Evaluation of the Rural Business Growth Programme in South Yorkshire

Business Link South Yorkshire, 2008

Executive Summary

The Rural Business Growth (RBG) programme is a South Yorkshire Objective 1 programme funded by the European Agricultural Guidance and Guarantee Fund (EAGGF) and the Department of Environment Food and Rural Affairs (Defra). Delivered by Business Link South Yorkshire (BLSY), the programme began in April 2002 and ends in March 2008. It offers business advice and financial assistance to help farmers in South Yorkshire become more competitive, respond to changes in consumer demand and add value to their produce, ultimately making farming businesses more sustainable.

The aims of the RBG programme are:

to improve the competitiveness of the agricultural sector in South Yorkshire by providing capital grants to advance the processing and marketing of primary agricultural products (Measure 2.9); and
to assist in the diversification of agriculture into other agricultural and non-agricultural activities to provide a wider income stream and broaden the economic base of the South Yorkshire rural economy (Measure 4.24).

Businesses eligible for support include farm based food processors, rural based food and drink manufacturers, manufacturers dependent upon South Yorkshire sourced primary products or those with potential to source produce from South Yorkshire, rural based food wholesalers (Measure 2.9) and agriculture and related SMEs (small and medium sized enterprises), individual rural entrepreneurs and collaborative marketing groups (Measure 4.24).

Cumulus Consultants Ltd was commissioned by BLSY in November 2007 to undertake a thorough evaluation of the RBG programme in order to identify its main successes and lessons learnt. The overall aim of the evaluation was to assess how far the RBG programme has met the objectives of both Measure 2.9 and Measure 4.24. The evaluation specifically assessed:

the extent to which the programme has met its targets in terms of contract outputs, results and impacts (as set out in the ‘targets and outputs’ document);
whether the programme has improved the agricultural infrastructure, rural tourism and the sectors’ supply chain in South Yorkshire;
the contribution the programme has made to regional and local strategy;
the extent to which the programme has added capacity to the agricultural sector and developed a business support network;
the value of the programme to businesses and its impacts;
the design and delivery of the programme, including the approach used to deliver business support and the application process and other processes involved.
businesses’ perception of Business Link;
the performance of the RBG programme relative to other similar schemes in the region and elsewhere, for example in terms of effectiveness and value for money.

The evaluation approach included: a review of relevant documents and data; an analysis of outputs and outcomes; a postal survey of 144 successful participants; face-to-face meetings with 20 participating businesses; telephone interviews with a number of unsuccessful participants; interviews with RBG programme managers and advisers; interviews with stakeholders and key interest groups; interviews with a number of intermediaries; analysis of findings; and the development of conclusions and recommendations. A presentation of the draft findings was given to stakeholders and staff on 11th March 2008, this included a workshop element assessing future trends and demand for support in the future.

The RBG programme has succeeded in spending its EAGGF/Defra budget of £13.5 million and levered in private sector investment amounting to £19.7 million. Total expenditure under the programme was £33.0 million, more the programme’s target of £27 million due to £6 million of additional private sector investment.

£11.5 million of grants have been awarded under the RBG programme. In total, 219 grant awards have been made to 160 businesses, an average of £52,644 per award and £72,056 per business. The breakdown of grants by district is: Doncaster 46%; Sheffield 26%; Rotherham 14%; Barnsley 13% and other 1%. The breakdown of grants by sector is: food 40%; farming 27%; tourism 28%; and other 4%. Examples of projects supported by the programme include: premium brand crisp processing and marketing; farm shop development; horse livery enterprises; a bottled water project; farm tourism; rural hotel improvements; and food chain linkage.

Over 50% of grants awarded were for less than £15,000. At the other end of the scale, 7 projects received a total of £3.3 million in grants, or 29% of the total grant fund. All sectors benefited from these key projects.

The performance of the RBG programme in respect of key economic outputs achieved up to the end of January 2008 is set out below. Note contracted outputs (to be delivered within three years following project completion) are greater.

Measure 2.9: 362 SMEs assisted; £109.1 million gross sales safeguarded; £138.5 million gross new or increased sales; 974 gross jobs safeguarded; and 121 gross new jobs. The number of SMEs assisted is slightly under target, however gross sales and employment targets have been significantly exceeded. Direct economic benefits are concentrated among a small number of food processing companies. Only a small proportion of outputs directly relate to farm based businesses, however these are likely to benefit indirectly from growth in the local food sector.
Measure 4.24: 251 SMEs assisted; £44.4 million gross sales safeguarded; £8.4 million gross new sales; 260 gross jobs safeguarded; 173 gross new jobs; and 30,376 square metres of floorspace refurbished/accommodated. All output and result targets have been exceeded. Direct economic benefits are more dispersed than Measure 2.9, with many farming and tourism businesses benefiting, particularly in the hotels sector.

