European Investment Bank - SPRUCE evaluation: final report

1. Introduction and background

1.1 Introduction

This report sets out the findings of the final evaluation of the Scottish Partnership for Regeneration in Urban Centres ("SPRUCE") fund, undertaken by the Indigo House Group ("Indigo House") on behalf of the JESSICA Holding Fund Scotland (JHF Scotland).

The 10-year investment period for SPRUCE ended on 28 November 2021 and the report contains a series of conclusions and recommendations which, it is expected, could provide a benchmark for future generations of similar type funds in Scotland.

1.2 Scope of the Brief

The purpose of the study, requested by Scottish Government, is to evaluate the performance of SPRUCE as of the end of the investment period. It sets out the achievements and impacts of SPRUCE activities in Scotland to date within the policies and the strategy initially established and considers the value for money ("VFM") offered by SPRUCE in contrast to traditional grant funding and other ways to address market failure.

It includes a comprehensive assessment of the fund overall and details the 18 individual projects funded by SPRUCE since 2011, setting out the direct impacts delivered and other spill over effects arising, such as wider benefits in the context of the Scottish Government's Regeneration strategy. It also sets out the additionality achieved from the revolving nature of the fund.

Case studies for all 18 projects funded are included in Appendix 1. In addition, 3 projects are set out in more detail, as exemplars of the exceptional impact that SPRUCE type funding can deliver in Scotland. The final evaluation builds on, and concludes, the interim evaluation also completed by Indigo House in 2018.

1.3 Our methodology

In undertaking the evaluation, Indigo House met with officers from EIB, Scottish Government and Amber Infrastructure and undertook fieldwork including structured interviews with project sponsors. This included site visits where possible. We also interviewed a range of stakeholders including property agents and representatives of both the Investment Committee and Advisory Board.

We reviewed a comprehensive range of documents including those provided by Amber and EIB, project sponsors and property agents alongside other documents available in the public domain.

The quantitative and qualitative data collated enabled an evaluation of the financial and broader impact of SPRUCE as well as some comparative analysis to assess the Value for Money offered by SPRUCE relative to alternative approaches to addressing market failure.

1.4 Limitations

The report has been prepared on the specific instructions of EIB and the Scottish Government for the sole purposes set out in our contract and for the sole use of EIB and the Scottish Government. In carrying out our work and preparing our report we have worked solely on the instructions of our client. Third parties may choose to make use of this report entirely at their own risk and Indigo House, EIB and Scottish Government shall have no responsibility in relation to any such use and we assume no responsibility or liability to any third party in respect of the contents of the report.

Other than general reasonableness checks the Indigo House Group has not sought to verify the accuracy of the data, information and explanations provided as part of the evaluation as would be the case during an audit or due diligence exercise. Reliance has therefore been placed on the information supplied, which has been used to inform our analysis.