Rural Regeneration and Development Fund: Discussion

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By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the joint committee. However, if they are directed by it to cease giving evidence on a particular matter and continue to do so, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable. Members are reminded of the long-standing parliamentary practice to the effect that where possible they should not comment on, criticise or make charges against a person outside the Houses or an official, either by name or in such a way as to make him or her identifiable.

We are continuing our series of meetings on the future of small towns and villages as attractive places to live in, work and visit. The €1 billion rural regeneration and development fund is designed to support economic and social development and to address depopulation outside of urban areas. The fund will also encourage enterprise development in rural towns and villages and outlying areas with a population of fewer than 10,000. We also want to hear about the type of organisations applying for funding, the areas where projects are being funded, and the type of projects being funded. We will seek an update on how much money has been allocated through the fund to date and future plans.

I welcome Ms Sheenagh Rooney, assistant secretary in the corporate affairs and strategic development division, Mr. Eddie Forsyth, principal officer in the rural fund and corporate support unit, and Ms Fiona Creegan, assistant principal in the rural fund and corporate support unit.

It is proposed that opening statements, submissions and other documents submitted to the committee by witnesses or any other body that relate to the meeting be published on the committee's website. Is that agreed? Agreed. I invite Ms Rooney to make her opening statement.

Ms Sheenagh Rooney

I thank the committee for affording us the opportunity to come before it today to discuss the administration and implementation of the rural regeneration and development fund. I am accompanied today by my colleagues, Eddie Forsyth, principal officer with overall administrative responsibility for the fund, and Fiona Creegan, assistant principal officer, also with responsibility for fund administration.

The Department of Rural and Community Development was tasked with implementation of the fund in 2018. The objectives of the fund are a good fit with the mission of our Department, which is to promote rural and community development and to support vibrant, inclusive and sustainable communities throughout the country. In fulfilling this mission, the Department assists communities by providing the right supports and conditions to encourage economic and social development in their areas. The rural fund is only one such support and it is complemented by a wide range of additional programmes and schemes which help to maintain the growth and vitality of rural areas and which support individuals and organisations to meet the needs of their communities.

Our mission has been further aided by the strategic focus and investment provided through Project Ireland 2040. The investment delivered under Project Ireland 2040 has enabled the Department to increase significantly the level of funding support available under the range of schemes and programmes that we operate, from the roll-out of the rural fund to capital investment in our libraries. Project Ireland 2040 also rightfully identifies the strengthening of rural economies and communities as one of the ten strategic priorities at the heart of planning and investment decisions which will be made across Government over the coming years. The Department is proud to take the lead in achieving progress on this goal. One of the key ways we will achieve this is to ensure that future growth is balanced and that all parts of the country share in prosperity, and we endeavour to do this in a sustainable way. The goal of strengthening rural economies and communities is complemented by the other strategic priorities identified under Project Ireland 2040.

The overall large-scale investment set out in Project Ireland 2040 is calibrated to deliver upon these priorities over the lifetime of the plan. Specific support for key priorities is provided through the four funds established under Project Ireland 2040. These are the €500 million disruptive technologies innovation fund, the €2 billion urban regeneration and development fund, the €500 million climate action fund and the rural regeneration and development fund we are here to discuss today.

As part of Project Ireland 2040, an additional €1 billion was provided to the rural regeneration and development fund over the period 2019 to 2027. The purpose of the fund is to provide investment to support rural renewal, strengthen and build resilience in rural communities and assist in the regeneration and sustainable growth of rural towns and villages. Since the fund's establishment, the guidelines relating to eligibility have remained relatively unchanged. The fund focuses on all settlements and rural areas with fewer than 10,000 people located outside the five city areas. Rural towns with a population of more than 10,000 people are eligible to apply under the urban fund. Certain towns with fewer than 10,000 people but with more than 2,500 jobs and which function as significant centres of employment may also be eligible under the urban fund but no individual project can apply for both funds.

For the purposes of compliance with public financial procedures, the lead party for an application to the fund must be a State-funded body. This is defined as body established by central government or with central government approval, which receives a portion of its funding from the State. This covers local authorities, LEADER local action groups, State agencies and so on. Community organisations and voluntary groups, private sector interests or philanthropists cannot act as the lead party to an application but can and do partner with appropriate State-funded bodies to access the fund.

Calls under the fund seek applications in respect of category 1 or category 2 proposals. Category 1 relates to proposals for capital projects which are fully compliant with planning and consent and are ready to commence. Category 2 relates to projects which require development support to become ready for full category 1 status. As the fund seeks to support projects of sufficient scale and ambition to make a significant contribution to the objectives of Project Ireland 2040, the minimum funding request for category 1 projects is €500,000, with no maximum funding specified. There is no minimum or maximum funding request under category 2.

In order to successfully unlock funding, the rules of the fund require matching contributions to be put forward by applicants. The fund will provide up to 75% of the total project cost with at least 25% to be provided in matching contributions by the applicants. A minimum of 10% of matching contributions must be in cash. A higher maximum contribution from the fund of 80% funding is permissible in certain circumstances. Matched funding may be in the form of a combination of wider Exchequer or State sector expenditure, local authority investment, community investment, philanthropic contributions, private sector investment or other asset contributions. Funds secured from our existing programmes are not eligible to be used as matched funding.

Calls for applications under the fund are made on a competitive basis. The applications are assessed based on their alignment with the objectives of Project Ireland 2040 and the fund. In order to meet the objectives of the fund, proposals need to demonstrate several qualities. These include the capacity to deliver on key strategies, such as Project Ireland 2040, county development plans, local economic and development plans or forthcoming regional spatial and economic strategies; collaboration between key stakeholders in the area or sector concerned and the endorsement of key stakeholders, such as the relevant authority or agency in the area or sector concerned; sustainability, that is, delivering lasting benefits which will outweigh the investment made, as well as financial independence; additionality, meaning the project could not have taken place without the fund and that the fund is not being substituted for investment already provided for; value for money, that is, delivering outputs and outcomes which will justify the investment; leveraging of funding from parties to the application; a significant and sustainable impact on social or economic development in rural areas; and transformative effect, the potential to deliver transformative change for a rural town or village and act as a catalyst for increased activity.

