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October 9, 2013

Action needed from the top

The law of unintended consequences has rarely been better illustrated than in the application of EU State Aid rules across the community sector. In recent years, the aspirations of countless communities have been thwarted by the interpretation of these rules by public funders.  The Alliance has proposed some actions that Scottish Government might take to improve the situation. Something needs done to prevent the sort of nonsense that the folk on Raasay are having to contend with.  


Action needed from the top

Third Force News 26th September

A COMMUNITY may have to abandon plans to buy a forest on a remote island after European funding restrictions prevented it raising enough cash for the purchase.

Residents of the Inner Hebridean island of Raasay say plans to buy 740 acres of Forestry Commission land have come to a halt because strict European Commission (EU) competition laws mean they can only receive 20% of the costs through public funding.

The problem has occurred because timber in the forest is categorised as an EU-traded commodity and therefore subject to competition laws restricting the amount of public cash that can be granted.

Raasay Community, which is making the bid, said the land which is valued at £400,000 was already too expensive for a small community group to raise, and alongside the funding restrictions, it has now made its bid practically impossible.

It now says that unless laws are relaxed, other communities will be locked out from similar buyouts

Raasay Community’s development officer, Lloyd Gudgeon, said the only hope was that its bid for funding could be considered using different criteria.

He said: “The most we can expect from public funding support is just 20% of the total price, which is not very much when you have to raise £400,000.

“If we buy it, and we are able to use it to create jobs and affordable housing, this will lower costs for other government departments.

“It will save money on income support for instance.”

A spokeswoman from Highlands and Islands Enterprise (HIE), which adminsters funding, said the use of state aid is a highly regulated mechanism, particularly around the acquisition of agricultural or forestry land and therefore its hands were tied.

It would however try to assist where possible said the spokeswoman.

“HIE is proactively working with relevant stakeholders to develop state aid-compliant interventions which should make some forestry projects more affordable for communities,” she said.

Despite having only 161 residents, Raasay has been successful in a number of community buyouts over the years.

Raasay Community Company was formed in 2006 and, using the Land Reform Act, bought Raasay House, its policies and walled garden, from HIE in December 2007.

It reopened the spectacular building this week as part of a £4.5m project, four years after a fire gutted the building.

The building offers a dramatic focal point for locals and visitors and delivers income to be re-invested in community projects.

It follows the island’s crofters’ association winning a five year lease for sporting rights from the Scottish Government after the lease was offered to a private company.

The Raasay Crofters’ Association managed the rights for 18 years, after a public agency gave them up, and it had expected to continue to do so when the lease was put out for tender last year.

It accused the government of acting like an absentee landlord and following a public and political row, the crofting association was awarded an extension.