TSEF 23 April Annex D EDDE Scottish Third Sector European Structural Funds 2014-20 3/15/2013 SCVO John Ferguson
Scottish Third Sector - European Structural Funds 2014-20 An initial scoping paper designed to assist Government Structural Funds Division in producing the draft Scottish Chapter of the UK Partnership Agreement for the 2014-2020 European Structural Funds Programme. The paper has two aims: 1. To provide a brief historical perspective of Third Sector experience of Structural Funds supported activity during the past 12 years identifying strengths and weaknesses of the delivery models adopted 2. To suggest options for engagement of the Third Sector in the 2014-20 Structural Funds Programme Contextual Background The Scottish Third Sector has a long track record of effectively utilising European Structural Funds in delivering high quality economic inclusion support to disadvantaged and harder to help and reach people in Scottish society who are furthest from the employment market and most at risk of social exclusion and poverty. During the 2000-2006 Structural Funds Programme the Scottish Third Sector was responsible for a wide range of interventions through direct funding awards and partnership collaborations with national government departments and local authorities delivering major social inclusion and employment activities. During that programme the sector won EU challenge fund awards averaging 34.5m per year ( 207m over 6 years) plus a further 9.5m of European funds per year ( 57m over 6 years)) via delivery of sub-contracted social inclusion projects. During the six year period this equated to 264m of European funded project delivery. When adding an average intervention rate of 40% a further 310m of match funding was engineered into the delivery model. This match was attracted from a range of sources including Non-Departmental Public Agencies, Trusts, Foundations, charities own funds/resources, public donations and in-kind contribution from society (volunteers etc.). Thus a total of 574m of economic and social inclusion activity was delivered across the nation. During 2006 at the end of the 2000-2006 Programme SCVO expressed concerns about the plans for the 2007-2013 Programme to Government on behalf of the Third Sector over: The proposal to allocate significant EU funds to Strategic Delivery Bodies The consequent reduction of challenge fund availability for Third Sector organisations The changing financial eligibility rules which excluded normal operating costs and full cost recovery The likely reduction in interventions by the Third Sector in combatting poverty in society The consequent risk of reduced focus on harder to help and reach people The removal of the 30% advance payment 1
The removal of Technical Assistance delivered by the Third Sector for the Third Sector Recent research on the disbursement of EU funds to the Third Sector in the 2006-2013 Programme reveals these concerns have proven to be well founded: Challenge Funding direct awards (nationally) have reduced to 70m across the life of the programme from 207m in the 2000-2006 programme The partnership/commissioning EU funds reaching the Third Sector from the new Strategic Delivery bodies has been 45m a reduction from 57m in 2000-2006 This makes a total over a six year period of 115m down from 264m in 2000-2006 This equates to 19m per year of European funds, a very significant reduction from the 44m per year awarded in the previous programme. Given the clear link between the Third Sector and the most disadvantaged target groups of people, it can only be concluded that there has been a very significant reduction in interventions to assist those furthest from employment in Scotland. Overall use of EU Funds in combatting poverty through Third Sector activity has reduced significantly. Several (local) government organised non- government organisations have been established and within that (politically controlled) status attracted EU Structural Funds to deliver activities arguably within the normal duties and responsibilities of local authorities (Source of financial information: Scottish Government, Skills Development Scotland, UHI and the Community Planning Partnerships. It is worth recording the exercise of tracking where ESF and ERDF funds have been spent was extremely easy in the previous programmes. All of the awards were posted on the five websites. A consequence of the SDB model and the HIPP and LUPs simplification is several layers of funds distribution and the level of transparency and indeed knowledge of where the funds have reached is significantly lacking by comparison. It remains to be seen how this will stand up to European Audit.) Given the social and economic inclusion focus of EU Structural Funds this seriously reduced level of Third Sector engagement and activity can only be considered a backward step from a societal perspective. A range of contracting /commissioning between SDBs/CPPs has involved further commissioned activity engaging Third Sector delivery (some co-financed at source matching the EU funds the EU funds component are incorporated in the figures