The Scottish Government

« Previous | Contents | Next »

Listen

APPENDIX SEVEN: LEVERAGE RATIOS FOR COMPARISON WITH CGF PROGRAMMES

Introduction

A7.1 This Appendix explores the extent to which public and private funds have been levered into regeneration programmes in other parts of the UK, and provides a comparator for the CGF. The majority of the programmes analysed were making use of the Single Regeneration Budget. They have been chosen as they contain a variety of individual projects which are contributing to specific themes. As such there are similarities with the CGF. The programmes, and the leverage ratios that they have attained, enable comparisons to be made with the CGF.

Comparator Projects

A7.2 East Kent Coalfields and Dover Single Regeneration Budget Programme: The programme (which merged funding from SRB rounds 3, 5 and 6) sought to encompass projects with several themes:-

Community transport, safety and the environment;
Development of community facilities;
Small projects programme;
Community capacity building; and
The Dover Discovery Centre and the Skills and Employment programme.

A7.3 The programme had a budget of £6.8 million, and was successful in attracting funds from both the public and private sectors. It attracted additional public spending of £12m, and additional private sector funding of £5.3 million (although this was £700,000 less than originally anticipated). Overall, the programme achieved a leverage ratio of 1:2.54, which compares favourably with other SRB funded schemes. ²⁰

A7.4 Tilbury Regeneration: The main aims of this scheme were to regenerate the town of Tilbury in Essex and to capitalise on its location on the River Thames. The programme had a range of objectives:-

Tourism development, environmental improvements and access to improvements on the riverfront;
Business and economic development;
Improving skills levels through training; and
Developing community capacity and empowerment in the regeneration process.

A7.5 Particular stress was placed on improving the local environment, and upgrading the public realm (streetscape). Construction work took place to improve the river front, to rebuild a bridge over the river, and to enhance street signage and town branding. Funding was also provided to encourage local business start-ups and to provide "enterprise workshops" for small businesses in the Tilbury area. The various projects received (as of 2000/01) £1.1 million SRB funding. This levered an additional £15 million from the public and private sectors, mainly into the capital projects associated with the Tilbury scheme. This gives a leverage ratio of around 1:13.6. ²¹

A7.6 Corporate Regeneration Fund (Suffolk): The Corporate Regeneration Fund ( CRF) was established in 2002/03, and was to run for 4 years. Available to external organisations and Suffolk County Council projects, the Fund was designed to be additional to mainstream budgets and to provide match funding. It had 3 main characteristics:-

In common with the CGF, the CRF was intended for capital projects (although under exceptional circumstances revenue projects were permitted);
It was used as foundation funding that projects could access before applying for match funding from sources such as the Lottery, the East of England Development Agency and European Structural Funds; and
Projects had to contribute to at least one of the Council's medium term priorities.

A7.7 In the period April 2002 to October 2004, some £1.8 million was allocated through the CRF, with a further £300,000 coming from Suffolk County Council. According to Council documents this levered £37m into the local area, giving a leverage ratio of 1:17.76. ²²

A7.8 West Cornwall Initiative: This was a 4 year programme running from 1995 to 1999, which used SRB funding to part support a range of projects in West Cornwall. The Initiative was broad in scope, and supported projects having a number of key aims, such as:-

Improving the physical environment and town centres
Promoting employment opportunities through economic development projects; and
Building capacity in local communities through local community projects.

A7.9 The projects were successful in attracting SRB funding of £2.7 million, which was matched by a further £11.5 million from the public sector and £3.7 million from the private sector. The leverage ratio for West Cornwall Initiative was therefore 1:5.62. ²³

A7.10 Regenerating Wolverhampton: The challenge in Wolverhampton was similar to that facing many other former British manufacturing centres in the mid 1990s: low levels of employment, poor housing and a physical environment in urgent need of refurbishment. SRB funding was secured in 1996 to support projects that would alleviate these problems, and had the following objectives:-

• Improving the economic base and competitiveness of the town;
• Regenerating the physical environment and the town centre; and
• Including the community in a full consultative process as to the priorities to be addressed.

A7.11 The scheme covered the whole of Wolverhampton, and lasted for 5 years. SRB expenditure during this period totalled £16 million, and was complemented by funding from other sources which totalled £29 million. The leverage ratio for this regeneration scheme was therefore 1:1.81. ²⁴

Comparisons with the CGF

A7.12 Table A7.1 shows the leverage claimed for the projects described previously compared to the leverage claimed by each of the 6 Scottish cities for their CGF expenditure. As can be seen, the Scottish cities do not compare favourably with the sample of projects from England. Indeed only Inverness (£3.27), Aberdeen (£1.70) and Glasgow (£1.66) have achieved leverage ratios that compare with (and in the case of Inverness exceed) those from England.

A7.13 However, as has already been stated in the main body of the report, the data on leverage ratios needs to be viewed with caution. The degree of slippage on many of the CGF funded projects (particularly those which were designed to develop large infrastructure projects) has meant that additional funding has not been secured, and in many cases (such as the Dundee Waterfront Project) it seems likely that additional funding will be levered in after project completion.

A7.14 It is also the case that, the concept of leverage, and the extent to which a consistent definition of the term has been used, is something that makes comparisons between projects challenging. There would appear to be little consistency as to what constitutes leverage; as has been stated previously some cities have adopted a narrow definition whilst others have sought to include a much wider range of public and private investment. This has also been the case in our basket of comparators.

TABLE A7.1 Claimed Leverage Ratios of Scottish Cities and Comparator Projects

« Previous | Contents | Next »