Peatland ACTION - Update and conversation on change to support expansion of peatland restoration in Scotland

Published: October 2024

Peatland ACTION is a Scottish Government-led partnership to restore Scotland’s degraded peatlands. The five delivery bodies in the Partnership are NatureScot, Forestry and Land Scotland, Scottish Water and the two National Park Authorities, Cairngorms and Loch Lomond and the Trossachs. Each delivery body operates in a different way to reflect the pressures/opportunities on the land they cover.

Introduction

In October/November 2024, NatureScot Peatland ACTION provided an update to stakeholders on changes it had undertaken, changes planned for 2025/26, and invited feedback on ideas for change in 2026/27 and beyond.

34 individuals and organisations responded.  This report summarises the key feedback received.  Although feedback has been assigned to specific topics/questions posed, we recognise that many comments received apply to several aspects of NatureScot Peatland ACTION and the summary should be considered in the round. 

Contents

General feedback on the Conversation

1. There was positive feedback on NatureScot Peatland ACTION and all that has been achieved in Scotland to date.  For example, many saw the developing Peatland Standard as a significant step towards aligning Scottish Government land use policies and best practice.
    
2. A number of responses said they welcomed the opportunity to contribute to this vital conversation, recognising that if 250,000 hectares are to be put on the road to recovery by 2030 then radical change to how NatureScot Peatland ACTION operates is definitely required.  One of the key issues raised is that the sector is looking for stability in the medium-term and clarity on the long-term future.
    
3. There were concerns, with feedback seeking:
   1. better communication within and between PEATLAND ACTION teams and partners; and,
   2. increased availability and capacity of NatureScot Peatland ACTION Officers to support project development and delivery.
4. Certainty of funding was a common theme throughout so that time, effort and money is not wasted in developing applications, and to provide potential investors with confidence in the projects.
    
5. However, some saw the principal barrier to expansion as practical or structural rather than solely relating to funding. 
    
6. There were questions about the wider supporting framework within which peatland restoration sits, for example:
   1. The Peatland Code is not seen as functioning as efficiently as it could whilst the Carbon market itself is viewed as illiquid and slow.
   2. There is a lack of clarity on how peatland restoration and management will be supported through agricultural subsidies and schemes and how this might interact with private finance is a key issue.
   3. The need to align the Peatland Standard with the UK Forest Standard.
       
7. The way that NatureScot Peatland ACTION operates was commented on, for example:
   1. The scope to better use technology and data to support improvement and acceleration in the sector as other sectors have done.
   2. The need for Project Maintenance post restoration.
   3. Clearer guidance on project management funding.
       
8. The need to learn from previously restored sites was also raised with monitoring of outcomes deemed essential. 
    
9. There was a call for greater transparency on what projects are being funded and where - to demonstrate how public money is being used. 
    
10. A common platform between Peatland ACTION delivery partners for sharing best practice techniques and approaches between themselves or within the sector was sought.
     
11. Several comments related to ‘Island Proofing’ operating models. There was a feeling that a regional approach that had worked well in the past has been lost in the drive for consistency, value for money and maximising returns.    More place-based decision making, investment and partnership working was seen as essential to delivering across Scotland. This ‘regionality’ also reflected availability of the workforce, which is not consistent in all areas.
     
12. A number of comments related to the Business Case for Peatland Restoration, including:
    1. The rationale for investing in peatland restoration was felt to be poor, even with substantial grant support.
    2. Surety of carbon prices is required to ensure there is a business case for projects.
    3. Operation and revenue grants are essential to project development.
    4. The weakness of the business case for restoration in the crofting context, where there is significant complexity and mistrust with regard to private funding.

Feedback on changes made in 2024/25

13. Feedback confirmed that some of the changes introduced in 2024/25 created challenges.  Whilst the changes were seen as necessary to increase scale of restoration work, many comments highlighted that the changes in April 2024 were unexpected and caused disruption.
     
