Heritage enterprise scotland june 2013


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HLF Scotland briefing on Heritage Enterprise programme 18th June 2013. More information on programme at www.hlf.org.uk

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  • State Aid rules apply where HLF funds projects that generate a commercial income in competition with others – should not create unfair advantage with public funds no matter who the organisation isHLF has an exemption but we can only… fund the additional heritage related costs of the development
  • Not-for-profit should have controlling stake in the heritage assetWe can fund set up costs for new organisations to do these projects through Start-up grants programmeLA are not excluded but the project must create economic growth – focus should not be about generating revenue for LA
  • End use that generates commercial income - the focus of the programmeHeritage at risk - building does not have to be on BARRDesignated - primarily focused on this to manage demand and rescue most important heritageEconomic disadvantage – no specific requirement e.g. SIMD ranking – but should be strong rationalePeople acquiring heritage skills
  • Residential – not funding housing – seeking long term commercial productive use – can be small/ minor part of overall scheme with mixed useCan fund building being returned to original use
  • Specialist research – archaeology, surveys, valuationsProject staff – new posts, backfill posts, FCR
  • >>> Explain weighted outcomes
  • Similar to HGReview during grant development period
  • Project enquiry not part of formal application process – not assessed as such – just getting advice – response in approximately 10 daysFirst round application with request for development funding – see handout for information requiredDevelopment phase – develop project proposal in more detail and prepare second round applicationSecond round application – see handout for information requiredDelivery phase/ development phase
  • This list does not cover everythingRIBA stages changed – guidance will be updated
  • Heritage enterprise scotland june 2013

