Executive Priorities (Greek Presidency)
I am sorry that I took so long to get here. I will try not to detain the committee for too long, but we will see how the questions go.
I am acutely conscious that the range of issues that the committee has the potential to enter into is quite enormous, and I am not an expert on the detail of the common agricultural policy or common fisheries policy—I see that John Home Robertson is surprised and disappointed by that.
I am incredulous.
Given that I am not an expert, I might refer to the officials who are on either side of me, drop the committee a note or come back before the committee with particular details if members want information that I do not have at my fingertips.
We are here to talk about the Greek presidency, which as you know started on 1 January. Jim Wallace could not be here today and has asked me to give his apologies. I am sure that you have had a chance to read the statements on ministerial priorities for the Greek presidency that were endorsed by the Cabinet on 12 February and provided to the committee on 14 February. I also hope that the committee found useful the forward look that was circulated to the EMILE—European members information liaison exchange network—group of which you are all members. We see those papers as the basis of the Executive's strategy for considering what is important during the Greek presidency.
We have included for the first time in the forward look a section that looks further ahead than the Greek presidency, to the Italian presidency, which starts on 1 July, and briefly to 2004. The Commission's 2003 work programme is also mentioned. The forward look and the priorities are extensive documents, which is why it would be helpful to have the committee's views on their usefulness and presentation, and on how we can ensure that the right focus for helpful discussion between the Executive and the committee arises from that documentation. The documents confirm the extent to which European Union initiatives impact on the Executive's devolved areas of responsibility. There are many opportunities available to us to ensure that Scotland is represented well when EU law is made and we are alert to the work that needs to be done under the Greek agenda. I am sure that the committee will agree that the documents are a good foundation for that work.
However, it is important that we prioritise our efforts to ensure that we maximise our influencing potential within the agenda over the next six months. Therefore, of the 24 or so dossiers that are mentioned in the forward look as being most important for Scotland during the presidency, the Executive has identified five as being of particular importance. We are concentrating special efforts on those and I am pleased today to make clear to the committee what they are.
The first priority is one that the committee has been heavily engaged in, which is influencing the convention on the future of Europe. The second priority relates to the mid-term review of the common agricultural policy and the third is the follow-up to the review of the common fisheries policy and the cod recovery measures, which were agreed in December 2002. The fourth priority is the on-going review of the structural funds and the fifth is the proposed revised bathing water directive. Those are all issues that are important to Scotland, so it is sensible that we make special efforts on them.
Ministers will undertake a variety of activities on the issues to ensure that the Scottish position is fully understood and taken into account. Activities will include intensive liaison with our United Kingdom counterparts to ensure that the UK position adequately reflects Scottish interests, and pursuit of those interests during ministerial visits to Brussels and at meetings with commissioners and other key players in the Commission.
The convener's report on Scotland's representation in the EU mentioned the importance of a "team Scotland" approach to working on EU issues. Looking back over the first session of this Parliament, I think that the European Committee and the Executive have, in general, worked reasonably well together, although we can always improve relationships. I hope sincerely that we can, in the second session, work more closely together on the agendas that emerge in that period so that we can collectively influence policy at EU level, which in turn will reflect back in a variety of ways for Scotland's benefit.
A good example of closer relationships is already emerging: my officials and the committee clerk were in contact prior to today's meeting to give us a clue about the areas that the committee might—I stress "might" because the clerk was careful not to prejudice the committee's interests by asking anything he wanted—want to cover. We found that to be helpful.
We could go a stage further on that. Some issues that members might want to ask questions about are specific to specialist areas within the Executive. Over time, if we can identify more of the horizontal themes that affect all the European work and that have an effect throughout the Executive, we might get more scope for further dialogue. For example, the intergovernmental conference, structural funds, enlargement issues, co-operation with other regions, environmental issues and so on are areas in which we can, no doubt, have much productive discussion in future. If we can develop those relationships, we can develop our contact and the constructive nature of our dialogue.
Before I take members' questions, it might be useful to give an update of the Executive's external relations strategy. The committee is aware that our external relations strategy has three main objectives: first, to promote Scottish devolved policy interests in the EU and internationally; secondly, to build mutually beneficial links with regions and countries of the EU and beyond; and thirdly, to promote a positive image of Scotland overseas. Once again, we have made many efforts in all three areas, some of which I will quickly cover.
