Evaluation of the Scottish Land Fund 2012-2016

How has the Scottish Land Fund 2012-16 benefitted communities?

The importance of the SLF to growing community ownership

The SLF has been of crucial importance to the growth of community asset ownership over the period 2012-16. In total, 50 communities have received awards totaling over £9.8 million which has resulted in a range of assets, from small amenity-based projects to entire estates, being acquired by communities. The SLF financed the acquisition of 83,829 acres over the 2012-2016 period, which is almost a fifth of the total acreage currently in community ownership. Interviewees from across the three stakeholder groups were unanimous in the opinion that the vast majority of projects supported by the SLF would not have been able to acquire assets if the SLF was not in place. This view is supported by figures for the uptake of the Community Right to Buy, which is the main statutory route through which communities have taken ownership of land. Of the 21 completed purchases through the Community Right to Buy since 2003, nine have occurred over the life cycle of the SLF. Of these nine, seven acquired SLF funding for acquisition, which suggests that the SLF has been the foremost source of support for community acquisition of land.

Another way of ascertaining the criticality of the SLF for asset acquisition is to look at success of those not eligible for the SLF in financing acquisition through other means. Until late 2014 uncertainty over the applicability of European Union State Aid restrictions to the SLF stalled the progress of some applicants seeking to take over woodland. These applicants looked extensively for other funding options, but none were successful in attaining funding. The projects were ultimately cleared through the SLF on resolution of the State Aid concerns towards the end of year three. The lack of success of woodland projects in acquiring land through other routes again implies that the SLF was a crucial channel for communities looking to acquire assets.

The outcomes of community ownership

It is beyond the scope of this evaluation to provide a comprehensive impact analysis of SLF 2012-16. Drawing principally on interviews with SLF beneficiaries and case officer supports, this section intends to generate an impression of the common outcomes - positive and negative - which have occurred through community ownership. Following a review of case notes, community interviewees were asked to describe what difference they felt ownership had made to their community, and following this were asked to consider the specific economic, social and environmental outcomes which had been achieved as result of taking ownership. Each community had been awarded SLF funds at least two years before interview, to allow time for benefits of ownership to emerge.

SLF grants were awarded to a diverse array of project types, from small amenity-based projects to large and complex estate buyouts in the Western Isles. There was also significant diversity in the reasons driving communities to seek ownership. Amongst the small sample of seven projects in this report, one community sought ownership reactively to prevent the closure of vital services (Beneficiary A), while another sought to safeguard themselves against changes in landownership (Beneficiary F); other communities sought ownership pro-actively, in order to generate sustainable revenue streams (Beneficiary D), to respond to community need (Beneficiaries B and G) or to convert assets to community amenity use (Beneficiary E). For some communities, a mixture of pro-active and reactive drivers appeared to prompt applications to the SLF (most notably in Beneficiary C). In lieu of such diversity in project type and intention, there was striking similarity in the responses of SLF beneficiaries to questions about the benefits of ownership. The following section delineates between three types of outcomes which occurred sequentially in the cases analysed: immediate outcomes, intermediate outcomes, and long-term outcomes.

Immediate outcomes

SLF beneficiaries framed the principal benefits brought about by ownership in terms of the more intangible impacts, which were realised immediately upon asset acquisition, or very shortly following it. Beneficiaries were less likely to consider the tangible outcomes, such as new services being delivered, or economic gains such as increased turnover or profit, as the primary outcomes achieved.

When SLF beneficiaries were asked what they considered the main benefit of ownership to be, the most cited factor, apparent in every case analysed, was an increased sense of being in control of their own futures, which enabled communities to take a long term and strategic approach to improving sustainable development. When beneficiaries were probed further on this point, this outcome was related to a number of other issues.

Firstly, several SLF beneficiaries responded that ownership ensured that the benefits of new projects and services developed would accrue directly to the community, rather than to an external landowner. Community ownership allowed communities to capture the full value of the development of the asset, and this acted as a greater incentive to pursue commercial activity. This motivation was apparent in cases (Beneficiaries B and C) which had a commercial focus. Community ownership was also seen as more clearly focused on the long-term wellbeing of the community than private ownership, and was contrasted in some cases (Beneficiaries B and F) with the financial or recreational interests of private individuals or companies who chose to acquire land.

