Natural and Cultural Heritage Fund - Stakeholder engagement - FAQs

FREQUENTLY ASKED QUESTIONS

Where has this new Fund come from?

This is part of the next phase of the Scottish Government’s European Regional Development Fund (ERDF) 2014-2020 programme which uses EU funds to promote economic growth and job creation.

What area does it cover?

The Fund is available only in the ‘Highlands & Islands” transition area as defined in the light blue area in the map below. This includes the local authority areas of Highland, Comhairle nan Eilean Siar, Orkney, Shetland, Moray, most of Argyll and Bute and part of North Ayrshire (Arran and the Cumbraes). See map below. A more detailed map is also available on request.

Is there a geographical preference?

We will consider projects anywhere within this transition area, but are particularly keen to support projects which benefit more rural and remote areas as this is where our investment can have the greatest social and economic benefit.

What’s the fund for?

The purpose of the fund is to showcase the outstanding natural and cultural heritage of the Highlands & Islands, provide more and better quality opportunities for visitors to enjoy it, encourage people to visit some of the more remote and rural areas and sustain jobs, businesses and services in local communities.

What is your definition of natural and cultural heritage?

The natural heritage includes natural habitats and wildlife, geology and landscapes. Cultural heritage includes history, language, architecture, ancient monuments, historical sites and cultural landscapes and the sectors of theatre, arts and literature. There is a close link between these two and interests often overlap. They are important locally, and on a national and international scale. They provide opportunities for the cultural and creative industries, environmental and tourism sectors.

Who can apply?

Applicants can come from the public, voluntary or third sectors (private businesses are not able to apply for ERDF). Partnerships can apply where they are legally constituted and can demonstrate that they have the necessary experience, staff and finances to handle significant EU funding. In particular, applicants will need to be able to demonstrate that they have the capacity to meet the stringent financial, audit and record keeping requirements required by the EU, as well as manage project cash flow in advance of grant being paid. It’s unlikely, therefore that smaller voluntary or community organisations will be in a position to apply.

How much money is available?

£5 million of EU money in total is available from 2019 until the programme closes in 2023.

What % of project costs will be supported?

Up to 70%. The remainder must come from match funding to be found by the applicants. Match funding can’t include other EU funding such as Leader or in-kind contributions or private/commercial funding.

How many projects will it fund?

Scottish Government has set us outline targets of 6 major capital projects (visitor and cultural centres) and 4 digital projects (interpretation, marketing campaigns etc). However, this is not set in stone. We will be working with other organisations to decide how the money can be used to achieve the best impact.

What are the eligibility criteria?

Full guidance on eligibility will be provided and available from December. The application round for the fund opens in January 2019. The main criteria are:

• Projects must be located in the Highlands & Islands Transition Area or demonstrate how they will benefit one or more community in that area.
• Projects must be based on promoting or developing the natural and/or cultural heritage assets of the region
• Projects must be seeking an ERDF grant of a minimum of £250k. The normal maximum grant amount will be £1million, although we may consider exceptions to this.
• The maximum contribution available from the Fund is 70% of eligible costs. Applicants must therefore contribute a minimum of 30% of the project costs from other sources. Match funding is eligible from public and ‘public like’ organisations – the ERDF definition of ‘public like’ is an organisation that does not have any individual (or other private / non-eligible organisation) benefiting from the activity of the organisation – typically this would be determined by whether there were any individuals as shareholders (including Directors) who received dividends from the organisation. Match funding cannot include other EU funding or in-kind contributions or private/commercial funding.
• ERDF is a funder of last resort so applicants must be able to evidence that the money is needed, and that other possible funding options have been explored – i.e. that the project cannot proceed at the required scale or same reach and impact without NCHF funding.
• Projects have to be additional – i.e. new, innovative or adding value to what is already there. See guidance about how we will assess the extent that any new projects are displacing or competing with other providers.
• The Fund cannot support any parts of a project which are:
  • required as part of a statutory duty;
  • are a condition of planning consent; or
  • have been carried out or started prior to our funding being awarded.
• Applicants must be able to demonstrate that their project does not breach the State Aid tests. Information on State Aid test requirements and legal responsibilities are provided in applicant guidance. Applicant guidance with full details of funding priorities and criteria will be available when the fund opens in January 2019.
• Where a project involves capital works, applicants must be able to demonstrate that they own the land in question or otherwise have the necessary legal rights to carry out works on the land.

What things are ineligible for funding?

