Upper Acharossan Forest Acquisition Feasibility Study Prepared by Jamie Chaplin Brice, October 2014 Version 5.0 29 October 2014 1 The Author would like to acknowledge assistance in the preparation of this document with thanks to Kilfinan Community Forest Company and the board of directors; Highlands and Islands Enterprise, Gordon Gray-Stephens, Ian Thomas, Munro Gauld, Argyll and Bute Council, Forestry Commission Scotland, Scottish Water and RJ Dixon LTD. This project has been supported by: “Kilfinan is a shining example of the value that can be unlocked when an able and motivated community takes ownership of a substantial mature woodland. The project has made huge strides in a short space of time in harvesting a mature conifer crop, developing a sawmill, a shop, a micro- hydro power scheme, community growing areas, achieving FSC accreditation, and is moving towards the building of affordable housing units made from timber felled on site. The project is providing employment and future housing and reconnecting local people with their local history, which puts the woodland right at the heart of community” Peter Wilson, Executive Director of Scotland’s Finest Woods Awards 2 Contents Page Executive Summary 4 1. Introduction 5 2. Background a) The forest 6 b) The community 6 c) The Kilfinan Community Forest Company 7 3. Proposal of acquisition a) The land 8 b) Process 11 c) Social and economic benefits 12 d) Community capacity and interests 13 e) Community ownership implications 14 4. Land options (for outcomes) a) Conifer plantation 16 b) Crofts 18 c) Housing 19 d) Holiday accommodation 19 e) Energy 19 f) Fishing and agriculture 20 g) Game 20 h) Training and education 21 i) Woodland burials 21 j) Paths/ bridleways/ cycle routes 21 k) Environmental improvements 22 l) Forest events and attractions 22 5. Valuation 23 6. Means of acquisition a) Delivery structure 24 b) Funding options 25 c) Opportunities and constraints 28 d) Summary 29 7. Conclusions 30 8. Appendices 31 3 Executive Summary Since being founded in 2007, Kilfinan Community Forest Company (KCFC) has evolved from a grant supported organisation to a financially sustainable social enterprise which provides employment, wood fuel, composting, education and recreation to the Kilfinan community. Affordable housing and hydro energy will be additional services from 2015 and ambitious plans are already in place to develop the forest to its potential. However, the extent of future growth is constrained because the current forest is only 127 hectares which cannot provide sufficient timber to sustain the sawmill in the longer term, and limits the potential for ambitious recreational development. KCFC is considering the purchase of Upper Acharossan Forest as a means to both secure the services already provided and to significantly increase growth of the forest business. The KCFC Board of Directors are clear that the security and sustainability of the current operations must not be threatened by the acquisition of the new forest. There is no point in acquiring the new forest if there is no income to invest in developing the forest resource and opening it up for community access and enrichment. The acquisition must be seen to add value and to be sustainable in the longer term. This Feasibility Study and the associated Business Plan shows that it would be possible to retain sustainability and support growth by the acquisition. The Feasibility Study and the associated Business Plan assess the following benefits: Economic • Employment from forest operations and management • Employment from secondary processing and value adding such as sawmilling and woodfuel, wood products and compost • Opportunities for land based businesses via establishment of forest crofts • Increased income for local businesses through improved attractions and amenity Social • Provision of nature trails, wildlife guides and interpretation • Forest School involvement to educate from an early age • Provide access to recreation to encourage an healthy and active community • Provide affordable housing, via selling plots and forest-made houses • Provide training and educational courses to develop skills in the community Environment • Increase biodiversity, age structure and benefit wildlife and people alike • Provide the community with timber and woodfuel and reduce road miles • Grow food locally to cut down on food miles and reduce the carbon footprint • Provide community access to wider forest for leisure and recreation • Improve habitat for the native mammals, birds and reptiles and amphibians The Feasibility Study and the Business Plan come together in the cost benefit analysis which shows the investment required to achieve the community’s vision for the greater forest. The acquisition will unlock significant income from timber to provide the reinvestment required to fund the ambitious development plans for the forest and to create the economic, social and environmental benefits identified by the Kilfinan community consultation. 