14. Communication of the change was perceived by some to be poor, with contractors and agents needing more warning to prepare for changes to the grant application process.  Comments indicated that the changes introduced:
    1. were communicated late in the process for developing 2024/25 projects;
    2. were conveyed inconsistently within NatureScot Peatland ACTION and by partners; and,
    3. was perceived as contradictory to some of the work and wider policies of Scottish Government, for example, the process was not sufficiently “island proofed”.
        
15. The workload created for contractors in a short period of time led to poor quality tendering with:
    1. poorly costed projects leading to cancellations or variations;
    2. insufficient tender submissions for some projects; and,
    3. contractors bidding for multiple projects to manage the risk of projects not securing funding, if the multiple awards were received, many projects were then allocated to different contractors leading to different/changing costs.
16. The revised Variation to Offer guidance caused issues this year and further clarity was sought to ensure confidence in restoration plans and to protect designers.
     
17. There was a feeling that Project Design Support Scheme (PDSS) projects were progressed at the expense of wider partnership/stakeholder projects. Unfortunately, there were examples of feedback not being provided on why applications submitted this year were not funded.
     
18. The competitive process, using criteria to maximise hectares and leverage private financing, led to confusion, misunderstanding and difficult discussions about wider NatureScot Peatland ACTION projects.   It excluded and prevented smaller landowners e.g. tenant farmers and crofters, from benefitting from NatureScot Peatland ACTION funding.  As a result, the new competitive process was perceived as unfair. 
     
19. There was a general disquiet with the increase in bureaucracy, with added costs and delays being attributed to the competitive process and the associated planning and regulatory systems which were not aligned. The move to incorporate private finance has not helped the process. 
     
20. Collectively, there was a strong message that these concerns have reduced confidence amongst contractors.

Feedback on changes for 2025/26

21. There is still a need for clarity on requirements/responsibility and financial assistance for project pre-planning and delivery surveys.  There is unease that standards may slip if applicants are left to do their own surveys, rather than them being managed directly by NatureScot Peatland ACTION. 
     
22. There was an ask for NatureScot Peatland ACTION to speed up the assessment/decision process.
    1. The three-month gap between application submission and grant award is creating unnecessary uncertainty. Pre-screening mechanisms are needed to avoid wasting resources on project development.
    2. The timescale for applications in 2025/26 does not allow for projects to be undertaken in the bird breeding season unless projects for 2026/27 are being award in 2025/26.
    3. There is concern that the deadline of 30 April is extremely close to the deadline for IACS forms which will be the priority for many farmers and crofters.
    4. Without increased funding, expanding scale and pace will remain challenging regardless of process improvements.
        
23. The timescale of the application for funding was questioned given that contractors will be wrapping up projects on the ground, writing NatureScot Peatland ACTION final reports and claims for 2024/25 grant awards at the same time as they are required to prepare application(s) for 2025/26,
     
24. In terms of workforce, it was reassuring to hear that contractor capacity is available.  But there was a concern with the capacity of NatureScot Peatland ACTION to backup/support the aspirations.
     
25. The requirement for applications to be fully tendered by the application deadline was questioned. It:
    1. creates a huge amount of work for companies tendering for projects that don’t have funding secured and that may never proceed;
    2. encourages over-bidding and could lead to contractors declining offers, or accepting offers and then not being able to service them, thereby precluding others from having it; and,
    3. re-allocation to ‘others’ means costs may shift upwards and the original scoring and allocation may be undermined.
        
26. It was suggested that NatureScot Peatland ACTION could pre-approve projects based on robust budget estimates and other known criteria.  Tendering would then only be applied to approved projects.
     
27. More transparency is sought on the scoring criteria and relative weightings.
    1. There is concern that the process/approach is likely to reward reworked projects that failed to secured funding in in 2024/25 rather than newer projects that could be more favourable in terms of multiple benefits.
    2. The process is perceived to be favouring a few developers who have big portfolios; and biased towards projects that were larger, cheaper and attractive for private investors.
    3. An alternative approach was suggested – to skew public money towards more complex and riskier, and as such more expensive, projects.
        
28. It was suggested that the roles and responsibilities of external delivery partners needs to be reconsidered.  They are struggling to work to NatureScot processes when they do not have access to the same systems and data.

