Community Regeneration Partnership Funding
Argyll and Bute Council · 20 February 2025
Back to Policy and Resources Committee — 20 February 2025 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE DEVELOPMENT AND ECONOMIC GROWTH 20 FEBRUARY 2025 COMMUNITY REGENERATION PARTNERSHIP FUNDING 1.0 INTRODUCTION 1.1 In the 2024 Autumn Statement the UK Government committed to delivering a package of support to Argyll and Bute Council in order to improve outcomes across the region in line with the Government’s core missions and priorities. Community Regeneration Partnership Funding (CRP) will build upon previous work and engagement undertaken by the Ministry of Housing, Communities and Local Government (MHCLG) under the banner of Levelling Up. This report provides members with an update on the financial package, how funding will be delivered, and important considerations for the development of priority projects. 1.2 As part of the core funding package, there is up to £20m capital funding and £250k revenue available for the CRP. Funding is profiled for payment in financial year 2026-27 and is subject to business case approvals. A further capacity payment of £45k will be provided to support dedicated resources to the process. This will be paid in FY25-26 and follows a separate capacity payment which was transferred at the beginning of FY24-25. A funding summary is included in Table 1 below:- Table 1: CRP Funding Summary £m 24-25 (Funding already delivered under LUP banner) 25-26 26-27 Total Capital Funding - - 20 20 Revenue Funding 0.045 0.045 0.25 0.34 Totals 0.045 0.045 20.25 20.34 1.3 Capacity funding totalling £90k will be used to support staff resources delivering administration and financial support to this programme. This resource will be managed by the Transformation Projects and Regeneration Team within Development and Economic Growth.
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1.4 The principal partnership of the CRP in Argyll and Bute is between the local authority and MHCLG. The Scottish Government’s Regeneration Unit will also be working in collaboration with key stakeholders to shape the CRP in line with UKG, SG and Council policy priorities. It should however be noted that MHCLG ministers will make the final decisions on all funding proposals. 1.5 A summary of the key CRP milestones and anticipated deadlines is set out below:- • Draft MoU to be shared with Council January 25; • UKG to commence desk based research w/c 6th January; • Weekly calls with Council to be arranged from w/c 6th January; • Fieldwork / visits – w/c 10th February; • Report back on initial findings – w/c 3rd March; • Announcement on projects – w/c 14th April. 1.6 The Council previously agreed a list of priority projects to put forward for Levelling Up Partnership Funding prior to the UK General Election in June. The Council have now been asked by MHCLG to identify 5 priority projects to put forward for potential funding via the CRP. A draft list of priority projects and estimated funding values is set out in Appendix 1 and it is proposed that this list will form the basis of negotiations with UKG for CRP funding. 1.7 It should be noted that these projects can only be regarded as suggestions by the council as MHCLG Ministers will make the final decisions on all projects to be awarded funding. 2.0 RECOMMENDATIONS 2.1 Members are asked to: a) Approve the updated list of priority projects included in Appendix 1, which will form the basis of further negotiations with the UK and Scottish Governments. b) Note that all funding requires to be committed by FY 26/27 and will be subject to business case approvals by MHCLG Ministers. 3.0 DETAIL 3.1 In the 2024 Autumn Statement the UK Government committed to delivering a package of support to Argyll and Bute Council in order to improve outcomes across the region in line with the Government’s core missions and priorities. Community Regeneration Partnership Funding (CRP) will build upon previous work and engagement undertaken by the Ministry of Housing, Communities and Local Government (MHCLG) under the banner of Levelling Up. This report provides members with an update on the financial package, how
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funding will be delivered, and important considerations for the development of priority projects. 3.2 The scope of the CRP funding is primarily driven by the UK Government’s 5 stated missions:- • Kick-starting economic growth • Making Britain a clean energy superpower • Take back our streets • Break down barriers to opportunity • Build an NHS fit for the future 3.3 The UKG will also work in collaboration with the Scottish Government’s Regeneration Unit to shape the CRP in line with SG missions. Final decision- making will ultimately lie with MHCLG ministerial team. The UKG have advised that they will consider all opportunities on their merits and that ministers will prioritise investments that deliver tangible, specific outputs from the CRP funding rather than topping up larger projects delivered through other streams. 