European and External Relations Committee, 05 Dec 2006

Meeting date: Tuesday, December 5, 2006

Official Report 214KB pdf

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European Commission Growth and Jobs Strategy Inquiry

Good afternoon, everyone. Welcome to the 17th meeting of the European and External Relations Committee this year. I welcome Alun Davidson to the committee. He will be on secondment from the National Assembly for Wales to the committee's clerking team until the dissolution of the Parliament at the end of March. Apologies have been received from Phil Gallie, who is unwell, I am afraid. Derek Brownlee will attend as his substitute at some point during the meeting. Apologies have also been received from Bruce Crawford for his late arrival. He should arrive fairly soon.

Item 1 is our inquiry into the European Commission's strategy for growth and jobs. This is our fifth evidence session for the inquiry, and we will take evidence on the regional dimension. We have one panel of witnesses. I welcome Professor Drew Scott, who is professor of European studies and director of the Europa institute at the University of Edinburgh. Our other guest is Jasbir Jhas, who is the policy and public affairs officer for the Local Government Association and the Local Government International Bureau. Jasbir has agreed to give us a quick outline of what the two organisations do and her relationship to them before we move to questions from members.

The Local Government Association represents the interests of local authorities in England and Wales and the LGIB is the European and international unit. It is funny for me to introduce it like that because, in January, the LGIB will no longer exist as an organisation but will become a distinct unit of the Local Government Association. The work of the LGIB as a European and international unit will continue. Our role is to represent in Europe, and to lobby on behalf of, the rights of local authorities. We also represent elected members such as Irene Oldfather on the Committee of the Regions and on the Congress of Local and Regional Authorities of the Council of Europe.

Thank you. That was succinct.

Each member state must submit a national reform programme, which sets out its delivery plan for meeting the targets. I wonder whether either of the witnesses can comment on the input of the various regional authorities in the United Kingdom and on the role of the Scottish Executive. How successful or unsuccessful have they been in having their views regarding the national reform programme taken on board?

I cannot comment on the input of the Executive; that would be for the Executive itself. The Executive was consulted, and the document makes clear the programme that the Government submitted under the revised Lisbon process last year. The question is to what extent that document energises further delivery of the Lisbon objectives in the UK in general, and in Scotland in particular, as it was intended to do.

The LGA and the LGIB have been engaged in the Lisbon process since the strategy was revised last year and we have been involved more generally since 2000, when it was first developed. We have been putting the local dimension into the employment and social inclusion national action plans, which preceded the Lisbon national reform programme.

Our role has been to ensure that the local dimension—the policies and good practice in local councils—is realised in the programme. On the value of that role, it could be argued that local authorities already have Lisbon-type objectives, such as ensuring that labour markets are inclusive and help socially excluded people in communities. We wanted to be involved in the national reform programme because we felt that, increasingly, sub-national strategies, such as the regional economic strategy that has been developed for the English regions, and the cohesion policy, which relates to structural funds, would be aligned to the Lisbon objectives.

The success of the Lisbon partnership, which the Commission developed in 2005, depends on whether the national Government can make progress with it and how it wants to bring a partnership together. A parallel partnership has been developed for the social inclusion national action plan in the United Kingdom, which is run by the Department for Work and Pensions. That has worked well in bringing together the devolved Administrations, the LGA and antipoverty groups. We would like that approach to be mirrored in the Lisbon partnership.

The way to get partnership is not to talk all the time about the process of pulling together the national reform programme, but to talk more about the policy content, such as the recent Commission document on flexicurity, which is about ensuring that we balance flexible labour markets with an adequate benefits system. We would like the Lisbon partnership in the UK to address such issues, because that is where the real value in the partnership could be.

Have you heard any comments from local authorities or others south of the border that they were at a disadvantage regarding input to the national reform programme compared with authorities in Scotland, because of the existence of the Scottish Executive and the Scottish Parliament?