Feedback on changes for 2026/27 and beyond

General comments on options to transform NatureScot’s Operating Model

29. Most feedback agreed that NatureScot is exploring the right four things to transform its operating model, i.e.:
    1. expanding the pipeline of investable projects;
    2. having a targeted approach to investment;
    3. bringing in private finance; and,
    4. simplifying the process.
        
30. The main ask was for more transparency and detail on how NatureScot Peatland ACTION will deliver on the aspirations for transformation. 
     
31. There was an ask for a place-based approach to funding that reflects regional variations in degraded peatland, land ownership and the required workforce to tackle it.   The need for a small scale or community focused support scheme was raised by a number of respondents.
     
32. There was encouragement for a more integrated approach linking NatureScot Peatland ACTION to wider initiatives, policies and frameworks to demonstrate responsible public spending on peatland restoration and monitoring. 

Comments on expanding the pipeline of designed / investable projects

33. There was some support for a further round of the Project Design Support Scheme (PDSS). Some commented that it would be essential to ensure a future pipeline of well-designed and investable projects to unlock private finance in peatland restoration. It was felt this would have the advantage of:
    1. reducing the financial risk to landowners/project developers;
    2. supporting riskier project development; and,
    3. exploring larger areas of peatland and to put forward multiyear grant applications.
        
34. Many respondents were keen to be considered for future PDSS funding.  They asked for it to be more widely available and awarded more fairly in future with any scheme supporting skill development and entry into the design sector.
     
35. There was also some concern about the potential for a further PDSS.  Some felt the previous scheme was unfair seeing it as concentrating work among a few companies, favouring larger projects and agents, and limiting strategic management and regional distribution. This was perceived as competing some areas and types of land holdings out of the process as well as stretching the capacity of some agents.
     
36. There was feedback that availability of designed projects is not currently the bottleneck but rather the availability of funding, therefore running the risk of investing in PDSS-developed projects that will not go ahead.  It was suggested design support should only be provided for projects which would be able to secure funding within two financial years.
     
37. A review of the previous PDSS process was encouraged - to look at the quality, impact, and success.  This was to ensure that any future scheme was fair and transparent supporting high quality design.  There were a number of suggested approaches to future NatureScot Peatland ACTION support for design including:
    1. Streamlining the feasibility requirements and keeping the rates the same per hectare but only funding a percentage of the costs.
    2. Lowering the intervention rate for capital projects but continuing to fully fund the design phase to ensure quality projects.
    3. Providing a support system and/or contribution to project development costs rather than bringing back PDSS in its previous form.
    4. The potential for a more integrated approach combining elements of PDSS with collaboration with Peatland ACTION Officers and NatureScot staff to provide consistency.
38. NatureScot was encouraged to prioritise mechanisms to ensure high quality design and consistency of approach including training, sharing of best practice, clearer standards, guidelines, and minimum requirements for Project Design.  It was also suggested that work should be undertaken to review delivered projects against their initial design.
     
39. The role of NatureScot Peatland ACTION Project Officers in design was identified as essential to smaller projects which would be unlikely to go ahead without their support.  It was noted that the knowledge and experience of the officers was key in project design, especially in more complicated projects.  It was also suggested that officers should have a level of involvement in the design of all projects before they reach application stage. Moving towards funding project agents/developers for design time, however, was seen by some as a very positive move.
     
40. A number of comments were received on the need to ensure quality of design and share best practice and technical approaches. Whilst the new Technical Compendium, development of the Peatland Standard, Case Studies, and the publication of a template Statement of Requirements were all welcomed, there were a number of further suggestions including:
    1. The Peatland Code developers’ forum should be used more widely to share good practice.
    2. Access to specialist advice to support complex design e.g. hydrologists.
    3. A central image classification of Peatland.
    4. Separation of outline design (e.g. feasibility and concept) from detailed design.
    5. Improved consistency of approach to mapping.
    6. Placing Contractors on a national tender framework (as FLS do for forestry) to allow for operational costs to be standardised, reducing bureaucracy and associated delays.
        
