Change of Policy at the HIE?

The Government is concentrating the whole of its purpose -through all its institutional apparatus -on economic growth. HIE, as one of the Government’s key delivery agencies, therefore plays a central role in advancing this agenda in the Highlands and Islands.

The Government continues to value HIE’s SC remit and wishes HIE to be involved in community development activity but it has re-aligned the institutional context within which HIE delivers the work. Creating stronger, more dynamic and sustainable communities is integral to the work of HIE and its activities in achieving GES objectives. These challenges are greatest in the fragile areas, but are also still to be found in rural parts of the H&I away from the main settlements. HIE’s SC activities contribute to the following GES strategic challenges:

• Economic growth -enabling social enterprises and stronger communities to foster growth
• Population -creating the conditions for talented people to live, work and remain in the area
• Solidarity (social equity) -developing social enterprises and an enterprising third sector to offer opportunities for those more distant from the workforce
• Cohesion (regional equity) -ensuring remote and fragile areas contribute to, and benefit from, economic growth
• Sustainability (inter-generational equity) -taking forward community renewable energy and other environmental initiatives.

As the Government’s enterprise agency for north Scotland, HIE will take a leadership role in promoting social enterprise. Whilst it is accepted that a healthy voluntary sector is vitally important in civil society, HIE can no longer be a lead player in supporting this activity, a task which will instead be carried by the Government itself, with local government and national sectoral bodies such as SCVO.

Policy Objectives

With GES clearly in mind, the following objectives for SC assistance are suggested:
• Asset development.
• The acquisition and/or enhancement of community-owned assets which have the potential to generate income.
• Building community capacity.
• Building the skills, confidence, leadership and infrastructure of communities so that they can maximise the income-earning potential of their assets, tangible and intangible.

These objectives apply to all rural communities, but we will focus our resources especially on the fragile areas, where disadvantage, peripherality, lack of local resources and constrained service provision are most keenly felt.

Policy Framework

The objectives above lead to the following proposals for a new policy framework:
• That every proposal is worked up so that it shows clearly how it will achieve GES objectives
• We will assume a proactive role. Every approval will be clearly targeted at new emergent or established social enterprise activity which has the potential to grow. This will mean that in many cases we will lead by making the first contribution rather than being the last brick in the wall.
• We will eliminate the very smallest grants, recognising that these are rarely directed at social enterprise activities, and acknowledging that resources in nearly all of our communities are comparatively greater now that in previous eras, and they have access to a wider range of external funding sources other than HIE.
• The emphasis will be on assisting community-based social enterprises, defined as incorporated open-membership voluntary groups. Assistance will be defined as assisting with the acquisition/enhancement of assets, and the building of capacity.
• Currently policy on capacity building will be retained and refined; current policy makes use of a series of capacity ‘credits’ which demonstrate that the community’s ability to operate is enhanced in some way by the award.
• Global approvals will cease
• We will draw a firmer distinction between fragile and non-fragile communities, and will provide preferential levels of interventions for the fragile area, as described below.

Fragile Areas

HIE will tackle the equity challenges of solidarity and cohesion through a new Growth at the Edge approach to generate economic growth and create the conditions for population retention and growth in the fragile areas. This will include the following elements:
• Differential rates of intervention. The minimum SC grant to assist the acquisition of income-generating assets with be £5k. While communities will be expected to make a contribution, the rate of HIE intervention will be governed by appraisal of additionality and displacement (while retaining compliance with State Aid regulations). Assistance for capacity building (feasibility studies, start up costs, marketing, R&D etc) will be assessed on a case by case basis, and can be upto 100% fundable by HIE intervention
• Continued programme of assisting communities to acquire land assets e.g. North Harris, S Uist, Assynt; and develop renewable energy initiatives which generate income e.g. Eigg, Gigha, and Tiree
• Targeted focussed proactive intervention, potentially through ‘community account management;, which we will undertake work to define
• Evolution of the Initiative at the Edge programme into a mainstreamed approach, in partnership with Local Authorities and CPPs
• Selective interventions to other public bodies projects where there is clear community benefit and genuine partnership working is in evidence
• Assistance to micro businesses where there is clear community benefit
• Development of innovative ideas such as low carbon islands, community “hubs”, development of new crofts and woodland crofts and delivery of services through digital technology.

Non-fragile areas

• Differential rates of intervention. The minimum SC grant to assist the acquisition of income-generating assets will be £10k. While communities will be expected to make a contribution, the rate of HIE intervention will be governed by appraisal of additionality and displacement (while retaining compliance with State Aid regulations). Assistance for capacity building (feasibility studies, start up costs, marketing, R&D etc) will be assessed on a case by case basis, and can be up to 100% fundable by HIE intervention.
• In smaller and more rural communities, assistance will be offered to communities wishing to acquire and develop significant income generating assets, such as land, community renewable energy projects, community buildings, and recreational/amenity facilities e.g. woodland management in Laggan; the Pier Arts Centre in Stromness, renewable energy in the new community centre in Boat of Garten; mountain rescue HQ in Arran; multi- purpose community centre in Dalmally; community shop in Sleat
• Selective ‘transformational’ projects in the cultural and sports area e.g. Campbeltown swimming pool, An Lanntair in Stornoway, Fas centre for the creative industries in Skye
• In disadvantaged urban communities, in close liaison with Local Authorities in their delivery of Single Outcome Agreements, the establishment of social enterprises designed to promote sustainable social cohesion and participation e.g. COPE in Lerwick; Ness Soaps in Merkinch; Pultneytown People’s project in Wick.

We will no longer be assisting:
• Small grants as outlined above
• Social projects in larger settlements particularly in the Inner Moray Firth
• Ongoing revenue costs
• Repeat funding
• Good causes
• Non-revenue generating activity
• Small scale sporting and arts activity.

The effects of adopting these policies will be a clearer focus on social enterprise, and the contribution it makes to economic growth, population increase, and to solidarity, cohesion and sustainability Bearing in mind that the growth sectors within social enterprise are renewables, recycling, and food, often combined with providing access to the workplace for mentally or physically disabled people, we will develop sectoral approaches to working with these and other emergent key sectors.

Programme targets are also set to reflect the contribution which the activities will make to the achievement of the GES targets. The measures for the key
programmes are as follows:
2008/09 2009/10 2010/11
No of account managed social enterprises growth plans** 40 50 60
Increase in turnover in the social economy £m * * *
No of community groups supported to invest in renewable energy 20 25 30
Decrease in carbon dioxide emissions (tonnes) * * *

*Targets under development
**New each year

Guidelines

We will develop detailed guidelines for incorporating in the revised rulebook, which will include clear and agreed definitions of the terminology and the concepts underpinning the new SC approach.

John Watt/Chris Higgins
HIE, Strengthening Communities,
4/6/08