If I understand your question correctly, the answer is that local authorities in England and Wales have no reason not to want to be involved. From our point of view, the fact that we can showcase through the national reform programme some of the work that local councils are doing enhances their work. It is a window to allow other member states to see how local authorities in England and Wales are delivering the Lisbon agenda. There have been no negative comments from local councils in England and Wales. The Convention of Scottish Local Authorities was invited to input into the national reform programme through the Scottish Executive, but I am not sure how that worked.

Were individual local authorities in England and Wales given the opportunity to input, or was it all done through your association?

It was done through the association. Our first job was to raise awareness among local councils about the existence of the Lisbon strategy, because many councils did not know about it. We have done two types of awareness raising: we worked with local authorities to let them know about the Lisbon strategy and to point out that local authorities are already doing what the Lisbon strategy aims to achieve, which is to create jobs and prosperity, but we also had to raise awareness of our role among other stakeholders.

One reason why we invited you along was to pick your brains a little, because of the experience the LGA and the LGIB have in the matter. Before I ask my question, I want to say that I am personally disappointed that the LGIB will not exist after January, because it has done an extremely good job. I have said that on the record and have written to ministers to ask them to reconsider their decision.

Will you talk us through how you approach the matter practically? The LGA has a liaison group. How do you decide the membership of that group? How do you involve people? How often do you meet? How do you set the agenda? Could you talk us through the practicalities, so that we can learn from your experience? How do you input the information that you get into the system?

The LGIB tries to track European policy, but our real aim is to ensure that it is mainstreamed into subjects that are already being dealt with by the LGA. Our role is to influence the agenda. Without member ownership or buy-in by the locally elected members who sit on the LGA boards, it is difficult to get European issues on to the agenda.

Because the Lisbon agenda is so cross cutting—it addresses lifelong learning, social inclusion, regeneration and so on—we wanted to take the issues to the LGA boards. We suggested setting up the member liaison group: it would be an LGA/LGIB group, co-ordinated by us in the LGIB. Our role was to explain what the Lisbon strategy is and to unpick it for people. We would explain, for example, the social inclusion national action plan and objectives, which relate to the LGA's work on social inclusion. We try to make Lisbon relevant to people who work in such areas.

There are seven people on the member liaison group. It covers many of the boards in the LGA. We have tried to do more than just discuss the Lisbon strategy, which might seem remote to a lot of people. If people are looking at a domestic agenda, they do not always have time to look outside that and to consider European issues. We try to examine regional policy, too, including how the policy aims—that is, the Lisbon strategy—are met through structural funding. We try to bring those things together—they are strongly linked.

The member liaison group has been quite effective recently. It was set up in the summer of 2005, and we have had meetings with Margaret Hodge, minister of state at the Department of Trade and Industry, to push the role of local government in the delivery of structural funding in England and Wales—something that will hit us all in 2007. The aim of the group was to get some exposure. The appointment of a Lisbon co-ordinator for the UK never really happened, which was a disappointment, but our aim was to make a link between our elected members and other politicians.

How often does the liaison group meet?

Twice a year. It last met in October, with Margaret Hodge.

Do you feel that, since you set up the group, local authorities have been sensing that they can have an influence and change things a little bit, and that they are becoming better informed?

I would hope so. The group is something we set up, so we want to make it a success. We also have a parallel officer network, called the Lisbon European officer network. It tries to steer the policy and create the ideas, which the members can develop. Other people have been able to contribute and to feed into discussions through our attempts to connect with the boards and update members on what is going on.

For the benefit of other members, could you say how you input that work into the Committee of the Regions, through briefing papers and so on? Presumably, you pick up issues and feed them into the UK delegation and UK members on the various commissions of the Committee of the Regions.

The first time the member liaison group met, we coincided that with the COR bureau meeting, in Birmingham, on jobs and growth. It was a two-way process. The members of the liaison group were able to find out a bit more about the Committee of the Regions, which was a fact-finding mission in itself, and they could relate things to what happens in the COR.

The LGIB also co-ordinates briefings for the whole UK delegation, to keep everyone in the loop about what our association is doing and what is going on from a UK perspective in general.

What relationship do you have with the Convention of Scottish Local Authorities?