On promoting Scotland's policy interests in the EU, we were pleased that the Executive was able to contribute so actively to the UK position in the convention on the future of Europe—I know that the committee will discuss that issue later today. There is much commonality between the position of the committee and that of the Executive. A very constructive working relationship with the UK Government has led to a joint UK devolved Administrations paper on Europe and the regions, which Peter Hain submitted to the convention on the future of Europe ahead of the 6 and 7 February convention plenary debate. The paper discussed the full and proper involvement of regions in EU decision making, and I understand that it was well received. We will continue to work closely with the UK Government as discussion of the convention's proposals progresses.
We have also worked with our regions with legislative power—REGLEG—partners, which culminated in a declaration on the future of Europe in November. The declaration was endorsed by 40 minister presidents of the regions with legislative power. I am pleased that the committee's discussions on the future of Europe on 16 September were so successful. As the convener is aware, the Executive has also engaged Scottish civic society on the range of questions that arose from that, principally through the Scottish Civic Forum. We have also worked closely with the Parliament, which agreed on 5 December a motion endorsing the Executive's policy proposals on the future of Europe.
On building links with other regions and countries, during the Danish presidency and already in the first two months of the Greek presidency, we have made good progress on pursuing links with other European sub-member state Administrations. In November, the First Minister signed an agreement on cultural matters with Tuscany, and the Deputy First Minister visited Barcelona to sign a detailed action plan to develop the agreement with Catalonia. In the week before last, Iain Gray signed a co-operation agreement with North Rhine-Westphalia. The Executive continues to play an active role in formal organisations of regional authorities, including the Committee of the Regions—on which the committee's convener serves—the Congress of Local and Regional Authorities of Europe, and the Conference of Peripheral Maritime Regions of Europe, of which the Executive is now a member. We also play a leading role in the REGLEG group, which the First Minister has been invited to chair in 2004. We will continue to maintain close contacts with the UK Government on a range of enlargement issues and with key accession countries. I am happy to answer questions on that matter.
Finally, there has been considerable activity to promote Scotland abroad since September, when Jim Wallace was last before the committee. Last October, the First Minister led a ministerial delegation to Stockholm for a successful four-day programme to promote Scotland in Sweden. That visit showcased Scotland's strengths in research, the arts, culture, food, sports and tourism. We hope that it will be the first in a series of "Scotland in" events in other countries in the EU and beyond.
Only 10 days ago, Mike Watson was in Paris to attend a series of events to promote Scotland in France. The visit included a visit to the rugby international, although that was not a particularly glorious occasion for Scotland. I regret that I cannot answer any questions about Scotland's performance on the rugby field.
Are there any?
Members can try to ask me questions if they wish.
The Paris event was very successful. In some ways, it was modelled on the tartan day parade that is held in New York, of which members are aware. We plan to build on such achievements and explore new ways of harnessing the high level of interest in Scotland as we develop our promotional activities.
As I indicated, over the parliamentary session, the Executive has become more and more engaged in European issues. On 1 July 1999, when the Parliament formally came into being, the Portuguese took over the EU presidency. At that time, no forward-look document was available and there was no Scottish Cabinet discussion of EU priorities. No Executive minister appeared in front of a European Committee and there were no pre and post-council briefings to the committee. I am glad to say that all of those are now regular events. Things have moved forward.
We also now have the regular and successful EMILE network that brings together all the European elected members to exchange information and talk about the issues that are of common interest and of interest to Scotland. We also have the structural funds forum that brings together all the key interests in Scotland and looks to the future of structural funds and their current administration. At last week's EMILE meeting, it was agreed that the forum should meet three times per year instead of two, and that it should consider the longer term EU issues that arise out of the Commission's annual work programme.
At this point, I acknowledge the good work of the European Committee in relation to European matters. There is no doubt that the dynamic between the committees and the Executive helps the Executive to sharpen its arguments about matters that are its responsibility. It also creates a platform for the Executive to hear new ideas and to deliver thoughts and ideas about issues of the day. I hope that, in the future, that process of parliamentary scrutiny of EU issues will continue, because it will help us to focus on the issues that are important to Scotland. With those remarks I will happily subject myself to questions.
Thank you minister. It is important to remember how far we have come in the past four years. The committee is particularly impressed that we have moved so far forward on issues such as scrutiny, openness and transparency. I am sure that members will welcome the minister's remarks.
