Scottish Government Consultation - Changing the International Territorial Level Geography for Scotland
North Ayrshire Council · 1 October 2024
Back to Cabinet — 1 October 2024 and its agenda
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NORTH AYRSHIRE COUNCIL 1 October 2024 Cabinet Title: Scottish Government Consultation: Changing the International Territorial Level Geography for Scotland Purpose: To seek Cabinet approval for the submission of the proposed response to the consultation on Changing the International Territorial Level Geography for Scotland Recommendation: That Cabinet: a) Approves the submission of the proposed consultation response provided at Appendix One; b) Notes the engagement with Scottish Government officers and Highlands and Islands Regional Economic Partnership to inform the consultation response; and c) Notes that responses to the consultation are also being submitted by Highlands and Islands Regional Economic Partnership and Highlands and Islands Enterprise. 1. Executive Summary 1.1 On 9 July 2024 Scottish Government commenced a consultation on proposals to revise International Territorial Level boundaries in Scotland. Created by the Office for National Statistics, these are geographical boundaries used to produce regional statistics in the UK and to allow comparisons with regions in other countries. The existing alignment of these boundaries positions Arran and Cumbrae within the Highlands and Islands region. The consultation proposes that Arran and Cumbrae move out of the Highlands and Islands groupings to be part of a new regional level with mainland North Ayrshire and East Ayrshire. This report seeks approval for the proposed response to the consultation provided at Appendix One. 2. Background 2.1 International Territorial Levels (ITL) were created by the Office for National Statistics (ONS) following UK withdrawal from the EU and are a replacement for the Nomenclature des Unités Territoriales Statistiques (NUTS) geographies. ONS is currently reviewing ITL boundaries in the UK and has asked Scottish Government to review the alignment of boundaries in Scotland. ITLs were designed to align with the previous NUTS specifications, allowing for international comparisons between regional level geographies.
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2.2 Prior to the UK leaving the EU, the NUTS geographies were primarily used to submit regional statistics to the EU. These statistics were used to formulate regional policy initiatives and determine regional funding allocations. The UK is no longer required to provide statistics to the EU and is no longer eligible for EU Structural and Investment Funds. Other uses of the ITL geography include submission of economic statistics to the Organisation for Economic Co-operation and Development (OECD) and the production of UK wide statistics by ONS on some policy areas reserved to the UK Government. Although demand for ITL statistics is currently limited, the consultation suggests there may be greater demand in the future. 2.3 To consider the potential impacts of proposed changes to the ITL boundaries, the Scottish Government commenced a consultation on 9 July 2024. The consultation closes on 1 October 2024 with the feedback used to inform a response to the ONS. It is expected that any revisions to the statistical boundaries will be implemented form 1 January 2025. 2.4 ITL is a hierarchical geography with three levels. There are agreed population thresholds for each level to ensure they are broadly comparable to international areas: • ITL1: the highest level. The whole of Scotland is an ITL1 region. • ITL2: currently divides Scotland into 5 regions. • ITL3: currently divides Scotland into 23 regions. 2.5 The consultation states that the purpose of the changes is to ensure better alignment of ITL boundaries to local authority boundaries in Scotland. This would make the calculation of ITL statistics easier by ensuring each region would either be a local authority or a group of local authorities. The proposed changes would also aim to ensure the proportion of population within the regions are more balanced. The consultation proposes that the number of ITL2 geographies is increased from 5 to 6 regions and the number of ITL3 geographies is reduced from 23 to 18. 2.6 Arran and Cumbrae are currently grouped with Highlands and Islands areas within both the ITL2 and ITL3 geographies. The consultation proposes that for both levels, Arran and Cumbrae are moved out of the Highlands and Islands grouping as follows: • For ITL2 it is proposed that Arran and Cumbrae move out of the ‘Highlands and Islands’ region and are grouped within the ‘Southern Scotland’ region (this includes mainland North Ayrshire, East Ayrshire, South Ayrshire, Dumfries & Galloway, South Lanarkshire and the Scottish Borders). • For ITL3 it is proposed that Arran and Cumbrae move out of the ‘Lochaber, Skye, Lochalsh, Arran and Cumbrae and Argyll and Bute’ region and are grouped within a region with East Ayrshire and mainland North Ayrshire. 2.7 Proposals to align regional statistical boundaries with local authority boundaries were considered as part of a previous consultation in 2012 and again in 2016. North Ayrshire Council objected to proposals at that time as Arran and Cumbrae would have been moved out of the EU geography that provided more flexibility in the type of support, increased intervention rates and a higher per capita amount of funding than the rest of Scotland. Following withdrawal from the EU and removal of eligibility for EU Structural and Investment Funds, this is no longer the case. There was also strong opposition to the proposals from island communities based on it being considered
