Highlands and Islands To Take Objective 1 Case to Goverment

21 November 2003

Highlands and Islands local authorities are to lobby the UK government and the Scottish Executive for compensation for the miscalculation of figures submitted for Objective 1 funding for the area.

A meeting of the Highlands and Islands Conveners Group last night noted with regret that the Office of National Statistics (ONS) had produced unreliable information which led to the area ceasing to qualify for Objective 1 status after 31 December 1999.

The GDP figure for the Highlands and Islands appears to have been considerably lower than the figure presented at the time. The Highlands and Islands lost their Objective 1 status because the GDP figures for the area were thought to be just above the threshold level of 75% of the European average. Revised figures now seem to indicate that the GDP figures were well below the threshold. The area was therefore designated as ‘in transition’ and consequently received a lower level of funds for the current period. It will also be disadvantaged in the next funding period.

Convener of Comhairle nan Eilean Siar, Mr. Alex MacDonald, who chaired last night’s meeting, said:
“The UK Member state submitted unreliable figures that cost the Highlands and Islands Objective 1 status.. Because of the unreliability of the figures millions of pounds that could have been used for regenerating the economy of the poorest parts of the Highlands and Islands have been lost. Wwe will be liaising with our partners and seeking discussions with UK and Scottish Ministers as a matter of urgency to discuss how our communities can be compensated. The ONS has admitted culpability. In our view that clearly implies liability. The only bright aspect to this appalling error is that it underlines the arguments we made at the time about the fragility of our economy and strengthens our case for a continuation of European funding”.

The UK government, led by Prime Minister Tony Blair, did achieve transitional funding for the Highlands and Islands of £190m for the period 2000-2006 but that is still considerably less than the £250m that went to the Highlands and Islands under Objective 1 status from 1994-1999. It is also less than might have been expected had the Government submitted reliable figures and Objective 1 status been maintained.

In addition, if the true economic picture of the area had been made clear, leading to the retention of Objective 1 status, the case for a continuation of substantial structural funds beyond 2006 would have been even more clearly recognised.

Nigel Scott
Communications Officer
Comhairle nan Eilean Siar

Tel: 01851 709389 (Work)
Tel: 01851 706412 (Home)
Tel: 07884 236103 (Mobile)
email: nscott@cne-siar.gov.uk