The Department has avoided limiting the type of activities that can be supported from the fund. We want the relevant local authorities and other State-funded bodies to consult and engage with communities in rural areas to establish the type of projects which will deliver the most beneficial effects in their areas. In that regard, the applications received to date and the projects which have been allocated funding have related to town and village regeneration, enterprise development, tourism development, digital and co-working initiatives, libraries, arts and cultural facilities, community facilities and sports and recreation facilities. The successful projects often combine more than one of these elements.

The first call under the fund was launched in July 2018, with applications welcomed under both category 1 and category 2. The Department undertook a series of regional information sessions to raise awareness of the fund and to assist applicants in preparing their proposals. Online information resources were also put in place, including the establishment of a mailing list, a dedicated website for frequently asked questions and an email address for specific queries, the outcomes of which were shared with all interested parties. A total of 280 applications were submitted under the first call. Of these, 126 were category 1 applications and 154 were category 2 applications. On foot of a comprehensive assessment process, 84 projects emerged as successful from the first call, comprising 38 category 1 projects and 46 category 2 projects. The 38 successful category 1 projects were allocated €69 million from the fund while the 46 successful category 2 projects were allocated €17 million. In total, the successful projects under the first call were allocated €86 million in support from the fund and will deliver a total investment of €117 million.

It should be noted that under the approach taken by the Department, the announcement of allocations of funding are in principle only and remain subject to the completion of final due diligence, including confirmation of matched funding and oversight of any emerging procurement costs. In due course, successful applicants enter into contractual arrangements with the Department, which set out milestones upon which payment dates for grant funding are based.

Regarding implementation, the Department is satisfied with the level of progress achieved in the delivery of projects which were successful under the first call. Many of the projects are large-scale and multi-annual in nature, but several projects have already reached their first and subsequent milestones and funding has been released for them. The Minister for Rural and Community Development, Deputy Ring, recently opened the first project to be fully completed with the support of the fund, the gteic digital and innovation hub in Spiddal, County Galway, developed by Údarás na Gaeltachta. Further project completions are expected in the weeks ahead. As of this week, €22 million has been drawn down from the fund by 46 separate projects. The Department is continuing to engage closely with project leads to provide whatever assistance is needed to manage the delivery of projects in line with expectations.

Following the completion of the first call in February 2019, the Department engaged with all applicants, both successful and unsuccessful, to garner feedback which would assist us in designing the second and subsequent calls for applications under the fund. Bilateral discussions also took place with key stakeholders and a feedback and discussion workshop was staged in March 2019. The detailed feedback provided was welcomed by all parties and was incorporated into the second call for applications, with changes made to the focus of the call and the application material required.

The second call for category 1 applications was opened in April 2019. The Department undertook a comprehensive process of engagement with all interested parties to communicate the fund's objectives and the level of information required as part of the application process. The feedback which emerged from the first call, which was supported by the policy discussions the Department had undertaken over that period, emphasised the huge importance of driving increased economic and social activity within our towns and villages. The importance of vibrant towns and villages in attracting investment, drawing in additional visitors and increasing residency, came through strongly in all our contacts to date, as did the knock-on benefits for the rural hinterlands which surround these centres. On that basis, the emphasis of the second call was on town and village regeneration and development that had transformational potential. The second call for category 1 applications closed on 6 August 2019. There was an excellent response from all across the country and 69 applications seeking a total of €160 million from the fund were received. The quality of the applications submitted in the second round and the standard of the projects proposed was extremely high.

I will now give an overview of the fund's assessment process. The assessment of applications is a multistage process. First, applications are scored by the Department in accordance with the published appraisal scheme. Secondly, the applications are categorised for submission to an independent project advisory board. The board is informed by the marks awarded to applications and an overall view of the cost of the projects and the level of funding sought relative to the proposals. It takes account of the need to ensure balanced regional development and the budgetary resources available from the fund for the call. Any outstanding issues or queries are also flagged.

The third stage of the assessment process involves seeking high-level guidance on the applications from the independent project advisory board. The project advisory board for the fund was established on foot of a Government decision applied to all four funds established under Project Ireland 2040. The advisory board for the rural fund is comprised of representatives from several Departments. In addition, the board has two independent members with experience in rural and local development. Another member of the board is the fund's independent process auditor, who is charged with providing guidance to the Department on the overall assessment process to ensure best practice and fair procedures are followed.

As part of the assessment process, the board is tasked with providing high-level guidance and observations on the suitability of proposals for funding in line with the fund's objectives. The board helps the Department to formulate recommendations for the Minister on projects which should be considered for funding. Board members are given access to all application documentation and all departmental assessments on each project, as well as summary information for convenience. The board provides observations on individual projects which are collated and used to inform the preparation of a report on recommended projects. The board may also identify further issues for the Department to follow up. Following the board’s considerations, the fourth and final stage of the assessment process is the preparation of a recommendation report by the Department for the Minister, identifying the outcomes which emerged from the assessment process and the discussions of the board. The final decision on successful projects to be allocated funding rests with the Minister.

On foot of the assessment process undertaken in respect of the first call, the Department prepared two reports on recommended projects for the consideration of the Minister. The 84 recommendations contained across the two reports were accepted by the Minister and represented the final outcome of the first call, as announced in September 2018 and February 2019. A report on the assessment process undertaken in respect of the second call for applications was submitted to the Minister in October 2019. The Minister accepted all 26 recommended projects detailed in the report. On 6 November last in New Ross, the Minister announced details of the projects which were successful under the second call. The 26 successful projects, which are located across the country, were allocated €62 million in support to deliver a total investment of €95 million. The focus on regeneration which was the basis for the second call came through strongly in the projects which were successful. Eighteen of the 26 successful projects should deliver town and village regeneration in different ways.