above). Data on the outcomes is in a range of sources and requires significant and time-consuming research to accurately quantify. This will be part of SCVO s Technical Assistance project in partnership with the Scottish Government Monitoring Evaluation Group and will complement the Lessons Learned analysis. When combined with the massive changes in the DWP Work Programme model moving away from harder to help and reach people in favour of the easiest to help and reach in society (linked to profit motives by private company delivery agents) a classic double whammy of reduced Structural Funds and reduced domestic spending is being experienced by those most in need. Poorly, as highlighted in the media in recent weeks, the job outcome performance of the Work Programme prime contractors is 3.5%. 2
By contrast Community Jobs Scotland funded by the Scottish Government and involving over 500 Third Sector organisations co-ordinated by SCVO has delivered over 3000 six- month jobs with an overall job outcome performance of 42%. Furthermore, 57% of young people have moved into positive destinations including a job, education or volunteering. The Future Structural Funds Programme The delivery options evolving for the 2007-14 Programme proposes the creation of National Delivery Partnerships as the natural progression from Strategic Delivery Bodies. The national delivery partnerships currently proposed would all be government based/led and would utilise allocations from Treasury budgets to match allocations from European Funds. It is accepted this has the potential to create many benefits, especially if joined-up collaborations between these varying departments and authorities occur, but it continues the risk of further excluding the Third Sector from accessing EU funds and the consequent continued reduction of interventions designed and delivered by the sector to assist harder to help and reach people. The broad evidence for this assertion has been established in the historical comparison between the 2000-2006 and 2007-13 Programmes. Options for the Third Sector 1. Disengage from the Structural Funds agenda and seek alternative non-structural Funds support for social and economic inclusion activity. Strength: Less compliance related administration in projects. Weakness: Reduced level of resources available. Fewer interventions and reduction in agency capacity through job losses. Potential increase in welfare burden and fewer people reaching the labour market. 2. Continue engagement through bidding for contracts and being commissioned by the currently planned National Delivery Partners as the route to accessing structural funds support for social and economic inclusion activity and outcomes. Strength: Continued EU income support for projects supporting disadvantaged people. Less risk of staff losses; capacity to deliver meaningful interventions. Weakness: Possible continued reduction in EU funds being accessed (following the trend from 2000-2013) with the commensurate reduction in activity. Not strategic. 3. Establish several Regional Third Sector Delivery partnerships. Strength: Local connections. Weakness: Complexity of ensuring national strategic approach. Potentially a post code lottery. Potentially different interpretations of policy drivers and compliance with regulatory framework. 3
4. Establish full engagement with structural funds at a nationally strategic level. Strength: Significant level of collaboration with National Delivery Partnerships leading to a range of joined up activity across all agencies, departments, CPPs involved. Simpler to coordinate (than option 3). Better use of resources available within Scotland. Greater retention of existing capacity within Third Sector agencies. Increased outcomes and efficiencies. Weakness: More complex (than option 2) to achieve but greater benefits possible. Our preferred option would be number 4 - full engagement. A improved national balance would be created by establishing a Third Sector National Delivery Partnership which would work in collaboration with SDS, SFC, HIE, SE and the CPPs as an equal partner, as opposed to a third sector fragmented across a range of non-strategic and/or contractual engagements. This provides scope for genuine inter-sector planning and co-operation working to everyone s strengths, achieving planning gain through best use of resources and minimising duplication on tackling shared societal responsibilities. It would also meet the ambition of EU2020 which emphasises the critical role civil society has to play in the economic recovery across Europe and the continued social, economic and environmental wellbeing of its people. This National Delivery Partnership would seek to work in a match funding partnership with the Third Sector Division at Scottish Government, the Food, Drink and Rural Communities Division at Scottish Government, the Big Lottery and potentially additional funders of projects with disadvantaged people. There would be mutual alignment of policies, delivering clear added value interventions to target groups through nationally agreed outcomes, coordinated by national and