Audit and Risk Com­mit­tee — Paper 8

For inform­a­tion

Title: LEAD­ER Grant Fund­ing – les­sons learned

Pre­pared by: Dav­id Camer­on, Deputy CEO Cairngorms NPA and Vice-Chair, Cairngorms Trust

19 April 2024

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Pur­pose of Paper

This paper sets out the les­sons learned and wider reflec­tions of run­ning a Com­munity Led Loc­al Devel­op­ment (CLLD) grant scheme under the umbrella of the Scot­tish Government’s LEAD­ER Pro­gramme. The intent of this paper is to help con­sid­er­a­tion in estab­lish­ment of future CLLD and grant fund­ing ini­ti­at­ives sup­por­ted in some way by the Park Authority.

This paper is not an eval­u­ation of the LEAD­ER Pro­gramme; this has already been con­duc­ted by inde­pend­ent con­sult­ants. Nor is it an audit of the Programme’s oper­a­tions and con­trols; this has been con­duc­ted reg­u­larly by intern­al audit. The paper sets out the reflec­tions of those involved in man­aging and deliv­er­ing the Pro­gramme on the les­sons to be learned from their exper­i­ence which may help inform future design and deliv­ery of grant programmes.

Sum­mary of Activ­it­ies Under Consideration

LEAD­ER is the title of an EU grant scheme sup­port­ing com­munity led loc­al devel­op­ment (CLLD). The under­ly­ing prin­ciple of the LEAD­ER grant scheme is that no mat­ter how well designed and delivered, nation­al fund­ing pro­grammes risk miss­ing key loc­al pri­or­it­ies, with that risk more extreme in rur­al areas where loc­al vari­ations in access to ser­vices and loc­al devel­op­ment pri­or­it­ies may be very spe­cif­ic to indi­vidu­al or groups of rur­al com­munit­ies. Con­sequently, 5% of fund­ing made avail­able through strands of EU rur­al and agri­cul­ture pro­grammes are ring-fenced for rur­al devel­op­ment pri­or­it­ies fun­ded through LEAD­ER. Use of fund­ing is to be determ­ined by com­munity led bod­ies and not by pub­lic agencies.

Fin­an­cial alloc­a­tions are made nation­ally to rur­al areas, with the deliv­ery of fund­ing pro­grammes led by Loc­al Actions Groups (LAGs). LAGs com­prise a range of mem­bers from com­munity, vol­un­tary, com­mer­cial and pub­lic sec­tor organ­isa­tions, with a minor­ity required to be from pub­lic sec­tor entit­ies. LAGs are often sup­por­ted by a pub­lic body to help provide fin­an­cial stew­ard­ship and a ​‘host’ for employ­ment of staff sup­port­ing the LAG. The Cairngorms has been iden­ti­fied as one of over 20 LAG areas in Scot­land receiv­ing a LEAD­ER alloc­a­tion from Scot­tish Government.

The LEAD­ER Grant Scheme comprised:

• Man­age­ment of nation­al funds by Scot­tish Gov­ern­ment, includ­ing fund­ing from EU aug­men­ted by nation­al fund­ing allocations.
• EU LEAD­ER Reg­u­la­tions, with nation­al LEAD­ER fund­ing guid­ance issued by Scot­tish Government.
• Park Author­ity act­ing as ​‘Account­able Body’ receiv­ing cash from Scot­tish Gov­ern­ment in line with alloc­a­tion made to Cairngorms Loc­al Action Group (CLAG) and mak­ing pay­ments to grantees as instruc­ted by CLAG. Also act­ing as employ­ing organ­isa­tion for CLAG staff, the costs of employ­ment being sup­por­ted in full from grant allocations.
• Cairngorms Loc­al Action Group Trust (‘Cairngorms Trust’) incor­por­ated as a char­it­able organ­isa­tion and act­ing as CLAG mak­ing fund­ing decisions with ref­er­ence to a Loc­al Devel­op­ment Strategy and EU, nation­al and loc­al fund­ing criteria.

Les­sons Learned

Pos­it­ive Aspects

The fol­low­ing are pos­it­ive ele­ments of the LEAD­ER grant pro­cesses that future schemes should seek to retain or build on.