As I have alluded to previously, the best projects combine regeneration with other priorities, such as renovating heritage structures, providing focal points for activity in town centres or delivering arts or library infrastructure. The successful project in Castleblayney will refurbish the historic Hope Castle gate lodge and deliver a modern public library and cultural and creative space in the centre of the town. The Wexfordia project in New Ross will deliver a new visitor and heritage attraction in the centre of the town, using the existing streetscape and regenerating a key building on the riverside to build on the town's Norman heritage. Once more, the successful projects cover a wide range of sectors. Economic and enterprise development underpins the projects in Monksland, County Roscommon, and Roscrea, County Tipperary. Tourism and recreation will be delivered by the Barrow blueway in counties Kildare and Laois. Community development forms part of the case for the projects in Ballinamore, County Leitrim, and Loughrea, County Galway. As with the successful projects under the first call, the 26 successful projects in the second call have been approved in principle only for now. The Department is engaging with the lead parties as part of the due diligence process. I expect we will shortly be in a position to issue provisional letters of offer regarding these projects. Second stage and full approval for the projects will follow upon completion of procurement. We hope to see significant progress on these projects in the new year.

We believe the projects which were successful under the first and second calls from the fund will deliver significant benefits in their local areas, counties and regions for many years. The Department remains anxious to ensure the fund continues to support the best projects in the areas which most need them. We are committed to continued consultation and feedback with all stakeholders, including this committee, with a view to ensuring local authorities and other organisations and the communities they serve are fully informed of the aims, intentions and requirements of the fund. As it did with the first call, the Department will schedule an open and detailed feedback session to give helpful feedback on all the applications received for the now-concluded second call and to assist those applicants to prepare for future calls. If further queries remain after this open meeting, the Department will endeavour to address them with the applicants. The Minister intends that a second call for category 2 applications will be announced shortly. The Minister and the Department are encouraging all potential applicants under the fund to continue to work to develop new and existing proposals which will benefit their local areas. The Department will continue to provide all appropriate assistance in that regard.

I thank Ms Rooney for her comprehensive outline of the fund. I have a number of preliminary questions on which she might be able to give me information. Can she confirm that any proposal received by the Department that has an enterprise element is subject to state aid rules? Ms Rooney has said that a State-funded agency - I understand that this means a body like a local authority, IDA Ireland, Enterprise Ireland, the Western Development Commission or Údarás na Gaeltachta - must be the lead agency. When one reads about the scheme, one sees that this stipulation is part of it. Is a LEADER company eligible to be a lead agency? I would also like to ask for details on the successful applicants to date, broken down across categories like enterprise agencies and local authorities. How many of the projects that have been successful to date have been led by local authorities? How many of them have been led by enterprise agencies?

I do not know whether the officials have information on the next issue I would like to raise. I am not a mad fan of these competitions. Nowadays, the cost of entering a competition is continuing to increase as the threshold of information that needs to be submitted gets higher and higher. It would be interesting to compare the total amount of money that all of the applicants spend on taking part in the competition with the total amount of money given to the winners. It is a bit like the lottery. We know what happens in the lottery. The lottery works on the basis that one or two people get a massive amount of money, but the total amount of money paid in by the participants outweighs the total amount of money that comes out. I am not saying that what is happening under the rural regeneration and development fund is at that level. Has the Department done a comparative assessment of the total amount of money spent by the applicants in making applications under the fund, in the context of what the winners get out of it?

A fundamental question arises in this regard. It is probably a policy issue for the Government, rather than a policy issue for the public servants who advise the Government. The example of Gteic, which is based sa Spidéal, has been mentioned. Those of us with tidy and simple minds would say that if Údarás na Gaeltachta were funded properly by the Government, as it was in the old days, Gteic would not have had to go to the second fund and would not have wasted money on making applications under this competitive process. Údarás na Gaeltachta could have decided to support Gteic sa Spidéal as a gcuid acmhainní féin, mar atá i gceist acu a dhéanamh i gCorr na Móna, mar shampla. Is this an efficient way of proceeding? The same thing goes for the town and village renewal scheme. Would it not be better for the Department of Housing, Planning and Local Government simply to give enough money to the local authorities to do town and village renewal?

Another question arises in this context. It keeps coming up here. New builds are not allowed outside towns and villages. The 1.5 million people in this State who live outside towns and villages account for a high percentage of the population. I do not what is wrong with us. I do not live in a town or a village. I do not know why we are banned from having any development. The other day, I was at the opening of a road that had been built beside a very large enterprise to facilitate people getting to their houses. They got planning permission for this road. Actually, it is the best tertiary road in the county now. It has been taken over by the county council. It ensures that people living in three houses will not have to go past a major industry of 200 people. As far as the rural regeneration and development fund is concerned, the industry in question does not exist. It is out the country at the back of the mountain. I do not get this hatred of allowing anything to happen outside a town or a village. It is often easier and quicker. I think we got the exposition. I did not get the whole of the submission last week as unfortunately, I had to be in a few places at one time. My understanding, however, was that in many cases, it is way more expensive to try to refurbish an existing building in a town or a village than to build a new building. When people are trying to get things done and get the economy going, they cannot be too fussy.

In this town, I have noticed that people seem to be able to knock away buildings that are fine and start again. What is the logical reason for a Department of Rural and Community Development suddenly putting the brakes on rural development?

There is a departmental score and an advisory board assessment, which is sent to the Minister, who approves applications. In how many cases did the Minister not approve recommendations? Has he any facility to approve a project that the board did not recommend? In how many cases did he send an application back for re-evaluation or is he just the proverbial rubber stamp?

Will our guests address those questions?

Ms Sheenagh Rooney

I thank the Deputy for his questions. I will attempt to answer some of them and my colleague might answer the remainder. The Deputy asked about the breakdown of applications.

The question on state aid was first.