The following list of activities are not eligible for funding:

• Activities unrelated to the natural or cultural heritage of the region
• Private business development projects
• Projects that displace existing business
• Promotion of an individual business or groups of businesses
• Generic marketing campaigns
• Applicants that don’t have the right to do the projects such as without landowner’s permission or lack of other consents
• Routine maintenance of existing facilities
• Projects on Scheduled Ancient Monuments without permission from Historic Environment Scotland
• Projects on protected sites without prior approval of relevant organisations
• Projects which are the statutory duty or responsibility of other organisations
• Foreign travel and conferences for skills development or generic promotional campaigns
• Feasibility research studies or the gathering of evidence to understand the need for the project
• Generic regional marketing campaigns
• Promotions not based on natural or cultural heritage
• Academic research
• Habitat monitoring
• General motorised transport projects
• Costs relating to Community Asset Transfers (other eligible project costs out with the community asset transfer will still be eligible.)
• Festivals

What sorts of projects are you expecting to fund?

Visitor centres, cultural centres, digital interpretation and new products or services which promote the region’s natural and cultural heritage. This can include (but it not limited to):
Activities and actions that are eligible include the following examples:

• Investment in infrastructure supporting the sustainable use of natural and cultural heritage assets such as visitor centres, interpretative facilities and improved accessibility.
• Digital interpretation projects and interpretive media that promote and protect the natural and cultural heritage and provide local economic and social benefits. This could include augmented reality and virtual reality digital applications for mobile devices, games and other innovative approaches which provoke interest and motivate visitors to discover and explore more.
• Improving the accessibility, interpretation and quality of sustainable development opportunities based on the region’s heritage such as improved physical access, on-site signage or facilities and installations that will improve visitors experience and their awareness or understanding of nature and / or culture.
• Promoting and developing the unique and distinctive natural and cultural heritage (such as Gaelic and the region's musical heritage) and resources of the region. These activities should not be generic marketing campaigns but focussed clearly on natural and/or cultural heritage to encourage new visitors and expand markets; such as improved virtual or digital pre visit information about unique and distinctive assets as well as on the ground physical hubs
• Projects to develop new products or services to groups of enterprises and sectors based on the region's natural resources, particularly for the tourism sector such as awareness raising, skills development as part of a scheme to connect like for like businesses with better insight to local nature and culture to improve host skills and co-ordinate an improvement to the visitor’s host offering. This could be with a particular focus on local stories, music, language and traditions as well as physical geography and information about unique and distinctive assets on the ground or in local tradition.

Rather than 10 or so big projects, wouldn’t it be better to have a larger number of smaller projects, with more places and organisations benefitting?

This is a one-off opportunity to invest, and therefore we want each of our projects to have a big impact on visitor experience and on the local economy of the community in which they are based. We also want projects to be sustainable in the long term.

ERDF funding is most suited to larger scale projects. It comes with detailed rules and regulations that can be complex to understand and comply with for those who are new to them. The financial, record-keeping and audit requirements are stringent, and have to be maintained to 2030. If these aren’t met, there are financial penalties and other risks for the lead organisation.

Money can only be claimed for a project after it has been spent and because of the checks involved it can take up to 3 months for a claim to be paid. So, organisations need to have sufficient resources to cover the cash-flow in that period.

All this means that the economies of scale are such that it wouldn’t normally make sense for ERDF to be used for a low value project. Other sources of funding are likely to be a better fit for those smaller projects or organisations.

Why have you set a minimum project value of £250k?

For these same reasons. We want large impact projects which are a good fit with ERDF as a funding mechanism.

Isn’t that disadvantaging community organisations?

Community organisations are able to apply if they can meet the funding criteria. However, for the reasons outlined above, it’s unlikely that most community organisations will be able to meet the ERDF requirements. While the availability of funding will be attractive to them, it’s important that we are open and honest up-front about what they would be taking on and the significant risks involved. We’re happy to advise any community organisation if their project idea is a good fit with ERDF or not.

When can people apply?

The Fund will open for applications w/c 7 January 2019 and close on 22 April 2019.

Can we apply without planning permissions?

Yes. Applicants are all advised that it is not mandatory to have planning permission in place to apply for the NCHF. During the application assessment there will be a question about whether the necessary planning and other consents are in place. A score will be given on the basis of their application and supporting information provided. All applicants are advised that they should consider providing as much information as they can about any statutory permissions required (including arrangements made for Planning Permission).

Local authorities offer pre-application services which would provide an indication of whether planning permission was likely and what we would have to satisfy in order to get it. A statement in relation to this supports fund applications and will strengthen the assessment score. Planning permission in principle will strengthen the assessment score further. Full planning permission would be essential after project funding is approved. No project will progress after offers of grant have been made without the necessary Planning Permissions or other consents in place. SNH will not sign or enter into a funding agreement contract until Planning Permissions or other consents are in place.

Can we apply without match funding in place?

Yes. However you will be expected to give an indication that sourcing match funding is underway and no contracts will be agreed without match funding in place.

When can projects start?

We expect to announce the successful projects by July 2019. Projects can start any time after that.

When do projects have to be completed by?

The latest works have to be completed by is June 2022 (earlier is fine). This is to allow final claims to be submitted and processed by the 2023 deadline for the end of the ERDF programme.

