How suitable were the conditions and support attached to SLF 2012-16 funding?
The second research question concerned the efficacy of the SLF in supporting community ownership. Initial discussions with key delivery partners in the Scottish Government primed the evaluation to take into account areas of the fund which represented significant unknowns or were contested in some way. Five elements were earmarked for analysis: the delivery arrangements of the SLF, pre-acquisition support, post-acquisition support, capital and revenue funding, and the operation of the Committee.
The Scottish Land Fund delivery process and headline figures
The SLF is delivered by Big Lottery Fund and HIE through a multi-stage process illustrated in the flowchart presented in Figure 2, below.
Communities access the SLF through a number of routes. Most applicants make contact with Big Lottery Fund first, often through its 'Single Front Door' funding portal, and are forwarded on to the SLF. After making sure that the project is likely to meet the eligibility criteria for the SLF, applicants are then referred to HIE, who note project details, and assign the relevant case officer covering the applicant's location. Some groups are notified of the SLF by HIE, and make contact with HIE first, however the group are directed to proceed through Big Lottery Fund initially and a formal referral is always made to HIE. In total, 167 referrals from Big Lottery Fund to HIE have been made over the course of the SLF.
Applicants are then contacted by the HIE case officer, whose job is to guide the community in preparing a formal application to the SLF. The case officer would make contact with the community applicant normally within days of a referral being made. The case officer would ensure that the community group met all essential criteria of the SLF, for example that applicants could demonstrate the support of their communities (often through a ballot of the local community), or that community bodies were properly incorporated. Case officers would also help communities ensure that the business case for ownership stacked up. Case officers would often get very closely involved with applications, and would make site visits - commonly communities were visited many times over the course of preparing an application - to support the project and speak at community meetings. Case officer contact formally ended once an application was submitted to Big Lottery Fund.
Once an application was handed over to Big Lottery Fund, the project would be assigned a funding officer with responsibility for assessing applications. The funding officer would prepare an assessment report which covered the specifics and intentions of the project, and perceptions of the capacity of the group to achieve their outcomes. The funding officer would also be the applicant's point of contact once an award was made, providing support, disbursing funds and procuring necessary legal assistance, and in grant monitoring.
Figure 2. Flow chart of the Scottish Land Fund funding process
The separation of the HIE case officer and Big Lottery Fund funding officer roles enabled case officers to get closely involved in projects without compromising objectivity in the assessment process. In practice, the Funding Officer would often receive a draft application before a formal application was submitted, and would make comments about how the application would be improved. This process would strengthen applications significantly before they were formally lodged.
The application was then scheduled for consideration by the SLF Committee at their next meeting. The SLF Committee was comprised of five individuals, led by a Chair, and it met four times per year. The Committee could vote either to approve or reject an application. No formal scoring system was used by the Committee itself to judge applications (this being done as part of the assessment process and presented to the committee), and decisions were reached instead by consensus or majority vote.
In total, 55 awards were made over the course of the SLF. Two of these successful applicants were unable to carry out their purchases and did not take up their award, two others could not arrange complete acquisitions before the completion of SLF 2012-16 and were put back on the pipeline for SLF 2016-20 (though still took up a small portion of their awards for legal fees, mapping costs and other assistance), two awards were made to the same group, and one additional beneficiary did not take up £510 of their award. The total value of awards successfully disbursed to communities was £9,833,606 over the course of the SLF 2012-16. Awards were made in 14 different local authorities, with 33 SLF beneficiaries in communities within HIE's operational area and 17 situated in the rest of Scotland.
Only five applications were rejected (less than ten per cent of awards approved), two in year three (2014-15) and three in year four at the final Committee meeting in November 2015. 45 groups withdrew from the pipeline, of which eleven were deemed not to be a fit for the SLF and referred back to Big Lottery Fund. A total of 65 groups remain on the pipeline for the new SLF 2016-20, with a total ask in capital and revenue costs of £9,737,195. Of this total, 9 groups (with a total value of £2,010,000) are not expected to progress to application, leaving an expected 56 groups and £7,727,195 in the pipeline for SLF 2016-20 funding.
