Regeneration Capital Grant Fund: evaluation

5. Factors affecting project delivery

5.1 Introduction

This chapter explores the key factors affecting project delivery. It explores the success factors and challenges, as expressed by project leads, partners and community members. It should be noted that research participants were simply asked to comment on the success factors and challenges that they experienced. Many of the success factors and challenges identified were not unique to RCGF funded projects and could equally apply to other capital programmes.

5.2 Success factors

The main success factors identified by project leads, partners and community members were:

• working in partnership
• clear vision and decision making processes
• RCGF funding

This section covers each of these in turn.

Community involvement was also identified as a key success factor. This is covered in detail in Chapter Two.

5.2.1 Working in partnership

Project leads and partners felt that working in partnership brought the following benefits:

• expertise in managing capital projects, funding bids, design, managing contractors and architects, project management
• expertise and skills in other areas of service delivery
• opportunities to access a wider range of funding sources
• opportunities to own, run and manage facilities in sustainable ways
• opportunities to introduce a wide range of services within the new facility
• access to staff secondment opportunities within the new project
• opportunities to include partners as anchor tenants within the facility
• opportunities to connect with a wider group of potential service users
• clear links to local and national strategies
• greater recognition and awareness of the project

"Working in partnership means that you can pull in expertise and new ways of thinking and delivering."

(Project lead)

Partnership was felt to be effective when:

• partners have clear, distinct roles
• partners are passionate and have a clear vision
• partners have good relationships and consistent involvement
• partners communicate well
• there is strong support across partners (including, in larger organisations) at senior level
• council teams are well connected and work together

"Everybody was truly passionate about the building and the project."

(Partner)

Partners stressed that it was not easy to work in partnership, but almost all felt that it was worth it as it helped develop a high quality, sustainable facility.

"If the different services hadn't worked together, we wouldn't have got the result."

(Partner)

However, one partner in one complex project reflected that some partners did not fully share the same vision, and that it may have been better to involve fewer partners, who all shared the same vision.

"A more modest scheme would have worked better. Having multiple partners did not benefit the project in the end, it constrained it."

(Partner)

Most projects experienced some challenges in partnership working. For example, in one project partners were at the stage of needing to shift their activity from management of the construction phase, to managing the project on a day-to-day basis. This required a change in ways of working for the partners, which took some time. In another project, a change of senior staff in one partner organisation towards the end of the design phase caused tension as some of the decisions were unpicked. A few partners highlighted that working effectively in partnership took time, and that this was challenging within the timescales for spending the RCGF grant.

Example: Working in partnership In one project, the council, leisure trust and local sports clubs worked together. The sports clubs saw the advantage of harnessing the council's experience in dealing with capital grants, and it was agreed that the council would lead on grant applications, and then deliver the capital project. The council brought expertise in planning applications, grant applications, tendering and project management. The project was overseen by a project board involving sports clubs, the council and the leisure trust. There was strong communication and support between the partners. The site remains in council ownership, with the project paying a peppercorn rent and taking responsibility for all repairs and maintenance.

5.2.2 Clear vision and decision making processes

Most projects highlighted that having a clear vision, good planning and a clear programme to manage expectations were critical. Where the vision was shared among partners this helped to build a joint understanding of the purpose of the work.

"We set out a high level programme from the outset."

(Partner)

The vision worked most effectively when it linked well to wider local and national strategies, and the priorities of public sector organisations and services.

Projects also worked well where there was a driving force bringing passion to the project – whether a social enterprise, community group, community activist, council officer or elected member. For example, one project was driven strongly by one very passionate individual – and some partners felt the project would not have happened without them.

"There was a real determination."

(Partner)

Partners and projects leads stressed that this vision needed to be balanced by a realism, and clear understanding of what was feasible. This required an ability to make tough and good decisions.

"We were all very clear about our aims, and realistic about what we can achieve."

(Project lead)

Partners and project leads emphasised the importance of good project management, governance, risk management and project planning to help inform decision making.

5.2.3 RCGF funding

Project leads and partners were asked what difference receiving RCGF funding made to the project. All felt that it was a key success factor in delivering the project, through:

• providing large amounts of capital funding not available from many other funders
• unlocking other funds – for that stage of works, further phases of work, or service delivery
• reducing the risk for other funders, by validating the project and providing security for funders
• strengthening and clarifying local authority funding commitments and giving the project a higher profile within local authority decision making processes

"It made an enormous difference, and it was critical to unlocking the project and making the project happen, when other funders wouldn't budge."

