Islands Programme capital fund 2021/22 to 2024/25: grant awards - evaluation

5. Suggestions for improving the current process

5.1 Throughout this evaluation, stakeholders made suggestions for relatively minor improvements to the current process. These are summarised below. However, it should be noted that these suggestions do not address the more substantial concerns which (some) stakeholders – particularly local authorities and some community organisations – raised in relation to the current process (discussed in Chapter 6 and below).

5.2 In relation to these bigger issues, stakeholders were asked for their thoughts on possible alternative funding mechanisms for the Islands Programme. A summary of these discussions is set out in Chapter 6.

Perceived problems with the current competitive process

5.3 As stated in Chapter 4, local authorities and representatives of community organisations welcomed and highly valued the Islands Programme as a source of funding for islands infrastructure projects. However, stakeholders also highlighted some of the limitations of the Islands Programme, including that:

• The amount of funding available through the Islands Programme – however welcome – was not adequate to address the scale of need of the islands for infrastructure development. In particular, the Islands Programme was not a suitable vehicle for delivering very large projects (related to, for example, housing or transport).
• It was run as a series of annual funding rounds, with no guarantee of a longer term (5- or 10-year) commitment. Local authorities highlighted the difficulties in taking a more strategic approach to funding large-scale capital projects when so many of the funds available to them – including the Islands Programme – provided only short-term (annual) funding. This prevented them from working with local communities to develop a pipeline of projects for delivery in a coherent and phased way.
• In addition, the actual amount of funding available varied from year to year in a way that made it difficult to start developing applications in advance of the announcement of funding.

5.4 Finally, a wide range of stakeholders also highlighted a need for investment at a local level in the capacity and capability required to develop and deliver capital infrastructure projects. There was an acknowledgement that organisations like SFT, HIE and DTAS had played a key role in developing capacity and / or providing capability, but that greater capacity and capability were needed within local authorities and community organisations.

Suggested improvements

5.5 Stakeholders made a range of suggestions for improvements to the current process. Most of these (listed below) were relatively minor in nature and were made by one or two stakeholders in each case. However, issues with the timetable and timescales were highlighted by all local authorities, and recognised by other stakeholders too (SFT, members of the Investment Panel, community organisations) and for that reason, suggestions relating to these issues are shown first in the list:

• There should be a more consistent timetable – roughly the same – from one year to the next, with dates specified for (i) the notification of available funding, (ii) the application deadline, and (iii) the date for notification of outcomes. The timetable should offer the longest lead-in times possible and take account of the timing of local authority election cycles.
• On the one hand, it was thought that the application guidance should be reviewed and revised to (i) rationalise the range of objectives and assessment criteria that applicants are required to address, (ii) offer a simplified explanation of what information is being sought at each question – particularly for representatives of community organisations, who do not always understand what is required, and (iii) make it clear that detailed information about local authority strategy is unnecessary.
• On the other hand, there was a view that more detailed information should be sought from applicants about the viability of their projects. One panel member did not think sufficient information was provided by many applicants to allow full scrutiny and ‘due diligence’ to be carried out. They said there was often not enough financial information about the expected ongoing running costs of projects and how these would be met, which would enable the panel to make a better assessment of project viability. This same panel member also suggested that the application form and assessment process should give greater attention to the potential for displacement^[11] and to subsidy control considerations.^[12]
• The application guidance should explicitly state that applications will only be considered if they demonstrate that the project will deliver ‘additionality’. This means that the project must produce an output or outcome that goes beyond the statutory responsibilities of local authorities or beyond what local authorities have already committed to fund. In addition, it was suggested that steps should be taken to ensure that all applications sent to the panel for consideration have been deemed to be eligible for funding.
• Written feedback from the panel on unsuccessful applications should be fuller and more informative. This is important, not only for local authorities, but also for the community organisations that are often involved in completing the application forms. Suggestions should be offered about how the project could be improved to be more likely to succeed in a future round of funding.
• Prospective panel members (particularly those who may have no previous experience of assessing applications for funding) would like better information about what the panel process involves (time commitment, length and content of applications) before they join. In addition, as part of the induction process for new members, it may be helpful to provide the opportunity to view previous Islands Programme applications to gain an understanding of the information that will be included, the differences between a good and bad application, and the scoring process.