Natural England

Annual Advice to the Minister on National Park Funding Allocations (AP03/33)

Background

1.   Every autumn the Countryside Agency makes recommendations to the Minister of State for Rural Affairs and Local Environmental Quality on the allocation of grant to the English National Parks and the Broads Authority.   This paper contains those recommendations.

2.   Since 2000/01 we have based our funding advice around a funding model developed by the Agency in 1999.   Under this arrangement 80% of the available grant to National Parks is allocated according to three baskets of proxy indicators of demands on the parks’ budgets.   The remaining 20% of the grant is allocated on a discretionary basis according to an assessment of individual park’s needs.   This assessment is made during a round of meetings between Defra officers, Agency officers and representatives from each authority, during which the park’s annual funding bids are discussed.   A summary of how the funding model operates is included at Annex I. See also AP99/31 for more detail.

3.   As part of the 2002 Review of English National Park Authorities, Defra employed an in-house policy consultant to revisit the funding model and make recommendation on refinements.   This has resulted in a modified model providing:

·        A rebalancing of the three funding baskets to 25% corporate, 30% conservation and 45% recreation/promoting understanding;

·        A top sliced core fund of £1m per park to be increased annually proportionate to the overall budget;

·        A new indicator “number of holdings” sourced from Defra with a weighting of 6%.

4.   No funding model will provide a perfect solution for NPA funding.   There are advantages and disadvantages associated with both variants now available, and a summary of these is provided in Annex II.   Whichever model was used we would need to distribute the discretionary element carefully to address the various special needs already outlined.   The eventual percentage increases would be the same in either case but we believe that use of the new model would result in a more needs-related distribution of the indicator-based element.

5.   In bidding for funds National Park Authorities are expected to balance achievement of their primary purposes with progress against a set of funding priorities agreed jointly between the Agency and Defra.   These priorities are reproduced in Annex III. Annex IV summarises what each park has bid, and provides a bid breakdown against the three main headings of corporate/other, recreation/understanding, and conservation.  

6.   In determining funding allocations for 2004/05 certain considerations should be given regard to – namely:

·        The access provisions of the 2000 Countryside and Rights of Way (CRoW) Act affect National Park Authorities significantly. They are “access authorities” under section 1 with new discretionary powers to negotiate and install means of access, erect notices, appoint wardens and make byelaws on access land. They are also “relevant authorities” under section 21 which places on them a duty to administer a system of local restrictions on access land, by making directions where necessary to restrict access for land management, fire prevention, public safety, nature conservation and heritage preservation.   It is expected that new access rights will come into force in the North West (affecting the Lake District, Northumberland and Yorkshire Dales) in late 2004.   These three parks have included provision for CRoW Act implementation in their funding bids. 

·        If possible all parks should receive a settlement that allows them to grow and innovate;

·        Inconsistency of ESA coverage means that some parks need to use proportionately more of their resources on the conservation purpose.   This is particularly true of Northumberland and the North York Moors;

·        National Park Authority review recommendation 17 requires research and information relating to visits to the parks.   This will not only yield key data on the value of National parks to the nation as a recreational resource, but will contribute data to the government’s recreational diversity review announced in the Rural White Paper.   An All Parks Visitor Survey is likely to cost in the order of £0.9m. If the survey is to be implemented Defra needs to be make provision for it in 2004/05 (and the year after).   The fairest solution seems to be having all parks and the Agency contribute to the cost.   It will not be necessary for the New Forest and South Downs National Park designates to be included in the overall provision as visitor survey activity has already been actioned in both cases.

Progress to date

7.   The annual round of bid appraisal meetings was concluded on 26 June (see Annex V for a summary of conclusions).   Defra produced illustrations of the result of applying the modified funding modeling tool in July and circulated these to the NPAs for comment. So far little in the way of feedback has been received and what there is does not indicate either clear support or resistance.   Defra hopes to be able to advise park authorities of their grant settlements for 2004/05 in November this year.