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important to align Arran and Cumbrae with other island communities which face similar challenges and opportunities. 2.8 The consultation proposals have been carefully considered by the Economic Policy Team and with advice from Legal Services. In addition, meetings have taken place with Scottish Government Officers and members of the Highlands and Islands Regional Economic Partnership (HIREP). The consultation has been shared with Arran Locality Partnership and North Coast and Cumbrae Locality Partnership. 2.9 The proposed consultation response provided at Appendix One recommends that the consultation proposals are rejected. This is informed by the potential risk and implications to the island communities of Arran and Cumbrae. The key issues and concerns are as follows and are noted in the response: • Under the proposals and for both ITL2 and ITL3 geographies, Arran and Cumbrae would be removed from their previous groupings as part of the Highlands and Islands region. From a policy, statistical and cultural perspective it is important that Arran and Cumbrae remain aligned to the other populated islands within the Highlands and Islands region. Removing two of Scotland’s populated islands from the rest would impact culturally, statistically and potentially in policy terms, removing alignment with the administrative boundary of Highlands and Islands Enterprise (HIE) and the Highlands and Islands Regional Economic Partnership (HIREP). • The proposed changes would further complicate access to data at a Highlands and Islands level. If the ITL2 proposals are accepted, this would result in loss of access to regional data which mapped to previous NUTS3 and the HIE agency boundary for key economic statistics. HIE would therefore lose the ability to consider trends and undertake analysis at the regional enterprise agency level. • While the proposed changes are noted within the consultation as for the benefit of statistical purposes, there is uncertainty on how the proposed changes may affect future decisions e.g. policy development and funding allocations. With the Scottish Government’s commitment through the recent Programme for Government to ‘empower decision making and investment through REP’s (Regional Economic Partnerships)’, retaining Arran and Cumbrae within the Highlands and Islands region may impact on availability of funding for regional economic activity. • There is uncertainty around how the provision of business support under Highlands and Islands Enterprise (HIE) versus Scottish Enterprise would be impacted. • There may be implications for North Ayrshire Council representation on the Convention of the Highlands and Islands (COHI) and Highlands and Islands Regional Economic Partnership (HIREP). 2.10 Some small benefits have been identified as part of the proposals such as improving statistical accuracy, reducing risk of disclosure of personal data and improving ease and efficiency of producing data particularly at an Ayrshire regional level. However, it is proposed that these limited benefits are outweighed by the potential risks to and implications for the island communities of Arran and Cumbrae. 2.11 It is understood that consultation responses are being prepared by HIREP and Highlands and Islands Enterprise with the recommendation of rejecting the proposals based on similar reasons to those identified above.
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3. Proposals 3.1 That Cabinet: a) Approves the submission of the proposed consultation response provided at Appendix One; b) Notes the engagement with Scottish Government officers and Highlands and Islands Regional Economic Partnership to inform the consultation response; and c) Notes that responses to the consultation are also being submitted by Highlands and Islands Regional Economic Partnership and Highlands and Islands Enterprise. 4. Implications/Socio-economic Duty Financial 4.1 There are no financial implications resulting directly from submission of the consultation response, however it is unclear if financial implications could arise from the removal of Arran and Cumbrae from the Highlands and Islands ITL geography. There is no clarity provided on the future use of these proposed regional geographies on funding allocations from Scottish Government. Human Resources 4.2 None. Legal 4.3 Legal Services have reviewed the proposals and provided advice. They have concluded that there are no apparent legal concerns. Equality/Socio-economic 4.4 There are no equality/socio-economic implications resulting directly from submission of the consultation response, however it is unclear if such implications could arise from the removal of Arran and Cumbrae from the Highlands and Islands ITL geography. There is no clarity provided on the future use of these proposed regional geographies and therefore no certainty that this would not lead to equality/socio- economic implications for island residents. Climate Change and Carbon 4.5 None. Key Priorities 4.6 None. Community Wealth Building 4.7 None.
