Letter from the Cabinet Secretary for Rural Affairs and Islands, Mairi Gougeon, to the Convener, 2 March 2022
Dear Finlay,
At its session on 9 February 2022, the Committee considered the draft Aquaculture and Fisheries etc. (Scheme for Financial Assistance) (Scotland) Regulations 2022. During the session I agreed to write to the Committee to provide further information on some of the questions raised by the Committee members. I hope the information I have provided below is helpful.
1. If possible, the Committee would appreciate more information regarding companies that received hardship funding through the marine fund Scotland from the Scottish Government in the past two years who also received fixed- penalty notices or have been referred to the Crown Office and Procurator Fiscal Service for breaches of fisheries rules.
The general guidance for the Marine Fund Scotland (MFS), available on the Scottish Government website, states that the MFS will not support individuals or businesses if they have been convicted of fraud or, within the last 12 months or longer, of a serious infringement. A serious infringement is defined in Article 42 of retained Council Regulation (EC) No 1005/2008 of 29 September 2008 as:
As stated in the general guidance, applicants to the MFS must immediately notify the Scottish Ministers if they or any other partner(s) in the project (or their organisation) is found to have committed a fraud or a serious infringement (as defined in the Eligible Applicants section of the general guidance) prior to submitting an application or at any time up to five years from the date of receiving the final instalment of any MFS grant funds.
Applications to the MFS are considered by Scottish Government Marine Scotland Directorate Compliance teams, as part of the overall governance process. To uphold commitments to sustainability, and to prevent, deter and eliminate illegal, unreported and unregulated fishing, funding offers will not be made where convictions for serious infringements are identified. In order to protect public finances from fraud (the use of deception with the intention of obtaining personal gain, avoiding an obligation or causing loss to another party) funding offers will not be made where convictions for fraud are identified. Fixed Penalty Notices (FPN) are not taken into account when determining whether to offer a grant as the acceptance of a FPN is not a conviction.
Hardship payments were not delivered through the MFS. The priority of this funding was to provide emergency support to the industry following the loss of markets and market access due to the UK’s exit from the EU and the COVID-19 pandemic, to help ensure business’ viability and provide vital support to coastal communities. Checks carried out by Scottish Government Marine Scotland Directorate Compliance teams were in place to ensure the integrity of the funding schemes and that only eligible businesses would benefit. The focus of these checks was on ensuring compliance with sea fish licence conditions relating to the submission of catch and landing data during the eligibility reference periods and, otherwise, ensuring that applicants met the scheme eligibility criteria.
2. The Committee asked whether the scheme would cover statutory costs. Officials confirmed such costs could be covered under the scheme but committed to providing more information regarding the precise definition of what the expenses would cover, and in terms of the use of catch quotas or effort quotas. With respect to statutory costs, the Committee would also appreciate more information regarding how the scheme will ensure adequate return on investment.
The Fisheries Act 2020 sets out the permitted purposes for which financial assistance may be given. Those purposes include contributing to the expenses of persons involved in commercial fish or aquaculture activities in relation to Scotland, the Scottish zone or Scottish fishing boats.
"Expenses" in this context could include statutory costs, as well as non-statutory costs. As noted during the Committee session, the scheme established by these Regulations provides the framework for our future marine funding. It allows the Scottish Ministers to exercise their discretionary power to give grant or loan funding for all the permitted purposes listed at paragraph 1(1) of schedule 6 of the Fisheries Act 2020 in relation to Scotland, the Scottish zone or Scottish fishing boats, but does not oblige Scottish Ministers to fund any or all of those purposes. We are currently developing the detailed assessment and eligibility criteria, and any conditions attached to funding, for the MFS in 2022/23, and as committed during the session we will share these with the Committee when they are finalised. No funding has been provided through the MFS in 2021/22 for the purchase of catch or effort quotas.
Applications to the MFS in 2022/23 will be assessed against a number of criteria to ensure allocated spend delivers against Scottish Ministers’ strategic priorities and that value for money is delivered through the successful projects. This value for money assessment may consider monetary or non-monetary economic, social and/or environmental aspects, and will form one part of the assessment process. To support longer term value for money and delivery against outcomes, a monitoring and evaluation programme will be established allowing for lessons to be learned and fed back into the delivery of future funding rounds to ensure the strategic priorities are best supported.
3. The Committee asked whether the scheme would allow boats that are not registered in Scotland to receive financial assistance. Officials were confident this was not the case but committed to confirming this in writing.
Paragraph 1(3) of schedule 6 of the Fisheries Act 2020 provides that the scheme (which the Aquaculture and Fisheries etc. (Scheme for Financial Assistance) (Scotland) Regulations 2022 establishes) can only provide for financial assistance to be given in relation to (a) Scotland or the Scottish zone, or (b) Scottish fishing boats.
Therefore, the provisions of the Act would theoretically allow us to provide financial assistance to non-Scottish boats, but only in relation to one or more of the purposes listed at paragraph 1(1)(a) to (i) of schedule 6 (the permitted purposes) and only so far as a permitted purpose relates to Scotland or the Scottish zone.
As noted above, we are currently developing the detailed assessment and eligibility criteria, and any conditions attached to funding, for the MFS in 2022/23. Only applications from vessels which are registered and licenced in Scotland were accepted for MFS funding in 2021/22 and we expect this approach to continue.
4. Finally, the Committee would be grateful if the Scottish Government could keep the Committee updated as to when you intend to launch a round of funding.
We are currently developing the approach to the MFS for the 2022/23 financial year and will of course update Parliament when we are in a position to launch that.
Yours sincerely,
MAIRI GOUGEON