Scottish Government

Introduction

1. The 2007-13 Scotland Rural Development Programme ( SRDP) will be a major tool for achieving economic, social and environmental policy priorities across rural Scotland and will be administered under the provisions of EC Regulation 1698/2005 (the "Rural Development Regulation").

2. The Scottish Executive carried out two public consultations between February and June 2006. The first addressed the priorities for the Strategic Plan which will guide the SRDP. The second sought views on the content and implementation of the SRDP itself.

3. The Executive is grateful for the wide range of responses that have been submitted in response to the consultations. There were 107 responses on the Strategic Plan and 259 responses on the SRDP. Responses were received from a broad range of stakeholders including local authorities (including Community Planning Partnerships), Government bodies, the voluntary sector, regional and local development partnerships, professional and academic bodies, representative organisations and private individuals and businesses.

4. Responses to the consultation on the Strategic Plan were analysed by officials within the Scottish Executive Environment and Rural Affairs Department. Responses on the SRDP were analysed by Dr. Sarah Skerrat at the Scottish Agricultural College.

5. The Minister and Deputy Minister for Environment and Rural Development have given careful thought to the reports on each of the consultations. This report provides a brief update to the Executive's response to the consultation on the Strategic Plan, and sets out its response to findings of the consultation on the SRDP.

Update on the consultation on the Strategic Plan

6. Respondents suggested ways in which links between the Strategic Plan and other policy documents could be enhanced. Some concerns were raised as to whether the three themes proposed for the axes of the RDR would add value to the Plan.

7. We welcome the helpful contributions made on the drafting of the Plan. The Scottish Executive's response to the consultation was included in its analysis of the findings that was published in July 2006. Further to this response, we confirm that the Plan will use the titles of the three axes as set out in the RDR in place of the themes that were proposed in the consultation. We have also updated the references to other relevant strategic documents and have amended the priorities under each axis to reflect stakeholder recommendations.

Scottish Executive's response to the consultation on the SRDP

8. This section summarises the key findings (in italics) for each of the questions posed in the consultation, and sets out the Executive's response to these findings.

Q1. Do you agree with the "historic payments" system proposed for Less Favoured Areas?

Key recommendations from respondents included that:

i. the period between now and 2010 should be used to gather evidence, and to re-consider objectives and options, particularly within a period of reduced EU funds; and that,

ii. the Less Favoured Area Support Scheme ( LFASS) should target 'genuinely disadvantaged' areas of rural Scotland.

9. We are pleased that there is some support for the proposed interim scheme, but recognise that there remain concerns about the distribution of funds and potential loss of cattle from remoter areas, which is seen by some as detrimental to the environment.

10. We aim to influence the EU proposals for 2008 concerning designation and payment rates, and once these are confirmed we can begin the development of the post-2010 scheme. We will continue to actively involve all key stakeholders in developments.

Q2. Do you agree with the suggested approach for ensuring that payments are only made in respect of land that is being actively farmed?

Key recommendations from respondents are that:

i. the definition of "actively farmed" requires urgent clarification;

ii. the definition should include land that is actively "managed" not only actively "farmed"; and that,

iii. there should be a re-think to whether LFA support should be addressing wider socio-economic objectives in addition to those of "actively farmed" areas.

11. We note and agree with the strong message that payments should only be made to those farming the land. Farming in LFAs is mainly associated with the grazing and management of livestock, and LFASS is required to be a land-based scheme. Therefore, we intend to define land eligible for LFASS along the lines of: "land used for keeping and/or breeding of farmed livestock and/or associated forage and cropping".

12. We have commissioned an LFA evaluation to look at objectives and options, and to provide an evidence-base for developing the post 2010 scheme in Scotland and to help influence Commission thinking on LFASS post-2010, while it is at a formative stage.

Q3. Do you agree with the proposals to give greater weight to "very fragile areas" and to increase the minimum payment?

Key recommendations from respondents are that there is a need:

i. to have a better working definition of LFAs;

ii. to establish an ongoing evidence base;

iii. to link LFASS with specific objectives (including a focus on High Nature Value farming systems); and,

iv. to look at alternative funding sources for crofting counties.