Mr. Eddie Forsyth

We require that all projects take account of state aid rules in their applications. The application form asks applicants to make a case for why their project does not have state aid implications. We have built that into the fund's guidelines. In addition-----

That does not clarify the matter. This is a rural development fund. My understanding of state aid rules is that, as the people involved in LEADER will be able to confirm, permission is needed for anything above €200,000 that is enterprise-related. That is a general rule. As such, Mr. Forsyth is saying that any project that would create actual jobs and exceeded €200,000 would more or less be out of the gate. I am not saying that there are not some strange exceptions, but it is generally the case.

Mr. Eddie Forsyth

There are exemptions under the general block exemption regulation. We have issued a note on that to the European Commission. We seek legal advice from the Attorney General's office on state aid issues as they arise, but it is not quite as clear-cut as anything above €200,000 necessarily being out. We would seek advice on the project as we delivered it. We have liaised with the Department of Business, Enterprise and Innovation and other Departments on the requirements that attach to state aid rules. We are satisfied that any enterprise-related project that we have approved is in compliance with state aid rules and will not displace any other supplier that is providing a similar sort of service in the area.

The next question was on a breakdown of local authorities and other State agencies.

Ms Sheenagh Rooney

We have compiled information in this submission, and I can provide the detailed table to the committee, but I will give members an idea of the breakdown. There were 126 applications in the first call for category 1. Of these, 86 were from local authorities, 16 were from LEADER companies - they can be lead applicants - and four involved Departments. Included in the first call for category 2 applications were education and training boards and eight State agencies. In the second call for category 1, we received 69 applications, 52 of which were from local authorities, 11 were from LEADER companies, one was led by a Department and five involved third level institutions. The detailed table breakdown not only-----

How many of those applications were successful?

Ms Sheenagh Rooney

What I am calling out are the applicants, but I can provide information on those applications that were successful. We have a table on it with us.

That is important. I have a funny feeling that there is a distortion because of the State agencies.

Ms Sheenagh Rooney

One of the issues with the fund that is important to bear in mind is that there is a requirement on lead applicants to have collaboration as part of their projects. Even if a local authority is the lead applicant, one will often find beneath its application support from a State agency, community group or matched philanthropic funding. From the first two calls, we have seen real evidence of that collaboration. This is notwithstanding the fact that the Deputy is right, in that the lead applicant in the majority of successful applications is a local authority. However, LEADER companies and State agencies have also been successful. We want to see a spread of collaboration and different bodies applying to the fund. We are satisfied that this is provided for and will grow over time. We have detailed tables based on the information from the first two calls and can provide them to the committee.

The next question posed was on the cost of applications.

Ms Sheenagh Rooney

We have been active in holding information sessions throughout the country that are well attended and that people seem to welcome. We held them in advance of the calls to design applications, during the calls to give information and after the calls to give feedback to people who had applied. The cost of engaging with the rural regeneration and development fund and has not arisen at any of the feedback sessions that we have arranged or in our bilateral contacts. In general, people seem to welcome this significant funding, which they see as filling a gap that was not there previously. Obviously, town and village funding was only able to do so much, although it is valuable. We have received feedback about: making the forms simpler, which we have tried to do; having more information sessions, which we have done; giving feedback on applications to help people; and ensuring that all of the information is accessible. We are open to making whatever other improvements can be achieved in that regard.

The cost of participating has not arisen as an issue. Often, people seem to have had good ideas for regeneration for which they were just waiting for a funding stream to arrive. In many cases, they had been working on their plans for some time. We are due to go out again in January to give feedback on the recent category 2 call. We will raise this matter in one of the open workshops and see whether we can garner any information on it, but it is not an issue that has come to our attention to date.

Mr. Eddie Forsyth

Deputy Ó Cuív mentioned new builds outside towns and villages. We do not have anything like a prohibition on them. In our last guidance, we stated that we would not prioritise new builds outside towns and villages for funding because the focus of the second call was that much more on regeneration. We generally wanted to prioritise regeneration projects in the centre of towns and villages. However, we are not eliminating new builds outside towns and villages in any way. In the last call, the Údarás na Gaeltachta-led project in Eachléim in Mayo involved a new build and an extension to an existing site. The Fethard project in Tipperary will involve a new build, as will the project in Listowel in Kerry. The decision is based entirely on the quality of the case an applicant makes for a project, but there is no prohibition per se.

The Deputy might repeat his other questions.

I asked about the Minister's role.

Ms Sheenagh Rooney

To add to my previous response, the Deputy should bear in mind that we also have category 2 applications, which are not as onerous on people to make and are for smaller amounts of money.

The Deputy raised an issue regarding the Minister's role.

I outlined in my opening statement the process we follow. In the calls we have had to date, following the various steps I outlined, we make a recommendation report to the Minister and, in all cases, the Minister has accepted that recommendation report. An issue has not arisen in respect of having to revert back to the project advisory board in that regard.

We had a similar process in the Department I was in previously; it was not totally dissimilar to Ms Rooney's Department. At ministerial level, a request we always made of the advisory board was in respect of all the applications that were refused. In a number of cases, the officials and I sat around the table to determine the basis for refusal. We asked the advisory board to clarify the basis for refusal because the Department or other Departments with responsibility for the sector would not have agreed with the decision by this independent board. I believe Ms Rooney. I am not one of the people who believe we have elections, elect 158 Members and then say we will give all the power to independent people, that is, people who answer to nobody. I believe they should answer to the Minister. Does they ever look for the ones that were refused? Does the Minister and his advisers ask in a rational way for the reasons for the refusals? If the Minister then believes that some of the reasons are not valid because the application was not properly evaluated does he ask them to review it or does he say that he had not thought of that issue and that he will rewrite the scheme for future applications? What is the level of engagement by the Minister? Does the Minister simply get a list of projects about which he is asked if he intends to refuse some of them? What Minister is going to turn down a project that will do some good, even if it is not a great project?

Ms Sheenagh Rooney

To clarify, in respect of the project advisory board, it has access to all the information. It submits, as part of the overall report, its report to the Minister but the Minister has detailed information in tabular form, both on the projects that are being recommended for funding but also the projects that are not being recommended for funding, and the reasons for that. There will be engagement with the Minister in order that we can explain the contents of the report for him and, as expected, queries would arise that would need to be addressed. The Minister has full information not only on the successful projects but also on the unsuccessful projects at that stage. Queries are answered and addressed at that time.

