Supporting the economic, social and environmental sustainability of the UK's marine sectors

This research considers barriers to sustainable marine economy growth in Scotland and the rest of the UK with particular regard to cross sectoral barriers and market failures.


5 Overview of existing support mechanisms

Introduction

5.1 This chapter provides an overview of the main support mechanisms currently available to organisations and institutions operating within the UK’s marine sectors, considering financial and technical support. It first sets out the key mechanisms available, the level they are available at and their key priorities. Following this, the chapter then considers any areas not covered by existing support, and any factors hindering the availability or access to these support mechanisms.

5.2 In order to provide a concise and clear overview, this chapter focuses on the key aspects of the interventions available. However, a more extensive list of support mechanisms has been compiled and can be found at Appendix 3, available as a Supporting Document.

Coverage of financial and other support mechanisms

5.3 A wide variety of support is available to the UK’s marine sector. The majority of this support is delivered through financial mechanisms, such as funding for sustainable economic development projects, funding to support projects aimed at enhancing biodiversity and the natural environment, and funding to support and drive research and collaboration. Other support mechanisms include networking centres, marine research programmes and industry promotion and representation bodies.

European support mechanisms

5.4 A number of support sources are available at European Union level. Arguably the most significant of these is the European Maritime and Fisheries Fund (EMFF)[182], which provides support for sustainable development within the fishing and aquaculture sectors, as well as supporting conservation of the marine environment, alongside growth and jobs in coastal communities in the UK. The Marine Management Organisation (MMO), Marine Scotland, the Department of Agriculture, Environment and Rural Affairs (DAERA) and the Welsh Government act as the Managing Authorities for the EMFF in each country of the UK, with around £190m split between each country over the period 2014 to 2020. The EMFF provides funding for investments in areas such as: on board fishing vessels, gear replacements, improvements to shore-based facilities, advisory services, partnerships, training and innovation, fisheries management and seafood processing, and aquaculture, animal health and inland fishing.

5.5 The LIFE programme[183] is also available at EU level, replacing the previous LIFE+ programme. The LIFE programme offers financial support for nature and biodiversity projects in line with EU directives on the birds, habitats and biodiversity strategy 2020. Notably, it covers marine and coastal management as part of funding for environment and resource efficiency projects. The current funding period is from 2014-2020 with a total budget of €3.4bn at the EU level. A 2017 project, RELIONMED-LIFE, in which the University of Plymouth is a delivery partner, aims to prevent the invasive Lionfish species disrupting ecosystems. A project delivered through LIFE+ and completed in 2016, BLUETEC aimed to demonstrate the technical feasibility and cost effectiveness of a full-scale 1 MW tidal-energy installation. The Environmental Research Institute at North Highland College UHI was a delivery partner.

5.6 Other EU-level support mechanisms include Funding FISH[184], an international funders collaborative developed with sole intention to support the implementation of the Common Fisheries Policy to drive sustainable fisheries. Support takes the form of grant-making and, additionally, Funding FISH works with potential partners to identify match funding and project development.

5.7 Horizon 2020[185] is the EU’s framework programme for research and innovation, providing around €80bn of funding between 2014 and 2020 for research projects to develop and demonstrate innovative technologies and approaches in response to major societal challenges such as climate change or food security. For example, a funding call for a 2018-19 project on Wave Energy Research & Development sought to consider the design, development and validation of cost-effective wave energy converters able to survive in a harsh and unpredictable ocean environment.

5.8 Many of the EU’s territorial co-operation (Interreg) programmes focus on marine and maritime issues. For example, the Ireland-Wales Territorial Cooperation Programme 2014-2020[186] is a maritime-focused programme connecting organisations on the west coast of Wales with the south-east coast of Ireland. It focuses on seeking solutions to shared challenges and improvements to the economic and sustainable development priority of Wales and Ireland, targeting cross-border innovation and the adaptation of the Irish Sea and coastal communities to climate change. Likewise, the 2 Seas Programme targets issues relating to economic, social and environmental sustainability on the coastal areas of South East England and East Anglia, as well as in France, Belgium and the Netherlands. Funded projects through Interreg programmes include Bluefish[187], which aims to develop knowledge and understanding of the marine resources of the Irish Sea and Celtic Seas by addressing knowledge gaps regarding the effects on and potential vulnerability of selected commercial fish and shellfish from predicted climate change. The Sustainable and Resilient Coastal Cities (SARCC) project seeks to address the challenge of rising sea levels by helping to mainstream nature-based solutions (NBS) into coastal management and policy making.[188]

