Timber Business Investment Scheme Evaluation

The Timber Business Investment Scheme (TBIS) (2014-2020) was a £9m capital grant aimed at private forest owners, tree nurseries, local authorities, public forest owners, and small to medium-sized enterprises (SMEs) involved in forestry activities, timber harvesting and processing. Funded by the Rural Development Programme (2014-2020), it operated from early 2016 to June 2023.

The scheme aimed to foster growth in the timber sector, improve woodland conditions in Wales and manage inaccessible woodlands through specialised machinery for sustainable production.

The evaluation's main goal, which corresponds to the final report, was to assess the scheme's implementation and impact in Wales, providing a foundation for future investment decisions in the timber industry. Eight key questions guided the evaluation:

1. How effective were the expression of interest (EOI), application and appraisal processes?
2. How well did beneficiaries and applicants engage with the scheme?
3. How efficient was the scheme's design, administration, claims process, monitoring, communications and post-award support?
4. Did TBIS meet its targets?
5. What were the scheme's economic and environmental impacts?
6. What was its overall value for money?
7. How aligned was the scheme with other services and strategic objectives of the Welsh government and EU?
8. What lessons and recommendations can be drawn from the TBIS evaluation?

A mixed-method approach was applied for the evaluation, combining both qualitative and quantitative data. The key activities involved in-depth interviews with Welsh Government officials and stakeholders, along with a survey of 31 businesses that had received support, representing a 48% response rate. The survey included a mix of qualitative and quantitative questions designed to understand their business journey and the role of the TBIS within that, their motivations for support, their experience of the scheme and the outcomes and growth reported. Additionally, a survey was conducted with 39 businesses that had submitted an EOI but did not receive support, yielding a 33% response rate. A review of management information (MI) data collected by the Welsh government was also part of the evaluation.

By the end of the research period in February 2023, 26% of projects remained active, and some beneficiaries had not yet completed their equipment purchases. This situation limited the ability to fully assess the impact of the scheme, although potential future outcomes were considered. Another limitation was the small sample size, which lacked statistical robustness due to difficulties in reaching both beneficiary and non-beneficiary groups. However, the findings were still indicative. Additionally, the economic impact assessment was constrained by the absence of detailed supply chain mapping, which would have required additional resources. Despite this, the assessment provided a general indication of the scheme's impact. Lastly, only 65% of beneficiaries were willing to share turnover data, further restricting the scope of the economic impact analysis.

The feedback on the application process for the scheme was mixed, with 42% of beneficiaries expressing dissatisfaction. The main issues reported were the complexity and time required for submission. More than a third of beneficiaries felt the need to hire consultants to assist with their applications, raising concerns about fairness in the process. Larger businesses with more resources seemed to benefit disproportionately. The delivery team highlighted delays, especially between the EOI and the full application stage, which were compounded by external events like Brexit, the pandemic and inflation. A lack of flexibility to adjust grant levels to reflect rising costs left applicants to manage increased expenses. The two-stage process, managed by separate teams, created a disjointed experience for applicants. While the appraisal process was generally seen as effective, it favoured larger applicants due to the value for money criteria.

The scheme was promoted through modest marketing efforts, primarily within industry channels. Many applicants, however, felt that there was low awareness of the scheme. The support provided by Welsh government was limited to advice on policy and scheme rules, and Rural Payment Wales (RPW) lacked the resources to provide timely and in-depth assistance. Most applicants expressed a desire for more support during the application process, and ongoing support was minimal once applications were submitted. While the claims and monitoring processes were generally satisfactory, 23% of beneficiaries reported dissatisfaction due to delays and bureaucracy. The lack of flexibility, driven largely by RDP regulations, caused frustration, particularly when beneficiaries were penalised for factors beyond their control. The delivery team acknowledged that inflexibility and resourcing issues had been persistent challenges.

Applicants generally approved of the design of the scheme, especially the grant size, intervention rate and eligible costs. However, there was a lack of clarity around the scheme’s objectives. Although the scheme was expected to focus on environmentally significant projects (Priority 5c), the majority of activities seemed to align more with economic development (Priority 6a). This suggests a lack of strategic focus, with some stakeholders highlighting ambiguity around the scheme’s intended role.

The scheme successfully distributed grant funding, with 77% of beneficiaries reporting that they achieved what they set out to do. Inspections confirmed that 84% of projects were delivered as intended, and 88% completed the work and purchased all planned equipment. Beneficiaries reported varied improvements, including increased production, accessing difficult terrains, new markets, and sales growth. Around 19% cited improved efficiency, 15% increased value from biomass and 11% developed safer processes. The scheme's impact on the timber sector’s capabilities in Wales is evident.

The scheme created or safeguarded 71 jobs and improved job quality for many, with beneficiaries reporting increased job security and improved workforce skills. The scheme also contributed to economic growth, generating an estimated £2.5m in additional gross value added (GVA), with further impacts expected as 30% of projects were still active at the time of the survey. Environmental benefits were also significant, with improved woodland management and reduced environmental risks. The scheme demonstrated strong additionality, with 75% of investments unlikely to have occurred without support, leveraging £6.4m in additional business investment.

Strategically, the scheme aligned well with several objectives, such as promoting sustainable woodland management. However, it fell short in supporting woodland creation and retaining supply chain value within Wales, with minimal impact on non-Welsh suppliers. While economic returns were initially modest, the scheme is expected to continue delivering returns, potentially exceeding the grant funding. The £6.4m leveraged investment and significant environmental benefits indicate the scheme provided good value for money.

Despite several challenges, the scheme largely met its objectives. It contributed to the sustainable management of woodlands, supported business growth and generated environmental impacts. Stakeholders acknowledged the need for similar future support, with recommendations for clearer objectives and a more defined focus for future interventions.