« Previous | Contents | Next »
Listen
Review of the Rural Petrol Stations Grant Scheme Final Report
11 RECOMMENDATIONS
Following the appraisal of options for the future of RPSGS, this section outlines our recommendations for the future of the fund. All are designed to assist the RPSGS to better meet its objectives and to obtain improved value.
Firstly, it is our recommendation that the RPSGS continues. It has been shown that, on average, petrol stations that have received the grant for improvements to infrastructure for the supply of petrol and diesel have achieved benefits that far outweigh the costs to the grant. Whilst regulatory changes over the last few years have generated the requirement for a higher number of infrastructure works than would usually be the case, the fact that such infrastructure has a finite lifespan will generate a limited number of new cases each year. Additionally, it is likely that proposed future changes to regulations will place new financial burdens on petrol stations.
In addition, RPSGS has been instrumental in the creation of almost all of the LPG supply sites in remote rural Scotland and hence made a valuable contribution to the achievement of this policy objective.
For works to cover replacement infrastructure for petrol and diesel, the benefits are such that we find it appropriate that the minimum 8-mile threshold and one million litres maximum throughput limit be removed. In their place, an assessment framework should be developed and applied to each application. This framework would estimate the costs and benefits taking into account the specific local circumstances (including number of customers, distance to next nearest petrol station site and range of other services offered) and hence enable a judgement on the value of investment to be made without resort to arbitrary pre-set criteria. More strategic sites (including those where the costs to customers of accessing the next nearest fuel supply is particularly high) could be identified and given priority for investment.
LECs should retain a role of working with local businesses to identify RPSGS funding opportunities and to help identify local priorities. However, in order to provide a national consistency of approach and check on funding applications that is found to be lacking in some areas at present, a central co-ordinator should be appointed to review all applications. The role of this co-ordinator should be to assist those LECs from where few applications are forthcoming to identify those sites worthy of RPSGS funding and to review all applications against the assessment framework. Particular focus should be placed on ensuring that the works to be undertaken are truly essential, that RPSGS funds are purely additional and that maximum use of alternative funds is made before a grant is given.
RPSGS should not be expanded to cover a wider range of expenditure; a focus on fuel supply infrastructure should remain. Moreover, the 30-minute minimum drive isochrone to the edge of a town of population of 30,000 or more remains an appropriate criterion for the definition of a rural area for the purposes of RPSGS.
The objectives for provision of LPG equipment are, we feel, fundamentally different from those of the rest of the RPSGS. To these ends, it is appropriate for different assessment criteria to be used. Current demand levels for LPG are not sufficiently great that a dense network of supply sites can be justified at the present time.
We recommend that a review of the environmental benefits of LPG use be undertaken and conclusions drawn about the population levels and inter-station distances so that conclusions on benefits and costs of LPG investment in rural Scotland be made. In order to maximise the efficiency of use of RPSGS funds, awards should not necessarily be made on a first-come first-served basis. Rather, if the benefits of LPG supply in a particular area have been identified, all petrol stations should be identified and bids invited. A decision on the placement of LPG can then be made according both to minimum cost to RPSGS and maximum potential for the site to attract users to LPG. Funding for LPG provision may not be able to be justified in some isolated sites where the cost of installation and on-going supply are greater than the potential long-term environmental benefits.
It is recognised that the above recommendations will require an increase in administrative time, and hence cost. Overall, however, once a system is put in place, the administrative requirements should not be onerous and, taking evidence from awards to date, could be as great as 34% of works costs 36 and still provide an overall value for money enhancement. Given that the average award to date has been 16,100 (so 34% of this is 5,400), a substantial efficiency saving can be gained even with detailed assessment work.
It is recommended that the 50% of works cost remain the maximum proportion of total funding available from RPSGS and that, unless the business case for a greater proportion is clear, that this threshold be more rigorously enforced.
Within all applications, there should be an assessment to ensure that all recipient businesses are likely to be viable in the long-term, with the ability to return reasonable operating profits.
We have identified that a large proportion of rural petrol stations are unaware of the existence of RPSGS. In order to avoid the circumstance that a petrol station generating significant overall benefits is subject to closure because of lack of knowledge, it is recommended that a co-ordinated national marketing campaign for the scheme be undertaken 37.
It is possible that the changes to the grant as suggested above could lead to a substantial increase in the number of applications in the short term (especially if marketing of the changes is effective). This places two requirements on the scheme. Firstly, the assessment framework should be in place beforehand in order to be able to respond to these new applications. Secondly, if budget remains limited, the framework should enable comparisons to be made so that those beneficial schemes that are most urgent to maintain business continuity are taken forward first and that, if constraints still remain, those improvements that provide the greatest benefit are prioritised.
ACKNOWLEDGEMENTS
The authors wish to thank all those individuals and organisations that assisted in the preparation of this report. Particular thanks are due to staff at HIE, SEDG and other LECs for their time and the provision of important information about the administrative process and the views of rural petrol stations. Additionally, we would like to thank those owners or managers of rural petrol stations that either met with us or completed the telephone interview and hence provided much of the information on which our research is based.
« Previous | Contents | Next »