How many decisions to refuse have been turned into a "Yes" having been looked at it again?

Ms Sheenagh Rooney

None that I recall.

I raise an issue that arose in my county. The local authority, which seems to be the big player here, decided, before it went to the people, and all of this is meant to be people-based, that only the big towns such as Ballinasloe and Loughrea could compete in this process. In terms of Connemara, I cannot recall whether it was Clifden or Carraroe. No matter how much the small place wanted to compete, the local authority cut them off at the pass before it ever got as far as the Department.

I will move on to Deputy Smyth, who will be followed by Senator Marshall.

I thank Ms Rooney for her presentation. It was very detailed in terms of what the Department does and very welcome. As a representative of Cavan-Monaghan, funds like this are crucial. I have a couple of questions leading on from Deputy Ó Cuív’s contribution.

The local authorities are the lead stakeholder in terms of any of the applications received. Could Ms Rooney give us statistics on that? Percentage wise, are local authorities the main organisation in any applications to the Department? Is there a sense that the Department’s fund is compensating for cases where local authorities cannot do the work? I refer to taking on derelict or disused buildings such as former courthouses, market houses and such venues?

This funding is very welcome. There was specific mention of the gate lodge in Castleblayney, which is fantastic, in the presentation. Mr. Paul Clifford, who is a senior official in Monaghan County Council, was before this committee last week talking about the myriad of projects that have to be done in terms of town and village renewal across counties like Cavan and Monaghan. He also alluded to the fact that the gate lodge is the more minor of all the projects that have to be taken on in towns like Castleblayney, where what was once a beautiful market house is now a shell of a building in the centre of the main street. The gate lodge is wonderful. However, as Mr. Clifford stated here last week, it will take millions of euro to do something with the market house. I am sure there is a cap in funding but could Ms Rooney give us some figures on the cap for such projects? I met officials in the Department of Culture, Heritage and the Gaeltacht to see how we best go forward to save a building that is of historical importance in a town like Castleblayney but which is literally a shell of a building because it has been allowed to become derelict. The huge strength in terms of the community organisations will see that building brought back to its former glory. Can those organisations engage with the Department with a view to funding a project such as that?

I thank Ms Rooney for her presentation. I want to make a couple of points but I will not go over points already covered. The witnesses have outlined a broad range of projects that have been successful. Very often, however, with these types of initiatives, certain buzzwords and language are used that ensure the application will probably be successful because of the way it was constructed and how it ticks certain boxes. Has Ms Rooney found gaps emerging because of this process, whereby the Department has found it does not have a sufficient number of applications in a particular area? There is a migration of easy wins, for want of a better term, to some organisations on certain projects they know will have a better probability of success. Can Ms Rooney identify any of those gaps?

Many of these schemes, unfortunately, whether by default or just the way it works out, need a good deal of money in terms of administering and delivering them. Does Ms Rooney have any figures on what it is costing to administer and deliver this initiative? What chunk of money is soaked up in that component of it?

On the unsuccessful applications, as Deputy Ó Cuív rightly said, there is a huge cost to organisations in preparing and submitting applications. In terms of feedback, what percentage of the successful ones are regurgitated, so to speak, and resubmitted in an amended form? If they have been near on the first call but unsuccessful, it seems logical that one would look at it again, identify the weaknesses in it and resubmit it. Does Ms Rooney have those percentages?

Deputy Smyth wants to come back in again.

I have a brief question. In recent weeks, the committee has had various organisations before it and there was a sense that in some ways, there is some duplication in this process. The witnesses may have heard some of Free Market's presentation. Its research has shown that there is a disjointedness in this process and that funding for town and village renewal could all come under the one umbrella. Currently, we have got CLÁR and the town and village renewal scheme. Does Ms Rooney get a sense that other funding streams are duplicating what the Department is trying to do?

Ms Sheenagh Rooney

I might start with the queries raised by Senator Marshall on our trend in seeing applications come back again. I will highlight that in the call we just announced, we had applications from people who were unsuccessful in the first round and were successful in the second round. That was good for us to see because we put a lot of time and effort into providing meaningful feedback to people following the first call. We were able to clearly point out the type of projects that were successful and the ones that were unsuccessful, and show the reasons for that.

This leads to the comment made about gaps.

In the first call we did not see real regeneration ambition but we certainly saw more of it in the second call and we can build on that. The majority of projects in the second call involved the repurposing of existing infrastructure in towns and villages or plans for regeneration. That regeneration has a number of elements. We were very pleased to see that a number of projects that were unsuccessful on the first call were successful on the second call because of the feedback from the Department. The feedback that we gave and the changes we made to the marking schedule in the second call meant that more regeneration projects came through. We have just finished the second call and intend to go out with another public session in January, when we will engage with all of the stakeholders on what has been learned from the last call and will try to identify any gaps that exist. One of the positive aspects of the fund is that it supports a wide variety of projects which means that communities are able to think about the best solution for them. We are not being prescriptive in that regard, which is good. We have information on the broad range of projects that have been funded and would be happy to forward that to the committee.

In response to Deputy Smyth's comment regarding disjointed funding, our Department has tried to present a coherent package of funding. When we are communicating with stakeholders, preparing application forms and going through the processes, we try to show that the rural regeneration and development fund is for transformational projects. It is for regeneration projects that require more money than other types of projects. The town and village renewal scheme is obviously for smaller-scale projects that yet still make a difference. That is complemented by funding available through CLÁR and the outdoor recreation infrastructure scheme. We will continue to monitor the coherence of those funding streams to ensure that they all make sense and are directed towards their different objectives. It is fair to say that the landscape is fairly busy but it is delivering different objectives for communities. We always welcome feedback on our various schemes. One of the most important aspects of the fund is the additionality element. The fund is there to be additional and to make projects happen that would not otherwise get off the ground. The feedback we have received is that the projects simply would not have happened without this funding source and that the rural fund is meeting that particular need.

