The Scottish Government

Main Findings

• There is a compelling case for retaining the SRPF, but we recommend that the three constituent strands of funding should be amalgamated to create a single fund, entitled the Scottish Rural Challenge Fund.
• We recommend that the operational features of the Fund are reviewed, especially with regard to the mechanisms for providing support and guidance to applicants and the terms and conditions of funding.
• Although most of the partnerships applying for funding were experienced in fundraising, there was evidence of a fairly widespread lack of understanding about the objectives of the SRPF. The development of a support network, based possibly on existing local partnerships would appear to be a beneficial development.
• It would be advantageous to introduce a new category of "small projects" within the Scheme, which would allow community groups to secure limited funding to develop their project, prior to submission for a full project grant.
• We recommend that the terms and conditions of funding are reviewed in three areas, namely with regard to the maximum ceiling on eligible grants, the single annual call for applications and the lack of provision for carrying over funds between years.
• There was clear evidence that the SRPF had contributed to capacity building in rural areas, but it was much more difficult to assess its overall contribution to economic and social development in tangible terms. Instituting an annual audit of a sub-sample of projects 'on the ground' might rectify this deficiency.

Introduction

The Scottish Rural Partnership Fund (SRPF), set up to provide financial support to communities in rural Scotland, has existed in its present format for seven years. It is not a single fund, but instead comprises three separate strands, namely: the Rural Challenge Fund (RCF), which provides grants for innovative projects aimed at addressing rural problems; the Rural Strategic Support Fund (RSSF), which awards grants primarily to facilitate the establishment of Local Rural Partnerships; and the Local Capital Grant Scheme (LCGS), which offers awards to fund new or upgraded community facilities. Together, these three strands handed out 3.18M in 2003/04.

However, there has been increasing concern within the Scottish Executive that the SRPF may no longer be fully realising its objectives. Accordingly, a review of the Scheme was commissioned with the aim of investigating three issues: i) the continued justification for the Scheme and its three component strands; ii) ways in which its operation might be improved to better meet its objectives; and iii) its output and benefits. These three issues were investigated through a survey and this review reports on the key findings.

The Survey

The survey involved a mixture of desk-based research, an audit of a sample of existing projects and consultations with key stakeholders. Records held by the Scottish Executive for 312 of the applications made in the 2002/03 and 2003/04 funding rounds were examined in detail and used as the basis for drawing a sample of successful and unsuccessful applications, to be surveyed. Out of 120 applicants initially contacted, 67 usable returns were obtained.

The audit of projects was complemented by a survey of key Scottish stakeholders, including Local Rural Partnerships (LRPs), Community Planning Partnerships (CPPs), Councils for Voluntary Services (CsVS), Local Authorities, Local Enterprise Companies (LECs) and the Scottish National Rural Partnership, as well as consultations with staff in 7 Units within the Scottish Executive. Out of a total of 116 stakeholders surveyed in a postal survey, 58 usable returns were obtained. In addition, a further 19 stakeholders were contacted and interviewed face-to-face to get more detailed opinions.

Justification for Retaining the SRPF

A study of a wide range of schemes open to rural communities in Scotland for funding projects revealed that the SRPF was relatively unique in respect of both its focus on rural communities and its lack of restrictions on the type of proposals eligible for funding. Both these features were seen as one of the Scheme's strengths. However, the corollary of this "openness" was that the Fund had no very clear framework for guiding funding towards the most disadvantaged rural areas, despite its stated objective of "closing the opportunity gap". Thus, it potentially ended up funding the best project proposals, rather than targeting local areas having the greatest need. Nevertheless, over 75% of applicants and stakeholders surveyed considered that the Scheme was both relevant to the needs of rural areas and a valuable addition to the portfolio of funds open to rural communities in Scotland.

On the other hand, the logic for having three funding strands within the SRPF, namely the RCF, the RSSF and the LCGS, was considered out-dated. First, the rationale for the RSSF was considered to no longer hold. Set up primarily to provide pump-priming funding for LRPs, the advent of CPPs and Social Inclusion Partnerships has partially undermined the role of LRPs. Added to this, the number of applications to the RSSF has fallen sharply in recent years. Equally, although there was evidence of demand for LCGS funding, its presence as a separate and distinctive strand was deemed by many stakeholders merely to fragment the overall Fund and diminish its public profile. Thus, there appear both administrative and practical advantages in integrating the three strands of the SRPF into a single Scheme, entitled the Scottish Rural Challenge Fund.