3.4 As part of the core funding package, there is up to £20m capital funding and £250k revenue available for the CRP. Funding is profiled for payment in financial year 2026-27 and is subject to business case approvals. A further capacity payment of £45k will be provided to support dedicated resources to the process. This will be paid in FY25-26 and follows a separate capacity payment which was transferred at the beginning of FY24-25. 3.5 Capacity funding totalling £90k will be used to support staff resources delivering administration and financial support to this programme. The Transformation Projects and Regeneration Team within Development and Economic Growth will manage this resource. 3.6 The principal partnership of the CRP in Argyll and Bute is between the local authority and MHCLG. The Scottish Government’s Regeneration Unit will be working in collaboration with MHCLG and the LA to shape the CRP in line with UKG, SG missions and the local context. Issues, opportunities and interventions will be identified / agreed collaboratively. MHCLG ministers will make the final decisions on all funding proposals. 3.7 Once particular projects and support has been agreed in principle, MHCLG will require Argyll and Bute Council to provide details of our internal governance processes and project specific detail on delivery, value for money, key measurable benefits, risks and mitigations, compliance with the subsidy control regime and equalities implications. The Council will require to complete template forms for each project listing relevant information. These will then help inform MHCLG's internal business case – a single business case developed by the CRPs team which when cleared within MHCLG structures will unlock payment to Argyll and Bute Council.
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3.8 Subject to business case approval, grants will be given as a direct award to Partnerships on an allocative basis. General grants will be directly awarded to each partnership. Grant recipients will primarily be local authorities. Funding will be delivered through non-ringfenced Section 50 grants via the UK Internal Market Act. These grants will be administered by Argyll and Bute Council in line with the terms of its existing procurement, delivery and governance structures and constitutional arrangements. 3.9 A Memoranda of Understanding (MoU) will require to be signed by both parties. The MoU will set out how MHCLG expect local authorities to spend the funding provided and how to monitor delivery. A Grant Determination Letter will be issued once funding has been released. Change Control 3.10 MHCLG will take a pragmatic approach to project adjustment, where changes to agreed interventions need to be made. Local authorities must outline the change, explain the reasoning, and provide formal Section 95 officer approval. Changes to the agreed package will be permitted under the following circumstances: A. If the local authority can demonstrate to the CRPs team that the funding would achieve the same aim as another project agreed as part of the package i.e. if an aim of the original package was aimed at boosting housing numbers, a new project could be funded from the CRP package if it also aims to boost housing numbers; and/or, B. If the project is an alternative option from the menu of interventions developed through the partnership and agreed with Ministers; and, C. Any new project would meet the three criteria, which each policy needed to in order to be included in the package originally. These are: i. Feasibility/deliverability. ii. Value for money. iii. Local Strategic Fit. 3.11 Changes in line with the above must be notified in advance to MHCLG officials, who in turn will notify Ministers through a streamlined approval process. Funding an intervention that does not meet the above scenarios would require a full business case and MHCLG Ministerial approval, MHCLG officials will again take a streamlined approach to securing Ministerial approval. Scottish Government priorities and input will also be taken into consideration Delivery and monitoring arrangements 3.12 Argyll and Bute Council will be responsible for implementation and will be expected to complete a fraud risk assessment as well as maintain and monitor a risk register. Where interventions are being delivered by local authorities, MHCLG will work with them to agree what milestones should be set on the package as a means of monitoring progress and to ensure projects
