I thank the committee for inviting me to contribute to its inquiry into the funding of EU structural fund priorities in Scotland post-Brexit. I know that the committee is keenly aware of how important European structural funds are to Scotland’s economy and society, particularly in rural areas and smaller communities where attracting private investment can be difficult. It is difficult to think of a sector or region in Scotland that has not benefited from structural funds since we joined the EU in 1973, which is why it is deeply regrettable that Scotland is set to lose out on that much-needed funding as a result of the United Kingdom’s exit from the EU.
Regarding the current programme, the EU’s aim of smart, sustainable and inclusive growth towards the Europe 2020 targets and the Scottish Government’s ambition of sustainable, inclusive growth, as set out in the national performance framework, are neatly aligned. We are using the European social fund to develop the skills of our workforce, to alleviate poverty and to increase social inclusion. The European regional development fund is supporting small and medium-sized enterprises and is developing energy-efficient renewables technologies to help Scotland’s transition to a low-carbon economy.
Looking to the future, this committee is aware that the UK Government promised to publish its consultation on the shared prosperity fund by the end of last year, but we are still waiting for it. In our dialogue with the UK Government on the shared prosperity fund, we have consistently reiterated five key principles: first, that Scotland should not lose out financially compared with the current level of funding that it receives from the EU; secondly, that the devolution settlement must be respected and the UK Government must make no attempt to take back powers that the Scottish Government has rightfully executed to date; thirdly, that the Scottish Government must be an equal partner in development of the shared prosperity fund; fourthly, that the current level of flexibility in allocation of funds should not be reduced; and fifthly, that the replacement scheme should be operational in time to be implemented in early 2021, so that our stakeholders do not suffer difficulties as a result of funding gaps.
Members will be aware that we are running out of time to provide certainty about future funding to our stakeholders. It is difficult to plan when the UK Government is providing no information, especially on simple questions such as what the value of the shared prosperity fund will be. We cannot wait for the UK Government any longer, which is why I have agreed with the Cabinet Secretary for Finance, Economy and Fair Work on a proposal to hold our own consultation exercise on future funding.
I intend to establish a steering group that will be made up of a range of stakeholders, including lead partners, delivery organisations and end users and beneficiaries of European structural funds. The steering group will ask key questions on future funding for Scotland and will identify possible priorities, administration practices, methods of allocation and funding periods. The group will also collate existing research, including the evidence that the committee has obtained, to inform the structure of the future programme. That work will generate interest not just across our huge range of stakeholders but across ministerial portfolios. I will be happy to provide an update to the committee, as that exercise progresses.
I am happy to answer questions.