Proposals

8.   We have agreed with Defra to suggest allocations based on two scenarios   – a 2% inflation only settlement, and an increase of 6% on last year’s settlement of £35.559m (see table below).   An inflation only scenario provides little scope for creative allocations. In these circumstances our recommendation should be that each park receives an identical 2% increase on last years allocation (see Annex VI).   At this level of funding a ring fenced All Parks Visitor Survey budget would absorb around a half of the increase. This would also provide less funds than have been bid for CRoW Act access implementation in the affected parks.   We understand that Defra are considering separately a proposal for funding of an access management scheme. (Any new financial resource would not be applicable to National Park Authorities).   It seems important that, one way or another, the parks should receive adequate funding for these responsibilities. 

9.   In the event of a 6% increase, we suggest that the allocations shown in paragraph 11 below are made. These are based on the new “Defra model” described earlier. Annex II provides a comparison between the results of both funding models. Each version of the funding model has advantages and disadvantages but on balance we believe it may be preferable to use the new Defra version  because it requires less use of the 20% discretionary element to achieve the desired boosts for:

·           Northumberland to redress its chronically low funding base and achieve landscape objectives without the ESA mechanism;

·           the North York Moors to provide alternatives to ESA payments; and

·          the Broads Authority for their unique wetland conservation and navigation responsibilities.

10.   The higher settlement should provide for a contribution averaging about £0.4m from each National Park to fund the first half of a visitor survey.   Each would contribute a proportionate share of the total as indicated by the funding model.   It would also be appropriate for the Countryside Agency to make a contribution to the survey cost as well as provide staff time for co-ordination.   A sum of around £50k for each of 2004/05 and 2005/06 is proposed.   Successful completion of the survey would be dependent on each park participating, and the Agency’s contribution should be made conditional on this.  

11.   The suggested allocations assume a continuing separate Sustainable Development Fund, so no provision has been made for it in the figures given.

Next steps

12.   Formula based approaches to funding allocation have limitations.   A better long-term solution may lie in an approach based on a true needs/performance assessment coupled with a simplified mechanism for applying for grant.   National Park Review recommendations 42 -44   (reproduced in Annex VII) all represent steps in this direction. Defra is currently leading on implementing these recommendations and it would be appropriate to signal the Countryside Agency’s support for them.  

Risks and mitigation

13.   Some National Park Authorities may not be persuaded that an All Parks Visitor Survey is as important as other more pressing priorities.   This might lead to lobbying against a ring fenced visitor survey budget.   The year 2004 is significant because it marks the start of open access delivered under the provisions of the 2000 Countryside and Rights of Way Act.   Survey work undertaken after 2004 will miss the opportunity for any “before and after” research into the impact of wider public access in National Parks.   We should seek a firm agreement from all NPAs to participate in the survey before investing CA funds and staff time in it. 

14.   If the National Parks receive an inflation only settlement they will be largely unable to pursue new areas of work in support of their purposes.   The biggest casualty would be work on promoting understanding and enjoyment, which represents the largest element of most parks’ bids this year.   This work includes a number of projects addressing the social inclusion agenda, which would be delayed or even lost in under an inflation only scenario.

15.   An inflation only settlement may not provide sufficient resources for implementation of the CRoW Act access provisions in the Lake District (bid £140k), Northumberland (bid £195k), and Yorkshire Dales (bid £75k).   We need to make clear in our advice to the Minister the importance of this matter.

Communications

16.   Once the Agency board has agreed our advice on allocations it will be necessary to write to the Minister for Rural Affairs and Local Environmental Quality confirming our advice. 

Annex I

National Parks funding - how it works

Legal basis 

National Parks enjoy a statutory basis for their funding stemming from sections 71 and 72 of the 1995 Environment Act. DoE Circular 12/96 establishes that National Park Authorities receive 75% of their approved expenditure direct from central government, and that the remaining 25% is provided through the principal local authorities appointing members to the park authority.