1. Clear and con­sist­ent expres­sion of interest and applic­a­tion pro­cesses through­out the programme.
2. Expres­sion of interest (EOI) mech­an­ism allowed for early explor­a­tion of fit of pro­ject ideas with pro­gramme cri­ter­ia; early guid­ance to poten­tial applic­ants from staff and decision makers; help­ing applic­ants decide wheth­er to engage fur­ther and lim­it­ing waste of vol­un­tary time.
3. Pro­cesses helped res­ult in very few applic­a­tion refusals.
4. LEAD­ER approach was a pro­cess: staff led anim­a­tion and guid­ance, and sup­port of applic­ant groups was as much a fea­ture of the pro­cess wel­comed by com­munity groups as the res­ult­ant funding.
5. Loc­al Devel­op­ment Strategy set out clear and con­sist­ent cri­ter­ia through­out the pro­gramme peri­od: con­sist­ent decision-mak­ing across all applic­a­tions and clar­ity for applic­a­tions in con­sid­er­ing the fit of their plans with fund­ing available.
6. Clear out­comes for pro­gramme and inter­ven­tion rationale estab­lished by Loc­al Devel­op­ment Strategy, sup­por­ted by a suite of Key Per­form­ance Indic­at­ors from which applic­ants could choose to allow best fit of pro­ject to pro­gramme outcomes.
7. Reas­on­able fund­ing alloc­a­tion to sup­port staff time for both anim­a­tion and management.
8. Clear intern­al divi­sion of respons­ib­il­it­ies (swim lane respons­ib­il­it­ies) on each EOI and applic­a­tion allowed sep­ar­ate staff to act as advisors and to assess applications.
9. Clear gov­ernance of pro­gramme, with Cairngorms Trust an inde­pend­ent incor­por­ated body as decision maker and rela­tion­ships with Park Author­ity set out in an agreed Memor­andum of Understanding.
10. Clar­ity in gov­ernance arrange­ments sup­por­ted by intern­al clar­ity on and divi­sion of lead­er­ship respons­ib­il­it­ies with­in the Park Author­ity, with Cor­por­ate Ser­vices respons­ible for man­age­ment of pro­gramme and deliv­ery ori­ented ser­vices inde­pend­ently able to sup­port com­munit­ies in pro­ject development.
11. Park Author­ity sup­port of pro­gramme provided cash flow secur­ity and prompt grant pay­ments to com­munity groups.
12. Park Author­ity host­ing of staff provided stable employ­ment pos­i­tion for CLAG staff; max­im­ised effi­ciency in oper­a­tions and cost man­age­ment; and helped with recruit­ment and retention.
13. Com­mit­ment of trust­ees to pro­gramme deliv­ery and to work of Cairngorms Trust helped provide a con­sist­ent set of decision-makers through­out the programme.
14. Innov­a­tion in requir­ing all applic­ants, includ­ing busi­ness devel­op­ment, to demon­strate some meas­ure of com­munity bene­fit from their grant funding.
15. Pos­it­ive risk appet­ite: gov­ernance and decision-mak­ing arrange­ments allowed for appro­pri­ate level of open­ness to risk in fund­ing com­munity led pro­jects, sup­por­ted by sep­ar­a­tion in decision-mak­ing from pub­lic sec­tor account­able body.
16. Clear and stand­ard grant terms and con­di­tions which included pro­vi­sion for pro­mo­tion of sup­port from LEAD­ER funds by suc­cess­ful applicants.
17. Respect for gov­ernance arrange­ments by all parties con­cerned. Clear decision mak­ing with no attempt by Park Author­ity as Account­able Body to ques­tion Trust decisions. Arrange­ments for nom­in­a­tion of lead Dir­ect­or and a board mem­ber as Trust­ees and engage­ment in Trust decisions helped sup­port this.

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1. Recog­ni­tion of the Cairngorms Nation­al Park bound­ary as a dis­crete LAG area allowed for clear policy link­ages to the Cairngorms Nation­al Park Part­ner­ship Plan and is an excel­lent demon­stra­tion of nation­al policy recog­nising the value of Nation­al Parks in place based policy mak­ing and delivery.
2. Com­munity groups reg­u­larly high­lighted the import­ance of sup­port from the CLAG staff in the devel­op­ment of their ideas into deliv­er­able pro­jects and their sup­port in pro­ject deliv­ery as key aspects of suc­cess­ful deliv­ery of their priorities.
3. LEAD­ER with­in the con­text of secure multi-year fund­ing worked well as a pro­cess and not simply a grant award­ing mech­an­ism: there was time to devel­op and work on idea, some­times link­ing dif­fer­ing groups with sim­il­ar ambi­tions togeth­er, before final­ising and pro­gress­ing pro­ject applications.
4. Know­ledge exchange and cooper­a­tion pro­jects between LAG areas domest­ic­ally and inter­na­tion­ally help devel­op new ideas for loc­al implementation.

Areas for Attention

The fol­low­ing are ele­ments of the LEAD­ER grant pro­cesses that atten­tion needs to be giv­en to in order that future schemes oper­ated with some degree of dual roles between the Cairngorms Trust or oth­er com­munity led man­age­ment body and the Park Author­ity can be cla­ri­fied or improved.