41. The role of project design in attracting private investment was raised suggesting that ‘shovel ready’ and well-designed projects will increase attractiveness to investors. However, it was also acknowledged that some investors are keen to participate from the outset. It was suggested that designed projects could be marketed for investment according to their benefits and strength of business case.  Those that are more complex and less attractive to investors could then be prioritised for public funding.

Comments on a more targeted approach to funding and support

42. Many recognised the need to ensure best value for public funding in support of projects and therefore the need to target NatureScot Peatland ACTION support.  There were a number of comments on the principles and approach to targeting funding and support in the future.  These include:
    1. Potential grouping of small scale / community projects – similar to the approach taken by the Peatland Code.  It was recognised, however, that these can be quite complex to administer if through different landowners.
    2. Robust metrics for assessment criteria are needed whilst recognising the need for simplicity and that the benefits and outcomes may vary between regions and stakeholders and may take some time to develop.
    3. There is a need for flexibility to ensure that a reduction in the intervention rate does not become a barrier to good projects and / or more remote and island areas.
43. Feedback suggested a general support for moving away from prioritising cost per hectare with a stronger emphasis on emissions savings and risk to delivery. One idea suggested was to group projects into different themes to allocate funds e.g.:
    1. Carbon - prioritise large scale, landscape projects with high hectarage.
    2. Biodiversity- Protected areas and species etc.
    3. Hydrology – Flood mitigation
    4. Community and connectivity and innovation – projects with community, education, training, research or cultural benefit
    5. Mixed Benefit
        
44. Other criteria suggested included a tiered funding approach: easier projects require more private equity, while public funding focuses on complex/risky/expensive works. It was highlighted that greater public funding would be required to offset the risk of more complex projects.
     
45. It was noted that private funding can often be confirmed at very late notice, and this does not align well with the introduction of NatureScot Peatland ACTION submission deadlines. 
     
46. A range of suggestions were received on principles for investment. For example, comparing outputs such as £/tCO2e makes a fairer comparison in competitive funding processes. It would highlight degradation levels of peatland when reporting benefits and provide the public, with a tangible way of understanding the benefits of peatland restoration. 
     
47. Others suggested that prioritising projects to maximise reduction of carbon emissions per hectare should be the highest priority.  It was also highlighted that if the priority continues to be 250,000 hectares being put on the road to recovery by 2030, there is a powerful argument for trying to maintain simplicity – with funding focused on delivery of hectares. This means a focus on drained sites (least risky and most attractive to private investment) and not deeply eroded sites. 
     
48. Whatever criteria are used, the overwhelming message was that there should be a greater and earlier transparency on any weightings for financing support.
     
49. A number of comments were received on the need to ensure that any targeted approach takes into account the needs of community and smaller projects, and the Just Transition Agenda.  There was concern that many sites and areas that could benefit from restoration may be excluded by the funding criteria - being too small in scale, lacking investment, and not viable for Peatland Code. A place-based approach with support for exploration of small scale or community focussed schemes was proposed, including the potential for NatureScot to use different “runways/pathways” of support.  It was suggested that there could be a ring-fenced pot for high quality community and biodiversity projects that are judged on more than just achieving the hectarage. It was also suggested that once projects are prioritised for support, it may be that the type and level of support then diverges, e.g. higher level of funding for projects that score highly against the criteria but are more challenging to incorporate private finance into.
     
50. A number of comments were received on the possible wider outcomes and benefits of projects and how these might be considered in a more targeted approach.  These include:
    1. The numerous jobs tied to the restoration sector, particularly in ‘fragile’ areas e.g. the Highlands and islands.
    2. Assessing the potential environmental benefits of peatland restoration e.g. biodiversity or water management is important but has not been progressed due to the focus on carbon and Peatland Code.
    3. The ability of applicants to supply information and data required to demonstrate potential wider environmental benefits will need to be developed along with the ability to measure and monitor these.
    4. There is a need to integrate and align the priorities of the NatureScot Peatland ACTION programme with wider strategies for natural capital, climate and biodiversity.
    5. Prioritising landscape scale projects potentially reduces the costs per hectare of restored peatland and can allow hydrological units to be restored where these straddle ownership boundaries.
    6. There is a need to evaluate and develop existing data and monitoring strategies to improve the understanding of environmental impacts of degraded peatland, the potential benefits of restoration and recognise the gaps in understanding of outcomes from various restoration work. 