regional third sector organisations. A strong example of policy alignment would be a key national role for the Third Sector in the Youth Employment Strategy. This national activity would be complemented by informing, supporting and coordinating local and regional agreements between CPPs and local and regional third sector organisations across Scotland. This would support interventions which link EU funds with local authority budgets to fund local initiatives in co-financed commissioned/procured models. CPPs by their nature operate within a local authority area. Through collaboration with the Third Sector National Delivery Partnership greater cross- border activity would be achievable. This would result in efficiencies for both CPPs and Third Sector agencies in strategic delivery across multiple local authority areas simultaneously. (Currently it is conceivable one national third sector agency could be delivering the same social inclusion type service across several CPPs with a different service level agreement for each zone). The Third Sector National Delivery Partnership would comprise a range of national agencies with significant national activity and track record in delivering EU funded interventions. The coordination role could include: Steering the strategic direction of the partnership Assisting national agencies (Government and Third Sector) into wider strategic deliveries Creating an endorsed brokerage service linking CPP s to third sector organisations 4
Creating a monitoring and evaluation service measuring outcomes (as distinct from inputs and outputs) of the national/regional and local delivery by the third sector Providing a technical assistance service for the Third Sector to guide full compliance with Structural Funds requirements. (Scotland is currently the only region of the UK where such a service for the third sector does not exist). Promoting a focus on the third sector s natural areas of activity linked to agreed operational plan priorities in Social Inclusion, Local Growth, Environment, Jobs, Rural and Fisheries. Promoting greater focus by the Third Sector on the wider EU funds available from Brussels and seek to attract greater income for Scotland Concerns The risk of a prolonged hiatus between the current and new programme leading to reduced capacity through staff and intellectual capital losses in third sector organisations. The continuation of the minimum 200,000 project threshold rule promoted in LUPS during the 2006-13 Programme. This led to a large number of previous participants being excluded. (This rule was not implemented in HIPP had it been, the majority of Third Sector organisations in the Highlands would not have been engaged and the subsequent outcomes not achieved). In the event of a Third Sector National Delivery Partnership being established it would be in a position to brigade smaller delivery agents into larger projects reaching wider beneficiaries collectively. The model of delivery through CPPs in Highlands and Islands was largely unsuccessful. In LUPS not every CPP was allocated EU strategic funds. A review of how all of Scotland can be engaged as appropriate would be helpful in targeting beneficiaries most in need. CPP performance in regard to its relationship with the Third Sector has been inconsistent with varying degrees of quality and engagement. Safeguards are needed to ensure the Third Sector is an equal partner in the membership and decision making process Eligibility of funds use should be reviewed. Core costs of premises/operating bases are essential in delivering positive programmes. The Third Sector has struggled to balance normal costs incurred with eligibility rules. Proportional advance payments should be available for projects to ensure third sector organisations are not expected to bank roll projects for several months until claims processes can occur. Summary The Third Sector in Scotland is a major force for social change with a successful track record of engaging with socially marginalised groups. It brings a unique balance of commitment to social justice and a deep well of human and social capital in the form of dedicated and experienced staff. This is linked to a trusting relationship with, and comprehensive reach into, communities and is underpinned by immeasurable community benefit in the form of volunteering. 5
As a significant collective employer on a par with the staffing numbers of the NHS, the Third Sector is a societal resource which should be fully included in and central to all planned interventions on behalf of the communities of Scotland. It has the expertise to contribute more to the economic recovery and growth of Scotland, and the experience, innovation and flexibility to respond professionally to the current Government objectives for it to engage even further in the delivery of Scotland s public services. In the light of evidence and arguments presented in this paper, our conclusion is that a Third Sector National Delivery Partnership is not only desirable but essential. John Ferguson Director of Development Scottish Council for Voluntary Organisations 15 March 2013 6