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The Government's Proposals for New Assisted Areas

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The Government's Proposals for New Assisted Areas 68 1 2 . NORTH LANARKSHIRE COUNCIL AGENDA ITEM NO. b- L. REPORT To: ECONOMIC DEVELOPMENT Subject: THE GOVERNMENT’S COMMITTEE PROPOSALS FOR NEW ASSISTED AREAS From: DIRECTOR OF PLANNING AND ENVIRONMENT Date: 26 JULY 1999 I Ref: TCREP596.doc 1 Purpose of Report 1.1 To inform the Committee of the outcome of the Government’s review of -4ssisted Area status and eligibility for Government Regional Policy assistance. 2 Background 2.1 The main form of assistance given by the UK Government within Assisted Areas is ‘Regional Selective Assistance’ (RSA) which provides discretionary grants to firms in support of projects which will create or safeguard jobs, increase competitiveness and generate benefits for the wider regional economy. 2.2 On 30 July 1998, the Government produced a consultation document which sought views on deriving a common methodology for reviewing Assisted Areas. Following discussions with colleagues at South Lanarkshire Council and the Lanarkshire Development Agency, North Lanarkshire Council submitted a response through this committee on 8 October 1998. 2.3 On 6 July 1999, the UK Government released its proposed Assisted Area Map to be operative from 1 January 2000 pending the approval of the European Commission. 3 The Government’s Proposals-Geographic Selection and Indicators Used 3.1 The Government considered a variety of possible geographical units. While recognising that larger units such as Local Authority boundaries have a wider range of statistical information available and that these numbers are more robust, the Government considered that they could lead to an inefficient targeting of regional aid. It was considered that the use of larger geographic units might lead to the exclusion of many deserving localities simply on the grounds that they were part of a larger unit which did not demonstrate its eligibility across its whole area. The Government therefore decided to propose Assisted Areas based on groupings of locai authority wards. Comprehensive up-to-date ward level statistics are generally not readily available from official sources. The statistical indicators used have therefore been derived by combining different official sources such as the Census of Population, Labour Force Survey, Count of Claimants of Unemployment-related Benefits and the Annual Employment Survey. 1991 wards were used because of data availability. 69 3.2 The Government’s aim has been to identify locations of need (largely in terms of labour market weakness) and match these with neighbouring areas of opportunity where regional aid might have most effect in alleviating these needs. The Government used 4 indicators to identify areas with significant labour market weaknesses: employment participation rates, residence-based unemployment rates, workforce-based unemployment rates, and local dependence on manufacturing. Using these four indicators, the Government reviewed all parts of Great Britain in order to identify areas suffering high levels of unemployment or low participation in the labour market, combined with significant manufacturing activity. 3.3 As anticipated, the eligible UK population fell from 34% to 28%. In Scotland the eligible population was reduced from 64% to 49%. The following table indicates the changes at a West of Scotland level. 1 West Dunbartonshire I 100% 168% 4 Implications for North Lanarkshire 4.1 As the above table shows coverage, based on 1991 wards is reduced from full coverage to 87%. The wards which remain eligible are identified in the full report a copy of which will be made available to members through the Economic Development Unit. Annex 1. Please note that these wards are arranged alphabetically under their former District Council areas. 4.2 It is important to identify those 1991 Wards which are no longer eligible Assisted Areas. Of the wards making up the former District Councils the following have been EXCLUDED from 0 Assisted Area- 87(3)c status. Cumbemauld and Kilsyth Kildrum and Park Abronhill West and Abronhill East Queenzieburn and Kilsyth North West Banton and Kilsyth Central and East Monklands New Monklands East Motherwell Cambusnethan Newmains Strathkelvin Stepps 70 5. Steps Being Taken 5.1 The Government has not as yet invited comments on the map in the form of a further consultation. Officers from North and South Lanarkshire Council’s and the LDA are meeting to consider the strategic implications of the review. An initial analysis of companies, industries and strategic sites which may be affected in North Lanarkshire is attached at Annex 2. This analysis will expand and form the basis of any response to the Government’s proposals. 