Research and analysis

Evaluation of the Coastal Communities Fund: executive summary

Published 28 June 2022

Applies to England

Foreword

This report outlines the findings from the evaluation of the Coastal Communities Fund (CCF) programme, which ran over 5 bidding rounds between 2012 and 2022. The report was commissioned in response to the House of Lords Select Committee report in to Regenerating Seaside Towns, chaired by Lord Bassam, in April 2019.

The CCF encouraged sustainable economic development of coastal communities by providing funding to create sustainable economic growth and jobs so that people are better able to respond to the changing economic needs and opportunities of their area. The programme focused on a single outcome that coastal communities will experience regeneration and sustainable economic growth through projects that directly or indirectly attract sustainable jobs, and safeguard existing jobs.

The evaluation study used a multi-methods approach in order to understand the impact of the programme, including interviews with key people who were either involved in the implementation of the programme or were key stakeholders in it on a national level; a retrospective review of data gathered by the CCF programme during implementation; and 21 in-depth case studies of projects funded by CCF, including schemes across all 5 rounds of funding

I would like to thank the team from IFF Research, and also Professor Pete Tyler of Cambridge University for his peer review of the report and findings.

I would also like to thank stakeholders who participated in the research, and the policymakers, operation delivery colleagues and analysts in the Department who provided input to the research materials and reviewed the outputs. DLUHC continues to develop its evidence base in this area, with a view to informing policy and improving outcomes across our remit for levelling up and bringing left behind communities up to the level of more prosperous areas.

Stephen Aldridge
Chief Economist & Director for Analysis and Data
Department of Levelling Up, Housing and Communities

Executive summary

Numerous coastal areas in England were built around the development of the domestic tourism industry, throughout the 19th and early 20th centuries; many developed as fishing ports or around boatbuilding industries. All these industries have seen significant decline throughout the late 20th century. In this sense, some coastal areas have much in common with inland post-industrial cities in the UK, which faced major economic change in the late 20th century. Yet in February 2007, a House of Commons report found that no national strategy existed to regenerate these areas, and no national or regional funding streams were specifically targeted at coastal areas^{[footnote 1]}.

The Coastal Communities Fund (CCF) is the largest amongst a series of interventions set up subsequently to tackle this issue, offering since its establishment in 2012, several hundred grants totalling £188 million in value to a range of projects targeted at creating jobs and wider economic regeneration in coastal areas. The Fund’s source of income derives from a percentage of the Crown Estate’s charging of rent for activities taking place in the UK’s coastal waters, known as the Marine Revenues.

The fund is administered separately in Scotland, Wales, and Northern Ireland; this evaluation covers the fund in England only. The Fund is currently delivered by Department for Levelling Up, Housing and Communities (DLUHC),^{[footnote 2]} in partnership with Groundwork UK.

1.1 Methodology

Research questions

This report, commissioned by DLUHC and carried out by IFF Research, seeks to evaluate the programme in England. It was required to answer the following questions:

• What did the programme deliver?
• Who benefited from it and how?
• What would have happened without the intervention?

The key elements of the evaluation were as follows:

• Six depth interviews with key people who were either involved in the implementation of the programme, or were key stakeholders in it on a national level (August - October 2020)
• A retrospective review of data gathered by the CCF programme during implementation, covering funding rounds 1 to 4. Impacts data for funding round 5 is not yet available, since these projects are not yet complete (September 2020, repeated in May - June 2021)
• 21 in-depth case studies^{[footnote 3]} of projects funded by CCF, including all 5 rounds of funding (September 2020 to June 2021).

The results of all of these strands of research are synthesised in this report.

Limitations

This research did not include a quantitative assessment of the impact of the CCF relative to what might have happened if the policy was not put in place^{[footnote 4]}. The quantitative elements of the research are limited to assessment of the delivered outputs of the projects. While the evaluation can comment on the perception of additional impacts among those interviewed regarding individual projects, this limits the extent to which conclusions can be drawn regarding the net impact of the CCF.