You rightly identified the future of Europe debate as one of the crucial issues for us all. The committee welcomed the UK Government's report on the matter. Will you say something about how we should proceed? We are aware that there is no mention of the role of regional Governments in the first 16 articles, but it is important that we in the UK work together to ensure that, in the run-up to the IGC, we continue to have discussions and negotiations about how we advocate a role for regional government in Europe up to 2004. Have you any ideas about how we could liaise with the UK Government and how the Executive could work with the committee on that?
The convener is right that the role of regions in the EU's future decision making has risen up the agenda in the past months. That has culminated in the joint paper that focused on the issue, which the committee will discuss. The convention on the future of Europe is continuing its work and will do so beyond the original time scale into July 2003. That will then feed into the intergovernmental conference. Once the work goes beyond the convention and into the intergovernmental conference, it becomes more of a national Government issue. Until that time, there is plenty scope for us to submit thoughts and views through Peter Hain, the UK minister on the convention.
As members are aware, there is a lot of work to be done in drafting the constitutional treaty. That will be coming out block by block—I am told that is the formal expression. There is an opportunity to influence the response to that; we are seeking to do so and to keep the committee informed of any information that comes out of that. We would welcome the committee's thoughts on any parts of the treaty that come out in draft form, so that we can feed those thoughts back to the convention through our UK contacts.
The time scales for such responses are extraordinarily tight. That is not just because of the Executive giving the committee tight time scales; the Executive is being given tight time scales by the UK Government. Equally, UK colleagues are being given tight time scales by the convention. Within those parameters, we will be more than happy to reflect on anything that the committee wants to say to the Executive about any parts of the draft treaty. Where possible, we will also help to present those thoughts to the convention on the future of Europe.
Until the convention finishes its work, there is ample opportunity to continue to make our views known in whatever way the committee would like. The committee should continue to feel free to raise any issue with the Executive.
We understand that the second tranche of articles has just been published. We are tasking the clerks with examining those to see whether we want to make comments. Perhaps we could send comments to you in writing.
Given the circumstances, the stronger the day-by-day relationship between the committee's clerks and my officials in dealing with such matters, the better. At times, e-mails and telephone calls can be more effective than written communications. The more we keep that dialogue going, the more we can influence events.
We will now follow up your remarks on the first 16 articles, which we have discussed with Peter Hain.
Peter Peacock said that he thought that Scotland should be represented well in Europe. He and I might differ about how that should be done, but I will ask about the current situation. Peter Hain spoke to the committee recently. He submitted to the European convention on behalf of the UK Government and the devolved Administration in Scotland a statement that said:
"Within the UK, we propose to put in place arrangements under the early warning system allowing EU legislative proposals which fall to be implemented by the devolved administrations to be referred in addition to the parliament and assemblies in Scotland, Wales and Northern Ireland."
How does the Executive envisage that coming about? Has it discussed the arrangements with the UK Government? Will you consult the committee on how that might best be done?
I am more than happy to hear the committee's thoughts on an appropriate way to structure relationships at the UK level to put that early-warning system in place. Please feel free to make your thoughts known.
My key point is that we have acceptance of a relationship between regions and member states that was not initially accepted at the UK level or by other member states. The UK Government has formally recognised that position and is expressing a strong desire, in the spirit of devolution, to devolve matters for consideration to Wales, Scotland and Northern Ireland once it has been consulted and given early warning. We are a fair distance away from deciding on the arrangements that will deal with that. After the convention's work is concluded and the intergovernmental conference's decisions are put in place, we will consider the domestic agreement in the UK and sort out how that will best be handled.
We have established mechanisms for regular contacts between UK ministers and Scottish ministers about all sorts of matters. We have much informal and formal contact and joint ministerial committees, and plenty of scope exists to develop that. The principle that we will have such consultation in the UK has been established. We have also established the principle of having as much early warning of issues as we can, so that we have a better chance to influence events at the European level. There is all to play for.
In short, you say that there is no problem in principle, but the practicalities have not been addressed.
Indeed.
Article 11, which was published on 6 February, says:
"The Union shall have exclusive competence to ensure the free movement of persons, goods, services and capital, and establish competition rules, within the internal market"
and suggests that the conservation of fish stocks should be within the exclusive competence of the European Union. Does the minister agree that the article is disturbing? What does the Executive propose to do about it?
We have raised that matter with Peter Hain, who said that he was willing to look into it and that ministers had discussed it with him earlier that day.