UK-level and national/devolved administration support mechanisms

5.9 A wide range of support is available at UK level, ranging from financial interventions to research/advisory support.

5.10 The UK Government introduced the Coastal Communities Fund (CCF)[189] in 2012 to support economic development projects in coastal regions throughout the UK. The CCF aims to do this through the promotion of sustainable economic growth and jobs. The UK Government announced in 2015 that the CCF was to be extended to 2020/21 with at least £90m of new funding available across the UK from the period 2017/18 to 2020/21. Round 5 funding amounts to £40m to be allocated between April 2019 and March 2021. Since the start of the CCF, grants have been awarded to 295 projects across Scotland, England, Wales and Northern Ireland to a value of £174m – these projects are forecast to deliver 18,000 direct and indirect jobs, and help attract over £316m of additional funds to coastal areas.[190]

5.11 Seafish is a Non-Departmental Public Body (NDPB)[191] set up by the Fisheries Act in 1981 and is funded by a levy on the first sale of seafood products in the UK, including imported seafood, in accordance with the 1982 Fisheries Act. Seafish offers information, support and guidance on careers and training in the seafood industry, as well as providing research and data on a range of marine topics and promoting seafood throughout the UK. EMFF/MCA funding is available for training through Seafish.

5.12 The Centre for Environment, Fisheries and Aquaculture Sciences (Cefas)[192] is an executive agency sponsored by the Department for Environment, Food & Rural Affairs and offers research and advisory support to the UK marine sector through collection, management and interpretation of data on the aquatic environment, biodiversity and fisheries. Similar support is provided by the National Oceanography Centre[193], which undertakes research in large scale oceanography and ocean measurement technology innovation, working with businesses of all sizes on the creation and advancement of new technologies (these are funded by Innovate UK).

5.13 Contracts for Difference (CfD) replaced the Renewables Obligations in the UK following the Energy Act (2013) receiving Royal Assent. By fixing the prices received by low carbon generation, this reduces risk for renewable energy generators and encourages greater levels of investment. Whilst industry stakeholders had previously anticipated specific provision for wave and tidal energy in CfD auctions, the most recent round did not include any, so CfDs continue to largely benefit offshore wind in terms of marine energy. Future CfD auctions may still offer potential for the sector, and particularly tidal, if they can be adjusted to fairly accommodate emerging technologies. Marine energy projects using emerging technologies need a mix of tapered support mechanisms, of which CfD is just one. Beyond the capital support requirement for initial R&D, CfD could remove some of the challenges the wave and tidal technologies face in terms of routes to market during the generation phase. At present, wave and tidal energy needs support in this regard, and addressing shortcomings around CfD auctions is one way of achieving this.

5.14 At the national level and lower (i.e. devolved administrations and local authorities), a wide range of financial, research, networking and business support is on offer to the UK marine sector. A number of Funds are available in Scotland, including the recently relaunched Saltire Tidal Energy Challenge Fund[194], which has a principal aim of driving innovation and incentivising investment in the Scottish tidal energy sector, supporting a pathway to long term cost reduction. A total of £10m is available for projects related to the development of a material/technical innovation aimed at reducing the levelised cost of energy (LCOE) from tidal generation.

5.15 The Scottish Aquaculture Innovation Centre (SAIC)[195], one of eight innovation centres introduced by the Scottish Government to drive growth, connects industry with academia to encourage collaboration on priority issues as well as share insights and knowledge and attract addition UK and EU investment into Scottish aquaculture. Funding is available to a company active within Scottish aquaculture that is willing to contribute resources to the project. In collaboration with an industry partner, any recognised Scottish higher education institution can also apply. Projects should target: environmental and health challenges, particularly around sea lice and gill health; feed development optimising fish health and nutrition; unlocking capacity for aquaculture development through innovative, evidence-based approaches; or establishing a reliable supply of mollusc spat.