SLF beneficiaries (A, B, C, and F) also commonly reported a feeling of security which accompanied ownership. Beneficiary F was strongly motivated by insecurity of land tenure towards community ownership. When the land it was occupying was put up to market, this beneficiary feared the community group would be forced to cease its operations if a new private owner took over.

In all cases, beneficiaries agreed that security of tenure lowered the risk of developments being interfered or objected to by landlords, or threatened by assets being sold on to owners with different intentions for land use. Ownership facilitated long-term planning and strategic management by improving stability in land use and control over development. While Beneficiary G did not rule out the possibility of pursuing a housing development without ownership, such a project would never have been attempted in the first place owing to the uncertainty and difficulty associated with leasing or other forms of land tenure. The stability brought about by ownership in this case made it worth planning in the long term, as the risk to derailment of community ambitions was significantly lessened.

The other principal immediate outcome, again reported by every SLF beneficiary interviewed, was a surge in interest and activity within the community upon asset acquisition. This was described variously as 'community interest' (Beneficiary D), 'energy' and 'enthusiasm' (Beneficiary E) or 'momentum' (Beneficiary A), which seemed to be generated upon taking ownership. In some cases (Beneficiaries A, C, D and E) there was a sense of increased engagement or buy-in from the local community following ownership, and the assets themselves became more of a focal point for the community. This was evident in some cases in an increase in enquiries or involvement from the wider community (Beneficiaries A and E), while other groups related it to a visible increase in social activities being carried out following asset ownership (Beneficiaries C and D).

Most SLF beneficiaries interviewed also reported an increased sense of confidence (Beneficiaries A, C, D, E, F and G). This confidence encouraged communities in the post-acquisition period and confidence was cited as encouraging communities' confidence in their abilities to take forward larger and more complex development projects following acquisition. Completing the asset acquisition process had for Beneficiary C 'shown what we can achieve' and increased ambitions for development projects following acquisition. Some communities also felt they were taken more seriously by external stakeholders, including other funders (all beneficiaries), other organisations, e.g. the local authority or other service delivery partners (Beneficiaries B and G), and one case had noted significantly increased media interest in the assets following acquisition (Beneficiary D). The confidence which ownership conferred was important in raising the profile of the community: following acquisition Beneficiary D reported the feeling that 'we're now definitely on the map'.

Intermediate outcomes

The set of immediate outcomes described in the previous section concerns intangible changes in the psychology and outlook of the community, and lacks a material impact on more tangible outcomes. In all of the cases analysed, ownership also fed into a set of intermediate outcomes in which tangible progress towards the community's ambitions was evident. These intermediate benefits could be seen on three main levels: in helping to leverage additional finance, in simplifying the development process, and in using acquired assets for small-scale, socially-focused activities for the community.

The SLF lacks a development funding component, and communities were expected in many cases to seek further funding upon acquisition for development purposes. Recipients of SLF funding appear to have been highly successful in this regard, and end-of-grant reporting indicates that SLF beneficiaries have leveraged over £4.5 million in post-acquisition funding at time of writing from a variety of sources. SLF beneficiaries appeared to be particularly successful at securing GCA funding, with over £2.9 million already secured, and almost £5 million under consideration for GCA stage 2 funding. Given that over half the SLF beneficiaries have not reached the stage of end of grant reporting, the leverage figure is a significant underestimate of the current total leverage of all SLF beneficiaries, and this will also increase over time at beneficiaries attract more funding. In every case analysed, community groups had begun to work towards larger and more complex projects than had been attempted before acquisition, and ownership was considered crucial to beginning work on, or even considering, these more ambitious developments. Many of the cases analysed (Beneficiaries A, B, C, and G) also had active applications for large development grants at time of interview.