I hesitate to go into the detail of the common fisheries policy and competition policy, which are huge and complex. I would prefer it if the committee let us know of its points about such policies, so that we can respond with research, rather than my improvising in front of the committee. Other ministers are deeply versed in those issues and I have no intention of cutting across what they might say or believe. It would be best for us to produce a researched answer to Nora Radcliffe's question, if that is acceptable to the committee.
That is fair enough. We will write to you. Peter Hain felt that the article would require further discussion and that perhaps that could be taken into account when he wrote to the praesidium about how the convention might shape up, the first 16 articles and the issues that would be shared among, or be unique to, member states.
I advise the committee that, when Peter Hain was here recently, he had discussions with the First Minister and I am advised that those issues were raised by the First Minister as well. It would be useful to hear the committee's angle and concerns on the matter.
Hold on—I am sorry, but although I am sure that we should applaud the minister's defence of his Liberal Democrat colleague on fisheries issues, is the Executive happy about the suggestion that the conservation of fish stocks should be an exclusive competence of the European Union? I do not want to put words in the minister's mouth, but you must accept that that is a matter of considerable concern.
Yes, but I am not going to get caught up in the detail of the matter.
I do not want detail; I want broad-brush stuff.
My point was that those have been signalled as matters of concern because the First Minister raised those issues with Peter Hain. Further issues that run counter to that matter have come out of recent fisheries councils, such as the regional advisory committees. By definition, that implies some greater role on a shared basis for interests across the fishing sectors. You can take it from that that the issue of principle is not shared, but I am not going to go into detail.
I would not want you to—mine was a broad-brush point.
Helen Eadie has a question about interregional co-operation.
Will the Executive agree to keep the committee informed of progress on any new bilateral agreements that it enters into with other regions? Will it agree to keep the committee informed about the implementation of those and existing agreements?
I am more than happy to do that. We expect and hope to get genuine benefits from the agreements that we come to with other regions of the EU and not just to have warm words. The warm words are important too, but we expect and want benefits. It is only right that we examine fully whether we are getting those benefits in the fullness of time. If it would be helpful, we could give the committee an annual report or letter from officials to say what is happening in the course of a year in our relationship with a particular region. We could use that as a basis for examining how we make progress.
I return to the point in your report about a "team Scotland" approach; the more common purpose there is in relation to the workings of concordats and arrangements that we have with other regions, so that the committee and its relationships at a parliamentary level operate in the same sphere of interest as the Executive, the better things will be overall. I am more than happy to be open about that and to see where we get to.
It occurs to me that the Executive has an agreement with Tuscany and that we have a parliamentary agreement with Saxony-Anhalt. We both have agreements with other areas, such as Catalonia and Flanders. It would be sensible if we followed through on the agreements that the Executive has in a parliamentary sense and perhaps the Executive could consider further the agreements the committee has with Saxony-Anhalt. There might be ways in which we can explore working together and dovetailing some of those matters in the next session.
I agree that the more we work on a common agenda, the better. The secret of achieving that is that there should be plenty of advance notice from both sides about emerging interests in order to ensure that we can agree where possible. We can work out our strengths in relation to the daily working of such relationships.
On what you said earlier about building concordats and agreements between Executives, such as your agreement with Tuscany, do you believe that it would be appropriate for the current Executive—or any Executive, given that there will be an election in a couple of months—to undertake parallel negotiations for direct connection between the legislatures of such regions and our Parliament as a kind of copper-bottoming?
If we as an Executive have an arrangement with Tuscany or Catalonia, it makes sense that the Parliament should have a similar relationship with those regions, so that we can embed and strengthen our relationships and use all the contacts that exist. I hope that we can work on that with our respective officials in the way in which I have hinted at. Equally, we must consider new relationships and the new forms of relationships we have with new countries. Again, if we get an agreement about that, we should work on a common basis on those relationships.
You mentioned in your opening statement that the First Minister has been asked to become chairperson of REGLEG in 2004. Is that a personal invitation, or are we building an institutional structure in which the First Minister of Scotland will take up that post on a rotational basis?
I am sure that that will not arise, so the question is academic.
It is an extremely important question.
I would have to check the facts. I am not sure whether the invitation was made personally or to Scotland. I will get back to you on that.
It would be quite a step forward if the First Minister of the Scottish Parliament were to be asked by the regions with legislative power to take the chair on a rotational basis. That would bind the Parliament firmly into that structure. It would also mean continuity through elections.