Comments on private finance

51. There was general recognition of the need to attract Private Finance in order to enable continued delivery.  It was also suggested, however, that NatureScot Peatland ACTION should be exploring other more regulatory mechanisms to facilitate uptake of restoration rather than focussing on levering in funding.  There was concern that, in some cases, public funding may be used to ensure investors achieve profits in the long term from their initial investment.
     
52. The potential integration of NatureScot Peatland ACTION and the Peatland Code was generally welcomed, however, many recognised the challenge involved in aligning process and principles. It was noted that confidence in the carbon market will only improve if corporates are comfortable in the legitimacy of carbon units and that they can be used to offset emissions. In turn, it was suggested that there may be fear and uncertainty for applicants if they are not experienced in engaging with private finance and may question the motives of some for entering into these sorts of agreements.
     
53. There was general support for the potential role of Carbon Credits in Peatland ACTION and the incentive this may provide for landowners and investors to become involved in peatland restoration.  There were a number of concerns and questions raised, however, around how this might work, the impact on carbon prices and confidence, and the risk of Scottish Government entering a voluntary and unknown futures market.   

Comments on simplifying the process

54. There was generally positive support for the simplification of processes. However, there was concern over the ability to implement changes timeously and the impact this may have on the current pipeline. 
     
55. It was noted that the current lack of efficiency in the process and insecurity over funding is resulting in key players and investors in the industry being lost.  It was also noted that annualised budgets mean that work will require to be tendered without any security of funding.  A number of key principles were suggested:
    1. Pre-screening processes and a strategic approach to ensure time, effort and regional availability is optimised.
    2. The process should enable restoration to be carried out year round, and in all areas, if the targets are to be achieved.
    3. There needs to be clarity and consistency countrywide with regard processes, planning, surveys, methodologies, timing of projects etc.
    4. The level of due diligence required for projects must be clearer.
56. There were a number of comments about the importance of timescales in the simplification process. Many were supportive of an annual fixed deadline for applications to enable people to plan ahead. However, it was noted that the transition year would require careful management and timescales in future years must be consistent.  Some indicated that a deadline in May/June would work well for them with others preferring September/November and/or multiple deadlines.  Some preferred a February deadline to enable projects to start once budget setting complete.   In contrast, however, there were those who felt that the funding window should be open year round to allow for wider approval processes, time pressures and seasonal variations in different regions.  There were concerns raised that an application deadline creates bottlenecks in the design, development, assessment and approval process (including Peatland Code). It was suggested that threshold scoring criteria for funding should be established (rather than appraising projects relative to each other) to allow for year-round funding and approval on a first come first served basis until budget ceilings are reached.
     
57. It was suggested that clear assessment criteria and timeframes for internal processing and assessment, both within NatureScot Peatland ACTION as well as wider NatureScot and other regulatory bodies with input to the process, is essential to keeping applications moving. 
     
58. There was support for the introduction of fixed standard costs for some types of restoration to simplify the process and help reduce uncertainty for landowners, developers, and investors. It was commented, however, that standard costs would not be appropriate for more complex projects.  It was also noted that fixed costs may not work in some areas e.g. islands, where the costs of delivery are higher.  In contrast, it may drive up costs in other areas where the cost of delivery is lower and could create a barrier to new entrants or smaller contractors.  A number of considerations for implementation of standard costs were suggested:
    1. Allocation of funds should be based on quality design to retain fair competition.
    2. Costs should be agreed upon by industry steering groups including any regional variations.
    3. Costs should be based on area costs and machine days rather than features.
    4. Costs could be offered based on e.g. a standard hectare payment for drain blocking.
    5. A fixed cost option for restoration by hectare could be offered with any costs above this met by the applicant, this approach may be suitable for the later phases of multi-phase projects.
        