Is this affected by Brexit?

No. The Fund will run through to June 2023 regardless because of guarantees given by the UK and Scottish Governments.

Wouldn’t it be better to spend the money on improving roads, car parks, toilets etc?

Where we invest in a new visitor facility, those things will be part and parcel of what is provided so we will be adding to the overall provision across the area.

But, we need to be realistic. We have got this money from the EU for a specific purpose – to support new opportunities for economic growth and employment in the Highland & Islands linked to the area’s outstanding natural and cultural heritage. We have to deliver on that purpose, so diverting money from our fund to address broader issues with tourism infrastructure isn’t an option. Were we to do so, the money would be withdrawn.

Our fund is an opportunity for a one-off investment in new facilities, all of which have to be delivered by 2022. The fund won’t exist beyond that. It’s not a long-term solution to the maintenance of existing facilities. That needs to be addressed in other ways.

Our fund also needs to be seen in context – it is part of a wider effort to provide visitors with a quality experience through the ongoing investment made by local authorities, visitscotland and the many other organisations and businesses working in this sector. There are other funding streams available – notably, Scottish Government’s recent £6m of funding given to visitscotland to deliver their Rural Tourism Infrastructure Fund. That Fund is investing in new toilets, car parks and campervan facilities in places where facilities haven’t kept pace with recent increases in visitor numbers.

It’s not realistic to expect a one-off fund of £5m to resolve every problem or issue, but the Natural & Cultural Heritage Fund is a fantastic opportunity to grow what the Highlands & Islands offers to visitors, raise awareness of the natural & cultural heritage and bring benefits to local communities while contributing to the tourism infrastructure that underpins that.

Why is SNH leading?

We’ve been asked to lead development of the Fund because of our experience of managing the Green Infrastructure Fund, which is also part of the ERDF programme. While the Funds are very different in subject and geography, we can use many of the same processes, and some of the same staff resource, for allocating and managing the money.

The Fund is a good fit with our Corporate Plan priorities. As is evident from its name, it will deliver natural heritage outcomes. It provides an opportunity to promote the value of the natural heritage as a tourism (and food & drink) resource in rural areas, generating visitor expenditure which supports local businesses and jobs. The close relationship in the Highlands & Islands between the natural and cultural heritage, and the likelihood that many projects will include an element of both, means that even projects which are primarily focussed on the cultural heritage will be of interest to us. It also fits with our desire to secure additional resources for the natural heritage from external funding sources.

Will other organisations be involved in overseeing the Fund?

Yes. This is an opportunity to further strengthen partnership links between SNH and tourism and enterprise bodies, such as Visitscotland and HIE; with cultural heritage bodies such as Historic Environment Scotland and Bòrd na Gàidhlig; and with the relevant local authorities and community planning partnerships. We have appointed a Performance Management Board to help assess applications and advise SNH on which projects should be supported.

Would purchase of a vehicle be eligible?

It is unlikely that a vehicle would be eligible.

Do you fund project staff costs?

Staff costs are only eligible where at least 40% of their time is spent on the project. A full time member of staff spending 100% of their time on the project would be eligible for us to fund 70% of those costs plus an additional 15% flat rate to cover overheads. If an applicant was seeking funding towards a member of staff that was spending only 50% of their time on the project then the fund would contribute up to 70% of the 50% of the eligible staff cost, plus 15% flat rate for overheads. In other examples if staff were only spending 35% of their time on the project then these costs would not be eligible for any funding.

Do you fund contractors to carry out project work?

All applicants are required to follow procurement principles (Open or Restricted tender or suitable Framework Agreement) for all elements of the work including the provision of works, materials and/or services. All work including that of contractors or items purchased for use in the project must be procured following the applicant’s own procurement policy and should be supported with a full audit trail for the appropriate procedure. Please note that for the NCHF only two cost models may be used: Direct Staff Cost + 15% Flat Rate and or Procurement. Projects can use one of, or a combination of, these two cost models. Only works incurred and defrayed within the approved lifetime of the project will be eligible.

What are the National Rules and do applicants need to know these?

Yes. The Scottish Government as Managing Authority has developed National Rules. These are an important basis of every application to the Fund and we share these here for you to consider as part of your preparations:

It is important to note that it is the responsibility of Grantees, to read and understand the ESIF 2014-2020 Programme National Rules regarding the Eligibility of Expenditure in conjunction with our own Natural & Cultural Heritage Fund guidance. Failure to read and understand the guidance, which subsequently results in ineligible expenditure, is the liability of the Grantee, not Scottish Natural Heritage as Lead Partner. We can, however, provide you with advice and, where necessary, get clarification from Scottish Government.

Where can I get further advice or refer people to?

There is further advice available on the Natural and Cultural Heritage Fund on our website. 

Enquiries should be sent to NCHF.

Pages: 6
Published: 2018