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Executive Summary
Introduction
1.GEN Consulting was commissioned in August 2006 to undertake an Interim Evaluation of the Cities Growth Fund ( CGF).
2. The study brief had a number of key objectives, including:-
Evaluating the extent to which the City Visions had been implemented;
Assessing the levels of leverage that resulted from CGF projects;
Assessing the impact that the CGF projects had on the Scottish Executive's Cross Cutting Themes; and
Making an initial judgement about the additional outcomes that have resulted from CGF projects.
3. The methodology for the study had 2 main elements:-
A desk review of documentation related to the CGF, including the City Visions, the Annual Reports produced by each city, the Investment Plans for the 2 nd Round of CGF and other relevant documents (such as individual project evaluations); and
A series of consultations with the key players involved in the CGF in each of the cities and at the Scottish Executive. A total of 24 interviews were conducted across the 6 cities.
Background to the Cities Growth Fund
4. The Cities Growth Fund was introduced by the Scottish Executive following the Review of Scotland's Cities in 2003. Totalling £90m to be spent between 2003-06, the Fund was to be used to support projects that contributed to the growth of each city, and to the development of the wider city region. A further allocation of £83 million was later approved for 2006-08. Funds were allocated through the Local Government Finance Settlement. Accordingly each city received an allocation in proportion to its population.
5. Prior to the allocation of funds each of the cities had to draw up a "Vision" that was to guide spend. The Visions were to outline the strengths and weaknesses of each city and to detail the projects that would build on these strengths and address the weaknesses. Although the CGF was intentionally "light touch", guidance was issued from the Executive outlining criteria which the Visions and project sets had to meet.
The City Visions
6. The Visions generally took a long term view of the challenges facing each city. The response tried to build upon the specific advantages of each city and the wider region.
7. The extent to which each of the cities' project sets matched their Visions varied. The "fit" for Edinburgh and Glasgow was good. In some of the other cities there were examples of projects that sat uncomfortably with the Vision. There were also examples of parts of the Vision for which no projects were put forward. However, given the long term nature of the Visions, this is acceptable. Indeed were all parts of the Vision to be covered this might imply that they were little more than short term funding plans.
8, The long-term nature of the Visions means that some element of mismatch is inevitable in the short term. However, there is a degree of concern about Dundee where, at this stage, it is hard to see the contribution that the Waterfront project will make to some parts of the Vision.
The CGF Projects
9. Streetscape projects were funded in 5 of the 6 cities and accounted for a third of the spend. Private transport infrastructure accounted for a further 21% of spend although this was in 2 cities (Dundee and Glasgow). Public transport infrastructure and training each accounted for 13% of spend.
10. Although CGF was intended to be a capital fund we calculate that around a quarter of spend is going on revenue projects. Vocational training and support for events are the largest categories, with Glasgow and Edinburgh accounting for much of this.
11. Not surprisingly, the bulk of capital spend is on streetscape (30%) followed by private transport infrastructure (25%).
Project Selection
12. The cities used a variety of processes to select projects. Some used formal appraisal processes, whereas other adopted more subjective approaches. There is some evidence that the more systematic the approach then the better the "fit" with the Vision.
City Categorisation
13. When the range of projects is considered the 6 cities can be seen to fall into 3 groups:-
Those such as Dundee and Stirling that concentrate spend on a number of geographically concentrated projects;
Those that are supporting a large number of geographically dispersed projects that are often quite small in financial terms (Aberdeen and Inverness); and
Those that spend on a large number of relatively large projects that are geographically dispersed.
14. Evidence from other research is that the greatest impact comes from concentrating spend.
Implementation Progress
15. Overall the first round projects are underspent by 38%, varying from 7% in Aberdeen to 59% in Dundee. Underspends are generally associated with large capital projects such as streetscape and transport.
16. The reasons relate to such factors as delays in obtaining planning permission, design and negotiations with other infrastructure providers.
Leverage
17. The overall leverage ratio is £1.42 and varies across the cities from £0.00 to £3.27, in the case of Inverness.
18. Using Single Regeneration Budget ( SRB) projects as comparators shows that there is a degree of overlap with the leverage ratios, with the best of the CGF cities performing as well as the worst of the SRB programmes.
19. Leverage ratios do, however, need to be treated with considerable caution. Not only are different definitions used when calculating them but they are likely to change as the CGF projects are implemented.
