Heritage Enterprise

Rope Walks, Liverpool

Aims of the session

• Introduce the new Heritage Enterprise grants programme

• Explain the rationale for Heritage Enterprise and why HLF have introduced it

• Give an overview of the programme outcomes.

• Explain the application and assessment process and the requirements for each stage

• Make you aware of the support that is available for applicants

“From 2013 we will make a new

strategic intervention to stimulate

local economic growth with an

enterprise-focused programme

offering grants of £100,000 to

£5million. This will support the

conservation and adaptation of

an individual historic building or

coherent group of historic buildings

for an end-use which actively

contributes to sustainable

development in areas

experiencing economic

disadvantage ”

Strategic Framework 2013-18

A lasting difference…

Background research

HLF Board agreed to introduce a

new “heritage and enterprise”

programme following a long period

of research, involving:

– review of consultation

feedback

– nef think piece

– consultation workshop

– other published studies

– 1:1 interviews

2011 Consultation

32%

34%

13%

6%

2%5% 8%

Strongly Agree

Tend to Agree

Neither Agree nor Disagree

Tend to Disagree

Strongly Disagree

No opinion

Don't know

Views on heritage-led regeneration

Q26. To what extent do you agree that heritage-led regeneration should continue to be a focus for HLF? (base=932)

Research – “New ideas need old buildings”

Heritage Enterprise

Butcher Works, Sheffield

• For projects that seek to achieve economic growth

• Aimed at enterprising community organisations

• Bridging the funding gap / addressing market failure

• Commercial / social enterprise partnerships

• Grants from £100,000 -£5million

State Aid Rules and the Conservation Deficit

• State Aid rules apply where HLF funds projects that generate a commercial income

• HLF can only fund the additional heritage related costs of development

• Funding restricted to the “conservation deficit”

• Conservation deficit is where the existing value of a heritage asset plus the cost of bringing it back into use is greater than the value of the asset after development has been completed

Heritage Enterprise – who we fund

• Not-for-profit organisations

• Partnerships led by not-for-profit organisations

• Key aim is the integration of commercial and

community interests – not mandatory

• Private sector for-profit encouraged to be involved

but as minority partners

• Special purpose vehicles and joint ventures

• Building Preservation Trusts, social enterprises,

Community Interest Companies etc

• Local authorities, other public sector organisations

also eligible

Involvement of private for-profit sector

• Development partner

• Occupier

• Freehold owner

Sowerby Bridge Wharf

What we fund - priorities

• End-use that generates a

commercial income

• Heritage assets “at risk”

• Designated heritage assets

• Economically disadvantaged

areas

• Skills opportunities

• Increased learning about heritage

NB Public access not a requirement

Adams Building, Nottingham

Less of a priority

Projects with a focus on:

• residential rather than commercial development

• an active place of worship

• an urban park

Saltaire Park

What we fund

• Purchase of a heritage asset

• Conservation work

• New work to bring vacant

buildings/sites back into

commercial use

• Training

• Activities during project

delivery

• Professional fees

• Specialist research

• Project staff

Capital work during development phase

• Urgent repairs during

development phase

• Temporary structures to

facilitate “meanwhile

uses”

• Costs should amount to

no more than 10% of

total delivery requestPop-up shops, Shoreditch

Heritage Enterprise - outcomes

Outcomes for heritage:

• better managed

• in better condition (Weighted)

Outcomes for people:

• developed skills (Weighted)

• learnt about heritage

Outcomes 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)

Outcomes for heritage

• better managed

• in better condition (w)Beith THI

Outcomes for people

• developed skills (w)

• learnt about heritage

Glasshouse, Stourbridge

Outcomes 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 (w)

Middleport Pottery

Heritage Enterprise application process

• Two round application process – competition at the second 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 including activities

• Applications requesting up to £2m decided by Committee for Scotland

• Applications requesting between £2m - £5m decided by UK Board

Project enquiry

First round application

Grant Development phase

Second round application

Delivery phase

Application process

Conservation deficit

• Heritage Enterprise designed to help bridge the funding

gap

• The case for funding depends on there being a

conservation deficit

• No conservation deficit = no grant

• Outline information about conservation deficit at first-

round indicated in Viability Appraisal

• Detailed information about conservation deficit at

second-round indicated in Development Appraisal

• Grant restricted to 90/95% of conservation deficit

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 after

completion

• 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 Heritage

Fund

Development Appraisal

• Development appraisal is the key document for the

programme

• Financial cash flow calculation that considers all

expenditure and income in the development process

• Establishes conservation deficit

• Draft development appraisals to be submitted for Stage C

Review

• All appraisals will be assessed by RICS registered valuers

• There will be a period of negotiation

• Guidance on development appraisals will be published soon

Development Appraisal calculation

Market value of the completed development (A)

MINUS

All costs of undertaking the development (B)

EQUALS

Residual value of heritage asset (C)

A – B = C

If C is positive, no conservation deficit and no grant

If C is negative, then grant justified

(Applicant contribution of 5/10%)

Developers’ Return

• Developers’ profit allowed to encourage investment

• Added as a development cost within the development

appraisal

• 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, whether

private or not-for-profit

First round requirements

• Viability Appraisal

• Partnership agreement (if applicable)

Development phase information

• Detailed information about work (including briefs) and timetable in development phase

• Detailed costs for development phase

• Detailed plans for capital works in development phase (RIBA Stage D) (if applicable)

First round requirements

Delivery 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 in delivery phase

• Outline costs for delivery phase

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 for delivery 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

Activity statement

• Activity Statement required with second-round application

• 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 not following project completion and can include:– Tours

– Exhibitions, oral history project etc

– Temporary interpretation, viewing platforms etc

• Digital interpretation, e.g.– Website

– Smartphone app

Terms of grant

• Standard terms of grant last for 10 years from project completion, even where property acquisition is involved

• If asset is sold within contract life, repayment may be required

• Repayment based on higher figure of value of the sale or the value of grant

• Fixed sliding scale for repayments that declines over time, starting at 100% in year 0-6 of the contract, down to 20% in year 9-10 of the contract

Start-up grants

• Grants from £3,000 - £10,000

- To create a new organisation to look after or engage

people with heritage

- For existing groups taking on new responsibilities for

heritage

•Examples of what we can support:

• viability appraisal, exploring options, early scoping

work, research to inform your project, developing skills,

condition survey, valuations, advice on business

planning

Get advice

• Get in touch and let us know about your project

• Submit a project enquiry to get detailed feedback – we will meet with you if we think it is necessary

• Guidance on our website

• Programme Manager in our policy team will be taking overview across the UK

• FAQs will be published soon

Any questions?