A question was asked about local authorities and the statistics show that about 70% of the applications were from local authorities on all calls to date.

What is the position with regard to the cap?

Ms Sheenagh Rooney

There is no cap for category 1 funding. That said, we are trying to manage a cashflow of €315 million from now out to 2022 so for every call we have a certain budget, depending on the number of applications we receive. There is no cap as such on the funding for individual projects. We are talking about a ten-year programme of €1 billion. The Castleblayney project, for example, as well as some other projects, have indicated that they will have other phases and there is nothing to stop those other phases coming through in subsequent calls.

It would not be the norm to receive applications for funding in excess of €5 million; such applications would be outliers. The amounts we have awarded to date have generally been between €1 million and €3 million, with very few in excess of €5 million. The largest award we gave, which was for a countrywide project, was €10.26 million. It was a project that was being done in lots of areas around the country involving the National Parks and Wildlife Service, NPWS.

I think all of Deputy Smyth's questions have been answered. I have a number of questions for the witnesses. I thank Ms Rooney for her comprehensive presentation and for engaging with the committee. This fund is critical and is a game changer for many communities. County Clare has benefited greatly, with the Ennistymon digital hub due to open soon. This follows on from the development of the Spiddal digital hub, which is very welcome. I am interested in the issue of LEADER companies being lead applicants. In County Clare, the LEADER there company was unsuccessful over the last two calls even though its applications were backed up by a philanthropic organisation called Tomar Trust, which pledged €300,000 for each individual application. Tomar Trust will only fund projects that are also funded by the State. There was considerable disappointment when these excellent projects were not funded. This situation begs a wider question on the number of applications nationwide from LEADER companies. Ms Rooney has told us that 70% of applications were led by local authorities. Why is it the case that LEADER companies are not as successful in their applications? Surely serious consideration must be given to applications that are backed up by a philanthropic organisation like Tomar Trust, which is working in counties Clare, Waterford and Cork. How much consideration is given to such applications?

I cannot overemphasise the importance of this scheme. I think of Seaworld in Lahinch in County Clare, which opened when preparations for the Irish Open were under way. The public realm in Lahinch enjoyed a significant upgrade to coincide with that massive sporting event. Work is also ongoing in Seaworld itself, with the upgrading of facilities and the provision of a surf rescue training centre. The effect on the village of Lahinch has been massive. This fund enables communities to think big. As Ms Rooney pointed out, the minimum award is €500,000 but there is no cap.

This is a new fund and as Ms Rooney explained to Senator Marshall earlier, some of the projects that were unsuccessful on the first call were funded on the second call. The fund provides enormous opportunities for communities. Again, I thank Ms Rooney for coming before us today. Deputy Michael Collins is next.

I thank Ms Rooney for her presentation. It would be wrong of me not to be truthful. There is great dismay about the RRDF, its distribution and how funds are allocated to rural communities in my own constituency of Cork South-West. We have what many feel are very strong and valuable projects, supported by Cork County Council, which have been refused funding in recent weeks. We were also refused funds in the last announcement. Indeed, I think most of County Cork was refused funding at that time and in Cork South-West there was zero funding.

I would like to delve further into the reasons. I do not begrudge any community getting from €6 million to €9 million because that is what the fund is for. Why, however, is one area funded while another is not? Sometimes there may be an issue over a project, especially when it is the lead project in the eyes of Cork County Council. Surely the issue would get ironed out in six months. I am aware that there were projects in Bandon, Clonakilty, Dunmanway, Ballinspittle, Bantry, Skibbereen, and Schull.

I would like to mention the Schull project because that was Cork County Council's lead project. My worry is that nobody refused ever got funding afterwards. Maybe I picked Ms Rooney up wrong in that regard. If so, she might clarify whether an organisation might still get funding if there was a box that was not ticked. The project in question was shovel ready a year ago.

I do not know whether the Deputy can stray into specifics.

Others did. I accept that the witnesses may have to generalise in their reply. I am only talking about the application because it was shovel ready.

I get where the Deputy is coming from but we cannot really get into specific projects.

A speaker did so a while ago and there was no problem. I am living in the community in question, so I know the project well. For a voluntary community organisation to raise €500,000 for a project it believes will be a game changer for the whole peninsula and far beyond, as with the Mizen Head Signal Station, and then get refused without finding out the real reason for refusal leaves a lot of questions to be answered. It does not matter what the name of the project is. Refusals leave a lot of unanswered questions and a sour taste in the mouths of people of Cork South-West. There are other projects also but I will not get into the detail.

When a voluntary community organisation is bending, twisting and turning in the best way possible to carry out what is a super project that is shovel ready, the matter should be addressed. With some of the projects that received funding 12 months ago, there has been no shovel turned yet. This raises the question as to how funding was given to projects that might not have been shovel ready, but which may have let on they were, and not given to a project that is ready to roll and has planning permission. The latter is continually refused. It begs many questions about the rural regeneration funds. I cannot answer them. I have raised them in the Dáil. The Minister cannot answer. I have been trying to raise the same question for seven or eight months but cannot get answers. I would appreciate it if Ms Rooney enlightened me today. If projects have been refused, they are going to reapply if they believe they are worthy. If they address an issue that they might not have been aware of, will they be eligible for funding afterwards? I would appreciate a reply.

Ms Sheenagh Rooney

I will endeavour to answer Deputy Collins's queries in the first instance. With regard to County Cork, eight projects were approved for funding in the first call. There were three category 1 projects and five category 2 projects. In total, for the county of Cork, almost €7 million in funding is being awarded. Recently, in the last round, there was funding awarded to the first phase of the regeneration project for Kanturk and the Briery Gap Theatre in Macroom. That is the information on projects that are being funded in that area.

