broad question, but what should the single Scottish plan be?

Well—here’s one I made earlier. We have tremendous economic opportunities in life sciences, information technology and renewable energy, such as the hydro nation idea and the low-carbon economy. Those larger strategic goals enable the different regions of Scotland to find their place, and the net result will be better. It means that institutions such as UHI will be able to collaborate with colleges on a bigger purpose, to the benefit of both sectors, and it will achieve more for Scotland plc, because we can all achieve more in collaboration than we can individually. Each individual benefits from collaborations, and the impact is bigger at the national level. That is why we like the single plan: it sets the big strategic targets to which everyone has to work.

There is another, mechanical side to that, which is that some of our funders tend to be national, so they will be driven by the national priorities. If we are all working in the same context, it tends to force everything together, which is to everyone’s benefit.

Do the other witnesses agree with that?

Certainly—I heard what was said in the first evidence session, and I totally agree with Jeff Howarth that having an overall strategic plan will give us a platform for moving forward, as long as there is regionalisation so that the plan is targeted. Obviously, each region is entirely different and has different issues, but as long as the plan addresses those issues it will offer an ideal opportunity to move forward.

Yes, I agree with that. It is not widely spoken of, but Scotland’s response to structural funds is one of our best stories. I am not giving credit to any particular Government for that; every Scottish Government since devolution has done exceptionally well with structural funds. It is a reserved issue that is run at a Scottish level—very autonomously, in my view, notwithstanding what Alison Cairns said in the first evidence session—and that makes a Scottish plan very feasible. I argue that colleges in Scotland should use their single programming documents as one of the base documents for their three-year plans.

15:15

What my sector does is not about the money coming in per se, but about tying it in with what is needed for Scotland. It is a very wooden process, but it works. I never thought that I would say this—particularly not to a committee of the Scottish Parliament—but stuck away in annex 2 or 3 of a report by Audit Scotland on the role of community planning partnerships is a wonderful wee piece of work, which is a checklist for strategic partnership working. I have tried my best to pick holes in it, because I do that with Audit Scotland reports all the time, but I cannot. It is, in my view, a perfect wee document about strategic partnerships.

Maybe I can help you with that.

Did you write it?

No. [Laughter.]

I think that Alan Boyle talked about protocols in the previous evidence session. If that planning partnership checklist was the basis for how partners perform or behave, we would be on to a winner.

I have a question for Derek Banks about the link with colleges and the concept of research being shared between colleges and universities. We are now running apprenticeships throughout Scotland. What role, if any, can we introduce for colleges and universities to allow some apprentices to take advantage of those links and learn a skill during the process? Is there any scope in that approach? Have you considered it?

Again, that is not particularly my area of expertise.

No, but it should be.

Colleges obviously have apprenticeship programmes in place. In fact, 60 per cent of our full-time students go out on placement. The placement process gives students a far greater understanding of what is required in the workplace, which can lead on directly to research and innovation in the college. It is important to have that process in place. Our intention is to make placements as widely available as possible, because of the benefits that they bring to the student.

I am interested to hear from Graeme Hyslop, in particular, because he is the architect of WOSCOP’s submission—

My colleagues produced it; I just signed it.

Well, you will be questioned on it.

I know it off by heart.

The last page of WOSCOP’s submission states:

“The European Commission has proposed a new model of working that would require regional groupings of delivery agencies, responding to National, Regional and local priorities through an intelligent mix of appropriate funding”.

It goes on to outline the elements of funding. We heard at one of our committee meetings that, aside from the ERDF and the ESF, something like 59 or 60 pots of money are available in the EU, many of which we have not even heard of. The colleges could perhaps help us with research on how we can unlock some of that funding.

Your submission specifically raises the vital question about how we communicate the importance of the new approach to all the relevant agencies in Scotland. I invite you to expand a little on that concern of yours. I am particularly concerned that we must not throw out opportunities for the kind of creative developments that have taken place; for example, Alan Boyle and West Fife Enterprise have taken a unique approach, which Alex Neil, the Cabinet Secretary for Infrastructure and Capital Investment, acknowledged in Parliament recently.

I am on the programme monitoring committee with Alan Boyle and I know of his excellent work. We admire that approach. In Alan Boyle’s terms, it is about a concertina of a plan meeting a protocol; for me, it is about the Audit Scotland checklist. If people were to adopt the attitude that we are all in this together—there is evidence that such an approach is beginning to develop in Scotland, certainly in the post-school education sector—and that we are trying to achieve things, which comes back to Laurie Russell’s concept of outcomes, I think that the approach would be a goer.

