Skills Development Scotland support for training, the employment of disadvantaged/disabled workers and consultancy 2014-20.

This scheme operates under Commission Regulation (EC) No 651/2014 of 17th June 2014 declaring certain categories of aid compatible with the common market in application of Articles 107 and 108 of the Treaty (General Block Exemption Regulation) as published in the Official Journal of the European Union (26th June 2014 - L 187/1).

Support for

Training and for the employment of disadvantaged/disabled workers is covered under Articles 31-35; and Consultancy is covered under Article 18 of the General Block Exemption Regulation.

The legal basis for the scheme: The Skills Development Scotland Co Limited (SDS) is a company incorporated under the UK Companies Acts.  SDS's operations are funded virtually exclusively by the Scottish Government.  SDS may provide training aid and incentives to recruit disadvantaged or disabled workers in accordance with Articles 31-35 of the General Block Exemption Regulation.

This scheme covers discretionary funding awarded to enterprises (1) to assist them with business improvements involving the training of their employees and (2) encourage them to recruit disadvantaged or disabled workers. There is no automatic entitlement to support from Skills Development Scotland.  Assistance will be offered through a range of products and services delivered by Skills Development Scotland, based on the merits of the proposed project and an assessment of need for assistance subject to rigorous due diligence appraisal.

General Provisions

The level of aid available will depend on whether the applicant is a Large, Small or Medium Sized Enterprise, as defined by the European Commission. Small and Medium Sized Enterprises are undertakings fulfilling the criteria laid down in Annex 1 to the General Block Exemption Regulation.

http://ec.europa.eu/competition/state_aid/legislation/gber_regulation_annex1_en.pdf

http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2014.187.01.0001.01.ENG

Undertakings not fulfilling the criteria are Large Enterprises.

Applicants must submit an application for assistance to Skills Development Scotland before work on the project or activity has started, and the application must be approved in writing before work can commence on the project or activity.

Where the applicant is a Large Enterprise (except where the aid relates to Disadvantaged or Disabled Workers), additional conditions will be applied to ensure that the aid has an incentive effect. The applicant must provide documentation which establishes one or more of the following:

A material increase in

  1. the size or scope of the project/activity due to the aid,
  2. the total amount spent by the beneficiary on the project/activity due to the aid or
  3. a material increase in the speed of completion of the project/activity, as a result of the aid.

Support for consultancy is only available to Small or Medium Sized Enterprises.

Skills Development Scotland is required to provide annual returns to the Scottish and UK Governments and European Commission detailing aid provided under this scheme, and to maintain detailed records regarding individual aid provided under the scheme. Such records must contain all information necessary to establish that the conditions laid down in the Regulation are fulfilled, including information on the status of any undertaking whose entitlement to aid or a bonus depends on its status as an SME, information on the incentive effect of the aid, and information making it possible to establish the precise amount of eligible costs for the purpose of applying the Regulation. Records must be maintained for 10 years from the date on which the last aid was granted under the scheme, in this case until at least 31 December 2028. The information which must be provided to Skills Development Scotland / retained by the aid recipient will be set out in the Offer of Grant.

Aid Intensities

Training

The maximum aid intensity allowed is based on a percentage of eligible costs, and depends on the type of training and the size of the company, as follows:
The aid intensity shall not exceed 50% of the eligible costs. It may be increased, up to a maximum aid intensity of 70% of the eligible costs, as follows:

(a)     by 10% if the training is given to workers with disabilities or disadvantaged workers;

(b)     by 10% if the aid is granted to medium-sized enterprises and by 20% if the aid is granted to small enterprises;

Where the aid is granted in the maritime transport sector, the aid intensity may be increased to 100% of the eligible costs provided that the following conditions are met:

(a)     the trainees are not active members of the crew but are supernumerary on board; and

(b)     the training is carried out on board of ships entered in Union registers.

There is a single project limit of €2million. Aid exceeding €2 million to any single project cannot be authorised under the Skills Development Scotland Training Aid Scheme, and must be notified to the Commission.

The aid intensity shall not exceed 50% of the eligible costs in respect of (1) the recruitment of disadvantaged workers and (2) consultancy. The aid intensity for disabled workers shall not exceed 75% of the eligible costs.

