Landfill Communities Fund
In 1996 the Government introduced tax on landfill sites as a way of reducing the amount put to waste each year. By allowing a portion of the tax owing to be allocated to environmental projects, the Government saw the LCF as a way for landfill operators and environmental bodies to work in partnership to improve the lives of communities living near landfill sites.
An Environmental Body is an individual project that meets the ENTRUST requirements. A Distributive Environmental Body is a grant-making organisation that distributes to various projects, all of which must meet the ENTRUST requirements (the Foundation is a DEB).
Currently, landfill operators may claim up to 5.5% against their annual landfill tax liability, which must be transferred to an EB or a DEB. The overall potential value of the fund for 2010-11 was £74.25 million.
The Foundation works with two landfill operators, managing monies from two landfill sites, with a third starting soon. This funding is distributed in small grants, primarily around the North East that are situated within 10 miles of a landfill site.
Wind farm funds
With the current interest in producing renewable energy, wind power is a growing business in County Durham. Tens of wind farm sites have been developed or are under planning application to be developed over the next two years. Local communities expect that with every wind farm development, a community benefit fund will be set up. Traditionally, this fund equated to £1,000 per MW capacity output, but recent developments have included £2,000 or £2,500 per MW capacity output. Although quite small amounts of money (County Durham’s sites vary from £4,000 per annum to £40,000 per annum), they guarantee funding for the local community for up to 25 years.
More and more developers are channelling their community benefit funds through community foundations to avoid the problems of political boundaries, which result in communities very close to turbines missing out because they are not situated in the “correct” parish. The changing boundaries (as recently experienced in County Durham) also raise concern for local communities as they fear that their local fund may become available to a wider geographical area.
The Foundation currently manages funds on behalf of E.ON, EDF Energy, Wind Prospect and ESB International, with negotiations ongoing for future sites with Cornwall Light and Power and BT. Nationally, the community foundation movement administers funds at a local level for most of the large wind farm operators (both onshore and offshore).
Wind farm developers like to a) ensure that a local community panel, made of members of the local community, is responsible for the decision making on the projects to be supported, b) have the fund branded and distributed in the name of the developer, c) keep an arms-length from the decision so as to avoid conflict with the local community over decisions taken, d) have professionals carry out the grant-making as this is not the speciality of the developers, e) ensure local community representation. All this can be achieved through the community foundation movement.
Open spaces funds
Many developers develop a site for housing or industrial purposes, and as part of their planning conditions (often through Section 106 Agreements) they agree to upkeep and maintain local green spaces. In the past, some developers have been able to have the responsibility of the land passed to the Parks Departments within the local authority. However, with the cuts to budgets that are occurring nationally, the local authorities are becoming more and more reluctant to take on new sites. As a result, the responsibility for the upkeep will remain with the developers.
In some cases, these green open spaces become a liability for the developer rather than an asset. In order to “get them off their books” developers are able to build into their plans a one-off endowment payment that, assuming a 5% return on investment each year, will cover the cost of maintaining the land. An example of this is Oakenshaw Reserve – the Foundation has received an upfront endowment amount which has been invested, producing sufficient funding each year to allow a local contractor (in this case Durham Wildlife Trust) to maintain the land. The Wildlife Trust benefits from receiving regular income and having access to a nature reserve, the Foundation benefits because it holds a fund for the local community (in line with the Foundation’s objectives) and the developer benefits because it no longer has responsibility for the land.
Ownership of the land can either a) be passed to a local community trust made up of local residents, or b) be passed to a local community group like the community association.
Levy funds
Linking in with the open spaces funds above, some developers can build in the cost of maintaining the green open spaces and other community facilities into their development by putting a levy clause into the property deeds at the outset (very easy in housing developments). The levy can be based on sq ft (common for commercials) or a flat fee per house. It can also be permanently fixed or linked to RPI.
The Foundation works with the developer to develop the fund’s criteria, inform the new property owners and collect the annual levy. The Foundation then works with the local residents (usually by way of a community panel) to ensure that the money collected through the levy is spent in line with the criteria and for the benefit of the local residents. An example of this is Darlington’s West Park Levy – the Foundation has been able to support the building of a play park, maintenance of the paths and woodlands and hosting of community activities (festival days, Halloween parties).
The developer benefits from this type of fund as the fund is in the developer’s name, but with the exception of the legal costs to draw up the deeds, there is no contribution required or ongoing commitment.
Compensation funds
Utility operators and developers are aware that their planned works may significantly impact a very local area for a short time.
In order to “compensate” the local community for the disruption, developers set up short term revenue funds that are allocated to groups working with the residents most affected by the works. Examples of these types of funds managed by the Foundation are Sheraton Park (a large development carried out by The Banks Group) and the Weardale Fund (major repairs and replacement of the main water pipes by Northumbrian Water PLC).
Temporary development funds
Some developers set up one large fund that targets specific geographical areas as these are areas they are currently working in. Upon completion of the development, the funds are no longer available in that area, but are diverted to other geographical areas where the developer is now working. This allows the developer to set an annual budget for community projects, without having to ring-fence separate amounts for each development. It also means that if groups are not forthcoming with their requests for funding, the money is not tied up in the area indefinitely.
The funding may be available to a specific area for as little as six months or as much as several years (depending on the size of the development). Examples of these funds managed by the Foundation are Esh Charitable Trust and Banks Community Fund. The geographical areas of interest can be changed as often as required (usually reviewed annually).
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