13. We have already undertaken some preliminary work on the analysis of cost differentials. This demonstrates that transport costs to the islands are higher. The Farm Account Survey shows no evidence of higher costs in "very fragile" areas, but it excludes part-time and very small farms which are often prevalent in such areas.

14. We recognise that there was very little support for the proposal to increase the minimum payment for holdings with less than 10 hectares. This proposal has been dropped from the interim scheme.

15. Broader issues of LFASS objectives and funding are being investigated in the context of the evaluation above, and will also be considered in the light of the new EU policy framework that is expected to emerge in 2008.

16. In summary, the interim LFASS Scheme for the period 2007-2009 will be based on:

• historic based payments;
• values per hectare derived from 2006 LFASS payments (at holding level);
• payments tied to the land and payable to the occupier;
• some redistribution of funding from "standard" to "very fragile areas";
• payments made only to those actively farming the land; and,
• applicants who demonstrate cross-compliance and maintain the land in Good Agricultural and Environmental Condition ( GAEC) and complying with the statutory management requirements.

Q4. Do you agree with the national objectives identified in Annex C (of the SRDP consultation document)?

Key recommendations from respondents are that:

i. the objectives of LMCs could be cross-referenced with those of relevant sectors;

ii. recreation and tourism assets need to be highlighted;

iii. climate change needs should be addressed;

iv. objectives should be holistic and interlinked;

v. sustainable territorial development needs to be addressed; and,

vi. all types of rural businesses should be considered for support, including those outwith the farming sector.

17. We are encouraged that the responses indicate general support for these objectives. We firmly agree with views expressed about the importance of economic development objectives. We recognise that a secure economic footing for businesses can enable them to deliver a range of environment and social benefits. It will also be important to articulate the breadth of outcomes that is encompassed within the LMC concept, including those relating to climate change and recreation and tourism, and to clarify how a wide range of activities have a role to play in achieving these outcomes. Meeting the priorities of different areas across rural Scotland will be critical to the success of LMCs and is addressed later in this report, particularly under paragraphs 34 to 36 on a regional perspective for the SRDP.

Q5. Do you agree with the proposed integration of schemes into LMCs?

Varied recommendations were made by respondents including that:

i. a broad range of schemes should be included, to reflect the diversity of rural Scotland;

ii. certain aspects of support - for example under Axis 3 - should be kept separate from LMCs because they do not relate to management of land;

iii. integration should be enhanced over time through closer links with regional objectives and bodies, and through improved co-ordination of and planning in the use of funds (for example, through whole farm plans); and that,

iv. clear guidance is required from SEERAD on the implementation of LMCs, including on eligibility.

18. The Executive welcomes the largely positive response to the proposal to integrate schemes into LMCs. We agree that LMCs should comprise a broad range of actions if they are to provide an integrated mechanism for supporting the diverse needs and priorities of rural areas. We intend that our proposals for a regional perspective for the SRDP (see paragraphs 34 to 36) and for the use of planning under Tier 3 of LMCs will address recommendations in these areas. We shall also draw up guidance to explain the components of LMCs and how they will operate, including eligibility for support. Eligibility is in part driven by the requirements of the RDR and, importantly, by the ability to deliver desired outcomes. A wide range of recipients will be eligible for support; these will mainly be land managers but will also include other individuals, businesses and community groups.

Recommendations were also made on the content and operation of LMCs, in particular that:

i. training is needed for those involved in drawing up plans under Tier 3;

ii. flexibility between Tiers 2 and 3 should be ensured, and the balance of funding between the Tiers should be revised;

iii. support should be maintained for the cultural/historic environment and there should be provision for specific activities such as equestrianism and goose management; and,

iv. some schemes should be excluded from LMCs.

19. We agree that it will be important to provide training and development support to build capacity and to ensure that plans under Tier 3 act as an effective mechanism to deliver our objectives. The advisory arrangements will be critical in this regard. This is explained in greater detail under Question 19.

20. We are currently finalising proposals for the measures that will receive support under Tiers 2 and 3. It will be important to strike a balance in order to secure the enhanced levels of benefits sought under Tier 3 while ensuring that Tier 2 enables delivery of a wide range of simpler measures that enhance rural Scotland. We have stated the importance of the historic environment in the Strategic Plan and propose measures to deliver this. The broad range of measures that we have proposed - and their applicability to different settings and activities - will enable a wide range of activities to be supported under the SRDP.

