Select Committee on Scottish Affairs Minutes of Evidence

Memorandum submitted by Strathclyde European Partnership (FCS 5)

  Purpose of this Paper:To provide the Scottish Affairs Committee with information on the modernisation of the Forth and Clyde Canal—the Millennium Link with particular reference to the job creation potential in Western Scotland.


  1.1  European Regional Development Fund grant assistance has provided a total of £8.59 million towards the overall capital costs of the Millennium Link in recognition of the longer-term economic development potential of the project. This funding was secured from the two 1997-99 Objective 2 European Structural Funds Programmes in eastern and western Scotland. £4.74 million was approved from the Western Scotland Programme and £3.84 million from Eastern Scotland.

  1.2  This paper should be read in conjunction with the evidence from Scottish Enterprise which provides a detailed analysis of the economic development potential of the Millennium Link project that formed the basis of the justification for European Structural Funds support.


  2.1  In Western Scotland the Millennium Link stretches from Bowling in the west to Castlecary and goes through the community economic development areas (now know as Social Inclusion Partnership (SIP) areas) of Clydebank and north Glasgow together with suburban East Dunbartonshire. A total European Regional Development Fund grant of £4.75 million was awarded to the project. This was 21.5 per cent of the capital costs associated within the Western Scotland area.

  2.2  The rationale for this assistance was to reflect the catalyst effect that the Millennium Link was expected to have on wider economic regeneration and job creation opportunities along the route of the canal and the particular benefits to the SIP areas. The following special conditions of grant were applied to the Millennium Link in Western Scotland:

    1.  The ERDF Grant will not exceed £4.75 million or 21.5 per cent of the total eligible costs, whichever is the lesser.

    2.  The sponsor will make a commitment to meet the maintenance costs of the restored canal for at least 25 years from project completion.

    3.  Separate accounting will be maintained in the basis of the individual schemes relating to each Structural Funds Programme in order to ensure that expenditure incurred is allocated correctly in the declaration of expenditure.

    4.  British Waterways should work closely with Glasgow North Limited and other appropriate development companies, training organisations and community organisations, prior to the implementation of the project to develop a detailed action plan, which will:

      —  Maximise the training and employment opportunities for residents of the Community Economic Development (SIP) areas adjacent to the canal.

      —  Demonstrate the integration of this project across the 1997-99 Objective 2 Programme.

      The action plan should focus on how the Millennium Link project will create additional opportunities in the following:

      —  Skills development and awareness

      —  SME development

      —  Strategic area regeneration and employment opportunities

      —  Community economic development

      —  Tourism


  3.1  The job creation targets for the Millennium Link were drawn from the economic impact study carried out by DTZ Pieda for Scottish Enterprise, which also formed the basis of the action plan developed for British Waterways by Hall Aitken Associates referred to in the special conditions of grant. In that study it was suggested that overall the Millennium Link could result in over 4,000 new jobs being created made up of:

    —  Direct benefits arising from the construction and operation of the canal including tourism, from informal recreation and boating on the canal.

    —  Indirect benefits arising from the maximising the development opportunities on adjacent sites that would be generated as a consequence of the project.

  3.2  A detailed analysis providing an accurate summary of the current progress position forms part of the Scottish Enterprise written evidence.


  3.3  For the Western Scotland element of the Millennium Link the direct job creation targets were as follows:

Direct FTE tourism jobs
Temporary construction jobs as part of capital works implementation.
Training places as part of capital works implementation.

  3.4  These are jobs associated with the implementation of the capital works. A record of progress toward these targets is provided as part of the monthly reports prepared for all the project funders. These reports coincide with the submission of claims to draw down grant payments and monthly progress meetings. Strathclyde European Partnership Limited has attended the progress meetings on a quarterly basis.

  3.5  The current indication is that temporary construction jobs targets have been exceeded. However, due to the specialist nature of the capital works the use of trainees has not been appropriate and that target has not been achieved.

  3.6  The timescale of 1997-2001 reflects the duration of the European Structural Funds Programmes in terms of achieving practical completion and finalising expenditure. The final claim for European Regional Development Fund has to be submitted on the basis of expenditure incurred and defrayed no later than 31 December 2001.


  3.7  The action plan indicated that the overall impact of the Millennium Link in terms of job creation at specific locations along the route in Western Scotland was anticipated as follows:

Permanent Jobs
Temporary Jobs (jobs/year)
Tourism Jobs
Bowling Basin
Firhill Basin
Port Dundas

  3.8  The action plan did not state a timescale for these jobs to be realised although there is an implication that the period 2001-2006 following completion of the capital works would be a key period.

  3.9  There are early indications that as the Millennium Link approaches practical completion interest in the development of canal side sites is increasing and the associated job creation opportunities are beginning to emerge. The monthly reports prepared by British Waterways include the emerging developments. However, a significant level of the development to date has been housing related which is not an eligible activity for European Structural Funds purposes and therefore would not be included in these targets.

  3.10  It has been generally accepted that the majority of the job creation opportunities will come after completion of the works and over a longer timescale. The majority of capital infrastructure projects supported by European Structural Funds do not realise the full economic impacts until a number of years after the project has reached practical completion.

  3.11  For the Millennium Link, and other large scale projects, it has been agreed that the reporting timescale for indirect benefits should be extended to coincide with the audit period for the overall 1997-99 European Structural Funds Programmes which is 31 December 2006.

  3.12  The Lowland Canals Advisory Group has the responsibility to monitor progress towards meeting the job creation opportunities and the implementation of the action plan. Strathclyde European Partnership Limited will expect quarterly progress reports and meetings on these targets. An early action of this group should be to review and update of the action plan in consultation with Scottish Enterprise and Strathclyde European Partnership Limited. This should include details of how it will be implemented.


  4.1  Overall good progress has been made towards practical completion of the capital works within the 1997-99 Programme period. The indication is that targets for direct job creation have already been exceeded.

  4.2  The early indication is that the Millennium Link has been a catalyst for development along its route, which should achieve the wider economic development outcomes. Private sector interest and investment has already been achieved at a range of locations along the Millennium Link and further significant development opportunities, some involving brownfield site restoration, are in the early planning stages.

  4.3  Further momentum is anticipated with the completion of the capital works. The groundwork is being established at local development group level, through the Lowland Canals Advisory Group, which will monitor, review and progress the implementation of the action plan in partnership with all other relevant agencies.

  4.4  The indirect job creation targets were part of the application for Structural Funds support and will be monitored until 31 December 2006. It is recommended that British Waterways through the Lowland Canals Advisory group review the action plan and prepared an implementation plan.

16 November 2001

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