Both the ownership of assets and the attainment of SLF funding itself appear to have helped communities to attract development funding following acquisition. Interviewees across the three stakeholder groups agreed that many funders (including LEADER, GCA and the Rural Housing Fund) understood ownership as a desirable or essential criterion for awarding grants to support the development of assets. This was due in large part to the risk mitigated by the control over land use and security of tenure which ownership conferred, as well as the ability to capture any increase in asset value which development imparted.

SLF beneficiaries were unanimous in the view that having received SLF funding itself helped leverage further finance for development. SLF funding was seen to demonstrate to funders a track record in carrying out complex developments, and a mark of professionalism. This view was echoed by SLF delivery partners. Ownership for the communities analysed had in the medium term enabled a significant expansion of the size and scope of development opportunities being pursued (in each of the cases analysed, within 1-2 years), which without ownership would have been impossible to achieve. Under leasing, communities could not guarantee stability in land-ownership and lacked control over factors which could impede the development process. This risk made both communities and funders less likely to support large developments without ownership. This was evidenced in one case (Beneficiary F), which before acquiring their assets through the SLF had explored the possibility of GCA funding for acquisition and development, without success. When the SLF supported the community to take ownership of their land, a second application to GCA for development funding was approved.

Beneficiaries also related how ownership had simplified the development process. Ownership brought control over land use which made projects simpler to plan and enact on a practical level than through leasing or other forms of land tenure. Control of land was seen as a crucial factor in project planning and strategic management. Beneficiary F spoke of wishing to place a bench on a patch of land for public use - however even this small change in land use could not have been attempted under the previous lease arrangement with the private landlord since 'the process would have taken months' of negotiations. In the case of Beneficiary E, control of land use was crucial in permitting the construction of a continuous footpath around the community-owned loch for community recreational use. These are isolated incidents, however in every one of the cases analysed, each could point to services and projects which would not or could not have been pursued prior to acquisition. Under ownership, communities did not need permission for changes in land use, nor did they require maintaining constructive relationships with landlords which in several of the cases analysed had been fractious.

Many cases analysed (Beneficiaries C, D, E and F) also progressed to using the asset for small-scale social activities and services for the benefit of the wider community. Many of these activities were focused on redressing services unavailable to the community, or were otherwise responses to local problems. For example, Beneficiaries D and E were able to use their recently acquired assets to put on a variety of social events in the first year following acquisition. In the case of Beneficiary D, the main building acquired began to function as a community hub, with regular events such as a craft fair for local artists which was staged because there were no local opportunities for artists in the region. Beneficiary E responded to the declining use of the loch they acquired by staging a range of social activities including fun runs, wildlife activities and school and nursery visits, and encouraged public use of the buildings acquired. These activities raised the profile of the group significantly and helped them to increase visitor numbers to the loch significantly over the first two years. Most of these social activities were put on with little or no funding, beyond staff costs of a development worker.

In the cases analysed, the process of securing funding and beginning significant development works following acquisition tended to be lengthy. This delay was partly justified to allow the careful researching and planning which significant commercially-focused development projects invariably entailed. However, in many cases the delay was prolonged by lengthy lead-in times between securing funding for acquisition and funding for development (for instance, it would take 18 months to complete both stages of the GCA application process). In the cases with a focus primarily on income generation (Beneficiaries A, B, C and D), small socially-oriented activities would take place while development funding was sought for larger projects over the long term. These small-scale projects and social activities were important in sustaining the energy and momentum released upon ownership into the medium term, preventing the wider community from becoming disinterested while enabling the innovative use of acquired assets to address local priorities and social needs.

Development workers were considered by SLF beneficiaries to give rise to confidence in their ability to plan and manage large development projects. SLF beneficiary interviewees responded in every case that development workers were essential to the success of projects in the post-acquisition period, and that volunteer committees would not have had the capacity or confidence to carry out works in their absence. Of the beneficiaries interviewed, those managing or planning large and complex developments ( e.g. Beneficiaries A, B, F and G) all described the development worker role as crucial, and considered that these projects would not have been attempted with just a committee of volunteers. Development workers brought a degree of professionalism, dedication and energy which made community groups more self-assured and this in turn raised the ambitiousness of the development projects pursued. It is likely that this increase in confidence and ambition is a contributing factor to the success of SLF beneficiaries in leveraging significant amounts of post-acquisition development funding.