Section 72 of the 1995 act requires the Secretary of State for the Environment to consult the Countryside Agency before deciding grant allocations to individual park authorities.

How the Countryside Agency makes its recommendations on grant allocations.

The Countryside Agency uses a computer model to aid its thinking on individual grant allocations. The following explanation assumes an approved expenditure figure of £28m for all the parks. This figure is split so that 80% of the total   (£22.4m) is apportioned according to various indicators of need and the remaining £5.6m becomes a “discretionary” proportion to be allocated according to an assessment of special needs within any particular park.   The incorporation of this discretionary, as opposed to purely formula-based element of funding, mirrors the local government finance system.

The £22.4m is subdivided into three categories of expenditure:-

1.          Corporate functions (planning, administration etc)   30%    (£6.72m)

2.          Conservation of the natural and built environment   35%   ( £7.84m)

3.          Promoting understanding/recreation management    35%   (£7.84m)

It will be noted that the primary purposes on the National Parks (conservation and recreation) take the lion’s share of the funding.

Within each category “indicators of need” decide the proportion of grant allocated to each park. The three collections of indicators are known as   “baskets”. 

In Basket 1 the indicators are:

Park population

Park area in km

No of authority members

No of planning cases

Annex I

In Basket  

Park area in km

Length of linear features (dry stone walls, hedgerows and ditches)

Land owned by park authority (in hectares)

No of scheduled ancient monuments

No of listed buildings

No of conservation areas

In Basket 3

Annual visit numbers in millions

Total length of public rights of way

Total length of public rights of way managed by park authority

Each indicator is weighted according to its importance to the calculation, and when the weighted indicators for each park are compared with each other we end up with the proportion of the £22.4m that needs to go to each authority.

The final stage is to decide what proportion of the “discretionary” £5.6m can go to each park. This is decided according to special needs not covered by the indicators.

For example - the Broads Authority needs an amount to fund its statutory responsibilities for wetland conservation and navigation which is not addressed by the terrestrial based indicators in Basket 2. 

The mechanism for payment

The funding model may tell us that £4.5m should go to the Lake District. This being the case, the Lake District National Park Authority would receive £3,375,000 (75%) from DETR, and £1,125,000 (25%) from the county and district authorities.   The 25% contribution is reflected in the Statutory Spending Assessments through which local authorities receive their funds from the Treasury. Because local authorities are compensated directly for having to contribute to their National Parks, there should be no need for local ratepayers to have to contribute as well. 

Non-statutory funding 

National Park Authorities are encouraged to supplement their statutory funding through other income sources including lottery and EU grants, visitor payback schemes, car park charging etc.   In addition, most operate business enterprises such as the sale of souvenirs etc from visitor centres.

Provided by John Butterfield 2001

Annex II

Comparison between the CA funding model and the Defra modified 

Allocations based on the two models using a 6% increase scenario

Comparison between the CA funding model and the Defra modified version

Advantages and disadvantages associated with the two variants of the NP funding model

  Annex III 

NATIONAL PARKS FUNDING PRIORITIES

Countryside Agency and DEFRA joint advice

a.          Implement relevant provisions in the Countryside & Rights of Way Act 2000 as these come into force, in particular by establishing local access forums by August 2003, and putting systems in place to fulfill statutory responsibilities for access to open countryside in line with Defra’s published timetable for regional commencement;

b.          Work with Defra, the Countryside Agency and other relevant organizations in implementing the action plan arising from the review of English National Park Authorities;

c.          Work with Defra and the Countryside Agency in identifying demand for the full range of sporting and other recreational activities and the extent to which these may be accommodated within the parks (para 11.3.9 of the Rural White Paper, and recommendation 13 of the NPA review);

d.          Actively promote understanding and greater use of National Parks by all sections of society, especially people with disabilities, people from ethnic minorities, the inner cities and young people (para 11.3.8 of the Rural White Paper and recommendation 15 of the NPA review);

e.          Work with English Nature in contributing to the delivery of Defra’s PSA target to bring 95% of SSSIs into favourablecondition by 2010

f.           Promote conservation activity by:

(i)          providing a “first stop shop” for advice on different sources of funding from Defra and other agencies for agricultural and other land management projects support agricultural and other land management projects which promote National Park purposes, ensuring full use is made of the England Rural Development Plan;

(ii)         where necessary adding value by providing targeted support for individual projects and schemes either separately or in partnership with other agencies. 

g.          Support sustainable rural development projects which further National Park purposes;

h.          Seek corporately and individually to develop and promote Lottery schemes to support National Park purposes;

i.           Corporately and individually, continue to take forward work on state of the park indicators as important contributing information to the management of the Parks.

j            Continue to work with authorities responsible for administering AONBs;

k.          Work with Defra in implementing agreed recommendations arising from the Review of Rural Delivery undertaken by Lord Haskins and, within the framework of Best Value, continue to improve performance and service delivery in all functional areas including conservation, recreation, planning and development control, and traffic and transport.  

                                                                                                     Annex IV

Summary of 2004/05 bids for additional funding 

Annex V

Conclusions from the 2003 round of funding meetings between Defra CA and individual National Park Authorities:

1.          All authorities have taken care to frame their bids to address the joint Defra/CA funding priorities. This means that it is almost impossible to separate bids on detailed content alone. Every project proposal can be associated with one priority or another, so our discussions centered on top priorities and balance.

2.          The least funded parks pleaded hardship and consequent lack of ability to innovate - this is blamed on a legacy of funding settlements that has disadvantaged the smaller parks. Northumberland was particularly concerned at how much its low funding level (the only park receiving less than £3m) constrains its capabilities.

3.          Several parks have pressing accommodation needs. The Broads Authority submitted a separate proposal for a £4.4m new build HQ on the eastern fringe of Norwich. Initial Defra advice is that a grant to this level is highly unlikely. Renting is a more feasible option even if it doesn't represent the best long term one. Other parks with a need to spend on refurbishment/extensions may benefit from new borrowing powers recommended under the NPA review if this measure is approved.

4.          Nearly all the parks expressed concern at the high cost of a future All Parks Visitor Survey. Even if a £1m price tag was spread over 2 FYs most felt that they had far higher spending priorities.

5.          There was a mixed reaction to Defras in-house policy consultant’s report on a new funding formula. All want to see a worked example of what it produces.

6.          Overall the bids were well balanced. There have been concerns voiced in previous years that the joint Defra/CA funding priorities tended to steer NPAs away from bidding for conservation purpose projects. This does not seem to be so much of an issue now.

7.          The Broads represents a fundamentally different funding environment to the other parks. Its navigation functions and aquatic conservation priorities certainly challenge the generic funding model. The 2002 NPA review recognised a significant gap in Broads Authority funding.

8.          There are still issues regarding absent or partial ESA coverage in Northumberland and the NY Moors. This necessitates a different approach to funding land management for conservation, and a resultant demand on NPA resources that is far less intensive in the other parks.  

Annex VI

Allocations based on 2% 

Annex VII

National Park Review recommendations 42-44 on future resource allocation

42.        The basis for determining funding allocations should be refined. There should be two elements:

i)           recurring needs based baseline:this would involve establishment of baseline funding for each park based on recurring needs or pressures common across National Parks.

ii)         performance based element (and exceptional pressures):this would be allocated on the basis of park authorities’ past performance and forward programmes.

43.        The Government should consider introducing National Park Authority service agreements, based on the local public service agreements made between the Office of the Deputy Prime Minister and local authorities.

44.        Defra should work with National Park Authorities to improve the quality of the information supporting park authority bids and to develop a better system of evaluating outcomes