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The Initial Approach
This module covers:
- Planning initial consultations
- Improving confidence in undertaking initial discussions with a commercial developer
Being Approached by a Developer
If you have been approached by a developer through the community council or other local group, ask that they hold a consultation for the potential community benefits completely separately from the development itself. Some people may be opposed to the development, but may still wish to have input on the community benefit format. There must therefore be a separate forum for this discussion. Address the different models of community benefit and ask the developer which models they are offering and why. This guidance package is designed around voluntary benefit payments, but there is the potential to engage in joint venture projects, or co-operative schemes. Gather information from the developer on these options and if possible, organise a separate meeting without the developer present to assess the resources available1 to your community.
Approaching a Developer Yourself
If you are aware of a potential development in your area, you may wish to discuss the opportunities for benefits with your community council. If you can work out what resources are available to your community before approaching the developer, you will be well equipped to enter negotiations. How active is your community? Is the community interested in developing their own energy project?
What to ask and when
You should engage in discussion with a developer as early as possible. Some groups may feel uncomfortable discussing benefits prior to planning consent being given. If so, be sure to offer these groups the chance to re-enter discussions at a later stage. You may wish to ask the following of the developer:
- How are payments calculated?
- Will the Scottish Government expected standard of £5k/MW/year be met?
- Is the payment related to profit?
- Is there an interest-free nominal loan?
- Where will the money be held until individual applications are made (and who will reap the interest in this period?)
- Can spend be rolled over from one year to the next? (Will money be lost if not spent in time?)
- What restrictions will be on fund spend?
- What happens if part of the development incurs a long-term fault or something happens to reduce the projected income?
Dealing with PR
Many developers will have a PR firm employed to negotiate community benefits. Take advantage of this and work with the company to engage as many people in your community as possible.
How to get a group together
For the initial meetings with the developer, the priority is to get as many people involved as possible. You will be able to constitute a community body once you’ve got some more concrete ideas, so in the first stages use your community council networks to pull together as many interested people as possible.
The Role of your Local Authority
Local authority involvement varies widely from area to area. Your local authority may wish to administer or distribute the funds; they may have clear guidelines, or they may wish to have no involvement in the process. Be sure to familiarise yourself with what role the council will play and how concrete this is. Even if your council has guidelines, it is likely that these are flexible, so if you have strong ideas on how you would like to manage your fund it may be worth suggesting this to your developer and approaching the local authority together. Remember that there are no national laws on community benefits so there’s room for new and innovative models.
Initial Community Consultation
You will need to assess the general feeling towards the project in your community, the resources available to your community and the need for revenue. Try to have a community consultation without the developer present, open to any interested parties. A couple of posters in public buildings and use of the community council mailing list is a good start to pull people together. Consider asking the developer to help you arrange a consultation without them, giving you the chance to discuss their proposals fully. You should use the community consultation to discuss some of the following issues:
- How much volunteer time can the community realistically contribute?
- Do you have the resources to process large sums of money?
- What does the community need in terms of facilities and services?
Think of projects which could be funded by a community benefit scheme — generally those which are not the responsibility of your local authority. Consider energy efficiency, fuel poverty reduction, sustainable transport, further investment into community energy schemes and other associated projects. Many communities focus initially on short-term amenity projects, and then progress to thinking about bigger, long-term projects; so try and think long-term from the outset. What volunteer resource is available to you? Do you have willing, skilled retirees or a few individuals with the time to spare? Willing volunteers with specific skills (i.e. retired professionals) can make a big difference when you come to some of the detailed financial and legal decisions.
As a community, assess what potential you have — if you have time and skills available, you may consider joint venture or community ownership models. In general the revenue return and the subsequent socio-economic benefits to your community will be greater with a greater level of community ownership and input. Advice and financial support is available from Local Energy Scotland to help, so do not be put off by a lack of experience. Undertaking more complex models can be a capacity-building process and you can navigate proceedings without any specific knowledge of the field. If you think a more complex model might be a possibility for your community, please contact Local Energy Scotland on the number below. If you wish to continue with the community benefit payment option, please continue with the guidance package.
1 Volunteer time, specific expertise, other sources of finance etc.