5 European Union structural funding
104. The European Commission categorises the European
Union into statistical areas known as Nomenclature of Units for
Territorial Statistics (NUTS) to allow for the collection, development
and harmonisation of EU regional statistics and for socio-economic
analyses of the regions. NUTS 1 areas are the major socio-economic
regions, which are subdivided into NUTS 2 areas.[163]
NUTS 2 areas are used for the allocation of the European Structural
Funds on the basis of the Gross Value Added (GVA) per head compared
to the EU average.[164]
105. EU Funding for 2014-2020 is allocated to three
types of regions, according to how their GDP per capita compares
with the EU average. These are defined as follows:
· Less developed regions, whose GDP per
capita is less than 75% of the average for the EU;
· Transition regions, whose GDP per capita
is between 75% and 90% of the EU average;
· More developed regions, whose GDP per
capita is above 90% of the EU average
Determining whether a region qualifies is a question
of comparing its per capita GDP to the EU average. The formula
for allocating the funding differs for each type of region, but
it is structured so that less developed regions get more funding
per head than transition regions, which in turn get more than
more developed regions.[165]
106. Scottish NUTS 2 regions fall into the following
groups:
· Transition: Highlands and Islands
· More developed: Eastern Scotland; South
Western Scotland; and, North Eastern Scotland.
107. Based on the economic profile of the south of
Scotland, it has been suggested that the NUTS 2 boundaries should
be re-drawn. The inclusion of Dumfries and Galloway in the South
Western Scotland region, and of the Scottish Borders in the Eastern
region, means that the economic needs of these areas are masked
by the relative economic strength of cities such as Edinburgh,
Dundee and Glasgow.[166]
As a result, the south of Scotland area may be missing out on
higher levels of transition funding, to which they would be entitled
if the existing boundaries were re-drawn. Such a redefinition
of NUTS 2 boundaries might even dovetail with the cross-border
area covered by the Borderlands Initiative outlined above.
108. We found wide cross-party agreement that the
current NUTS 2 configuration does not accurately represent the
spatial economic geography of Scotland.[167]
Over the past decade, representations have been made by Scottish
Borders Council, Dumfries and Galloway Council and the South of
Scotland Alliance to the Scottish and UK Governments calling for
changes in the NUTS 2 boundaries. These representations have not
succeeded thus far because of the relatively small population
of this area, which is well below the guideline NUTS 2 region
average size.
109. Two possible options that would satisfy the
population target for NUTS 2 funding were outlined by Dumfries
and Galloway Chamber of Commerce:
a) to include parts of Ayrshire and South Lanarkshire,
which border the region and have similar population and economic
characteristics.
b) to include similar areas in Northumberland
and Cumbria.
110. The Chamber advocated the first option,[168]
as redrawing the NUTS 2 region on an east-west basis would more
accurately describe the region and define an area with similar
characteristics to that of Highlands and Islands.[169]
Both Scottish Borders Council and Dumfries and Galloway Council
agreed on the designation of the south of Scotland as a NUTS 2
area.[170] Alistair
McKinnon, Scottish Enterprise suggested, "if you take in
South Lanarkshire and parts of South Ayrshire…that would
not negatively impact on the existing NUTS areas that Ayrshire
and Lanarkshire are in, so everyone is a winner."[171]
111. RSA Fellows Borders Network stated that the
relevant local authorities should be "encouraged to maintain
their laudable momentum and initiative," and that local authorities
and the Scottish Government should proceed with the initiative
"unimpeded and without interference, to achieve their stated
strategic objective, which involves delicate and detailed negotiations."[172]
Joan McAlpine MSP stated that "it is pivotal for the UK Government
to work with all stakeholders to lobby for this re-designation
as soon as possible."[173]
112. We recommend that the NUTS 2 boundaries in
the south of Scotland should be redrawn to ensure greater structural
funding for the region. We are satisfied that this can be achieved
without compromising other existing administrative boundaries,
and without causing a reduction in the likely overall levels of
funding which would be allocated to Scotland. This could result
in significant sums of additional funding being allocated to the
south of Scotland.
113. We urge the UK Government to work with the
Scottish Government and local authorities to redraw the NUTS 2
boundaries in Scotland in order to create a NUTS 2 region for
the south of Scotland that does not incorporate the Central Belt.
We also expect the UK Government to facilitate this at an EU level.
163 European Commission (Eurostat), NUTS - Nomenclature of territorial units for statistics,
accessed 2 March 2015 Back
164
European Commission, Regional Policy - how does it work? Is my region covered?,
accessed 7 July 2014. Currently, Scotland is divided into four
distinct regions for the purposes of the allocation of NUTS 2
funding: North Eastern Scotland, Eastern Scotland, South Western
Scotland and the Highlands and Islands. The south of Scotland
is not a defined NUTS 2 area. The Dumfries and Galloway region
is part of the South Western Scotland NUTS 2 area, which also
includes Glasgow; The Scottish Borders are part of the Eastern
Scotland NUTS 2 area, which also includes the cities of Edinburgh
and Dundee. Back
165
Eur-Lex - access to European Law, Regulation (EU) No 1303/2013 of the European Parliament and of the Council of 17 December 2013,
accessed 7 July 2014 Back
166
Dumfries and Galloway Council area is part of the South Western
Scotland region along with Glasgow, Scottish Borders Council area
is part of the Eastern Scotland region along with Edinburgh and
Dundee.- Office for National Statistics, NUTS: Scotland, accessed
13 March 2015 Back
167
Support for such a process also came from NHS Borders (NHS Borders,
(BOR0016)), Scottish Borders Chamber of Commerce (Scottish Borders
Chamber of Commerce, (BOR0005), para i), AIMUp, Peebles Community
Council and Peebles Community Trust (AIMUp, Peebles Community
Council and Peebles Community Trust, (BOR0017), para 2.1) and
Scottish Land and Estates (Scottish Land and Estates, (BOR0012),
para i). Back
168
Dumfries and Galloway Chamber of Commerce, (BOR0002), para 4.3 Back
169
Ibid., para 4.2 Back
170
Scottish Borders Council, (BOR0003), para 14; Dumfries and Galloway
Council, (BOR0006), para 2.18 Back
171
Q81 Back
172
RSA Fellows Borders Network, (BOR0008), para 9 Back
173
Joan McAlpine MSP, (BOR0020), para 4.1.1 Back
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