Additionality
20. The CGF projects are generally felt to be additional in terms of being larger, having gone ahead sooner and being of a better quality as a result of CGF support. There are also examples of absolute additionality, where projects would not have gone ahead but for CGF support.
Contribution to the Executive's Cross Cutting Themes
21. The contribution that each project was felt to make to the Executive's Cross Cutting Themes was assessed and the results aggregated for each city. Overall the greatest contribution was felt to be made to Growing the Economy to which half the CGF spend was contributing. Slightly less than a third of spend was contributing to Closing the Opportunity Gap. There were considerable variations across the cities.
The Regional Impact
22. Edinburgh and Glasgow were the 2 cities where a relatively large proportion of spend was being made in adjacent authorities. This had increased between the first and second round of funding, no doubt reflecting the "bedding in" of the CGF.
Economic Impact
23. Generally it is too soon to assess the economic impact of CGF. Not only has there been slippage in implementation but some of the projects are likely to have impacts that will only be apparent in the long term. It is also the case that some projects are so small that identifying their impact separately will be very difficult.
Partnership
24. Partnership working has been generally good, albeit that the main partners have been other local authorities. In many cities it has been facilitated by the use of existing partnership structures, some of which have been operational for many years.
25. Where there have been tensions these have generally been caused by a feeling that too little of the CGF allocation has been spent in the wider sub-region.
Management
26. Strategic management of the CGF monies is relatively consistent and resides broadly with the original Community Planning Partners charged with the development of the Visions and the initial project selection. Each of the Cities now has a recognised project manager. However, this was not the case initially in Stirling or Inverness.
Long Term Planning
27. There is evidence that the Visions are having some longer term impact in some cities as they begin to influence other partners and provide a coherent focus for development independent of the CGF.
Local Authority Views on the CGF
28. The local authorities liked CGF as it had been operated very flexibly with the minimum of formality. There were some fears that the change of responsibility within the Executive might result in this being lost, although, as yet, there was no evidence of this.
Good Practices
29. The main good practices to emerge were:-
- The Executive's flexibility in administering the Fund;
- The use of project selection templates to ensure that the projects, amongst other things, contributed to the Vision;
- Securing the involvement of senior politicians and officers at the start of the process;
- Securing the involvement of adjacent authorities;
- Developing good partnership links at the local level;
- Working though existing structures, when they exist;
- Using the Vision as a mechanism for longer term planning, independent of CGF;
- Having effective management and delivery structures;
- Having fewer projects so that a more coherent focus is obtained; and
- Using Challenge funds both to encourage "buy in" and to diffuse tensions.
Conclusions
30. CGF is liked by the cities. There are indications that there is additionality associated with it and the process has resulted in good partnership working. There are also indications that the Visions are beginning to perform a wider strategic co-ordination role.
31. However, it does seem that in many cities the funding has been dispersed over a relatively large number of projects most of which are very similar to the things that the local authority and its partners would generally support. There are very few examples of "iconic" or "visionary" projects being supported that would result in a step change in cities and their perceptions.
32. It is also often difficult to see how what CGF is supporting differs from what is being supported through other Executive programmes, such as the Quality of Life Fund. In part this is a reflection of the scale of projects being supported in some cities.
33. Many of these criticisms reflect the size of the Fund and the way it is allocated. That population is the key driver of the size of allocation means that the smaller cities, where arguably CGF could make a real difference, receive relatively little. The larger cities, although they receive far more, are still not getting enough to undertake iconic developments.
34. Overall we feel that CGF has not had as great an impact as it could have. Although spend has been additional, and has contributed to the Visions, in most cities it has been used to fund projects that are essentially "more of the same", rather than to support ones that will make a lasting, visible change in the cities.
The Way Forward
35. In determining a way forward 2 fundamental decisions need to be made:-
- Should funding be concentrated in a limited number of large projects or should it be spread?; and
- Should resources be allocated according to impact, rather than population?
36. Our view is that the Executive should issue guidance that states that:-
- Funding is to be used to support a limited number of projects in each city, that are to be new and additional;
- Funding justification needs to be in terms of the projects visionary or iconic status;
- Funding should be allocated according to population and impact, with the impact element being allocated on a competitive basis. The suggested split between the 2, we suggest, should be 60:40; and
- Projects should be expected to achieve leverage ratios of at least 1:2.
37. Consideration should also be given to whether the Fund should be used solely to support capital projects .
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