Development workers in most of the cases (Beneficiaries A, C, D, E and F) were also observed to play a leading role in service delivery and project management of small-scale socially-focused activities which engaged the wider community in the use of the acquired asset(s). In the case of Beneficiary E, the development worker was engaged in organizing fund-raising events, marketing and promotion of the asset, and building links with local nurseries and schools to increase its use. Having a consistent and professional presence behind its social events enabled Beneficiary D to sustain community interest and engagement two years following acquisition. This community body reported that development workers had a key role in preventing the energy and momentum which accompanied acquisition from burning out in the post-acquisition development process.

Long-term outcomes

Communities applying to the SLF were asked to consider how to achieve at least two out of four outcomes which spanned economic, social, and environmental domains, community engagement and community resilience. These outcomes represented the tangible impacts which the SLF aimed to achieve in the long term. Accordingly, SLF beneficiaries were prompted in interview to identify the more tangible outcomes which had been achieved through ownership. All cases could point to progress in the development of new services after taking ownership, and the majority could clearly demonstrate an increased level of community engagement and social activities following acquisition. However, far fewer communities felt they were in an advanced enough position to say they had achieved economic outcomes, for example increased turnover, profit, job creation, or tangible manifestations of community resilience, for instance increasing population levels, the restoration of vital services, or progress towards economic self-sufficiency.

There were two beneficiaries (A and D) which could demonstrate increasing revenue and progress towards self-sufficiency. These were both communities which had acquired assets which were in commercial use prior to ownership and in one case had significant pre-existing revenue streams, which were capitalised upon after acquisition. These cases both entailed significant development costs, however when compared with many other SLF projects, these developments needed less time, finance and creativity before they could begin to generate income. Larger and more complex SLF projects - for example estate buyouts, woodland developments, or larger housing projects - often had to undertake significant development work over a period of years before assets became usable and they could begin to generate any income. In three of the most complex cases analysed (Beneficiaries B, C and G), although each had plans to establish sustainable revenue streams through commercial activities, interviewees predicted it would still take years to achieve self-sufficiency.

With the exception of Beneficiaries A and D, none of the cases had a business plan to reach a state of economic self-sufficiency and no group had begun to make profit at the time of interview. This suggests that communities are not likely to be able to finance their own staff or project costs in the short or medium term, and most are likely to take a number of years to generate substantial revenue streams. This in turn suggests that achieving economic sustainability through community ownership, as opposed to realising its social benefits, is a long-term goal and can only occur after a lengthy development process. Only in situations where pre-existing revenue streams can be exploited can economic benefits be expected in the short term (in the cases analysed, within two years). However, given that much community ownership has traditionally taken place in situations of market failure and prolonged underdevelopment, building revenue streams and improving sustainability should be understood as a long-term ambition likely to take a number of years.

More success was seen in generating economic benefits indirectly to the wider community through local multipliers. This was an economic benefit shared by both amenity and commercially-focused projects, most clearly apparent in Beneficiaries A, D and E. This benefit was communicated through anecdotal evidence in the cases of Beneficiaries A and D, however Beneficiary E, through re-development and promotion of the loch and surrounding area, was able to substantially improve visitation rates which had clear knock-on effects for local cafes, pubs and hotels.

Another long-term benefit, which was apparent only with the most established community asset-owner, with acquisitions pre-dating its SLF award (Beneficiary G), was that having assets on the balance sheet improved the credibility of community bodies as financial entities. This group described how having assets on the balance sheet had acted as collateral to help achieve lower interest rates when borrowing privately and through social finance. This shows how asset ownership can support the long-term development of established and professionally-run community organisations by accessing more favourable interest rates when borrowing.