    1. 1. Heritage EnterpriseRope Walks, Liverpool
    2. 2. Aims of the session• Introduce the new Heritage Enterprise grants programme• Explain the rationale for Heritage Enterprise and why HLFhave introduced it• Give an overview of the programme outcomes.• Explain the application and assessment process and therequirements for each stage• Make you aware of the support that is available forapplicants
    3. 3. “From 2013 we will make a newstrategic intervention to stimulatelocal economic growth with anenterprise-focused programmeoffering grants of £100,000 to£5million. This will support theconservation and adaptation ofan individual historic building orcoherent group of historic buildingsfor an end-use which activelycontributes to sustainabledevelopment in areasexperiencing economicdisadvantage ”Strategic Framework 2013-18A lasting difference…
    4. 4. Background researchHLF Board agreed to introduce anew “heritage and enterprise”programme following a long periodof research, involving:– review of consultationfeedback– nef think piece– consultation workshop– other published studies– 1:1 interviews
    5. 5. 2011 Consultation32%34%13%6%2%5% 8%StronglyAgreeTendtoAgreeNeitherAgree norDisagreeTendtoDisagreeStronglyDisagreeNoopinionDontknowViews on heritage-led regenerationQ26. To what extent do you agree that heritage-led regeneration should continue to be a focus for HLF? (base=932)
    6. 6. Research – “New ideas need old buildings”
    7. 7. Heritage EnterpriseButcher Works, Sheffield• For projects that seek toachieve economic growth• Aimed at enterprisingcommunity organisations• Bridging the funding gap /addressing market failure• Commercial / socialenterprise partnerships• Grants from £100,000 -£5million
    8. 8. State Aid Rules and the Conservation Deficit• State Aid rules apply where HLF funds projects thatgenerate a commercial income• HLF can only fund the additional heritage relatedcosts of development• Funding restricted to the “conservation deficit”• Conservation deficit is where the existing value of aheritage asset plus the cost of bringing it back intouse is greater than the value of the asset afterdevelopment has been completed
    9. 9. Heritage Enterprise – who we fund• Not-for-profit organisations• Partnerships led by not-for-profit organisations• Key aim is the integration of commercial andcommunity interests – not mandatory• Private sector for-profit encouraged to be involvedbut as minority partners• Special purpose vehicles and joint ventures• Building Preservation Trusts, social enterprises,Community Interest Companies etc• Local authorities, other public sector organisationsalso eligible
    10. 10. Involvement of private for-profit sector• Development partner• Occupier• Freehold ownerSowerby Bridge Wharf
    11. 11. What we fund - priorities• End-use that generates acommercial income• Heritage assets “at risk”• Designated heritage assets• Economically disadvantagedareas• Skills opportunities• Increased learning about heritageNB Public access not a requirementAdams Building, Nottingham
    12. 12. Less of a priorityProjects with a focus on:• residential rather thancommercial development• an active place ofworship• an urban parkSaltaire Park
    13. 13. What we fund• Purchase of a heritage asset• Conservation work• New work to bring vacantbuildings/sites back intocommercial use• Training• Activities during projectdelivery• Professional fees• Specialist research• Project staff
    14. 14. Capital work during development phase• Urgent repairs duringdevelopment phase• Temporary structures tofacilitate “meanwhileuses”• Costs should amount tono more than 10% oftotal delivery requestPop-up shops, Shoreditch
    15. 15. Heritage Enterprise - outcomesOutcomes for heritage:• better managed• in better condition (Weighted)Outcomes for people:• developed skills (Weighted)• learnt about heritageOutcomes for communities:• environmental impacts will be reduced• your local area/community will be a better place to live, work or visit• your local economy will be boosted (Weighted)
    16. 16. Outcomes for heritage• better managed• in better condition (w)Beith THI
    17. 17. Outcomes for people• developed skills (w)• learnt about heritageGlasshouse, Stourbridge
    18. 18. Outcomes for Communities• environmental impacts will bereduced• your local area/community willbe a better place to live, work orvisit• your local economy will beboosted (w)Middleport Pottery
    19. 19. Heritage Enterprise application process• Two round application process – competition at thesecond round• Each application assessed in approximately 3 months(depends on meeting schedule)• Grant development period can last up to 2 years• Project delivery period can last up to 5 years includingactivities• Applications requesting up to £2m decided by Committeefor Scotland• Applications requesting between £2m - £5m decided byUK Board
    20. 20. Project enquiryFirst round applicationGrant Development phaseSecond round applicationDelivery phaseApplication process
    21. 21. Conservation deficit• Heritage Enterprise designed to help bridge the fundinggap• The case for funding depends on there being aconservation deficit• No conservation deficit = no grant• Outline information about conservation deficit at first-round indicated in Viability Appraisal• Detailed information about conservation deficit atsecond-round indicated in Development Appraisal• Grant restricted to 90/95% of conservation deficit
    22. 22. Viability Appraisal• Required with first-round application• Short statement, including:– Brief assessment of heritage building or site– Condition– Options for new uses– Outline costs of repair and adaptation– Reasonable estimate of market value of asset aftercompletion• Make the case for a conservation deficit• Detailed costs and values not required• Can apply for a start-up grant to assist with this work• Other grants available e.g. Architectural HeritageFund
    23. 23. Development Appraisal• Development appraisal is the key document for theprogramme• Financial cash flow calculation that considers allexpenditure and income in the development process• Establishes conservation deficit• Draft development appraisals to be submitted for Stage CReview• All appraisals will be assessed by RICS registered valuers• There will be a period of negotiation• Guidance on development appraisals will be published soon
    24. 24. Development Appraisal calculationMarket value of the completed development (A)MINUSAll costs of undertaking the development (B)EQUALSResidual value of heritage asset (C)A – B = CIf C is positive, no conservation deficit and no grantIf C is negative, then grant justified(Applicant contribution of 5/10%)
    25. 25. Developers’ Return• Developers’ profit allowed to encourage investment• Added as a development cost within the developmentappraisal• Amount of profit depends on:– Degree of risk– Nature of development– Stability of market• Profit capped at 15% of capital construction costs• Allowance of profit for all project partners, whetherprivate or not-for-profit
    26. 26. First round requirements• Viability Appraisal• Partnership agreement (if applicable)Development phase information• Detailed information about work(including briefs) and timetable indevelopment phase• Detailed costs for development phase• Detailed plans for capital works indevelopment phase (RIBA Stage D) (ifapplicable)
    27. 27. First round requirementsDelivery phase information• Outline plans for capital works in delivery phase(RIBA Stage B)• Outline proposals for activities• Outline information about outcomes• Outline information about timetable and work indelivery phase• Outline costs for delivery phase
    28. 28. Second round requirements• Development Appraisal• Updated partnership agreement (if applicable)• Activity Statement• Detailed plans for capital work (RIBA Stage D)• Detailed information about outcomes• Detailed information about timetable and work fordelivery phase• A project business plan (if grant request is over £2m)• A conservation plan (if grant request is over £2m)• A management and maintenance plan• Detailed costs for delivery phase• Confirmation of partnership funding secured
    29. 29. Activity statement• Activity Statement required with second-roundapplication• Mandatory requirement for skills training, e.g.– Traditional building skills– Retrofitting– Building maintenance– Planning and guiding tours, IT skills etc• Activities are required during capital works notfollowing project completion and can include:– Tours– Exhibitions, oral history project etc– Temporary interpretation, viewing platforms etc• Digital interpretation, e.g.– Website– Smartphone app
    30. 30. Terms of grant• Standard terms of grant last for 10 years from projectcompletion, even where property acquisition is involved• If asset is sold within contract life, repayment may berequired• Repayment based on higher figure of value of the saleor the value of grant• Fixed sliding scale for repayments that declines overtime, starting at 100% in year 0-6 of the contract, downto 20% in year 9-10 of the contract
    31. 31. Start-up grants• Grants from £3,000 - £10,000- To create a new organisation to look after or engagepeople with heritage- For existing groups taking on new responsibilities forheritage•Examples of what we can support:• viability appraisal, exploring options, early scopingwork, research to inform your project, developing skills,condition survey, valuations, advice on businessplanning
    32. 32. Get advice• Get in touch and let us know about your project• Submit a project enquiry to get detailed feedback – wewill meet with you if we think it is necessary• Guidance on our website• Programme Manager in our policy team will be takingoverview across the UK• FAQs will be published soon
    33. 33. Any questions?