1.2 Distributing funds

Application process

Nearly all case study interviewees felt that the process of applying for funding from CCF was straightforward, including those who had experience of applying to other funding sources. This was felt by many interviewees to be a strength of CCF, enabling it to reach community-based projects which might have a lesser capacity for administration.

However, some of those interviewed who were involved in the process of assessing projects did say that it was challenging to effectively assess the viability of the larger, more complex projects with the information available to them from the application forms.

Recommendation: Create a two-tiered application process by amount of funding requested; this would enable more detail to be gathered for larger projects on their plans and their projected economic impact, making project selection more efficient, while retaining the much-valued simplicity for smaller projects.

Selection process

The CCF was widely praised for its flexibility, and willingness to fund projects which were eclectic in nature, rather than being narrowly focused on one particular way to achieve economic growth or create jobs. The process of releasing and drawing down funding was also praised as being simpler than many other public sector funding sources, which it was suggested were frequently excessively complex and burdensome.

It was, however, suggested that too many projects were taken to second stage, and there was some criticism of the speed of awards being made in England relative to Scotland and Wales^{[footnote 5]}. The key issues were thought to be the requirement for very high-level approval of recommended projects at both stages of the two-stage application process, and the relatively large number of projects invited to submit a stage two application. Some of those involved nationally felt that MHCLG input had sometimes resulted in less good value projects being taken forward to the second stage or awarded funding, although this may reflect a need to take wider priorities into consideration.

Recommendation: Consider reducing the extent of high-level involvement from DLUHC in the selection of individual projects at both application stages, to increase the speed of the decision-making process, and focus it more on the CCF England Funding Panel recommendations based on objective criteria relating to projected outcomes.

Several national stakeholders also highlighted that the one-off and short-term nature of the funding made it difficult to build projects into a wider strategy, or into a long-term plan. This also influenced the design of projects.

Project types

Over the 4 rounds for which data was available, although most CCF projects were small (41% less than £0.5 million in grant value), most of the funding was dedicated to the larger projects. There was a shift in priorities toward funding larger projects as the Fund developed, although spending on the smallest projects was retained; it was mid-sized projects (£1 million to £2 million in value) which received less funding.

The priorities for spending varied over time; in the first round a high proportion of funding went to training and skills projects (37%), but these were a small proportion of the total in rounds 2 and 3. Infrastructure projects made up a large proportion of spending in rounds 1 (43%) and 3 (41%), but property projects dominated in round 2 (73% of grants)^{[footnote 6]}.

Geographical distribution

For this study, a new measurement of the coastal population was undertaken, using 2011 Census data, combined with the ONS BUA (Built-up area) classification. It found that the total coastal population was 12.3m of 53.4m in England, or 23% of the total. More information about this estimate is provided in Appendix A.

The CCF’s grant giving funding across the coastal areas of England amounted to £15.20 per head from rounds 1 to 5. On a per head basis, the funding was strongly tilted toward rural areas. Across rounds 1 to 5, coastal areas with less than 10,000 population received £33.43 per head, compared to only £3.82 per head in the largest places with 500,000 or more population.

Within coastal areas, CCF funding was targeted broadly, without a particular focus on areas of the most need. The data indicates a lower level of funding per head in areas with high levels of long-term unemployment^{[footnote 7]} than areas with low levels of long-term unemployment. This may relate to the targeting of funding at smaller towns and villages, which even in local authorities with relatively high levels of deprivation on the whole, tend to have lower levels of long term unemployment than urban areas (see Appendix A). In addition, the CCF relies on communities putting forward projects for consideration, and more economically disadvantaged areas may tend to have more fragmented communities^{[footnote 8]}.