Our assessment of the additionality of the RBG programme, based primarily on a survey comprising 32% of beneficiaries, together with qualitative feedback, indicates the following: moderate to high deadweight; some displacement at a local level, but low displacement in terms of business advice; low substitution; no evidence of leakage; and moderate to good multiplier effects.

Applying these additionality factors, the performance of the RBG programme in terms of impacts is provided below. These estimated impacts are expected to increase in line with measured outputs over the next three years.

Measure 2.9: 60 net new jobs, slightly below target; 399 net jobs safeguarded, above target; £3.6 million net additional GVA (gross value added); and £22.4 million net GVA safeguarded.
Measure 4.24: 85 net new jobs, above target; 107 net jobs safeguarded, above target; £2.0 million net additional GVA; and £9.1 million net GVA safeguarded.

The programme’s value for money has been good for clients and for funders, when compared against other rural Objective 1 schemes in South Yorkshire. There is a more mixed picture however when the programme is compared against relevant ERDP schemes.

The RBG programme has also contributed to:

Objective 1 cross cutting themes including: social inclusion and diversity; employment and skills; environmental good practice; and creativity, innovation and technology.
A number of wider strategic objectives including Objective 1 Programme and Priorities; Objective 1 Agricultural Strategy; Regional Economic Strategy; Strategy for Sustainable Farming and Food; and the England Rural Development Programme. The RBG programme and the experience gained has had an important influence on the development of the new Rural Development Programme for England, both inside and outside the region.

A survey of RBG programme beneficiaries provided very positive feedback. 96% of businesses surveyed have implemented new business practices and procedures as a result of the support received, and working with BLSY has changed the way business owners think in the areas of long term investment, innovation and operations. The programme also opened new markets, improved skills and education, improved confidence, improved information and communication technology, contributed to diversification and new product development, and added value to products and new processes. Survey respondents rated their experience of dealing with the RBG programme and BLSY very highly. Staff knowledge and competence and staff approachability were both rated ‘excellent’. Overall, the RBG programme was rated as ‘excellent’ by the 46 businesses surveyed. A survey of unsuccessful clients also provided positive feedback on the RBG programme and the type of support given. However some criticism of processes and delivery, including red tape, was made.

A telephone interview of stakeholders (the funding bodies, Defra and Objective One) and other key interest groups (including CLA, NFU, LANTRA, YTB and others on the Advisory Board) provided a different perspective. Overall, stakeholders and key interest groups rated the RBG programme highly. Staff knowledge and competence was again considered ‘excellent’ with other strengths being a strong, well managed team, a sector-based approach, lots of supply chain activity (the Fantasy Farming League was regarded as excellent), a willingness to try something new and good linkages with other programmes and initiatives. Weaknesses included some grey areas relating to the project appraisal process and the current uncertain exit strategy.

Key strengths of the RBG programme, in addition to those already mentioned, include: the combination of integrated advice and grant support; a budget sufficient to meet regional demand; the length of the programme, which allowed ideas to develop and come to fruition; a stable team; targeted initiatives such as the Fantasy Farming League and the South Yorkshire Food Directory; and good marketing and promotional activity.

Key weaknesses, in addition to those already mentioned, include: over complicated application forms and process; a focus on increased turnover as opposed to profit; the risk of advisers getting too close to projects and applicants; slowness in generating applications under Measure 2.9; poor engagement with some larger food companies; and the need for improved monitoring to gauge the full range of outputs and impacts.

Recommendations are made to secure the legacy of the RBG programme, including an amended exit strategy with provision for ongoing support and monitoring, and to guide similar schemes in the future, such as the continuation of an integrated funding and advisory service.

In summary, our evaluation shows that the RBG programme has been an effective scheme which has met or exceeded most of its targets. The programme has been well received by beneficiaries, stakeholders and others, who acknowledge that BLSY has done well in establishing relationships with rural businesses, building confidence, gearing up a wide range of projects and delivering the desired outputs and outcomes. It has also used the opportunity presented by Objective One and Defra to try new ways of adding value, notably through local sourcing and supply chain activity. Overall the RBG programme has made a valuable contribution to the rural economy of South Yorkshire and provided a good example for others to follow both inside and outside the region.

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