21. We continue to examine the case for inclusion of various schemes (either all or in part) within LMCs, and are taking forward discussions with stakeholders. Our primary aim is that LMCs deliver the key outcomes sought in the Strategic Plan, including those that are delivered currently through separate schemes. We confirm that near-farm processing, marketing and value-adding activity should be included within LMCs, and that processing and marketing operations that have a more urban or industrial focus may be more suited as a stand-alone scheme.

Q6. Are the proposed lists of Tier 2 and Tier 3 measures in Annexes D and E suitable for the delivery of LMC objectives on:

i. economic issues

ii social issues

iii environmental issues?

Extensive comments were received on this question. The main comments are that:

i. the tiers of LMCs are aiming for too many measures - especially with the given (decreasing) budget - and there is a need for targeting and prioritisation;

ii. a better balance is needed between economic, environmental and social/wider rural community outcomes, including those "beyond the farm gate";

iii. there are concerns that the wider remit identified within the SRDP will lead to much-needed funds leaving agriculture;

iv. there is an apparent disjointedness with LEADER, particularly given its underpinning role as outlined in the new RDR;

v. there is a lack of explicit mechanisms and approaches for integration with other schemes, policies and priorities; and,

vi. recommendation for the addition of a variety of specific activities.

22. The Executive is working to finalise the measures that will be supported under the SRDP and agrees that these should be carefully targeted and prioritised. The priorities set out in the Strategic Plan identify the key outcomes sought from the SRDP. We intend to bring a wide range of schemes into LMCs (see question 5). These schemes cover economic, social and environmental outcomes, and provide funding for activities in both land-use and other sectors, including community development and quality of life improvements.

23. We agree strongly that the SRDP should support actions that build on the assets of rural Scotland. We note that a wide range of activities and measures are referred to in responses as deserving greater emphasis in the SRDP. We will ensure that due emphasis is given to activities that contribute to our strategic outcomes - for example, climate change - while ensuring that support under the SRDP is targeted to make best use of available resources. It will also be important to draw clear lines of demarcation with complementary sources of funding including the EU Structural Funds and domestic resources. We will continue to involve stakeholders as we finalise the measures in the coming weeks. LEADER will play an integral role in delivering outcomes across the three axes of the RDR, although we expect its contribution to be greatest under axis 3. This is discussed further under question 11.

Q7. Is there an appropriate balance between the proposed economic, social and environmental measures for LMCs?

Half of respondents did not answer this question although most of those who did respond expressed concerns about the balance between economic, social and environmental measures, and between measures to support land-use and other activities. Specific comments were that:

i. the distribution of resources between Tiers is dominated by the Single Farm Payment under Tier 1; and,

ii. LMCs do not provide an effective "shorthand" for wide range of measures that they may encompass.

24. We note that a significant proportion of those who responded felt that an appropriate balance has not been reached. There was no consistent recommendation on how this balance should be redressed. Different respondents considered that either economic or environmental, or agricultural or non-land-use, measures should attract greater attention. We will examine further the proposed set of measures in order to best meet the requirements of the RDR and the full range of our priority outcomes as set out in the Strategic Plan.

Q8. Do the proposed measures encourage an integrated approach compatible with sustainable development?

This question was also answered by only half of respondents. Some respondents believed that the mix of economic, social and environmental measures would contribute some integration, while others argued that greater integration is needed across economic, social and environmental objectives, highlighting the following concerns:

i. there is too much flux at a time when, following recent CAP reforms, stability is needed; and,

ii. the measures themselves cannot ensure integration or sustainability - it is the process for implementing them that is critical in this regard.

25. We recognise the need to provide for a set of measures that addresses broad-ranging economic, social and environmental outcomes. We have been working to develop measures that maximise opportunities to support multiple outcomes. We have also cross-checked measures in order that they complement one another and collectively contribute to policy outcomes. We agree that the process adopted for implementing the measures in the SRDP will determine whether effective integration that encourages sustainability is achieved. Subsequent questions address how we propose to implement the SRDP.

Q9. Should there be a mechanism for ensuring that land managers adopt a spread of measures from Tier 2?