One of the difficulties with Jeff Howarth’s concept of the apprentice-to-PhD continuum is that an individual can be funded for only three years in that process. Perhaps we should address that for the next programme and think about, for example, having longer lead times and periods of experience for the people who will be part of tomorrow’s research cadre. That is worthy of consideration.

My big idea—I have written to Mike Russell about this—is to get the civil servants in the lifelong learning directorate more engaged and thinking about what Scotland will need after 2013. That will include examining the difficulties in the cities and the learning shortfall in literacy and numeracy and so on, and it will tie in with the structural funds’ concentration on employability post 2013. That is what Scotland needs. I am with Laurie Russell and Alison Cairns in wondering why we need to limit our approach to a fund or financial instrument here and a fund or financial instrument there. We should have a “making it better for Scotland” fund that will have various financial attributes.

However, that will require a cultural shift. This Government has got my sector, at least, to buy into the transformation agenda, but we might also need regional frames of reference, which we do not have at the moment. That shift is happening in my sector and none of us should be afraid of it. I repeat: my sector is up for this. We used to be called the Cinderella sector. Now they call us the can-do sector, because we have delivered balanced budgets in the face of significant funding cuts. However, we have to turn round Scotland’s economy. We can do that, as well.

Could you help us to unlock research into the various funding pots in order to make it easy for the voluntary sector, small businesses or whatever to access the more innovative European funding that might be around?

My sector, particularly in the west of Scotland, is really lucky. We have a fantastic team that I call the west of Scotland European partnership; it does our research, feeds things in and gets us ready as well as—at the other end—protecting us from angry auditors. It does everything and it should be a national service. I would be happy to discuss setting up such a team outwith the college sector. I have tried to discuss it with colleges furth of the Clyde valley, but they are too busy managing projects and spending money on administration. If you can get the research and support right, you can transfer some of that admin into front-line delivery.

Might it be appropriate to share such knowledge and experience on a transnational basis with, say, eastern European countries?

WOSCOP has advised a number of countries on developing readiness for receipt of structural funds. For example, we had people based in Lithuania for a number of years. It certainly made a difference; that country is now slightly ahead of the game with regard to enlargement.

I support WOSCOP’s approach; indeed, our ERDF bid would not have been successful without it. It is vital that its advice is available to people, that its work is centralised and consistent and that it is able to do its research. I can certainly see a strategy for expanding its approach across Scotland.

Strangely, the UHI is already in that position, because we do that work on behalf of the whole partnership.

Part of the reason for introducing the regionalisation model for colleges is to give them a regional strategic pathway. Will such a move strengthen their ability to access funds and to work at a strategic level?

It will not make any difference to accessing funds in the present programme. However, there is no reason why we could not design a Scottish programming document that focuses on regional variations. With the move in this programme from a Maoist to a Stalinist model—you will have to forgive me; I am a social scientist—there has been a shift of emphasis, and if we were to design regions as areas that define their own needs and seek to hybridise their funding sources, such an approach would certainly work better than anything that we have at the moment.

The regionalisation model for colleges would certainly help, because it brings together a mass of experience, knowledge and skills that can be developed into a centre of excellence in that region, which can be used to secure research funding and so on.

It is natural for the UHI to think about regionalisation. We have added higher education and it is great to see it in further education.

I know that the UHI is good at articulation, but with regard to the funding streams, is there more work to be done on articulation?

I am glad that you asked about that because it is a bugbear of mine. There is a six-year honours degree in Scotland. It is alive and well and it conspires against kids and adults who cannot get that sixth year of funding. It means that someone who has to do a higher national diploma before their first year cannot possibly become an honours degree graduate who then goes into teaching, unless they pay for that themselves.

To go back to Laurie Russell’s point, that sits within a framework that has been signed up to by every institution in Scotland, including the traditional universities, which I love. However, it is not practised. The Scottish Further and Higher Education Funding Council has a mechanism to enforce that—the condition of grant that goes with the letter that each institution receives—but it chooses not to use it. We in Scotland have a problem with that, but I think that this Government is about to change that. I hope that the forthcoming legislation dispatches it to the dustbin of history because it conspires against access, makes it difficult for young learners to progress and makes HNDs look meaningless.

