Community Benefit – Bribe or Act of Generosity

When is a bribe not a bribe? When it is dressed up as Community Benefit. If a UK company sells somehigh value asset to a middle eastern state and includes a little pourboire in the same way their Chinese competitors do, they are likely to be paraded through ever newspaper in the country and every court in the land. Even if these funds are directed to a water scheme, electricity scheme or hospital, they will be deemed as an unfair advantage against our EU and US competitors and pilloried. Doing business in that part of the world is as it has always been and always will be. Now the contractors are more often than not from China, who have few western scruples. The roads, airports and sports stadiums they build are part of the deal by which they are granted mining contracts for resources they need. Most of the employees are Chinese. So are we now a third world country(?) taking the bribes from the mostly foreign wind farm developers. Except, for us, it is called Community Benefit. From the early days when it was little more than bakshish, a paltry sum to reward the locals, it has now grown to large sums of money, currently at about £5k per mw per year. So is it a bribe or a consideration for the disruption and despoilment of the scenery. That of course depends which side of the fence you sit. The definition of a bribe is to try to make someone do something for you by giving them money, presents or something else that they want. So you receive a promise of funds to support an application. Sounds pretty much like a bribe to me. One thing that we must not forget and that is Community Benefit is voluntary, and it is paid by us. A fact of life states that without the Renewable Obligation payments, the return would not permit any bribes or “acts of generosity”. There are Community Benefits contracts out there that tie that payment directly to ROCs. Therefore these payments are simply revolving doors. It should also be remembered that, once divided within the communities, the sum is often derisory at about £8 per household per year. What may sound a grand total over twenty five years isn’t actually that much in comparison with either the profit that the developer and landowner will make over that time-span or the loss in value of properties that will suffer the blight of the wind farm. Scotland is benefiting from good levels of inward migration and those house buyers bring with them a great deal of wealth that, when taken together, would eclipse any community benefit. The reverse side of the coin is the danger of homeowners moving away and taking their wealth with them. Some will be trapped but many will have the financial means to simply abandon their properties as has happened in Norfolk and in the US. To these people the value of Community Benefit is as nothing in comparison to the lifestyle choice that they have made. Concentrating though on the Community benefit, a developer has no obligation to pay it and yet many councils seem to make payment an obligatory element of approval. Under Planning rules, should a developer refuse to pay, that could not be used as a factor in turning down the application. There remains a question over how long developers will continue to support these payments. Where it becomes invidious is where it is necessary for Community Councils to enter in to negotiations for the Benefit before the Community has an opportunity to voice their concerns. From the Community Councils position it is necessary to come to an agreement before an application is presented, otherwise they will find themselves bypassed and other councils will receive the funds. Commercial confidentiality is normally imposed by the developer which precludes open discussion and creates distrust between the Community Councillors and the Community they serve. This is used by PR companies working for the developer to drive a wedge right through the centre of the community. This is probably the most negative part of wind farms, the division not only of Communities but often even of families. In truth each case is different and some schemes work well but most are disasters. The more honest way is to impose the charge at a fixed figure, more as a tax. Negotiations would not start until after an approval was made and developer and landowner would be excluded from any control. When is a bribe not a bribe? When it is an act of generosity. No conditions imposed and no agreements entered into in advance. It can be immediately seen that, regardless of all the meetings and promises, Community Benefit fails on those scores. It is simply an inducement to support an application. Either by the Council or the Community Council.

Now we enter the thorny problem of spending the money. Although the sums are large, they are insufficient to pay everyone’s electricity bill for example. Expenditure tends to gravitate towards sports and the elderly, but this often excludes the middle ground of the populace. There are various models to include schemes to support roof lagging, grants to new eco heating systems. The problem is to an extent, there is little consistency. Some are run through Community Trusts, some through third party charities. Some schemes impose conditions such as not being able to use the money to fight another wind farm application. Others that the landowner or developer must have a seat on the committee. The first couple of years, it is reasonably easy to find worthy causes but after that it becomes much more difficult. Councils may start to shirk some of their duties if they know the Community has funds. Highland Council has recently instigated a scheme which will hive off part of the benefit for pan Highland projects. However this means that up to 40% of the Community Benefit is directed towards those not affected by the turbines. Whilst Highland Council has taken a pro-active stance on ComBen, many are concerned that this seemingly atruistic approach may shadow a true approach of self interest. Future Councils may want to get their dirty mits on our money. Like much in life honest and well intentioned objectives can be high-jacked by less noble souls in the future. Scottish Renewables have taken great exception to the demand that off-shore installation pay the same figures to be divied up by Highland Council due to the high cost of implementing new off-shore intsallations. It is without doubt that Scottish Renewables influence has resulted in the Scottish Government coming out and clearly stating that they will not be supporting Highland Council lobbying to make Community Benefit a legal obligation. Where it is fair that those affected by Wind Farms, denied any form of compensation, should receive some financial benefit from the development, the method of so doing will always be controversial. The distribution of those funds will nearly always create some ill feeling. From US information, it would seem that payment of Community Benefit does not always follow the agreement and, at best, dribbles away over a few years. Those companies in Scotland at the forefront of wind were the big two and it would seem that they have complied with their agreements although some information is not up to date. Changes in ownership of some wind farms may herald a cessation of community support depending on the details and burdens within the original contracts and how voluntary payments can be enforced.