I take your point. I will check the facts, but one reason for the First Minister's invitation was the interest in other regions of Europe about developments in Scotland and changes to our democratic life. The First Minister has also made a personal impact in that respect and in his work in the Committee of the Regions. I suspect that a combination of circumstances has contributed to that invitation. I am not sure whether REGLEG views this as a constitutional arrangement, but we can quickly establish that.
Let us move on to the question of enlargement.
I am grateful, minister, that you should come in front of us with such a broad remit. As the Greek presidency is specifically on the agenda today, I hope that you will be able to answer some more detailed questions. Enlargement and the signing of the accession treaty will obviously be among the main thrusts of the Greek presidency. When the enlargement report for the Parliament was done, there was a dearth of consultation of the Executive by the Foreign Office. Many organisations in Scotland were not consulted about the accession requests or the derogations from the applicant countries. Is the Executive now fully aware of the derogations that will be put in place on signature of the treaty and of their likely impact on Scotland and on Scottish business?
Again, I will get back to you on the detail. In general terms, there is no doubt that enlargement offers Scotland huge opportunities and a huge increase in the marketplace. Also, because of the nature of the development of the accession countries' economies, which are lagging far behind, there are huge opportunities for economic growth in those countries. Scottish Enterprise is currently undertaking work as to the impact that that might have on Scottish business.
We all agree with that, and that was the thrust of our report. However, it is not the impact of enlargement per se that we are interested in, but the impact of the derogations from EU law. We are obliged as member states in ways in which the applicant countries are not, and that may give them a competitive edge. For example, the Poles wanted to be exempt from the law on capital ownership, so Scottish firms that invest in Poland will be prevented from owning capital there for another seven years. That has an impact on the success of Scottish business. I would like to know whether the Executive is now fully genned up on that. In a submission to the committee, the Executive referred to a study that it had done on enlargement, and we wondered whether it would be possible for us to have a copy of it.
I am sure that once that study is published, it will be entirely possible to access it. One purpose of such a study is to draw out the implications of the agreements that were signed up to by the accession countries. I do not have those details at my fingertips. We will provide a note to the committee about all of that. As I understand it, part of the purpose of the report is to look at the economic development opportunities and the threats of EU enlargement. Therefore, it would be bound to draw out matters of the sort that Ben Wallace has mentioned, such as whether there might be a competitive disadvantage. I do not know about that in detail.
I know that Ben Wallace was at a recent meeting of the structural funds forum, at which the issue of accession countries was discussed in the context of structural funds reform. Those discussions involved consideration of reform of the state-aid policies, which impact across the EU. On one level, the state-aid policies protect the interests of the UK; at another level, some people find them very restrictive. That is another dimension of the change that enlargement will bring about that needs to be fed into the debate.
The study is quite important. It was referred to in November 2002 in the Executive's statement on enlargement. We presume that the study exists. Would it be possible to provide the committee with a copy of that study?
I understand that the study has not been completed or published. Once it has been completed and published, I am sure that appropriate access will be provided.
So it will be an open document.
That is my understanding. There would be little point in producing a detailed report to examine the implications of enlargement for Scottish business and then keeping that report a secret.
I ask because the derogations will be signed up to and it would be nice to know their impact before they are agreed to.
Quite so. I will look into the current state of the study.
The clerk could liaise with your officials about the time scale and when the study could be passed on to committee members.
It would be useful to know the nature of the derogations that committee members are looking at.
As you are probably aware, the committee produced a report on enlargement. Ben Wallace was the reporter. We had a cursory look at derogations and at what the impact might be in certain areas in Scotland. We are keen to follow through on that, so it would be helpful to obtain the study.
That brings us neatly on to structural funds, on which John Home Robertson has a number of questions.
The minister has already referred to structural funds. I understand that the Executive took part in a recent meeting of the forward studies group that dealt with structural funds post-2006. What are the latest developments on that issue?
How long have we got?
Give us a brief account.
I attended the meeting in Brussels a couple of weeks ago. As you will know from your experience of European matters, some of the meetings are extremely long.
And tedious.
You might say that, but I could not possibly comment. There were in excess of 40 speakers at the meeting. I made a brief intervention on behalf of Scotland.
The meeting involved people who were representing regional interests in the current debate. Therefore, the emphasis was very much on continuing regional policy and the importance of regional policy in the future. Through a series of meetings on reform of the structural funds, the Executive has been emphasising the need to capture what is important about regional policy, what we have learned from structural funds in the past and how we should apply those lessons in the future. That is what we need to do above all at this stage; we do not need to be quite so interested in the debate about exactly where the resources to fund that regional policy come from.
