EXECUTIVE SUMMARY
The following Operational Programme provides the framework for the spending of the European Social Fund ( ESF) for the Regional Competitiveness & Employment Programme for Scotland for 2007-13. The Programme covers the 'Lowlands & Uplands Scotland' area, defined as the whole of the NUTS 2 areas for Eastern Scotland, North-East Scotland and South-Western Scotland (that is, all of Scotland apart from the Highlands & Islands, which are covered by programmes under the Convergence Objective). It will complement the European Regional Development Fund Programme under the Regional Competitiveness & Employment Objective for the same area.
The socio-economic analysis of the regions suggest that there are a number of key strategic challenges which the Programme should address.
1. Reducing the acute levels of worklessness in certain groups and areas. Significant efforts are still required to reduce the 520,000 working-age people who are on state benefits. Although pathways to work should not be the preferred solutions in all cases, securing sustainable employment can be critical in helping individuals out of poverty. Efforts are needed to provide individuals with the opportunity and skills for entering/re-entering the labour market. At the same time, there are parts of the region where worklessness is at acute levels, resulting in self-reinforcing poverty cycles that can hinder the employment prospects of individuals located in particular communities.
2. Improving employment rates in those groups which are the 'hardest-to-help'. Linked to the above issue, there is a case for support to concentrate on those individuals and groups which face multiple and severe barriers to their participation in the workforce. Domestic support is more available for those 'close' to the labour market. As the 'hardest-to-help' require more intensive forms of assistance, resources should be targeted to allow them to access the full set of services they require to enter the labour market. While sustainable employment may not be the right solution for all individuals in these groups, there is scope for helping those who want to enter the labour market. This may mean focusing on improving 'soft', basic skills in entering the labour market and aim to further their progress towards achieving sustainable employment, rather than focus exclusively on supporting individuals to get jobs immediately. At the same time, employer attitudes need to be addressed to ensure that employment opportunities will be extended to this group.
3. Increasing the ability of the low-waged and low-skilled to progress through the labour market. Only a small proportion of low-waged/low-skilled employees appear to progress in the labour market. For some groups though, the issue is not simply one of supply but demand as well, particularly with respect to employer attitudes to certain groups (such as ethnic minorities, migrants and older workers).
4. Tackling representation in key occupations and sectors of under-represented groups. Persistent gender earnings gaps and strong gendering in specific occupations and industries need to be addressed more effectively, both to widen opportunities for women and increase the labour supply to occupations and industries dominated by particular genders. Similar issues apply to ethnic minorities. At the same time, there is a need to encourage greater retention and retraining of groups such as older workers and migrants to ensure a thriving, growing supply of labour. As a market failure in the region, the issue relates to both labour supply needs (such as training) as well as demand (such as employer attitudes).
5. Increasing the skills levels of entrepreneurs and new enterprise managers. Entrepreneurialism is less common in the region's labour market relative to the rest of the UK and the EU. General skills/training support is needed to help raise the new firm formation rate, but there is also a strong case for specific measures to help move under-represented groups into self-employment, including the currently employed. At the same time, new enterprise managers often lack sufficient management, e-business and knowledge economy skills.
6. Providing social enterprise managers and workers with greater skills to sustain their organisations. The capacity of the social economy to deliver services more effectively to vulnerable groups and develop the skills to achieve long-term enterprise survival is important.
7. Increasing lifelong learning participation rates among the most disadvantaged groups. In terms of headline figures, the region compares favourably for overall participation rates in lifelong learning, but they vary considerably by group. This underlines the need to focus on the most disadvantaged. It also confirms that working intensively to address these disparities is essential to make in-roads into closing the opportunity gap that currently exists.
The strategy for the ESF Competitiveness Programme proceeds from the identification of key challenges within the socio-economic analysis as well as the need for actions to fit with EU, UK and Scottish policy frameworks and the experience of previous programming. The EU resources in the ESF programme are €269.921 million for 2007-13, resulting in a total programme value of €598.526 million. In light of current developments in the EU, the funding may be the last substantial funding of this scale for the region, and so it is essential that the Programme aims to deliver lasting legacies to the region that will extend beyond the programming period. Consequently, the strategy for the ESF Programme for the Lowlands & Uplands Scotland area is set by its overall vision:
to contribute towards sustainable growth in the size and skills of the Scottish workforce in line with the Lisbon Jobs and Growth Agenda, in a climate which offers equality of opportunities to individuals to achieve their full potential.