6. Recommendations 6.1 That the committee note the contents of this report and the action being taken to assess its impact in North Lanarkshire. David M Porch Director of Planning & Environment 71 Annex 1 The Governments Proposals for New Assisted Areas-Department of Trade and Industry, July 1999 72 THE GOVERNMENT’S PROPOSALS FOR NEW ASSISTED AREAS The Department of Trade and Industry in conjunction with The Department of the Environment Transport and the Regions The Office of the Secretary of State for Wales The Office of the Secretary of State for Scotland JULY 1999 73 The new Assisted Areas This publication The Assisted Areas are those areas of Great Britain where reports the regional aid may be granted under European Community law. Regional Selective Assistance (RSA) is the main form outcome of the of such aid in Great Britain. It is a discretionary grant, review of the awarded to secure employment opportunities and increase Assisted Areas. regional competitiveness and prosperity. On 30 July 1998 the Government announced that it would be carrying out a review of the Assisted Areas in response to new European guidelines on regional aid. The Government has carried out a comprehensive review of the Assisted Areas taking into account responses to the Consultation Document issued last July. It describes the The three month public consultation generated over 3 50 Government’s responses. A wide variety of criteria were proposed for determining the new Assisted Areas. Labour market proposals to the indicators, particularly unemployment, received the most European support. Wards were the most widely supported unit of Commission for geography to form the basis of the map. new Assisted Areas to operate The Government’s proposals are published today. They will from 1 January need the approval of the European Commission. They may therefore be subject to amendment after discussion with the 2000. Commission. The Government will announce the definitive map of the new Assisted Areas when they have been agreed with the Commission. 74 European The review of the Assisted Areas has been conducted under Commission the European Commission guidelines on regional aid published in the Official Journal of the European Regional Aid Communities on 10 March 1998 ’. These guidelines aim to Guidelines introduce a transparent and comparable regional aid system across Member States; they are part of the drive to reduce the overall level of aid to industry in the Community. The Government supports this. The guidelines require all Member States to propose new Assisted Areas to operate from 1 January 2000. The aims of the The Government is committed to creating a modem and Government’s competitive economy. Regional industrial policy has a key role to play. It brings under-utilised resources back into the regional industrial economy, enhancing employment opportunities and policy improving competitiveness. In the Competitiveness White Paper2, the Government made two commitments on regional industrial policy. It said that it would support the policy of developing forward- looking regions by: focusing support more on high-quality, knowledge-based projects which provide skilled jobs; and introducing a new Assisted Areas map, taking account of the response to the public consultation. The Government’s proposals for designating new Assisted Areas have today been submitted to the European Commission. ’ ref. 98lC 74/06 “Our Competitive Future: Building the Knowledge Driven Economy”. Cm 4176 75 The Government also stated in the Competitiveness White Paper that it would consider new measures to support the growth of smaller businesses in selected areas with particular needs. Details of the new scheme will be announced in the autumn. Results of the The review of the Assisted Areas began with a three month Public period of formal consultation. The Consultation Document was given wide distribution with over 4000 copies sent out Consultation and through publication on the Internet. The Consultation Document asked respondents to comment on areas which might be designated. It also invited views on the geographical unit and criteria which should be used in drawing up the new map. Over 350 responses were received in total. Some 244 local authorities responded, some individually and some as joint bids with neighbouring authorities or as part of a partnership bid. Submissions were also received from national bodies, as well as organisations representing specific types of area. A wide range of criteria were suggested, sometimes as specific proposals for the methodology which the UK should put forward for determining the map but more commonly as evidence of the social and economic needs of a particular area. Unemployment was the most frequently cited. For the geographical unit there was most support for the use of wards because of the scope this unit offers to target areas with severe problems masked in statistics for the wider area. There was also however sizeable support for the use of travel to work areas (TTWAs) and local authority districts. 76 Support for NUTS 3, the Commission’s preferred unit, was more limited. The Government also received comment and advice from the English Regional Development Agencies. Over 40 meetings were held with delegations who wished to underline the case for Assisted Area status for their areas. Members of Parliament, local authorities and other bodies continued to submit their views after the formal consultation period ended.
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