Perceptions of the SLF delivery process
Flexibility of the SLF delivery process
Both delivery partners and SLF beneficiaries were very satisfied by the SLF application procedure and delivery process. SLF beneficiaries compared the application procedure favourably to several other large funds, with praise directed towards the relatively straightforward application process, the quality of guidance and support given by Big Lottery Fund fund officers and HIE case officers, and the flexibility involved with the application procedure which responded effectively to the individual characteristics of the application.
Community asset acquisitions under the SLF could entail a long and drawn out process of developing plans for asset development, establishing ownership of the land, and protracted negotiation between communities and landowner. Alternatively acquisition could be a rushed and time-critical process, for example if land was suddenly put on the open market and communities were faced with a short time to respond. An appropriate fund for community ownership had to respond to both contingencies. Delivery partner and community body interviewees felt the SLF was well-equipped to face up to this challenge by incorporating a flexible approach to processing applications.
Applications could, if circumstances demanded, be fast tracked through the application process by Big Lottery Fund funding officers. One group benefitted from this quite significantly when the land they were occupying was suddenly put on the market. The sale of the land one community occupied (Beneficiary F) to a private buyer was considered likely to jeopardise the ability of the community to continue its operations and land use. This group's application was fast-tracked by the Big Lottery Fund funding manager to meet the next Committee meeting date, and approval was received in time for the community to be able to finance the acquisition. This flexibility was improved by clear responsibilities being divided between Big Lottery Fund and HIE, and good lines of communication being maintained between the two organisations.
Although formal approval for funding could only be granted by the SLF Committee which met four times per year, in exceptional circumstances the Committee could grant awards by teleconference. There were four cases of this occurring. While committee members felt that teleconference meetings were somewhat cumbersome over the phone and lacked the cohesiveness and productivity of face-to-face meetings, committee members agreed that this facility was an effective method of approving projects on a flexible basis.
The role of case officers
The clear separation of the organisational responsibilities of HIE and Big Lottery Fund throughout the SLF delivery process was highly praised by delivery partner interviewees. The separation of case officers from the assessment process enabled case officers to become very involved and highly supportive of community bodies without compromising objectivity in the funding allocation process. Consequently, the case officer role was universally felt by SLF beneficiaries to have significantly improved the quality of applications, and in gearing the community to meet the requirements of the fund. The specific aspects with which case officers supported SLF beneficiaries was manifested in various forms, for instance in helping the community to take on a suitable organisational structure, how to go about attracting local support, or in conducting effective community engagement.
One aspect of the case officer role seen as particularly beneficial by both case officers themselves and SLF beneficiaries interviewed were the visits made by case officers to project sites. HIE case officers made at least one visit to each case site, and often made many more (up to 15 individual visits), depending on the complexity of the project. This was seen as helpful for communities as it demonstrated an interest from the SLF itself towards potential projects and was noted as an encouraging factor by several community interviewees. In one SLF beneficiary's experience, the visit of a case officer to a community consultation was important in demonstrating the feasibility of the project to the wider community and building in community support at an early stage. Such visits also gained projects the confidence of the wider community - one project (Beneficiary D) claimed a visit by a case officer in the early stages had 'made [the project] seem more real'. The benefit of case visits was also felt on the delivery side, as HIE case officers found visits enabled a better-informed appraisal of the merits and deficiencies of a project by being seeing the project first-hand.
Inequalities between HIE and rest of Scotland communities
Communities within HIE's operational area appeared to be more successful than communities in the rest of Scotland in attaining SLF funding. Just over half (54%) of initial referrals from Big Lottery Fund to HIE came from communities in HIE's operational areas, yet almost two thirds (65%) of awards disbursed went to these communities. Unusually for HIE, their role within the SLF is pan-Scotland and not confined to HIE's operating area in the North and West of Scotland. This enabled the extension of HIE's considerable expertise in supporting community ownership to rest of Scotland communities. Nevertheless, communities in the rest of Scotland were assigned just two of the seven case officers, who each supported vast areas of land across many local authorities. Case officers interviewed believed that the rest of Scotland was not neglected in this regard, and there was not a significant disparity evident between case officer workloads in HIE and rest of Scotland areas . However, a belief that rest of Scotland areas could not access the same level of support was held by some delivery partner and committee interviewees. Community applicants across HIE and rest of Scotland areas spoke equally highly of case officers, suggesting that non-financial pre-acquisition support available was not a key source of the inequality seen in grants made to HIE and rest of Scotland communities.