While the number of projects funded was, as intended, broadly similar in each region of England, other than the South West due to its much longer coastline, the regional distribution of funds and projects provided by CCF is, however, patchy when compared to the coastal population of each region. A substantial tilt toward Yorkshire and Lincolnshire and away from the South East was seen. It could be argued that this funding could have been more evenly distributed relative to the coastal population.

Recommendation: Take into account the size of the coastal population, and level of deprivation when setting geographical targets for grant-giving, although not necessarily to the exclusion of other factors.

Match funding

CCF monitoring data indicated that it was most often the majority funder of projects, but most (83%) attracted at least some match funding. Total match funding amounted to £210.7 million, compared to £134.8 million of CCF direct funding across Rounds 1 to 4. This suggests that for every £1 spent on CCF grants, an additional £1.56 was gathered in match funding.

Depth interviews suggested that it was far more common for CCF funding to be the ‘seed funding’ leveraging other sources of funds, than it was for CCF to ‘fill gaps’. Nearly all case study projects felt that the CCF funding had been essential, and many felt that match funding arose because CCF funding was already there, giving the project credibility.

1.3 Project design

Achieving successful design

From case study interviews, there were a number of similarities found in projects where the design led to successful economic outcomes. Wide consultation at an early stage was found to be a key feature of projects where the project had a strong economic impact. Organisers of the most successful projects consulted with a variety of people (e.g., local businesses, residents, and stakeholders) during the idea generation phase, and gathered information from a range of people in an open-minded fashion.

A focus on designing an economically viable business model was also critical. The most successful projects met an unmet need locally, using a proven business model. Projects which were focused around restoring an existing building or structure, rather than putting into place a new service or facility, seemed find this more difficult. A few case study experiences suggested that understanding the seasonal nature of the local economy was also important, particularly for projects in areas with an economy strongly oriented toward tourism. Projects needed to take into account both the impact of seasonality on their own viability, but also the impact on local businesses, to avoid impact falling during an already busy period.

Improving project design

Key weaknesses in project design, with long term consequences, tended to relate to the viability of business plans. This often related to a lack of consultation, or relatedly, not taking sufficient notice of local circumstances. Importantly, problems here tended to occur early on in a project when the initial design idea was forming, perhaps before much engagement with CCF would have taken place. Any measures taken to improve this therefore need to influence projects very early in their development.

The creation of Coastal Communities Teams (CCTs) could be argued to have partly addressed this, and indeed many of the projects most affected by early failures in business planning were those without input from a CCT. However, interviews suggested that these Teams are often created in response to a project idea, rather than beforehand. Guidance is provided to projects: the guidance published by the Coastal Communities Fund^{[footnote 9]} is very comprehensive in terms of what is required to apply, and the administrative and legal processes of obtaining funding. However, although it clearly states that a well-supported business plan will be required, it does not signpost to advice on how to put this together.

Recommendation: Investment in generic support materials for community groups, or signposting toward any existing materials, would be valuable. This has already been put in place in London, by the Mayor’s office,^{[footnote 10]} but some similar guidance, with promotion to the intended audience – and perhaps wider in scope to cover regeneration and heritage – might be useful nationally.

Stakeholders felt that the short-term and one-off nature of the fund created little incentive for long term planning for projects. One national stakeholder also suggested that the structure of the fund created a natural bias toward capital projects, because they would take a short time to implement, giving more certainty regarding spending occurring within the financial year. However, funding awarded for a specific financial year must be spent within that financial year due to long-established public spending principles, and budgeting takes place on an annual basis. There may be ways to reduce this, however:

Recommendation: Future rounds of funding could take more of a strategic approach to investment in specific local areas. A portion of funding could, for example, be ring-fenced for projects in the same location, with a preference for funding development or expansion of existing projects^{[footnote 11]}. This would decrease the spending power of the CCF in a single year, but might increase overall impact by giving confidence to applicants.

