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PART 3

IMPLEMENTATION OF THE SCOTLAND RURAL DEVELOPMENT PROGRAMME 2007-13

A regional perspective

51. Rural Scotland has diverse landscapes and wildlife, and provides wide-ranging opportunities for public enjoyment of the countryside. Some of its communities are located in remote island and mountain settings, and others lie close to major towns and cities. In these differing circumstances, the nature of public benefits that can be delivered through application to the SRDP will vary too and applicants for support will have very different needs.

52. We have been working in recent months to develop an approach to delivering the SRDP that adequately addresses regional and local circumstances. Tailoring support to the needs of communities across rural Scotland, while also respecting how land managers, businesses and others are best placed to respond, should be a central component of the SRDP, in particular to the delivery of LMC Tier 3. Regional and local stakeholders should therefore play an important part in this process. We recognise that taking account of local or regional perspectives is essential for the delivery of effective schemes that meet the needs of the environment, businesses and rural communities across Scotland.

53. We intend that arrangements are put in place for the 2007-13 SRDP that build on existing regional and local structures, including the SEERAD area networks and those of other agencies, schemes and local authorities, as they increasingly come together under the Scottish Executive's drive for efficiency and SEERAD's On the Ground approach. Through a collaborative approach by SEERAD and its family of agencies, the On the Ground approach encourages flexibility in the delivery of support schemes. It aims to facilitate closer working, integrated support and enhanced service to customers across all schemes and programmes.

54. We propose that the following principles are fundamental to establishing a suitable approach:

• matching local/regional aspirations to national policies, objectives and outcomes;
• efficiency by balancing administrative costs and the delivery of high-quality outcomes;
• evidence that capacity exists at a local, regional and national level to make effective decisions;
• flexibility and simplification in the processes for delivering schemes;
• accountability for the use of funding; and,
• consistency in the assessment of applications and the disbursement of funds.

55. Two specific proposals underpin our approach to ensuring a regional and local dimension to Tier 3 of LMCs:

• Regional Project Assessment Committees ( RPACs) to enable a broad range of stakeholders in different areas of rural Scotland to participate in the process of deciding which applications should receive funding; and,
• regional Rural Development Guidance on the outcomes and priorities of relevance in making decisions to fund applications.

56. Our aspiration is that stakeholders with understanding of regional and local needs and priorities will be actively involved in decisions about which applications should receive funding. We propose that a network of RPACs be established across rural Scotland. Membership of these committees will be open to key government agencies, non-government organisations, business and community groups, and will, as much as possible, be based around existing administrative structures. There will be scope for some interest groups, if preferred, to adopt observer status. RPACs would establish priorities for their regions. These priorities would need to meet national objectives and comply with the provisions of the RDR.

57. In terms of how RPACs might operate, the first stage in the assessment process would be for applications (whether for a single measure or a range of measures) to be sent to a single regional contact (the SEERAD regional office). RPACs would initially review the round of applications in order to take an overview. They would liaise with a national committee (comprising government representatives of the RPACs) in order to consider the round of applications against national and international objectives and obligations, and in the light of available funding. RPACs would then assess the applications and make recommendations for funding, although 'clear winners' could be fast-tracked for quicker decisions within local delegations. Depending on the extent to which the measures in an individual application contribute to national and regional objectives, some or all components of the application may be recommended for funding. SEERAD would administer payment of funds to successful applicants. The national committee would also seek to ensure that there is consistency in the assessment process across regions. Flexibility in the system would be encouraged, to allow continuous applications, several assessment rounds and more than one payment window per year, subject to any constraints imposed by EC regulations. Unsuccessful applications that are of a high quality could be re-submitted or roll forward for a subsequent assessment.

58. The decision on the appropriate number and arrangement of regions will be determined on the basis of greatest improvement in efficiency and minimal disruption to established regional structures where these are delivering effectively. Existing networks include the SEERAD regional offices, the Scottish Natural Heritage areas, the Forestry Commission Scotland conservancies, Community Planning Partnerships and LEADER Local Action Groups.