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5. Consultation 5.1 The proposed response has been informed by consultation with Legal Services, Scottish Government officers, members of the Highlands and Islands Regional Economic Partnership (HIREP) and HIREP Officers Group and Highlands and Islands Enterprise (HIE). RUSSELL McCUTCHEON Executive Director (Place) For further information please contact Emma McMullen, Senior Manager- Economic Policy, on 07956 461806. Background Papers 0
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Appendix One – Proposed Consultation Response Question 1 Do you support the principle of changing the ITL2 and ITL3 geographies so that each region is an exact grouping of Local Authorities? Yes No If no, why not? In some cases, alignment to local authority boundaries is considered appropriate, for example the inclusion of the entire Argyll and Bute local authority within Highlands and Islands ITL2. However, it is not considered appropriate that Arran and the Cumbraes are removed from their previous groupings within ITL2 and ITL3 to align with the rest of North Ayrshire Council. This grouping reflects strong geographical, socio-economic and cultural circumstances which have existed for many years and still persist. This includes challenges in relation to: − Reliance on seasonal tourism and the need for diversification − Transport particularly aligned to ferries − Recruitment and retention of employees − Housing − Health and social care including meeting the needs of older people − Preservation of the natural environment, heritage and cultural identity − Education and skills and retention of young people − Population and depopulation − “Island premium” costs − Resilience The Council has consistently resisted proposals to date for change which might result in our islands being subject to different treatment from other islands, and which might exclude them from the ability to take on both challenges and opportunities in a structured and coordinated way, which reflects the circumstances of the Highlands and Islands region. We are seriously concerned that the proposed changes would constrain this. From a policy, statistical and cultural perspective it is important that Arran and Cumbrae remain aligned to the other populated islands within the Highlands and Islands region. Our islands of Arran and Cumbrae have a connection with Scotland’s other populated islands. Removing two of Scotland’s populated islands from the rest would impact culturally, statistically and potentially in policy terms, removing alignment with the administrative boundary of Highlands and Islands Enterprise (HIE) and the Highland and Islands Regional Economic Partnership (HIREP). The different nature of the challenges, opportunities and economic circumstances that the islands and remote areas face are recognised at present in the support frameworks currently in place. This position is supported by both HIE and HIREP. It is acknowledged there are some benefits to aligning ITL2 and ITL3 geographies to exact groupings of local authorities such as improving statistical accuracy by removing the need to estimate data, ease and efficiency of producing statistical data and reducing the risk of disclosure of personal data. These benefits are however outweighed by the potential risks to and implications for our island communities.
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Question 2 Do you support the proposed groupings at ITL2 level? Yes No If no, why not? Question 3 Do you support the proposed groupings at ITL3 level? Yes No If no, why not? Question 4 Are there specific statistical products that you currently use that would be negatively affected by these proposals? Yes No If yes, how might we ensure that your requirements continue to be met? North Ayrshire Council proposes that the islands of Arran and Cumbrae should remain as part of the ITL2 Highlands and Islands region for the reasons outlined at our response to Question 1. It is considered critical to retain all populated islands within the same region due to the unique cultural and socio-economic contexts of island communities. This position is supported by both HIE and HIREP. If the ITL2 proposals are accepted, this would result in loss of access to regional data which mapped to previous NUTS3 and the HIE agency boundary for key economic statistics. HIE would therefore lose the ability to consider trends and undertake analysis at the regional enterprise agency level which is of importance to North Ayrshire Council and our island enterprises. North Ayrshire Council is opposed to the proposal that Arran and Cumbrae are moved to a new ITL3 grouping which includes East Ayrshire Council and mainland North Ayrshire Council for the reasons outlined at our response to Question 1. It is considered important to retain Arran and Cumbrae with similar geographies within the Highlands and Islands due to islands having similar development requirements as well as sharing many cultural and socio-economic similarities. This position is supported by both HIE and HIREP. It is noted that consolidating the islands of Arran and Cumbrae with the rest of mainland North Ayrshire provides a slight benefit in terms of carrying out analysis of GDP/GVA figures for the Ayrshire region. East Ayrshire would be grouped with North Ayrshire and South Ayrshire would have its own ITL3 geography, this would therefore make it easier to generate regional level statistics. However despite this, it is considered the risk of potential impact to our islands outweighs the small benefit.
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Question 5 Do you have any other comments, suggestions, or alternative proposals for the ITL geographies? It is proposed that the islands of Arran and Cumbrae remain within their existing ITL geographies for the reasons outlined in our response to Question 1. While the proposed changes are noted within the consultation as for the benefit of statistical purposes, there is uncertainty around how the proposed changes may affect future decisions e.g. policy development and funding allocations. For example, if the revised boundaries were used for the calculation of funding allocations, this could impact the level of funding received according to the geography in which the area is based, as was the case with EU Structural and Investment Funds. The Highlands and Islands region, including Arran and the Cumbraes, qualified for Special Transitional Status in 2000 then Transitional Status for the 2007-2013 and 2014-2020 ERDF and ESF programmes. This provided more flexibility in the type of support, increased intervention rates, and was a higher per capita amount of funding than the rest of Scotland. Scottish Government has been unable to answer questions posed about the future impacts of these changes. Although they have outlined that the consultation is for statistical purposes, they have been unable to confirm that future funding decisions may be impacted by these geographical changes The Council has concerns regarding the removal of Arran and Cumbrae from the Highlands and Islands region which could have impacts on the following areas: • Business Support: There is uncertainty around how the provision of business support under Highlands and Islands Enterprise versus Scottish Enterprise would be impacted. • Island Authority Representation: There may be implications for North Ayrshire Council’s representation on the Convention of the Highlands and Islands (COHI) and HIREP. • Funding: For example, Scottish Government decisions on funding, specifically relating to islands and population-based decisions. To our knowledge, no products used by North Ayrshire Council would be negatively affected by these proposals.