59. There was significant support for alignment of NatureScot Peatland ACTION and Peatland Code, however, it was recognised that achieving this may be overly complex and could impact on timescales, workloads and result in dependencies and bottlenecks.   It was also suggested that alignment may reduce the opportunity for smaller scale, community, and environmentally focussed projects.  It was acknowledged that Peatland Code and NatureScot Peatland ACTION assess projects on different criteria with Peatland Code assessing projects for accuracy of emissions reduction estimates and eligibility for carbon credits, based on legal and financial criteria, and NatureScot Peatland ACTION assessment is focussed on quality and value for money.
     
60. There were a number of comments on the need to simplify the approach to data management and reporting.  It was suggested that NatureScot Peatland ACTION should align its spatial data requirements and format with Peatland Code to avoid duplication of effort.  It was also suggested that data and reporting requirements should be flexible and proportionate to project complexity and project manager/contractor competency. There were a number of requests for NatureScot Peatland ACTION to allow for data to be submitted as a spatial data pack/shapefile and linked images rather than production of additional mapping.
     
61. There were a number of people who welcomed the idea of a Quality Assurance or Trusted Status approach.  It was suggested that this might expedite approvals, with a certification process for competent contractors and delivery partners enabling them to be prioritised and exempt from certain aspects of the development scrutiny. It was proposed that any Quality Assured status must have independent verification and allow for regional variation.  There were others, however, who felt that this approach has the potential to create a 'closed shop' and would not be required if criteria are objective, clear and fair. It was suggested that project design should be based on evidence of delivering outcomes rather than a qualification or status. It was recognised that the Technical Compendium for restoration techniques, the upcoming Peatland Standard and continuing workforce development are all essential to ensuring quality. 
     
62. There were a number of comments highlighting the need for consistency of approach for approvals and assessment processes across public and regulatory agencies.  Key issues highlighted include the need for:
    1. a national standard/agreement regarding pollution prevention including crossing of watercourses;
    2. consistency of approach to archaeological constraints in Local Authorities in terms of specialist surveys and standard mitigations;
    3. agreed acceptable activities for peatland restoration projects in relation to Local Authority planning requirements;
    4. removing any duplication between the NatureScot Peatland ACTION application and permitted Development Rights (PDR) process and ensuring this is not further exacerbated by the introduction of an ‘Expression of Interest’ process;
    5. alignment of PDR Prior Notification Approvals with NatureScot Peatland ACTION to avoid delays with Local Authorities; and,
    6. alignment and improved communication within NatureScot between NatureScot Peatland ACTION and the wider organisation and teams e.g. on protected sites and with local area teams.
        
63. Feedback highlighted that the application process and level of detail requiredshould be simplified to speed up the approvals process.  It was suggested that streamlining paperwork, approach, and reporting complexity / requirements would speed things up and enable the scaling of the pipeline of projects. It was also suggested that there is duplication of effort between funding officers and project officers in NatureScot Peatland ACTION and that officer site visits and monitoring could be used to monitor progress on the ground and reduce reporting burdens.  It was proposed that NatureScot Peatland ACTION should consider grouping applications within the same region for consideration with input from the local officers.
     
64. There were a number of comments about pre-tendering, suggesting that this can place a heavy burden on contractors and can impact on their availability to deliver where multiple projects tendered for are awarded simultaneously.   It was suggested that NatureScot Peatland ACTION consider multi-year/phase funding applications with restoration plans produced for each phase rather than at application stage, and with competency checks for contractors rather than re-tendering.
     
65. There was some support for prioritising landscape scale projects and outcome linked support, however, it was suggested that this would require careful implementation.  It was suggested that landscape scale projects could be achieved by batching/grouping of applications, to realise greater economies of scale, particularly in areas characterised by smaller land holdings. It was noted that the term ‘landscape’ needs to be carefully defined in order for these projects to be prioritised and accounted for in the criteria scoring process.   Consider what a ‘successful outcome' means and the process for measuring and recording this also needs to be carefully defined.