(Project lead)

"It provided a rubber stamp and validation for other partners."

(Project lead)

In most projects, partners felt that the project may not have happened without RCGF.

"I remember it (RCGF) being hugely important when it came through, and that it was on the cusp of not happening without it."

(Partner)

"It wouldn't have happened without RCGF."

(Elected member)

"If RCGF funding had not been available, I am 100% sure that project would not have gone ahead."

(Project lead)

Some projects felt that their project may have gone ahead without RCGF, but that without the funding the project may have been smaller, taken longer, be done in more phases or been lower quality.

"I think the success would have taken much longer to achieve if at all."

(Partner)

"We might not have put all of the things in place, especially not to the same specification."

(Partner)

"Other funders wouldn't have understood it… All funders found it complex."

(Partner)

Some found it hard to know what would have happened without RCGF, and where the priority would have fallen in terms of local political processes. In one project, partners felt that the project was so important they would have eventually found a way to do it – but it could have been quite difficult and taken much longer.

In a few projects, RCGF funding opened up access to wider funding opportunities for wider activities – including streetscaping, town centre regeneration, public realm improvements and artwork.

"The project has now acted as a catalyst for the regeneration of the rest of the street and has unlocked private sector investment."

(Partner)

A few projects emphasised that while RCGF funding was very important, it was also very important to have a range of funders. In one project, the community group had a source of income through local wind turbines, which also helped greatly with sustainability of the project over the longer term.

5.3 Challenges

The main challenges identified by project leads, partners and community members were:

• the nature of the sites and buildings
• securing and managing funding
• timescale
• partner capacity
• sustainability
• This section covers each of these in turn.

5.3.1 The nature of the sites and buildings

The main challenge for most partners was the nature of the sites and existing buildings that the RCGF projects focuses on.

Projects focusing on renovating old buildings found that these buildings brought significant risks and unknowns. In a few projects, the original aim was to refurbish the buildings but after more detailed exploration a decision was made to develop new build facilities instead. In some other projects, despite extensive planning and surveying, unexpected issues still arose in relation to the physical fabric of the building. Often these issues came up as works were underway.

"You can do as much survey and pre-development work as you like, but until you get to site you never know what you're going to deal with."

(Partner)

These issues added to the cost, and some projects had to compromise on other elements of the work because of this. The issues also meant that the build stage took longer.

Example: Complications due to concrete structure One project was complicated by a concrete structure which had been built at a time before there was a full understanding of the structural requirements for using concrete. For example, the concrete floors are too thin to safely put holes through without collapse. This led to extra costs in putting services into the building. Costs increased by about £350,000.

Example: Complications due to rot and structure One project had planned to fit a lift against a gable wall. However, this was actually an internal wall, which had been part of an earlier larger structure. The internal wall structure wasn't able to support the lift, so extra unplanned work was needed to reinforce it. Rot was also found in the walls and ceilings. This added to the cost, impacted on the way in which funding was directed to design, and added to the overall construction time.

In a few projects, it was the site itself that presented challenges. For example, in one project there were issues with the ownership of the land. It was owned in pockets of land, some by the local authority, some entrusted to the people of the town, and some by other public sector agencies. It was also on a foundry, and the site was contaminated. This meant that instead of owning the land as planned, the third sector organisation rents it. Sorting out these land ownership issues caused a delay.

In another project, the site and building were large and derelict. The costs involved in making the site safe and accessible were significant. There were also concerns about safety, which restricted community access to the site. A plan to bring parts of the site and building into use and leave other parts derelict was in the end found to be too challenging and risky for the partners to progress with and it has stalled.

"It was a huge project. If it came off it would have been massive… Nothing like that exists. It would have had lots of international interest…"

(Partner)

However, some project leads and partners indicated that these sites and buildings present challenges, but also helped to build motivation.

"It (the building) has an intangible magic to it, and it makes people want to get involved and do more than they normally would."

(Project lead)

"Old buildings come with unknowns, but also high ceilings and beautiful stonework that you can't get now."

(Partner)

In another project, it was challenging to keep the town centre open and functioning whilst large scale demolition work was happening. This meant the work had to be phased which was more complicated – but otherwise existing retailers may have had to move to other premises and people would not have had anywhere to shop.