5.16 Examples of more local support mechanisms include the proposed development of an Aquaculture Hub for Innovation[196] as part of the Stirling and Clackmannanshire City Region Deal, which would see a centre for research and development opportunities installed in the region to support job growth and innovation in the sector. The Argyll Rural Growth Deal[197] also outlines a number of aquaculture, marine science and fisheries proposals, such as investment in critical marine infrastructure to support nearby industry, the delivery of a new aquaculture business incubator hub at Machrihanish, Kintyre, and the construction of a state of the art industry training centre in the European Marine Science Park. In England, Regional Growth Deals and Local Growth Funds have also been used in some parts to renew coastal infrastructure, e.g. in Dover.[198]

Support gaps and issues

5.17 Though many support mechanisms are available to the UK marine sector, support gaps and issues do currently exist. For instance, some support mechanisms set out specific criteria in terms of funding eligibility, with references to such criteria made in the previous section. The LIFE programme, for instance, typically does not cover proposals for small projects with total costs below €500,000, meaning smaller projects tackling marine and coastal management would likely have to find another funding source. Some support is also precluded by geography, particularly when it comes to funding, for instance eligibility for Horizon 2020 funding requires applicants to be a consortium made up of at least three organisations from different countries.[199] Interreg programmes – both cross-border and transnational – also have similar requirements for partner organisations from a minimum number of member states.

5.18 Concerns have been raised around the EMFF over the perceived lack of substantive funding for areas such as data collection, data control and increased protection of fish stocks and the marine environment.[200] This issue was flagged by stakeholders through the research consultation programme. There is a perception that though significant proportions of the current EMFF allocation is dedicated to supporting monitoring, control and enforcement, as well as the improvement and supply of scientific knowledge and collection and management of data (under Priority 3), there has been little effect in this area.

5.19 A further issue highlighted by stakeholders was the eligibility criteria around participation in EMFF projects. As with many EU funding programmes, large enterprises are precluded from participation (though in some instances they can be observers on projects). Low de minimis thresholds also prevent research and innovation active businesses from participation in successive projects. The perception is that this prevents projects from generating the maximum possible impact. A number of stakeholders in England and Scotland argued that this effectively excludes a large number of seafood processors, as well as some fishing businesses. It was felt that the consequence of this was that potential impacts were not maximised; however, this view does not acknowledge the issue of how impacts would be distributed on a spatial or individual company basis, were larger companies able to participate. Nevertheless, a mechanism such as a sliding scale of intervention – similar to that in some Horizon 2020 funding strands – may be a means to allow participation of larger fisheries and seafood processing businesses in projects supported by future mechanisms of this kind.

5.20 The availability of funding across a number of support mechanisms, notably those at EU level, is likely to be impacted by the uncertainties around Brexit, and the UK’s likely departure from the EU and its financial and technical support mechanisms. For instance, a no-deal Brexit would impact the UK’s eligibility for funding from the LIFE programme, with a risk that funded bodies or organisations would have to participate in projects with existing funding eliminated, or leave projects entirely. The UK Government has guaranteed to fund LIFE project bids submitted by UK organisations and approved by the European Commission while the UK is still a member of the EU, as well as LIFE funding due to UK organisations working as partners in projects led by other member states and those given funding before the end of 2020. Similar assurances have been provided over the participation of research organisations, higher education institutions and innovative businesses in Horizon 2020. Though the UK Government previously committed to “establishing a far-reaching science and innovation pact with the EU, facilitating the exchange of ideas and researchers”, this nevertheless poses a threat to future funding revenue streams for research and innovation beyond the 2014-2020 programme period. It remains unclear what access UK organisations will have to the European Commission’s future research framework programme.

5.21 There is also no clarity on future participation in Territorial Cooperation Programmes beyond 2020. These programmes have facilitated a number of innovative coastal projects around the UK, such as MaxiGreen through the Interreg IVa 2 Seas Programme.[201] The continued uncertainty around the impact of Brexit on future involvement in the programme may further constrain access to support for sustainable development of coastal areas.

5.22 Stakeholders also voiced a serious concern that exiting the EU without a withdrawal agreement would result in complete loss of access to EU funding support mechanisms in future.

5.23 At the outset of the Brexit negotiations process, it was anticipated that there will be a shift in focus to opportunities with Official Development Assistance (ODA) eligible countries to better target international aid to drive collaborative work. However, there has been little development on this front in recent years.

5.24 There are also some concerns over the funding process of mechanisms. For instance, concerns have been expressed over the Coastal Communities Fund’s bidding process with a perception that it favours larger communities and that the Fund’s short-term nature meant support for more holistic and sustainable approaches to regeneration in coastal areas lacked long term impact.[202] The bidding process of some other funds was also flagged by stakeholders as an issue, particularly where a two-stage process existed, requiring bidders to first submit an expression of interest. This often time-consuming and resource intensive approach acts to deter organisations and particularly businesses from applying, thereby acting as a barrier to innovation.

Contact

Email: Amy.McQueen@gov.scot

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