The strategic vision of the ESF Programme operates through three sets of Objectives, addressing market failures in the following areas:
1. Progressing into Employment
2. Progressing through Employment
3. Improving Access to Lifelong Learning
Objective 1: Progressing into employment
Increasing the size of the workforce is important if Scotland is to contribute to the Lisbon Jobs and Growth Agenda. As the socio-economic background highlighted, trends in Scotland's population have emphasised the importance of ensuring that there is a large enough labour force to drive Scotland's economic growth. This not only means joining up the various supports already available for individuals who face multiple barriers to entering the workforce, but also ensuring that they gain the skills on the way to ensure that they can remain in sustainable employment in the future. At the same time, it also means that employers need to be encouraged to give equal opportunities to individuals drawn from these disadvantaged groups. Consequently, the Objective has been set as follows:
to assist the co-ordinated progress of unemployed and inactive people of all ages towards sustainable employment
Given the limited resources of the Programme, funding will be geographically targeted on those Local Authority areas where urban deprivation and worklessness - particularly among the NEET group - is most acute. Within this Objective, the Programme will be delivered in part by the Community Planning Partnerships, which will be able to bid for a dedicated small pot of funding within Priority 1 for the first two years of the Programme.
Objective 2: Progressing through employment
Improving the quality of the Scottish skill base can contribute directly to the productivity increases necessary to raise Scottish economic activity and employment rates and enable Scotland to be integrated into rapidly growing global markets. This objective has several dimensions. Higher skills levels are linked to higher employment rates across Europe. This has meant that the issue of education and levels of qualifications is an important one for Scotland. Similarly the rise in the perceived importance of soft skills means that assurance is needed that young people and other workers are being equipped with the right skills. Again, it means that the additional European funding should be concentrated where it can make a significant difference outside the mainstream education and skills funding streams.
This will mean firstly concentrating on those sections of the workforce that are most vulnerable, particularly to those at risk of losing their jobs or dropping out of employment - in other words, providing the skills necessary for sustainable employment. Secondly, European funding will also tackle the need to target the skills of particular groups within the labour market. The need to reduce the gender gap in participation and incomes remains an important issue for the LUPS region. Similarly, support is needed where upgrading skills or learning new skills can contribute to other economic development objectives co-ordinated with those under the ERDF programme - such as financial management and enterprise training for new entrepreneurs and managers. Consequently, the Objective has been set as follows:
to improve the skills of the workforce to enhance employability, productivity, adaptability, inclusion and entrepreneurial expertise
Objective 3: Improving access to lifelong learning
This Objective recognises that support for individuals must be made in parallel with improvements to the systems that will enable them to access the training and support needed to enter, stay and progress in the labour market. That not only means enabling those within the lifelong learning and training sector to improve their ability to reach out to all groups, but also allowing them to work collaboratively with other agencies to invest in new methods, technologies and models for accessing lifelong learning. The Objective also needs to be targeted on those groups and enterprises for whom lifelong learning access is the greatest challenge. Lastly, it needs to take full account of issues of geographical access - for example, in areas of urban deprivation where there is no acknowledgement of the value of learning, or in rural areas which often lack the same level of training and lifelong learning provisions available in other areas, giving rise to opportunities for developing more innovative approaches to distance learning. Consequently, the Objective has been set as follows:
to widen access to post-school lifelong learning, particularly for key client groups.
The Programme will be fully complementary with other sources of EU funding, particularly the European Regional Development Fund (including the Co-operation Objective), the European Agricultural Fund for Rural Development, the European Fisheries Fund and EU research and lifelong learning programmes.
The Programme will also promote three key cross-cutting themes: equal opportunities; environmental sustainability; and social inclusion. These will be mainstreamed into all aspects of project design, delivery and monitoring.