Improving the Operation of the SRPF

Alongside the wide expression of support for retaining the SRPF were calls for improvements in the way that the Scheme was operated. The areas attracting most comment were those related to the support and guidance offered to applicants and the terms and conditions of funding.

The audit of applications revealed that, although most of the groups had significant experience in fundraising, the majority of the applicants considered that the provision of support and guidance to them was inadequate. Whilst undoubtedly expectations of the assistance that could be provided by the Scottish Executive were unrealistically high, the evaluation threw up several noteworthy concerns.

Over 20% of all proposals submitted in the 2003/04 round were deemed ineligible, suggesting that applicants were unclear about the objectives of the SRPF. This impression was reinforced by the survey of stakeholders, nearly half of whom considered the promotion and advertising of the Fund was inadequate. Moreover, investigation of regional differences in the number and success rate of applications in the 2002/03 and 2003/04 rounds revealed a close association with the level of support provide by Local Authorities and LECs to applicants. Together these observations suggest that the current ad hoc arrangements for advising and informing applicants may need to be replaced by a more formal support network, based on local agencies and partnerships.

At the same time, the quality of 30% to 40% of the proposals eligible for funding was also low. Many submissions appeared rushed and not fully formed. Currently, there is no formal provision in the Scheme for funding small feasibility studies to permit the development of the basic concept behind the project. Against the background of growing concern by the Scottish Executive about the quality of the proposals submitted to the Scheme, such a development might be beneficial.

Predictably, the terms and conditions of funding attracted considerable comment from both applicants and stakeholders. In particular, the present ceilings of 50,000 on RCF and RSSF grants and 100,000 on LCGS awards, unchanged since 1996/97 were universally considered out-dated. In the case of the LCGS, the maximum eligible grant from the SRPF represents only about 25% of the cost of a new village hall.

While there was general acceptance of the requirement for match funding from other sources, there was a widespread view that having only one call per year for SRPF applications, made it difficult to align funding from other grant-awarding bodies. Accordingly, there was strong support for moving to two calls per year.

Finally, the lack of provision for carrying over grants between years or for virement between budget headings was cited as a major problem by many applicants. In capital projects, difficulties in getting building warrants on time often meant that the project start was delayed and so the community group was unable to spend all the money within the allotted time. For revenue projects, the difficulty of getting all the match funders to release funds simultaneously gave rise to similar problems. In particular, many trust funds would only approve an award, subsequent to an SRPF grant being awarded, so that community groups wasted months in trying to get everybody to sign up. Changes in the conditions of award, which address the problems, might greatly reduce the administrative burdens on community groups.

Output and Benefits of the Scheme

Evaluating the outcomes and benefits of the Scheme on rural development was particularly difficult. While the audit indicated strongly that SRPF-funded projects had made a very positive contribution to community capacity building, in terms of both skills and self-confidence. However, it was more difficult to establish tangible economic and social benefits. The responses given to the survey team tended to be very non-specific about the project outcomes. More informative perhaps were the responses of stakeholders, who were more critical of the Scheme. On a scale of 1 (ineffective) to 5 (effective), across a range of twelve indicative statements reflecting different aspects of outputs and benefits, they gave an average scored of 2.8 for the RCF, 2.6 for the RSSF and 2.0 for the LCGS. These scores reflected to a large extent a concern noted earlier among stakeholders, that the SRPF was not sufficiently targeted on the areas of greatest disadvantage in rural Scotland.

Overall, there was an impression that the way that monitoring of project outputs was conducted needed to be reviewed. Currently, it is difficult to make a global assessment of the impact of the Scheme on rural Scotland. By making provision to inspect and audit a sub-sample of projects 'on the ground' each year, the Scottish Executive would have a much clearer view of the economic and social impact of the Scheme and its contribution to the long-term sustainability of rural communities

About the study

This report was based on analysis of survey results, conducted in August and September 2003, by Prof Chris Doyle (Larch Research Ltd), Prof Phil Thomas (Artilus Ltd), Marsaili Macleod (The Scottish Agricultural College) and Mike Burr.