Key recommendations by respondents were that:

i. there should be flexibility to reflect the diversity of farms and different priorities over time;

ii. there is a need for an environmental emphasis, within a Whole Farm Plan approach;

ii. account should be taken of regional priorities and catchment management plans; and,

iii. there should be training and advice for farmers to support them in making informed decisions.

Some respondents who disagreed with the proposal argued that resources should be targeted rather than spread in a shallow manner across all measures, and that farmers' own decisions should be respected.

26. There was a mixed response to this question. We agree that it is important to have sufficient flexibility in Tier 2 to ensure that diverse priorities and needs are met across rural Scotland. We commissioned an evaluation of the Menu Scheme following its first year of operation in 2005, and have carried out a review of the measures in the scheme in 2006. We have adjusted the range of measures accordingly. It will also be critical that the advisory system is effective in meeting demand for capacity-building and maximises the effectiveness of Tier 2 in delivering outcomes.

Q10. Do you agree with the list of capital items as proposed in Annex G?

Respondents were generally supportive but made a number of specific recommendations concerning the specification of different items. There were also requests for flexibility to allow the list of items to be changed during the Programme, including to accommodate new technologies and systems.

27. We welcome the positive responses on this question with regard to the comprehensiveness of these items and their ease of delivery. We believe that standardisation of costs, where appropriate, plays an important role in the efficiency of delivering the SRDP. We are examining respondents' suggestions for further standard costs items and for changes to the specification of some items.

Q11. Should the LEADER mechanism be used to deliver across all the Axes?

Some respondents felt that more detailed explanation of the 'mechanics' of applying LEADER across all Axes is required. Recommendations included that:

i. use should be made of experience and knowledge already gained;

ii. LEADER should not lose its emphasis on being innovative; and,

iii. reallocation of resources should take place such that LEADER receives a greater proportion of the overall SRDP budget.

28. We welcome the helpful suggestions in response to this question which underpin the potential for LEADER to deliver important outcomes in the SRDP. We note comments that LEADER's role in the new Programme requires greater definition. We are also conscious that it is a 'bottom-up' initiative and that care has to be taken not to be too prescriptive about its role or render it too restrictive for Local Action Group partnerships to operate. Further detail is being prepared on the proposals and these will be shared with stakeholders at the earliest opportunity. We confirm that we intend to build on the knowledge and experience acquired through previous LEADER programmes. LEADER will play a particularly important role in stimulating innovation and cooperation. There is strong enthusiasm by community groups, LAG partners, and officials working in rural development to engage with LEADER and be involved in its development.

29. It will be necessary to achieve a balance between funding for LEADER and LMCs. The minimum spends across all four axes must be respected. LEADER is likely to contribute greatly to axis 3 which has a minimum spend of 10% of the European funds but LEADER can also assist towards spend in axes 1 and 2.

Q12. How can LMCs and LEADER be administered to deliver mutually supportive approaches to rural development?

There were 120 responses to this question, representing 46% of respondents.

Respondents recommended that a mutually supportive, and sustainable, approach to rural development would require the following components:

i. co-ordination and integration;

ii. strategic partnerships;

iii. using existing knowledge/capacity;

iv. training and familiarisation;

v. suitable make-up of the groups, allowing for knowledgeable decisions to be made;

vi. defining of local, regional and national priorities;

vii. avoidance of undue administrative and bureaucratic burdens; and,

viii. mechanisms to resolve conflicts of interest.

30. The Executive appreciates the positive proposals made in response to this question, and are taking these suggestions forward in our work to implement a Programme in which LMCs and LEADER have co-ordinated and complementary roles.

Q13. Do you agree with the proposed Rural Development Framework approach?

Respondents who were supportive of this approach regarded it as a viable means of ensuring an integrated and strategic approach to rural development and, by bringing different measures together, of simplifying the application process. Some felt that the term 'Rural Development Framework' is not appropriate for a Programme that focuses largely on land management, and that there is a need to engage RDFs with priorities at a local level. The main reasons given against adopting the proposed approach were that it is complicated and theoretical (particularly for local and voluntary groups) and that it adds to bureaucracy.

31. There was good support for the Rural Development Framework ( RDF) approach. Further consideration will be given to the term used to describe the approach. We believe that it is essential that RDFs address our strategic priorities, at a national, regional and local level. To this end, it will be important that they have access to appropriate guidance to support effective prioritisation and implementation (see questions 17 and 18).