A final long-term benefit was that communities were better able to respond to opportunities which presented themselves after acquisition. Many of the cases analysed (Beneficiaries A, B, C and D) were engaged in activities which did not form part of their original business plan or ideas prior to ownership, but which had occurred as a result of the community taking advantage of local opportunities which had emerged following acquisition. For instance, Beneficiary D had recently been given the opportunity to take ownership at no cost of a local building under local authority ownership which the authority was seeking to be rid of, and had begun plans to turn part of the building into a commercial let. This case had also expanded into hosting weddings using the assets acquired, which was also unanticipated before ownership. Beneficiary B had just received funding at the time of interview to develop a marina to provide a long-term income stream and improve the accessibility of the community. Ownership had enabled the community to take advantage of a large local development project to develop a network of connected marinas. These examples would not have occurred had the communities not taken ownership of their assets, and they show that ownership can bring about opportunities which are unexpected at the time of acquisition. This supports Skerratt's argument that community asset owners achieve resilience in the long-term, not just in their ability to respond to threats or shocks, but through being pro-active and entrepreneurial. ^[5]

In the long-term, revenue funding appeared to be an important factor once again in enabling communities to move from intermediate to long-term outcomes. Many cases (Beneficiaries A, B, C and G) had large development projects underway which needed specific expertise - e.g. woodland management, knowledge of the planning permission process, or architectural qualifications and experience - without which the community would not have had the necessary skills base to proceed with desired developments. Development workers were felt by one delivery partner to punch above their weight in many cases, bringing skills which were crucial in moving development projects forward. Beneficiary A for instance was able to attain planning permission for three properties on land it had acquired because of the development worker's knowledge of the planning process and architectural background. This made it possible to tackle a highly complex project which the volunteer committee lacking such skills would have found much more time consuming and technically challenging.

In all cases, development workers took a lead on fundraising efforts for development. Development workers brought with them knowledge of the funding landscape and often were accomplished in preparing confident grant applications. Development workers would lend additional capacity in making sure that applications were strong, and that projects were delivered on time. In this way, the presence of paid development workers was observed to accelerate the pace of development and shorten lead-in times between acquisition and the initiation of development projects. The cases analysed were highly successful in securing additional funds, with two cases (Beneficiaries B and F) in receipt of grants of more than £500,000 for large development projects. These beneficiaries were unequivocal that funding for these projects would not have been secured had development workers not been employed.

Understanding the outcomes of community ownership

Ownership in the cases analysed was observed to have triggered a common chain of effects whereby the intangible benefits occurring immediately upon ownership facilitated the transition to a set of medium-term 'intermediate' outcomes, which in turn eventually resulted in more tangible impacts in the long-term. The logic model presented in Figure 3, below, attempts to capture this process in detail.

Figure 3. The sequential realisation of outcomes under community ownership

SLF beneficiaries interviewed understood the main immediate benefit of ownership as the ability to take a long-term and strategic approach to development which was better linked to local concerns and harnessed local assets. This was buoyed in all cases by an increased sense of community energy and momentum released upon ownership, and a greater sense of confidence and ambition shared by the community.

These immediate outcomes enabled the transition into a set of intermediate outcomes where more concrete progress was observed. In this stage, ownership enabled a more straightforward means of land use than previous arrangements of asset use such as through leasing. This facilitated the strategic management of assets over the long-term, and made it both possible and worthwhile to plan larger development projects in the post-acquisition period. Control over asset use also enabled communities to use assets for community benefit on their own terms, which in many of the cases analysed led to an increase in social events for the community which built community cohesion and engagement.

Ownership also aided communities significantly in leveraging funding in the post-acquisition period for larger and more significant developments. Ownership itself brought communities the security of tenure which mitigated risk associated with development and assured funders that projects could be completed. Having received SLF funding was an additional reassurance for funders, and was an additional factor for the observed success of SLF beneficiaries in acquiring significant finance for developments following acquisition.

