Operational Programme 'Highlands and Islands of Scotland'

Programme under the Convergence Objective, co-funded by the European Regional Development Fund (ERDF)

United Kingdom

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On 3 November 2007, the European Commission approved a Regional Operational Programme for the Highlands and Islands of Scotland for the period 2007-13. The Operational Programme falls within the framework laid out for the Convergence Objective and has a total budget of about €291 million. Community funding through the European Regional Development Fund (ERDF) amounts to about €122 million, which represents approximately 1.1% of the total EU investment earmarked for the United Kingdom under the Cohesion Policy 2007-13.

1. Purpose and aim of the programme

With Gross Domestic Product (GDP) per capita rates at 90% of the EU average, the Highlands and Islands faces a number of challenges thanks to a unique combination of geographic isolation, insularity, low population density and a widely dispersed enterprise base.

Despite the low GDP figure and the enterprise sector’s relatively low levels of value added, the region enjoys near full-employment. The programme aims to make a difference by enhancing competitive and innovative businesses. It will also offer support to the region’s research base and its higher and further education networks. In addition, work will be undertaken to promote the region’s natural and cultural heritage and address issues related to community stability.

2. Expected impact of the investment

The Programme is expected to create 4 700 jobs and help to establish 150 new businesses. Support will be offered to 250 small and medium sized enterprises (SMEs) for the implementation of environmental audits and the introduction of energy-saving systems. Funding will also be offered to about 30 research projects.

The Programme will provide support to the University of Highlands and Islands Millennium Institute (UHI). The UHI is a unique partnership of 15 colleges and research institutions. The network allows colleges throughout the region – along with students from remote areas – to better utilise information technology and thus create an effective virtual learning environment. The UHI aims to attain full university status and provide the region with a first-class research base, which should help it to attract and retain more students who would then be willing to stay and work in the region. Such an outcome will help the Highlands and Island address issues in fragile communities that are linked to falling population numbers.

3. Priorities

The Programme is structured around the following priorities:

Priority 1: Enhancing business competitiveness, commercialisation and innovation [approximately 40.8% of total funding]

This priority aims to expand the number and diversity of the region’s enterprises, while increasing their competitiveness. It will focus on a number of key sectors, including: renewable energy, food and drink, forestry, life sciences and new technologies in the nuclear decommissioning sector.

Priority 2: Enhancing key drivers of sustainable growth [approximately 31.6% of total funding]

The Programme has identified three key drivers on which it will focus attention under this priority:

  • The region’s core research and training capacities, which are nurtured by the UHI and its network;
  • The wider research infrastructure; and
  • The sustainable economic use of the region’s natural and cultural assets.
Priority 3: Enhancing the sustainable growth of peripheral and fragile communities [approximately 25.1% of total funding]

The sustainability of fragile communities living on the islands and in remote areas of the mainland is a particularly important issue. Many of these communities have limited access to services and suffer from out-migration and a weakened enterprise base. In response, this priority will focus on developing small-scale infrastructure projects that will provide enterprise-related facilities and training and e-skills centres. Renewable energy, transport and telecoms are subjects that will also receive Programme support.

Priority 4: Technical assistance [approximately 2.5% of total funding]

Provision exists for technical assistance to help implement the Operational Programme.

Financial and Technical information

Operational Programme 'Highlands and Islands of Scotland'

Intervention Type

Operational Programme

CCI no


Number of decision


Final approval date


Breakdown of finances by priority axis

Priority Axis EU Investment National Public Contribution Total Public Contribution
Enhancing business competitiveness, commercialisation and innovation 47 526 332 71 289 496 118 815 828
Enhancing key drivers of sustainable growth 41 433 214 50 640 596 92 073 810
Enhancing the sustainable growth of peripheral and fragile communities 29 246 973 43 870 460 73 117 433
Technical assistance 3 655 873 3 655 873 7 311 746
Total 121 862 392 169 456 425 291 318 817