Scottish Rural Development Programme 2014-2020: ex-post evaluation - annex A scheme summary report

7. Forestry Grant Scheme

Scheme description

Under the SRDP 2014-2020 the Forestry Grant Scheme (FGS) was administered by Scottish Forestry, the SG agency responsible for forestry policy, support and regulation. The scheme provided financial support and incentives for the creation of new woodlands and the management of existing woodlands.

In the first two years of the Programme, the land under forestry management was due to on-going commitments from the 2007-2013 Programme. Forestry land was under management as a result of the FGS from 2016 onwards. Under the SRDP 2014-2020 final payments were made to beneficiaries in 2023.

Overall, the FGS aimed to reduce the impacts of climate change and provide timber for industry, as well as ensure that Scotland’s forests enhance and protect the environment and provide opportunities for public enjoyment. This aligned with the UK Forestry Standard’s three pillars of Sustainable Forest Management – Environmental, Economic and Social.

The FGS provided financial support for:

• the creation of new woodlands.
• the improvement and sustainable management of existing woodlands.
• tree health.
• rural development.

There were eight categories of financial support – two for the creation of new woodlands and six for the management of existing woodland, as follows:

• Woodland Creation (for the creation of new woodlands).
• Agroforestry (for the creation of silvoarable and silvopastoral woodlands).
• Woodland Improvement Grant (for improving the condition of habitats and species).
• Sustainable Management of Forests (for managing woodlands in a sustainable way).
• Tree Health (to support the control of Phytophthora ramorum).
• Harvesting and Processing (for the purchasing of new equipment to support forest nurseries and timber producers).
• Forest Infrastructure (to improve access to undermanaged woodlands).
• Forestry Co-operation (to facilitate forestry projects at a landscape scale).

Each category had individual aims and many were split into multiple ‘options’.^[2]

Grant support for each option under the categories listed above varied depending on the category, the option, and whether an application was within a target area. The full list of payments can be found under each category on the Rural Payments and Services website.

Grant payments were split into two distinct types, including:

• capital payments: one-off payments for capital works, normally paid once the approved work had been completed and inspected (typically for capital works relating to woodland creation, habitat improvements or infrastructure).
• annual recurrent payments: payments claimed annually by the applicant on their Single Application Form (normally for maintenance payments or payments to support sustainable forest management).

Public expenditure

The FGS was programmed to contribute to various Priorities and FAs, as follows:

• Priority 2 (Enhancing farm viability and competitiveness of all types of agriculture in all regions and promoting innovative farm technologies and the sustainable management of forests), and to FA 2A.
• Priority 4 (Restoring, preserving and enhancing ecosystems dependent on agriculture and forestry) and to FA 4A, FA 4B, and FA 4C.
• Priority 5 (Promoting resource efficiency and supporting the shift towards a low carbon and climate resilient economy in agriculture, food and forestry sectors) and to FA 5E.
• Priority 6 (Promoting social inclusion, poverty reduction and economic development in rural areas) and to FA 6A.

Note: all financial and performance data for Priority 4 and associated FAs are presented in the AIR 2023 in aggregate form. This is due to how the monitoring data was required by the EC.

A summary of the public expenditure achieved by the FGS is provided in Table 7.1. Under the SRDP 2014-2020 the FGS made final co-financed payments to beneficiaries in 2023.

The FGS also contributed to Priority 1 (Fostering knowledge transfer and innovation in agriculture, forestry, and rural areas), and to FA 1A (Fostering innovation, cooperation, and the development of the knowledge base in rural areas), and FA 1B (strengthening of links between agriculture, food production and forestry and research and innovation, including for the purpose of improved environmental management and performance).

Source: Scottish Government, Annual Implementation Report 2023.

Note: The table only includes outputs from projects that were approved under the FGS as part for the 2014-2020 Programme. The ongoing forestry related commitments from the 2007-2013 Programme were paid from the FGS budget. The total FGS spend was €376.0 million.

Performance indicators

A summary of the aggregated outcomes achieved by the FGS is provided in Table 7.2. Table 7.3 then provides details of annual outcomes where figures cannot be aggregated.

Source: Scottish Government, Annual Implementation Report 2023.

Note: The table only includes outputs from projects that were approved under the FGS as part of the 2014-2020 Programme. The ongoing forestry related commitments from the 2007-2013 Programme were paid from the FGS budget. The total FGS spend was €376.0 million.

Note: * Considers this output under measure 8.1 Support for afforestation/creation of woodland establishment. Does not include maintenance. See Table 7.3 for annual outcomes including both establishment and maintenance activity.

Source: Scottish Government, Annual Implementation Report 2023.

Three of the six target indicators for Priority 4 related to forestry. The AIR 2023 reports that:

• the original planned estimate for the area to be supported by sub-measure 15.1 was just over 200,000 hectares (the maximum area that could have been supported is just under 130,000) - the contribution to the targets of the area supported was therefore set 70,000 hectares too high. The planned output for the area to be supported was amended to reflect (approved in the ninth modification of the Programme).
• in total, 196,784 hectares of forestry land was under management contracts during the 2014-2020 Programme period - this is 13.96% of the total forest and other wooded land.
• the target percentage for all three forestry target indicators is 37.99% - meaning that only 36.73% of the target area has been under management contracts.
• using the final revised planned outputs, the area under management contracts that contribute to these three targets would have been 213,153 hectares. This would be the equivalent of 15.12% of the total forest and other wooded land - with there being 196,784 hectares of forestry land under management contracts this means that 92.23% of the amended planned output was achieved.

According to the AIR 2023 the amended planned outputs for the area under management contracts were not quite achieved as less area was supported under by sub-measure 15.1 than had been forecast.

