Chamber and committees

In 2003 a total of €2,026,960.77(£1,380,461) was deducted from the European Agriculture Guidance and Guarantee Fundelement of the Highlands and Islands Special Transitional Programme. In 2004 €2,147,214(£1,462,360) was deducted from the Financial Instrument for Fisheries Guidance element;it is also likely that a further €9,009.82 (£6,136) willbe deducted from 2005.

It would not be appropriate toprovide details of individual cases. Failure to achieve spending levels is attributableto a range of factors including particular problems faced by the farming and fisheriessectors over the last few years affecting confidence and ability to fund applicants’share of project costs.

Although the level of Europeanfunding was reduced there was no loss to the programme or individual projects asthe Environment and Rural Affairs Department increased the level of its fundingto compensate.

A number of steps have been takento monitor financial progress. In 2003 the Programme Monitoring Committee adoptedan N+2 (Annual Expenditure Target) Action Plan. This is updated annually. N+2 isa standing item for Programme Monitoring and Management Committees. In addition,the Scottish Executive and the Programme Management Executive monitor progress ona monthly basis, increasing to weekly if progress is slow and as the end of yeardeadline approaches. Officials also meet regularly to consider progress and takeappropriate steps to expedite spend including contact with project applicants toensure that claims are submitted regularly. Officials also provide progress reportsto me on all structural funds programmes and I have written to a number of applicantsencouraging them to submit claims timeously.

(Note: Exchange rate used €1= £0.681050 – March 2006).

Notes:

* Exchange rate €1 =£0.681050 (March 2006).

** Excludes 2005decommitment of €9,009.82 –S2W-24124 answered on 20 March 2006 refers.

Allocations establish the extentto which funds can be made available to individual projects. Satisfactory progresswith projects, reported in individual grant claims, allows the Scottish Executiveto pay grant to applicants. The Scottish Executive effectively acts as banker forthe programme. When the programme was approved by the Commission in 2000, the Commissionpaid an advance to the Executive from which grant could be paid to projects. Projectexpenditure will continue into 2008. As claims are settled, the Executive seeksre-imbursement from the Commission – usually three or four times each year. Thisprocess will continue until the programme closes.

Final payment is not made untilthe programme has been closed by the Commission. It is anticipated that final claimand closure statements will be submitted to the Commission by June 2009 and finalpayment will be made thereafter. This does not affect applicants. Allocations aremade in full by the Commission to the programme. Payments from the Commission cometo the Executive via HM Treasury and are automatically transferred in full to the Scottish budget on receipt.

The Scottish Executive is unableto supply estimates at the local authority level.

New financial spend targets havebeen introduced in 2000-06, by which the full sum of any one year’s allocationsmust be spent within two years of the allocation year or risk automatic de-commitment(referred to as “N+2”). Scottish programmes have met all their N+2 targets apartfrom under the Highlands and Islands Special Transitional Programme, where lackof spend by project beneficiaries led to automatic de-commitment of European AgriculturalGuidance and Guarantee Fund monies in 2003 and Financial Instrument for FisheriesGuidance monies in 2004.

I have decided to use “aid ofa social character”. This flexible approach maximises value for money; ensures thatbenefits go straight to the traveller; works with the market, thus avoidingthe need to provide subsidies to airlines in areas where services can be providedcommercially and would allow competition where it exists, to be maintained, andensures that the aid provided is targeted at the individuals and communities thatneed it most.

Highlands and Islands Enterprise and HITRANS have also undertakentheir own evaluation of the impact of reduced fare levels on air services betweenGlasgow International Airport and Barra, Campbeltown and Tiree.