32. We recognise the importance of a cost-effective approach to the implementation of the SRDP. RDFs will help to prioritise applications competing for limited resources and will help beneficiaries to implement land management proposals and other projects. We agree that it is important that beneficiaries have 'ownership' of RDFs in order to make them effective working documents. The information to be provided by potential beneficiaries will be proportionate to the level of overall funding sought. Essentially, RDFs should be "sufficient for purpose".

33. We are examining respondents' recommendations to use RDFs to support collaborative applications and to inform monitoring and evaluation of the SRDP. We believe that collaboration among rural businesses to deliver priority outcomes will be easier if applicants are aware of what has already been or is likely to be supported in their locality; Forest Plans funded by the Forestry Commission provide an example of this approach. This will of course be balanced against the need to protect sensitive commercial information.

Regional perspective

Q14. Do you think that the proposed RPAC approach would be an effective means of delivering regional and local priorities while meeting national objectives?

Q15. Would RPACs be an appropriate approach for applications under all of the Axes?

There were 105 responses to this question, representing 41% of respondents.

Q16. Which interests do you think should be represented on the RPACs?

There were 126 responses to this question, representing 49% of respondents.

Responses generally favoured a regional approach to the SRDP, stating that the proposals would enable regional diversity to be recognised through a decentralised approach that would enable decision-making to be more tailored to different localities. Concerns were raised about the governance arrangements for RPACs, the levels of bureaucracy and the need to meet national priorities. Some alternative models were proposed, including that RPACs adopt a purely advisory role, that their role be filled by Community Planning Partnerships and LAGs and that a system is established that parallels the arrangements proposed in England.

Respondents provided diverse views on how RPACs might best operate. The main reason for supporting this approach was that RPACs would provide a joined-up approach that avoids duplication. Concerns focused on how RPACs can have a representative and manageable membership that has the expertise to assess applications across the three axes of the RDR.

34. We appreciate the support expressed for the principle of regionalisation and welcome the comments received on how a regional approach may be implemented most effectively. We will proceed to develop our regional proposals and have already made significant changes to our proposals as a result of the practical suggestions made by respondents. We now propose a separation of responsibilities for setting regional priorities and evaluating applications for funding; we intend that the former will be taken forward through the establishment of regional stakeholder forums, and the latter through RPACs consisting of officials from government departments and agencies. This change takes account of stakeholders' concerns about external parties looking at confidential project information.

35. We are grateful for the views expressed about the proposed RPACs. We intend that their membership draws on all the key departments and agencies that have responsibility for rural development. We will consider respondents' views in further developing our proposals for how an efficient and effective network of assessment committees can be set up.

36. We are carrying out further work to finalise the regional proposals, including the geographical areas used to administer the arrangements. It will be essential to ensure that workable and streamlined arrangements are put in place. We are examining how bringing together currently disparate application and assessment processes will achieve efficiencies in the delivery process.

Q17. Do you agree with the proposed system of guidance on regional and local priorities to enable greater targeting in the SRDP?

Q18a) Do you agree with the range of topics that the guidance will cover?

Q18b) Should the guidance adopt the same approach across all three Axes?

Respondents who agreed with this proposal for regional guidance cited the importance of establishing such regional and local priorities to targeting resources in a way that recognises regional diversity. It was also argued that there should be flexibility to allow changes in the guidance over time, that guidance be available well in advance in order to maximise how well it is understood, and that the guidance be properly integrated with the advisory infrastructure for the SRDP. Some respondents disagreed with the proposal on the grounds that it adds complexity and would result in a compartmentalised approach.

Respondents generally felt that the range of topics proposed provide for a comprehensive and integrated system of guidance. Care is required as to how the guidance will relate explicitly to the Axes and measures, and the guidance should acquire a better balance in which social, economic and business elements are adequately incorporated. A range of areas were suggested where respondents feel that further guidance should be developed, and some concerns were raised that diversity at a very local level should not be overlooked. Among those who disagreed, concern was expressed that the guidance will be too generic, and will therefore be unworkable at a local level. In the main, respondents believed that a similar approach to guidance should be adopted for each of the axes in order to encourage consistency and integration.