59. We propose that the development and use of Regional Rural Development Guidance will identify local priorities for environmental, social and economic objectives in the SRDP, although a uniform approach to guidance across these objectives may not be appropriate. Work has begun to develop guidance in relation to biodiversity, water, landscape, the built and cultural heritage, forestry and recreation and access. Such guidance will reflect the diversity of Scotland's natural environment and land-use patterns. A regional dimension will also be important in establishing priorities for business development, diversification and other rural development measures, although a flexible approach may be particularly important in these areas. A regional approach will help enable appropriate alignment with the work of regional and local bodies delivering rural development, including local authorities, the local enterprise network and community planning partnerships. This approach to the SRDP must recognise, however, that regional and local measures contribute to national and international objectives and obligations, and that there is flexibility in the system to adapt to changing needs and priorities during the programming period.

60. Ongoing work on the ecological and land-based elements of the guidance is considering the most appropriate geographic areas for regional guidance. The natural environment and river catchments are two approaches to identifying geographical areas on which ecological regions may be based. We recognise, however, that differing approaches may be needed for guidance across the three Axes and that it is essential that regional and local stakeholders play a full role in developing the guidance. In the coming months, we will work with stakeholders at a regional level to determine the scope and content of the guidance, and to ensure a shared vision and approach in taking the work forward. We aim to complete this process as soon as possible. The guidance will be a user-friendly reference source that is available to assist applicants achieve quality and targeting in their proposals and that is used by RPACs and others in evaluating applications.

Advisory network

61. Availability of high quality advice to land managers and businesses is a critical component in ensuring that schemes deliver effective outcomes that meet policy objectives. This is particularly so at a time when increasing demands are being placed on land managers to provide environmental and amenity benefits while maintaining profitable businesses. Advice will help them select the best options for their business and the wider environment, economy and community. In addition, an effective advisory service should maximise awareness of expected outcomes from LMCs, and how to manage for these.

62. There are already a number of bodies and individuals, in the public and private sectors, providing advice to land managers and rural businesses across rural Scotland. We propose that the advisory arrangements for the 2007-13 SRDP build on existing structures and networks. Therefore integration of existing sources of advice, rather than a new service, is central to our approach. The system that is put in place will need to incorporate advisory needs in at least the following areas:

• EU regulatory requirements. Council Regulation ( EC) No 1782/2003 requires Member States, by 1 ^st January 2007, to set up an advisory system on land and farm management, operated by one or more designated authorities or by private bodies. The system should cover at least statutory management requirements and Good Agricultural and Environmental Condition.
• National statutory requirements. SEERAD, Forestry Commission Scotland and associated agencies, including Scottish Natural Heritage, provide advice to ensure compliance with environmental rules and guidelines.
• LMC and Rural Development Framework requirements. Agricultural advice is currently provided by independent consultants (with financial support from SEERAD) to land managers for the preparation of agri-environment applications and whole farm reviews. For forestry, support is given to secure advice from consultants through the SFGS, for example for plan preparation. The breadth of activities supported through LMCs in 2007-13 will require an advisory network that supports applicants across relevant economic, social and environmental areas.

63. We propose that greater integration be achieved across these diverse sources of advice to help deliver the broad-ranging policy objectives of the SRDP, and especially LMCs. The joined-up approach requires joined-up advice. The recent Agriculture Strategy includes proposals to establish a single gateway for advice of this kind. In terms of the people giving advice, we need a combination of broad guidance and specialist advisers to whom applicants can be referred on technical matters. For example, integration of the Scottish Forestry Grants Scheme and Natural Care into LMCs will require specialist support from Forestry Commission Scotland and Scottish Natural Heritage to ensure that the right management is put in place. The same principle will apply to other schemes (or the relevant parts) that may be brought within the SRDP. We will develop arrangements to ensure that access to this breadth of expertise is available to address key government priority issues.