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are being delivered to schedule. There will be a minimum expectation of a quarterly check point between MHCLG and Argyll and Bute Council on progress and learning for the first year and then move to six monthly reviews. 3.13 Further detail of delivery and monitoring arrangements will be set out in the MoU between MHCLG and Argyll and Bute Council. 3.14 MHCLG will prioritise projects that can spend funds within the financial year in which payments are received. In order for the MHCLG Accounting Officer to be able to sign-off on grant funding to local authorities, they will need assurance from the Section 95 officer at the local authority that if they were to receive funds they would be spent by the end of each relevant financial year. 4.0 Next Steps 4.1 MHCLG We are currently finalising plans internally, however they have advised that they anticipate their work to broadly follow the key stages set out below:- • Scoping phase (December-January TBC): MHCLG will be gathering evidence through desk based research – as well as reviewing information from their analytical team and input from the Scottish Government. This, along with local conversations will provide an initial view of the opportunities and challenges in Argyll and Bute in line with the priorities of all parties. • Fieldwork phase (January-February TBC) – A series of in person conversations with stakeholders on the opportunities and challenges in Argyll and Bute and (in some cases) potential suggestions for solutions. Where necessary, supplemented with further remote meetings. • Policy development phase (February-March TBC) During this phase MHCLG will develop policy recommendations on an iterative basis with Local Authorities. They will take the scoping research and fieldwork findings and give their own suggestions as well as considering suggestions for projects from the Council and local stakeholders. At this stage Ministers will also be asked to take a view on developing priorities. • Final package agreed (April 2025): The final package will be finalised by early April. MHCLG will continue to work with the Council to refine it, through March and early April before Ministers make a final decision. • Business case development phase: (timings TBC): MHCLG will seek input to develop internal business case, which will cover all agreed projects. Once the business case is completed and signed off through internal MHCLG structures arrangements will be made for funding to be released as per the agreed financial profile. 4.2 The Council previously agreed a list of priority projects to put forward for Levelling Up Partnership Funding prior to the UK General Election in June. The Council have now been asked by MHCLG to identify 5 priority projects to
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put forward for potential funding via the CRP. A draft list of priority projects and estimated funding values is set out in Appendix 1 and it is proposed that this list will form the basis of negotiations with UKG for CRP funding. 4.3 It should be noted that the projects identified in Appendix 1 are considered to be deliverable within a relatively short timetable and have clear demonstrable outcomes which is also a key requirement of this process. 4.4 Projects funded by CRP monies require to be approved by UKG Ministers and as such, there is no guarantee that any project ideas submitted by the council will be selected. All projects will be subject to detailed business case development by the UK Government with council inputs as appropriate. Other projects may also emerge at the discretion of the UK Government following consultation with local stakeholders. 4.5 It should be further noted that removing barriers to economic growth is still an aim of the UK Government working in collaboration with the Scottish Government. Consequently, this will be explored further during discussions with the civil servants in the coming weeks. 5.0 CONCLUSION 5.1 The UK Government have committed to delivering a package of support to Argyll and Bute Council totalling £20.34m via the Community Regeneration Partnership. 5.2 The Council have now been asked by MHCLG to identify 5 priority projects to put forward for potential funding via the CRP. A draft list of priority projects and estimated funding values is set out in Appendix 1 and it is proposed that this list will form the basis of negotiations with UKG for CRP funding. 5.3 It is currently anticipated that the final package will be confirmed in early April 2025 and MHCLG Ministers will make the final decision. 5.4 It should be noted that any project ideas submitted by the council to the UK Government have no guarantee of being selected and are all subject to detailed business case development by the UK Government with council inputs as appropriate. Other projects may also emerge at the discretion of the UK Government following consultation with local stakeholders. 5.0 IMPLICATIONS 5.1 Policy – The Community Regeneration Partnership funding has the potential to support a number of council priorities included in the Single Outcome Agreement (SOA) and Economic Development Strategy and Action Plan support the sustainable growth of our economy.