In many cases, SLF applicants had some form of pre-existing relationship with HIE, and some larger and more growth-focused communities were account managed by HIE prior to application. Many communities within HIE's operational area had made initial contact with the SLF through HIE rather than the Big Lottery Fund. Communities in the rest of Scotland lacked such an integrated and widely-known agency which supported community ownership. Delivery partner interviewees considered this pre-existing relationship and knowledge of HIE was the reason that HIE communities were quicker to access the SLF, particularly in the early years of the fund, than rest of Scotland communities.
Inequalities in pre-acquisition support
Applicants to the SLF in the pre-acquisition stage had to demonstrate the feasibility of their project, including the production of a business plan. This was often a costly and time-consuming procedure, requiring the production in all cases of professional business plans, and in a few more complex cases, expensive ground surveys, specialist consultancy support, legal fees, or extensive mapping to define the boundaries of the land being sold.
The only pre-acquisition support available across the whole of Scotland was Big Lottery Fund's Investing in Ideas fund, which was accessed by most applicants and provided up to £10,000 for pre-acquisition support costs. Investing in Ideas tended to be used for business plans, feasibility studies or other technical assistance. In more complex projects, the £10,000 limit could quickly be reached. SLF applicants would have to formally apply to Investing in Ideas and were not guaranteed to receive it, however in practice SLF applicants were prioritised above other applicants and there was an almost 100% success rate for Investing in Ideas for applicants who had come through the SLF. Investing in Ideas provided a total of £418,583 to 47 SLF applicants over the lifetime of the fund.
An Investing in Ideas application took a maximum of six weeks. However, SLF applicants could also be fast-tracked through the Investing in Ideas process if circumstances demanded, and awards could be made in as little as four weeks. Nevertheless, one community interviewee (Beneficiary C) did not pursue an Investing in Ideas award because they perceived it as too onerous and time-consuming, instead turning to raising funds locally. While other SLF beneficiaries interviewed had a positive experience applying for Investing in Ideas, delivery partners were clear that this was not a workable solution in the long term since it reduced the pot of money available to applicants outwith the SLF pipeline, and was always accompanied by some degree of inflexibility and uncertainty.
Delivery partners felt that a lack of pre-acquisition financial assistance for communities outwith HIE's operational area was a major barrier in delivering the fund's stated outcomes. Whereas Investing in Ideas funding was often the only source of financial support available to rest of Scotland communities in the pre-acquisition stage, applicants from HIE areas could also access a range of flexible support options directly from HIE. In the pre-acquisition stage, HIE provided SLF applicants in HIE communities with a total of £320,000 over the course of the SLF. This financial assistance tended to support the more complex projects (particularly estate and woodland projects) which faced greater challenges in demonstrating project viability in the early stages.
Although case officers and other delivery partners believed that the financial limit of Investing in Ideas was too low and likely constrained the development of some applicants, none of the communities spoken to considered the £10,000 limit restrictive, despite many HIE communities accessing far larger amounts . In the main, SLF applicants in the south and east of Scotland tended to acquire assets which were smaller, more amenity-based, in better condition, and less complex than those in HIE communities. Smaller projects may have only required the production of a business plan, which would in most cases cost significantly less than £10,000. More complex projects often entailed more comprehensive technical assistance in the pre-acquisition stage for often extensive land mapping, ground surveys, complex legal advice, and other specialised technical assistance. Nevertheless, the lack of additional pre-acquisition support would be a significant constraint on the development of more complex projects within rest of Scotland communities.
