Memorandum submitted by Eastern Scotland
European Partnership Limited (FCS 3)
OBJECTIVE 2 PROGRAMME
ERDF PROJECT THE
Purpose of this Paper: To provide the Scottish
Affairs Committee with information related to the restoration
of the Forth and Clyde CanalThe Millennium Linkfrom
the European Structural Funds perspective with particular reference
to job creation potential in Eastern Scotland.
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 RationaleEastern 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
2.2 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
|Number of gross direct new jobs||720
|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||£6,148,800
|Number of net additional new jobs||332
|Number of net jobs safeguarded||12
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
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
Gordon McLaren, Chief Executive ESEP Ltd
15 November 2001