1. Clar­ity of com­mu­nic­a­tions and respons­ib­il­it­ies between staff hos­ted by Park Author­ity to design and man­age the pro­gramme, and those with a wider deliv­ery interest in projects.
2. Over­lap of CLAG staff in anim­a­tion of pro­gramme with Park Author­ity com­munity engage­ment activ­it­ies: clar­ity of intern­al com­mu­nic­a­tions and staff respons­ib­il­it­ies again required in areas of com­munity engagement.
3. Some con­fu­sion with pub­lic over Cairngorms Trust and Park Author­ity roles, poten­tially made worse by funds com­ing from a Park Author­ity bank account / pay­ment remittance.
4. Key Per­form­ance Indic­at­or tar­gets in many cases needed to be best guesses / estim­ates of reas­on­able impact. Data­sets rel­ev­ant to Cairngorms baseline pos­i­tion were dif­fi­cult to establish.
5. Com­plex match fund­ing pack­ages for many pro­jects made for exten­ded approv­al pro­cesses in some cases. LEAD­ER fund­ing needed to be ​“final enabling sup­port”. How­ever, this is a com­mon require­ment for many fun­ders, lead­ing to mul­tiple fund­ing agen­cies all wish­ing to make the ​‘last’ decision.
6. Com­plex match fund­ing for many pro­jects res­ul­ted in dif­fi­cult pro­ject man­age­ment where cost and deliv­ery vari­ations arose in pro­ject delivery.

Neg­at­ive and / or Sig­ni­fic­ant Risk Elements

The fol­low­ing are ele­ments of the LEAD­ER grant pro­cesses that were neg­at­ive, cre­ated sig­ni­fic­ant risk which was dif­fi­cult to mit­ig­ate and / or impeded effect­ive deliv­ery of the pro­gramme which need to be avoided or resolved pri­or to imple­ment­a­tion of a sim­il­ar scheme.

1. Com­plex guid­ing reg­u­la­tions made even more com­plex by added lay­er of nation­al guidance.
2. Delayed issue of nation­al guid­ance and fin­an­cial allocations.
3. Incon­sist­ent inter­pret­a­tion of guid­ance by dif­fer­ing officers at Scot­tish Gov­ern­ment level, and between teams in Scot­tish Government.
4. High level of fin­an­cial risk to the Park Author­ity as Account­able Body as a con­sequence of com­plex reg­u­la­tions and guid­ance and incon­sist­ent inter­pret­a­tions lead­ing to risks of ineligible pay­ments and pen­al­ties. Risk mit­ig­a­tion through mak­ing spe­cif­ic budget pro­vi­sion for ineligible payments.
5. Risk appet­ite inher­ent in LEAD­ER prin­ciples not shared at gov­ern­ment admin­is­tra­tion level.
6. Sig­ni­fic­ant delays at times in reim­burse­ment of grant pay­ments made by Park Author­ity as Account­able Body by Scot­tish Government.
7. Com­plex, admin­is­trat­ively heavy admin­is­tra­tion and IT systems.

Cur­rent Context

The Cairngorms no longer received LEAD­ER fund­ing since Brexit. UK Gov­ern­ment replace­ment fund­ing such as Lev­el­ling Up Funds has ten­ded to focus on loc­al author­it­ies as lead con­tacts and this has by-passed oth­er agen­cies such as Nation­al Parks. Scot­tish Gov­ern­ment has com­menced a LEAD­ER replace­ment fund from domest­ic budgets, which has grown in scale over the last 3 years. The CLAG con­tin­ues to lead on the man­age­ment and deliv­ery of an annu­al alloc­a­tion of funds, which exceeded £400,000 in ²⁰²³⁄₂₄. The les­sons learned set out above have been reflec­ted on in the devel­op­ment of man­age­ment and admin­is­tra­tion arrange­ments for these funds, albeit some aspects of these reflec­tions are less rel­ev­ant to single year fund­ing alloc­a­tions. The devel­op­ment and design of the Com­munity Led Cli­mate Grant Pro­gramme, as part of the Cairngorms 2030 (C2030) Pro­gramme, will build on the les­sons learned set out in this paper. This grant pro­gramme, as with oth­er ele­ments of the C2030 pro­gramme, is now at the early phase of design. The con­sid­er­a­tions set out in this paper will also inform the devel­op­ment and deliv­ery of the Park Authority’s plans for a Cli­mate Adapt­a­tion Cap­it­al Fund as part of deploy­ment of cap­it­al resources in the ²⁰²⁴⁄₂₅ budget.

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