Food Processing, Marketing and Co-Operation Fund 2014-2020: evaluation

4. Looking ahead: Conclusions and recommendations

The evidence gathered for this evaluation found strong support for the continuation of FPMC. The scheme has been demonstrably valuable to many businesses and fulfils important purposes not covered by any other single scheme available.

Some parts of the scheme perform particularly well, including the straightforwardness of the claims process and perceptions of the committee’s functionality. FPMC’s increasing popularity amongst new and familiar applicants across all sectors, sizes and locations within Scotland is testament to its effectiveness.

There are nevertheless some issues such as increasing competition for the grant, applicants’ permitted but unequal use of agents, and an upward trend of repeat applicants.

Based on the findings from this research, the below recommendations have been developed to offer straightforward and inexpensive ways forward^[26].

1. Minimise delays to applicants starting projects

Applicants would benefit from being allowed to commence projects at their own risk before confirmation of outcome of their application.

Delays would be further reduced by improving efficiency of application amendments procedures.

2. Upfront payments

EU regulations do not permit upfront payments. This can be particularly burdensome for smaller businesses having to temporarily cover project costs.

A recent Scottish Government report of LEADER identified a similar recommendation and suggested that a way forward, post-Brexit, could be to replicate The Lottery Fund framework which distinguishes between small (<£10k), medium (£10-100k), and large (>£100k) organisations, paying the smaller upfront and the larger on a gradated basis (50% upfront, 40% after first instalment, 10% at end).

3. Better guidance

There is desire amongst applicants for more online and telephone guidance.

Improvements to guidance would likely reduce inequity by helping smaller businesses unfamiliar with the application and unable to afford agents.

Applicants want to see honest more reliable timelines to avoid the current sense of unpredictability which makes it hard to plan business activities and can have consequences for business functionality.

Making appropriate and realistic changes towards better flexibility and transparency would not only serve to improve applicant experience, but also help target businesses most relevant to the scheme’s objectives and ensure grants are awarded to those truly in need.

Development of these guidance materials would benefit from more specific input from applicants to identify the most useful changes.

4. Targeting businesses equitably

Larger business are more likely to be able to commission help with their application. Steps should be taken to ensure that smaller businesses are not disadvantaged because of their size. Smaller businesses also find it harder to cope without up-front payments.

There was desire for more consistent and better quality feedback on failed projects to help them towards reapplication.

Supporting smaller businesses could include a better feedback strategy to improve experience of submitting or resubmitting applications.

5. Joined-up thinking

A tool for flexibility will be to think about and assess projects as holistically as possible. This means, for example, not restricting the assessment of ‘health’ to physical wellbeing, or the understanding of economic effects as isolated to the projects’ immediate capital activities.

Economic, health, and environment metrics are not mutually exclusive and their interrelations are important for making accurate assessments of projects’ impacts. It is worthwhile ensuring that assessors are resourced for thinking holistically. Training, if available, may help, but adding representatives who specialise in key areas such as environment, health, and economics may be a more achievable step towards this. Ensuring assessors are familiar with the application process would be a useful step.

6. Revision of eligible applicants types

An holistic approach may prove especially helpful when revising eligibility of applicant groups. This evaluation reveals a desire to scrutinise the position of non-capital and alcohol sector projects. Insights into the perception and performance of alcohol sector projects have been provided, which may help to inform decisions if ever there is need to streamline the scheme.

7. Further research

Generally there is scope for more research to counter limitations of depth of evidence due to time and resource restrictions of this report. For example research may strengthen understanding about net value-for-money effects through factoring in measures of deadweight, leakage, displacement, and multipliers against gross effects.

This evaluation is limited by inconsistencies and incompleteness of available data. At assessment, proper evaluation of a project’s economic viability needs less vague data about current and projected figures, which applicants should evidence with justified calculation.

8. Monitoring and recording project information

To inform further research, there needs to be more consistent and complete monitoring data.

Part of this should involve enforcement of applicants supplying correct and justified data in assessment and monitoring forms. This will require applicants to be clear about whether they are to provide figures for the project specifically or the business as a whole.

It may however be unrealistic to expect applicants to perform the more rigorous and consistent calculations required to assess effects upon upstream and downstream jobs, which would need professional input.

9. Extra support for the grants team

Much of this may be for one-off assistance with improving current processes. Other elements such as acting on grant recovery processes may need longer-term contribution.

10. To decide upon an appropriate replacement fund

FPMC receives almost half of its funding from the EU. Post-Brexit, it is still unclear from where this will be replaced. A new Rural Economy Framework to embed the rural economy within the broader National Performance Framework has been proposed^[27]. One of the key actions is to “ensure equitable access to finance for rural communities and businesses, including a simplified grants system”(ibid.). By incorporating these recommendations, FPMC would be an example of this.

Given the significant role of the rural economy for Scotland, and given the risk of disadvantage to the rural Scottish community from lost EU funds, the proposed UK Shared Prosperity Fund could be an appropriate alternative source. The Fund aims to replace EU structural funding for the purpose of reducing inequalities between communities by “strengthening the foundations of productivity[…]to support people to benefit from economic prosperity”^[28]. Parts of England are already preparing to “priortise long-term opportunities and challenges to increasing local productivity” (ibid.). The devolution settlement in Scotland will be respected by the Shared Prosperity Fund and thereby should suitably accommodate FPMC. The advantages of improved flexibility and simplified management of funding is recognised in The UK Shared Prosperity Fund briefing paper and this speaks directly to earlier recommendations for FPMC. Without replacing lost funds, FPMC will be forced to change radically or be withdrawn altogether.

The UK Shared Prosperity Fund is outlined as an example route for replacement funds but is likely to be in high demand and so further alternatives need to be explored.