< Back to '20th November 2019' briefing
November 19, 2019
Crisis looms
Local councils have always been able to make a distinction between capital and revenue expenditure. In order to finance capital projects, local authorities can borrow from the markets whereas revenue expenditure is determined by how much block grant or local tax revenue is generated. But the funds that are available to meet the capital requirements of the community sector seem to be determined by a different set of rules. Funding for capital projects – community assets – is dwindling fast and a crisis is looming. Andrew Ward from Creetown Initiative explains.
Creetown Initiative Ltd is a leading social enterprise that specialises in helping groups acquire and manage local assets. Taking control of local assets is actively encouraged by the Scottish Government and in our experience local ownership is effective and can bring considerable benefits to communities.
However, many of these assets, require some form of upgrade in order to make them fit for purpose. As such they need financial investment.
Taking control of an asset through the asset transfer process or via the Scottish Land Fund is to some degree the easy part, although there are always exceptions to the rule to contradict that statement, we won’t dwell on those. In the main taking ownership has been relatively straight forward and the Scottish Land Fund and other bodies have been superb in supporting communities through the process. The real anguish comes when the groups must find capital funding to restore or make their asset fit for purpose.
In happier times there was Leader (EU Funding), and until recently the lotteries Community Assets Fund. Leader as we know has gone, and the future of the lotteries community assets fund is in doubt.
Beyond that there are some wonderful and reliable funders such as the Robertson Trust who support capital projects. But after that, capital funders who can contribute significant amounts are becoming increasingly thin on the ground.
A crisis is brewing in capital funding, and asset transfers and Scottish Land Fund acquisitions could stall if communities cannot access capital funding.
The lottery in Scotland has had its funding cut and naturally it must consider whether making large capital grants is making best use of its funds. We would suggest that it is best use of its funds because physical assets are a key resource for communities to develop sustainable services, and assets can provide income streams. These types of projects and about Funding Futures, people’s futures.
In addition, if the lottery funds a project, other funders take confidence in that, and it helps their case to commit. For example; the £850,000 secured from the lottery for a project in Kirkcudbright recently was the catalyst for a further £1.75m being secured from another eleven funders. So rather than do away with a programme like Community Assets we would ask that the lottery reduce the maximum amount that groups can apply for.
A maximum £500,000 or even £250,000 would retain the involvement of the lottery which then helps give confidence to other funders. Having lottery support is a big deal and worth much more than just the cash the lottery commit.
In addition, we would urge other funds to be made available to groups for capital projects and that schemes such as the Scottish Governments Town Centre Regeneration Fund are extended to include smaller communities