4 1) INTRODUCTION Kilfinan Community Forest Company (KCFC) is a charitable enterprise formed to work with and for the local community to manage and develop their forest, creating opportunities for a sustainable future. The forest history is complex in that initially in 2010 a wider area was due to be purchased and in July 2014 a further area became available to the community. KCFC purchased 127 hectares of Acharossan forest from Forestry Commission Scotland (FCS) in March 2010, now known as Kilfinan Community Forest (KCF). This was part of a proposed 452 hectare holding, but the Community could not raise sufficient funding to purchase the entire area. The remaining 325 hectares of Acharossan has been held in the community interest until March 2015. In 2014, a further 107 hectares have been offered to the community in conjunction with the 325 hectare area. This area was initially unknown to the forest and therefore doesn’t feature on any earlier documentation. For the sake of this study, the currently owned area is referred to as KCF (127 hectares). The original retained area for the community is referred to as Acharossan (325 hectares) and the formerly unknown area of land on which this study focuses is referred to as Upper Acharossan (107 hectares). The total new area to be purchased equates to 432 hectares and the entire area should the purchase be successful amounts to 559 hectares. The purpose of this feasibility study is to consider the Upper Acharossan 107 hectares in addition to the original feasibility study (MacIntyre and Gauld 2008) for Kilfinan Community Forest. The consequence is that there is crossover between the two feasibility studies and the valuation for the total new area of 432 hectares. This feasibility study therefore compiles the new information regarding Upper Acharossan (107) and recent known information such as community consultation and then considers the funding options for the total new area (432) and subsequent routes to completion. For simplicity, the detail of finance is covered in the business plan. For the sake of SLF applications, the total 432 hectare area is referred to as “Upper Acharossan”. 5 2. BACKGROUND a) The forest Acharossan forest is grown on un-drained heathland and unimproved grassland. The land was acquired by the state in 1963, when planting commenced sporadically until the late 1980’s. Prior to 1963 the land was used for grazing by local hill farmers, after which it was managed by Forestry Commission Scotland. The land was divided in 2010, with land in the north west being sold to Scottish Southern Energy (SSE); 127 hectares to the south east acquired by KCFC and FCS retaining ownership of 432 hectares (107ha +325ha); now up for disposal. While the new holdings have received active management since 2010, the FCS land has been undermanaged and provides no local employment. b) The community The parish of Kilfinan constitutes the community within the Cowal Peninsula (postcode area PA21). It includes the villages of Tighnabruaich, Kames, Otter Ferry, Kilfinan, Millhouse, Portavadie and Ardlamont. Argyll & Bute Council is the local authority. The community of Kilfinan has experienced 50 years of decline since its heyday in the 1950s, when the resident population was about 3,500 people, it is now around 700 people. The loss of the direct ferry service to Glasgow and latterly the building of the New Road led to shops and local businesses going into decline. The local Forestry Commission Office also closed in 1987 and 37 forestry jobs were lost. The area is now popular for retired people and second homes, which has pushed house prices well beyond the reach of local people. Nearly a third of houses in the parish are unoccupied second homes or holiday homes. This has created a population imbalance and the area has nearly double the national average of elderly people.1 Local businesses are struggling and people are moving away. The local primary school roll has decreased significantly since 30 years ago when there were over 70 pupils – the roll is now 29, which has halved in the last ten years. With regard to the present KCF, several community consultations have been undertaken to date, in particular prior to the initial purchase to verify the requirement of a community forest. Methods included the following: • A scoping study, • Community consultant assistants visiting residents and discussing the project, • A Management Plan for Acharossan Forest 2007, • A Renewable Energy Study, 1 Argyll and Bute Council, 2011 census statistics: PA21 has 28% economically inactive retired; the estimated national average retired over 65 year olds is 19%, n.b. this does not account for “economically active” retired, whom it is also believed make up a percentage of residents in the Kilfinan Parish. 6 • Phase One Affordable Housing Development – Master Plan and Design Guide • A Housing Needs Analysis, • The initial Acharossan Forest Acquistion Feasibility Study 2008 Several public meetings were held over the 5 year period between the initial community consultation in 2005 and the purchase of 127 hectares of Acharossan in 2010.