The Replacement of European Structural Funds In Scotland Post EU-Exit

The Young People's Consortium (The Prince's Trust, Action for Children and Barnardo's) advocate that this funding should tackle inequality in order to promote a higher standard of living for those most in need, through job creation and investment in skills for all.

Supporting young people to access quality employment is central to driving inclusive growth and should therefore be a main aim of the fund. By helping young people to develop the skills and confidence to enter employment or self-employment, this funding can help transform the prospects of generations to come.

Funding should tackle disadvantage by focusing on those communities who most lack opportunity. Spatially this would include areas of greatest deprivation and least opportunity.

However spatial inequality, as analysed by the Scottish Index of Multiple Deprivation, gives just one measure of inequality. The funding should also support vulnerable groups who are at greater risk of exclusion due to protected characteristics i.e. young people, people with disabilities and members of ethnic minorities.

We advocate that the priorities are set at a national level to align with Scotland’s Performance Framework and ensure consistent and effective use of the funds across the country. These national priorities can be then be flexed and refined to reflect the needs of particular geographies and communities.

In the face of economic uncertainty and rapid social change, the goals of future funding need to allow greater flexibility and responsiveness, allowing priorities to adapt to meet changes in the external landscape.

It is logical and desirable that rather than sitting in isolation, future funding should align with national and local government policy. As set out in the No One Left Behind policy, employability activity delivers solutions across several social policy areas including improving mental health, reducing or preventing offending behaviour and reducing homelessness. Future funding should support activity that is complementary to existing provision, recognising where there are gaps in meeting the needs of end users. We should also measure and recognise the wider social impact of funded interventions, not solely job outcomes.

However, this is not to say that future funding must be governed or distributed in the same way as other sources. The Young People's Consortium (YPC) strongly recommends that future funding for the third sector is protected, in recognition of the value that charities bring to the Scottish economy; The Social Enterprise Census 2019 demonstrates that the sector’s contribution has grown by 13%, bringing £2.3 billion in Gross Value Added (GVA). It is critical that the third sector is recognised as a key strategic partner in the system, playing a unique role in tackling inequality and unlocking potential within groups and communities.

It makes sense for the funding to align with the UK Industrial Strategy - our biggest and closest market. Upskilling our young people to be the agile workforce of the future is imperative to unlocking productivity and economic growth; the goals of the UK IS. Future funding priorities should also dovetail with existing policies such as City and Region Deals. The Young People's Consortium (YPC) believes we need to build and improve upon this place-based approach, where the public, private and third work collaboratively to share regional expertise and insight across agencies, facilitating joined-up decision-making. Together we can drive efficiencies and focus investment on those programmes which are proven to promote social and economic inclusion.

The YPC believes, at its heart, future funding must continue to strike a balance between economic and social investment. Aligning with the values of the Scottish Government, the funds must improve wellbeing, equality and sustainability, not just solely focus on productivity. The alignment and integration of the ERDF and Social Fund has been critical to past successes and should be maintained.

The EU Cohesion Policy feels closely aligned to the policy and values of the Scottish Government and population. Therefore, although perhaps not practically necessary, it seems likely that priorities which meet the needs and aspirations of Scotland, will still align with those of the EU.

The Young Person's Consortium would like to see future funding align with both the UK and EU, enjoying the ‘best of both worlds’ for the benefit of Scotland and its young people.

The Young People's Consortium (YPC) believes customer satisfaction should be valued over compliance. The current processes are designed and led by compliance and evidencing outcomes, as opposed to the needs of end users. For young people they feel impersonal, daunting and unappealing.

Alternative, existing sources of hard evidence should be explored i.e. SQA registrations or records held by HRMC and DWP. By making better use of technology and the data already available, there would be greater time to focus on wellbeing qualitative measures.

We must establish a culture where young people’s voices are heard, respected and acted upon. In our experience, young people sometimes feel they are there to ‘make up numbers’ and that their needs are secondary to box-ticking and form-filling. The experience of young people must be placed ahead of compliance and a programme-oriented approach.

We must move away from time bound outcomes, which assume that every client will progress directly into employment following a fixed length intervention. Every young person is different and must be allowed to take an individualised journey to a successful outcome. Evaluation should recognise progress over time, rather than fixating on time bound milestones and outcomes.

Evaluation of delivery is currently outdated. Improved wellbeing and the development of soft and meta skills need to be given parity of esteem with hard outcomes, such as securing employment. With’ jobs for life’ being a thing of the past, young people need a wealth of transferable skills and an appetite for lifelong learning, in order to adapt to a variety of future roles. It is critical that soft skills – teamwork, communication and confidence – are measured and recognised.

The YPC would recommend that future funding is evaluated through the National Measurement Framework, currently in development for the rollout of No One Left Behind Policy. We hope that this framework will include measures of wellbeing and soft skills, in line with our National Outcomes.

The evaluation approach must also allow scope for innovation and collaboration. Through a ‘test and learn’ approach, we can try new activities to improve engagement, impact and outcomes. With the external factors such as technology changing so rapidly, it is critical that space is created for innovation and some risk-taking.

This level of long-term investment could contribute to all elements of the NPF. However, as a Consortium which supports young people, we feel it is critical that the funding supports people to “grow up loved, safe and respected so that they realise their full potential”. If we can ensure young people realise their full potential, we will enable the realisation of many other parts of the framework i.e. tackling poverty, creating inclusive and empowered communities and having a skilled and sustainable economy.