Countries all over Europe love and covet our unitised curriculum. When we go to Brussels and explain it, they cannot believe that we have such a thing. However, we still force people to re-study things. If we want the continuum that Jeff Howarth spoke about and which I think is a great idea—the engineering apprentice going on to become an engineering researcher within six or seven years—we cannot make people re-study; we have to fast track them. That is the challenge and that is the direction of travel in which we should be moving. We should be addressing that across the whole of the Scottish post-school education sector.

For us, the situation with articulation is slightly changing. The views of the University of the West of Scotland and Glasgow Caledonian University of our students and of how we prepare them are changing. Now, our students are getting direct access to some of the year 2 provision, which certainly helps them straight away.

I might be in danger of reinterpreting what you mean by articulation, but my boss is dead keen on the idea of linking to schools. I think that the post-16 agenda, in which university-level education is delivered in the sixth year of high school, is a tremendous concept that should be pursued because it has all-round benefits for the students, the institutions and the economy. I do not know whether that can be funded through structural funds, but it would be a great thing to pursue.

Earlier, we heard about existing expertise and we have taken evidence about the ability of Scotland to access not only structural funds, but other sources of EU funding. Have you accessed EU funding other than structural funds? If so, how was the process of applying for those funds? Was it more or less difficult than applying for structural funds? Was it the same? How do we access the lesser-known funds that were mentioned?

I have been at this game a long time and, to be honest, the experience is variable. Some of the funds for students to traverse borders and go on exchanges are quite easy to apply for, but some of the other funds are almost impossible to interpret. It is a wee bit like the process of procurement tendering in that, at the end of it, you can find that you have lost the stomach for applying.

That is the experience in my sector—the middle-sized college sector—but larger colleges might have the resources to spend time researching and presenting applications. We have tried to perform a balancing act with WOSCOP and the colleges, which has to a great extent been successful. For example, every college in the partnership now has an Erasmus charter. However, the big funds are still a glint in our eye.

15:30

I think I am right in saying that, when I went to Brussels last year, the Commission—in particular DG emploi—told us that it would like other funding, including that for lifelong learning, to be much more closely aligned with what is being done on employability. That should happen and I would love it to happen. I am sure that if my city got its head round that and attacked all the funding that is available, with a view to making Glasgow better, it could do something massive. Sometimes the process is easy and sometimes it is difficult.

You talked about WOSCOP, which is your creation. Was other support available outwith that—Scotland-wide or from the Government—to assist you through the rather complex process?

There is a thin line. I would like Scottish civil servants to work developmentally. I would like my directorate—which deals with lifelong learning—to make a difference by bringing in ideas about how to lever in funds to make things happen. Unfortunately, civil servants are too busy doing other things. That is one of our difficulties.

A Scotland-level frame of reference for such matters should be considered. Scotland’s post-school learning sector is malleable enough to live in a Scottish context. We had Strathclyde region for many years, which was nearly—but not quite—as big as Scotland.

I agree with Graeme Hyslop. The small and medium-sized colleges do not have the capacity to chase the funds and develop them for students and staff, so greater knowledge and experience across a region might help the process. Realistically, it would be best to have a national approach and a centre of excellence that could advise groups. That applies to the third sector as well; such a national resource would also be ideal for us.

It struck me when Graeme Hyslop spoke that the old Strathclyde Regional Council used to have such a unit.

That unit was successful. It included Tony Rennie and it was brilliant. In those days, Strathclyde Regional Council’s further education sector was the third-biggest recipient of EU structural funds among anything of its ilk in Europe. We punched above our weight.

Unfortunately, Europe has moved on now. We have far more competition.

Does Jamie McGrigor want to speak?

Stewart Maxwell has covered my questions.

I will make a comment rather than ask a question. The lesson that we all learned from Strathclyde Regional Council was that the political will to make the issue a priority made the difference. After that happened, every other local authority across Scotland woke up and asked how Strathclyde was doing what it did. We all learned after Strathclyde had its successes. I agree absolutely with you that having a national resource would be first class.

We still have time between now and the beginning of 2013 to give the matter thought. My sector is willing to contribute to the debate. I can give an assurance on behalf of 14 colleges, but I am also—for my sins—the spokesperson for Scotland’s Colleges on European matters. If a think tank or another exercise emerges, we will put in strategic manager resource.

I am happy to support you in that proposal. If you want to have a chat with me, please do.

Okay—I will do so.

That concludes the evidence on European Union structural funds. I thank the witnesses for their attendance and their valuable contributions.

15:34 Meeting suspended.

15:38 On resuming—