As ministers consider how to compensate people living near shale gas sites, a DrillOrDrop analysis of the UK’s only fracking community benefit fund raises questions about its value.
Most households who got direct payments from the scheme for Cuadrilla’s Lancashire fracking site received only £150, out of a total fund of nearly £0.25million.
None of the projects awarded grants from the fund could give details of how many people had benefitted.
Between 2017 and 2019, Cuadrilla built a 7.34ha shale gas site at Preston New Road, near Blackpool, and drilled and partially fracked two horizontal wells. As a form of compensation, it made voluntary payments to the community.
The company has not responded to our questions about the payments. But we have examined financial records, local newsletters and meeting minutes. We also talked to people who distributed or received the money.
We’ve been told that Cuadrilla made payments totalling £40,000 for the two horizontal wells drilled at Preston New Road (£20,000 per well).
We were also told that the company paid a total of £200,000 when it fracked at the site in 2018 and 2019 (£100,000 for each fracked well).
The £40,000 wells payment and the first £100,000 for fracking went into a fund operated by the Community Foundation for Lancashire and Merseyside, based in Liverpool.
The Foundation told us it gave grants totalling nearly £97,000 from the Cuadrilla fund to four local organisations.
To qualify, the projects should “benefit residents within Westby with Plumptons parish”. Priority was given to projects that helped to reduce social isolation and improve community cohesion or had a positive environmental impact.
DrillOrDrop contacted the four organisations that received grants to find out what they spent the money on.
St Anne’s RC Church at Westby had not yet spent its £12,000, a diocesan official told us. The money had been sought for pointing work to the listed building.
The church will decide at a meeting later this month whether to use the money or send it back.
The official said the Roman Catholic church did not invest in fossil fuels.
The Bishop of Salford, the lead on environmental issues for the Roman Catholic church, told BBC Radio Lancashire last month that the government should look again at its decision to lift the moratorium on fracking in England.
Just Good Friends, a community support group operating mainly in St Annes, received £17,400.
Its founder, Bev Sykes, told us she did not deal with grants and could not provide information on what the Cuadrilla money was used for. No trustees were available to talk to us, she said.
We contacted her again today but no one from the organisation has responded to our questions.
The AFC Fylde Foundation received £10,400. The organisation is linked to AFC Fylde football club, which Cuadrilla sponsored directly. An official from AFC Fylde Foundation said its management team changed two years ago. No one who had details of what the grant was spent on still worked there, he said.
The largest payment, of £57,196, went to the broadband provider, Boundless Networks Ltd.
A spokesperson for the company said today:
“This funding was used to build broadband infrastructure to support the local community within the Westby-with-Plumptons parish.
“Due to various delays in gaining approval for the transmitter sites a large part of the intended coverage area had its internet capability upgraded by Openreach so we never achieved the anticipated uptake from customers.
“We welcome any interest from within the Parish to get connected to our network and ask that enquiries are made via our website.”
Four other organisations applied for grants but were refused, the Foundation told us.
Almost £43,000 in the Preston New Road fund managed by the Foundation has not been spent, it said.
Direct payments to households
The second fracking payment of £100,000 was divided between households living within 1.5km of the site.
Cuadrilla reported that 29 households within 1km of the centre of the site would receive £2,070 each. This was an equal share of 60% of the £100,000 fund, the company said.
The remaining 259 households, living between 1km and 1.5km of the centre of the site, received £150 each. This was an equal share of 40% of the £100,000.
Not all the households who were entitled to these payments made a claim or cashed the cheque.
The Community Foundation told us that it had received a further £13,000 from the money set aside for direct payments for fracking the second well that had not been claimed by households.
“Payments don’t necessarily benefit residents most affected”
Susan Holliday, of Preston New Road Action Group, is one of the closest residents to Cuadrilla’s site. She told us:
“The business secretary has said that the companies should come up with packages that will make what they are proposing look attractive. The prime minister has said that there is need for local consent before fracking operations will take place.
“It seems to me that they are suggesting that compensation will be used as a tool to buy people’s consent.
“Cuadrilla used two methods of compensation; payment into a community fund and direct payments to local residents. However, there was still no community consent, as evidenced by the number of objections and challenges.
“Payment into a fund does not necessarily benefit the residents most affected by the site.
“Direct payments to residents close to the site will benefit from them to a certain extent, but this will not outweigh the risks. However, particularly in the current financial crisis, people may not be in a position to turn down any financial payments being offered to them, even if they object to fracking taking place in their community. In addition, people may accept the compensation on the basis that the outcome will be inevitable, so they may as well get some benefit.
“It is clear that the acceptance of financial benefits is not a measure of community consent. It is morally wrong that people should be forced to choose between their finances and their health and well-being.”
Government discussions on compensation
Ministers are reportedly backing a scheme that would give each household £1,000 to approve provisional fracking in their area – considerably more than paid out directly by Cuadrilla to most of the households within 1.5km.
If Cuadrilla had adopted this model, it could have spent more than £280,000 on direct payments.
Other schemes being considered are royalties for people who own land under fracking wells and a share of revenue for local residents.
So far, there has been no definition of how close to a fracking site you would need to live to receive any of these payments.
DrillOrDrop reported in July 2022 about the difficulties of gauging local support and deciding who should receive compensation.
There’s been no definite information from politicians since then.
We asked whether just the views of the most local residents should be considered and how do you define local.
We suggested that people living further away from a site may not receive any compensation but could be affected by deliveries if they were on a lorry route.
And the impacts of fracking could affect people living in a wider area. There were reports of damage to buildings across the Fylde region from the 2.9ML fracking-induced earthquake in August 2019 – so should they be compensated too?