We have outlined at length in this response, the restrictive and compliance-driven nature of current funding, which the Young People's Consortium believes is counter-productive and detrimental to achieving the aims of the European Cohesion Policy.

It is our hope and wish that the Scottish Government will take this opportunity to re-think the monitoring and evaluation of future funding, to better serve the needs of end users and enable a more efficient use of funds.

The allocation of funding must be driven by a place-based analysis of need, but at a scale that makes delivery financially viable for providers. Effective decision-making is only possible if we have parity of esteem across sectors and absolute transparency. Currently, local authorities must approve the planned delivery of third sector organisations; there is no such imperative on local authorities to share their plans and rationale. Similarly, third sector organisations must demonstrate the efficacy of their programmes, evidencing their impact at every stage; currently local authorities have no similar accountability.

For future funding to have a real and sustained impact, we must invest in those programmes which are proven to have the most positive impact on social and economic objectives. This is only possible if all agencies work together, to share intelligence on perceived need and best practice in meeting that need.

The priorities of the funding should be ambitious and long-term; if a system with appropriate freedom, scope and flexibility can be devised (aligned with other significant Scottish Government investment and policy), Scotland can become a more inclusive and productive society.

The current capacity and capability of the 32 local authorities to administer EU programmes is highly variable, particularly given their tight fiscal restrictions. We would advocate for a national fund reflecting regional priorities and aligned to other publicly funded provision, avoiding some of the challenges that have been experienced in the rollout of the City Deal and Fair Start; these include poor consultation in the design stage, a high risk financial model, a focus on reducing benefit claimant numbers as opposed to improving inclusion and wellbeing, and lack of third sector involvement. To deliver the best possible outcomes for young people, it is critical that the third sector have parity of esteem with the public sector within these collaboratives.

We believe there should be a specific allocation of funding for the third sector, governed independently by the sector, accountable to the Scottish Government and aligned with local and national government policy. Third sector organisations hold a wealth of expertise and specialist knowledge, particularly in supporting vulnerable groups. They are close to their beneficiaries, understanding their lived experience and key challenges. For this reason, third sector organisations can design the delivery of their services around the need of the end user, responding agilely to changes in demand.

The existing method of managing EU funding has proven too ineffectual. This is not only demonstrated by the current underspend of funds (despite clear and considerable need for investment across Scotland), but an estimated 25-30% of funds are being wasted on administration and fraud prevention. We appreciate the need to protect the public purse, but it seems incongruous to spend such a large portion of disbursed funds to protect against a potentially small misuse of funds. Setting a proportionate level of acceptable financial risk would seem more practical.

If controlled and administered by the Third Sector, we believe funding would be allocated with flexibility and transparency, reaching the frontline where it can have a real, measured and sustained impact on lives.

The Young Person's Consortium appreciates it is desirable that activity is co-financed by a variety of public and private sources, to ensure alignment, engagement and sustainability. However, the current requirement to evidence match funding at the bid stage is extremely challenging and can create a barrier, particularly in rural areas where there are less sources of match; opportunities are reduced as a result. The current model also increases competition in the third sector and reduces collaboration. Instead, future funding should be provided as leverage to secure funding from other sources, as opposed to additional funding being secured beforehand.

We would also ask that a replacement to EU funding is in place from April 2021 to ensure that there is no funding gap for stakeholders and that this crucial inclusion focussed support continues for disadvantaged young people.

Reducing the bureaucracy and removing the requirement for match funding at the outset, would undoubtedly make future funding more accessible to local partners. The future fund should also foster the sharing of best practice and networking between participants. A good example of this is the Scottish Government’s Children and Families Fund; recipients of funding are represented by a stakeholder group, who meet quarterly with Government. An annual conference is also held to share current successes and future challenges, with speakers from organisations of every scale. Similarly, the National Lottery Community Fund is a good example of funding which is accessible and supports programmes on a local and national scale.

As mentioned previously, the current system for administering the European Social Fund, is overly bureaucratic, risk averse and inflexible. Restrictive rules and regulations stifle innovation and collaboration. The required compliance-driven behaviour alienates vulnerable people and is counter-productive in supporting those most in need. As a result of this the Young People's Consortium cannot evidence its full impact, therefore results do not fully reflect the scope of the programme; a loss to all those involved.

We advocate for a progression away from transactional to relationship-based contracts as the foundation for strategic, collaborative partnerships built on trust, shared risk and accountability. Establishing a clear performance measurement will ensure impact can be demonstrated against shared and clearly defined goals.

There must be a more collaborative and innovative approach taken to solving issues, with the needs of end users at its heart. Key learnings on best practise should be taken from published research, such as the European Policies Research Centre, to rethink how these funds can be put to best use.

As mentioned in our response to question 3, the programme needs to be flexible and more able to respond to the ever-changing external environment. Currently, it takes 4-5 years to develop and agree the priorities of an EU fund. As a result, by the time of its launch, the priorities of the fund are out-dated and its purpose defunct. Our hope is that future funding is rolled out more quickly, and as a result, is more responsive to real time issues and need.

As mentioned in our response to question 5, there is currently limited knowledge and transparency around the levels of funding allocated to strategic interventions across Scotland, under the management of multiple agencies and authorities. Adopting a one-agency regional approach, underpinned by regional expertise and data, would drive greater alignment between Local Authorities and other actors.