Supporting impact - Scottish Crown Estate net revenue: local authority use and insights

Current constraints

As a society we urgently need to go beyond business-as-usual, and the Just Transition, Green Recovery and Blue Economy policy goals all point us towards the evidence for that. The redistribution of net revenues offers an opportunity to do that with untethered allocations which can be flexibly administered to greatest local effect.

Before considering approaches to unlock scale, it is vital to consider the current approaches to net revenue distributions, what may be constraining scale, and how they might be overcome.

Structural constraints and risk appetite

In Section 1, we described the current management for the first two rounds of net revenue distribution. The way net revenues are managed can nurture or constrain scale and innovation. Each Local Authority took a slightly different approach to management, often based on structures already in place, given the limited timeframes. For many Local Authorities, the approach has drawn on previous experience of administration of other funds, including EU LEADER or FLAG^[3] funds. Whilst often providing a useful framework to build upon, the structures and rules associated with these may be limiting some aspects of delivery. The flexibility and lack of constraint on the net revenues provides an opportunity to encourage more innovation.

Choices about what and who is eligible for support and how much is available to them could encourage more innovation and open up other avenues to scale of impact or close them down. When making choices about what and who is eligible for support, consider how the structure could open up new avenues of scale that is not available through other revenue streams. Possibilities include:

• Funding 100% of a project rather than requiring matched funding
• Increasing eligibility to include private sector as well as public and third sector organisations
• Funding pilot, proof of concept or new business models, with the possibility of continued funding
• Offering core funding for organisations to encourage innovative approaches to challenges

For example, research by the Esmee Fairburn Foundation shows that where organisations are provided with core funding, they tend to take more risks and innovate to meet the needs of the challenges they are addressing, rather than directing time towards funding requirements. These findings sit alongside other research by Development Trust Association Scotland that notes support to core funding underpins greater organizational capability that allows additional and new revenue streams to be secured. Benefits like this could be secured through a change to funding criteria.

These choices will go hand in hand with the organisational approach to risk. The flexibility of the net revenues allow a greater potential risk appetite for each Local Authority, the benefits of which could be passed on through well-designed funding criteria.

A review of the eligibility and administration criteria is essential when considering ways to support scale and to remove barriers. Risk appetite is essential to be considered in this context with targeted increases in that appetite likely to help create more space for innovation.

Distribution and coordination

Another constraint on achieving scale is spreading projects or activities too thinly. In Section 1, many Local Authorities were shown to distribute funding widely across the region or across different sectors. While a widely distributed approach can indeed achieve scale, additional work can be required to ensure that this is also coordinated for maximum impact.

For scale to be achieved there needs to be a system that coordinates and networks the activities across boundaries to capitalise on synergies and to avoid gaps and conflicts. This is particularly important when support is distributed widely and across numerous administrative boundaries.

For example, using collaborative approaches to inform your adaptive shoreline management plan can bring people together across area or authority boundaries and create solutions to larger scale issues such as beach replenishment, managed retreat from coastal erosion or the ability to exploit tourism opportunities.

Consideration at all levels of how best to align, network or coordinate activities to work across boundaries to unlock the benefit of shared impact is essential.

Vision

Having a clear shared vision is essential to ensure all actions are targeted and have focus. In Section 1 we discussed how the flexibility of the net revenue distribution is a strength, but can also lead to a wide range of goals being adopted.

To achieve scale, the cumulative benefits of multiple decisions all working to the same goal are critical. Importantly, this ambition needs to be shared and very clearly understood. Although we highlighted the overarching policy ambitions of Just Transition, Green Recovery and Blue Economy that have a broad level of agreement, the details of how these can be achieved are open to interpretation by so many different groups that the benefit of alignment is diluted or even lost. Overcoming this can be challenging, and will take time and a clear strategy to develop and build consensus and a clear action plan.

For example, the current tourism strategy – Scotland Outlook 2030 – establishes a clear and seemingly simple vision: Scotland – we will be a world leader in 21^st century tourism.

Behind this statement however lies a huge exercise that engaged with over 2500 leaders and stakeholders from across the tourism industry to contribute towards its development. The vision does not stand on its own and is carefully described across two pages in the strategy to help everyone understand it and their role. The strategy also established a framework to help focus activities from multiple partners across the sector.

Time taken to develop a deeper consensus around your ambition, to shape that ambition to be place-specific, to use a framework to focus attention and to develop a pipeline of activity that contribute directly to those aims will provide dividends and set the conditions for scale of impact.