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5.2 Financial – The Council have identified 5 priority projects which will form the basis of negotiations with the UKG around the allocation of £20.34m of grant funding via the Community Regeneration Partnership. 5.3 Legal – Legal will require early sight of draft MoU and funding conditions. 5.4 HR – None arising from this report. 5.5 Fairer Scotland Duty: 5.5.1 Equalities - the report explains a process that can help support the economy of our areas generating employment opportunities. 5.5.2 Socio- Economic Duty – the projects identified will enhance outcomes for those experiencing socio-economic disadvantages. 5.5.3 Islands – projects have been identified on our islands for member’s consideration. 5.6 Climate Change – Each project will require to have regard to climate change implications. 5.7 Risk – Our rural economy is fragile and failing to deliver this external investment would be a considerable concern. 5.8 Customer Service – No specific implications, but all projects identified will impact positively on our customers / communities. 5.9 Rights of the Child (UNCRC) – No implications arising from this report. Councillor Jim Lynch, Policy Lead for Economic Development, Islands and Rural Communities, Housing For further information contact: Fergus Murray, Head of Development and Economic Growth Fergus.Murray@argyll-bute.gov.uk January 2025 Kirsty Flanagan, Executive Director with responsibility for Development and Economic Growth
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Appendix 1: CRP Priority Projects Project Title What is it? Likely Ask? Status Link to Labour Manifesto Oban Airport Aviation Business Park To contribute to the construction of 2 key buildings that form part of phase 2 of the Oban Airport Business Park. Two private sector businesses have signed Heads of Terms to occupy the buildings and the project also complements the proposed UAV hub funded through RGD. £7.4m matching TIF funding; prudential borrowing and RGD UAV Hub £4m. Costs based on verified Contractor estimates and tendered costs due in March 2025. Land in control; business case work partly completed and detailed planning consent for two buildings including UAV Hub. Supporting Scotland’s Economic Growth through innovation Former Royal Hotel Rothesay, Bute To remove dereliction and restore a valuable heritage building in a prominent position in Rothesay town centre on the island of Bute; To create through a public/private sector partnership new list accessible homes including key worker housing; tourist accommodation and commercial space. £3.5m matched by potential private finance/ £1m from Strategic Housing Fund, HIE possible and Historic Environment Scotland. New Non Profit Trust created; Condition and Cost Estimate report completed; layout drawings commissioned Supporting Scotland’s Economic Growth; Housing delivery and supporting communities through removing dereliction European Marine Science Site Phase 2 This is a key strategic priority project for HIE. The strategic vision for the development is here: 240117-emsp-the-vision.pdf (europeanmarinesciencepark.co.uk) The development of Camas House, the second business office/laboratory development on the site specifically developed to support business growth in the marine economy. This will directly support boosting productivity, local pay, jobs and living standards by growing the private sector. This project complements SAMs with the £1.6m to fit out floor of EMSP matched by £8m from HIE Full Planning consent granted with building on site at this time; proposal relates to fitting out of one floor which has not been included in tender. HIE have already invested in excess of £8m into this project. Supporting Scotland’s Economic Growth through innovation
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building acting as an incubator for blue economy businesses. Affordable Housing For Key Workers Adding scale to our work associated with the Housing Emergency to build affordable housing for key workers on a number of sites across Argyll and Bute. Argyll and Bute was the first council in Scotland to declare a housing emergency with a lack of key worker housing a critical issue for the future of our area. £5m adds to £3.7m RGD/Island Infrastructure fund and other works we are taking forward on our islands including Islay and Mull. Scaling up impact of RGD Key Worker Housing Initiative Supporting Scotland’s Economic Growth through provision of key worker housing SME Business Units Work in partnership with HIE and Scottish Enterprise to establish a number of business units targeted at local SMEs. Units will be constructed within local business park sites and/or in locations where a shortage of commercial space has been identified across Argyll and Bute. This project will support new and existing SMEs to establish and grow across Argyll and Bute and will potentially result in increased NDR/lease revenues for the Council, which can be re- invested to support initiatives targeted at business growth. £2.5m Synergies with existing investments being delivered via RGD, and projects such as Oban Airport Business Park and Kilmory Phase 2, EMSP and Colgrain. Opportunity to work with key partners to add value to existing investments at strategic business sites across Argyll and Bute. Kick starting local economic growth by addressing lack of capacity in rural commercial accommodation. Breaking down barriers to employment by providing opportunities for rural businesses to grow and flourish.