CCF does require extensive information regarding a project prior to awarding funding. However, it may be useful to review these to ensure that they routinely provide robust evidence of:

• Local consultation including feedback on the basic design, not just the final detail.
• Having taken into account lessons learned from other similar projects.
• A business plan not excessively reliant on the success of a small number of business ventures, bearing in mind the failure rate of new retail and leisure businesses.

1.4 Project delivery

Challenges to delivery

The most commonly occurring challenge was construction problems, apparent in several case studies. Many were not foreseeable; however, there were some commonalities. Ground conditions and flooding related to working near the coast, and in some cases building structures in the sea were often particular challenges. Most projects overcame these challenges, although some required additional funding. CCF provided significant support for projects to network with each other and learn lessons from other projects, and there is no strong evidence of projects feeling unsupported in this area. This perhaps speaks to a wider lack of available specialist knowledge in the architecture and engineering sectors of the issues around construction on the coast, rather than an issue specific to CCF.

Issues with partnership working were a frequent challenge for projects at this stage; for example, a partner dropping out of a project at a late stage, or difficulties with setting up a crucial partnership.

Another area which seemed challenging for several projects was in implementing training and apprenticeships. Often this overlapped with issues around partnership working, since training was often delivered by an external partner, but also related to difficulties connecting training to jobs.

Finally, a handful of projects had problems identified with basic project management. In some cases, this was noticed and addressed internally; in others the issue was not addressed and impeded project progress. It is likely that these issues occurred at other projects as well; such issues are by their nature difficult to detect from outside.

Recommendation: CCF should ensure at award of funds that larger projects funded have a suitable and robust process of audit and/or challenge in place, whether external or internal. For smaller projects this might be overly onerous; they could instead be contacted mid-project to check that they have basic project management processes for a small project in place, and encourage them to put them in place if they do not.

Monitoring project delivery

The monitoring of projects was widely praised by projects; they found it ‘light touch’ and felt it fairly represented their projects. The burden, unlike some other funders, was not found to be unreasonable by any project. However, there were limitations to the monitoring outputs, significantly affecting the quality of the data. The monitoring data, although comprehensive in terms of categories of information gathered, contained some errors and omissions, most significantly an inability to distinguish between a project genuinely achieving nothing by a particular metric and that project not submitting data for that specific metric. These data quality shortcomings presented some analysis difficulties; in this report we must in most cases compare the outcomes and projected data only for projects which had submitted a non-zero actual outcome.

Recommendation: CCF should define outcomes clearly so that they can be understood by all projects, and allow for non-response in how data is gathered, rather than recording this as a zero.

Recommendation: CCF monitored outcomes once, at a fixed point in time. Many projects reported longer term outcomes to this evaluation, which could have been captured with multiple snapshots of data monitoring, although this need not be across the full spectrum of items monitored. Monitoring for schemes intending to stimulate long term economic regeneration should be extended for a longer period of time to take this into account.

Recommendation: CCF should separate out elements of larger projects for monitoring and reporting, and separate out the funds given to each element of the project. To avoid losing the simplicity of funding drawdown, this allocation could be notional based on initial project budgets rather than closely monitored during the drawdown process.

1.5 Outputs and Impact

Direct economic outputs

Many projects created jobs directly; nearly all created at least some jobs in the construction and/or administration of the project. However, for other projects this was reportedly a key source of impact, for example in business centres or market developments, which created substantial numbers of jobs directly. At least 16 of the 21 projects examined in-depth through case studies showed evidence of establishing a sustainable, on-going project with a plausible route to attracting or generating further investment, with a further 2 of the 21 where evidence was as yet unclear. Three of the 21 could be said not to have had the outputs intended.

However, the larger reported impact tended to be in terms of indirect employment. Numerous projects had an impact on the wider economy; local beneficiaries frequently spoke about how a project had transformed a high street or a local area, or attracted more tourists, and created opportunities for other businesses.