5.3.2 Securing and managing funding

Partners, project leads and community members all highlighted challenges around securing funding, beyond the RCGF.

Most projects had a range of funders in place, with different requirements in terms of priorities, funding conditions, timescales and monitoring and evaluation. Often different partners were in control of different pots. Some projects found it challenging to line up all the different funders to the required financial timelines and intended outcomes and had to manage this carefully. Some funders were felt to be more flexible than others. This was a particular challenge where projects were led by small community organisations, which also had to ensure they had core funding in place to continue their everyday work.

In most projects, costs were higher than expected. This was because issues had been found in the building or site, or tender costs were higher than expected. Partners and project leads indicated that early stage surveys undertaken at RCGF application stage were unlikely to be detailed enough to get an accurate estimate of final costs.

This meant that additional funding had to be found or savings had to be made. In a few projects, partners – including private companies – did work pro-bono to make the project happen. In two projects, a national partner was unable to provide funding and had to pull out of the project due to budget pressures.

"We had to make compromises to try and reach the vision within the budget."

(Partner)

Example: Aligning funding with purchase of site In one project, a community interest company had planned to acquire a derelict building and bring it into use. It had agreed the costs for acquisition and improvements and included these in the RCGF application. However, after the application was submitted the company which owned the site decided to sell. There was a competitive bidding process and the community interest company couldn't compete. The community interest company therefore developed its plans in another building in the area – using the RCGF funding and amending the work required to meet the needs of the other building.

5.3.3 Timescales

Some partners had concerns about the timescales for spending RCGF. Some felt that for complex capital works it was important to have more flexibility^[16]. Some felt that many tasks were required to be completed within what could be too short a period of time – including planning, building control, preparation and agreement of tender documents, tendering, negotiating and signing contracts.

Some pointed to a wide range of issues which can impact on timescales, including:

• effectively engaging communities
• being part of a wider regeneration project
• decision making within large public sector organisations
• harsh climates – particularly in very rural areas
• drawing up complex legal arrangements

"The timeframes are very inflexible."

(Project lead)

"Maintaining the momentum of projects is really important, but the timescales can kill the energy of communities and the officers who are leading the projects."

(Project lead)

5.3.4 Partner capacity

In some projects, the responsibilities placed on different partners was a challenge. For example, in one project, the architects were concerned that the project wanted to impose a very high level of liability on them, and nearly had to cease involvement. A few local authorities and third sector organisations had concerns that they were managing the project but were not able to cover their costs for this.

There were also issues with the responsibilities placed on community organisations, which meant that two community organisations had to pull out of managing projects. One community organisation pulled out because it reported that the local authority rejected its proposals for managing the facility itself, and another pulled out because of the financial risk. In one other project, the community organisation was very pleased to have a third sector organisation managing the project, to reduce pressure on community volunteers.

There were also issues with capacity of contractors. In one project, the original contractor went into liquidation. In another project, the contractor pulled out due to market uncertainties and the plans had to be reviewed. One project highlighted that some of their contracting had to be done using Scottish Government procurement processes which meant that sometimes they were not able to use local contractors.

5.3.5 Financial sustainability

Finally, there were challenges with sustainability once capital projects were completed. In particular, a few projects found it a little challenging to balance community use of the facility with the need to cover costs and operate as a financially viable business.

"We have struggled to get the right balance. At the end of the day you have to be able to pay the bills."

(Project lead)

A few partners and community organisations were prepared to pay slightly higher usage costs in order to have the facilities they wanted. However, this caused some issues. For example, in one project one original anchor tenant found that the costs were high compared to other facilities, and they were reviewing their tenancy options for that reason.

Example: Balancing community need with sustainability One project knew in advance of applying for RCGF that the cost of hiring a facility would be more than three times higher at the new facility, in order to make the finances work. However, they believed that the quality of the facility was worth it and were very happy with the result.

In some projects, partners were working closely together to develop new organisational structures and business plans to make facilities more sustainable over the longer term.

Example: Sustainability One project which completed in 2015 is continuing to work on future sustainability. In 2019, the grant funding started to taper off. The project now needs to generate enough income to make it sustainable in the long term. Four years after opening, the centre's turnover is 50% traded, 50% grant funded. Some space in the centre is rented out, but this is not enough to cover costs. It can be very challenging to cover management, administration and utilities costs and it has been hard to find additional funding to help with running costs.