Scheme evaluation

An evaluation of the FGS is currently being carried out by Scottish Forestry’s Forestry Development team, with input from other business areas. The final report is expected to be published before the end of the calendar year 2024. The purpose of this evaluation is to answer the relevant EC’s Common Evaluation Questions (CEQs) by analysing whether the FGS met its original aims and objectives.

Some early (draft) findings were shared with the EKOS study team and were also incorporated into the main ex-post programme evaluation report.

What worked well and/or less well

While the FGS has had some significant achievements over the delivery period (as outlined in the draft FGS evaluation report), Scottish Forestry officials noted that that there were several areas of under-performance. This was in the main due to challenges and/or a low volume of grant applications submitted.

Points raised included that:

• the desired split of 50% Conifer and Diverse Conifer options and 50% other woodland creation options^[3] was not met – a ratio of 61% / 39% respectively was achieved, suggesting that the incentive to plant Conifer and Diverse Conifer exceeded the other woodland creation options. However, investment markets are a key driver of commercial plantations, so this was also likely to be a contributing factor.
• protection costs for new woodlands equated to over one-third of capital expenditure (over £35 million^[4]) in order to protect new woodlands from deer - meanwhile deer management grants experienced low uptake, suggesting the root cause of the protection requirement may not be being proactively managed.
• a total of 29% of sampled projects deviated by greater than 10% from their contractual tree densities - this suggests that areas are not being maintained to contract standards.
• FGS grants targeted at species and age restructuring in felled woodlands predominantly funded the replanting of Sitka Spruce, indicating that the grant may not be providing sufficient incentive to use other diverse species.
• only 5% of forest plans including Low Impact Silvicultural Systems (LISS) brought forward a grant application – uptake was low – LISS are less competitive in a buoyant timber market as greater short-term profits can be gained through clearfell making employing LISS less attractive.
• only eight applications for FGS funded Deer Management Plans were received covering 16,000 hectares - non-grant funded Deer Management Plans are often submitted with Long Term Forest Plans, but many of these were vague and lacked commitment toward controlling deer populations at a landscape scale.
• a total of 60% of Habitats and Species applications included fencing, suggesting that domestic or wild herbivores are a significant pressure on sensitive habitats.
• there were large geographic gaps in areas funded under Species Conservation for operations that benefit Red Squirrel, Black Grouse, and Capercaillie - operations to benefit these species rely on being carried out cross-ownership and at a landscape scale, so the efficacy of existing funding may be compromised by lack of consistent, landscape scale approaches.
• applications for the Woods In and Around Town (WIAT) funding were low in some areas despite there being eligible settlements – largely due to issues such as limited staff resource in local authorities, arbitrary limits including caps on maximum funding, and distance to eligible woodlands.
• rural access only provides maintenance for existing path infrastructure, unlike WIAT grants which can provide capital costs for installing new infrastructure, meaning no new path networks were supported in rural areas. Applicants found the aims of the grant restrictive and diverted funding away from prescribed operations to achieve positive outcomes.
• there was low uptake of agroforestry grants (four applications in seven years) - this suggests that the grant structure and/or offer did not sufficiently incentivise farmers to implement silvoarable or silvopastoral systems.
• three-quarters of all Sheep and Trees applications were in South Scotland - while this is to be expected due to geography and land use patterns, other sheep farming areas, such as the Highlands, had low uptake.
• only three out of the 26 co-operation grants led to subsequent applications within the evaluation period, indicating that there are barriers to projects coming forward.
• only around one-third of Statutory Plant Health Notices were followed up with a grant application for Tree Health, however, grant applications were not required to comply with Statutory Plant Health Notices.
• on average 71% of FGS applications were processed within the specified FGS Customer Charter timeframe – this fell short of the 90% target, however, there is currently no way to quantify how much time an application is with an applicant to address specific feedback; therefore, this figure may be misleading.

Lessons learned

According to Scottish Forestry officials, the tale of the SRDP FGS will be very long. Some projects are due to run until 2028 with longer-term impacts not realised until 2050. It typically takes about 70 years for a planted woodland to adopt the characteristics of the native woodland and for other species and plants to make their home there.

The FGS evaluation largely examined forecast impacts and so this may not be representative of actual outcomes achieved by supported projects. Further research would be needed to examine impacts and outcomes achieved.

Scottish Forestry officials noted the important facilitating role of the agency in enabling key stakeholder groups to have a greater voice in informing and shaping forestry policy development and implementation. They felt this is in part due to the success of the FGS and in particular its horizontal impact on other government policy areas such as:

• farming and agriculture.
• net zero targets.
• low carbon activity.
• increasing regenerative practices.
• sustainable land management.
• enhancing, restoring, and protecting biodiversity.
• species and habitats.

The draft FGS evaluation notes that stakeholders consulted expressed support for increased grant rates – Scottish Forestry officials agree this is desirable to continue delivering the transformative change required for a nature positive transition to net zero.

Current status of the scheme

The FGS continues to operate as a legacy scheme supported by SG monies. According to Scottish Forestry officials the intention is to gradually start up new modules rather than replace the whole scheme all at once.

Under the current legacy of the FGS the same rules, regulations, and activity have been maintained but not the budget. The aim is to avoid closing and reopening the scheme as the Scottish Forestry team wish to enhance and improve on what is currently delivered. The biggest challenge reported by the delivery team is the IT required to match delivery plans. It was reported that IT and scheme rules, etc. are outdated and need refreshed and updated.

Scottish Forestry is undertaking a stakeholder consultation on the future of the FGS and considering future funding (other government and non-governmental funds). Scottish Forestry officials would like to contribute more to other projects and initiatives but have been constrained within the current framework - this is something they hope changes going forward.