Marine and coastal restoration plan: consultation analysis report

4. Theme 3 – Funding and Finance

Views on Theme 3: “Funding and Finance” were sought in Q7 to Q9, with the analysis of responses to those questions presented in this Chapter. Theme 3, which has three objectives, considers how the Scottish Government can address funding gaps, leverage private sector investment, and channel funding streams so that the benefits of restoration are felt and seen in local communities.

Half of respondents who answered Q7 considered “Continue investment in pipeline of projects” and “Ensure private sector investment can support restoration at scale but does not bypass local communities” as very important objectives, with seven in ten considering these ‘very important’ or ‘important’. Support was slightly higher for the objective “Address the funding gap for project development and groundwork phases”, which was rated as important by over three quarters (76%), including 59% who rated it as ‘very important’.

Among those answering Q8, three fifths (62%) felt that the action to “Explore the potential for a matchmaking service linking businesses to projects” should be included in this plan. Beyond this, at least three quarters of those answering felt that each of the remaining actions should be included in this plan, with the highest level of support (84%) for the plan to “Highlight existing public and private sector funding streams such as Scottish Marine Environmental Enhancement Fund (SMEEF) that already target this phase”.

Q9: Is there any further information you would like to share with us on the objectives or actions in this theme? This could include your reasons for selecting the answers to the previous two questions, or any further reflections on the overall content of the theme.

Just under four fifths of all respondents answered Q9. The analysis below presents comments related to each objective under Theme 3, followed by other points raised.

Address the funding gap for project development and groundwork

Several respondents commented on this objective, with the most prevalent comments being general agreement with the need to address the funding gap, accompanied by broad comments about why funding is important for active restoration. Respondents frequently noted that having sufficient funding is a key challenge to creating and sustaining projects, and expressed support for the plan’s approach to ensuring a mix of public and private funding options remains available. A few noted that this mix will be crucial to ensuring that active restoration can occur at scale. Some stressed the need for funding to be inclusive and flexible to accommodate the range of restoration projects.

“Access to sustained and flexible funding remains one of the greatest challenges to marine and coastal restoration. We support the plan’s focus on developing diverse and blended finance models, including private investment and nature markets, alongside continued public funding. Support for smaller-scale and community-led projects should also be retained to ensure inclusivity and innovation.” – Solway Firth Partnership

In particular, some respondents welcomed the plan’s recognition of the importance of the project development phase. Respondents noted that foundational work can include baseline surveys, community engagement, site assessments, preparation, and licensing, all of which are time and cost-intensive but need to be carried out before any outcomes or impact can be demonstrated. It was noted that in some cases, this early work could result in a project being deemed unfeasible; however, funding the early stages is essential for creating a pipeline of projects and can help widen participation in restoration by de-risking the potential of projects that do not progress.

“Feedback from restoration practitioners indicates that a critical barrier to progress lies in the funding gap at the initial, exploratory stages of projects. To stimulate private sector participation in early research and development phases, it is essential that these activities are recognised as legitimate restoration efforts, even where subsequent assessment determines a site or approach to be unsuitable. Such recognition would incentivise private investment by demonstrating that exploratory and feasibility work contributes meaningfully to Scotland's wider restoration objectives.” – Individual

Some respondents acknowledged the plan’s recognition of the need for long-term funding. Respondents noted that core funding was often critical to the continuation of projects, but called for more certainty over how long funding could be sustained. Scottish Seaweed Industry Association noted that it can be many years before the results of a restoration project are visible, stressing the need for funding beyond one to three-year cycles.

“The plan should commit to ring-fenced operational funding for proven community-led initiatives. This requires multi-year (5+ year) grants for coordinator positions, infrastructure funding for collection points and transport, simplified reporting, and recognition that "project" funding is inappropriate for ongoing operational work.” - Individual

Some respondents detailed what they felt funding is needed for. This included:

Staff: Respondents noted the need for well-paid, highly-skilled staff to run projects, as well as staff to support or coordinate wider restoration activity. Funding for ongoing training was also noted. A few respondents commented on the need for funding to mitigate the potential for ‘volunteer burnout’, which they identified as a barrier to community-led restoration.

Equipment: One suggestion included funding for establishing a restoration “hub” where survey and restoration equipment can be held locally.

Allowances for essential costs: These included insurance, travel and subsistence costs, and first aid training, for example. One organisation noted the need for costs to cover community engagements. While these essential costs were mainly raised in relation to small-scale projects, one organisation advocated for the need for large-scale projects to be run professionally, partly because of the “financial and legal governance, insurance, health and safety, liability and wider regulatory obligations” that a large project would likely incur.