37. We welcome the support for guidance. We agree that guidance is important in achieving a targeted approach to the SRDP that meets the challenges and aspirations of communities across rural Scotland. It will be essential that the guidance can be amended over time and that the advisory network plays a full role in ensuring that it is used effectively. We support the active engagement of stakeholders in establishing the priorities to be set out in the guidance.

Q19. What mechanisms could be put in place to ensure that the advice provided is of a high standard that will help achieve the policy outcomes expected?

The key response to this question was the need for accreditation of advisors. Concerns were raised about the wide range of expertise that will be required and the potential tension between new and existing advisory networks and sources. Respondents made a series of recommendations for ensuring that trained and specialist advisers are used, and that the advisory network builds on existing mechanisms and is properly joined-up to allow applicants to seek the advice that they need.

38. We are grateful for the recommendations that have been made by respondents to ensure that the advisory network provides high quality advice that helps to deliver policy outcomes. We will work with stakeholders and existing accreditation arrangements as much as possible when implementing arrangements to ensure a suitable standard of advice provision across all aspects of the Programme. It will be important to ensure that arrangements are put in place to continually assess the quality of the proposals being submitted by potential beneficiaries. This will include regular feedback to advisors on areas where any improvement is needed. Where the Executive is directly supporting the provision of advisory and facilitation capacity, any contractual arrangements will include provision for monitoring and feedback to ensure a high standard of advice.

39. We agree that the advisory network must achieve consistency in the provision of advice to support the SRDP. Joint working arrangements are being developed among the Environment and Rural Affairs Department, Forestry Commission Scotland, Scottish Natural Heritage, SEPA and others as part of the On the Ground initiative. This initiative is also examining how advice on the SRDP may be best coordinated, for example through a 'one-stop-shop' approach. This will be linked to the implementation of a National Rural Network in Scotland (required by the Rural Development Regulation), and the development of a Single Information Portal as part of the implementation of the revised Forward Strategy for Scottish Agriculture.

Q20. What areas of activity should the SRDP support in order to ensure that it complements activities supported through other funding streams?

Responses highlighted a diverse set of activities for support through the SRDP. These include activities under each of the axes in the RDR. Respondents also cited a wide range of initiatives in Scotland where "co-ordination of activity and purpose" should be achieved with the SRDP. The need was also identified for complementarity between the SRDP and EU Structural Funds and national funds.

40. The Executive acknowledges that it is essential that the SRDP adopts a strategic approach through which support is targeted at delivering desired outcomes while complementing activities supported through other funding streams including the Structural Funds. This co-ordinated approach will help to ensure that the SRDP plays an integral role along with other funding streams in improving economic, social and environmental well-being in rural areas. We will set out clear lines of demarcation in the Programme document between the SRDP and other key sources of support for rural Scotland.

Q21. Do you have a view as to the potential impact of this programme on equality groups, such as those relating to gender, ethnicity, disability, sexual orientation, age and faith or belief?

Varied responses were received to this question. Some respondents felt that the SRDP is highly targeted in terms of its beneficiaries and that this militates against its ability to address equality issues. However, the LEADER approach was given as an example of an inclusive approach to rural development. Some specific areas were suggested where the SRDP could foster inclusion, including public access, migrant workers and young people.

41. The Executive places great importance on addressing equality issues. An equality impact assessment has been carried out on the proposals for the SRDP. We will seek to ensure an inclusive approach to the mechanisms adopted for implementing the SRDP (for example, the regional stakeholder forums) and, where possible, will implement measures to encourage an inclusive approach to rural development (for example, the provision of public access and information).

Conclusions

42. The Scottish Executive welcomes the contributions to this consultation that have been made by a wide range of stakeholders. The responses provide much food for thought and a range of helpful suggestions for finalising the SRDP, and for developing our proposals for the 2007-13 Programme in order to deliver key rural development outcomes that are sought for Scotland. We do not, of course, start with a blank sheet of paper. We have an existing Rural Development Programme for 2000-6 that must be rolled forward and modified to meet new outcome requirements. Our Programme is subject to the opportunities and constraints of the RDR and, of course, the priorities of government and a wide range of stakeholders must be balanced in ways that will enhance the well-being of rural Scotland and its people.