Two interesting points on the Commission's position emerged from the meeting in Brussels two weeks ago. First, the Commission made a pretty strong plea for what it calls proportionality in the administration of the future structural funds. That represents recognition that administering the structural funds has become hugely complex. Given that it is likely that our receipt of structural funds will decline post-2006, the scale of the administration relative to the scale of the funds will become a material consideration. There are clear indications that the Commission wants to make the scale of the administration more proportionate to the scale of the funds that are received and to be much more flexible about that than it has been in the past. That is partly a response to those member states that argue that, in some cases, the structural funds are now so bureaucratic that they have become unworkable.
The second thing that came out of the meeting was the Commission's strong emphasis on what it calls tripartite contracts between the Commission, the member state and the region in relation to the programmes for that area. Again, that recognises the arguments that have been emerging during this debate about the need to devolve more decision making to the local level throughout the EU and to give more flexibility locally than has been the case in the past.
I am happy to go into those two new dimensions to the debate—the potential tripartite arrangements and proportionality of administration relative to funds received—in more depth if you want.
On that point about proportionality, I am sure that all of us would agree that it would be a good idea to simplify things, but I hope that that would never be used as a device to deny access to communities or anybody else in Scotland to structural funds to which they are entitled. I hope that that is something that the Executive would fight for.
The argument for proportionality feeds into discussions about simplification of the current funds. There are more discussions than there are actions, but there is certainly a strong recognition at the EU level of the need to address those questions, partly for the reason that John Home Robertson referred to, about the nature of future funds.
A profound change is taking place, the nature of which we should not underestimate. The gross domestic products of the accession states that are joining the EU are so significantly below the average that it is estimated that it will take 25 to 35 years of above-average growth each year to bring them up to the current average in Europe. The accession states are lagging far behind. The implication of that is that structural funds support will move to the east to help to develop those economies, in the same way that Scotland has received aid over the past 25 years to develop its economy. It is right that that should happen and the Executive supports that.
However, there are huge challenges for us about the nature of the future within Scotland, where there is the potential for declining rates of receipts. It is therefore even more important to focus on what receipts will be used for. That is why, in the discussions that we have been having over recent weeks—we have had a wide range of discussions with all the key interests in structural funds in Scotland—we have emphasised the need for continuing regional policy in Scotland. The fact that Poland and the Czech Republic and other accession states have significant problems does not mean that we do not still have significant problems to overcome. We have been putting continuing regional policy at the forefront of our discussions in Scotland and with our colleagues in the UK.
We have been trying to ensure that we get the best out of what we have learned from regional policy in the past so that we can apply it in future. Wherever we go, we have not only made those points but pointed out clearly that, hitherto, we have enjoyed substantial European receipts. Those receipts have been of enormous benefit to Scotland in a variety of ways, which is why we want them to continue, in order to develop regional policy in Scotland in future. That is a firm part of our position on this.
I welcome that statement.
Finally, as you have said, Scotland has benefited quite considerably from structural funds over the years. Last month I took part in a discussion in Craigmillar, which is an example of an area that has made good use of the funding. That emphasises the importance of making full use of the remaining years of the current package, up to 2006. What is the level of uptake and what can we do to ensure that eligible areas of Scotland and eligible projects in Scotland get the full benefit up to 2006?
I would need to come back with the precise levels of uptake—that information is readily available. For the most part uptake is according to target. The Commission now provides annual targets, which must be met. To fail to meet them means potentially losing receipts. There is therefore strong pressure in Scotland at the moment to ensure that people are spending up to the levels that are required, and for the most part that is happening. We have one or two concerns in the west of Scotland and action is being taken to encourage more applications there.
Having said that, I want to return to one of my earlier points. An issue that is emerging is that because the scale of receipts in certain parts of Scotland is less now than it was, some organisations are finding that the sheer weight of the bureaucracy surrounding those funds is disproportionate to the scale of the benefits. There is some evidence of a slowing down of applications in some places, but we are taking a lot of action to encourage applications because, as was said, that money is available to us. The last thing that we want to see—in particular in the context of arguments about future regional policy—is current regional policy not being fully utilised. We need to keep our efforts going on that.
You will be aware of recent press reports about the uptake by Scottish Enterprise. Could you clarify for the committee whether smaller groups under the umbrella of Scottish Enterprise fall within the category that you just mentioned? Is there a particular reason why the uptake for Scottish Enterprise is low, or is the story just nonsense?