Applications

64. We also propose to simplify the application/approvals and claims process for LMCs as far as possible within the terms of the Implementing Regulations for the new RDR (which are yet to be finalised). We intend, where there are clear benefits, to link applications to the IACS Single Application Form and to Rural Development Frameworks (see Paragraphs 48-50). We await final regulatory requirements from the European Commission on this issue, but it appears that Axis 2 applications may have to be made through IACS. If so, a twin-track approach to applications is likely to be needed, through which applications for support under Axes 1 and 3 would be made separately.

Finance

65. The meeting of EU Heads of Government in Brussels in December 2005 agreed a Financial Perspective for the European Union from 2007-13. A total of 69.75 billion Euros was allocated to rural development spending under Pillar 2 of the Common Agricultural Policy. This is substantially less than the 88.7 billion Euros that the European Commission had originally sought and, combined with a shift of resources to Member States in Eastern Europe, will result in significantly reduced allocations to Member States in the EU-15.

66. Based on estimates from Defra, we believe that Scotland's allocation of EU monies will be reduced by approximately 20% compared to 2000-6. In real terms (i.e. if inflation is taken into account), this reduction becomes greater. However, given that monies from EU funds only account for a proportion of the funds in the SRDP - approximately 30% in 2000-6 - the reduction will represent a smaller impact on the total SRDP budget.

67. Another major influence on the size of the 2007-13 SRDP budget will be the allocation of Scottish Executive resources agreed as part of the 2007 Spending Review. Agreement to the Scottish Executive funds to support the SRDP needs to be reached later this year to demonstrate how the Programme will be delivered. A tight financial situation is expected for Spending Review 2007, so new resources to support schemes under the SRDP are unlikely.

68. We are currently examining options for bringing resources into the SRDP, in particular to fund Tier 3 of LMCs. As indicated in paragraphs 33 to 35, we propose to bring schemes that are currently outside the 2000-6 Programme within the scope of the 2007-13 SRDP. We intend the inclusion of such funds to deliver a balanced and integrated suite of measures, and to improve administrative efficiency by bringing the funds together.

69. Modulation enables Member States to redirect Common Agricultural Policy resources to rural development measures under Pillar 2. It has been previously agreed that by 2007 compulsory modulation and voluntary modulation will each reach 5%, giving a combined rate of 10%. This amount is match-funded from domestic sources. The Financial Perspective agreed in December 2005 allows Member States to increase rates of voluntary modulation to a maximum of 20% without the need for match-funding any increase from domestic funds.

70. We propose to increase voluntary modulation during the 2007-13 programming period beyond the 5% level currently agreed for 2007. Given the tight financial situation for domestic funds, it is unlikely that any additional match-funding will be available from domestic sources to match these increases. A higher rate of voluntary modulation will help us to meet key policy priorities across all areas of rural development including, for example, actions on climate change and diffuse water pollution. No change in the rate of compulsory modulation is envisaged at this stage.

71. We believe that increases in voluntary modulation should be implemented in a way that respects pressures on the stability of farm incomes. We propose that a stepped increase in voluntary modulation be adopted between 2007 and 2013 and that sharp rises in the modulation rate are avoided.

72. Final agreement on the EU Financial Perspective requires ratification by the European Parliament, which may not be forthcoming until May. Discussions are ongoing between officials in the UK and the European Commission about the final allocation of rural development monies to the UK. In the meantime, we cannot be certain of the our allocation of monies from EAFRD. We are unable, therefore, to publish precise details on the amounts of funding that will be available for the 2007-13 SRDP. However, if possible, we will present more detail on funding during the consultation period, including at public meetings which be held around Scotland as part of the consultation.

73. The balance of spending between Axes and objectives is a critical aspect of funding for the 2007-13 SRDP. We are required to spend the required proportions of EU monies across the three Axes under Regulation 1698/2005 (see Paragraph 16). We are also committed to maintaining spending to meet our key national and international policy objectives and obligations, for example on agri-environment, forestry, business development and diversification and other rural development measures.

