Memorandum submitted by Strathclyde European
Partnership (FCS 5)
Purpose of this Paper:To provide the Scottish
Affairs Committee with information on the modernisation of the
Forth and Clyde Canal—the Millennium Link with particular
reference to the job creation potential in Western Scotland.
1. BACKGROUND
1.1 European Regional Development Fund 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 in eastern and western Scotland. £4.74
million was approved from the Western Scotland Programme and £3.84
million from Eastern Scotland.
1.2 This paper should be read in conjunction
with the evidence from Scottish Enterprise which provides a detailed
analysis of the economic development potential of the Millennium
Link project that formed the basis of the justification for European
Structural Funds support.
2. CONTEXT AND
RATIONALE—WESTERN
SCOTLAND
2.1 In Western Scotland the Millennium Link
stretches from Bowling in the west to Castlecary and goes through
the community economic development areas (now know as Social Inclusion
Partnership (SIP) areas) of Clydebank and north Glasgow together
with suburban East Dunbartonshire. A total European Regional Development
Fund grant of £4.75 million was awarded to the project. This
was 21.5 per cent of the capital costs associated within the Western
Scotland area.
2.2 The rationale for this assistance was
to reflect the catalyst effect that the Millennium Link was expected
to have on wider economic regeneration and job creation opportunities
along the route of the canal and the particular benefits to the
SIP areas. The following special conditions of grant were applied
to the Millennium Link in Western Scotland:
1. The ERDF Grant will not exceed £4.75
million or 21.5 per cent of the total eligible costs, whichever
is the lesser.
2. The sponsor will make a commitment to
meet the maintenance costs of the restored canal for at least
25 years from project completion.
3. Separate accounting will be maintained
in the basis of the individual schemes relating to each Structural
Funds Programme in order to ensure that expenditure incurred is
allocated correctly in the declaration of expenditure.
4. British Waterways should work closely
with Glasgow North Limited and other appropriate development companies,
training organisations and community organisations, prior to the
implementation of the project to develop a detailed action plan,
which will:
— Maximise the training and employment
opportunities for residents of the Community Economic Development
(SIP) areas adjacent to the canal.
— Demonstrate the integration of
this project across the 1997-99 Objective 2 Programme.
The action plan should focus on how the
Millennium Link project will create additional opportunities in
the following:
— Skills development and awareness
— Strategic area regeneration and
employment opportunities
— Community economic development
3. ECONOMIC IMPACTS—JOB
CREATION POTENTIAL
3.1 The job creation targets for the Millennium
Link were drawn from the economic impact study carried out by
DTZ Pieda for Scottish Enterprise, which also formed the basis
of the action plan developed for British Waterways by Hall Aitken
Associates referred to in the special conditions of grant. In
that study it was suggested that overall the Millennium Link could
result in over 4,000 new jobs being created made up of:
— Direct benefits arising from the
construction and operation of the canal including tourism, from
informal recreation and boating on the canal.
— Indirect benefits arising from the
maximising the development opportunities on adjacent sites that
would be generated as a consequence of the project.
3.2 A detailed analysis providing an accurate
summary of the current progress position forms part of the Scottish
Enterprise written evidence.
DIRECT BENEFITS
3.3 For the Western Scotland element of
the Millennium Link the direct job creation targets were as follows:
| Impact | 1997
| 1998 | 1999
| 2000 | 2001
| Total |
| Direct FTE tourism jobs | 6
| 17 | 48
| 79 | 142
| 292 |
| Temporary construction jobs as part of capital works implementation.
| 30 | 89
| 41 | 55
| 6 | 221
|
| Training places as part of capital works implementation.
| 0 | 30
| 30 | 30
| 30 | 120
|
3.4 These are jobs associated with the implementation
of the capital works. A record of progress toward these targets
is provided as part of the monthly reports prepared for all the
project funders. These reports coincide with the submission of
claims to draw down grant payments and monthly progress meetings.
Strathclyde European Partnership Limited has attended the progress
meetings on a quarterly basis.
3.5 The current indication is that temporary construction
jobs targets have been exceeded. However, due to the specialist
nature of the capital works the use of trainees has not been appropriate
and that target has not been achieved.
3.6 The timescale of 1997-2001 reflects the duration
of the European Structural Funds Programmes in terms of achieving
practical completion and finalising expenditure. The final claim
for European Regional Development Fund has to be submitted on
the basis of expenditure incurred and defrayed no later than 31
December 2001.
INDIRECT BENEFITS
3.7 The action plan indicated that the overall impact
of the Millennium Link in terms of job creation at specific locations
along the route in Western Scotland was anticipated as follows:
| Location | Permanent Jobs
| Temporary Jobs (jobs/year)
| Tourism Jobs |
| Bowling Basin | 150
| 90 | 150
|
| Firhill Basin | 5
| 1 | 5
|
| Port Dundas | 2000
| 250 | 200
|
| Bishopbriggs | 5
| 1 | 5
|
| Kirkintilloch | 2000
| 180 | 200
|
3.8 The action plan did not state a timescale for these
jobs to be realised although there is an implication that the
period 2001-2006 following completion of the capital works would
be a key period.
3.9 There are early indications that as the Millennium
Link approaches practical completion interest in the development
of canal side sites is increasing and the associated job creation
opportunities are beginning to emerge. The monthly reports prepared
by British Waterways include the emerging developments. However,
a significant level of the development to date has been housing
related which is not an eligible activity for European Structural
Funds purposes and therefore would not be included in these targets.
3.10 It has been generally accepted that the majority
of the job creation opportunities will come after completion of
the works and over a longer timescale. The majority of capital
infrastructure projects supported by European Structural Funds
do not realise the full economic impacts until a number of years
after the project has reached practical completion.
3.11 For the Millennium Link, and other large scale projects,
it has been agreed that the reporting timescale for indirect benefits
should be extended to coincide with the audit period for the overall
1997-99 European Structural Funds Programmes which is 31 December
2006.
3.12 The Lowland Canals Advisory Group has the responsibility
to monitor progress towards meeting the job creation opportunities
and the implementation of the action plan. Strathclyde European
Partnership Limited will expect quarterly progress reports and
meetings on these targets. An early action of this group should
be to review and update of the action plan in consultation with
Scottish Enterprise and Strathclyde European Partnership Limited.
This should include details of how it will be implemented.
4 CONCLUSION
4.1 Overall good progress has been made towards practical
completion of the capital works within the 1997-99 Programme period.
The indication is that targets for direct job creation have already
been exceeded.
4.2 The early indication is that the Millennium Link
has been a catalyst for development along its route, which should
achieve the wider economic development outcomes. Private sector
interest and investment has already been achieved at a range of
locations along the Millennium Link and further significant development
opportunities, some involving brownfield site restoration, are
in the early planning stages.
4.3 Further momentum is anticipated with the completion
of the capital works. The groundwork is being established at local
development group level, through the Lowland Canals Advisory Group,
which will monitor, review and progress the implementation of
the action plan in partnership with all other relevant agencies.
4.4 The indirect job creation targets were part of the
application for Structural Funds support and will be monitored
until 31 December 2006. It is recommended that British Waterways
through the Lowland Canals Advisory group review the action plan
and prepared an implementation plan.
16 November 2001
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