Monitoring and evaluation: Funding was felt to be needed for baseline surveys, ongoing monitoring and post-project monitoring.

One individual suggested “Funders could fund research that targets the knowledge gaps in restoration success to promote restoration projects 20-50 years down the line, where the stressors on the marine environment become even more intense”.

“Volunteers frequently absorb personal expenses to keep projects running — from purchasing equipment to covering transport and insurance costs. The recent withdrawal of Fife Council’s public liability insurance support was highlighted as having a serious impact, with several groups now facing significant financial strain to maintain cover. This has, in some cases, delayed local environmental work.” - Fife Communities Climate Action Network (FCCAN)

A small number of respondents expressed support for the action to “Work with regulators and other public bodies to de-risk project development”. They noted that taking steps to give investors confidence in a project's future, particularly private sector investment, is vital to continued restoration efforts. Respondents were keen to see a reduction in uncertainty and suggestions for how this could be done included providing greater clarity around expected costs and regulatory processes, clear monitoring expectations, and a more transparent licensing process with predictable timescales. More specifically, the Sustainable Inshore Fisheries Trust advocated for spatial management as an essential tool to de-risk projects.

Respondents provided various suggestions concerning the action to “Support to develop innovative funding streams". A few comments suggested using a range of market-based funding options, with respondents naming carbon credits, natural capital credits, and habitat enhancement bonds as potential options.

“A well-designed biodiversity credit system could enable developers to contribute meaningfully to larger, professionally managed restoration projects, with credits applied across multiple farm developments. This model would centralise efforts, reduce fragmentation, and significantly improve ecological outcomes. However, for developers to engage effectively, there must be clear guidance on two fronts: first, whether financial contributions to third-party enhancement funds will satisfy biodiversity policy requirements; and second, how contribution levels will be calculated to ensure they are proportionate to the nature and scale of each development. Clarity in these areas is essential to build investor confidence and unlock private sector support for biodiversity enhancement at scale.” – Cooke Scotland

Other suggestions for funding streams included:

• A few suggested using funding from energy developments, particularly offshore wind farms, but these respondents stressed this would be separate from existing statutory compensatory measures or existing community benefit funds.
• Fisheries Management Scotland noted that a Scottish Rivers Fund supported through the Facility for Investment Ready Nature in Scotland (FIRNS) and backed by NatureScot, SEPA, and the Marine Directorate is currently in development.
• WWF Scotland urged the Scottish Government to commit to continued funding of the Nature Restoration Fund (NRF).
• Funding posts that can identify potential funding sources and help community groups access funding.

More specifically, a few individuals and organisations called for funding or contributions to SMEEF to be provided via charges, taxes, or penalties imposed on organisations or sectors that they felt were negatively impacting the environment.

Continue investment in the pipeline of projects

Some respondents commented on SMEEF in relation to various aspects of Theme 3, and these comments are consolidated here. Respondents were generally positive about what SMEEF had achieved to date and supported the plan’s aim to maintain support for it. Conversely, Northbay Innovations Ltd reported that SMEEF has been closed for applications for a second year, while Fife Communities Climate Action Network expressed the view that schemes like SMEEF “are often oversubscribed, time-intensive to apply for, and insufficient to cover early-stage costs such as site surveys, insurance, and staff time”.

However, respondents also suggested ways in which SMEEF could be improved. Two respondents suggested that contributions to SMEEF should include contributions from industries that impact the marine environment, such as fisheries, aquaculture, offshore energy, and shipping, or from private sector developers. Singular suggestions included: strengthening its independence; improving transparency and accountability; ensuring that private funding of restoration is targeted at priority sites and issues and aligns with wider environmental policy; and expanding its scope to include baselining and monitoring, rather than just the restoration activities, which the respondent felt would increase chances of identifying improvements early.

“There is a clear need for fostering the grassroots restoration sector. However, it is also important to recognise that there will be coastal areas (such as those without an active local community) or habitats (such as offshore areas) that are not the focus of grassroots activity but would equally benefit from restoration and deliver restoration benefits to society-at-large. It is important to understand how investment will be funnelled for these projects and how restoration in such areas might be championed, funded, and undertaken.” - The Scottish Association for Marine Science

A few comments were made about the need to consider the prioritisation of projects within the pipeline. Orkney Regional Inshore Fisheries Group cautioned that a commitment to invest in pipeline projects could result in a lack of funding for other projects that could have a positive impact. West of Scotland & Orkney Fish Producers Organisations and Scottish Fisheries Federation used the same wording to call for funding “to be streamlined towards projects which are well organised and will have the highest level of success” and are most likely to benefit communities.