Co-ordination with other funding streams

74. In order to maximise the added value from the 2007-13 SRDP, we will seek to ensure that measures supported in the Programme complement funding available through other channels in a co-ordinated way. Such channels include EU funds, primarily the Structural and Cohesion Funds and the European Fisheries Fund, and domestic funds including support from economic and social development agencies, local authorities and environmental bodies. Clear demarcation between the SRDP and these funding streams will allow potential recipients to understand the role of support from the SRDP in a wider context. Further to this consultation and ongoing discussions with partners and stakeholders, we will set out in the SRDP the split of responsibilities, in terms of funding, between the Programme and other relevant streams of funding. This will be important across wide-ranging activities in economic (e.g. downstream processing), social (e.g. rural services) and environmental areas (e.g. Natura 2000).

75. There will be a decrease in EU funds available in Scotland for both the SRDP and Structural Funds programmes in the 2007-13 programming period. It is, therefore, particularly important that these funds are used in a co-ordinated way in order to maximise their collective impacts. In taking this forward, we will build on the good cross-fertilisation that there is at present between the Structural Funds Forum and the equivalent fora for rural development and fisheries.

76. The consultation on the Strategy set out ways in which demarcation can be achieved between the SRDP and other sources of funding. We do not add further to these proposals here.

Monitoring and Evaluation

77. We propose that a systematic process of monitoring and evaluation should be integral to the 2007-13 SRDP in order to assess progress towards policy objectives and outcomes and to examine whether the resources for the Programme are being used effectively.

Monitoring

78. The new RDR advocates a strategic approach to monitoring. The basis for reporting on progress will be a common monitoring and evaluation framework ( CMEF) which will be established in cooperation with the Member States. The CMEF will provide a specified list of common indicators and a common methodology to encourage consistency across Member States. The use of a common set of indicators across Member States is intended to enable the outcomes of individual RDPs to be aggregated across the EU in order to assess progress in achieving EU priorities. The Regulation also allows for the specification of additional indicators that reflect national and/or regional needs or that monitor objectives that are specific to the programme area. The CMEF indicators - as proposed by the European Commission - can be found in Annex H of this document.

79. In accordance with the new RDR, a Monitoring Committee will be set up in Scotland to assess - using the CMEF - the effectiveness of the measures implemented under the SRDP⁴. We intend membership of the Committee to include representatives from the Scottish Executive (as the Managing Authority), Forestry Commission Scotland, local authorities, social and economic development agencies, environmental bodies and non-governmental organisations.

Evaluation

80. In addition to monitoring the progress of the SRDP, we will evaluate the impacts of the measures supported in the Programme. Our evaluations will assess the SRDP against policy priorities set out in the Strategic Plan and the outcomes used to assess the activities of the Scottish Executive Environment and Rural Affairs Department. They will be used to inform future programmes. Following the provisions of Regulation 1698/2005, we will commission independent ex ante, mid-term and ex post evaluations (see Articles 85, 86 and 87 of the Regulation) of the SRDP. The results of these evaluations will be placed in the public domain.

81. As part of our strategic approach to evaluation, we intend to evaluate key components of the schemes supported through the SRDP. In particular, we have made substantial investments in recent years in agri-environment schemes; uptake has increased dramatically and we are now facing significant funding and delivery issues. We propose that a major review of these schemes be carried out during the 2007-13 SRDP, most likely in 2008, to consider and prepare a strategy for the future support of agri-environment schemes. As indicated in Paragraph 23, we have also commissioned an evaluation of the Less Favoured Areas Support Scheme.

82. The Rural Development Programme for Scotland 2007-2013 may have impacts on businesses and therefore it is necessary to assess the likely impacts of the programme through a Regulatory Impact Assessment ( RIA). The RIA assesses the impact of the programme and its implementation, and in particular the likely impact upon small and micro businesses. A partial RIA forms part of this consultation and is published on the website ( www.scotland.gov.uk/consultations/). Comments on the partial RIA are invited from all consultees. Organisations that represent businesses, as well as individual businesses, are encouraged to respond to this part of the consultation. Responses to the consultation will be used to develop a full RIA.