The lead parties range from Cork County Council to LEADER companies in Duhallow and Blackwater. Coillte is also involved, in addition to the Office of Public Works, OPW, and Údarás na Gaeltachta. Cork is a good example of where there are good projects coming through from a variety of stakeholders. That is what we want to see.

With regard to queries people may have about their applications, we are very open to addressing them. We endeavour to do so as a result of the first call. We are planning to do it as part of the second call. We do it in two phases. First, we have our public information session, which we had during the year in response to the first call. In that, we try to bring together useful information and feedback for every applicant that is of interest to them. We have received positive feedback that the information we provide in that regard is useful. If, after the information session, people still have queries, we will be very much prepared to engage with them bilaterally. If those behind any individual project feel they have queries that are unanswered in this regard, we will be very happy to address them.

The last call involved an extremely competitive process. We are very conscious that there are communities, including in Cork, that are very happy with the outcome, but obviously there are those who are very disappointed and feel they had excellent projects that should have been funded. From our point of view, we will endeavour to answer all the queries and explain to people the reasons for the decisions. I have been through a multistage decision-making process, and in all instances we try to be fair and equal in our treatment of all parties.

I mentioned groups that got funding 12 months ago but that have not even turned the shovel yet. What is the follow-through? Why are legitimate groups that have a shovel-ready project or that could turn the shovel within a month not getting funding while those that indicated they were shovel ready but that are no longer shovel ready are getting funding? Is the money taken back from the latter and given to the groups that are ready to go?

Ms Rooney mentioned that any project that has been refused to date has not had a successful application further down the line. Did I pick her up incorrectly?

Ms Sheenagh Rooney

I will clarify that. There were a number of projects that were unsuccessful in the first call that have gone on to be successful in the second call because they received feedback. People do take the feedback on board. We have received information that feedback was taken on board and that the issues outstanding were addressed. Subsequently, those concerned were successful in receiving funding. That is not in all cases but in some.

With regard to shovel-ready projects, it is a matter of all consents being in place. That is in advance of procurement. The Department must go through two important stages. Once someone is announced as successful, that just implies funding in principle. We then have to engage in a due diligence process. Then the applicant must come back to us with the procurement cost, and then we sign a contract with them. That is to protect Exchequer funding and to do things in the right way. Afterwards, payment is linked to milestone delivery. It can be the case for some projects, given their scale and the fact that delivery will be over a number of years, that procurement takes longer.

It took some time to get the due diligence process and contractual arrangements set up but it was important for us to do that because taxpayers' money is involved. Now that we have done this, we are beginning to see delivery on projects and expenditure. There is momentum and we expect it only to increase. We are delivering all the time on a pipeline of projects and there is a ten-year investment programme. I highlighted already that the expenditure to date is up by €21 million. We would expect that to ramp up significantly. We are seeing progress but we understand the reasons it has taken a little time. It was because we wanted to do things the right way.

There was a query on philanthropic funding. We are very open to LEADER companies becoming increasingly involved. They are involved somewhat but we appreciate that local authorities are still in the majority. We will provide more detailed information on that to the committee. When we were setting up the design of the scheme, we were keen to see projects that had philanthropic donations succeed as part of their matched funding.

Admittedly, to date, and we are only in the early stages, it has been small. There are six examples of projects with matching funding from philanthropic sources, including the Tomar Trust, that have been successful. They amount to almost €6 million. I appreciate it is a small start but that is the direction of travel we want to see. One of the Department's responsibilities is in this area and we are developing a strategy on this, so it is something on which we are very keen to see progress.

To follow on what Deputy Collins said, and I accept it is a new fund, up to 38 projects were approved under the first call. I understand it is multi-annual and these are major projects. Have any of the 38 projects run into trouble and are any in a position where they will be unable to deliver? What would happen to the funding then? Would it be reallocated?

Ms Sheenagh Rooney

The status of the 86 projects is that three have fallen into trouble, and therefore the funding becomes available in the overall pot. On the 83 projects remaining, 46 have commenced, work is happening on the ground, and those projects are drawing down money. That is good to see. One project is complete, 19 are in the detailed design stage, and 17 are just ending procurement. We are in regular contact with these people, both in visiting them and on the phone in establishing where the projects are at and when the money will be drawn down.

I was looking at the advisory board of the rural fund. It includes the Departments of Housing, Planning and Local Government, Communications, Climate Action and Environment, Business, Enterprise and Innovation, Agriculture, Food and Marine, and Transport, Tourism and Sport. That is five Departments and Ms Rooney's Department is also included, so that is six. Why was the Department of Culture, Heritage and the Gaeltacht not included? It has responsibility for the geographic area of na Gaeltachataí and the islands and it has responsibility for all the waterways, which one would have thought would be a big focus. It affects the Chairman's constituency, Leitrim up into Fermanagh and so on. It also has responsibility for national parks and wildlife. The Department of Business, Enterprise and Innovation, with responsibility for IDA Ireland and for Enterprise Ireland and SFADCo and Ms Rooney's Department has responsibility for the Western Development Commission, but the Department of Culture, Heritage and the Gaeltacht has responsibility for Údarás na Gaeltachta, probably the most multifunctional of all the development agencies there. Why was it not on the advisory board given that it is very relevant to it?

The Department can provide 70% of funding and 80% in some exceptional circumstances. Can the lead agency or another State agency provide the other 20%? There would be obvious implications for that.

Ms Rooney said that the spend was €22 million to date. From next week, and we need to take out weekends and Christmas, there will be about 20 days of spend. What does Ms Rooney expect the Department's outturn to be? Her estimate was in excess of €50 million for the year and it is now about 40% of that.

As a general comment, Údarás na Gaeltachta should not have had to go to the Department. It should have had enough funding to do it itself. The Department has done an excellent project in west Connemara that I do not think would have happened without the Department's fund. I am not convinced on the totality of it, that it is not a whole duplication. As far as most of the village renewal and town renewal is concerned, we should just fund local authorities properly so that they can do these things themselves without running around with a begging bowl from agency to agency, thus duplicating the whole administration, the system delays and so on, but that is a personal view.