Inequalities in post-acquisition support
Communities in HIE areas also benefitted from a continuity of relationship with HIE which was unavailable to rest of Scotland areas. Although HIE's formal role in supporting SLF applicants ended upon making an application to Big Lottery Fund, it was not uncommon in practice for HIE to maintain contact with groups following acquisition, and in some cases, if they met HIE criteria, the community would enter into account management by HIE following acquisition. Case officers in rest of Scotland areas spoke of being 'frustrated' that the relationship with rest of Scotland communities could not continue following application. While the Big Lottery Fund provide account management for larger projects for three years, this was primarily a grant monitoring relationship with more limited support options compared with HIE.
The lack of post-acquisition support available to rest of Scotland communities is problematic in the long-term both in terms of the continued development of community assets and in risk management. While community asset owners (both those who have come through the SLF and those who acquire their assets through other means) within HIE areas can turn to HIE's expertise and internal financial resources if they came into trouble, rest of Scotland communities cannot access a comparable source of support. While community asset ownership sector has so far seen few significant difficulties and no major failures, the lack of a single body with expertise of community-led development and the ability to disburse financial support and technical expertise on a flexible basis for the rest of Scotland is a significant consideration for risk management in the wider community land sector in the long-term.
The importance of revenue funding
Although primarily a mechanism for enabling acquisition through funding capital costs (including legal fees), the SLF also funded revenue costs up to a maximum of £50,000 over two years post-acquisition. The vast majority of revenue funding was used to fund development worker posts, which generally carried a range of responsibilities including fundraising, strategy, project management and service delivery. These posts also often called for specific project-relevant skills, for example a housing officer was employed by Beneficiary G, and a forestry officer was employed by Beneficiary C. Over the course of the SLF, 37 of the beneficiaries (73%) applied for and were successful in securing some revenue funding in their application, over the length of the SLF, with 10 beneficiaries attaining the maximum £50,000.
The average revenue funding disbursed per award decreased over the course of the SLF, from £33,087 per award across years one and two, to £18,577 in year three, and £8,819 in year four. The decreasing trend observed is largely due to there being no carry-over of funds permitted after the SLF's expiration at the end of March 2016, and the requirement for all revenue funding to be spent before this date regardless of the date of application. This in effect limited those receiving their award at the end of year three to one year of funding, while awards made in the middle of year four would only be entitled to six months of funding. Given that there was an often lengthy process between initial contact with the group and awards being made (an average of one year across all SLF beneficiaries), there was a significant inequality between early applicants (years one and two), and later applicants (years three and four) in their access to revenue funding. This was seen as particularly unfair by delivery partner interviewees, and remains a significant problem in the new SLF 2016-20, which maintains this arrangement.
There was also significant disagreement between different stakeholder groups over the value and importance of revenue funding. Revenue funding was seen as crucial to achieving SLF outcomes by the delivery partners, and both Big Lottery Fund and HIE case officers would actively encourage applicants to incorporate a significant revenue funding component into their application. Delivery partners felt it particularly important for community bodies to have paid development workers on board who could bring energy, professionalism and commitment to community ownership projects, and this was seen to significantly enhance the capacity of community groups significantly, compared with volunteer-run boards.
The SLF Committee attached far less value to revenue funding. While recognising that some revenue funding was appropriate in certain cases, Committee members understood the overall ambition of the SLF to be to provide the capital costs of asset acquisition, not to fund the process of asset acquisition or to fund post-acquisition work. The Committee also felt that many projects, particularly in the first year, made weak cases for the inclusion of revenue funding, and that in many cases the value of revenue funding was disproportionately large compared to the capital costs of acquisition. For the Committee, revenue funding when not properly justified lessened value for money in applications, suggesting that if competition was a bigger factor, economy in the revenue funding ask would have been a competitive advantage.
The division between the SLF delivery staff and the Committee reflected a wider dissonance in perception over the purpose of the SLF, which was echoed by community land sector representative interviewees. Amongst these groups, there were different perceptions over whether the SLF was simply a mechanism for acquiring assets, or if it also had responsibility to facilitate the development of the asset. This is suggestive of a lack of policy clarity over the relative roles of capital and revenue funding in delivering SLF outcomes. It also suggests that the value of revenue funding has not been justified strongly enough in the application detail which reaches the Committee.
