Scotland receives an appropriate share of Structural Funds money allocated to the UK by the EU according to a major report published today by the Parliament's European Committee.

Announcing publication of its report, European Structural Funds and their Implementation in Scotland, convener Hugh Henry said:

"On the basis of the available evidence, our committee can state that the transitional Objective 1 area and the Objective 2 areas in Scotland have been allocated an appropriate amount of the Structural Funds allocated to the UK by the EU. And, similarly, the same would appear to apply to Objective 3 funding.

"Notwithstanding this conclusion, our committee believes that the additional information we requested from UK government departments on the details of departmental spending plans with respect to Structural Funds would have helped clarify the situation beyond doubt.

"Although requests were made to UK Government Ministers to attend our inquiry meetings, they declined. The committee feels that the subsequent written information they provided was not sufficient to verify the net impact of EU funding on economic development spending in Scotland. This was a matter of regret to the committee.

"Our unanimous, all-party report agreed that, over the 2000-06 period, it is unlikely that Scotland is losing out in the allocation for Structural Funds to programmes in the Scottish Block. The committee recognised that the converse has been argued (by some) for the 1994-99 period, but, in the absence of the relevant information, this cannot be confirmed. On the basis of the evidence, the committee considered that the ring-fencing of Structural Funds is not likely to be in Scotland's interests over the 2000-06 period.

"We, however, advocate greater transparency in the publication of information on how the Barnett Formula works in practice with respect to Structural Fund expenditure planning. In particular, 'expenditure relatives' should be published to indicate how changes in comparable Structural Fund programmes in England have been translated into formula consequences for the Scottish Block, both in the past and in future on an annual basis.

"Our report also recommends strongly that there should be greater transparency and detail in the reporting of the relationship between annual Structural Fund expenditure and spending by government departments. This would enable Parliament to establish with certainty whether EU money is matched pound for pound by UK government spending. Such measures would dispell any doubt over past, present or future governments using EU money to offset its own domestic spending."

The committee's full report is available on the Parliament's website. (Click here)

BACKGROUND NOTES

The European Structural Funds are the second largest item of expenditure by the European Union, and are designed to help regions of Europe whose development (in terms of their level of wealth, economic development and social cohesion) is lagging behind the more prosperous areas.

The Funds are spent according to 3 Objectives, namely:

Objective 1: funding in areas whose development lags behind the EU average, and where the aim is to bring their economies and infrastructures up to parity with the rest of the EU.

Objective 2: funding to help the economic and social development of regions of industrial decline, rural areas, urban areas and fishery-dependent areas.

Objective 3: funding to help with the adaptation and modernisation of policies and systems of education, training and employment.

Between 2000-06, in total, Scotland will receive nearly £1.1 bn across all three Objectives, with nearly £200 m for Objective 1 type spending (available in Highlands and Islands only), over £500 m of Objective 2 type spending (West, East and South Scotland only) and over £300 m for Objective 3 type spending (across all of Scotland). Scotland gets 10.8 per cent of the UK's total amount of Structural Funds.

Both the Secretary of State for Scotland Rt Hon Dr John Reid and the Chancellor of the Exchequer Rt Hon Gordon Brown were invited to attend the committee in letters dated April 14, 2000. Both Ministers offices verbally declined the invitations.

Hard copies of the committee's report are available for purchase from outlets of the Stationery Office.