Scottish Rural Development Programme 2014-2020: ex-post evaluation - main report

19. Focus Area 6A

Introduction

This chapter answers the evaluation question related to FA 6A.

CEQ 16: To what extent have RDP interventions supported the diversification, creation and development of small enterprises and job creation?

Contribution to FA 6A

Public expenditure

One scheme was programmed to contribute to FA 6A - FGS.

In addition, some money from the 2014-2020 Programme budget was used for on-going commitments from the 2007-2013 Programme for the RP scheme, with expenditure incurred up to and including 2018.

Source: Scottish Government, Annual Implementation Report, 2023.

The AIR 2023 reports that total realised expenditure under FA 6A was circa €4.8 million. Points to note include that:

• there was committed expenditure of €1.8 million and a realised expenditure of €3.3 million for Measure 8 - the realised expenditure was marginally greater than the planned expenditure for the whole Programme period. This was due to the level of interest in investments in forestry technology and primary processing/marketing (Sub-Measure 8.6) being higher than originally anticipated.
• the planned Programme expenditure for Measure 8 under FA 6A was increased as part of the sixth, seventh and ninth modifications of the Programme. The remaining relatively small difference in the planned and realised expenditure figures could be the result of different exchange rates between Pounds Sterling and Euros used for the expenditure figures.
• Measure 4 was programmed under FA 6A as part of the third modification of the SRDP 2014-2020, and all the planned expenditure for Measure 4 under FA 6A was ANF. The planned expenditure was allocated to Sub-Measure 4.2: support for investments in processing/marketing and/or development of agricultural products.
• by the end of the 2014-2020 Programme period, there had not been any committed or realised expenditure associated with Measure 4 under FA 6A as a similar type of support was offered under Sub-Measure 8.6: support for investments in forestry technologies and in processing, mobilising and marketing of forest products which proved popular.

Performance indicators

A summary of the outcomes achieved under FA 6A is provided in Table 19.2.

Source: Scottish Government, Annual Implementation Report, 2023.

Wider commentary at a SRDP scheme level

Forestry Grant Scheme

The FGS had a realised expenditure of circa €3.3 million under FA 6A – this represents a majority of the total realised expenditure under this FA (68%).

With respect to Measure 8, increasing forestry on farms represents a form of diversification, both of farm businesses and of the rural economy. There were undoubtedly positive impacts on rural business and jobs created that extend beyond the farms that undertook this form of diversification. According to SG officials a large amount of money went into rural areas via the FGS, and there were significant positive effects on contractors, agents and managers, nurseries producing and planting trees, and job creation. However, this was seen as a secondary benefit the wider environmental benefits of woodland (that is, biodiversity, carbon sequestration and other impacts).

This area was predominantly covered by the Harvesting and Processing Grant which could be used by grant recipients to buy machinery and relevant plant. The FGS evaluation notes that these actions helped the FGS in meeting its targets. The scheme evaluation reported additional benefits such as enabling the timber to be brought to market which would not have been a viable option without the grant support.

FGS application forms captured information on planned changes in employment, business turnover, etc. as a direct result of the grant support. To help SG report on actual impacts achieved, a survey was issued to New Woodland Creation grant recipients (110 contract holders) who had claimed funding for their project in 2018. This represented circa 10% of all unique registered businesses who had claimed for woodland creation funding between 2015 and 2021. The survey asked about the benefits that their project had and the number of jobs it created.

Key findings from the survey, which formed part of the FGS evaluation (currently in draft form) include that:

• a total of 28 responses were received (spanning 28 projects).
• a total of 3.85 FTE jobs were created - this equated to 0.14 FTE jobs per Woodland Creation project. It was not possible to accurately extrapolate this beyond the sample to the total population of projects supported due to significant variability in project types and scale.
• 12 respondents (43%) said that the woodland creation project had diversified their business, and examples included:
  • timber income.
  • carbon sequestration.
  • improved amenity for holiday letting business.
  • diversifying farm/croft portfolio.
  • improved cover for sporting activities.
• wider benefits reported included:
  • improved biodiversity.
  • improved landscape/visual amenity.
  • active deer management.

Other findings from the FGS evaluation relating to job creation through the Harvesting and Processing grant scheme include:

• a total of 165 FTE jobs are forecast to be created (note: not actual achieved).
• 25 projects (12.5% of the total projects within the evaluation period) were visited as part of the FGS evaluation. Actual FTE job creation over these projects averaged at 185% of forecasts, suggesting that the benefits of investment had surpassed most applicants’ expectations and total FTE jobs created may be much higher.

The FGS has also had some impact in respect of supporting contract labour in woodland creation (fencing, ground prep, planting); many of the workers in these areas are self-employed and sub-contracted to large private sector enterprises. However, the focus on woodland creation resulted in the FGS having very little impact on supporting development and diversification of forest enterprises.

EKOS conclusions and recommendations

The SRDP has supported the diversification, creation and development of small enterprises and job creation.

Early findings from the FGS evaluation indicate that job creation forecasts will be met and, in some instances, may be exceeded. This would be a key achievement for the FGS. However, it is important to note that forecast data is not actual achieved.

It was also noted, however, that the focus on woodland creation and increasing management of woodland resulted in the FGS having very little impact on supporting diversification of forest enterprises. Other parts of the SRDP contributed to these aims. For example, one of the target indicators for the LEADER programme shows that supported projects created 523 jobs.