There are several questions. The worry about the weight of the bureaucracy relative to the size of funds applies less to Scottish Enterprise than it does to voluntary organisations, which have been big users of the funds. The audit requirements are substantial and demand that records be kept for many years after the funds have been spent. A number of those organisations are creaking under the weight of that requirement. The bigger local authorities, enterprise companies and so on are much more able to cope.
I am conscious of the stories in the past few days, but I am happy to reassure the committee that Scottish Enterprise is very much on top of the issue. There were issues a few months ago, where projects were beginning to slip or perhaps applications were not being made as quickly as we might have liked, given the pressures to meet the new targets that the European Union sets, but there have been several discussions between officials of Scottish Enterprise and the Scottish Executive, and we have no reason to believe that they are not giving this matter all their attention. We believe that applications will come through and that funds will still be able to be drawn down.
You will appreciate that in all the programmes that have been running for many years there is a difference between committing cash to a project and drawing down the cash. One of the challenges is not only to get the commitments, but to get the money spent. Work is being done to ensure that those are fully aligned, so that we are in a position to utilise the resources that are clearly available to us.
Does the Executive currently leave the cost-benefit analysis of applying for European funding, given the complexity of the bureaucracy, to the individual organisations or—as the Executive is part of the process—does it influence their decisions on a cost-benefit basis? I find it surprising that people can simply say that things have become complex and are therefore not worth the administrative candle, when we are talking about millions of pounds.
I do not want to overstate the issue and give the wrong impression. I am saying that we are detecting that organisations have difficulties because of the sheer weight of the bureaucracy, and that people in individual projects are thinking hard about taking on that bureaucracy, with all the implications of it relative to the funds. I do not want to overstate what the impact of that will be over the coming period.
We are doing a lot to streamline the administration to the extent that we can. We have done a lot of work to rectify computer systems. Where there were difficulties in exchanging data previously, systems are now being developed for making applications and drawing down funds, so that they are much more streamlined than they were in the past. Those are things that we can control.
Does that mean that it is the voluntary sector that is having difficulties? Given that so much policy is delivered by the voluntary sector, would it not be a cost benefit for the Executive to provide that administrative support for the drawing down of European funding, rather than leave it to the individual organisations to work it out?
Systems are in place in the voluntary sector to support organisations in making applications. Technical support has been provided in the past to help with that process.
So it is becoming less complex.
The nature of European funding is hugely complex. Let us not be under any illusions about that. There are sound audit reasons for that, as in the past there were difficulties at EU level, which placed heavy burdens on the system. We are doing all that we can to streamline the process, make it easier and support organisations. We are doing so because we feel that those organisations have roles to play and can deliver well in communities, on training schemes or inclusion schemes, wherever they happen to be.
We want those organisations to participate, which is why we are putting in much effort. We are also putting much effort into ensuring that we provide payments to the voluntary sector as quickly as we can. Many administrative difficulties have occurred because of the number of errors in the system for funding applications. The audit requirement is that those errors should be eliminated before funding is provided. We are working to streamline the system within existing constraints.
The Scottish Council for Voluntary Organisations used to provide training days and to act as an umbrella organisation for many smaller voluntary groups. Groups in my constituency felt that without such support, they could not have processed applications. I hope that that is still available.
Martin Sime, who is the SCVO's chief executive, is a member of the structural funds forum partly to ensure that we hear feedback from the voluntary sector and to allow us to encourage change that will allow the sector to thrive.
I heard your response to the convener's question on uptake. Like the convener, I am one of the few who has been a member of the committee from the Parliament's beginning and I was a member of the committee when the programme areas presented their plans, which we scrutinised. A fear that arose from the previous programmes was of too much bureaucracy, complications and slowness in relation to applications. That was especially significant because of the clawback that the EU would instigate in the new programme.
We were given assurances. The Scottish Executive approved the plans and is the management authority, yet you say that the cause of some problems is that the plans are terribly complicated. The committee and previous service users raised such issues. As funds are starting to be threatened with clawback or targets are not being met, it is a little late to say that the plans are terribly complicated. We do not have time.
I was interested that you did not have at your fingertips the figures on uptake. I have those figures. The uptake in the west of Scotland is 9.3 per cent, the objective 3 uptake is 5.7 per cent and the east of Scotland uptake is 8.4 per cent for the programme year 2002, so uptake is not even into double figures.
