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Executive Summary

1. Tribal Consulting was commissioned by the Scottish Executive Development Department to undertake an initial evaluation of the first phase of the Vacant and Derelict Land Fund ( VDLF) 2004-06. The Fund was set up in response to the Cities Review which highlighted that not enough was being done to tackle the problem of long term vacant and derelict land that persisted in Glasgow City Council, North Lanarkshire Council and Dundee City Council. £20 million was allocated to phase 1 of the Fund (2004-06).
2. The aim of this research was to assess the effectiveness of the VDLF in reducing long term vacant and derelict land, stimulating economic growth and job creation and promoting environmental justice and improved quality of life.
3. We conclude that the fund had a significant impact on reducing the quantity of vacant or derelict sites across all three areas. However it is too early to assess the full impact of the fund. These impacts are likely to take time to unfold - as sites prepared for business are occupied and as the catalytic effects of path breaking investment on sites in weak market areas are felt. We also make recommendations for the monitoring of site delivery and development that should assist in the assessment of outcomes in the future.
4. In Dundee, where there were 224 hectares (ha) of vacant or derelict land in 2003, the fund supported the delivery of around half the vacant and derelict sites that were dealt with between 2004 and 2006. This included 8 ha of land for business, 7 ha of land for housing and 20 ha of green or open space. VDL funding of just under £4 million over the two year period reduced the quantity of vacant or derelict land in Dundee by 35 ha (equivalent to almost 16% of the total). The focus in Dundee was initially on the low demand 19 ^th century housing area of Stobswell. The spread of projects was subsequently increased - although still with a degree of clustering - so that the cumulative effects of the projects was greater. This focus on regeneration areas facilitated significant synergy with other local improvements.
5. In Glasgow, where there were 1,335 ha of vacant or derelict land in 2003, the fund was responsible for the delivery of 10% of the vacant and derelict sites that were dealt with between 2004-06. This included 55 ha of land for business, 7 ha of land for housing and nearly 10 ha of green or open space. VDL funding of £10 million over the two year period reduced the quantity of vacant or derelict land in Glasgow by 72 ha (or just over 5% of the total). In Glasgow, there was a focus on sites which had no other potential funding source and on sites for economic development, greening, site information to raise the prospects for development and surface water management projects on hard-to-develop sites. Achievements include the delivery of two major strategic sites for economic development and a number of housing sites within regeneration areas.
6. In North Lanarkshire, where there were 1,509 ha of vacant or derelict land in 2003, the fund was responsible for the delivery of 8% of the vacant and derelict sites that were dealt with between 2004-06. This included 14 ha of land for business, 45 ha of land for housing and nearly 48 ha of green or open space. VDL funding of just over £6 million over the two year period reduced the quantity of vacant or derelict land in North Lanarkshire by 107 ha (just over 7% of the total). In North Lanarkshire, the priorities selected were town centres, regeneration projects, former Social Inclusion Partnership areas and transport corridors. The cluster approach that was adopted for prioritising sites facilitated some significant synergies between sites.
7. Overall, we conclude that the VDLF was an appropriate response to deal with issues of land vacancy and dereliction identified in the Cities Review. It gave local authorities and their partners the opportunity to address the problems of a diverse range of sites, depending on the individual needs and priorities in their area. We recommend that the fund should be continued and that its procedures for project appraisal, clawback / fund rotation and monitoring of project impacts should be refined to reflect lessons from the first two years of its operation.
8. Project appraisal: We considered the two related questions of whether there was a genuine market failure and whether the VDLF delivered additional outcomes. Our impression is that the Fund has achieved a high degree of additionality, partly because it focused on activities which the market is generally unwilling to fund, for example open space and economic development after-uses. Many of the projects showed temporal additionality - in the opinion of their funders they would have happened eventually, but they were brought forward in time by the VDLF. We estimate that just under a third of the funding was spent on projects which might have come forward over the next five years, just over a third on projects which were brought forward by between five and ten years, and just under a third on sites which it is unlikely would have been dealt with at all.
9. The fund achieved most when used for sites or development types which had limited access to other sources of funding. It was also particularly valuable when used as matched funding for funding streams such as the European Regional Development Fund ( ERDF). However we highlight that additionality is likely to be lower where it is a very small part of the overall funding package - although we acknowledge this is not always the case. 'Top-up' funding has in some instances been successful in allowing Registered Social Landlords to build on brownfield sites.
10. While the market failure arguments were not made explicit when the programme was announced, the emphasis on long-term dereliction implies that market failure was an important consideration. The sites brought forward in Glasgow had been vacant or derelict for, on average, 18.5 years and those in North Lanarkshire for 10.3 years. The Dundee sites were slightly more recent (averaging 7.7 years) probably because of the focus on tackling partly vacant private sector housing. One detailed example of best practice was the use of the fund to overcome one of the classic causes of market failure - poor information. The fund was used to pay for high cost site investigations for a site suspected to have a high degree of contamination. Once the true extent of contamination was known, market interest was restored.
11. Monitoring of impact. The evaluation identified some weaknesses in the monitoring of site delivery and development. Given the flexibility of the fund, it is important that these mechanisms are in place, so that progress can be measured without having to restrict the form and scale of projects. Improved procedures should be put in place to ensure that the full outcomes of the 2004-06 fund and the outputs and outcomes of any future funding can be effectively assessed. This should include:

• A consideration of what the VDLF will directly achieve, and any partners and leverage that will assist in this.
• A clear summary of outputs (site delivery) and outcomes (longer term development achieved on site and catalysed on other sites in the locality), which distinguish between what is anticipated and what has been achieved. Differences in actual and anticipated outcomes should be clearly highlighted.
• Mechanisms put in place to ensure that when development proceeds, the longer-term outcomes for the project are effectively captured and reported. For example the number of households whose quality of life has been improved, the impact on deprived neighbourhoods, catalytic impacts on other sites and projects, and the overall impacts on the perception of the neighbourhood and the local authority area as a whole.
• These would be best captured in periodic evaluation studies drawing on primary research on perceptions as appropriate.

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