Scottish Rural Development Programme 2014-2020: Evaluation of Capital Grant Schemes – Main Report

Executive Summary

This summary presents a high-level summary of findings of the independent evaluation of three capital grant schemes funded through the Scottish Rural Development Programme (SRDP) 2014-2020. The schemes subject to evaluation were the: New Entrants Capital Grant Scheme (NECGS), Small Farms Grant Scheme (SFGS), and Crofting Agricultural Grants Scheme (CAGS).

The evaluation findings confirm that the CAGS and NECGS were popular schemes and supported many new entrants and crofters. CAGS is a long-established grant scheme and is highly valued among the crofting community, while the NECGS was over-subscribed. SFGS under-performed due to scheme design and eligibility issues.

The grant schemes have broadly supported the right type of project activities (for example, agricultural sheds, fencing, field drainage, land management, equipment for the handling and treatment of livestock), and importantly supported small and large projects alike. The maximum individual award size of £25,000 has been at this level for some time. There should be flexibility and discretion to make larger awards for some capital projects where the cost of inflation has made items more expensive.

Grant scheme monitoring arrangements were limited (exceptions being financial claim reporting and inspections), and data from the SG APEX IT system was also incomplete. There is therefore scope for improvement in this area of scheme management to better capture evidence on activities, outputs, and short-term outcomes.

The grant schemes were, however, universally welcomed and valued by stakeholders and grant recipients. Support for industries like farming are considered vitally important given its long history, tradition, and presence at the heart of rural communities. Grant support, including for infrastructure development and modernisation, was viewed as crucial to further help develop small agricultural holdings into economically viable businesses and improve their efficiency with respect to mitigating climate change and enhancing the environment.

Farmers and crofters expressed high levels of satisfaction with their interaction with, and support received from, Rural Payments and Inspections Division (RPID) area office staff. Those who used agents to help with the grant application form also considered this support invaluable. The evaluation, however, found that many of the grant schemes processes worked less well for farmers and crofters, including: ease of sourcing funding upfront to pay for the project; maximum individual award size; ease of completing application forms; providing supporting evidence (the required number of quotes); time taken to receive a decision on application; and time taken to receive payment.

These issues are likely to act as barriers to participation for some farmers and crofters. SG should continue with its efforts to introduce standard costs for some capital improvements, and to undertake regular reviews of standard costs to ensure they remain relevant and appropriate. SG should also undertake further messaging and communication with farmers and crofters to increase awareness among grant recipients that they can submit interim claims for grant funding – this would help to ease some (but not all) of the cash-flow pressures experienced by some grant recipients.

Farmer and crofter project delivery was impacted by a range of issues, not least the COVID-19 pandemic and wider factors outwith their control – for example, poor weather, the ability to find suitable contractors, supply chain issues, and price increases. Wider feedback from grant recipients was, however, mainly positive, including that:

• all farmers and crofters, except one, who answered the question on benefits (99%) reported at least one benefit achieved as a direct result of the grant support. By far the main benefit reported was improved stock control, followed by improved hygiene conditions and animal welfare standards, and improved grassland management.
• almost all farmers and crofters (95%) who answered the question on business outcomes reported the achievement of at least one outcome as a direct result of the grant support – for example, reduced livestock mortality, extended grazing periods, and reduced labour input.
• the grant support made a quantifiable impact on recipient farms and crofts. The grant support: increased annual work units (FTE) employment by 75 (2-years post project completion); increased the value of sales by £62.5m (2-years post project completion); and increased the value of stock by £19.2m (2-years post project completion).
• additionality of the support was high.

An identified need for capital grant support remains – most farmers and crofters indicated a current/future need for support, primarily in the form of grant and no-low-cost loans to support capital projects, similar to project activities supported by the capital grant schemes. As SG may be constrained in its ability to provide capital grant funding in the future this may result in a mismatch when the identified needs of farmers and crofters are considered. While the move to an online application process for future SG grant support for farmers and crofters is generally considered a sensible approach, it was recognised that it may not suit everyone (for example, older farmers and crofters with less digital skills), and that it would depend on the quality and functionality of any new process. Any new online process should be refreshed, streamlined, and simplified to ensure it is accessible to crofters and small farmers, including those who cannot afford to pay for professional support from agents. Farmers and crofters could be involved in the design and testing of any new online application process to ensure it is fit for purpose, easy to use, and does not unintentionally exclude the intended target audience.