Disabled worker means any person who:

(a) is recognised as worker with disabilities under national law; or

(b) has long-term physical, mental, intellectual or sensory impairment(s) which, in interaction with various barriers, may hinder their full and effective participation in a work environment on an equal basis with other workers;

'Disadvantaged worker' means any person who:

(a)     has not been in regular paid employment for the previous 6 months; or

(b)     is between 15 and 24 years of age; or

(c)     has not attained an upper secondary educational or vocational qualification (International Standard Classification of Education 3) or is within two years after completing full-time education and who has not previously obtained his or her first regular paid employment; or

(d)     is over the age of 50 years; or

(e)     lives as a single adult with one or more dependents; or

(f)     works in a sector or profession in a Member State where the gender imbalance is at least 25% higher than the average gender imbalance across all economic sectors in that Member State, and belongs to that underrepresented gender group; or

(g)     is a member of an ethnic minority within a Member State and who requires development of his or her linguistic, vocational training or work experience profile to enhance prospects of gaining access to stable employment;

'Severely Disadvantaged Worker' means any person who:

(a)     has not been in regular paid employment for at least 24 months; or

(b)     has not been in regular paid employment for at least 12 months and belongs to one of the categories (b) to (g) mentioned under the definition of 'Disadvantaged Worker'.

'Sheltered Employment' means employment in an undertaking where at least 30% of workers are workers with disabilities.

Eligible Costs are as follows:

For Training

(a) Trainers' personnel costs, for the hours during which the trainers participate in the training;

(b) Trainers' and Trainees' operating costs directly relating to the training project such as travel expenses, materials and supplies directly related to the project, depreciation of tools and equipment, to the extent that they are used exclusively for the training project. Accommodation costs are excluded except for the minimum necessary accommodation costs for Trainees who are workers with disabilities;

(c) costs of advisory, guidance and counselling services linked to the training project;

(d) Trainees' personnel costs and general indirect costs (administrative costs, rent, overheads) for the hours during which the Trainees participate in the training.

For activities targeted at disadvantaged workers, the wage costs over a maximum period of 12 months following recruitment and 24 months in the case of a severely disadvantaged worker.

Eligible costs for support for the employment of disabled workers shall be the wage costs over any given duration which the disabled worker is employed.

Eligible costs for consultancy are the costs of consultancy services provided by external consultants provided the services are not a continuous or periodic activity nor relate to the undertaking's usual operating costs, such as routine tax consultancy services, regular legal services or advertising.

Exclusions

1. Export Aid

The General Block Exemption Regulation and this scheme do not apply to the following:

  • Aid to export-related activities, namely aid directly linked to the quantities exported, to the establishment and operation of a distribution network or to other current costs linked to export activity
  • Aid contingent upon the use of domestic over imported goods.

These types of aid are not allowed under any European regulations.

2. Sectoral

This scheme applies to all sectors of the economy. Aid favouring activities in the processing and marketing of agricultural products is allowable, unless the aid is aimed at directly influencing the price or quantity of primary production i.e.

  • The amount of the aid is fixed on the basis of the price or quantity of such products purchased from primary producers or put on the market by the undertakings concerned; or
  • The aid is conditional on being partly or entirely passed on to primary producers.

Agricultural product means products listed in Annex 1 to the Treaty (except fishery and aquaculture products), cork products, and products intended to imitate or substitute milk and milk products.

3. Recovery of Illegal Aid / Undertakings in Difficulty

The following are explicitly excluded from this scheme:

  • Payment of aid in favour of an undertaking which is subject to an outstanding recovery order following a previous Commission decision declaring an aid illegal and incompatible with the common market; and
  • Aid to undertakings in difficulty, defined as follows:
    a)     In the case of a limited liability company, where more than half of its registered capital has disappeared and more than one quarter of that capital has been lost over the preceding 12 months; or
    b)     In the case of a company where at least some members have unlimited liability for the debt of the company, where more than half its capital as shown in the company accounts has disappeared and more than one quarter of that capital has been lost over the preceding 12 months; or
    c)     Whatever, the type of company concerned, when it fulfils the criteria under its domestic law for being the subject of collective insolvency proceedings.
    d)     An SME which has been incorporated for less than 3 years shall not be considered, for the purposes of this scheme, to be in difficulty unless point (c) applies.

Cumulation of Aid

Aid provided under the scheme may be cumulated with other forms of aid in relation to the same eligible costs only within the aid intensity limits for this scheme. Therefore, if the maximum aid intensity is determined to be 60%, then the total of Skills Development Scotland, ERDF / ESF and other public funding made available to the project or activity cannot exceed this level. De Minimis aid cannot be used to "top up" the aid awarded under this or any other scheme, in respect of the same eligible costs.