We work quite closely with COSLA. It is part of the Committee of the Regions officer support group, and we often have contact at officer level about our COR members. We also share a lot of policy information. COSLA has its own offices to deal with its specific policy issues, and we ensure that we make connections with it.

So that you are all singing from the same hymn-sheet.

Yes.

Are your COSLA colleagues as proactive as you evidently are in promoting the Lisbon agenda among Scottish local authorities?

Obviously, I cannot speak for COSLA—

The question is a bit unfair and I will understand if you cannot answer it.

COSLA colleagues are in the Lisbon European officer network, so they are kept in the loop about everything. I also know that Scottish local authorities have been involved in the social inclusion national action plans and, to some extent, in the Lisbon national reform programme. Some of the UK documentation that has been issued has shown evidence of good practice.

Of course, that is from a Scottish perspective. However, from your involvement with the Committee of the Regions and so on, have you found that local authorities in other parts of the European Union have been able to introduce a local and regional dimension to the Lisbon agenda?

That is an interesting question. Last year, following the publication of the national reform programmes for the whole EU, the Committee of the Regions undertook a stock-taking exercise. The responses to its questionnaire showed that there was a general lack of involvement by local and regional authorities and, indeed, that any involvement had been bilateral. Of course, that probably reflects the fact that it was the first year of the renewed Lisbon partnership. However, there is certainly room for improvement in that respect.

I would also like to ask Professor Scott some questions.

I will ask Professor Scott a number of introductory questions, then I will open it up to members.

Jasbir Jhas has told us a lot about relationships with local authorities. Professor Scott, with regard to the paper that you published in September 2005, will you outline how you reached your conclusions on the missing regional dimension? Do you feel that things have improved? Indeed, how can they be improved?

The background to that paper was Wim Kok's high-level report that concluded that the Lisbon strategy was failing, partly because it had not been mainstreamed enough in domestic governance. Its valid point was that the whole Lisbon process should be taken out of the national capitals in order to broaden the stakeholder base.

In the paper, I argued, first, that national Governments cannot deliver the Lisbon strategy alone because many of the competences on which it touches reside at local or sub-state level, so the partnership with organisations at such levels must be much more active.

Secondly, I argued that, in the member states, the Lisbon process was becoming very introspective and that, because the overlapping issues in the strategy were quite narrow, Governments had little incentive to co-ordinate with each other. After all, Governments co-ordinate and co-operate on their shared interests. It is hard to find such issues in the strategy, which concentrates on domestic employment, domestic growth and domestic innovation. On such matters, Governments stick to their own agendas.

However, it struck me that regions have an incentive to co-ordinate matters with each other. What is missing from the Lisbon strategy is a forum or a serious way of encouraging regions in which there is best practice to get together with other regions outside national frameworks to discuss shared interests, resolutions to common problems and how to reach common targets.

It seems to me that regions have a lot of information that is simply not being spread to similar regions, although I should mention the Lisbon regions network, of which there are six or seven members—I think the west midlands region is involved in it. That network has grown up to cross-pollinate best practice at the regional level rather than through national capitals, but a lot of work still has to be done to package and deliver the Lisbon agenda at the regional level and to ensure that best practice does not have to be exchanged through national Government processes, in which there are great black holes; information simply does not get out.

How can the process be improved? Should regional networks be set up?

Yes. Historically, it has been shown that co-ordination at the regional level can take place in a number of guises. For example, there was the Association of European Regions of Industrial Technology—RETI—which was founded back in the 1980s. The group of regions with legislative power—Regleg—tried to campaign for reforms to the putative convention on the future of Europe. The Lisbon regions network, which has been developing for the past 12 to 18 months, is an example of a co-operation, co-ordination and best practice network that could be used much more fully. We tend to ask whether the Lisbon strategy sits with the smart, successful Scotland strategy and the UK's broader economic strategy, but we tend not to look systematically enough beyond these shores and ask how regions are dealing with particular problems. Recent research has highlighted the fact that Scotland may not be dealing with particular problems as well as other regions in the European Union are.

In the paper to which the convener referred, you said of opportunities to play a greater role in the Lisbon strategy:

"The extent to which the regions can and will avail themselves of these opportunities depend not only on the readiness of national governments to ‘admit' them … but equally upon the extent to which regional authorities are willing to take advantage of the opportunities".