Ensure private sector investment can support restoration at scale but does not bypass local communities

Some respondents highlighted the importance of private sector investment in supporting restoration. Respondents acknowledged that, as part of a mix of funding options, private sector funding could help scale up restoration efforts and provide longer-term financing. A few emphasised the increasing interest from private sector organisations in fulfilling other environmental policy requirements, such as Biodiversity Net Gain. The Scottish Association for Marine Science also noted that private sector investment may help to progress projects that are less championed by communities.

However, Oyster Heaven and Sunbird expressed the view that private sector investment was more likely to be needed, and effective, when used in large-scale restoration projects.

“These questions appear to be most relevant to community-led projects, where local delivery and engagement are central considerations. In contrast, attracting private investment at the ecosystem scale requires a different set of incentives. Such investment is most likely to be mobilised through policy mechanisms obliging developers to deliver biodiversity net gain embedded within National Marine Plan 2 (NMP2) or other policies, which can provide the clarity and assurance necessary to support projects of this scale.” – Oyster Heaven

Only a few brief comments were made about the action “Explore the potential for a matchmaking service linking businesses to projects”, though these were typically positive, describing a service as “a wonderful idea” and “an excellent concept”. A few respondents emphasised the importance of ensuring that the service is designed to incorporate local voices and decision-making. Dumfries and Galloway Council noted the need to consider how the service would interact with NatureScot’s portfolio of nature projects seeking investment. Crown Estate Scotland cited Restoration Forth as a good example of a collaborative project involving community, third-sector, and university groups. Thistle Wind Partners suggested piloting a service in specific regions.

While not always referring specifically to a matchmaking service, respondents made a range of comments about funding and the role of local communities. A few made broad points about the need to ensure that funded projects provide both economic and social benefits to communities, especially those funded by private investment.

A small number noted the need to reflect on a potential power imbalance between small community-led projects and large private investors, and to ensure that the views of everyone in a community are considered at all stages, not just those of a funded group or a group claiming to represent a community. For example, two organisations expressed the view that SMEEF had not sufficiently engaged with or considered the views of fishing communities regarding funded projects. The Sustainable Inshore Fisheries Trust called for the plan to provide details on how the Scottish Government will ensure that project design and direction come from local communities rather than private funders. Another concern raised by a few respondents was the need to support, rather than overwhelm, small projects run by volunteers or local people with disproportionate expectations imposed under a funding agreement.

“Whilst coastal community groups across Scotland are growing rapidly in passion, motivation and expertise for contributing to active restoration, there is a fine line between valuing and supporting their input, and putting them under a great deal of pressure to ‘achieve’ restoration results as volunteers, with little capacity in terms of resources… Whilst we see the potential in this, we would always be keen to ensure that communities are still leading decisions in any local restoration efforts, and not being led by any funders’ own/personal preferences.” – Flora & Fauna

In addition to mitigating power imbalances and private investment bypassing community wishes, a small number of respondents note potential risks or concerns associated with involving private sector investment. These typically noted concerns about ‘greenwashing’, ineffective carbon offsetting schemes, or commodifying restoration. Suggested mitigations included one individual recommending “mandatory community partnership requirements and benefit-sharing mechanisms, with [Island Community Impact Assessment (ICIA)] of all private investment models”, while Crown Estate Scotland called for more guidance on the “appropriateness of international codes or other ways to ensure the integrity of marine restoration projects incorporating natural capital markets.”.

Other themes

While a few respondents commented on passive restoration at Q9, only a small number linked their comments to funding, calling for large-scale, inclusive funding to cover all approaches, including both passive and active restoration. One respondent suggested it was a waste of money to fund an active restoration project if it was likely to be unsuccessful because pressure management had not been implemented alongside it.

A few respondents raised various concerns related to Theme 3. Two respondents called for more clarity about, or a commitment to, continued public sector funding and two called for a reduction in, or light touch regulation. Other singular comments included: a call for all funding to be accounted for; concerns about the lack of a joined-up approach; and questions about how restored sites will be protected in the long-term. Orkney Islands Council expressed the view that this part of the plan is too high-level, and called for more detail on how communities and funders can work together and for clarity over the role of other national policies such as NMP2.

“However, there is a risk that this plan simply prompts a series of small, disconnected projects and/or that the private sector (driven by other concerns) has a disproportionately large impact on what is and isn't funded. The focus should be on the large-scale funding and regulatory changes needed to ensure a joined-up approach, supported by an emphasis on passive regeneration. Without this, there is a risk of generating multiple small-scale projects which 'sound good' but which have little meaningful impact on the marine environment generally.” - Individual