83. A Strategic Environmental Assessment ( SEA) of the 2007-13 SRDP is being carried out, in accordance with EC Directive 2001/42 ⁵. An SEA is the process for evaluating the environmental impacts of any proposed programme that is likely to have significant effects on the environment. It informs the decision making process, and aims to improve the final programme in order to promote sustainable development. In addition, the process seeks to increase public involvement in environmental decision-making.

84. Following consultation with statutory authorities on the scoping phase of the SEA (as required in the Directive), we shall put out the full SEA report to public consultation in mid-May. The SEA consultation will be placed on the Scottish Executive website ( www.scotland.gov.uk/consultations), alongside the consultation on the SRDP and the Regulatory Impact Assessment, and a press release will be issued. If you require a hard copy please refer to the contact details in Paragraph 5, or alternatively contact your SEERAD Area Office.

Publicity

85. The 2007-13 SRDP will represent a major investment in rural Scotland and we propose that the content of the Strategy and the Programme and their desired outcomes be widely communicated. We will set up a Communication Plan, in accordance with the draft Implementing Regulations.

86. We will inform relevant stakeholders of the possibilities offered by the Programme and the rules for gaining access to programme funding. These stakeholders include potential beneficiaries, professional organisations, economic and social partner organisations, bodies involved in promoting equality, and non-governmental organisations, including environmental organisations.

87. In addition to distributing consultation documents on both the National Strategy Plan and the Scottish Rural Development Programme, we will carry out a series of public meetings around Scotland in the spring and early summer of 2006. These meetings will provide an opportunity for regional and local views to be expressed on our proposals for the SRDP. Key stakeholder groups have been identified at an early stage in the preparation of these documents and have had the opportunity to feed into the process at key stages. We acknowledge that some social and ethnic groups may be under-represented through the key agencies and stakeholders. With regard to race equality, migrant labour is an increasingly pertinent issue in rural areas. We will attempt through the consultation process to make provision for the involvement of such groups.

88. Final versions of the Strategy and the Programme documents will be made available online and in paper copy. The Programme document will contain information on the level of EU funding allocated to Scotland. Notice of the consultations and final publications will be disseminated through press releases. In addition, all published documents will be lodged in the libraries of the Scottish Parliament and the Scottish Executive.

89. We will publicise any updates or modifications to the SRDP via the SRDP web section of the Scottish Executive website which can be accessed at www.scotland.gov.uk/Topics/Rural/RDR/Intro.

90. In accordance with European regulations, all publicity relating to activity supported by European monies must include the appropriate logos and text.

91. Finally, we will use the Rural Network - under Article 68 of Regulation 1698/2005 - as a means of communication during the next Programming period.

Equality/Discrimination

92. The Scottish Executive has a proactive role in promoting equality and encouraging measures that reduce disadvantage, discrimination and prejudice. The new RDR states under Article 8 that "Member States and the Commission shall promote equality between men and women and shall ensure that any discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation is prevented during the various stages of programme implementation." The Scottish Executive has a voluntary commitment to the advancement of equality for gender, ethnicity, disability, sexual orientation, age and faith or belief. In addition, it is required under law to assess the impact of new policies on race equality; from the end of 2006, these requirements will be extended to disability and gender.

93. The following legislation in the United Kingdom applies to the provisions of the RDR set out above. The UK is a signatory to the UN Declaration of Human Rights, the European Convention on Human Rights, the Human Rights Act 1998, and has passed domestic legislation to protect the rights of individuals who risk potential discrimination on the basis of their sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation. Equality between men and women will be ensured, also by complying with the Sex Discrimination Act and the Equal Pay Act ⁶. These laws apply across the UK. New regulations that outlaw age discrimination at work will be introduced in October 2006.

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