Do you have any observations to make to the committee on the British-Scottish context? From your studies, to what extent are national Governments in countries such as Spain and Germany prepared to admit sub-state Governments or Parliaments into Lisbon strategy policy processes and to what extent are bodies such as Länder willing to participate in them?

Different types of opportunities arise from different national traditions. I have not detected any obstacle in the UK to conversations taking place. The strategy has been mainlined in national politics, but it has not been sufficiently mainlined in sub-national politics. It is not a matter of doors being closed; rather, it is a matter of where shared interests lie. Where national Governments retain competence over labour systems and social welfare systems, the proper conversation must be between the national and the sub-national Government to try to develop common objectives and responses, but there are other areas in which policy competence resides at the sub-national or sub-state level. In those areas, sub-states must energise cross-country comparisons and look for cross-country opportunities. There is no reason why national Governments should necessarily be involved or interested in such matters.

Things may have changed since I wrote the paper from which you have quoted—I have not carried out an empirical review since I wrote it—but the Lisbon regions network is active and interesting. In the paper, I ask why regions are not talking to one another about similar problems. They could learn from one another and find alternative reactions to problems.

You mentioned recent research that shows that Scotland is possibly missing a trick or two. Will you point us in the direction of that research and give us an illustration of what you mean?

We are not taking the opportunities that the existing structures in the European Union present, for example by not plugging into the Lisbon regions network. We could consider a number of potential areas, but the Lisbon regions network, with which I have been most closely involved, and in which, as I have said, the west midlands is involved, jumps out at me. We must ask what lessons can be learned from the arrangements and conversations between the regions that are involved in it.

Another example, which came out of a paper by Andy Cumbers, is that Scotland's traditional industrial regions—the old declining regions—are not responding at the same rate as similar regions in other parts of the European Union. He does not suggest reasons for that—I guess that that would be the next stage of the research. Old industrial regions in some parts of the EU are clawing themselves into higher growth and better employment prospects than comparable regions in Scotland. He noted the south-west of Scotland as a particular example.

Such cross-country comparisons are crying out for explanation. We should not be considering why we are doing less well than the south-east of England on some of the Lisbon targets such as innovation and new firm start-ups, but why some comparable regions are doing better than us. We could ask the question the opposite way round: why is Scotland doing quite well on the employment target while other regions are not doing so well? We need to look beyond the shores of this jurisdiction to find out what is happening.

The example of the south-west of Scotland is interesting. Do you get the feeling that we too often consider Scotland as a whole rather than consider what could be done within Scotland at a sub-regional level?

That is an extremely good point, with which I agree entirely. Scotland is not a unified economy in that sense; different parts of the country have different economic forces and different labour markets. We talk about Scotland and local authorities and development authorities in England. We should have a smaller aggregation unit in Scotland. I guess that the Scottish Enterprise network does that, but given the targets that we are talking about, we have to break the area down further.

I call Bruce Crawford.

My question is on a slightly different subject, so I will let other members in first.

Do the witnesses feel that the European Commission is moving towards a regional agenda? You probably share my views on that. What regions are involved in the network? The fact that the west midlands is involved will be of great interest to the committee. We tend to think that we in the Scottish Parliament are ahead of the game in a lot of these things, so it is interesting to see regions in England taking the agenda forward. I suspect that that is to do with Birmingham.

I did not print out a list of all the regions involved. Brussels, Stockholm, Emilia-Romagna, a German region, Valencia and the west midlands are involved. Seven or eight regions are involved. It is an active group. Of course there are big differences between them, but they have lots of conversations about the best strategy in relation to Lisbon issues.

I do not have any real views about the Commission's approach, other than to say that it has always been quite open to regional discussions and has always welcomed the regional representatives in Brussels. I have never heard any suggestion that the Commission is anything other than supportive of contact with regions. The difficulty with Lisbon vis-à-vis the Commission is that it touches on competencies that are entirely national.