The difference between this fund and CLÁR is how matching funding was done in CLÁR which was fundamentally different. This fund is open to the whole country because there is another fund in another Department, namely, Housing, Planning and Local Government, for the big towns and cities. Everyone is in this gig and it is not trying to achieve an objective of pulling the money in one direction. It would be claimed that, between the two Departments, all the assistance is covered. The idea with CLÁR matching funding was there was a perception, which I think was valid, that the depopulated areas did not get their fair share of funding. There was a pull factor, therefore, where a previous Government decided to pull the money into these areas by saying it would provide a euro where there was a good project in a depopulated area. I used to do that in the islands where if someone built a health centre, for example, we would provide 50% matching funding, but that was to pull money into areas that normally would not be able to compete in getting priority for funds. Since this is open priority for the whole country, it does not have that bigger philosophical logic behind matching funding.

An interesting paper was written for the Department of Rural and Community Development on RAPID. I did not agree with the paper but it excoriated the principle of matching funding. I am wondering why it has since come back to fashion. It was one of these value for money things. The Minister gave it to me and it excoriated the whole idea of matching funding. I thought it was wrong because it missed the whole point that it was matching funding into very deprived areas, but that is another day's work.

Ms Sheenagh Rooney

The project advisory board is a high-level advisory board that provides guidance. We are only in the second round of the funding and its membership. We have adapted over time. For example, we added the Department of Transport, Tourism and Sport to the board in the previous round when we saw the type of applications that were coming through because we felt we needed that expertise. While the Department to which the Deputy referred is not necessarily represented on the project advisory board, we engage with it bilaterally on the fund. If projects come through that we have particular queries on or that look like they are likely to be funded, we would seek the Department's advice and input.

The Department of Culture, Heritage and the Gaeltacht has itself been a successful applicant, and as such it might have been fortuitous that it was not on the project advisory board.

Were all the applications from other Departments?

Ms Sheenagh Rooney

The Department was a lead applicant.

I know the National Parks and Wildlife Service was, but obviously that was in the Department. Many people do not realise that but it is.

Ms Sheenagh Rooney

That is right. The Department itself was a lead applicant in a number of applications and it was not represented on the project advisory board. That is the current situation but we will keep an eye on membership over time. However, it has proved a very useful model. On the spend-----

No. Can the lead agency or another State body in association with the lead agency put up 100% of the matching funding?

Ms Sheenagh Rooney

The Deputy had a query on matching funding that I will ask my colleague to address.

Mr. Eddie Forsyth

Yes, they can. The Deputy mentioned the National Parks and Wildlife Service project where the Department of Culture, Heritage and Gaeltacht provided matching funding. There are other examples where State agencies have put forward matching funding. Fáilte Ireland has assisted with matching funding for two of the bigger projects that were announced in the previous call. It is usually in the 75% range because the 80% funding support only relates to community.

This is Nile Delta stuff. Mr. Forsyth should try to figure that out. It is like the Nile Delta.

Is the Deputy happy with that?

No, I asked about the spend. That was only €22 million of the more than €50 million the Department had.

Ms Sheenagh Rooney

I have already outlined the reasons for the time that needed to be spent on due diligence, and that we are engaging on a regular basis with the lead parties. We are at €22 million but we have line of sight to a greater spend between now and the end of the year, and we are currently processing payments in that regard.

I want to highlight that because there has been a ramp up in LEADER spending this year. As the Deputy is aware, there has been a reallocation of €10 million from the rural regeneration and development fund to LEADER, and the Minister would have highlighted that previously when he was in front of the committee. While it is good to see the ramp up in LEADER spend happening, it also enables us to manage the cashflow in regard to the rural regeneration fund. Therefore, there is still an amount of money to be spent this year and we are very much engaged in that at the moment.

Would the Department expect to spend another €18 million?

Ms Sheenagh Rooney

It is difficult to say. There are still a number of weeks left but we are engaging with the parties to get as much spend as we can this year because the more spend we can get this year, the better the cashflow for next year. We are satisfied with the direction of travel in regard to the spend but there has been some reallocation of money to LEADER.

If I take €10 million from €50 million, it is €40 million, and the original figure was actually over €50 million.

Ms Sheenagh Rooney

It was €52 million.

It was initially €55 million.

Ms Sheenagh Rooney

It was €52 million.

That was what the Department got eventually.

Ms Sheenagh Rooney

Some €10 million has been reallocated to LEADER.

That is €42 million and, as €22 million is spent, the Department would have to spend as much in 20 days as it spent in 11 months.

Ms Sheenagh Rooney

We are managing a series of rural programmes together. Obviously, there is the spend on the town and village scheme and also the spend on the outdoor recreation scheme, so we are managing spend within the overall pot of rural spending.

What about the outturn?

Ms Sheenagh Rooney

We expect to see a full spend in regard to the rural programmes in total this year. What we are talking about is just managing cashflow between a number of programmes.

Have there been advance payments to achieve that, as happened in previous years? Will all the work be invoiced and inspected before it is paid for?

Ms Sheenagh Rooney

There has been some element of prepayments where that is within the sanction and has been agreed in accordance with certain terms and conditions.

I asked a question earlier in the year about money, a sum of €1.8 million, that was given in 2016 but has not yet been spent. That money had been given to the local authorities but they had not done the work, even in 2019. That is the kind of thing that happens when the Department prepays people.

Ms Sheenagh Rooney

There would be very strict conditions around prepayments and in regard to the rural fund.

I was told at the time that it was given but the work did not happen.

Ms Sheenagh Rooney

In regard to the rural fund, there are certainly very strict conditions around prepayments.

That draws our debate to a conclusion. I thank the witnesses for their engagement with the committee and we look forward to engaging further into the future.

It is proposed that we suspend for a short period and then resume in private session. Is that agreed? Agreed.

The joint committee suspended at 12.04 p.m., resumed in private session at 12.05 p.m. and adjourned at 12.33 p.m. until 10:30 a.m. on Wednesday, 11 December 2019.