Interviewees in case studies often said that it was often hard to quantify the true extent of economic impact from the projects, primarily because of the difficulties of attributing impacts directly to the CCF funded project. One national stakeholder highlighted that assessing the economic impact of tourism on a locality was a specialist skill, and that standard techniques might miss significant elements of this, for example the impact of a change in an area’s image.

Although as previously noted, recording was patchy, numerous CCF projects created and maintained jobs. In total, the programme over its first four rounds was reported to have created 2,680 jobs directly, and 4,485 indirectly, as well as safeguarding a further 1,835 jobs. However, projects not reporting any actual indirect job creation accounted for a further 5,730 forecast jobs; it seems likely from examples of case studies that in reality at least some of these forecast jobs were created but not reported to CCF. In proportion to the population, more jobs were created in smaller towns and villages than in large towns and cities.

In total, 960 vocational training places were created, and 4,520 non-vocational training places were created. Nearly 400 trainees gained employment as a result of the projects; but nearly 2,000 trainees gained qualifications. This imbalance is quite significant and speaks to an issue spotted in several case studies, where one of the key difficulties was providing training at the right time to lead to employment. In at least one case where a project was delayed, training was delivered in an attempt to deliver at least some elements of the project on time, thus severing the link between training and the employment it was intended to lead to. In other cases, other practical difficulties or design issues prevented this connection being made.

CCF projects recorded 6,712 private businesses supported and 482 new businesses started and supported across the four rounds as a result of the funding. CCF projects also recorded an increase in business sales totalling £29.7 million.

CCF projects reported an increase of 3.2 million visitors across Rounds 1 to 4 and £226.7 million in expenditure from new visitors.

Wider impact

Many projects’ impact reportedly went beyond the immediate effect of the intervention funded. Project extensions took place in a number of cases, after the conclusion of CCF involvement. Of the 21 projects examined in qualitative case studies, 12 were able to show persuasive evidence of further investment and/or economic growth following on from the CCF project outside the project itself, for example new businesses being created or existing businesses moving to the area, or increased tourism footfall benefiting existing businesses. In 3 further cases, the evidence for additional investment was unclear, although this did not mean it did not occur. Interviewees often felt that the impact of a project on an area was quite diffuse and difficult to attribute directly and solely to the project itself.

Case study participants often spoke of an image change, or an improvement in ‘morale’. Several case study projects received positive media coverage – typically at a local or regional level, and occasionally even at a national level. This was often credited for an increase in visitor numbers or private investment. These longer-term effects are perhaps the most difficult to measure, since CCF may be one of many factors influencing a visitor to come to an area, or a business to invest or expand.

Recommendation: CCF should encourage relevant projects to spend some funds on promotion of their project, not only for the immediate benefit in terms of custom and community engagement, but due to the knock-on effects (in terms of investment and community cohesion) of improving the image of a location.

Where partnerships were working well, there were also examples of further collaboration, leading to new projects or wider community networks providing resilience (particularly during COVID-19) being created. Enhanced stakeholder relations were a key outcome from some projects, which would not be reflected in monitoring data. Sometimes strong ongoing relationships were formed between local authorities and charities who had worked with the CCF funding.

Recommendation: CCF and similar funds going forward should consider retaining or implementing a similar approach to Coastal Communities Teams, to assist in ensuring wider consultation and community buy-in for projects funded.

For some projects, their success became a catalyst for further successful funding applications, since the evaluation of the first project could be cited as support subsequently. This is undermined a little, though, by the lack of systematic evaluation of CCF projects, particularly smaller projects where little resource or expertise exists for this.

Recommendation: CCF and other similar funds should consider ways to better support and assist projects, particularly small projects, to estimate their actual economic impact.

Maximising delivery

Analysis of CCF data showed that some types of project were more efficient than others in terms of the creation of jobs, selected as a metric due to its wide availability for all projects. In particular, smaller projects seemed to achieve greater returns per pound spent. Property-based projects (e.g. restoration of a building) were less effective per pound spent, although in some cases they may be essential to regenerating a specific location.