In a sense, the interesting thing about Lisbon is that it represents a new form of governance; it is a move away from acquiring competencies at Europe level and towards engineering collective responses and saying, "These are matters that are best left to national and sub-national Governments, but we feel that there is sufficient common interest that we should be learning." The learning part of the so-called open method is failing. It is about the extent to which countries are prepared to adjust domestic strategies—which is not costless—or sub-national Governments are prepared to adjust sub-national policies in the context of best practice. There will always be losers from a policy change.

The difficulty is that, somehow, the circle has to be squared. We have to see the gains as being trade-offable against the losses. There is no doubt that that is difficult, but the Commission is entirely supportive. The reaction to the Kok report was that we should get the Lisbon agenda out and involve not only national capitals and civil services, but open it up to more stakeholders as part of a broader attempt to reinvigorate Europe's economy and address the challenges, which are extremely serious.

Do we have the relevant data at regional level to allow such comparisons or should we try to pull them together?

The data in Scotland are extremely rich, although they can always be improved. The economic data are very rich, which reflects the many years over which the Scottish Office and the Scottish Executive have addressed Scotland as a specific economic jurisdiction. The data in England are far less rich, so it is much more difficult to make comparisons across the English regions. We have good data on most things, which can be used usefully for the Lisbon strategy targets on which competences arise. We know a lot about the indicators and it would be helpful to make the targets harder and give them more indicative power.

Something that might be of interest to Drew Scott and to the committee is the Lisbon monitoring platform that the Committee of the Regions has newly developed. It builds on the questionnaire that the COR distributed last year to national associations to ask how they were involved in formulating the reform programmes.

The new phase of the COR's work, which is purely voluntary and takes place through its members, is intended to engage local and regional authorities and to find out how they are working and what their data are. It is a data-rich network, in which 65 local and regional authorities throughout the European Union have been involved so far. The Committee of the Regions hopes to make it a test-bed so that regions can compare their performance against each other and build an argument that certain regions in different countries perform better in certain areas because they have different competences. That will enable them to lobby their own Governments and the European Union to make things slightly easier for local and regional authorities to act on the Lisbon strategy.

Many of the local authorities that were involved in the LGA-LGIB submission to the Lisbon national reform programme are involved in that. I think that there is some Scottish involvement; I can check that and get back to you on who is involved.

We are being encouraged to consider issues on a much more regional or sub-national basis. What is your perspective on how other parts of Europe deal with matters on which different levels—the Government of Catalunya and the Government in Madrid, for example—have different views on the way forward? How can we ensure that member states note such different approaches, recognise them and find ways to reconcile the differences? If we are going to achieve some of the things that the Lisbon strategy requires us to achieve, there will need to be much more acceptance of the fact that particular areas within a member state may have different views about the solutions.

That is a big question. The straightforward answer is that the different views can be reconciled by assigning competences, which follow when the points of difference are found. That is the principle of subsidiarity. Many sub-state authorities have different levels of competence. The reason for giving competences down to lower levels in the governance hierarchy is to take advantage of different opportunities and respond to different challenges. There is no glide path to a straightforward solution. The process happens by disagreement as different problems emerge and are resolved. I do not think that there is any particular recipe for the perfect configuration of powers that will result in a devolved parliament or executive that meets the aspirations and needs of particular sub-state areas. There is no one answer to that question; it comes through the competence issues.

Are there examples of places in Europe that are approaching the situation differently, accepting that differences exist and reconciling everything in a more open way than we are doing?

From an employment perspective, there is a lot that we can learn about how various regions and cities are working to make employment policies that reflect the needs of their areas. We are doing that through the Committee of the Regions, and the Council of European Municipalities and Regions, which is another pan-European association of local government organisations. That is a useful tool that we can use for the exchange of best practice.

The LGA is doing a lot of work on sub-regional partnerships and how local authorities are working together to deliver their regional economic strategies. We are trying to learn from that. The Lisbon COR platform provides another way in which we can learn from what is going on elsewhere.

We have covered a lot of ground. You have both given us food for thought in the complementary evidence that you have given us.

At our next meeting, we will take evidence from the European Commission and the Deputy First Minister.