A brief resume of Fairburn Community Benefit over the last two years is of interest. Fairburn wind farm is in Strathconon and fairly remotely sited with only the hamlet of Scatwell to suffer the full visual and auditory impact. (An application for an extension of up to thirty six new turbines is being promoted at this time.) The fund is administered by the Scottish Charities Foundation with a committee representing the local communities. Expenditure in the last two years amounted to £75k for youth, £18k for the elderly, £112k for community projects which tend to centre on capital expenditure on community halls and £13k for others which is mostly to one church for new heating and to the local Gun Club for a shelter for clay pigeon shooting. The high levels to community halls are perhaps reflective of the early days and reflect long overdue refurbishment. The limits on the finance preclude the preferrable avenue of total replacement. The figures do though identify that youth, who are perhaps the least inconvenienced by the wind farm, gets much more support than the elderly and the majority of the population get little from the pot. This is a broad brush approach and not intended as a critique. This is just one scheme and many use different models but it does expose the issues that are relevant to all schemes.

It is of interest that Invergordon, on the Cromarty Firth, is now suggesting that the disruption noise and inconvenience of the oil industry should justify a Community Benefit payment from the Port Authority. Seeing as many turbines to be constructed in the area arrive at Invergordon, it would seem that the opportunities have been seen and grabbed with both hands.

I have just attended a workshop on Community Benefit run by Highland Council and whilst the intention to standardise the application of the benefit to the communities is laudable, there is a long way to go. Scottish Government has clearly stated that this will not be mandatory as Planning Gain is but will remain a voluntary contribution to local communities. Therein lies the rub. Developers use Community Benefit to divide community councils from communities and councils from councils. Experience shows that when local community councils show a lack of enthusiasm for a wind farm the net spreads wider until that developer can find councils that will welcome the Community Benefit and will support the application despite being at some distance and, in many cases, not effected by the application. The proposed Highland Concordat does away with that producing a somewhat complicated and at the same time broad based bush approach which effectively directs the bulk of the finances to those communities most affected. The questions remains about how many developers will sign up for this policy and what benefit does it bring them. Highland Council is at pains to confirm that none of the money will be handled by Highland Council and all will be through independent trusts, charities or funds. There may also be legal issues of how to enforce a voluntary payment over twenty five years. Will a reduction of the Value of ROCs and their demise be seen as a supervening event reducing the income thereby causing the developer to withdraw the Community Benefit. How enforcible are burdens on new wind farm owners what happens in the case of liquidations unless the landowners are also signatories.

We talk of cummulative effect of wind farms but there is cummulative effect of benefit when a community at some distance from any project but within the curtilage used by many might benefit disproportinately than those closer to individual wind farms. There is a no size fits all answer. Highland Council make great pains to say that this is a voluntary scheme but the devil is in the detail. If the developer signs up with Highland Council, there is no option for individual community councils to opt out. As the first point of contact for any application is Highland Council and they will be promoting their Concordat that might suggest an unfair advantage. As to the methodology, in simple terms the area around a wind farm is divided into circles of impact: less than 5km, 5-10km, and 10-15km. Each influence of impact is weighted at 4:2:1. By using each figure as a multiplyer, a statistical model is created. Each Community Council is then overlaid on the map and the percentage of each circle they control is used to calculate the percenatge of the community benefit that accrues to them. There are four impact standards: Proximity(40%), Visual Impact(20%), Construction Impact(20%) and Number of Residences(20%). The Residences can throw up anomolies where a city comes within the fifteen km circle. I should say that the circle is not a perfect term as they will reflect the shape of the wind farm and for a linear farm it would be more a sausage shape. Now to the finance. The first £100,000 will go to the Local Fund. The remainder will be divided 55% to be added to the local fund, 30% to a regional or area fund and 15% to a Pan Highland Fund. The division of the £100,000 plus 55% of the balance will be divided as per the model with the bulk going to the under 5Km area, and a declining percentage to those further away. The definition of region has not been identified as yet or in fact pan Highland but the intention of the latter fund is to provide support for some areas that no Renewable generation will ever affect. The intention of that is to prevent pockets of lack of provision poverty which might otherwise occur. Regional aims to provide assistance to areas which may be surounded by wind farms but such fall outwith any fifteen km zone. Regional funds might also be provided for regional projects or in fact to areas that already benefit but have a shortfall for a certain project. That is at this time supposition only. Off-shore wind is out of the equation as the developers will not play ball as they state the cost of impementation allows little flexibility. For many off-shore, the model is not applicable as the 5 and 10km zones are only populated by fish. However there may be an alternative model which takes into account the transient nature of those harvesting the seas and those on-shore that rely on them.

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About Dougal Quixote

Slightly mad. Always believes a cup is half full so continues to tilt at Wind Turbines and the politicians that seem to believe it is their god given right to ruin Scotland for a pot of fool's gold.
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One Response to Community Benefit – Bribe or Act of Generosity

  1. Pingback: – Amherst Island Calls For Comments From Communities on Community Vibrancy Funds

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