UK Government’s decision will see Scottish Government gain extra €228m
Scotland will have more EU funds to invest in jobs, skills and research projects as a direct result of being in the UK, after the UK Government announced the division of Structural Fund allocations for the period 2014 to 2020.
It will see the Scottish Government receive total funding of around €795 million, an addition of €228 million compared to the amount Scotland would receive under the normal funding formula.
The UK is reallocating the funds to minimise the impact of sudden cutbacks in Scotland. This will see Scotland, England, Wales and Northern Ireland take an equal percentage cut of 5 per cent in funding compared to 2007-13 levels, where the EU formula would have seen Scotland take a 32 per cent cut.
The Government believes that this delivers the fairest deal for each of the four administrations which would otherwise have lost funding vital for economic growth.
The Secretary of State for Scotland Michael Moore said:
“By sharing the cut in EU structural funds across the UK, the government is protecting Scotland from the big cut we would otherwise receive.
“Scotland will now get €228 million more than it would if the EU funding formula was applied directly.
“By being in the UK, Scotland has not only got a better EU budget deal, we will also get better funding from Brussels - creating jobs and supporting communities.
“Just a few weeks ago the Scottish Government put out a scare story saying Scottish funding was set to fall by 32 per cent.
“Now we can confirm that an independent Scotland would face that 32 per cent cut - and only an independent Scotland - because it would not have the UK’s flexibility.
“On structural funds, €228 million is the price of leaving the UK family.”
Last month, the Prime Minister negotiated a real-terms cut in the EU budget for the first time in history. As the independent OBR has said, the effect of this deal was to reduce the forecast for what taxpayers across all parts of the UK will pay by £3.5 billion over the next five years.
By the end of 2011, programmes funded by EU Structural Funds had helped create more than 50,000 jobs in the UK, assisted the start up of more than 20,000 businesses and supported more than 1,300 research and technical development projects. Funds are used to support for a wide variety of projects such as building skills for the unemployed, increasing the participation of women in science and engineering careers, and developing new healthcare technologies.
The EU funds covered include the European Regional Development Fund (ERDF) and the European Social Fund (ESF). These funds are the main European instruments for supporting local projects to increase jobs and growth. Funding for the European Territorial Cooperation (ETC) objective and the Youth Employment Initiative will be subject to a separate process.
The European Regional Development Fund (ERDF) focuses on regeneration projects through investment in infrastructure, enterprise and innovation. The European Social Fund (ESF) focuses on investing in the labour market, particularly to raise skills amongst marginal groups.