Recommendation: CCF and other similar funds should reconsider the balance of funds between small and large projects, given the value for money apparently represented by these smaller projects.

Generally, projects in the North and South West of England generated stronger returns (in terms of job generation) than projects in the South East and East, possibly due to lower property costs. Projects in smaller settlements were slightly more efficient in terms of jobs generated per pound spent than those in larger towns or cities. Finally, efficiency of job generation was greater in areas of moderately high long term unemployment, and least in areas with the least unemployment of this type.

Recommendation: CCF and other similar funds should continue to target a range of urban and rural areas, but should also take account of the level of deprivation and unemployment in the area of projects when awarding funds.

1.6 Conclusions

The fundamental rationale for the programme has been found to be sound; prior to CCF coastal areas, despite suffering similar economic shocks as former industrial cities, had not previously seen the level of focus on regeneration experienced by those cities. The focus on rural areas or smaller towns is also supported by the data; projects in these areas seem to have greater returns in terms of jobs gained.

Generally, the administration of the Fund was found to be good, but with some improvements possible in areas such as speed of decision-making, and support or advice made available to community-led projects for project design (as opposed to making their application).

The programme delivered £187 million of grants over 9 years and 5 rounds to a wide range of projects around England’s coasts, case studies suggest that most of which could with reasonable confidence be said to have contributed to job growth and prosperity. Participants often expressed strong support for the CCF, and appreciated its simple and flexible design.

There is also a strong case from the qualitative case studies that CCF funding is generally additional rather than displacing other spending; the vast majority of those case studies spoken to felt that their projects could not have gone ahead without CCF funding. Several projects had, for example, been seeking funding for some years prior to the CCF. Many of the projects were also reported to have had knock-on effects which also would have been absent. While it did not prove feasible to produce an estimate of economic impact in a quantitative sense as part of this research, this does suggest that the net impact of the CCF on some local areas was substantial.

Key factors in the success of projects in generating economic impact were also identified from the case studies, including:

• Wide consultation at an early stage, prior to key design decisions (already encouraged by CCTs introduced at round four, but could be further improved)
• Strong partnership working (already encouraged by the CCTs introduced at round four)
• A focus on long term economic viability from the start (which could be encouraged further by CCF)
• Good project management and project leadership

1. House of Commons. Communities and Local Government Committee (2007). Coastal Towns: Second Report of Session 2006-07 (PDF, 4.39MB). ↩

2. Prior to September 2021 known as the Ministry of Housing, Communities and Local Government (MHCLG). ↩

3. 18 of these were full case studies, while 3 ‘mini case studies’ had limited numbers of interviews, mainly due to the delay between project and evaluation meaning those involved could not be contacted. ↩

4. Usually termed a ‘counterfactual’. ↩

5. Stakeholders were not able to comment on the relative speed of the processing of applications to the CCF in Northern Ireland. ↩

6. No data for round 4 was available on this metric. ↩

7. Long-term unemployment is used here as a proxy for economic performance, since the most widely used direct measure of economic deprivation (the Index of Multiple Deprivation) is not available at ONS Built-up Area level. ↩

8. Local Trust (2018). Empowered Communities in the 2020s. IVAR Research Briefing 2 – Countries Dialogue (PDF, 500KB). ↩

9. Ministry of Housing, Communities and Local Government (2018). Coastal Communities Fund Round Five: Guidance Notes England. ↩

10. Mayor of London (2017). Community Projects Handbook (PDF, 2.39MB). ↩

11. This approach was taken to some extent in Round 4 and again in Round 5, through the portfolio project approach, where a partnership-type organisation was funded to deliver a range of projects. However, because the majority of these projects were in Round 5 for which no outcomes data is available, it is too early to judge whether this approach is more successful in quantitative terms. ↩