Select Committee on Scottish Affairs Minutes of Evidence

Memorandum submitted by Eastern Scotland European Partnership Limited (FCS 3)



  Purpose of this Paper: To provide the Scottish Affairs Committee with information related to the restoration of the Forth and Clyde Canal—The Millennium Link—from the European Structural Funds perspective with particular reference to job creation potential in Eastern Scotland.

1.  Background

  1.1  European Regional Development Fund (ERDF) grant assistance has provided a total of £8.59 million towards the overall capital costs of The Millennium Link in recognition of the longer-term economic development potential of the project. This funding was secured from the two 1997-99 Objective 2 European Structural Funds Programmes covering eastern and western Scotland.

  1.2  This paper should be read in conjunction with the detailed written evidence provided by Scottish Enterprise which provides an analysis of the economic development potential of the Millennium Link that formed the basis of the justification for European Structural Funds support for the initiative.

2.  Context and Rationale—Eastern Scotland

  2.1  The British Waterways Board (BWB) approached the PME in 1995 with a view to developing the Millennium Link project. An application for £6.9 million ERDF support was submitted under the first round of the 1997-1999 Programme and was appraised by a cross Programme Large Project Advisory Group. The Programme Management Committee deferred the project on the grounds that the activity included within the application was very broad in nature and much of it did not fit well with the essentially economic strategic development priorities of the Programme. BWB were asked to recast the application and submit it under the Tourism Priority as this provided the best economic fit for the majority of the activity. Once this principle was established and agreed only the tourism costs and benefits of the project were presented for consideration by the Eastern Scotland Objective 2 Partnership.

  2.2  The Programme Management Committee agreed an ERDF award of £3.84 million in February 1998 based on a detailed consideration of the projected tourism benefits of the project. In agreeing to the award the Commission under the terms of a large project approval requested three conditions be attached to the award:

    —  The ERDF grant would not exceed £3.84 million or 9.2 per cent of the total eligible project costs which ever was the lesser,

    —  BWB had to make a commitment to meet the maintenance costs of the canal for at least 25 years from the completion of the project and;

    —  BWB had to maintain separate accounting procedures for the East and West Programmes.

  This award still remains the largest grant given in support of a capital project in the east of Scotland. The forecast economic impacts for the Eastern Scotland Programme Area are shown below.

Total 1999-2001
Number of gross direct new jobs
Number of gross direct jobs safeguarded
Increase in day visitors from outside the Programme Area
Increase in overnight visitors from outside the Programme Area
Increase in total visitor spend
Number of net additional new jobs
Number of net jobs safeguarded

3.  Additional Awards to Supporting Infrastructure

  3.1  Visitor Centre, Falkirk Wheel, 1999

  3.1.1  In December 1999 the Programme Management Committee agreed an additional £1.28 million to assist in the creation of a Visitor Centre at the Falkirk Wheel. In preparing the ERDF submission for the Visitor Centre BWB commissioned an independent report which looked at the likely economic impacts of the development. The Visitor Centre was treated as a separate project from the Millennium Link and only the additional benefits were included in the application.

  3.1.2  The study predicted that the Visitor Centre and Millennium Journey boat trip would generate visitor numbers of 250,000 p.a. The Wheel alone, without supporting infrastructure, was expected to generate approximately 150,000 visitors. The Centre would therefore add 100,000 visitors with additional spending from the full 250,000 since it was only by its construction that the opportunity for the majority of the spend would be provided.

  3.2  Visitor Management Scheme, 2001.

  3.2.1  A further £478,000 was awarded to the visitor management scheme at the Falkirk Wheel in October 2001. This project, led by Falkirk Council, is designed to manage visitor access to the wheel site by providing improved road access and on-site parking as well as a new park and ride facility from the site to the main bus and rail links in the centre of Falkirk. A major part of the project also included the creation of a network of cycleways and footpaths.

  3.2.2  Whilst it is anticipated that some additional visitors will be generated by this project the applicant acknowledged that the majority of the economic impacts, i.e. visitor numbers and expenditure, would be attributed to the Visitor Centre application. However, the project is an important component part of the Millennium Link project, and it will also support the anticipated ancillary economic development around the Wheel site.

  3.2.3  It is also likely that a separate application for marketing support will be submitted in February 2002.

4.  Project Progress

  4.1  The PME have attended quarterly monitoring and progress meetings with the main funding partners and BWB have submitted monthly written progress reports. These are exceptional monitoring and reporting arrangements and have been very productive in maintaining progress and momentum towards achieving the initial physical outputs. Without exception BWB have met every deadline for the letting and completion of contracts in the East. British Waterways are to be congratulated in achieving the physical completion of the essential engineering and construction works within a very tight timescale. A final claim form has been submitted for the Millennium Link and a similar claim is expected for the Visitor Centre by mid February 2002.

5.  Progress Towards Economic Targets

  5.1  As the focus for ERDF support in the east of Scotland was based on forecast tourism benefits it is too early to expect the applicant to report on progress towards achieving the agreed economic targets. Many of these forecast targets depend to a large extent on the physical completion of the canal project and in particular key visitor facilities and attractions such as the Wheel. There is however, some evidence that development opportunities adjacent to the canal are now being realised albeit they are predominantly for residential use and are not eligible for ERDF support. It is therefore imperative that a system for monitoring the impacts of the project is agreed and established to provide detailed information to at least 2006. This might be achieved though the continuation of the existing mechanism and potentially through the forum of the current Lowland Canals Advisory Group with a written submission every quarter.

Gordon McLaren, Chief Executive ESEP Ltd

15 November 2001

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