SLF beneficiaries in receipt of revenue funding were universally supportive of the development officer post, most of them describing it as an essential part of the funding. Several groups could point to key services being delivered which would have taken much longer to come into fruition had a paid member of staff not been present. This evidence suggests, in line with the view of delivery partner stakeholders, that revenue funding should be considered a key part of the SLF, particularly if the long-term outcomes specified by the SLF 2012-16 are maintained in the SLF 2016-20. A fuller elaboration of how the revenue funding component facilitated the achievement of SLF outcomes is provided in the following findings section.
Recommendation 1. Ensure all delivery partners and Committee members understand the role of revenue funding in achieving SLF outcomes, and appreciate the SLF as an integrated fund for sustainable asset acquisition and limited post-acquisition support costs.
Effectiveness of the SLF Committee
The SLF 2012-16 had a Committee of five individuals, led by a chair, which met four times per year. The Committee approved all applications in the period 2012-16 bar five, two of which were rejected in 2014, and three of which were rejected at the final Committee meeting in November 2015. Since the SLF was not particularly competitive over its life cycle, the Committee largely managed to avoid having to make difficult decisions over the allocation of funding. Some Committee members felt this restricted the effectiveness of the Committee, consigning them to a rubber stamping role. The Committee did not however feel that any projects which were passed were particularly deficient, since support from case officers and Funding Officers had strengthened applications considerably prior to the Committee receiving them.
Some committee members interviewed also felt they lacked sufficient guidelines at many instances on judging criteria. The committee at numerous points had to request clarification on policy from the Scottish Government, and some members felt that the basis for making decisions was not explicit enough, particularly at the last meeting in which three were rejected. One member suggested that a way forward would be to adopt a systematic scoring method backed by clearer guidelines of Scottish Government priorities for the fund, while ensuring that changes did not constrain the Committee in decision making. The Committee were however provided with assessment scoring undertaken during the initial assessment process.
Owing to the clarity of funding guidance, the pre-acquisition support and the efficient and thorough assessment process prior to the application going to Committee, there was little competition between applicants, few rejections, and the decision making capacity of the Committee was not put under significant stress over the course of the SLF. Nevertheless, the views of the previous SLF Committee stress the importance of clarity of policy guidance going forward with SLF 2016-20, where competition may be fiercer.
Recommendation 2. Ensure the new SLF Committee members are provided with clear guidance for making awards and understand how to compare the benefits of urban and rural applications
Both SLF beneficiary and delivery partner interviewees were very positive about the SLF funding conditions and its administration. Many compared the application process favourably to comparator funds, and the flexibility displayed in fast-tracking applications avoided a likely negative outcome in at least one of the projects analysed.
Nevertheless there are two major concerns which have emerged. The first is a significant disparity in support available to communities in HIE areas and those across the rest of Scotland across the asset acquisition and development process. This is most clearly apparent in the pre-acquisition support available, where HIE communities are able to draw upon a range of flexible support funds (accessing an additional £320,000 over the course of the SLF), leaving rest of Scotland communities limited to applications to the Investing in Ideas fund which had a £10,000 ceiling (£418,583 was invested through Investing in Ideas across both HIE and rest of Scotland communities in total). HIE communities could also expect their relationship with HIE to continue following receipt of SLF funds, with communities sometimes passing into account management through HIE. While SLF beneficiaries could access some grant management support from BIG Lottery Fund, this has long-term implications for risk management in community ownership in the rest of Scotland as a sector, which can draw on single organisation with HIE's expertise, flexibility of support, and resources.
The second major concern is a tension between SLF Committee members and delivery partners over the purpose of the SLF. While the Committee saw the fund primarily as a tool for funding the capital costs associated with acquisition, delivery partners saw it as providing an integrated approach to asset acquisition and facilitating development. At the heart of this disagreement is the importance attached to funding a development worker post to facilitate development upon acquisition. The SLF beneficiaries interviewed were unanimous in their perception of the importance of development workers, which helped to improve post-acquisition outcomes in many of the cases analysed. Nevertheless, this difference in viewpoints suggests that the role of revenue and capital funding in achieving SLF outcomes should be made clear to all stakeholders in the new SLF 2012-2016.
Email: Clare Magill, email@example.com