According to a Scottish Enterprise internal memo, the programme adviser groups have identified that £8 million of European funding has probably been lost. While voluntary sector organisations are starved of cash or are in trouble, we do not have the time to talk about improving services. We risk losing what you are right to say is probably our last tranche of structural funding. What can you do quickly to put that right, to help people and to cut through the bureaucracy created by the plans that the management authority approved, to ensure by April that we do not lose more European funding?
I make it clear that we are not in immediate danger of losing cash, because we have met the targets that we were required to meet and we intend to meet our targets to the end of the period. We are making much effort to do that. In some programmes, such as that in the west of Scotland, cash that is drawn down for a single approval might take many millions of pounds and help to recover some of the targets to which Ben Wallace referred. The benefit of the n+2 targets in the European Union is that they focus attention on ensuring that cash is spent effectively.
We are in the midst of the mid-term evaluations of the programmes, which will help to reveal to us any shortage of applications from a sector and how we can tweak the programmes to ensure that we use all the cash. I assure Ben Wallace and other committee members that we have no intention of sending cash back to the European Union if it is available to us. Every effort is being made to ensure that we meet the targets. So far, we have not missed a target.
Paragraph 2 of a memo on network performance by Scottish Enterprise's chief executive says:
"‘Analysis of Program Advisor Group' Papers has revealed that approximately £8m has been lost in terms of European income."
Are you saying that that is not true and that we have not lost £8 million or a similar sum through our failure to secure uptake in line with targets?
I have no knowledge of the document to which Ben Wallace refers.
But you are in charge of structural funds, minister.
Ben Wallace seems to be quoting from an internal document from Scottish Enterprise to which I have not had access.
In all fairness, if the document is internal to Scottish Enterprise, the minister might not have seen it. However, we can ask him to investigate the matter and to report back to the committee.
The minister is responsible for structural funds—the Scottish Executive is the managing authority that is responsible to the European Union for the administration of structural funds. If the minister is not aware of £8 million being lost and of the Scottish Enterprise internal memo, which is a fairly substantive document, surely he has not done his job. Organisations on the ground could have done with that money.
I think that the minister said that the £8 million has not been lost.
I will not be drawn into arguments about apparently leaked documents that one member of a committee has. If Ben Wallace wants to write to me to make those points, we will consider them, but I will not indulge in speculation about leaked documents.
Perhaps the minister would answer a question about the committee's mid-term review of structural funds, which was about nine months ago. The review highlighted the same problems that the minister just mentioned, such as the complicated nature of the process and the slow uptake. Why was the committee's mid-term review of structural funds not acted on?
We have been acting on it for some time. The audit requirements for the funding are hugely complex and we are doing everything in our power to ensure that the process is streamlined as far as possible so that we draw down the cash properly. I am more than happy to give the committee an outline of all the measures that have been taken to improve the situation.
Historically, one of the things that we suffered from under the Conservatives in relation to additionality issues was that, although local authorities and voluntary organisations were always willing to put up the funding, the Tories were not willing to provide the additional funding. Thanks to Bruce Millan, we eventually got it.
He was a Tory.
He was not; he was a very good Labour minister.
When I went to the Scottish Executive's structural funds forum at Victoria Quay, one of the things that impressed me was the computerised system that the minister's assistant showed me, which allows any voluntary organisation to go online. The value of the system is that it eliminates at the beginning of the procedure mistakes that might create problems with the audit trail at a later date. I was impressed by that system and I ask the minister to describe it further. The system addresses the important issue of how voluntary organisations can be given active help with funding.
Helen Eadie gives a good description of what she and others who attended the forum saw of the way in which the Executive is seeking to streamline and improve the administration to help voluntary organisations and others to access and utilise the funds effectively.
Helen Eadie also mentioned co-financing. Because the Executive has made available more funding to local authorities and removed section 94 expenditure controls, local authorities have more flexibility to co-finance good schemes and to draw down European funding. Progress is being made on that front as well.
Thank you, minister. I know that your time is tight and that you wanted to leave by 3 o'clock. We have one or two other areas of questioning, but you have said that you are willing to communicate with the committee on those issues. It might well be that some of our questions could be answered with a phone call but, where necessary, perhaps we will invite a written response.
Colleagues, I suggest that we take a short break to allow the minister to withdraw, after which we will continue with the agenda.
Meeting suspended.
On resuming—