Ownership was also observed to facilitate community resilience in the long-term, evident in the gradual increase in revenue generation and progress towards self-sufficiency in Beneficiaries A and D, and in the use of assets on the balance sheet in facilitating better access to social finance in the case of Beneficiary G. Communities also became more pro-active and entrepreneurial, with ownership of assets enabling several groups (Beneficiaries A, B, C and D) to respond to opportunities for development which had arisen after acquisition.

Development workers were observed to facilitate the transition of immediate outcomes to intermediate outcomes by building community confidence and the ambitiousness of post-acquisition development projects, and also by sustaining energy and momentum into the post-acquisition development process. Development workers also helped some cases to move from immediate to long-term outcomes, by improving fundraising capacity and the management of large development projects, and also by bringing specific professional skills which could make development projects a reality.

Negative outcomes

While many of the positive impacts of ownership described so far were experienced to greater or lesser degrees by different communities, no SLF beneficiary interviewed reported any notable negative impacts which had occurred following ownership despite being asked directly about this.

The main negative outcomes uncovered were experienced by communities which were judged to be ineligible for the SLF. Some groups were blocked from applying for the full SLF grant due to European Union State Aid concerns, which was a subject of significant contestation from 2012-2014. State Aid was a particularly thorny issue with communities seeking to take over woodland areas. Delivery partners did eventually reach a shared position on State Aid which allowed most of the applications from community woodland groups to be approved eventually, however the process resulted in significant delays and frustrations for the affected groups.

One case (Beneficiary C) requested £750,000, but later accepted a smaller grant of £311,500, making use of the de minimis regulation in State Aid which limits the total funding available to be disbursed. In order to raise the extra capital for acquisition (total project cost of £1,663,500) this group was forced to grant a 99-year lease for its commercial timber activities to a private company, which nullified the community's original plans to use the assets as a commercial business to generate revenue themselves. The group's ambitions for self-sufficiency were significantly hampered without the commercial timber activities, and the group remained dependent on short-term grants to keep the services it had developed running. This negative outcome is specific to one particular application, however it is an indication that poor communication and a lack of clear guidance shared across the delivery partners can have significant negative consequences for communities.

Section summary

Community ownership has been, in every case under study, an overwhelmingly positive factor for sustainable development. No SLF beneficiary spoken to reported any negative outcomes arising from ownership, and all reported significant improvements in conditions following acquisition. Many of the outcomes of community ownership reported here resonate with the findings of the Short Life Working Group ( SLWG) report, ^[6] which in itself suggests that the SLF has been an efficient mechanism for realising many of the benefits of community ownership.

The main point which the findings presented here add to existing understanding of the outcomes of community ownership is a greater appreciation of the broadly linear and sequential process through which outcomes are achieved. Ownership in the cases analysed triggered a common chain of effects whereby the intangible outcomes which occurred upon immediately upon ownership facilitated the transition to a set of medium-term 'intermediate' outcomes, which in turn eventually resulted in more tangible impacts in the long-term. The logic model presented in Figure 3 attempts to capture this process.

Communities which had taken over assets in existing use and in a good state of repair were able to demonstrate material progress towards long-term economic outcomes (Beneficiaries A, D and E), either to the wider community through increasing local economic multipliers (Beneficiaries D and E), or directly to the community body through increasing revenue streams (Beneficiaries A and D). Most of the cases analysed, particularly those which required more substantial post-acquisition development work, had not reached such an advanced stage of development by the time of interview. Given that the cases analysed were amongst the first awards given by the SLF, it can be assumed that the majority of projects funded by the SLF are yet to achieve long-term outcomes. Most projects had however accessed significant further funding streams and were undertaking large developments, suggesting that, in accordance with the logic model in Figure 3, more tangible long-term benefits will be achieved further down the line.

Understanding the outcomes of community ownership as a sequential process implies that funds which aim to realize the benefits of community ownership should aim to identify and enhance the factors which accelerate progress along this sequence of outcomes, and limit the factors which impede progress. Findings suggest that revenue funding for paid development workers had a key role in aiding communities in transitioning firstly from immediate to intermediate outcomes, and then from intermediate to long-term outcomes. This is represented by the curved arrows in Figure 3.